We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Royal Bank of Canada (RY) Stock Gains as Q3 Earnings Rise Y/Y
Read MoreHide Full Article
Shares of Royal Bank of Canada (RY - Free Report) gained 1.6% on the NYSE following the release of its third-quarter fiscal 2023 (ended Jul 31) results. Adjusted net income of C$4.02 billion ($3.01 billion) increased 10.9% from the prior-year quarter.
Results were aided by an improvement in revenues. However, higher expenses and provisions were the undermining factors. In the reported quarter, the company’s capital ratios improved.
Revenues Improve, Expenses Rise
Total revenues were C$14.49 billion ($10.86 billion), up 19.4% year over year.
Net interest income (NII) was C$6.29 billion ($4.71 billion), growing 6.7% from the prior-year quarter. Non-interest income was C$8.20 billion ($6.14 billion), which rose 31.4% year over year.
Non-interest expenses were C$7.86 billion ($5.89 billion), up 23.1% year over year.
The company’s provision for credit losses was C$616 million ($461.6 million), up 81.2% from the year-ago quarter.
As of Jul 31, 2023, Royal Bank of Canada’s total loans were C$840.21 billion ($635.94 billion), up marginally from the prior quarter. Deposits totaled C$1.22 trillion ($0.92 trillion), up marginally sequentially. Total assets were C$1.96 trillion ($1.48 trillion), up almost 1%.
Capital Ratios Improve
As of Jul 31, 2023, Royal Bank of Canada’s Tier 1 capital ratio was 15.4%, up from the prior-year quarter’s 14.3%. Total capital ratio was 17.3%, up from 15.9%.
The company’s Common Equity Tier 1 ratio was 14.1%, up from 13.1% in the prior-year quarter.
Our View
Improvement in loan balances, rising rates and a diversified product mix will likely keep driving Royal Bank of Canada’s organic growth. However, higher provisions on the worsening economic outlook is a major near-term concern.
Royal Bank Of Canada Price, Consensus and EPS Surprise
Bank OZK’s (OZK - Free Report) second-quarter 2023 (ended Jun 30) earnings per share of $1.47 missed the Zacks Consensus Estimate by a penny. However, the bottom line reflects a rise of 33.6% from the year-earlier quarter.
Results were positively impacted by an improvement in NII, driven by higher rates and loan balances. However, rising expenses and a rise in provision for credit losses on a challenging economic backdrop were concerning for OZK.
BankUnited, Inc.’s (BKU - Free Report) second-quarter 2023 earnings per share of 78 cents missed the Zacks Consensus Estimate of 79 cents by a penny. The bottom line declined 4.9% from the prior-year quarter.
BKU’s results were adversely impacted by an increase in operating expenses, lower deposit and loan balance, and a decline in NII. However, higher non-interest income and lower provision for credit losses acted as tailwinds.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Royal Bank of Canada (RY) Stock Gains as Q3 Earnings Rise Y/Y
Shares of Royal Bank of Canada (RY - Free Report) gained 1.6% on the NYSE following the release of its third-quarter fiscal 2023 (ended Jul 31) results. Adjusted net income of C$4.02 billion ($3.01 billion) increased 10.9% from the prior-year quarter.
Results were aided by an improvement in revenues. However, higher expenses and provisions were the undermining factors. In the reported quarter, the company’s capital ratios improved.
Revenues Improve, Expenses Rise
Total revenues were C$14.49 billion ($10.86 billion), up 19.4% year over year.
Net interest income (NII) was C$6.29 billion ($4.71 billion), growing 6.7% from the prior-year quarter. Non-interest income was C$8.20 billion ($6.14 billion), which rose 31.4% year over year.
Non-interest expenses were C$7.86 billion ($5.89 billion), up 23.1% year over year.
The company’s provision for credit losses was C$616 million ($461.6 million), up 81.2% from the year-ago quarter.
As of Jul 31, 2023, Royal Bank of Canada’s total loans were C$840.21 billion ($635.94 billion), up marginally from the prior quarter. Deposits totaled C$1.22 trillion ($0.92 trillion), up marginally sequentially. Total assets were C$1.96 trillion ($1.48 trillion), up almost 1%.
Capital Ratios Improve
As of Jul 31, 2023, Royal Bank of Canada’s Tier 1 capital ratio was 15.4%, up from the prior-year quarter’s 14.3%. Total capital ratio was 17.3%, up from 15.9%.
The company’s Common Equity Tier 1 ratio was 14.1%, up from 13.1% in the prior-year quarter.
Our View
Improvement in loan balances, rising rates and a diversified product mix will likely keep driving Royal Bank of Canada’s organic growth. However, higher provisions on the worsening economic outlook is a major near-term concern.
Royal Bank Of Canada Price, Consensus and EPS Surprise
Royal Bank Of Canada price-consensus-eps-surprise-chart | Royal Bank Of Canada Quote
Royal Bank of Canada currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of U.S. Banks
Bank OZK’s (OZK - Free Report) second-quarter 2023 (ended Jun 30) earnings per share of $1.47 missed the Zacks Consensus Estimate by a penny. However, the bottom line reflects a rise of 33.6% from the year-earlier quarter.
Results were positively impacted by an improvement in NII, driven by higher rates and loan balances. However, rising expenses and a rise in provision for credit losses on a challenging economic backdrop were concerning for OZK.
BankUnited, Inc.’s (BKU - Free Report) second-quarter 2023 earnings per share of 78 cents missed the Zacks Consensus Estimate of 79 cents by a penny. The bottom line declined 4.9% from the prior-year quarter.
BKU’s results were adversely impacted by an increase in operating expenses, lower deposit and loan balance, and a decline in NII. However, higher non-interest income and lower provision for credit losses acted as tailwinds.