(Bloomberg) -- RBC said earnings climbed 17% to a record on domestic lending and investment banking, surpassing analysts' estimates. However, the firm's wealth management division stumbled.
Wealth-management profits fell 2.1% to C$230 million, after recording C$27 million in restructuring costs for its U.S. and international operations, while insurance earnings rose 18% to C$185 million.
RBC said in November it's exiting Caribbean wealth management, closing some international advisory and private-banking groups in Canada and the U.S., and reviewing its Swiss operations. Investor and treasury services, which includes RBC's global custodial business, gained 34% to a record C$142 million.
RBC's net income for the fiscal first quarter ended Jan. 31 rose to C$2.46 billion ($1.97 billion), or C$1.65 a share, from C$2.09 billion, or C$1.38, a year earlier, the Toronto-based bank said Wednesday in a statement. Adjusted profit, which excludes some items, was C$1.67 a share, beating the C$1.58 average estimate of 14 analysts surveyed by Bloomberg.
"Royal posted exceptionally strong results today, which should be well rewarded," John Aiken, an analyst with Barclays, said in a note to clients. "It is hard to argue that there was any surprising weakness in the underlying results."
The company raised its dividend 2.7% to 77 cents a share. RBC posted record profit in personal and commercial banking, and had higher earnings from its investment banking and insurance businesses. Restructuring costs hampered earnings in wealth management, a business RBC is expanding with a $5.4 billion agreement last month to buy Los Angeles-based City National.
RBC shares have fallen 6.5% this year, more than the 5.3% decline by the eight-company Standard & Poor's/TSX Banks Index.
"We are confident that our diversified business model, with our strong risk and cost management capabilities, positions us well to navigate macroeconomic headwinds in Canada," Chief Executive Officer David McKay, 51, said in the statement.
Revenue rose 14% to C$9.64 billion from a year earlier, RBC said. The lender set aside C$270 million for bad loans, down from C$292 million a year earlier.
Personal and commercial banking profit rose 17% to C$1.26 billion, with Canadian lending increasing 7%. Banking operations in the U.S. and Caribbean, which underwent a reorganization in the past two years, added C$35 million of profit, the company said.
Capital markets earnings surged 18% to C$594 million on higher trading revenue and investment-banking fees from advising on takeovers. Underwriting and advisory fees rose 11% to C$445 million, while total trading revenue jumped 19% to C$880 million, led by equities.
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