(Corrects adjusted EPS figure in last paragraph)
Dec 2 (Reuters) - Royal Bank of Canada reported a small rise in quarterly profit that beat analysts’ expectations on Wednesday, driven by strength in its capital markets unit and reduced provisions to cover potential loan-losses from the COVID-19 pandemic.
Canada’s largest lender by market capitalization set aside C$427 million in the fourth quarter, as economic disruptions from the pandemic raised the possibility of defaults. The amount was far lower than analysts’ expectation of C$798.75 million, and down 14% from a year earlier.
Net income from personal and commercial banking - RBC’s biggest source of income - fell 7% to C$1.5 billion, largely reflecting the impact of lower interest rates.
The country’s banks have faced margin pressure this year from surging deposits and slower lending growth across retail and business segments.
RBC’s capital markets division, which includes trading, investment banking and advisory, however, saw net income soar 44% to C$840 million, helped by increased volatility in markets due to the health crisis.
Total net income rose to C$3.25 billion ($2.51 billion) for the quarter ended Oct. 31, or C$2.23 per share, from C$3.21 billion, or C$2.19 per share, a year earlier.
On an adjusted basis, the bank earned C$2.27 per share, higher than analysts’ average estimate of C$2.05 per share, according to Refinitiv data.
$1 = 1.2936 Canadian dollars Reporting by Noor Zainab Hussain and Ambar Warrick in Bengaluru, Nichola Saminather in Toronto; Editing by Shinjini Ganguli
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