Canada's largest bank beat analysts' expectations after posting higher profits in each of its business segments except insurance when it reported its fourth-quarter earnings results on Wednesday.
The company's net income for the three months ended Oct. 31 was $5.4 billion, up 29 percent from the same period a year ago, resulting in net earnings per share of $3.76.
The company's adjusted net income (excluding the impact of one-time items) was $5.5 billion, up 25% year-over-year, resulting in adjusted earnings per share of $3.85, beating analysts' expectations of about $3.55 per share.
For the fiscal year ended Oct. 31, RBC's net income was $20.4 billion, up 25 percent from fiscal 2024. Adjusted net income was $20.9 billion, up 20 percent from last year.
As a result of the positive results, the bank increased its target return on equity to more than 17 percent from more than 16 percent. The company also increased its quarterly dividend by 10 cents to $1.64 per share.
“In 2025, we have strengthened our position as one of the most trusted and successful financial institutions in the world,” Chief Executive Dave Mackay said Wednesday. “Our relentless focus on the customer drives everything we do.”
RBC is the second of Canada's Big Six banks to release its fourth-quarter earnings after Bank of Nova Scotia did so on Tuesday, and the results help provide key insight into how the economy is faring.
For example, analysts closely monitor provisions for loan losses (PCL), which lenders set aside to address potentially bad loans, a key indicator for measuring the health of a bank's loan portfolio and the ability of households and businesses to repay their debts.
RBC's total PCL was about $1 billion, up 20 percent from a year ago and 14 percent higher than the third quarter due to higher provisions in its commercial banking, capital markets and personal banking segments.
The bank reported fourth-quarter net income of $1.88 billion in its personal banking segment, up 20 percent from a year ago. Its net income in its asset management and capital markets segments increased 33 percent and 45 percent, respectively, from a year ago, but its net income in insurance — $98 million — fell $64 million, or 40 percent.
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