Standard & Poor’s Ratings Services says that its negative outlook on Royal Bank of Canada remains unchanged following the bank’s Enron provisioning.

On Tuesday, RBC announced that it plans to establish a litigation reserve in the pretax amount of US$500 million (after-tax impact of US$255 million) in fourth-quarter 2005 for
Enron-related matters.

“Although Royal Bank has made an estimate on the litigation charge, the magnitude of the settlement related to the larger Newby class action suit remains unclear,” notes S&P. “The negative outlook is in place until the overhang of the Enron litigation risk is resolved.”