(Bloomberg) -- Royal Bank of Canada said it plans to cut as much as 2% of its full-time staff in the coming quarter after a surge in expenses weighed on third-quarter results.
Expenses climbed 23% to C$7.86 billion ($5.8 billion) for the fiscal third quarter, compared with the C$7.31 billion average of analyst estimates compiled by Bloomberg. Royal Bank ended the quarter with 93,753 employees after it shed about 645 jobs in the period.
“We remain focused on executing on our cost reduction strategy while leveraging our strong balance sheet and diversified business model to support our growth,” Chief Executive Officer Dave McKay said in a statement Thursday.
Even so, a jump in earnings from the firm’s traders and investment bankers helped boost firmwide net income 8.2% to C$3.87 billion for the three months through July, and per-share earnings beat estimates.
Net income from the firm’s capital-markets division soared 57% to C$938 million, topping the C$805 million average of analysts’ estimates.
Trading desks have benefited from an increase in client activity as investors wrestle with the impacts of central-bank activity around the world. Investment bankers, too, are seeing a pickup in deals compared with the doldrums of a year ago.
Royal Bank has been on a dealmaking spree. Earlier this year, the Toronto-based firm announced it would acquire HSBC Holdings Plc’s Canadian unit for C$13.5 billion to extend its lead in domestic retail banking. The company has warned the acquisitions would boost costs in the coming quarters.
Royal Bank shares have slumped 5.5% this year through Wednesday, more than the 4.5% decline for the S&P/TSX Commercial Banks Index.
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