RBC quarterly profit drops 9%

Royal Bank of Canada said Friday its fourth-quarter profit slipped nine per cent to $1.12 billion as it booked losses related to the sale of its Liberty Life insurance division and weak results from U.S.retail banking operations.

Canada's biggest bank said the results were equal to 74 cents per share for the quarter ended Oct. 31, down from $1.24 billion, or 82 cents a share, in the same quarter last year.

Revenue was $7.2 billion, down from about $7.5 billion at the same time last year.

The cash earning per share was 84 cents, below analyst expectations of $1 per share, according to those surveyed by Thomson Reuters.

"Overall we are certainly disappointed with our international banking segment," president and chief executive Gordon Nixon said ona conference call with financial analysts.

In October, the Royal Bank announced an agreement to sell Liberty Life to Bermuda-based reinsurer Athene Holding Ltd. for $628.1 US million, saying it's concerned the division cannot properly compete at its current size.

The bank booked a $116-million loss on the sale. A year earlier, the quarterly results included a $1-billion charge to reflect the reduced value of intangible assets.

Refocuses strategy

Excluding the special items in both years, Royal's fourth-quarter earnings rose $481 million, or 10 per cent, driven by record earnings in Canadian banking and solid growth in wealth management and insurance.

Royal has been refocusing its international strategy outside the United States as its operations in the southeast continue to struggle while an economic recovery hits further turbulence.

The bank's international banking business lost $157 million in the quarter comparedto a loss of $125 million a year ago.

"In international banking, our U.S. retail bank continues to be challenged by weak economic and credit conditions, and we remain focused on restoring its operating performance and returning to profitability," Nixon said.

For the year, the bank reported net income of $5.2 billion, an increase of 35 per cent from a year ago. Revenue was down to $28.3 billion from $29.1 billion.