Royal Bank of Canada’s (TSX:RY) wealth management’ net income grew 25% over the last year. For Q3 ended July 31, the segment reports net income of $486 million, up $98 million over last year.

This is mainly due to growth in average fee-based client assets, reflecting capital appreciation and net sales, says RBC. Also, the bank cites higher net interest income reflecting higher U.S. interest rates and volume growth.

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In a report to shareholders, RBC says it has $601.2 billion in assets under management as of July 31, compared to $575 billion a year ago.

In its Q3 slideshow, the bank provides the following year over year revenue breakdown for wealth management:

  • Canadian revenue was up 12%, primarily due to higher average fee-based client assets.
  • U.S. revenue (including the revenue of City National Bank, which was acquired in 2015) was up 16%.
  • RBC Global Asset Management revenue was up 5%, primarily due to higher average fee-based client assets.

The slideshow also notes the bank continues to rank first in market share by AUM. As of June 2017, it says RBC “has captured 32.2% of share amongst banks and 14.9% all-in.”

Dividend hike surprises to upside

RBC has reported nearly $2.8 billion of net income for its fiscal third quarter as well as an unexpectedly large increase to its quarterly dividend.

RBC’s net income was down 3% over last year — when its bottom line was boosted by the sale of an insurance business. Total revenue for the three months ended July 31, 2017 was $9.99 billion, down 2.6% from a year ago.

Excluding one-time items, Royal Bank’s net income was up 5% from the third quarter of fiscal 2016. The profit amounted to $1.85 per share of net income under generally accepted reporting, or $1.89 per share on an adjusted cash basis.

Chief executive Dave McKay, who describes the quarter’s results as solid in a press release, has also announced that RBC’s quarterly dividend will be going up 5% to 91 cents per share.

Banking analyst John Aiken of Barclays Capital said in a note to clients that the dividend increase was twice as big as expected and overall performance was better than anticipated.

“Although we […] had been expecting a drop in [RBC’s] earnings after a strong second quarter, [the bank] managed to exceed expectations on the back of impressive performances in its retail bank and wealth management platforms,” Aiken wrote.

In RBC’s release, McKay says, “We are driving sustainable growth by further investing in our people, digital capabilities, and key markets, while leveraging our strengths in data and technology to exceed our clients’ expectations.”

The Royal Bank is the first of Canada’s six biggest banks to report third-quarter financial results this year. CIBC (TSX:CM) reports on Thursday while the others report next week.