RBC enjoyed solid growth in its bottom line last quarter, but its leadership sees trouble ahead.
From May through July 2023, which RBC considers the year's third quarter, the Canadian firm saw its net income rise to $3.87 billion (all figures are in Canadian dollars, unless otherwise noted). That's an 8% increase over the third quarter of 2022.
But in a call with investors on Thursday, RBC CEO Dave McKay also expressed misgivings about next quarter.
"Our base case forecasts a softer economic outlook," McKay said. "We expect slowing growth and lower inflation due to the lagging impact of monetary policy, combined with a slowdown in China and elevated climate in geopolitical risks."
To adapt to this climate, RBC plans to cut jobs. McKay said the firm lowered its headcount by about 1% last quarter, but will still need to reduce it by another 1% to 2% in Q4. At a company with over 97,000 employees, that could mean the loss of about 1,900 jobs.
"We've heightened our focus on expense control," McKay said. "We expect to further reduce FTE [full-time equivalent] by approximately 1% to 2% next quarter, through attrition and targeted reductions."
In other ways, RBC has increased its headcount in recent months — particularly in the U.S. Earlier this week, RBC Wealth Management
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So it was with a mix of concern and optimism that McKay described RBC's American operations.
"We are well positioned to benefit from our diversified U.S. business mix, including our top 10 capital markets and wealth management platforms," McKay said.
For a closer look at how RBC did in the third quarter of 2023, scroll through the cardshow below (all numbers are in Canadian dollars). To see how RBC did in the second quarter,
