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Royal Bank of Canada posts C$3B profit in fiscal Q1

Toronto-based Royal Bank of Canada posted net income of C$3.01 billion, or C$2.01 per share, in the fiscal first quarter. A year ago, it was C$3.03 billion, or C$1.97 per share.

The S&P Capital IQ consensus normalized EPS estimate was C$1.99.

The recent quarter includes the impact of the recent U.S. tax reform of C$178 million, or 12 Canadian cents per share, mainly related to the writedown of net deferred tax assets. Excluding the previous year's specified item related to the gain on the sale of the U.S. operations of Moneris Solutions Corp., first-quarter net income was up 7% and EPS was up 10% from a year ago.

Net income from personal and commercial banking segment slid 4% to C$1.52 billion as the prior year included the company's share of the gain related to the sale of the U.S. operations of Moneris. Net income from the insurance segment also decreased by 5% to C$127 million.

Meanwhile, wealth management net income jumped 39% to C$597 million, reflecting higher average fee-based assets, an increase in net interest income, and a lower effective tax rate. Other upticks in net income were seen in investor and treasury services, which increased by 2% to C$219 million, and capital markets, which grew 13% to C$748 million.

Provision for credit losses was C$334 million. This was higher by $40 million from a year ago and by C$100 million from the previous quarter.

The board of Royal Bank of Canada declared a dividend of 94 cents per share, payable on and after May 24 to common shareholders of record on April 25. This was higher than the previous dividend of 91 cents per share.

The Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions also approved the company's share buyback plan for up to 30 million common shares. Purchases under the normal course issuer bid may start on Feb. 27 until the earlier of Feb. 26, 2019, or when the company completes the purchases. The shares represent around 2.1% of Royal Bank of Canada's outstanding common shares, which totaled 1,444,064,647 as of Jan. 31.