Royal Bank of Canada (RY.TO) narrowly beat second-quarter profit estimates amid growth in most of its major divisions, including the lender’s core domestic unit.

Total net income rose six per cent year-over-year to $3.23 billion for the quarter that ended April 30. On an adjusted basis, RBC earned $2.23 per diluted share. Analysts, on average, expected $2.21 per share.

Profit from Canadian banking rose two per cent year-over-year to $1.46 billion. The uptick in that division stands in contrast to the weaker performance in core domestic retail banking that Canadian Imperial Bank of Commerce reported Wednesday. And, notably, RBC’s Canadian mortgage book rose to $252.6 billion from $250.2 billion in the previous quarter.

Overall credit quality improved in the latest quarter, as provisions for loan losses fell to $426 million from $514 million in the fiscal first quarter. However, RBC set aside more money for loans that could go bad in its core P&C business.

RBC also benefited from a strong performance in its capital markets division, where profit jumped 17 per cent year-over-year in the second quarter.

The bank's insurance and investor and treasury services units were profit drags in the second quarter, as earnings in those divisions fell 10 and 29 per cent, respectively.

“Our consistent earnings growth is a testament to the strength of our diversified business model and our strategy to transform the bank to create more value for clients," said RBC CEO Dave McKay in a release.


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