RBC Q121 posts net income of C$3.85bn ($3.07bn), up 10% year-on-year for the three months to end January.

The RBC Q121 earnings beat analyst forecasts and benefit from strong volume growth and increased client activity. This is partially offset by the impact of low interest rates and higher expenses.

Specifically, the RBC Q121 numbers represent record earnings in Capital Markets.  In addition, RBC posts positive earnings growth in Personal & Commercial Banking, Wealth Management and Insurance. Results this quarter also reflect lower provisions for credit losses, with a PCL on loans ratio of 7 basis points. This largely results from releases of provisions on performing loans. Lower provisions on impaired loans also contribute to the decrease.

RBC Q121 highlights

The bank posts Personal & Commercial unit net income of C$1.79bn, up 6% year-on-year. This is primarily attributable to continued strong average volume growth of 12% (+19% in deposits and +6% in loans) in Canadian Banking and lower PCL.

Wealth management net income rises by 4% y-o-y to C$649m. This is primarily due to average loan growth and higher average fee-based client assets. And it reflects market appreciation and net sales, net of the associated variable compensation. Higher performance fees driven by strong fund performance and lower PCL also contribute to the increase. These factors were partially offset by lower interest rates on loans and sweep deposits, as well as higher staff-related costs.

RBC’s Capital Markets unit reports record quarterly net income of C$1.07bn, up 21% y-o-y. This is mainly due to higher revenue, largely driven by higher equity trading primarily in the US. And it reflects increased client activity, partially offset by lower, albeit strong M&A revenue.

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First quarter digital highlights

RBC digital usage continues to grow with 90-day active mobile users up by 12% y-o-y to 5.2 million. Mobile sessions rise by 40% from a year ago to over 100 million for the first time. Total active digital users rise by 5% y-o-y to 7.75 million. Meantime, digital adoption rises to 56.0% with self-serve transactions ahead by 500 basis points from a year ago to 93.8%.

RBC ends the first quarter with a branch network of 1,200 outlets from 1,206 a year ago.

“We entered 2021 with strong momentum across our businesses,” says Dave McKay, RBC President and CEO. “This is a reflection of the resiliency of our diversified business model, prudent approach to risk management, significant technology investments, and our colleagues’ dedication to our clients and communities. As global economies pivot to recovery, our scale, robust capital and liquidity position, and data and technology capabilities provide us with the foundation to continue prudently investing for long-term growth and delivering sustainable value for our clients, shareholders and communities.”