* Profit of C$1.47/share excluding items vs. C$1.43 estimate
* Capital markets income drives results
* Hikes dividend by 6 percent to C$0.71 a share
By Cameron French
TORONTO, Feb 26 Royal Bank of Canada
reported a higher quarterly profit on Wednesday and raised its
dividend by 6 percent after surging capital markets income more
than offset charges from a restructuring of Caribbean
Canada's largest bank earned C$2.09 billion ($1.89 billion),
or C$1.38 a share, in the first quarter ended Jan. 31, up from
C$2.05 billion, or C$1.34 a share, a year earlier.
Excluding charges of C$60 million from the sale of Jamaican
operations and C$32 million for a restructuring in the
Caribbean, the bank earned C$1.47 a share, topping analysts'
expectations of C$1.43.
The results build on slightly higher-than-expected profits
this week by rivals Bank of Montreal and National Bank
of Canada in a quarter that has shown steady growth in
consumer lending volumes in spite of worries of a housing
"(Loan) volume growth in Canada continues to do well, even
though we would think the volume growth would be down," said Ian
Nakamoto, director of research at MacDougall, MacDougall and
"(The banks) are fairly well diversified among different
loan categories," Nakamoto said. "I think they're quite cautious
towards who they lend to."
RBC's capital markets income rose 9 percent to C$505
million, while loan-loss provisions decreased by 16 percent to
C$292 million from a year earlier.
"The beat against expectations appears to be from lower
provisions and better-than-anticipated capital markets revenues,
largely trading," Barclays Capital analyst John Aiken said in a
Income from investor and treasury services, which includes
financial custodial and management for corporate clients,
climbed 34 percent to C$106 million.
Personal and commercial banking income slipped 3 percent to
C$1.07 billion but would have risen 5 percent without the items
from the Jamaican operations sale and Caribbean restructuring.
The bank said in January that it would sell its Jamaican
banking operations to Sagicore Group Jamaica Ltd, but it did not
have any plans to divest other assets in the Caribbean.
Personal and commercial income benefited from the
acquisition of auto lender Ally Canada in early 2013, RBC said.
Asked on a conference call about the bank's plans for
further acquisitions, RBC Chief Executive Officer Gordon Nixon
said the interest was there, but availability was lacking.
"We've looked at a tremendous number of opportunities in the
wealth management space over the last year or so," he said. "The
ability to execute is more challenging than the stated
opportunities; a combination of price levels and performance
Nixon will step down in August after 13 years as CEO. He
will be replaced by Dave McKay, who heads RBC's personal and
commercial banking business.
The bank said it was raising its quarterly dividend by 4
Canadian cents per share to 71 Canadian cents, which Nakamoto
said was more than he had expected.
RBC shares were up 3 Canadian cents at C$72.73 in morning
trading. The stock rose 19 percent in 2013, mirroring the strong
performance of other Canadian banks, and is up slightly more
than 2 percent so far in 2014.
Toronto-Dominion Bank and Canadian Imperial Bank of
Commerce will release their quarterly results on