Tuesday, Sep 25, 2018
HomeBusinessRBC FINCO’s net income up 89.2 percent

RBC FINCO’s net income up 89.2 percent

Nathaniel Beneby.

RBC FINCO saw a net income increase of 89.2 percent last year, according to the company’s annual report. It’s executives are now looking to increase the company’s mortgage portfolio in 2018 after low mortgage growth in 2017 and a continuing non-performing loan portfolio.

Royal Bank of Canada (RBC) is the majority shareholder of RBC FINCO, which managed to keep its operating costs low thanks to its relationship with RBC. Last year the company’s net income increased from $11.6 million in 2016 to $22 million in 2017.

“The increase in net income is attributed to lower loan provisions in 2017 and higher recoveries of debts written off,” RBC FINCO Chairman Robert Johnston in the report.

“Higher provisions were experienced in 2016 due to increased non-performing loans and an increased adjustment to the general provision. Other operating costs remained flat year over year.

“Our core earnings continue to be volatile and under pressure from lower mortgage growth, lower mortgage interest rates and unacceptably high levels of delinquent and non-performing mortgages.”

RBC FINCO Managing Director Nathaniel Beneby said the company has improved the structure of its mortgage department in order to focus on growing its mortgage business.

“While we have experienced a decline in net mortgage growth in 2017, we are maintaining market share and are reviewing our mortgage product to ensure we remain competitive,” Beneby said in the report.

“We have recently increased our mobile mortgage professionals sales force, and repurposed the mortgage specialist positions as relationship managers to better retain and grow the mortgage business. Additionally, we have expanded the sales team by adding experienced senior leadership and depth to our team to accelerate mortgage growth in 2018.”

Johnston said as RBC FINCO has been operating “in a flat to low recovery economy” with a high unemployment rate, it is likely to be plagued by a high level of non-performing mortgages, which totaled $120.9 million last year compared to $119.4 million in 2016.

 

 

SHARE US ON:

Tourism markets Bahamas to African American women at BEWOP summit

Ferreira: Govt close to finalizing bill creating separate environment ministry