Royal Bank says its fourth-quarter profit slipped nine per cent to $1.12 billion as it booked losses related to the sale of its Liberty Life insurance division in the United States.
Canada’s biggest bank said the results were equal to 74 cents per share, down from $1.24 billion, or 82 cents a share, in the same quarter last year.
Cash earnings per share was 84 cents, which was below analyst expectations of $1 per share, according to those surveyed by Thomson Reuters.
During the period Royal booked a $116-million loss on the previously announced sale of Liberty Life Insurance Co. A year earlier, the quarterly results included a $1-billion charge to reflect the reduced value of intangible assets.
Excluding the special items in both years, Royal’s fourth-quarter earnings rose $481 million, or 10 per cent, driven by record earnings in Canadian banking and solid growth in wealth management and insurance.
Revenue was $7.2 billion, down from about $7.5 billion at the same time last year.
“RBC once again demonstrated the power of our diversified business model, delivering strong earnings of $5.2 billion in a year characterized by economic, regulatory and market uncertainty,” said president and CEO Gordon Nixon.
During the quarter, a strengthening of the Canadian dollar had a significant impact on the results, reducing revenue by $1.18 billion, net income by $150 million and diluted share price by 10 cents, it said.
Royal Bank is the country’s largest bank by assets and market capitalization, and has 77,000 employees serving more than 18 million clients. The bank has operations across Canada, the United States and 52 other countries.
In October, the Royal Bank announced an agreement to sell Liberty Life to Bermuda-based reinsurer Athene Holding Ltd. for US$628.1 million, saying it’s concerned the division cannot properly compete at its current size.
For the year, the bank reported net income of $5.2 billion, an increase of 35 per cent from a year ago. Revenue was down to $28.3 billion from $29.1 billion.
Source : The Star