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Royal Bank of Canada Q2 Earnings Improve Y/Y on Higher Revenues
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Key Takeaways
RY posted C$4.41 billion in adjusted net income in Q2, up 6.9% from the year-ago period.
Total revenue rose 10.7% year over year to C$15.67 billion, led by strong net interest income growth.
Higher expenses and a 54.8% jump in credit loss provisions pressured profitability and shares.
Royal Bank of Canada’s (RY - Free Report) second-quarter fiscal 2025 (ended April 30) adjusted net income available to common shareholders was C$4.41 billion ($3.10 billion), up 6.9% from the prior-year quarter.
Results reflected the impacts of the specified items relating to the HSBC Canada transaction and integration costs, along with the amortization of acquisition-related intangibles. RY’s quarterly results were aided by higher revenues, and marginal growth in loans and deposit balances. However, an increase in expenses and provisions were major headwinds. Probably because of the negatives, RY shares have lost 1.8% since the release of its results.
RY’s Revenues Improve & Expenses Rise
Total revenues were C$15.67 billion ($11.03 billion), up 10.7% year over year.
Net interest income was C$8.06 billion ($5.67 billion), growing 21.6% from the prior-year quarter. Non-interest income was C$7.62 billion ($5.36 billion), up 1.1% year over year.
Non-interest expenses were C$8.73 billion ($6.14 billion), up 5.1% from the prior-year quarter.
The company’s provision for credit losses was C$1.42 billion ($999.1 million), soaring 54.8% year over year.
RY Reports Strong Balance Sheet Position
As of April 30, 2025, Royal Bank of Canada’s total loans were C$1.01 trillion ($730.8 billion), up marginally from the prior quarter. Deposits totaled C$1.45 trillion ($1.05 trillion), rising marginally from the previous quarter end. Total assets were C$2.24 trillion ($1.62 trillion), up 2.3% from the previous quarter.
Royal Bank of Canada’s Capital Ratios Improve
As of April 30, 2025, the company’s Tier 1 capital ratio was 14.7%, up from the prior-year quarter’s 14.1%. The total capital ratio was 16.5%, up from 16.1% in the prior-year quarter.
The Common Equity Tier 1 ratio was 13.2%, up from 12.8% in the prior-year quarter.
Our View for RY Stock
Solid loan balances and a diversified product mix will likely keep driving Royal Bank of Canada’s financials. However, higher provisions on the uncertain economic outlook remains a near-term concern.
Royal Bank Of Canada Price, Consensus and EPS Surprise
HSBC Holdings (HSBC - Free Report) reported a first-quarter 2025 (ended March 31) pre-tax profit of $9.48 billion, which declined 25% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
HSBC’s results were affected by a year-over-year fall in revenues, higher expected credit losses and other credit impairment charges, partially offset by a fall in expenses.
Deutsche Bank (DB - Free Report) reported first-quarter 2025 earnings attributable to its shareholders of €1.78 billion ($2.01 billion), up 39.2% year over year.
DB’s results were aided by a rise in revenues and lower expenses. However, higher provision for credit losses was a spoilsport.
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Royal Bank of Canada Q2 Earnings Improve Y/Y on Higher Revenues
Key Takeaways
Royal Bank of Canada’s (RY - Free Report) second-quarter fiscal 2025 (ended April 30) adjusted net income available to common shareholders was C$4.41 billion ($3.10 billion), up 6.9% from the prior-year quarter.
Results reflected the impacts of the specified items relating to the HSBC Canada transaction and integration costs, along with the amortization of acquisition-related intangibles. RY’s quarterly results were aided by higher revenues, and marginal growth in loans and deposit balances. However, an increase in expenses and provisions were major headwinds. Probably because of the negatives, RY shares have lost 1.8% since the release of its results.
RY’s Revenues Improve & Expenses Rise
Total revenues were C$15.67 billion ($11.03 billion), up 10.7% year over year.
Net interest income was C$8.06 billion ($5.67 billion), growing 21.6% from the prior-year quarter. Non-interest income was C$7.62 billion ($5.36 billion), up 1.1% year over year.
Non-interest expenses were C$8.73 billion ($6.14 billion), up 5.1% from the prior-year quarter.
The company’s provision for credit losses was C$1.42 billion ($999.1 million), soaring 54.8% year over year.
RY Reports Strong Balance Sheet Position
As of April 30, 2025, Royal Bank of Canada’s total loans were C$1.01 trillion ($730.8 billion), up marginally from the prior quarter. Deposits totaled C$1.45 trillion ($1.05 trillion), rising marginally from the previous quarter end. Total assets were C$2.24 trillion ($1.62 trillion), up 2.3% from the previous quarter.
Royal Bank of Canada’s Capital Ratios Improve
As of April 30, 2025, the company’s Tier 1 capital ratio was 14.7%, up from the prior-year quarter’s 14.1%. The total capital ratio was 16.5%, up from 16.1% in the prior-year quarter.
The Common Equity Tier 1 ratio was 13.2%, up from 12.8% in the prior-year quarter.
Our View for RY Stock
Solid loan balances and a diversified product mix will likely keep driving Royal Bank of Canada’s financials. However, higher provisions on the uncertain economic outlook remains a 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
Currently, Royal Bank of Canada carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
HSBC Holdings (HSBC - Free Report) reported a first-quarter 2025 (ended March 31) pre-tax profit of $9.48 billion, which declined 25% from the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
HSBC’s results were affected by a year-over-year fall in revenues, higher expected credit losses and other credit impairment charges, partially offset by a fall in expenses.
Deutsche Bank (DB - Free Report) reported first-quarter 2025 earnings attributable to its shareholders of €1.78 billion ($2.01 billion), up 39.2% year over year.
DB’s results were aided by a rise in revenues and lower expenses. However, higher provision for credit losses was a spoilsport.