For the third quarter, RBC Wealth Management reported net income of $156 million, its lowest since the second quarter of 2010.
While the overall firm experienced record growth, the wealth management division was bogged down by "regulatory and legal matters" and lower revenues "largely due to lower transaction volumes reflecting continued investor uncertainty partially offset by higher average fee-based client assets," RBC reported.
"This reflects both challenging market conditions in terms of lower transaction volumes in the equity markets despite solid growth in AUA and AUM, and investments we are making for the long-term that position us well for increased client activity," George Lewis, global head of Wealth Management at RBC, said in an email. "We continue to extend our number one position in Canada in both wealth and asset management and are investing to strengthen our competitive position outside of our domestic market as a leading global wealth and asset manager."
RBC Wealth Management stumbled over a couple regulatory hurdles during the second quarter which cost the firm an estimated $21 million after tax.
Net revenues across their Canadian and international wealth management divisions fell as well, sinking $52 million to $1,167 billion. Transaction-based revenue alone dropped $62 million.
Some fee-based growth helped to counter those losses. As assets under management grew 1% from $322 billion to $324 billion in the third quarter and revenue from fees on those assets rose $10 million to $742 million over that same time frame.
Across the entire firm, net income rose $2,240 million, up 73% from $946 million at the same time last year.