The Royal Bank of Canada (RBC) has reported a net income of $4.3bn for Q3 2021, up $1.1bn or 34% from the same period last year.

Diluted earnings per share (EPS) was $2.97, up 35% on last year’s Q3 results. The Q3 2021 results for RBC included releases of provisions on performing loans of $638m, mainly driven by improvements in credit quality and macroeconomic outlook as compared to provisions of $280m taken in the prior year due to the evolving impact of the COVID-19 pandemic.

Compared to last quarter, net income was up $281m, with higher results in personal and commercial banking, capital markets, wealth management, and insurance, which the RBC attributed to the favourable impact of lower provisions. However, these gains were partially offset by lower earnings in investor and treasury services.

Pre-provision, pre-tax earnings were up 6% from a year ago, which the RBC says is connected to strong client-driven growth in volumes and fee-based assets, constructive markets, record investment banking revenue and well-controlled discretionary expenses.

The firm’s wealth management arm, RBC Wealth Management, reported a net income of $738m, up 31% from a year ago. This increase was attributed to to higher average fee-based client assets that reflected market appreciation and net sales. Average volume growth and lower PCL were also cited as factors that contributed to the increase.

There was also a 7%, increase in net income compared to last quarter, mainly due to higher average fee-based client assets reflecting market appreciation and net sales, and average volume growth. These factors were partially offset by higher variable compensation and lower transactional revenue that was  mainly driven by client activity, and lower spreads.

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By GlobalData

Graeme Hepworth, chief risk officer for RBC, said he was “pleased” with the positive trends in this quarter’s results.

Hepworth continued: “We have seen pandemic-related government restrictions easing and significant progress on vaccine distribution, which has contributed to the strong credit performance this quarter. While pandemic-related uncertainty has declined, translating into a larger release of reserves on performing loans this quarter, uncertainty does remain elevated due to a rise in cases of the COVID-19 Delta variant. This could impact the timing and pace of the economic recovery. We do however remain adequately provisioned for an expected increase in delinquencies and impairments in 2022 that we believe will result in 2022 PCL on impaired loans trending above our long-term average.”

Earlier this year, RBC made GlobalData’s list of the top ten financial advisers in North America, holding the top spot in Canada by volume.