Royal Bank Of Canada Earnings Call Insights: Quarter Margins and Outlook
Royal Bank Of Canada (NYSE:RY) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Rob Sedran – CIBC: Janice, you mentioned the net interest margin and I guess on Slide 19 it shows it that excluding some of the noise in the quarter, the margins was up basically a basis point. Can you give us a sense for what earnings would have been in the segment without those items or is it more just a classification issue rather than actual revenue issue?
Janice R. Fukakusa – CAO and CFO: It is a revenue issue because our NIMs impacts are spread. But if you look at the actual sizing of the Ally purchase accounting adjustments it’s sized – I think it’s sized in our disclosure and I think it’s about the actual difference is about C$18 million of adjustment. And remember this that purchase accounting adjustment will continue as the loans pull back to par, so a portion of that is a quarter catch up and then a portion is going to be still there as an explanation for the NIM. The reversal of the prior quarter accounting volatility, I think, last quarter we sized it at about two basis points. So, the reversal of that today wouldn’t imply that the net quarter-over-quarter change is about 4 basis points.
Rob Sedran – CIBC: So a little larger than the C$18 million than on that item. Sorry, 4 basis points swing then will be about like C$22 million or C$23 million?
Janice R. Fukakusa – CAO and CFO: Yes, they are about the same, yeah because with the C$18 million.
Rob Sedran – CIBC: But I guess what you’re saying is that the fair value purchase accounting from Ally, that’s – I mean, it’s an explaining item, but it’s not really an adjusting item because it’s going to continue…