Royal Bank of Canada Q3 Profit Soars 34% YoY: Buy Alert for RY stock?

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 Royal Bank of Canada Q3 Profit Soars 34% YoY: Buy Alert for RY stock?
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Highlights

  • The Royal Bank of Canada (TSX:RY) published its Q3 FY21 financial results in the early hours of Wednesday, August 24.
  • Ahead of it, on Tuesday, Royal Bank’s stocks noted an increase of about one per cent, settling at C$ 132.05.
  • The Royal Bank of Canada saw its net income propel by 34 per cent year-over-year (YoY).

The Royal Bank of Canada (TSX:RY), known to be the largest bank in the nation in terms of market cap, published its Q3 FY21 financial results in the early hours of Wednesday, August 25.

Ahead of it, on Tuesday, Royal Bank’s stocks noted an increase of about one per cent, settling at C$ 132.05.

Let’s take a look at top lender’s latest quarterly report.

Also read: BNS stocks rise as Scotiabank posts $2.5B Q3 profit. Time to buy?

Royal Bank of Canada (TSX:RY)

The Royal Bank of Canada saw its net income propel by 34 per cent year-over-year (YoY) to a total of C$ 4.3 billion in the third quarter of fiscal year 2021.

The big six lender’s provision for credit losses (PCL) stood at C$ 540 million in Q3 FY21.

Its PCL on impaired loans, on the other hand, dropped to C$ 146 million in the latest quarter, down by C$ 252 million YoY, primarily motored by lessened provisions in the bank’s personal and commercial segment.

Its diluted earnings per share (EPS) stood at C$ 2.97 in Q3 FY21, notably up by 35 per cent YoY.

Like Bank of Montreal and Bank of Nova Scotia, the Royal Bank of Canada too has decided to leave its quarterly dividends unchanged at C$ 1.08 a share. It currently holds a dividend yield of 3.27 per cent.

RBC reported a return on equity (ROE) of 19.6 per cent in the latest quarter, which was up by 390 bps. It also noted a return on assets (ROA) of 0.91 per cent and a debt-to-equity (D/E) ratio of 2.71.

Also read: BMO Q3 profit soars by 85%, but still no dividend hike! Buy or not?

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Now, let’s look at how Royal Bank’s stocks are performing.

Royal Bank of Canada stock performance

Stocks of Royal Bank of Canada have soared by nearly seven per cent in the last quarter, and recorded a year-to-date (YTD) growth of over 26 per cent.  

The bluechip stock has also expanded by about 33 per cent in the past one year.

RY stock noted a 52-week high of C$ 132.35 on August 23, ahead of its Q3 FY21 results release. It is currently almost 46 per cent above its 52-week low of C$ 90.75 (October 29, 2020).

Bottomline

The Royal Bank of Canada pointed in its earnings report that lowered provisions helped boost its income from the personal and commercial unit as well as the capital markets and wealth management segments.

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