For its third quarter of fiscal 2024, ended July 31, Royal Bank of Canada (RBC) reported an improvement in net income available to common shareholders in its Wealth Management segment, but a decline in its Insurance segment compared to the same quarter of 2023.
In Wealth Management, net income available to common shareholders was $840 million in the third quarter of 2024, compared with the $650 million reported in the same quarter of 2023. This represents an increase of 29%.
As was the case in the previous quarter, RBC attributes this result to “higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation.”
Revenues for this wealth management segment totaled $4.8 billion in the third quarter of fiscal 2024, up $363 million on the third quarter of 2023. This represents an increase of 8%.
Insurance
For its Insurance segment, RBC reported net income available to common shareholders of $168 million in the latest quarter, compared with the $219 million reported for the same quarter last year. This represents a 23% decrease in earnings.
The financial institution attributes this result to “lower favourable investment-related experience, partially offset by lower capital funding costs. This was partially offset by higher insurance service result, largely attributable to improved claims experience in life retrocession and business growth across the majority of our products.”
RBC adds that the results are not fully comparable with fiscal 2023, as it did not manage its asset and liability portfolios in accordance with the provisions of IFRS 17 then. These were implemented on November 1, 2023, at the start of the current financial year.
Insurance revenues amounted to $285 million in the third quarter of 2024, compared with $336 million for the same period of 2023. This represents a decline of 15%.
Premiums and deposits
Insurance premiums and deposits totaled $1.5 billion in the third quarter of 2024, down by $428 million, or 22%, compared with the third quarter of 2023.
Premiums and deposits “include premiums on risk-based individual and group insurance and annuity products as well as segregated fund deposits, consistent with insurance industry practices,” RBC points out in its report to shareholders.
Executive management changes
For all its operations, RBC reports net income available to common shareholders of $4.4 billion in the third quarter of fiscal 2024. This represents an increase of $577 million, or 15%, compared to the same period last year.
The inclusion of HSBC Bank Canada's results boosted net income by $239 million. The transaction closed on March 28, 2024.
The provision for credit losses amounted to $659 million in the third quarter of 2024, an increase of $43 million or 7% compared with the same quarter of 2023.
For the first nine months of the year, the provision for credit losses was $2.4 billion, up 37% over the first nine months of the previous year.
Executive leadership team appointments announced on July 11 will take effect on September 1, 2024.
Doug Guzman, who was Group Head, RBC Wealth Management and Insurance for the past nine years, will become Deputy Chair, RBC.
Taking over from Guzman on the wealth side is Neil McLaughlin, who was Group Head, Personal and Commercial Banking. He has been named Group Head, RBC Wealth Management. On the insurance side, the Group Head will be Jennifer Publicover, who was appointed CEO of RBC Insurance in 2023.
"The unique skills, experiences and perspectives they bring to the table will be invaluable as we embark on our next phase of growth and further deepen trusted client relationships across all our businesses," stated Dave McKay, President and Chief Executive Officer, RBC.
As of the fourth quarter of 2024, RBC will have five business segments for financial reporting purposes: Personal Banking, Commercial Banking, Wealth Management, Insurance and Capital Markets.
