Royal Bank of Canada and Toronto-Dominion Bank, Canada's two biggest lenders, on Thursday reported second quarter earnings which were ahead of market expectations, shrugging off concerns over slowing mortgage growth. RBC, Canada's biggest lender by market value, posted an 11 percent rise in earnings per share to C$2.06 in the quarter to Mar. 31, also helped by strong growth at its wealth management business. Excluding one-off items, earnings per share rose to C$2.10. Analysts had on average forecast earnings of C$2.05, Thomson Reuters I/B/E/S data showed.
RBC said net income increased by 9 percent compared with the previous year to C$3.1 billion ($2.4 billion). That included net income of C$1.46 billion at its personal & commercial banking business, up 7 percent, reflecting improved margins and sales.
The bank's wealth management business lifted net income by 25 percent to C$537 million, in part reflecting benefits from tax reform in the United States. RBC's investment banking business fared less well, with net income totaling C$665 million, roughly unchanged on a year ago amid less favorable market conditions.
Rival TD said earnings per share, excluding one-off items, totaled C$1.62 in the quarter to March 31, compared with C$1.34 a year ago. Analysts had on average forecast earnings per share of C$1.50, according to Thomson Reuters I/B/E/S data. TD's net income, excluding one-off items, rose to C$3.06 billion, compared with C$2.56 billion a year ago. The performance benefited from a 17 percent increase in net income at the bank's Canadian retail business to C$1.83 billion.