First-quarter profit at Royal Bank fell 17%, with the bank citing higher writedowns and loan losses for the decline.

The bank said today that it made just under $1.25 billion in the quarter ended January 31, or 95¢ a share. In the same quarter of the previous year, Royal made a profit of $1.32 billion, or $1.01 a share.

On a cash basis, which excludes the amortization of intangibles, Royal said it earned 97¢ per share.

Royal said it took a writedown in its capital markets division of $187 million after-tax for losses related to the U.S. subprime market, its U.S. municipal GIC business and its U.S. commercial mortgage-backed securities business.

The bank reported a $61 million provision for impaired loans at its U.S. banking operations, primarily stemming from its U.S. residential builder finance business.

Royal also took a $45 million charge on strong appreciation of the Canadian dollar against the U.S. dollar.

Revenues at the bank dipped 1% year-over-year, coming in at $5.65 billion.

Return on equity, a key measure of profitability, fell to 21.4% in the quarter, from 27.3% a year earlier.

The bank said it is maintaining its quarterly common share dividend at 50¢ share.

“Almost all of our businesses within our four segments delivered solid performance this quarter and while a few have been affected by the difficult market conditions, our diversified business mix, proactive approach to risk management and rigorous operational discipline continue to underpin strong earnings,” said Gordon Nixon, President and CEO, in a release.

Canadian banking net income was $762 million, flat compared to last year and down 15% over last quarter.

Global Insurance net income was $89 million, down 52% or $96 million over last year and down 13% or $13 million over last quarter.

Wealth Management net income was $181 million, down 14% or $30 million over last year and flat compared to last quarter.

U.S. & International Banking net income was $31 million, down $36 million over last year due to higher provisions for credit losses of $61 million, primarily on higher impaired loans in the bank’s U.S. residential builder finance business, as well as in its commercial and retail portfolios.

Capital Markets net income was $304 million, down $92 million from record results a year ago primarily due to writedowns related to losses in U.S.
subprime, the investment portfolio supporting the bank’s U.S. Municipal GIC business, the U.S. commercial mortgage-backed securities business, and its U.S. auction rate securities portfolio.