WRAPUP 1-Royal Bank of Canada profit misses estimates on weak equity trading

() – Royal Bank of Canada (RY.TO) missed estimates for quarterly profit on Wednesday, on declines across several segments, while smaller rival National Bank of Canada (NA.TO) prevailed over the industry’s challenges to post better-than-expected growth. The Royal Bank of Canada (RBC) logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. /Chris WattieCanadian banks are facing global economic uncertainty, leading to sluggish capital markets, rising provisions for bad loans and pressure on margins in the United States. But that has been offset somewhat by commercial loan growth at home and strong wealth management expansion. Royal Bank, Canada’s biggest lender by market value, said adjusted income fell to C$2.22 per share in the fourth quarter, from C$2.24, a year earlier. Analysts had expected C$2.28, according to IBES data from Refinitiv. The decline was driven in part by a 12% drop at RBC’s capital markets unit, as lower investment banking fees weighed on profits. National Bank said adjusted earnings rose to C$1.69 a share, from C$1.52 a year earlier, surpassing expectations of C$1.62 a share, driven in part by an industry-beating increase in profit from its capital markets business and lower-than-expected loan losses. While both banks also posted increases in provisions, Royal Bank’s 41% jump was bigger than expected and surpassed National Bank’s 22% rise, which was lower than estimates. Select international markets are also helping boost results. National Bank’s U.S. specialty finance and international unit posted growth of 42%, driven by its ABA Bank in Cambodia. The results follow Bank of Montreal (BMO.TO), which reported a drop in profit on Tuesday resulting from costs related to a 5% reduction to its workforce as part of its push to trim expenses. Bank of Nova Scotia posted disappointing profit growth in its Latin America-focused international division. Net income at RBC’s personal and commercial banking division rose 5% from a year earlier, and wealth management earnings grew 32%, due in part to the sale of a business. Insurance, investor and treasury services and capital markets all posted double-digit declines. National Bank’s retail banking division’s earnings also grew 5%, wealth management expanded 10%, and capital markets expanded 7%. Reporting by Nichola Saminather in Toronto; Additional reporting by Abhishek Manikandan and C Nivedita in Bengaluru; Editing by Krishna Eluri and Steve OrlofskyOur Standards:The Thomson Trust Principles.