(Bloomberg) -- Royal Bank of Canada posted earnings that topped analysts’ estimates as business loans and solid credit conditions powered its retail-banking business.

Revenue in the personal and commercial banking business rose 17% to C$2.23 billion ($1.74 billion) in the fiscal second quarter, Toronto-based Royal Bank said Thursday. 

Businesses have ramped up borrowing to meet customer demand and stockpile inventory to protect against supply-chain snarls, and Canada’s real estate market remained hot during much of the quarter, boosting Royal Bank’s mortgage balances. Royal Bank also released C$342 million in provisions for credit losses. Analysts estimated the bank would set aside C$241.2 million, on average.

“The resilience of our diversified business model, prudent risk and capital management, and strategic investments in talent and technology continued to define our performance in the second quarter,” Chief Executive Officer Dave McKay said in a statement.

Royal Bank shares have fallen 4.3% this year, compared with a 4.1% drop for the S&P/TSX Commercial Banks index. 

Also in the earnings release:

  • Net income rose 5.9% to C$4.25 billion, or C$2.96 a share.
  • Excluding some items, profit was C$2.99 a share. Analysts estimated C$2.69, on average.
  • Capital markets revenue declined 14% to C$2.35 billion.

©2022 Bloomberg L.P.