TORONTO - Royal Bank of Canada (TSX:RY) is reporting a higher second-quarter net income of $2.2 billion, including record earnings in its wealth management segment.
That's up 15 per cent, or $292 million, from $1.9 billion in net income in the same quarter of 2013.
RBC earned $1.47 in reported diluted earnings per share, up 22 cents from $1.25 in diluted earnings per share in the same quarter last year.
Excluding certain items, Royal Bank had an adjusted net income of $1.94 billion, up 13 per cent, and earnings per share was up 20 cents from $1.27 year-over-year.
Cash diluted earnings per share were $1.49, beating estimates by five cents a share.
"These results demonstrate the earnings power of RBC, our prudent approach to risk management and our ability to manage costs effectively," CEO Gordon Nixon said in a news release on Thursday.
"We continue to extend our leadership positions in Canada and select global markets through our ongoing focus on our clients," Nixon said.
Royal Bank said its wealth management segment had record net income of $278 million, up $56 million or 25 per cent year-over-year.
But its insurance segment had lower net income of $154 million, down $10 million or six per cent year-over-year.
RBC had a return on common equity of 19.1 per cent in the quarter ended April 30, up from 18.7 per cent year-over-year.
Royal Bank and TD Bank (TSX:TD) were the first Canadian banks to report financial results for the quarter.
Toronto-Dominion Bank has reported a higher second-quarter net income of $1.98 billion, up from $1.71 billion in the same quarter of 2013.
Three other big banks are scheduled to issue results next week.
RBC's Capital Markets segment had net income was $507 million, up $124 million or 32 per cent compared to last year, largely due to strong trading results and growth in its U.S. loan book.
The bank's personal and commercial banking net income was $1.11 billion, up $76 million or 7 per cent compared to last year. The Canadian banking segment had net income of $1.11 billion, up $86 million or eight per cent, largely due to growth across most businesses and lower provisions for credit losses.
Barclays analyst John Aiken said RBC had solid start to the earnings season for the big banks.
"The beat against expectations largely came from provisions for credit losses that continue to defy expectations," Aiken said in a research note.
"We estimate that the better than anticipated credit added approximately $0.04 per share to earnings. While the market has typically shaken this off, it is hard to continue to deny the trend, despite our belief that credit will have to turn at some point," Aiken wrote.
Royal Bank is the country's largest bank by assets and market capitalization and has 79,000 employees serving more than 15 million clients. The bank has operations across North America and in 44 other countries.