Royal Bank of Canada’s third quarter net income was up 3% year on year at $2.3B, supported by a massive 51% rise in earnings for the bank’s wealth management business.
RBC said its wealth management net income was a record $236 million, up $80 million or 51% compared to the same quarter last year. It attributed the gain to higher average fee-based client assets resulting from net sales and capital appreciation. Higher transaction volumes also contributed to the increase.
Excluding an unfavourable impact of $29 million ($21 million after-tax) charge related to certain regulatory and legal matters in the prior year, earnings in the segment were up $59 million or 33%. Compared to the prior quarter, net income was up $11 million or 5%, mainly due to higher average fee-based client assets.
“We continue to deliver solid performance, with record earnings of over $2.3 billion, as we leverage our strength, scale,and strong capital position to successfully execute on our disciplined growth strategy through a slow growth environment,” said Gordon Nixon, RBC president and chief executive.
Canadian wealth management revenue increased $53 million or 13%, mainly due to higher average fee-based client assets resulting from net sales and capital appreciation.
US and international wealth management revenue increased $91 million or 19% mainly due to higher average fee-based client assets resulting from net sales and capital appreciation, higher transaction volumes reflecting improved market conditions, and an increase in fair value of our US share-based compensation plan.
Global asset management revenue increased $76 million or 28%, mainly due to higher average fee-based client assets resulting from solid net sales of long-term funds to retail high net worth and institutional clients, as well as capital appreciation.