Royal Bank of Canada said on Friday that its fourth quarter performance helped boost its status as an international wealth manager, even as uncertain market conditions posed challenges for its wealth management business in the second half of the year.

The firm’s wealth management results came as RBC had a 43% surge in its quarterly profit from last year.

“RBC delivered strong earnings from continuing operations of over C$1.6 billion in the fourth quarter and record C$6.7 billion this year driven primarily by record earnings in Canadian banking, wealth management and insurance, and strong results in corporate and investment banking,” RBC President and Chief Executive Gord Nixon said in the firm’s earnings release.

Non-adjusted net income for RBC’s wealth management business rose to C$189 million for the fourth quarter, up 6% or C$10 million from the third quarter and 8% or C$14 million for the same period in 2010.

With accounting adjustments that resulted from a deferred compensation liability, for a total reduction of C$32 million, net income totaled C$157 million for the quarter. That marked a decrease of 12%, or C$22 million from the previous quarter, while also down 10% or C$18 million from the fourth quarter of 2010.

RBC said those declines in the wealth management performance came mostly from a decline in transaction volumes related to declines in investor confidence and uncertain market conditions.

Despite lower transaction volumes, compared to both last quarter and last year, RBC’s wealth management unit helped contribute to higher earnings from continuing operations for the overall firm versus last year as higher average fee-based client assets rose.

“This year, wealth management was recognized as the sixth largest wealth manager in the world by client assets, a testament to our leadership position in Canada and our expanding global presence,” Nixon said Friday. “While uncertain market conditions, particularly in the second half of the year, negatively impacted transaction volumes and asset values, we have a focused growth strategy and are well positioned to benefit when market and economic conditions improve.”

RBC’s U.S. and international wealth management business excluding Canada posted $465 million (in U.S. dollars) in revenue for the fourth quarter, down from $469 million for the third quarter and $502 million in the same quarter in 2010.


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