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Taylor Swift concert sponsorship helps RBC add 600K clients in Q4, CEO says
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Money


TAYLOR SWIFT CONCERT SPONSORSHIP HELPS RBC ADD 600K CLIENTS IN Q4, CEO SAYS

By Nivedita Balu and Arasu Kannagi Basil Reuters
Posted December 4, 2024 3:45 pm
2 min read

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2:12 Business Matters: Royal Bank of Canada reports $4.22-billion Q4 profit,
raises quarterly dividend
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Royal Bank of Canada raised its dividend as it reported a fourth-quarter profit
of $4.22 billion, up from $3.94 billion in the same quarter last year. The bank
said Wednesday it will now pay a quarterly dividend of $1.48 per share, up from
$1.42 per share. Anne Gaviola has this story and more in Business Matters for
Dec. 4, 2024.
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Royal Bank of Canada, the country’s biggest bank, beat quarterly profit
expectations, helped by its acquisition of HSBC’s domestic business and strength
at its wealth management arm, sending shares to a record high on Wednesday.

CEO Dave McKay told analysts the bank added over 600,000 clients to its Canadian
banking business, also helped by its sponsorship of singer Taylor Swift’s
Toronto and Vancouver tour. RBC saw higher client interest in the U.S., a key
market for its wealth management business.

4:40 BC Place prepares for a Swiftie invasion, what ticket holders need to know

National Bank, the smallest of Canada’s six large banks – which together control
over 90 per cent of the domestic market – also reported earnings above
estimates, helped by a rise in income at its wealth management arm.

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The wealth management business has been a big focus for Canadian banks as more
high-net-worth clients and others are increasingly opting for services and
advice to secure their financial futures.


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RBC’s wealth management division, which includes U.S. subsidiary City National,
reported a threefold rise in income to C$969 million ($689 million) and recorded
a recovery in loan loss provisions of C$25 million, largely helped by higher
fees.

The $10 billion acquisition of HSBC’s Canadian operation helped RBC increase
earnings by C$86 million, adding about 780,000 clients to its retail and
commercial business and expanding its mortgage and corporate loan books.

“HSBC is a big part of the overall theme,” McKay said.

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Jefferies analyst John Aiken noted that RBC’s “bigger than anticipated”
quarterly dividend increase of 4% to C$1.48 per share signaled its confidence in
the integration of HSBC Canada.

 

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McKay however had a cautious tone on the future, noting rising unemployment in
Canada, more constrained immigration policy and the threat of U.S. tariffs.

“You heard maybe a bit of a cautious outlook, it is just a macro call. It’s hard
to make a macro call right now with so many variables, but we’re cautiously
optimistic,” he told analysts.

“We haven’t changed our forecast… We said whatever it is, we will adjust to that
and that will play out as it does.”

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Jefferies’ Aiken said the outlook for contributions from HSBC and City National,
along with a rebound in capital markets bodes well for earnings growth next
year.

Provision for credit losses came in at C$840 million in the three months ended
Oct. 31, compared with C$720 million a year ago. Analysts had forecast C$831.7
million, according to LSEG data.

The bank’s adjusted net income rose 17.7% to C$4.44 billion. On a per share
basis, RBC earned C$3.07, 6 Canadian cents higher than the analysts’ average
estimate.

National Bank reported adjusted earnings of C$2.58 per share, a cent more than
expectations. Analysts said it was a “lower quality result” as its personal
banking unit struggled.

Its shares were down 3.5%.

RBC’s shares rose as much as 2.4% to hit a record of C$179.86.

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