Royal Bank of Canada (RY.US) Delivers Strong Q4 Results, Provision For Credit Losses Below Expectations

Canada's largest bank, Royal Bank of Canada (RY.US), reported its fourth-quarter 2024 earnings on Wednesday. The data showed that the bank's Q4 revenue reached C$15.1 billion, topping market expectations of C$14.8 billion; adjusted EPS was C$3.07, topping market expectations of C$3.03.

The total provision for credit losses was C$840 million (US$597 million) in the three months ended October, lower than analysts' previous forecast of C$846 million. The bank had also set aside much less than expected for potential bad loans in the third quarter.

Despite deteriorating credit conditions as consumers and businesses struggle to repay their debts, the Bank of Canada's series of rate cuts helped ease investors' concerns about bad loans. Scotiabank (BNS.US), the first of Canada's Big Six banks to report earnings, set aside C$1.03 billion in the quarter, also lower than analysts' estimates. Phil Thomas, Scotiabank's chief risk officer, said he expects provisions to remain high in the first half of next year, "with a more positive trend by the end of 2025."

RBC acquired HSBC's Canadian subsidiary in March, giving its domestic business a new boost.

RBC's stock has risen more than 30% this year, with analysts saying the bank's execution has been solid in multiple business areas.

RBC's stock rose 2.61% before the US market opened on Wednesday.