Bank of Montreal, Royal Bank Profits Rose in 2nd Period
TORONTO -- Royal Bank of Canada and Bank of Montreal posted increased net incomes for their fiscal second quarters as prudence helped them weather the recent economic slowdown and stock-market volatility.</br></br>Canadian banks have fared better than their U.S. counterparts as the economy has soured, partly because the Canadian companies had less exposure to deteriorating credit. "Canadian banks are relatively cautious," said Kevin Choquette, a Toronto analyst with Scotia Capital, the brokerage arm of Bank of Nova Scotia.</br></br>Credit problems for Canadian banks have also been milder because Canada emerged a year later than the U.S. from the last recession, Mr. Choquette added. That lag gave U.S. banks "an extra year to put on more marginal credit," he said.</br></br>For the quarter ended April 30, Royal Bank, based in Toronto, said net increased 4% to 602 million Canadian dollars (US$390.8 million), or 92 Canadian cents a fully diluted share, from C$578 million, or 89 Canadian cents a share, a year earlier. Royal Bank's total provision for credit losses rose to C$210 million from C$172 million in the year-earlier period.</br></br>Results for the latest quarter included, for the first time, a full quarter of earnings for two recently acquired businesses: Dain Rauscher, a Minneapolis securities firm, and the insurance subsidiaries of South Carolina's Liberty Corp. While Dain Rauscher's results contributed to a 42% drop in Royal Bank's wealth-management earnings, the Liberty acquisitions' results fueled a 63% jump in insurance earnings. Personal- and commercial-banking earnings rose 26% to C$334 million.