RBC Financial Group reported net income of $3.6 billion from all operations for the third quarter of 2022, which ran from May 1 to July 31. This result is down 16.7 per cent or $719 million from the $4.3 billion in net income reported in Q3 2021.  

“The current quarter includes the impact to PCL of provisions taken on loans in the current quarter as compared to releases of provisions in the prior year,” RBC notes.  

“Our earnings reflect lower results in Capital Markets, Personal & Commercial Banking and Insurance, partially offset by higher earnings in Investor & Treasury Services and Wealth Management,” the group adds.  

Insurance  

For its insurance business, RBC reported net income of $186 million in the third quarter of 2022, compared with $234 million in Q3 2021. This decline of 20.5 per cent or $48 million “is primarily due to the impact of new longevity reinsurance contracts in the prior year.”

Wealth management  

For its wealth management business, RBC reported net income of $777 million in the third quarter of 2022, up from $744 million in Q3 2021. This increase of 4.4 per cent or $33 million “is mainly due to higher net interest income.” 

“This was partially offset by higher non-interest expenses, including staff and technology related costs, as well as higher PCL. Non-interest income was impacted by challenging market conditions,” RBC says.

Insurance income  

RBC had insurance income of $1.2 billion in the third quarter of 2022, versus $1.7 billion in Q3 2021. This income thus fell 29.7 per cent or $521 million.

Looking at the results in closer detail, in Canada, RBC reported insurance revenue of $597 million in the third quarter of 2022, compared with $1.1 billion in Q3 2021. This decrease of 47.4 per cent or $539 million is “primarily due to the change in fair value of investments backing policyholder liabilities and lower group annuity sales, both of which are largely offset in policyholder benefits, claims and acquisition expense (PBCAE).”

International insurance revenue was $636 million in Q3 2022, versus $618 million in Q3 2021. This increase of 2.9 per cent or $18 million is “mainly due to the change in fair value of investments backing policyholder liabilities, partially offset by lower revenue in longevity reinsurance, both of which are largely offset in PBCAE.”

Benefits, claims and expenses

Insurance policyholder benefits, claims and acquisition expense decreased 34.8 per cent or $454 million, “reflecting the change in fair value of investments backing policyholder liabilities, and lower sales in group annuity and longevity reinsurance, all of which are largely offset in revenue,” RBC says, adding that “these factors were partially offset by the impact of new longevity reinsurance contracts in the prior year.”

Premiums and deposits

RBC's insurance premiums and deposits were $1.2 billion in the third quarter of 2022, compared with $1.3 billion in Q3 of 2021. This represents a decrease of 12.6 per cent or $166 million.

Looking at the results in closer detail, premiums and deposits in Canada were $550 million in Q3 2022, versus $645 million in Q3 2021. The corresponding decrease is 14.7 per cent or $95 million.  

International premiums and deposits were $605 million in Q3 2022, compared with $676 million in Q3 2021, for a decrease of 10.5 per cent or $71 million.