Royal Bank of Canada (TSX:RY)(NYSE:RY) is the largest of the Big Six Canadian bank stocks and the largest stock on the S&P/TSX Composite Index by market cap. Shares of this top bank stock have increased 5.2% month-over-month as of close on April 27. The stock is up 4.5% so far in 2023.
Early this week, Royal Bank declared that it would release its second quarter fiscal 2023 earnings on Thursday, May 25. In the first quarter of fiscal 2023, Royal Bank delivered adjusted net income of $4.3 billion – up 4% compared to the first quarter of fiscal 2022. Meanwhile, adjusted diluted earnings per share (EPS) climbed 7% to $3.05.
The bank was weighed down by higher provisions set aside for credit losses as macroeconomic conditions have worsened. Moreover, its credit growth has been challenged by interest rate tightening.
Net income in its Personal & Commercial Banking segment posted net income of $2.12 billion – up 8% compared to the previous year. This segment was powered by improved margins due to higher interest rates and average volume growth of 9% in loans and 8% in deposits. Wealth Management posted net income growth of 3% to $848 million, once again bolstered by higher net interest income. Moreover, Capital Markets delivered net income growth of 9% to $1.22 billion.
Shares of Royal Bank currently possess a favourable price-to-earnings ratio of 12 at the time of this writing. Meanwhile, the bank offers a quarterly dividend of $1.32 per share. That represents a 3.9% yield.
