National Bank of Canada (TSE: NA) and Royal Bank of Canada (TSE: RY) said on Wednesday that their profit in the fiscal fourth quarter came in better than expected on lower provisions for potential loan losses.
Canada’s largest lender, Royal Bank of Canada, valued its provisions for credit losses in the quarter that concluded in October at £247.57 million that represents a more than 33% decline as compared to the prior quarter and a 14% decline on an annualised basis. Analysts had expected the bank to take a higher £463.84 million of provisions instead.
Royal Bank of Canada shares tanked close to 1% on market open on Wednesday. On a year to date basis, the bank is now about 3% up in the stock market. At the time of writing, it is valued at £87.70 billion and has a price to earnings ratio of 13.68.
National Bank of Canada values provisions at £63.71 million
The National Bank of Canada, on the other hand, valued provisions at £63.71 million versus experts’ forecast of a much higher £92.67 million.
The Coronavirus pandemic that has so far infected more than 385 thousand people in Canada and caused over 12 thousand deaths pushed Canadian banks this year to put aside billions of dollars worth of capital in total to cover for credit losses.
The Royal Bank of Canada and the National Bank of Canada reported profit only a day after rivals Bank of Nova Scotia and the Bank of Montreal topped forecast for profit.
Gross impaired loans, Royal Bank said on Wednesday, saw a 17% decline in the fourth quarter. National Bank, on the other hand, saw a 3% growth in gross
