06:30 AM EDT, 05/29/2025 (MT Newswires) -- Royal Bank of Canada ( RY ) on Thursday reported lower-than-expected adjusted earnings and revenue for the second quarter on a mixed performance from its division as provision for credit losses ran higher. But the bank increased its dividend.

Net income rose 11% to $4.4 billion for the quarter ended April 30. Diluted EPS was $3.02, up 10% over the same period. Fiscal Q2 revenue was $15.67 billion, versus a FactSet estimate of $15.82 billion.

Adjusted net income was $4.5 Billion, up 8%, and adjusted diluted EPS was $3.12, up 7%, but below a FactSet estimate of $3.18.

National Bank earlier this month forecast that RBC would report an EPS of $3.26 versus a consensus $3.13. At the time, it expected RBC to announce a dividend increase. National Bank in looking at key themes for RBC said updated 'peak PCLs' timing was expected to be pushed to 2026; the Capital Markets business should be strong, but with one caveat; and it noted the buyback pace accelerated during the quarter.

RBC said consolidated results reflect an increase in total PCL of $504 million from a year ago, including a $324 million increase in PCL on performing loans. Provisions were up across Commercial Banking, Personal Banking and Wealth Management, and in Capital Markets to a lesser extent. The PCL on loans ratio of 58 bps increased 17 bps from the prior year, "mainly driven by unfavorable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs)."

Among division highlights, RBC said "strong" earnings growth in Personal Banking, Wealth Management and Insurance, and higher results in Commercial Banking, were partly offset by lower results in Capital Markets. Net losses were lower in Corporate Support, primarily due to the after-tax impact of specified items related to the HSBC Bank Canada transaction last year. The inclusion of HSBC Canada results increased net income by $258 million.

The board of directors increased its quarterly dividend by $0.06, or 4%, to $1.54 per share, payable on or after August 22 to shareholders of record at the close of business on July 24. The board also said it is seeking regulatory approval for a normal course issuer bid to repurchase for cancellation up to 35 million common shares.

RBC closed up $0.73 at $178.60 on the TSX yesterday, leaving it near 52 week highs.