Royal Bank of Canada (TSX:RY)(NYSE:RY) released its third quarter of fiscal 2020 results on August 26 before the market opening bell. The largest Canadian bank reported a 1.3% year-over-year (YoY) decline in its Q3 earnings to $2.23 per share. However, it was significantly better as compared to Bay Street analysts’ estimate of $1.77 per share.
RBC’s third-quarter earnings were primarily driven by solid YoY growth in its capital markets, insurance, and wealth management segments.
The earnings event seemingly boosted investors’ confidence, as its stock rose by 1.3% on Wednesday morning. At the same time, the S&P/TSX Composite Index was up 0.5% for the day.
RBC’s Q3 revenue rose amid the pandemic
In the quarter ended July 31, 2020, Royal Bank of Canada reported $12.9 billion in revenue — up 11.9% YoY. It was also better than analysts’ expectation of $11.5 billion.
While lower interest rates caused a decline in client activity, the bank’s net interest income rose by 2% in Q3 2020 as compared to the same quarter of the previous fiscal year. Also, its trading revenue from capital markets segment registered solid gains.
Its Canadian banking arm, as well as City National Bank — a subsidiary of Royal Bank of Canada — saw positive volume growth during the last quarter.
COVID-19 headwinds in the banking sector
The COVID-19 crisis has increased the challenges for the Canadian banking sector. In the third quarter, Royal Bank of Canada’s insurance segment was hit, as the pandemic led to a rise in insurance claims. Nonetheless, lower claims costs and a strong 51% YoY rise in its insurance segment revenue helped the Toronto-based bank negate these COVID-19-related headwinds.
In the last quarter, COVID-19-related measures also increased RBC’s overall expenses. Its management considers the extent and duration of the pandemic’s impact on the economy to be uncertain.
Uncertainties about the economic recovery
In its Q3 earnings report, Royal Bank of Canada confirmed a rise in economic activity across North America due to easing COVID-19 restrictions. But the bank predicts labour market weakness to continue in the near term and considers the trajectory of the economic recovery to remain uncertain.
Despite the recent rise in economic activities, Royal Bank of Canada expects the U.S. and Canada GDP to remain well below 2019 levels in the second half of 2020. Weak business and consumer confidence, along with higher unemployment rates, are likely to hurt the GDP.
How low interest rates are also hurting RBC
Unlike in capital markets and insurance segments, Royal Bank of Canada’s revenue from its investor & treasury services fell by 14% YoY and 32% sequentially to $484 million. It was primarily due to lower funding and liquidity revenue as a result of lower interest rates and a rise in enterprise liquidity.
Is Royal Bank of Canada stock a buy after Q3 results?
Royal Bank of Canada’s third-quarter results showcased strength due to a sharp rise in capital markets revenues and trading activity. I expect these factors and its strong Q3 results to accelerate the recovery in its stock in the coming weeks.
In contrast, low interest rates, higher insurance claims, and low business confidence could continue to hurt banking sector investors’ sentiments. That’s the reason why I wouldn’t recommend conservative investors to buy its stock, as these factors — along with a weak economic outlook — could keep RBC’s stock highly volatile in the short term.
But if you’re looking to invest your money in stocks for long-term wealth creation, then you can consider buying its stock on any dip towards the support level between $95 to $98 per share.
The latest on the coronavirus outbreak for Sept. 23 – CBC.ca
We looked at 120,000 confirmed COVID-19 cases in Canada. Here’s what we found
The coronavirus has been confirmed in more than 146,600 people across the country since the first case was detected. CBC News has dug deep into the data collected by the Public Health Agency of Canada (PHAC) to examine how COVID-19, the illness caused by the virus, affects the young, the elderly, men and women in order to better understand what’s most likely to land you in hospital — or worse. The data contains details on 121,795 cases up to the first week of September.
Some of our findings:
CBC’s analysis reveals that since mid-August, infections among young people (under 30) have surged and now, after a summer of provincial reopenings and expanded testing, cumulatively outnumber the elderly. COVID-19 infections are also on the rise among the very youngest (under 20) as schools, colleges and universities reopen.
The 9,000 cases that list symptom details suggest that people with COVID-19 suffer differently depending on age and symptoms. Chills, sore throat and runny nose were reported more frequently among those under 50. Cough and fever were common among all age groups.
Close to 10 per cent of people who tested positive for coronavirus ended up in hospital, according to the cases tracked by PHAC. Two per cent of cases landed in intensive care units (ICU) across all ages but mostly among people over 50. In people admitted to hospital, shortness of breath and fever were more common symptoms, while headaches, sore throat and runny nose were seen more often in less severe cases.
More than 9,200 people have died in Canada with COVID-19. Of all confirmed infections in Canada, six per cent, or 9,274 cases, have been fatal, with the elderly hit the hardest. Only two people under 20 are known to have died from the disease so far. More women in Canada have died from COVID-19, especially in the 80+ age group, where they outnumber men. Outside that age group, more men are dying from the virus.
Click below to watch more from The National
Trudeau to make rare address to the nation amid COVID-19 fight; throne speech promises more support for affected Canadians
Prime Minister Justin Trudeau will make a rare address to the nation Wednesday evening on the fight against COVID-19 as confirmed cases continue to climb in Canada. Trudeau is also expected to summarize the government’s plans laid out in the throne speech, which included a promise to extend emergency support to people affected by the pandemic.
Two of Trudeau’s rival party leaders, Conservative Leader Erin O’Toole and Bloc Québécois Leader Yves-François Blanchet, have tested positive for the virus and have been forced to delay their responses to the throne speech until their self-isolation periods have ended.
CBC News will carry Trudeau’s address at 6:30 p.m. ET, followed by analysis and reaction. Watch, listen and follow live on cbcnews.ca, the CBC News app, CBC TV, CBC News Network, CBC Gem and CBC Radio, as well as on YouTube, Facebook and Twitter.
Ontario to launch COVID-19 testing in pharmacies Friday
Ontario will begin offering COVID-19 testing in pharmacies Friday, beginning with up to 60 pharmacies around the province, Premier Doug Ford says. The testing will be available by appointment only, for those not experiencing symptoms of the virus, and is expected to roll out to further locations in the coming weeks, the province says.
In addition, three hospitals will be offering saliva testing starting this week. Those hospitals include Women’s College, Mount Sinai and University Health Network―Toronto Western Hospital. The saliva-based tests will at first be conducted alongside the usual nasal-pharyngeal testing to assess their accuracy, Health Minister Christine Elliott said at a news conference Wednesday.
The testing initiative is the second part of the government’s fall pandemic preparedness plan. The first piece involved purchasing millions of seasonal flu shots that the government is encouraging all residents to get.
“We have prepared for the worst,” Elliott said. The province has seen modelling of various scenarios including a slow burn of little peaks and valleys in the daily numbers to more dramatic increases, the minister said. Elliott said further details about those models will be unveiled as the province continues to roll out its fall plan.
120 active COVID-19 cases reported on First Nations reserves across Canada
There are currently 120 active cases of COVID-19 on First Nations reserves across Canada, according to data from Indigenous Services Canada. New cases since last week were primarily reported in Alberta, British Columbia and Manitoba. One death was reported, bringing the total of deaths on-reserve from COVID-19 to 10.
There have been 616 cases of COVID-19 on First Nations reserves as of Sept. 21, as well as 51 hospitalizations. A total of 486 First Nations people have recovered. Cases on First Nations reserves reported per region as of Sept. 21:
- British Columbia: 132
- Alberta: 265
- Saskatchewan: 96
- Manitoba: 8
- Ontario: 68
- Quebec: 47
Stay informed with the latest COVID-19 data from Canada and around the world.
Johnson & Johnson begins final phase of single-shot COVID-19 vaccine study
New Jersey-based drug conglomerate Johnson & Johnson is beginning a huge final study to try to prove if a single-dose COVID-19 vaccine can protect against the coronavirus, The Associated Press reports. The study starting Wednesday will be one of the world’s largest coronavirus vaccine studies so far, testing the shot in 60,000 volunteers in the United States, South Africa, Argentina, Brazil, Chile, Colombia, Mexico and Peru.
In August, Canada signed a deal with a subsidiary of Johnson & Johnson to secure up to 38 million doses of the company’s potential vaccine.
A handful of other vaccines in the U.S. — including shots made by Moderna Inc. and Pfizer Inc. — and some in other countries are already in final-stage testing. Hopes are high that answers about at least one candidate being tested in the U.S. could come by year’s end, maybe sooner.
Many vaccine specialists question whether the Food and Drug Administration (FDA) will move at a safe pace under intense pressure from the current U.S. administration. U.S. President Donald Trump has consistently presented a faster timeline for a new vaccine than experts say is adequate to fully test the candidates. On Wednesday, he tweeted a link to news about the new Johnson & Johnson vaccine study and said the FDA “must move quickly.”
“We feel cautiously optimistic that we will be able to have a safe and effective vaccine, although there is never a guarantee of that,” Dr. Anthony Fauci, infectious disease chief at the National Institutes of Health, told a Senate committee on Wednesday.
Preserving your pandemic harvest? Start slow, say experts
Canadians who grew their own gardens this pandemic summer and are looking to try pickling their bounty for the first time should start small, says an Edmonton woman who has been canning for years.
“You don’t have to take the whole weekend,” said Johwanna Alleyne, who teaches canning courses and runs a pickling business in Edmonton called Mojo Jojo Pickles, which produces everything from ketchup to jelly and relish. “Start with single jars, like make one or two jars of something that you’re really proud of…. You’ll catch on pretty quickly.”
This year saw an explosion of interest in gardening as the pandemic forced people to stay closer to home. Similar to the early rush for toilet paper and flour, people are now facing a shortage of Mason jars used to preserve their homegrown fruits and veggies.
Alleyne said she’s certainly noticed people getting into canning and pickling for the first time this year. “I didn’t know that pickles were an essential service, but it seems like they are,” she told CBC Radio’s The Current. “I think we’ve all appreciated just slowing down a little bit. And fresh, real food and good flavour and the comfort of good flavours become really important.”
With pickling, the amount of acid in the jar and how you fill it is important, as is the processing time, said Alleyne. That’s because canning gone wrong can lead to spoilage or cause botulism. If jars meant to preserve peaches or nectarines aren’t prepared properly, for example, you may notice air bubbles, which will cause the preserved fruit to slowly spoil.
Find out more about COVID-19
Still looking for more information on the pandemic? Read more about COVID-19’s impact on life in Canada, or reach out to us at email@example.com if you have any questions.
If you have symptoms of the illness caused by the coronavirus, here’s what to do in your part of the country.
For full coverage of how your province or territory is responding to COVID-19, visit your local CBC News site.
To get this newsletter daily as an email, subscribe here.
COVID 19: Here's the list of Ottawa-area pharmacies that will offer free testing for asymptomatic people – Ottawa Citizen
The Ontario government announced Wednesday it would expand COVID-19 testing to pharmacies, with as many as 60 pharmacies set to offer free testing to asymptomatic people beginning Friday.
Here are the 13 pharmacies in the Ottawa area that will offer testing by appointment to asymptomatic patients.
Shoppers Drug Mart pharmacies at:
1180 Walkley Road, Ottawa, ON, K1V 2M5, (613) 737-3344, https://stores.shoppersdrugmart.ca/en/store/620/
647 Earl Armstrong Road, Ottawa, ON, K1V 2G2, (613) 822-6746, https://stores.shoppersdrugmart.ca/en/store/1161/
455 Bank Street, Ottawa, ON, K2P 1Y9, (613) 238-9041, https://stores.shoppersdrugmart.ca/en/store/1428/
541 Montreal Road, Ottawa, ON, K1K 0V1, (613) 740-0616, https://stores.shoppersdrugmart.ca/en/store/641/
3940 Innes Road, Orléans, ON, K1W 1K9, (613) 834-7383,https://stores.shoppersdrugmart.ca/en/store/1139/
Shopify fires two 'rogue' employees following data breach – CTV News
Shopify Inc. says it has notified Canada’s privacy commissioner about a recent data breach it says was carried out by two “rogue” employees.
“In accordance with Canadian law, we promptly notified all affected merchants,” a spokeswoman for the company wrote in an email.
“We have subsequently provided information regarding the incident to the Office of the Privacy Commissioner.”
Earlier Wednesday, the commissioner’s office said it hadn’t yet received a report about the breach.
“Our office is reaching out to Shopify, given the potential seriousness of the breach, to request more information about the matter,” Vito Pilieci, a senior communications adviser wrote in an email.
Under the Personal Information Protection and Electronic Documents Act, it is mandatory for companies to report breaches to the privacy commissioner’s office, “where it is reasonable to believe that the breach creates a real risk of significant harm to an individual,” Pilieci said.
Shopify spokeswoman Rebecca Feigelsohn said the two employees involved in the breach were fired.
On Tuesday, the Ottawa-based company first revealed on an online discussion board that it had identified two workers involved in illegitimately obtaining records connected to some of its merchants.
“We immediately terminated these individuals’ access to our Shopify network and referred the incident to law enforcement. We are currently working with the FBI and other international agencies in their investigation of these criminal acts,” the company said.
“While we do not have evidence of the data being utilized, we are in the early stages of the investigation and will be updating affected merchants as relevant.”
The customer data the employees were accessing was linked to fewer than 200 merchants, who Shopify has declined to identify but says have been notified.
The improperly accessed data includes basic contact information such as emails, names and addresses, as well as order details, such as what products and services were purchased.
Shopify said complete payment card numbers and other sensitive personal or financial information were not part of the breach and it has yet to find evidence that any of the data was used.
This report by The Canadian Press was first published September 23, 2020.
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