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Royal Bank of Canada posts record-quarter profit as tariffs loom
RBC reported net income of $6.0 billion in fiscal third quarter, while management warned new Section 338 tariffs on Canadian exports could reduce Canadian GDP by about 40 basis points.
Royal Bank of Canada delivered record results in its fiscal third quarter ended August 27, posting net income of $6.0 billion, up 11% year over year, alongside adjusted diluted earnings per share of $4.28, also up 11%. Total revenue rose 9% to $18.538 billion, with strength spread across multiple business lines, according to Yahoo Finance.
Wealth Management net income jumped 32% to $1.4 billion, helped by growth in fee-based client assets, with Canadian Wealth Management assets under administration up 20% year over year and the US wealth business up 14%. Capital Markets net income increased 16% to $1.5 billion on record corporate and investment banking revenue, as investment banking revenue rose 23% and equity financing volumes grew 40% from a year earlier.
Commercial Banking contributed record net income of $936 million, up 12%, supported by 9% deposit growth and 4% loan growth. RBC returned $4.0 billion to shareholders in the quarter, split between $1.6 billion in buybacks and $2.4 billion in dividends, with return on equity rising to 17.9%.
Even as the company highlighted longer-term plans, including accelerating execution around AI ambitions toward $700 million to $1 billion in enterprise value by the end of fiscal 2027, management flagged tariff and credit risks. RBC warned that newly implemented Section 338 tariffs on Canadian exports could shave about 40 basis points off Canadian GDP, provisions for credit losses rose to $1.0 billion, and gross impaired loans increased $353 million sequentially, concentrated in real estate and utility exposures.