Royal Bank of Canada (RBC) announced on Tuesday that its second-quarter profit rose 25% from a year ago, leading the bank to increase its dividend. The Toronto-based lender reported net income of $4.2 billion for the quarter ended April 30, up from $3.36 billion in the same period last year.
Strong Revenue Growth
Revenue for the quarter increased by 12% to $14.1 billion, driven by higher net interest income and growth in wealth management and capital markets divisions. RBC's Canadian banking segment saw a 10% rise in earnings, while its wealth management unit reported a 15% increase.
Dividend Hike
The bank's board of directors approved a quarterly dividend increase of 4 cents per share, bringing it to $1.42. This marks the latest in a series of dividend boosts as RBC continues to generate strong cash flows.
CEO Dave McKay attributed the results to the bank's diversified business model and disciplined cost management. 'Our team delivered solid performance across all segments, reflecting the strength of our client relationships and our ability to navigate a dynamic environment,' he said in a statement.
RBC also set aside $600 million for credit losses, slightly higher than the $580 million provision in the same quarter last year, reflecting cautiousness amid economic uncertainty.
The bank's shares rose 1.2% in early trading on the Toronto Stock Exchange following the announcement.
