Royal Bank of Canada – $1.4B
May 29, 2008 – 6:07 pm2008-05-29 Royal Write Downs Up:
The Royal Bank of Canada reported more reported profit declines and increased write downs on subprime back debt.
Royal Bank had C$854 million in pretax writedowns on investments tied to U.S. subprime mortgages and other debt securities, in line with its May 14 estimate.
The bank said that the major write downs came from a likely source.
The bank, which is Canada’s largest financial institution, said the single biggest devaluation, worth about 200 million Canadian dollars, came from its exposure to a subsidiary of MBIA, the troubled bond insurer based in Armonk, N.Y.
They also revealed losses in the auction rate bond market.
Royal Bank of Canada, that country’s largest lender, told shareholders on May 14 that the value of its investments fell by $185 million.
So we have the Royal Bank of Canada topping the billion dollar mark, $544 million + $ 854 million – $1.398 billion
2008-03-01:
Fiscal first quarter earnings for the Royal Bank of Canada fell 17% on business related to US subprime earnings.
For the quarter ended Jan. 31, the financial-services company reported net income of C$1.25 billion, or 95 Canadian cents a share, down from C$1.49 billion, or C$1.14 a share, a year earlier. The latest results include a C$187 million after-tax write-down related to U.S. subprime exposure, and a C$45 million impact from the weaker dollar.
And ” impact from the weaker dollar” that has got to be a first. Let’s see if we can do the math on this one. The US dollar is weak from ruthless rate cutting, to shock start a still heart of the walking dead man US economy, infected by the subprime virus. Is that right? If so the new subprime related write downs will be C$187 million + C$ 45 million, but being conservative as we are let’s just add the C$187 million.
2008-02-20:
Royal Bank of Canada reported net income of $5,492 million for the year ended October 31, 2007, up $764 million, from the previous year. The bank also took charges related to subprime mortgages of $357 million pre-tax ($160 million after-tax).From the press release
In Capital Markets, we recorded a charge of $357 million pre-tax ($160 million after-tax and reflecting compensation adjustments) consisting of write downs on the fair value of our direct holdings of U.S. subprime residential mortgage-backed securities (RMBS) and collateralized debt obligations of asset-backed securities (CDOs of ABS) and related credit default swaps.
Let’s see now that’s a charge of $357 million consisting of what, write downs? Well what was it a charge or a write-down? Let’s see if they are any clearer on remaining subprime mortgage related exposure .
We do not originate U.S. subprime loans and have $216 million of net exposure to U.S. subprime collateralized debt obligations of asset-backed securities. We also have $388 million of exposure to U.S. subprime residential mortgage-backed securities, which is classified as available-for-sale and which we intend to hold until maturity.
Well that seems clear enough $216 million + $388 million = $604 million. Now to play it safe lets start the count at $357M, then we have $357 M down and $604M to go. We will keep counting.
3 Responses to “Royal Bank of Canada – $1.4B”
TORONTO, April 16, 2009 — Royal Bank of Canada (RY on TSX and NYSE) today announced that it expects to record a goodwill impairment charge (on both a pre and after tax basis) of approximately US$850 million for the second quarter ending April 30, 2009. While the charge will reduce second quarter reported earnings by approximately US$850 million, it is a non-cash item and an accounting adjustment, and will not affect our ongoing operations, or our Tier 1 and Total capital ratios.
As described in our First Quarter 2009 Report to Shareholders, we conducted the first of a two-step goodwill testing process during the first quarter and determined that the goodwill assigned to our International Banking reporting unit may be impaired. We have now completed the second step of the testing process and have determined that the International Banking reporting unit goodwill is impaired, resulting in the expected charge to second quarter earnings noted above.
This expected charge reflects the impact of prolonged challenging economic conditions that have affected our International Banking reporting unit; in particular declines in the U.S. housing market, the deterioration in the overall U.S. economic environment and the decline in the market value of U.S. banks.
By VivaViva on Apr 19, 2009
1.4 Billion… wow that is a lot of money.
Well written article.
By Matt Goulart on May 31, 2009
RBC is a fraud. This organization knowingly underwrites bad real estate loans and quickly securitizes these loans thru public markets. Junk in, junk out. You, the taxpayer covers RBC’s fraudulent actions.
By Rodger Matlin on Jul 30, 2009