Latest news with #RoyalBankofCanada
The Sun
19 hours ago
- Business
- The Sun
HSBC to close its US business banking unit to simplify operations
HSBC is exiting its business banking portfolio in the United States, as it continued to simplify operations and shift its focus to Asia and Middle East markets. 'Following a strategic review of our business, we have decided to exit our Business Banking portfolio in the United States,' it said in a statement. 'We are supporting impacted clients while they transition to a suitable alternative provider and will retain some clients in our Mid-Market and Global Network Banking business,' it added. The Wall Street Journal reported on Friday that HSBC's move would affect about 4,500 clients. The UK-headquartered lender has been reducing its global footprint in an attempt to boost profits and expand in Asia and Middle East markets. The bank said in January it would wind down M&A and some equities businesses in the Americas and Europe. The Wall Street Journal said HSBC laid off 40 employees in the U.S. business banking division. HSBC declined to comment, In 2021, the bank said it was withdrawing from U.S. mass market retail banking by selling some parts of the money-losing business and winding down others. It sold its Canadian business to Royal Bank of Canada in 2022 for C$13.5 billion.
The Sun
19 hours ago
- Business
- The Sun
HSBC exits US business banking to refocus on Asia
HSBC is exiting its business banking portfolio in the United States, as it continued to simplify operations and shift its focus to Asia and Middle East markets. 'Following a strategic review of our business, we have decided to exit our Business Banking portfolio in the United States,' it said in a statement. 'We are supporting impacted clients while they transition to a suitable alternative provider and will retain some clients in our Mid-Market and Global Network Banking business,' it added. The Wall Street Journal reported on Friday that HSBC's move would affect about 4,500 clients. The UK-headquartered lender has been reducing its global footprint in an attempt to boost profits and expand in Asia and Middle East markets. The bank said in January it would wind down M&A and some equities businesses in the Americas and Europe. The Wall Street Journal said HSBC laid off 40 employees in the U.S. business banking division. HSBC declined to comment, In 2021, the bank said it was withdrawing from U.S. mass market retail banking by selling some parts of the money-losing business and winding down others. It sold its Canadian business to Royal Bank of Canada in 2022 for C$13.5 billion.
Bloomberg
a day ago
- Business
- Bloomberg
Economists Join Traders as Bets on Canada Interest-Rate Cut Fall
Economists are abandoning their calls for monetary-policy easing in Canada next week as traders price in only a small chance of an interest-rate cut and the nation's output beat all estimates. Canada's so-called loonie rose as much as 0.5% to trade at 1.3740 per US dollar on Friday after gross domestic product for the first three months of the year grew faster than at the end of 2024. Bank of Montreal and Royal Bank of Canada now expect no changes in rates next week, contrary to the cut they saw before.
Economic Times
a day ago
- Business
- Economic Times
Will your mortgage get cheaper? Bank of Canada may cut interest rates soon
Reuters The Bank of Canada will announce its next interest rate on June 5, 2025, with expectations of a 0.25% cut from the current 5%. A rate cut could make it easier for first-time homebuyers or individuals considering major loans to borrow money. (File photo) As inflation cools and borrowing costs remain high, many Canadians are asking: Will the Bank of Canada finally lower interest rates? After two years of rising interest rates to control inflation, many households feel the pressure. Mortgage payments have surged, loans have become costlier, and small businesses are also facing credit strain. With inflation now closer to the Bank of Canada's target, hopes for a rate cut are a tangible goal. Also Read: Royal Bank of Canada new return-to-office policy: 4 days in, 1 day remote starting September The Bank of Canada's next interest rate announcement is scheduled for June 5, 2025. According to market watchers and economists, there is a strong chance the Bank will cut its key interest rate by 0.25%, bringing it down from the current 5%. Several economists, including those from Desjardins and Capital Economics, believe the Bank has enough evidence to act. Inflation has slowed, wage growth has moderated, and economic activity is weaker than expected. These are key signs the Central Bank looks at when deciding rate policy. If Canada's Central Bank cuts rates, it could mean: Lower mortgage payments for those renewing or on variable rates Easier access to credit for individuals and small businesses Much-needed relief for debt-laden households A rate cut could also make borrowing more affordable for first-time homebuyers or people considering major loans. However, financial advisors warn that rate cuts may be gradual, so big changes might not happen right away. Desjardins economists say the economy is showing 'clear signs of slowing,' especially in consumer spending and housing. They believe the Bank of Canada could lead the way with an early rate cut, possibly ahead of the US Federal Economics agrees, stating that the Bank could make three rate cuts by the end of 2025. The first could come in June, followed by others in the second half of the year. Meanwhile, economists at the Royal Bank of Canada are more cautious. They say a June cut is possible, but the Bank may wait until July to get more inflation and wage growth data. Also Read: Credit cards are feeding young Canadians more than actual food; As wages stagnate and rent soars, debt becomes the only thing they can afford Any change in interest rates affects everything from credit card rates to investment returns and housing prices. That's why every day Canadians, not just economists, watch the Bank of Canada's decisions days before the June 5 announcement, all eyes are on the central bank. If a rate cut comes, it may mark the start of a new phase aimed at helping Canadians breathe easier financially.
Yahoo
2 days ago
- Business
- Yahoo
Royal Bank of Canada (RY) Q2 2025 Earnings Call Highlights: Strong Earnings and Dividend Boost ...
Second Quarter Earnings: $4.4 billion; Adjusted earnings of $4.5 billion. Pre-Provision Pretax Earnings: Nearly $7 billion, with a 16% growth year-over-year. Revenue Growth: 11% year-over-year. Common Equity Tier 1 Ratio: 13.2%. Quarterly Dividend Increase: $0.06, or 4%. Allowance for Credit Loss Ratio: Increased to 74 basis points. Average Deposits in Personal Banking: Increased 13% year-over-year. Commercial Banking Average Deposit Growth: 15% year-over-year. Net Interest Income Growth: 22% year-over-year. Net Interest Margin (NIM): Canadian Banking NIM up 5 basis points from last quarter. Noninterest Expenses: Up 5% year-over-year. Personal Banking Net Income: $1.6 billion, up 15% year-over-year. Commercial Banking Net Income: $597 million, up 3% year-over-year. Wealth Management Net Income: $929 million, up 11% year-over-year. Capital Markets Net Income: $1.2 billion, decreased 5% year-over-year. Insurance Net Income: $211 million, up 19% year-over-year. Warning! GuruFocus has detected 8 Warning Signs with RY. High Yield Dividend Stocks in Gurus' Portfolio This Powerful Chart Made Peter Lynch 29% A Year For 13 Years How to calculate the intrinsic value of a stock? Release Date: May 29, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Royal Bank of Canada (NYSE:RY) reported strong second quarter earnings of $4.4 billion, with adjusted earnings of $4.5 billion, including $260 million from the acquisition of HSBC Bank Canada. Revenue growth of 11% year over year was driven by strong volume growth in Personal and Commercial Banking, as well as robust fee-based revenue growth in Wealth Management. The bank announced a $0.06, or 4%, increase in its quarterly dividend, reflecting confidence in its earnings power and capital strength. The common equity Tier 1 ratio stood at 13.2%, well above regulatory minimums, indicating a strong capital position. The bank's diversified business model and strong balance sheet provide a resilient foundation to navigate economic uncertainties and create value for clients and shareholders. The allowance for credit loss ratio increased to 74 basis points due to a prudent reserve build amidst heightened economic uncertainty. Gross impaired loans increased by $1.1 billion, primarily driven by Commercial Banking and Capital Markets, reflecting ongoing challenges in certain sectors. The macroeconomic environment remains uncertain, with potential structural disruptions to global supply chains and capital flows due to changes in trade policies. Investment banking activity was muted this quarter due to market volatility, impacting revenue in the Capital Markets segment. The bank's cautious outlook on mortgage growth and commercial loan demand reflects ongoing uncertainty and cautious business sentiment in certain sectors. Q: Can you explain the increase in gross impaired loans and whether this is a Royal-specific issue? A: Graeme Hepworth, Chief Risk Officer, explained that about 40% of the increase was due to administrative issues related to the integration of HSBC, which have since been resolved. The classification of impaired loans is based on forward views of a company, not just payment status, and Royal Bank of Canada (RBC) maintains consistent processes for this. Q: What are your expectations for impaired provisions for credit losses (PCLs) in the second half of the year, and are there new areas of stress within the books? A: Graeme Hepworth noted that 80% of the reserve build is due to macroeconomic uncertainty, with no new significant credit pockets of concern. The base case scenario has been adjusted to reflect a weaker economic outlook, including higher unemployment and lower GDP growth. Q: How does the recent U.S. Court of International Trade ruling on tariffs impact your outlook? A: David McKay, CEO, stated that while the ruling helps, it does not eliminate the medium-term uncertainty related to trade negotiations with the U.S. The bank remains cautious due to ongoing uncertainties in trade agreements and their impact on various sectors. Q: Can you provide insights into the net interest income (NII) growth guidance and the impact of potential rate cuts by the Bank of Canada? A: Katherine Gibson, CFO, explained that NII growth is expected to be driven by volume growth and favorable product mix. The impact of rate cuts will depend on client behavior and competitive pressures, with the bank maintaining its guidance for high single-digit to low double-digit NII growth. Q: What is the outlook for M&A and investment banking activity given the current tariff situation? A: Derek Neldner, Group Head of RBC Capital Markets, noted that while there is improved sentiment and increased client dialogue, the timing of M&A activity remains uncertain. Flow financing activity has picked up, but strategic M&A transactions may take longer to materialize. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
