NEW YORK (TheStreet) -- Shares of Royal Bank of Canada (RY) are down -1.25% to $73.72 after it was reported that the bank is facing a conundrum about one of its fastest growing businesses: when to apply the brakes, the Wall Street Journal reports.
The bank's capital markets business, after pushing for years to become a global player, threatens to become a victim of its own success, the Journal said.
Earnings from capital markets, which the company today said contributed about 27% to its overall profit, are coming up against a self-imposed limit that is key to the risk control on which Canada's banks built their recent reputation.
TheStreet Ratings team rates ROYAL BANK OF CANADA as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ROYAL BANK OF CANADA (RY) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."