Royal Bank Of Canada: 35% Upside, 4.5% Yield, And $1 Trillion In Assets
Williams Equity Research • 39 Comments
Williams Equity Research • 39 Comments
Royal Bank Of Canada: New CEO, Old Strategy
Dec. 1, 2015, 5:30 PM
Dec. 1, 2015, 1:12 PM
- The Canadian banking sector is mostly known for being roughed up this year thanks to concerns over a bubbly housing market and the crash in natural resources prices, but it's enjoyed a decent bounce since late August.
- The move continues today following FQ4 results from Scotiabank and Bank of Montreal. After adjusting for some items, Scotiabank missed estimates, says Barclays' John Aiken, and he also questions the quality of BMO's beat, noting gains tied to an asset sale and recovery from a legal settlement.
- Bank of Montreal also tossed in a dividend hike and new buyback plan.
- BMO is higher by 1.5% on the session, and BNS by 0.1%. Reporting later this week: TD Bank (TD +1.2%), Royal Bank (RY +1.2%), and CIBC (CM +1.1%).
- Previously: BMO adds buyback to dividend hike and earnings beat (Dec. 1)
- Previously: Bank of Nova Scotia beats by C$0.03, misses on revenue (Dec. 1)
Nov. 2, 2015, 7:48 AM
- The bank previously had an internal limit of C$1.25M on loans to borrowers with no in-country credit history, making things difficult in Vancouver, where the median price for a single-family home in the city's desirable west side is C$2.87M - up 31% over the last two years.
- This high-end mortgage market currently is the domain of HSBC Canada, CIBC (NYSE:CM) and Bank of Montreal (NYSE:BMO). RBC (NYSE:RY) has just an 8% market share.
- The move may help put to rest the myth of Chinese buyers showing up in the country with suitcases full of cash with which to buy property. It turns out they use credit as well.
Oct. 27, 2015, 3:03 PM
- Worried about the effect of the energy crash on Canadian lenders, the market is ignoring structural improvements in revenue and loan mix, balance sheet improvements, and profitability, says analyst Kevin Choquette.
- Share prices are lower by about 5% this year even though earnings are up 6% and dividends by 8%. Toss in price-to-book values at their lowest level since during the financial crisis.
- It's a great opportunity to buy, says Choquette, reiterating Outperform ratings on Royal Bank of Canada (RY -0.4%) and Bank of Montreal (BMO -0.8%), and upgrading National Bank of Canada (OTCPK:NTIOF -0.3%) to Outperform.
Aug. 26, 2015, 7:58 AM
Aug. 26, 2015, 7:31 AM
- Royal Bank of Canada (NYSE:RY): FQ3 EPS of C$1.66 in-line.
- Revenue of C$8.83B (-1.7% Y/Y) beats by C$680M.
Aug. 25, 2015, 5:30 PM
Jul. 14, 2015, 8:24 AM
- RBS Suisse SA has been under strategic review since late last year, and earlier this year JPMorgan was hired to run the sale. The buyer is Geneva-based SYZ Group.
- Terms were not disclosed.
- The sale “fits with our stated long-term growth strategy to build a focused global wealth management business that serves high net worth and ultrahigh net worth clients in priority markets from our hubs in North America, the British Isles and Asia," says George Lewis, group head of RBC (NYSE:RY) Wealth Management and Insurance.
- RBC Suisse had about $10.6B in AUM as of the end of last October.
- Source: WSJ
Jul. 2, 2015, 1:59 PM
- Canadian equity financings of C$30.3B were a record, and up 40% from a year ago, according to Thompson Reuters, and Royal Bank of Canada (NYSE:RY) led the way on advisory roles, with Bank of Montreal (NYSE:BMO) and CIBC (NYSE:CM) rounding out the top three.
- The largest deal to-date was Element Financial's C$2B raise, followed by Valeant's C$1.9B.
Jun. 26, 2015, 11:03 AM
- Advisers Dodd Koeckert and Nicholas Anger recently exited Merrill Lynch (NYSE:BAC) - where they oversaw about $1.2B in client assets - for RBC Wealth Management (NYSE:RY). Koeckert was a three-decade veteran at Merrill and frequently made the list of Barron's top advisers.
- Earlier this week, Merrill lost two other advisers with $185M in AUM to RBC, and two others with $620M for Morgan Stanley.
- The company has been on both sides of the tally though, and last week brought on 20 advisers (most from Barclays) managing more than $1.8B.
- Source: WSJ
May 29, 2015, 2:25 PM
- The last of Canada's big six lenders to report FQ2 results, Bank of Nova Scotia (BNS +1.2%) beat estimates (as did the others), helped by strong action in capital markets. The bank also announced a 24M share buyback.
- “These results were on balance better than I would have expected a few weeks ago, however they’re not strong enough to really serve as much of a catalyst for the stocks,” says Edward Jones' Jim Shanahan. "The stocks are trading cheaper, but given a weaker loan growth outlook and weaker return profiles, that’s probably warranted.”
- RBC Capital is impressed enough with Scotiabank's results to upgrade to Outperform from Sector Perform.
- Checking the scorecard this week: BNS is up 1.2%, while CIBC (NYSE:CM) is down 1.8%, Royal Bank of Canada (NYSE:RY) is down 2.7%, Bank of Montreal (NYSE:BMO) down 3.9%, and TD Bank (NYSE:TD) 4.3%.
- YTD, Scotiabank also leads with just a marginal decline, while the other four lenders are down anywhere from about 8%-13%.
May 28, 2015, 6:59 AM
- Royal Bank of Canada (NYSE:RY) declares C$0.77/share quarterly dividend, in line with previous.
- Forward yield 3.84%
- Payable Aug. 24; for shareholders of record July 27; ex-div July 23.
May 28, 2015, 6:35 AM
- Royal Bank of Canada (NYSE:RY): Q2 EPS of C$1.61 beats by C$0.01.
- Revenue of C$8.83B (+6.8% Y/Y) beats by C$960M.
May 27, 2015, 5:30 PM
Apr. 22, 2015, 11:45 AM
- "After building a powerful U.K.-based platform, France and Germany have become the strategic frontier for RBC’s (NYSE:RY) development in Europe,” says Eric Meyer, head of France for RBC.
- Canada's largest lender by assets, Royal Bank of Canada ranks 10th globally in equity sales, and 13th in corporate bond sales. It's 22nd in M&A advice.
- Meyer: “We want to become a meaningful player in [France], among the 7 or 8 foreign banks that matter in Paris. RBC has a great balance sheet and the will to deploy it.”
Apr. 21, 2015, 1:19 PM
- Bank of Montreal (NYSE:BMO), CIBC (NYSE:CM), Scotiabank (NYSE:BNS), RBC (NYSE:RY), and TD Bank (NYSE:TD) all sold options to U.S. shale drillers looking to hedge against lower prices back when oil was above $90 per barrel. Now they're on the hook for at least $478M, according to Bloomberg.
- National Bank analyst Peter Routledge says it's a sizable liability, but given the heavy regulation of Canadian lenders, it's a pretty good bet they hedged their exposure. If you want to worry about Canadian banks as regards to oil. says Routledge, it's on the lending side, not the capital markets side.
- “We actively hedge and manage our exposures to fluctuations in commodity prices,” says BMO's Anthony DeMartino, head of commodity trading.
Royal Bank of Canada engages in the provision of diversified financial services. It operates through the following business segments: Personal and Commercial Banking, Wealth Management, Investor and Treasury Services, Capital Markets, and Insurance. The Personal and Commercial Banking business... More
Industry: Money Center Banks
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