RBC's Trading Unit Posts 37% Gain in Volatile Markets

RBC's trading unit posted a 37% gain in Q3, beating analyst expectations. The bank's global markets unit generated revenue of nearly 2bn Canadian dollars ($1.44bn), with both equities and fixed income experiencing significant growth. Volatile markets continue to provide a boost to investment banks.

Royal Bank of Canada (RBC) has reported robust earnings for the third quarter of 2025, with its trading unit posting a significant 37% gain, outperforming analyst expectations [2]. The bank's global markets unit generated revenue of nearly CAD 2 billion, with both equities and fixed income experiencing substantial growth. This performance is a testament to the resilience and growth potential of RBC in volatile markets.

The bank's trading unit, which includes its capital markets business, saw a notable 13% jump in net income to CAD 1.33 billion, driven by higher revenue in investment banking and stronger equity markets in the United States and Canada [1]. The wealth management unit also contributed significantly to the overall growth, with net income rising 15% to CAD 1.1 billion [1].

The provision for credit losses increased to CAD 881 million, up from CAD 659 million in the same period last year. However, this figure was below the CAD 1.06 billion expected by analysts, indicating a more favorable outlook on the risk of default. The bank's capital position remained strong, with a common equity Tier 1 ratio of 13.2%, steady on the quarter before and up from 13% a year earlier [1].

The improved financial performance is attributed to growth across each of RBC's business segments, reflecting a diversified business model and disciplined approach to risk and expense management. The bank's President and Chief Executive Officer, Dave McKay, attributed the strong results to RBC's focus on clients and investments in technology and talent [4].

Overall, RBC's Q3 results demonstrate the bank's resilience and growth potential in a rapidly changing economic landscape. The bank continues to deliver strong performance across its segments, positioning itself well for future growth opportunities.

References:
[1] https://www.marketscreener.com/news/royal-bank-of-canada-earnings-rise-credit-loss-provision-lower-than-expected-ce7c50dedd8df723
[2] https://www.marketscreener.com/news/rbc-s-third-quarter-profit-rises-on-strength-in-wealth-management-unit-ce7c50deda8ef627
[4] https://finance.yahoo.com/news/royal-bank-canada-reports-third-100000645.html