Topic: How To Invest

The Successful Investor Hotline – Friday, May 26, 2023

Article Excerpt

ROYAL BANK OF CANADA, $123.08, Toronto symbol RY, is a buy. Canada’s largest bank by market capitalization earned $3.69 billion before unusual items in its fiscal 2023 second quarter, ended April 30, 2023. That’s down 12.7% from $4.23 billion a year earlier. Due to fewer shares outstanding, per-share earnings declined at a slower rate of 11.4%, to $2.65 from $2.99. That missed the $2.79 consensus estimate. The lower earnings are mainly because the bank set aside $600 million to cover future loan losses, compared to a net credit of $342 million a year earlier. Earnings from Royal’s retail banking division (51% of the total) fell 14.3% due to the higher loan-loss provisions. Higher employee salaries and investments in its digital platforms also offset the benefit of higher interest rates. As well, earnings from wealth management (20%) declined 8.3%, partly because the year-earlier quarter included a gain on the sale of a business. The Insurance division (4%) also reported 32.5% lower earnings due to a..