RBC profits slide as larger loan provisions weigh

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Royal Bank of Canada on Wednesday reported a modest decline in fourth-quarter earnings as higher provisions for potential defaults and weaker underwriting activity overshadowed gains from higher interest rates .

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Banks have had to rely heavily on their lending business which has been boosted by the central bank’s aggressive rate hikes this year, while shrinking transactions due to inflation and hawkish monetary policy have dampened the growth of their market-oriented units.

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Net income from personal and commercial banking at RBC, its largest lending and credit card business, rose 5%.

On Tuesday, the lender agreed to buy the Canadian operations of British bank HSBC for $13.5 billion, seeking to expand its presence in the domestic retail market.

Canada’s largest bank reported net profit of $3.88 billion for the three months ended Oct. 31, up from $3.89 billion a year earlier.

© Thomson Reuters 2022


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