The net income decline included the adverse impact of $29m or $21m after-tax that was reserved for certain regulatory and legal matters in the current quarter.
PBI is currently awaiting a response from the bank on what these matters were. However, it is understood that this relates to a refund of taxes paid to the Canada Revenue Agency.
Omitting this figure brings the wealth unit’s net income to $177m, down $15m or 8%. The bank said that lower transaction volumes reflecting continued investor uncertainty, were partially offset by higher average fee-based client assets.
It has not yet clear whether the arm’s purchase of the Latin American, Caribbean and African private banking business Coutts, Royal Bank of Scotland’s private banking division, had a direct impact on these figures.
RBC said that compared to last quarter, net income was down $56m or $35m excluding the aforementioned regulatory and legal issues. The bank said that this was largely due to the decrease in fair value of its U.S. stock-based compensation plan and lower transaction volumes.
Lower market activity and other unfavourable seasonal factors were also said to have contributed to the drop in numbers.
Source: Private Banker International