Topic: How To Invest

The Successful Investor Hotline – Friday, March 1, 2024

Article Excerpt

ROYAL BANK OF CANADA, $131.94, Toronto symbol RY, is a buy. Due to concerns over rising interest rates and inflation, Canada’s largest bank by market cap continues to set aside more funds to cover potential loan losses. In its fiscal 2024 first quarter, ended January 31, 2024, loan-loss provisions jumped 52.8%, to $813 million from $532 million a year earlier. That’s mainly why Royal’s earnings before unusual items in the quarter fell 5.0%, to $4.01 billion from $4.22 billion. Due to more shares outstanding, earnings per share declined at a faster rate of 6.3%, to $2.85 from $3.04. Even so, that beat the consensus estimate of $2.80. Earnings from Royal’s retail banking division (51% of the total) fell 3.1%, mainly due to the higher loan-loss provisions. Earnings at the capital markets business (29%) also declined 7.0% on lower trading volumes. As well, the wealth management division (15%) reported 27.0% lower earnings due to a $159 million fine paid to U.S. banking regulators and higher employee…