Royal Bank of Canada raises dividend on release of reserves

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Royal Bank of Canada raises dividend on release of reserves

TORONTO, December 1, Reuters said that the Royal Bank of Canada would raise its dividend by 11%, with an increase of 19% from a year earlier, which was largely driven by the release of reserves set aside to cover bad loans.

The country's biggest lender increased its quarterly dividend to C $1.20 a share, up from the C $1.08 it has paid the last six quarters. It said it would repurchase up to 45 million common shares, representing about 3.16% of its outstanding shares.

Royal Bank reported an adjusted profit of C $2.71 a share, compared to C $2.27 a year ago. Analysts had expected C $2.81.

The release of about C $227 million of reserves led to a lot of improvement. Royal Bank's earnings rose 4% from a year ago to C $4.76 billion, despite the impact of provisions and taxes.

Retail banking saw 9% loan growth but more than doubled from a year ago, but other loans outside of mortgages were pulled back.