The share price of Royal Bank of Canada (TSX:RY)(NYSE:RY) has seen a 3% increase in 2017. The stock has been in a steady decline since brushing close to the $100 mark in early March. The bank is expected to release its third-quarter results before trading opens on August 23.
Should investors be stacking RBC stock before its Q3 report as we head into the last third of 2017?
RBC reaches settlement in the United States
RBC, Morgan Stanley, and three other banks agreed on a settlement to pay $111.2 million in light of accusations of price rigging in the foreign exchange market. RBC paid $15 million out of pocket to cover its portion of the settlement. All of the banks concerned have denied wrongdoing, and only two out of the 16 facing litigation have not stepped up to settle.
In late June, RBC announced it would pay its clients $21 million in compensation over allegations that it had charged excess investment fees due to technological and personnel oversights.
The bank just launched innovative bill-payment technology
On August 1, RBC announced that it would become the first bank in Canada to enable bill payments using Siri, the personal assistant on iOS Apple, Inc. products. The update was made to the RBC Mobile app; it will allow personal banking clients to request that Siri pay bills using their iPhones and iPads.
RBC also introduced Interac e-transfer payments within Apple iMessage. RBC clients can now type the amount of the transfer into the iMessage window and use TouchID to authenticate. The bank reported that it has seen growth of more than 20% in active mobile users over the last year.
The launch comes courtesy of RBC innovation labs, a division of the bank that is dedicated to partnering with experts in academia, FinTech, and clients of the bank to improve processes and applications. In January, chief executive officer David McKay said he wanted the bank to spend at least 40% of the technology budget on innovation. In this interview, McKay also referenced investments in blockchain, which allows information to exist as a shared and continually reconciled database, and artificial intelligence.
Is the stock a buy right now?
As of August 3, the stock is priced at $93.96 — down 0.17% for the day. The stock has increased 18% year over year. Second-quarter earnings posted in late May beat analyst estimates — up 11%. It boasts a dividend of $0.87 per share with a dividend yield of 3.7%. RBC currently has the largest market cap of any company on the S&P/TSX Index.
The share price of RBC has fallen victim to some headwinds in the Canadian economy that have emerged after the winter of 2017. These include a slump in oil prices, concern regarding an overheated housing market in Ontario, and the Bank of Canada raising rates on what some consider to be over-leveraged consumers. Investors should see this period as an opportunity to stack RBC stock for the long term.
