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All amounts are in Canadian dollars and are based on our unaudited Interim Consolidated Financial Statements for the quarter ended January 31, 2011 and related notes prepared in accordance with Canadian generally accepted accounting principles (GAAP), unless otherwise noted. Our Q1 2011 Report to Shareholders and Supplementary Financial Information are available on our website at rbc.com/investorrelations.
Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $1,839 million for the first quarter ended January 31, 2011, up $342 million or 23% from last year and up $718 million or 64% from last quarter. Earnings were driven by record results in Canadian Banking, Capital Markets and Wealth Management.
“RBC had an exceptional start to the year, earning a record $1.84 billion in the first quarter of 2011. We grew our earnings across our segments demonstrating the strength and diversification of our businesses and the earnings power of this organization,” said Gordon M. Nixon, RBC President and CEO. “Through 2011, we plan to extend our leadership positions in Canada and build on our global platforms by focusing on clients’ needs and capitalizing on the global economic recovery.”
First quarter 2011 compared to first quarter 2010
- Net income of $1,839 million (up 23% from $1,497 million)
- Diluted earnings per share (EPS) of $1.24 (up $.24 from $1.00)
- Return on common equity (ROE) of 20.3% (up from 17.5%)
- Tier 1 capital ratio of 13.2%
First quarter 2011 compared to fourth quarter 2010
- Net income of $1,839 million (up 64% from $1,121 million)
- Diluted EPS of $1.24 (up $.50 from $.74)
- ROE of 20.3% (up from 12.3%)
First quarter 2011 compared to fourth quarter 2010, excluding the loss on Liberty Life(1)
- Net income of $1,839 million (up 49% from $1,237 million)
- Diluted EPS of $1.24 (up $.42 from $.82)
- ROE of 20.3% (up from 13.7%)
Canadian Banking net income was $882 million, up $105 million or 14% from last year, reflecting solid volume growth across all businesses and lower provision for credit losses (PCL), partially offset by increased staff costs including higher pension expenses. Compared to last quarter, net income was up $117 million or 15%, driven by volume growth across all businesses, lower PCL and lower marketing costs.
“Our record earnings in Canadian Banking reflect our leadership and proven ability to outperform in the marketplace. Our size and scale gives us enormous potential to drive efficiencies while re-investing in our businesses to generate top line growth,” Nixon said.
Wealth Management net income was $221 million, up $2 million over last year and up $46 million from last quarter, driven by higher average fee-based client assets, increased transaction volumes and a favourable cumulative accounting adjustment of $15 million ($11 million after-tax) related to our deferred compensation liability. Last year included a favourable accounting impact related to the foreign currency translation on certain available-for-sale (AFS) securities of $39 million ($34 million after-tax) and a favourable income tax adjustment of $30 million.
“Our continued growth in Canada and expanding presence in the U.S. and select international markets allowed us to capitalize on the recovery of global equity markets. As a global leader in wealth and asset management, we are well positioned to leverage our strong positions and continue to grow this attractive business,” Nixon said.
Insurance net income was $145 million, up $27 million or 23% from a year ago, largely reflecting lower reinsurance and disability claims costs and favourable life policyholder experience, partially offset by net investment losses in the current quarter. Compared to last quarter, net income was up $2 million excluding the loss on Liberty Life(1).
“Insurance contributed another solid quarter to our diversified earnings stream. We are growing market share by continually innovating and tailoring products to better suit customer needs,” Nixon said.
Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. We are Canada’s largest bank as measured by assets and market capitalization, and among the largest banks in the world, based on market capitalization. We are one of North America’s leading diversified financial service companies, and provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. We employ approximately 79,000 full- and part-time employees who serve close to 18 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 56 other countries. For more information, please visit rbc.com.
Trademarks used in this release include the LION & GLOBE Symbol, ROYAL BANK OF CANADA and RBC which are trademarks of Royal Bank of Canada used by Royal Bank of Canada and/or by its subsidiaries under license.
For further information: Media Relations Contacts: Geoff Owen, Media Relations, [email protected], 416-974-3558 or 1-888-880-2173 (toll-free outside Toronto); Tanis Robinson, Director, Financial Communications, [email protected], 416-955-5172 or 1-888-880-2173 (toll-free outside Toronto); Investor Relations Contacts: Josie Merenda, VP & Head, Investor Relations, [email protected], 416-955-7803; Bill Anderson, Director, Investor Relations, [email protected], 416-955-7804; Karen McCarthy, Director, Investor Relations, [email protected], 416-955-7809