Topic: How To Invest

The Successful Investor Hotline – Friday, August 25, 2023

Article Excerpt

ROYAL BANK OF CANADA, $121.02, Toronto symbol RY, is a buy. The bank continues to benefit from higher interest income on its loans due to higher interest rates. As well, it cut the number of full-time employees by 1% in the latest quarter, and it plans to further reduce headcount by 1% to 2% in the current quarter. In its 2023 third quarter, ended July 31, 2023, Royal’s earnings before unusual items rose 11.4%, to $2.84 a share (or a total of $3.96 billion) from $2.55 a share (or $3.56 billion) a year earlier. That topped the consensus estimate of $2.71 a share. Due to rising interest rates and the possibility of higher loan defaults, Royal set aside $616 million to cover future loan losses, up 81.2% from $340 million a year earlier. Earnings from Royal’s retail banking (54% of the total) rose 5.5% due to higher interest rates. As well, earnings at Royal’s capital markets business (23%) jumped 56.6% due to a lower tax…