Royal Bank of Canada posted a $92-million loss for its third quarter on Friday, its first quarterly loss in more than two years, mostly because of a writedown of U.S. retail banking operations that have been sold.
That amounted to a loss of 11 cents per share including discontinued operations, compared to earnings of 85 cents per share during the quarter a year ago.
Revenues, however, rose to $6.79 billion from $6.66 billion in the year-earlier period.
Excluding the discontinued operations, RBC had $1.57 billion of net income — up 13 per cent from last year. That amounted to $1.04 of diluted earnings per share from Royal's continuing operations.
Analysts had expected Canada's largest commercial bank to do better during the quarter, with a Thomson Reuters consensus estimate of $1.08 per share from continuing operations and $7.3 billion of revenue.
RBC's shares were trading down 1.2 per cent or 64 cents at $51.27 in pre-open trading on the New York Stock Exchange.
RBC's Canadian banking operations remained solidly profitable, with net income rising 12 per cent from the same time last year to $855 million.
But several other divisions experienced lower profits or underperformed analyst expectations.
RBC's wealth-management operations saw net income fall $6 million from a year ago to $179 million, while net income at the insurance operations was down $9 million to $144 million and international banking fell $5 million to $31 million,
In the third quarter, Capital Markets net income was $277 million, which was up $76 million from a year ago but down $130 million from RBC's second quarter of this year.
RBC said Capital Markets suffered from a deterioration in trading conditions during the third quarter that resulted in significantly lower trading revenue, primarily in its fixed-income businesses outside Canada.
Royal is the third major Canadian bank to report its third-quarter results.
Both Bank of Montreal and National Bank met or exceeded expectations.
RBC had already announced it would book a related to its sale of its U.S. regional retail banking operations to PNC Financial Services for about US$3.62 billion.
Royal Bank operates under the RBC Bank banner in the U.S., with more than 400 branches throughout North Carolina, South Carolina, Virginia, Georgia, Florida and Alabama.
The banks were formerly part of the Centura and other brands that were acquired by Royal starting a decade ago. However, the Canadian bank's rapid expansion struck a major hurdle when the U.S. housing bubble burst and hit mortgage markets hard in southern U.S. states where the former Centura bank operated.
Royal Bank is the country's largest bank by assets and market capitalization, and has 77,000 employees serving more than 18 million clients. The bank has operations across North America and 52 other countries.
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