Profits down for the Royal and Bank of Montreal

Profits en baisse pour la Royale et la Banque de Montréal

Photo: Doug Ives, The canadian Press
The net income of Royal Bank for the quarter ended April 30, decreased to 1.48 billion, compared to that of 3.23 billion posted a year ago.

A massive increase in provisions for bad debts, due to the pandemic of COVID-19, has forced the Royal Bank to register a decline of 54 % of its earnings in the second quarter.

The financial institution has increased its provisions for losses on loans of $ 2.4 billion in its divisions of personal and commercial banking, capital markets and wealth management.

“We have acted quickly to support our customers, particularly in granting relief for payment to more than 490 000 of them so that they can redirect their money where they needed it the most,” said Wednesday the chief executive of the Royal, Dave McKay, to analysts during a conference call. But Mr. McKay has assured analysts that the levels of capital of the Bank remained above the regulatory minimum, ” which gives us a strong foundation to face these risks head on.”

The net income of Royal Bank for the quarter ended April 30, decreased to 1.48 billion, compared to that of 3.23 billion posted a year ago. This decrease was primarily attributable to the provisions of 2.83 billion for credit losses, an increase compared to 426 million in the same quarter last year.

The net earnings per share of the Royal is $ 1, down compared to $ 2.20 last year. The profit adjusted for its share reached $ 1.03 per share, down compared to that of 2.23 cents per share posted a year earlier. Analysts expected, on average, adjusted earnings of $ 1.59 per share for the quarter, according to forecasts compiled by the firm of financial data Refinitiv.

 

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The Bank of Montreal

The Bank of Montreal posted a profit of 689 million in the second quarter, down compared to $ 1.5 billion in the same period last year, because it has also increased its provisions for loan losses due to the pandemic.

The Bank said that its reserves amounted to $ 1.11 billion for the most recent quarter, compared with 176 million in the same quarter last year.

However, the Bank of Montreal posted a profit of $ 1 per share for the quarter ended 30 April, compared with a profit of 2.26 cents per share, a year earlier. On an adjusted basis, the Bank of Montreal reported earnings per share $ 1.04 for the quarter, compared to adjusted earnings of 2.30 $ a year ago. Analysts expected, on average, adjusted earnings of $ 1.22 per share for the quarter, according to forecasts compiled by the firm of financial data Refinitiv.

The chief executive officer of the Bank, Darryl White, has estimated that the scale of the pandemic remains uncertain, but that the Bank is well placed to meet the challenges. “In the second quarter, we demonstrated the resilience of our earnings power despite the volatility of the markets and a provisioning prudent loan losses,” said Mr. White in a press release.

“As we enter the re-opening of our economies, we will adapt our activities and ensure their sustainability in order to support our customers, our employees, the communities and the economic recovery as a whole, and we will come out collectively from this crisis even stronger. “

The activities of personal and commercial banking in Canada have generated 361 million for the quarter, down from $ 616 million a year ago, due to the higher provisions for losses on loans, while the increase in revenues was partially offset by higher expenses.

In the United States, the banking operations in personal and business the Bank reported $ 339 million, against 406 million in the same quarter a year ago.

The division of wealth management the Bank has earned $ 144 million, compared to 305 million a year ago, while its activities on the financial markets have lost 74 million, compared to a profit of $ 250 million in the same quarter last year. The results of the group of business services of the Bank remained relatively unchanged with a loss of $ 81 million, compared to a loss of 80 million a year ago.

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