The nation’s largest mortgage lender reported 6.4% growth in Canadian residential mortgages in the fiscal first quarter, with average balances climbing to $238.5 billion.
Royal Bank of Canada’s latest results were down from the 6.6% growth rate in the fourth quarter, though it’s still the second-best pace in seven quarters.
RBC’s home loans represent 15.7% of Canada’s $1.52 trillion mortgage market. Mortgage lending comprises a significant part of the firm’s Canadian banking division, whose earnings rose 11% to $1.48 billion from a year earlier when excluding gains from selling a payments business. Said contributions, along with gains in wealth management and capital markets, helped the bank post total profit that defied analysts’ expectations.
“The beat was driven by better than expected results across most business lines,” Credit Suisse Group AG analyst Nick Stogdill said in a client note, as quoted by Bloomberg.
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Canadian banks have been anticipating a slowdown in mortgage lending amid elevated housing prices, overextended borrowers, and tougher mortgage eligibility rules that kicked in this year. Still, the nation’s housing market remained robust. Canadian home sales last year were second only to a record 2016, though sales in Toronto’s market has cooled.
“We will continue to help Canadian homeowners while supporting balanced growth in the market,” CEO David McKay said on a conference call after earnings were released last week. “We will not compromise our risk profile just to add mortgage volume.”