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The S&P/TSX composite index has climbed 15 per cent in the past year.
The S&P/TSX composite index has climbed 15 per cent in the past year.
(FRANK GUNN/THE CANADIAN PRESS)

Will investors finally buy into RBC’s capital markets strength?

Wondering why Royal Bank of Canada would downplay its ability to mint money in the securities business? A quick look at the early analyst reaction to RBC’s earnings hints at the answer.

The market is still dubious about the sustainability of such earnings. For some investors and analysts, a dollar of trading or investment banking earnings is lower “quality” than a dollar from lending or some other vanilla banking business. Their take on the issue is based on the perceived repeatability of earnings.