* Q1 EPS C$1.97 vs forecast C$1.77
* Dividend up 5 percent to C$0.87
* CEO says focus in United States on organic growth
(Adds CEO comment from conference call)
TORONTO, Feb 24 Royal Bank of Canada on
Friday reported quarterly earnings of more than C$3 billion
($2.3 billion) for the first time, beating market forecasts, and
benefiting from a strong performance at all its businesses.
Canada's biggest bank said on Friday net income for the
first quarter to Jan. 31 rose by 24 percent to C$3.03 billion.
Earnings per share increased to C$1.97 from C$1.58 a year
earlier, exceeding analysts' forecasts of C$1.77, according to
Thomson Reuters I/B/E/S.
Shares in RBC, which has a substantial business in the
United States, have risen by nearly 20 percent since Donald
Trump's election as U.S. president in November.
The stock has benefited from expectations the new
administration will introduce softer banking regulations and a
lower corporate tax rate and that pro-growth policies will lead
to higher interest rates.
Chief Executive Dave McKay said that the bank's U.S.
strategy is focused on organic growth following its $5 billion
acquisition of Los Angeles-based City National in 2015.
"Our large focus in the United States right now is executing
organic growth within City National and organic growth within
the capital markets franchise. We continue to see opportunities
to deploy capital organically," he said on a conference call.
McKay added that rising valuations for U.S. banks following
Trump's election make it harder to do deals in the current
"You look at the prices of U.S. banks and the ability to
generate synergies and return on capital remains challenging at
best so we're obviously very conscious of shareholder return as
we look at tuck-in acquisitions for City National," he said.
Net income at the bank's personal and commercial business
rose by 23 percent to C$1.59 billion. The capital markets
division reported a 16 percent increase to C$662 million.
RBC also cheered investors with a 5 percent increase in its
quarterly dividend, to 87 Canadian cents per share.
Smaller rival Canadian Imperial Bank of Commerce
reported higher-than-expected earnings on Thursday, but
uncertainty over a planned U.S. acquisition overshadowed its
At current share prices, RBC is North America's fifth
most-valued bank, with a market capitalization of C$147 billion.
($1 = 1.3099 Canadian dollars)
(Reporting by Matt Scuffham; Editing by Lisa Von Ahn and Andrea