(Reuters) – Royal Bank of Canada on Thursday posted a rise in third-quarter profit as a high-interest rate environment boosted its lending business.
The bank’s profit came in at C$3.81 billion, or C$2.73 per share, in the three months ended July 31, compared with C$3.52 billion ($2.60 billion), or C$2.51 per share, a year earlier.
The Bank of Canada hiked its overnight rate to a 22-year high in June and again by 25 basis points in July.
Net income in RBC’s personal and commercial banking unit rose 5% in the quarter.
While lenders have benefited from a sharp rise in interest rates, that has also raised the risks of loan defaults, prompting banks to increase their buffers for credit-loss provisions.
RBC set aside C$616 million as provision for credit losses.
(Reporting by Sri Hari N S in Bengaluru; Editing by Shilpi Majumdar)
