Royal Bank encouraged by COVID-19 vaccines

Royal Bank of Canada chief executive David McKay expressed optimism in the economic recovery from COVID-19 on Wednesday, amid a hot housing market and a quarter of record earnings from capital markets.

“As we approach a year into the global pandemic, we are encouraged by both the number and efficacy of vaccines,” McKay told analysts on a conference call on Wednesday. “This — in addition to significant pent up demand, rising prospects of further stimulus programs, expectations of a gradual easing of lockdown measures and pledges of continued low interest rates — to support the sustained economic recovery.”

Executives also pointed to mortgages and the stock markets as factors that boosted the bank’s outlook and profit.

RBC is one of four big Canadian banks so far to report betterthan-expected profit growth for the quarter ended Jan. 31 compared with the same period a year ago, before the COVID-19 virus spread was declared a pandemic.

Overall, RBC says it earned net income of $3.85 billion or $2.66 per diluted share for the quarter ended Jan. 31, up from $3.51 billion or $2.40 per diluted share a year earlier. Revenue totalled $12.94 billion, up from $12.84 billion.

On an adjusted basis, RBC says it earned $2.69 per diluted share, up from $2.44 per diluted share a year ago.

Analysts on average had expected an adjusted profit of $2.27 per share, according to financial data firm Refinitiv. Barclays analyst John Aiken said the bank had “strong growth in domestic lending and very impressive results in wealth management.”