Topic: How To Invest

The Successful Investor Hotline – Friday, May 27, 2022

Article Excerpt

ROYAL BANK OF CANADA, $130.95, Toronto symbol RY, is a buy. In its fiscal 2022 second quarter, ended April 30, 2022, Royal took back $342 million of the funds it had earlier set aside to cover potential bad loans. That’s due to improving credit quality as the COVID-19 pandemic eases. A year earlier, the provision for loan losses was a net credit of $96 million. As a result, Royal’s earnings rose 5.9%, to $4.25 billion from $4.01 billion. Per-share earnings gained 7.2%, to $2.96 from $2.76, on fewer shares outstanding. If you factor out unusual items, the bank earned $2.99 a share in the quarter. That easily beat the consensus estimate of $2.71. Earnings from Royal’s retail banking division (55% of the total) rose 17.1% on higher loan volumes and mutual fund fees. Earnings from wealth management (18%) also improved 9.8%, mainly due to higher assets under management. As well, Royal’s insurance business (5%) reported 10.2% higher profits thanks to better returns on its investment…