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File photo of a Royal Bank of Canada branch in Montreal.Ryan Remiorz/The Canadian Press

Royal Bank of Canada's latest quarterly results prove the lender can consistently make over $2-billion. Now the country's most profitable bank must demonstrate it can earn even more.

RBC's results marked the third straight quarter in which the bottom line topped $2-billion, giving management enough confidence to hike the bank's dividend again. Yet investors were unmoved, sending the shares slightly lower, while the incoming chief executive officer stressed to shareholders that RBC knows it can't afford to take it easy.

"History has shown that there can be a danger when leaders get complacent and take success for granted," said Dave McKay, head of personal and commercial banking, who will step into the CEO's role in August. "RBC does not, and it will not, belong to that group.

"We know we hold a privileged position, and we'll work hard to keep it."

The growth needed to stay on top of the industry won't be easy to come by.

Personal lending in Canada is cooling and the profits from loans are thin because of intense competition and low interest rates, so each bank is developing its own expansion strategy.

RBC is keen on expanding in wealth management, yet finding the right acquisition is a tough task.

The bank looked at "a tremendous number of opportunities" in the past year, CEO Gordon Nixon said, but most asset managers that are up for sale are expensive because sellers are demanding "extremely high valuations."

Those that are affordable and fit into RBC's strategy often don't have the best performance, Mr. Nixon added.

The bank isn't too worried in the near term. Aside from some one-time charges related to the restructuring of its Caribbean arm, which amounted to $100-million, RBC's core profits ticked higher in each of its biggest divisions. Earnings were 2 per cent higher than in the same quarter a year earlier. After stripping out one-time items, RBC made $2.18-billion.

RBC's total personal and commercial banking earnings dropped 3 per cent to $1.07-billion because of the Caribbean issues, but Canadian banking continued to deliver growth, with earnings rising 4 per cent over the year prior. Mr. Nixon acknowledged that personal lending is cooling, but said the bank still expects mid-single-digit growth in the near future.

Capital markets' profit climbed 9 per cent higher in the first quarter, boosted by lower loan-loss provisions and strong trading revenue, while wealth management earnings climbed 3 per cent to $235-million.

Investor and treasury services, which provide back office support for other companies, were a bright spot for the bank, with net income soaring to $106-million, up 34 per cent over 2013. Some gains came through tight cost control, while others stemmed from growing client deposits.

"Though expectations are always high for this bank, we see both the quality and quantity of earnings as supportive of our [positive] investment thesis," analyst Rob Sedran at CIBC World Markets wrote in a note to clients.

Despite RBC's recent success, demonstrated by its stellar 18 per cent return on equity in the quarter, the bank had some hiccups – particularly in the Caribbean where the regional economy is weak. The bank recently announced plans to sell its Jamaican operations.

"The decision to restructure our Caribbean business was a difficult one but one that will allow us to focus our effort on those markets that allow us to be a leading financial institution," Mr. Nixon said. "We remain committed to the region."

Aside from wealth management, RBC has been vocal about its plans to boost its capital markets arm. However, executives have pledged that this unit will not account for more than 25 per cent of the bank's bottom line, and the focus is on adding relatively safe earnings by growing plain vanilla investment banking and corporate lending, particularly in the U.S.

RBC raised its dividend by 6 per cent to 71 cents a share.