The Big Six Canadian banks have stepped up to release their first batch of 2021 results in late February and going into early March. Royal Bank (TSX:RY)(NYSE:RY) is the largest financial institution in Canada and the largest stock on the TSX by market capitalization. Its shares have climbed 6.1% year-over-year as of close on February 25.
Royal Bank unveiled its first-quarter 2021 results on February 24. It delivered a strong quarter on the back of higher trading fees and lower loan-loss provisions. The bank’s net income increased 10% from the prior year to $3.8 billion. Meanwhile, diluted earnings per share climbed 11% to $2.66. Investors should be encouraged by its results in the face of the lingering COVID-19 crisis.
Personal and Commercial Banking net income rose 6% year-over-year to $1.79 billion. It achieved this increase on the back of average volume growth of 12%. Net income also climbed 19% from the previous quarter. Royal Bank’s Capital Markets segment achieved record net income of $1.06 billion – up 21% from the prior year. The segment was powered by higher equity trading primarily in the United States. Net income in its Capital Markets division rose 27% from Q4 2020.
Shares of Royal Bank fell 1.3% in trading on February 25. Investors should beware as bank stock valuations are high and volatility is picking up. Still, Royal Bank stock possesses a favourable price-to-earnings ratio of 13. It offers a quarterly dividend of $1.08 per share. That represents a 3.9% yield.
