Advisor recruiting adds $4B to RBC’s US wealth management in Q2

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The RBC brought in $4 billion in assets to its U.S. wealth management business in the second quarter by hiring advisors, the company reported in its recent earnings report.

This comes on top of $22 billion added over the previous eight quarters, said RBC president and CEO David McKay on a call discussing the company’s earnings. McKay credited the bank’s culture, resources and technology for the recruitment gains.

RBC’s U.S. wealth management business grew assets under administration 30% year-over-year, reaching $530 billion.

The bank got a lift from its capital-markets business, fueled by surging equity markets and record merger activity in its home market.

Fiscal second-quarter net income from RBC’s capital-markets unit rose 10-fold to $885 million, helped by investment banking. Overall profit topped analysts’ estimates.

By the numbers
RBC has been one of the more conservative banks in terms of setting aside capital to protect itself against potential loan losses. The lender’s common equity tier 1 capital ratio was the second-highest of Canada’s six largest banks at the end of the first quarter. The bank set released $79.6 million in loan-loss provisions in the second quarter. Analysts estimated $228.4 million in set-asides.

The rising market has also boosted RBC’s wealth-management business. Profit in the unit rose 63% to $572.67 million, helped by gains in both Canada and the U.S.

Net income from RBC’s personal and commercial banking unit more than tripled to $1.58 billion, driven by the strength of the Canadian mortgage market.

Market reaction
RBC shares have advanced 19% this year, compared with a 23% gain for the S&P/TSX Commercial Banks Index.

Net income rose 171% to $3.33 billion, or $2.29 a share, in the three months through April. Excluding some items, profit was $2.31 a share. Analysts estimated $2.08, on average.

—Additional reporting by Kevin Orland of Bloomberg News