Royal Bank of Canada reported third-quarter net income of $6.02 billion, up 11 per cent from a year earlier, and 4.8 per cent above Visible Alpha-compiled analyst estimates. Capital markets net income rose 16 per cent year-over-year to $1.54 billion, driven by higher corporate, investment banking and global markets revenues. (The Logic)

Talking point: The bank’s capital markets franchise still generates more than 70 per cent of its revenue outside Canada, with roughly half coming from the U.S. Net income at its wealth management division, meanwhile, jumped 32 per cent year-on-year to $1.44 billion, supported by growth in fee-based client assets. Chief risk officer Graeme Hepworth said the recent implementation of Section 338 tariffs on Canadian exports to the U.S. is not expected to materially alter RBC’s economic forecasts. However, he added the bank is factoring in the potential for a global trade war and North American recession as it sets its allowances for losses. RBC also sees an opportunity in the AI and infrastructure spending boom, Derek Neldner, the bank’s capital markets group head, told analysts, adding that demand for financing data centres and related infrastructure is already driving strong loan growth. RBC served as the sole Canadian bank in the underwriting syndicate for SpaceX’s blockbuster IPO. 

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