Despite a 14 % increase in profits, Royal Bank Of Canada missed second quarter earnings estimates, due mainly to a lag in trading revenue in the U.S., Bloomberg reports. Profit form the U.S. rose 8 %, outpacing growth in Canada. However, expenses increased 18% due mainly to the acquisition of AmSouth Bancorp and Flag Financial Corp., in addition to the opening of new branches stateside. In the past year, the bank has opened 70 new commercial branches in the U.S. and upped its workforce by 2,267. In the investment banking division, profits fell 15% to $350 million Canadian, due mainly to a 7.2 % drop in fixed income trading revenue. Earnings at the wealth management group, on the other hand, rose 22%, propelled mainly by a 25 % surge in mutual fund sales. In this respect, RBC beat analyst expectations. “The mutual fund business has been going fantastically,” Dundee Securities analyst John Aiken said. RBC and Toronto Dominion dominate fund sales in Canada, where the industry had its greatest growth in nine years. For the period ending April 30, net income rose to $1.28 billion Canadian, or 98 cents Canadian per share, compared to $1.12 billion Canadian, or 85 cents per share. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
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