Canadian Banks: Royal Bank Misses, National Bank Beats Estimates For Fiscal Q3 2022

Royal Bank of Canada (TSX: RY) missed earnings estimates while National Bank of Canada (TSX: NA) exceeded analysts’ expectations as two of the Big Six reported their financial results for their respective fiscal third quarters.

Both banks saw declines in their net income: Royal Bank posted a 17% decline year-on-year, ending with $3.58 billion in net income; National Bank posted a 1.5% decline year-on-year as it finishes the quarter with $826 million in net income.

Royal Bank ended with $2.55 earnings per share, missing the estimate of $2.66. On the other hand, National Bank saw $2.35 in earnings per share, exceeding the expected $2.34. The former attributes the annual income decline to a 58% drop in its capital markets earnings while the latter highlights the year-on-year increase is a result of the boost in its trading business.

The two banks also both took provisions for credit losses: Royal Bank is taking $340 million in PCLs to guard against potential loan impairments, coming from a recovery of $540 million last year. National Bank, however, took PCLs of $57 million, compared with a release of $43 million.

Royal Bank of Canada last traded at $126.49 while National Bank of Canada last traded at $92.33.

Information for this briefing was found via Reuters and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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