Royal Bank of Canada (RBC) Wealth Management reported a CAD$48m (US$48.3) drop in its net income for the year to 31 October 2012 on a year-on-year basis from $811m in 2011, to $763m in 2012.
On a quarterly basis, the wealth management division posted net income of CAD$207m in its fourth quarter, up 33% from CAD$156m in the third quarter and up 16% (CAD$28m) on the same quarter last year.
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The bank said the increase was mainly due to higher average fee-based client assets and higher transaction volumes.
Total revenue up 10%
Total revenue at RBC wealth unit’s increased CAD$110m or 10% to CAD$1.3bn on a year-on-year basis, and up CAD$94m or 8% on a quarterly basis.
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By GlobalDataThe bank said the increase was mainly due to higher average fee-based client assets reflecting capital appreciation and net sales and higher transaction volumes reflecting improved market conditions.
All the businesses that make up RBC wealth management division recorded rises in the past three months.
From November 2011 to November 2012, the wealth management division included a favourable accounting adjustment related to a deferred compensation plan of $27 million ($16 million after-tax), with q3 including an unfavourable impact of $29 million ($21 million
after-tax) related to certain regulatory and legal matters.
RBC wealth management confirmed the unfavourable impact refers to regulatory issues that have been resolved as well as other legal matters that they did not comment on.
All units posted revenue rises
Wealth Management Canada has also seen a growth of around 200bps in its HNW market share, or 18% in the last two years, the banks said. RBC reported it’s Canadian unit was generating around 35% of RBC Wealth Management earnings.
Revenues in the Canadian unit increased 10% to CAD$463m.
In its US and international wealth management unit, revenues increased 7% to CAD$509m.
Global asset management revenues also rose 7% on a quarterly basis from $271m to $289m in its fourth quarter.
Total assets under management stood at $339.6bn as at 31 October.
