Two of Canada’s largest banks separately reported rising first-quarter profits on Wednesday, results that may help ease investor worries about the effects of a slowing economy, the steep decline in oil prices and stubbornly low interest rates.

Royal Bank of Canada announced plans to increase its dividend as it unveiled record net income of $2.46 billion for the three months ended Jan. 31.

That’s up five per cent from the fourth quarter of 2014 and up a whopping 17 per cent from the first quarter of 2014, when the bank was hit by specific charges related to its operations in the Caribbean.

Excluding those items, which include a $60-million loss related to the sale of RBC Jamaica, as well as $32 million in after-tax restructuring charges, net income rose by 12 per cent or $272 million.

National Bank of Canada reported net income of $415 million for the first quarter, up two per cent from $405 million in the year-earlier period. The increase was driven by higher trading activity and banking services, the bank said. Revenues rose to $1.41 billion, up threeper cent from $1.36 billion in the first quarter of 2014.

RBC, as the bank is known, is Canada’s largest lender. National Bank is the country’s sixth largest. Both results beat Bay Street expectations in contrast to disappointing results released by the Bank of Montreal on Tuesday.

“Royal posted exceptionally strong results, which should be well rewarded,” John Aiken, an analyst with Barclays Capital, wrote in a research note.

Shares of both banks rose in trading on the Toronto Stock Exchange on Wednesday. Shares of RBC gained $2.75 or 3.66 per cent, to close at $77.80. National Bank stock rose by 3.26 per cent or $1.53 per share to close at $48.43 apiece.

RBC said it will hike its quarterly common share dividend by two cents per share, orthree per cent, to 77 cents per share.

Cash earnings per share came in at $1.67, beating analyst expectations by 10 cents.

Most of RBC’s major operating segments showed growth, although net income from wealth management declined two per cent or $5 million to $230 million as a result of restructuring costs for its U.S. and international businesses.

“While we are pleased with our first quarter results, recent changes in the macro environment have created some headwinds,” RBC president and chief executive officer Dave McKay told analysts on a conference call.

The price of oil declined 40 per cent in the first quarter, McKay noted. Though prices have recovered some lost ground and stabilized in recent weeks, “the price of oil remains at levels that challenge the profitability of the sector,” he said.

“To date we haven’t seen any significant weakness in our oil and gas credit portfolio or our retail portfolio in the Prairies,” McKay said. “But in this environment we are conducting extensive stress testing to help us understand the potential impacts of persistently low oil prices on our business, and we are actively monitoring on an ongoing basis.”

Lower energy prices are expected to lead to increased consumer spending, McKay added. It has also lead to a lower Canadian dollar, which is a boon to exporters.

Oil and gas companies account for just under 1.5 per cent of RBC’s total loan book, Mark Hughes, chief risk officer, told analysts.

Exploration and production companies account for over 60 per cent of those loans, and drilling services firms make up another 20 per cent.

The bank has identified clients that could run into trouble if oil prices remain low and is monitoring those companies for signs of trouble, Hughes said.

It is also conducting extensive stress tests on its lending portfolio, assuming a variety of scenarios, including oil prices that remain at $45 (U.S.) per barrel for an extended period of time, a significant increase in unemployment rates and interest rates, a national downturn in real estate, and a recession in Alberta.

“Under these very extreme scenarios, we have determined that potential losses would still be manageable and within our risk appetite,” Hughes said.

Last month, RBC announced a $5.4-billion (U.S.) deal to acquire Los Angeles-based City National Corp.

RBC has said City National will allow it to expand its wealth management business south of the border. The acquisition marks RBC’s first major return to the U.S. market, after selling its U.S. retail banking business at a loss in 2011.

Overall, provisions for credit losses at RBC were $270 million in the quarter, down $75 million, or 22 per cent, from the previous quarter mainly due to lower provisions in personal and commercial banking in the Caribbean and capital markets, partially offset by higher provisions in wealth management, the bank said.

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Bank of Montreal, Canada’s fourth-largest bank, reported a six-per-cent slide in profits as lower interest rates hurt its insurance business.

Canadian Imperial Bank of Commerce and TD Bank Financial Group report their results on Thursday.

With files from Star wire services

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