Royal Bank of Canada: Credit Normalization Looks Manageable

Nov. 30, 2022 12:42 PM ETRoyal Bank of Canada (RY), RY:CAHSBC1 Comment
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Junius
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Summary

  • Royal Bank of Canada defied market expectations to deliver higher EPS in Q4 2022 - C$2.74 vs C$2.68 a year ago.
  • Weaker investment banking revenues were offset by wider net interest margins and resilient loan growth.
  • Although credit normalization looks set to eat into RBC’s medium-term earnings, higher provisions will likely remain manageable on strong credit quality and revenue tailwinds.

RBC (Royal Bank of Canada) headquarters at Toronto’s financial district.

JHVEPhoto

Royal Bank of Canada (NYSE:RY, TSX:RY:CA) defied analysts’ predictions that economic headwinds would cause revenues to drop in its fourth quarter. Canada’s largest bank by market capitalization posted revenues of C$12.57 billion (~$9.30 billion), representing an

rbc royal bank of canada 2022 q4 net income by division

Royal Bank of Canada Q4 2022 Earnings Presentation

rbc Royal Bank of Canada loan growth

Royal Bank of Canada Q4 2022 Earnings Presentation

Royal Bank of Canada rbc q4 2022 allowance for loan losses pcl

Royal Bank of Canada Q4 2022 Earnings Presentation

This article was written by

Junius profile picture
721 Followers
An anonymous contributor who would like to share some of his ideas. My choice for the pseudonym "Junius" has been inspired by an 18th century British political writer who wrote a series of letters promoting individual freedom and liberty, and whose identity has been a source of mystery ever since. I'm a top-down investor who prefers to examine longer-term themes and wider economic trends before reviewing the individual attributes of a given company. My focus is on value, but not ignoring opportunities that offer growth at a reasonable price. And in pursuit of the best investment candidates, my search often takes me beyond domestic markets.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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