|By PR Newswire||
|February 26, 2014 06:01 AM EST||
All amounts are in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Our Q1 2014 Report to Shareholders and Supplementary Financial Information are available on our website at rbc.com/investorrelations.
TORONTO, Feb. 26, 2014 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported net income of $2,092 million for the quarter ended January 31, 2014, up $45 million or 2% from the prior year and relatively flat from last quarter. We also announced an increase to our quarterly dividend of $0.04 or 6%, to $0.71 per share.
Net income was $2,184 million, up $137 million or 7%(1) from the prior year and up $52 million or 2%(1) from last quarter, excluding specified items related to Caribbean banking as noted below. Our results were driven by continued strength in Canadian Banking, and higher earnings in Capital Markets, Investor & Treasury Services and Wealth Management.
"We delivered first quarter earnings of over $2 billion, reflecting solid client volume growth across most businesses as we continue to extend our leadership position in Canada while growing our businesses globally," said Gordon M. Nixon, RBC Chief Executive Officer. "We believe our focus on developing innovative products and services, and our ongoing discipline in managing costs, remain clear competitive advantages in today's environment. This morning we also announced a 6% increase to our quarterly dividend."
Q1 2014 compared to Q1 2013
Q1 2014 compared to Q4 2013
|• Net income of $2,092 million (up 2% from $2,047 million)||• Net income of $2,092 million (compared to $2,101 million)|
|• Diluted earnings per share (EPS) of $1.38 (up $0.04 from $1.34)||• Diluted EPS of $1.38 (down $0.01 from $1.39)|
|• Return on common equity (ROE)(2) of 18.1% (down from 20.0%)||• ROE of 18.1% (down from 18.8%)|
|• Basel III Common Equity Tier 1 (CET1) ratio of 9.7%|
Results and measures excluding specified items(1), as discussed on page 2 of this Earnings Release, include a loss of $60 million (before and after-tax) related to the sale of RBC Jamaica in the current quarter and provisions related to post-employment benefits and restructuring charges in the Caribbean of $40 million ($32 million after-tax) in the current quarter and $40 million ($31 million after-tax) in the prior quarter.
Excluding specified items(1): Q1 2014 compared to Q1 2013
Excluding specified items(1): Q1 2014 compared to Q4 2013
|• Net income of $2,184 million (up 7% from $2,047 million)||• Net income of $2,184 million (up 2% from $2,132 million)|
|• Diluted EPS of $1.44 (up $0.10 from $1.34)||• Diluted EPS of $1.44 (up $0.03 from $1.41)|
|• ROE of 18.9% (down from 20.0%)||• ROE of 18.9% (down from 19.1%)|
Personal & Commercial Banking net income was $1,071 million, down $33 million or 3% compared to last year. Excluding specified items related to Caribbean banking as discussed on page 2 of this Earnings Release, net income was up $59 million or 5%(1). Canadian Banking net income of $1,137 million was up $47 million or 4%, largely due to higher revenue from 7% volume growth, which includes the contribution of our Ally Canada acquisition, partially offset by higher provision for credit losses (PCL). We also achieved positive operating leverage of 0.5%.
Compared to last quarter, net income was essentially flat. Canadian Banking net income was up $50 million or 5% largely due to solid volume growth across all businesses.
Wealth Management net income was $235 million, up $6 million or 3% compared to last year, mainly due to higher average fee-based client assets resulting from capital appreciation and strong net sales. Our results were unfavourably impacted this quarter by additional PCL related to the same accounts that impacted the fourth quarter of 2013. These accounts are now fully provisioned. Compared to the prior quarter, net income was up $33 million or 16%, mainly due to higher average fee-based client assets, semi-annual performance fees, and lower PCL.
Insurance net income was $157 million, down $7 million or 4% from a year ago, mainly due to higher disability and weather-related claims costs, partially offset by earnings from two new U.K. annuity contracts. Compared to the prior quarter, earnings increased $50 million or 47%, as our prior quarter results included an unfavourable impact related to a charge of $160 million ($118 million after-tax) as a result of the new tax legislation in Canada, which affects the policyholders' tax treatment of certain individual life insurance policies.
|1||These are non-GAAP measures. For further information, including a reconciliation, refer to the non-GAAP measures section on page 2 of this Earnings Release.|
|2||This measure does not have a standardized meaning under GAAP. For further information, refer to the Key performance and non-GAAP measures section of our Q1 2014 Report to Shareholders.|
Investor & Treasury Services net income was $106 million, up $27 million or 34% from a year ago, primarily reflecting continuing benefits from our ongoing focus on efficiency management activities and higher net interest income on growth in client deposits. Compared to the prior quarter, net income increased $15 million or 16%, mainly related to higher funding and liquidity revenue on assets held for liquidity purposes which largely benefited from tightening credit spreads, and increased net interest income on growth in client deposits.
Capital Markets net income was $505 million, up $43 million or 9% from a year ago, primarily due to lower PCL, a lower effective tax rate, and the impact of foreign exchange translation. These factors were partially offset by solid but moderately lower global markets and investment banking revenue, compared to robust levels last year which included a one-time gain related to the disposition of our London Metal Exchange (LME) shares.
Compared to last quarter, earnings were up $36 million or 8%, mainly due to higher revenue in our fixed income, commodities, and foreign exchange trading businesses, and higher M&A activity and lending revenue, including the impact of foreign exchange translation. These factors were partially offset by higher variable compensation on improved results and losses on fair value adjustments on certain RBC debt. In addition, the prior quarter was unfavourably impacted by litigation provisions and related legal costs.
Corporate Support net income was $18 million, largely reflecting asset/liability management activities.
Capital - As at January 31, 2014, Basel III CET1 ratio was 9.7%, up 10 basis points compared to last quarter, as strong internal capital generation was partially offset by the impact of the credit valuation adjustment (CVA) capital charge, and a new pension accounting standard, both of which became effective this quarter.
Credit Quality - Total PCL of $292 million decreased $57 million or 16% from a year ago, largely reflecting a recovery in PCL in Capital Markets comprised of a few accounts compared to provisions taken in the prior year, and lower provisions in our Caribbean portfolio. Total PCL decreased $42 million or 13% from the prior quarter, mainly due to lower provisions in Wealth Management, Capital Markets and our Caribbean portfolios. PCL ratio of 27 basis points declined 8 basis points compared to the prior year and 5 basis points compared to last quarter.
Results and measures excluding specified items are non-GAAP measures. Specified items include a loss of $60 million (before and after-tax) related to the sale of RBC Royal Bank (Jamaica) Limited and RBTT Securities Jamaica Limited (collectively "RBC Jamaica") as previously announced on January 29, 2014 and provisions related to post-employment benefits and restructuring charges in the Caribbean of $40 million ($32 million after-tax) in the current quarter and $40 million ($31 million after-tax) in the prior quarter.
Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined, do not have a standardized meaning under GAAP and may not be comparable with similar information disclosed by other financial institutions. We believe that excluding these specified items from our results is more reflective of our ongoing operating results, will provide readers with a better understanding of our performance and should enhance the comparability of our comparative periods.
|Net Income excluding specified items|
|(Millions of Canadian dollars, except per share and percentage amounts)||Reported||
Loss related to
sale of RBC
Provision for post-
|For the three months ended January 31, 2014|
|Personal & Commercial Banking|
|For the three months ended October 31, 2013|
|Personal & Commercial Banking|
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this earnings release, in filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, and include our Chief Executive Officer's statements. The forward-looking information contained in this earnings release is presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could" or "would".
By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors - many of which are beyond our control and the effects of which can be difficult to predict - include: credit, market, liquidity and funding, insurance, regulatory compliance, operational, strategic, reputation and competitive risks and other risks discussed in the Risk management and Overview of other risks sections of our 2013 Annual Report and in the Risk management section of our Q1 2014 Report to Shareholders; the impact of regulatory reforms, including relating to the Basel Committee on Banking Supervision's (BCBS) global standards for capital and liquidity reform, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, over-the-counter derivatives reform, the payments system in Canada, the U.S. Foreign Account Tax Compliance Act (FATCA), and regulatory reforms in the United Kingdom (U.K.) and Europe; the high levels of Canadian household debt; cybersecurity; the business and economic conditions in Canada, the U.S. and certain other countries in which we operate; the effects of changes in government fiscal, monetary and other policies; our ability to attract and retain employees; the accuracy and completeness of information concerning our clients and counterparties; the development and integration of our distribution networks; model, information technology and social media risk; and the impact of environmental issues.
We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Material economic assumptions underlying the forward looking-statements contained in this earnings release are set out in the Overview and outlook section and for each business segment under the heading Outlook and priorities in our 2013 Annual Report, as updated by the Overview section in our Q1 2014 Report to Shareholders. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.
Additional information about these and other factors can be found in the Risk management and Overview of other risks sections of our 2013 Annual Report to Shareholders and in the Risk management section of our Q1 2014 Report to Shareholders.
Information contained in or otherwise accessible through the websites mentioned does not form part of this earnings release. All references in this earnings release to websites are inactive textual references and are for your information only.
ACCESS TO QUARTERLY RESULTS MATERIALS
Interested investors, the media and others may review this quarterly earnings release, quarterly results slides, supplementary financial information and our Q1 2014 Report to Shareholders on our website at rbc.com/investorrelations.
Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for Wednesday, February 26th, 2014 at 7:30 a.m. (EST) and will feature a presentation about our first quarter results by RBC executives. It will be followed by a question and answer period with analysts.
Interested parties can access the call live on a listen-only basis at: www.rbc.com/investorrelations/ir_events_presentations.html or by telephone (416-340-2217 or 1-866-696-5910, passcode 2674741#). Please call between 7:20 a.m. and 7:25 a.m. (EST).
Management's comments on results will be posted on our website shortly following the call. Also, a recording will be available by 5:00 p.m. (EST) on February 26, 2014 until May 21, 2014 at: www.rbc.com/investorrelations/ir_quarterly.html or by telephone (905-694-9451 or 1-800-408-3053, passcode 2038368#).
Royal Bank of Canada is Canada's largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and capital markets products and services on a global basis. We employ approximately 79,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 42 other countries. For more information, please visit rbc.com.
Trademarks used in this Earnings 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. All other trademarks mentioned in this Earnings Release, which are not the property of Royal Bank of Canada, are owned by their respective holders.
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
Jan. 16, 2017 11:45 PM EST Reads: 4,176
Internet of @ThingsExpo, taking place June 6-8, 2017 at the Javits Center in New York City, New York, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. @ThingsExpo New York Call for Papers is now open.
Jan. 16, 2017 11:30 PM EST Reads: 3,507
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Jan. 16, 2017 09:00 PM EST Reads: 7,435
Up until last year, enterprises that were looking into cloud services usually undertook a long-term pilot with one of the large cloud providers, running test and dev workloads in the cloud. With cloud’s transition to mainstream adoption in 2015, and with enterprises migrating more and more workloads into the cloud and in between public and private environments, the single-provider approach must be revisited. In his session at 18th Cloud Expo, Yoav Mor, multi-cloud solution evangelist at Cloudy...
Jan. 16, 2017 08:45 PM EST Reads: 4,575
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
Jan. 16, 2017 08:00 PM EST Reads: 616
The proper isolation of resources is essential for multi-tenant environments. The traditional approach to isolate resources is, however, rather heavyweight. In his session at 18th Cloud Expo, Igor Drobiazko, co-founder of elastic.io, drew upon his own experience with operating a Docker container-based infrastructure on a large scale and present a lightweight solution for resource isolation using microservices. He also discussed the implementation of microservices in data and application integrat...
Jan. 16, 2017 06:45 PM EST Reads: 3,486
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Jan. 16, 2017 06:00 PM EST Reads: 367
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
Jan. 16, 2017 05:00 PM EST Reads: 4,012
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at Logz.io, will explore the value of Kibana 4 for log analysis and will give a real live, hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He will examine three use cases: IT operations, business intelligence, and security and compliance. This is a hands-on session that will require participants to bring their own laptops, and we will provide the rest.
Jan. 16, 2017 03:30 PM EST Reads: 4,821
IoT is at the core or many Digital Transformation initiatives with the goal of re-inventing a company's business model. We all agree that collecting relevant IoT data will result in massive amounts of data needing to be stored. However, with the rapid development of IoT devices and ongoing business model transformation, we are not able to predict the volume and growth of IoT data. And with the lack of IoT history, traditional methods of IT and infrastructure planning based on the past do not app...
Jan. 16, 2017 03:15 PM EST Reads: 353
"LinearHub provides smart video conferencing, which is the Roundee service, and we archive all the video conferences and we also provide the transcript," stated Sunghyuk Kim, CEO of LinearHub, in this SYS-CON.tv interview at @ThingsExpo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Jan. 16, 2017 02:30 PM EST Reads: 1,549
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Jan. 16, 2017 02:15 PM EST Reads: 5,267
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
Jan. 16, 2017 01:45 PM EST Reads: 3,594
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
Jan. 16, 2017 01:30 PM EST Reads: 3,309
In a recent research, analyst firm IDC found that the average cost of a critical application failure is $500,000 to $1 million per hour and the average total cost of unplanned application downtime is $1.25 billion to $2.5 billion per year for Fortune 1000 companies. In addition to the findings on the cost of the downtime, the research also highlighted best practices for development, testing, application support, infrastructure, and operations teams.
Jan. 16, 2017 01:00 PM EST Reads: 3,647