Royal Bank of Canada (RBC) on Wednesday became the first Canadian financial institution – in fact the first Canadian company of any kind – to pass the $10bn milestone in terms of annual profit. Unfortunately, insurance was not a key contributor to the balance sheet.
For the full year 2015, RBC booked net income of $10bn, up 11% from $9bn in 2014. Insurance net income for the fourth quarter was $225m, down $31m or 12% from a year ago, mainly due to a change in Canadian tax legislation which became effective in November 2014, the company said.
But on a quarter by quarter basis, net income for the last quarter was up $52m, or 30% mainly due to favorable actuarial adjustments reflecting management actions and assumption changes, and lower net claims costs.
Canadian insurance revenues were down to $295m in the fourth quarter, from $603m in the previous quarter. While international insurance revenues were almost flat at $422m, versus $418m in the previous quarter.
