Its C$498-million writedown (C$263-million after tax and compensation adjustments) was in the middle of most analyst expectations, according to Blackmont Capital’s Brad Smith. This was linked to MBIA hedges, CDOs and subprime securities.
Meanwhile, Royal’s earnings from personal and commercial banking rose 19% year-over-year, which is well ahead of its “more challenged peers,” Mr. Smith told clients.
Overall, we believe Royal had a good quarter as it continues to position itself well in the face of weaker global competition.
He reiterated a “buy” recommendation and C$55 price target on the stock.