The Royal Bank of Canada’s wealth management unit in the United States increased its net income by 10% in the third quarter from the same period a year ago.
RBC Wealth Management’s net income hit $175.1 million, up $16.1 million, according to the firm’s Toronto-based parent company’s earnings report released Thursday.
The increase primarily reflected “a favorable tax accounting impact reacted to the foreign currency on certain [available-for-sale] (AFS) securities and a favorable income tax adjustment in the current quarter,” the company said in a statement.
The Minneapolis-based wealth group also reported higher average fee-based clients assets as well as a loss compared to a gain last year in its stock-based compensation plan and spread compression.
In the earnings report’s press release, Royal Bank of Canada said its wealth management division was recently recognized as the seventh largest global wealth manager in an independent survey.
International and U.S. wealth management revenue dipped 5%, but in U.S. dollars, revenue increased by $4 million or 1% because of a favorable accounting impact, the company said.
Overall, the parent company reported net income of $1.23 billion for the third quarter ending July 31, down 18% from its record quarter a year ago. The company blamed reduced trading revenue and earnings in its capital markets unit for the decline. In addition, the third-quarter assets under management for the entire company rose to $237.7 billion from last year’s $226.9 billion, the bank said.
“We continue to build on our strong competitive positions and invest in our businesses for long term growth,” Gordon M. Nixon, RBC’s president and chief executive officer, said in a press release. “The strength of our geographic and business diversity enabled us to produce another solid quarter despite challenging global capital market conditions.”
RBC Wealth Management U.S. has approximately 2,200 financial consultants with 209 offices in the U.S. and more than $166.4 billion of assets under administration.