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RBC profit up 24%

Royal Bank of Canada, the country's largest lender, reported stronger-than-expected first-quarter results Friday on the back of solid earnings from its Canadian banking, wealth management and capital markets businesses.

RBC, the second of the five big banks to report quarterly earnings, had $3.03 billion of net income during the quarter, up 24 per cent from a year ago.

That amounted to $1.97 per diluted share, up 39 cents from the same quarter last year.

"Credit quality across our portfolios also improved, benefiting from stable economic conditions in Canada and higher oil prices," CEO David McKay said during a conference call to discuss the bank's results.

RBC reduced the amount of money it has set aside for bad loans to $294 million, down 18 per cent from the previous quarter thanks in part to recoveries in the oil and gas sector.

Total gross impaired loans came in at $3.56 billion, down $344 million from the fourth quarter of last year.

The Toronto-based bank shuffled its management ranks, moving Jennifer Tory, the sister of Toronto mayor John Tory, to the role of chief administrative officer.

For the past three years Tory has served as group head of personal and commercial banking at RBC, a role that will be taken over by Neil McLaughlin, currently the executive vice-president of business financial services.

The lender cautioned that it's keeping an eye on its portfolio of mortgage loans in Toronto and Vancouver, two markets that some economists have cautioned could be in a bubble.

"Given accelerated house price appreciation in both of these markets we continue to closely monitor this portfolio with extra due diligence for higher value mortgages," chief risk officer Mark Hughes told analysts.

"Overall, we remain comfortable with our residential mortgage portfolio given our clients' ability to repay and the strong underlying credit quality of this portfolio."



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