Royal Bank of Canada (NYSE:RY) posted second-quarter results that exceeded analyst expectations, helping lift shares 2.57% in premarket trading as the lender benefited from broad-based strength across its major business divisions.
The bank reported adjusted earnings per share of Cdn$3.90, ahead of analyst estimates of Cdn$3.77.
Quarterly revenue totaled Cdn$17.45 billion, surpassing the consensus forecast of Cdn$17.15 billion and increasing 11% from Cdn$15.67 billion in the same quarter last year.
Adjusted net income climbed 23% year-over-year to Cdn$5.6 billion, supported by strong performance in Capital Markets, higher fee-based revenue from Wealth Management, and increased net interest income within the Personal Banking and Commercial Banking segments.
Total provisions for credit losses declined by Cdn$512 million from the prior-year period to Cdn$912 million. The bank noted that the same quarter last year included elevated provisions tied mainly to trade disruptions and tariff-related concerns.
“Our second quarter earnings showcase our consistency in delivering premium profitability and long-term shareholder value, underpinned by solid growth across our diversified businesses and balance sheet strength,” said Dave McKay, President and Chief Executive Officer.
Pre-provision, pre-tax earnings rose 15% year-over-year to Cdn$8.0 billion, driven by stronger revenue in Capital Markets and Wealth Management, as well as loan growth and improved spreads in Personal Banking and Commercial Banking.
The provision for credit losses ratio on loans improved to 35 basis points, compared with 58 basis points in the prior-year quarter.
Royal Bank also maintained a strong capital position, ending the quarter with a CET1 ratio of 13.5%.
During the quarter, the bank returned Cdn$4.0 billion to shareholders through Cdn$1.7 billion in share repurchases and Cdn$2.3 billion in dividends.
The company declared a quarterly dividend of Cdn$1.76 per share, representing a 7% increase, and announced plans to repurchase up to 45 million common shares, or roughly 3% of shares outstanding.