Royal Bank of Canada’s (RBC) wealth management
division reported a $36m year-on-year drop in net income to $156m
($157m) in the bank’s third quarter results.
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.
Lower transaction values
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.
Decline due to decrease in
transactions
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.
