RBC Reports Higher Q3 Profit on Strong Commercial Banking and Capital Markets Growth

Royal Bank of Canada reported a 21% increase in Q3 profit, driven by strong growth in commercial banking and capital markets divisions. Net income was $5.4-billion, well above the average analyst expectation of $3.29 per share. The bank set aside $881-million in provisions for credit losses, a 34% increase from the same period last year, but lower than expected.

Royal Bank of Canada (RY-T) reported a 21% increase in net income for the third quarter of 2025, driven by robust performance in its commercial banking and capital markets divisions. The bank's net income for the period from May through July reached $5.4 billion, significantly exceeding the average analyst expectation of $3.29 per share. This performance reflects the bank's ability to navigate market conditions and capitalize on growth opportunities.

Adjusted earnings per share (EPS) were $3.84, up 18% year-over-year, indicating strong profitability. The bank set aside $881 million in provisions for credit losses, a 34% increase from the same period last year but lower than the $1 billion expected by Canaccord Genuity analyst Matthew Lee [1]. This reduction in provisions for credit losses allowed the bank to report a 40% increase in profit from its commercial banking division. The capital markets division also performed well, with profit up 13% year-over-year, primarily due to higher revenue in global markets and corporate and investment banking [1].

The bank's total revenue for the quarter increased to $16.98 billion, up from $14.63 billion the previous year. This growth was driven by higher revenue in capital markets, personal banking, and commercial banking, reflecting strong average volume growth and higher spreads in personal banking. Pre-provision, pre-tax earnings reached $7.8 billion, up 29% from last year [3].

Royal Bank of Canada's strong performance in Q3 highlights its resilience and ability to adapt to changing market conditions. The bank's focus on operational efficiency and strategic investments in digital capabilities positions it well for sustainable long-term growth. As economic uncertainties and potential credit risks remain, particularly in international markets, the bank's diversified business model and strong risk management practices should help mitigate these challenges.

References:
[1] https://www.theglobeandmail.com/business/article-rbc-reports-higher-q3-profit-on-strong-commercial-banking-capital/
[2] https://www.investing.com/news/company-news/scotiabank-q3-2025-slides-net-income-surges-32-yoy-eps-up-31-93CH-4210438
[3] https://www.nasdaq.com/articles/royal-bank-canada-q3-net-income-rises