Royal Bank of Canada (NYSE:RY) stock edged lower Tuesday, even after the bank reported better-than-expected third-quarter earnings and record profit last week.

Earnings Beat Estimates

Royal Bank reported adjusted earnings of $3.07 per share, beating the analyst estimate of $2.89. Revenue reached $13.282 billion, topping the $12.9 billion forecast.

The Toronto-based bank reported net income of 6.02 billion Canadian dollars, up 11% from a year earlier. Diluted earnings increased 13% to 4.23 Canadian dollars per share.

Adjusted net income rose 10% to 6.1 billion Canadian dollars. Adjusted diluted earnings climbed 11% to 4.28 Canadian dollars per share.

Total revenue increased 9.1% to 18.54 billion Canadian dollars. Adjusted return on equity improved to 18.1% from 17.7% a year earlier.

Wealth, Capital Markets Drive Growth

Wealth management profit surged 32% to 1.44 billion Canadian dollars. Market gains and net sales boosted fee-based client assets.

Capital markets profit increased 16% to 1.54 billion Canadian dollars. Stronger debt and equity underwriting helped the business. Higher mergers and acquisitions activity and equity trading revenue also supported growth.

Commercial banking profit rose 12% to 936 million Canadian dollars. The segment benefited from loan and deposit growth, along with lower credit-loss provisions.

However, personal banking profit slipped 1% to 1.92 billion Canadian dollars. Higher expenses and credit-loss provisions offset growth in net interest income.

Credit Costs Rise

Total provisions for credit losses increased 14% to 1 billion Canadian dollars. The provision ratio on loans edged up 1 basis point to 36 basis points.

Royal Bank ended the quarter with a common equity Tier 1 ratio of 13.5%. The bank returned 4 billion Canadian dollars to shareholders. That included 1.6 billion Canadian dollars in share repurchases and 2.4 billion Canadian dollars in common dividends.

The board also declared a quarterly common dividend of 1.76 Canadian dollars per share. It is payable on or after Nov. 24 to shareholders of record on Oct. 26.

RY Price Action: Royal Bank of Canada shares were down 1.11% at $201.87 at the time of publication on Tuesday, according to Benzinga Pro data.

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