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UPDATE 2-Royal Bank of Canada earnings beat market expectations

* EPS C$2.05 vs forecast C$1.99

* Net income C$3 billion, up 7 percent (Adds details on divisional performances)

TORONTO, Feb 23 (Reuters) - Royal Bank of Canada reported first-quarter earnings that were above market expectations helped by a strong performance in wealth management.

Canada's biggest bank by market value reported earnings per share, excluding one-off items, of C$2.05 for the quarter to Jan. 31. Analysts had on average forecast earnings of C$1.99 per share, Thomson Reuters I/B/E/S data showed.

RBC reported net income of C$3 billion ($2.4 billion), up 7 percent from a year earlier. That included a writedown of C$178 million as a result of a tax overhaul in the United States.

The bank's core personal & commercial banking division produced a 10 percent rise in net income to C$1.5 billion, benefiting from a 6 percent increase in sales of residential mortgages despite concerns over Canada's housing markets.

Canadian authorities have taken a number of steps over the past 18 months to cool overheating housing markets in Vancouver and Toronto, including imposing taxes on foreign buyers. The country's banking regulator in January introduced stricter rules on mortgage lending.

RBC said net income at its wealth management business rose by 39 percent to C$597 billion, benefiting in part from the U.S. tax changes. Net income at its capital markets business rose 13 percent to C$748 million, also benefiting from the U.S. tax changes.

The bank reported an increase of 3 cents in its quarterly dividend to C$0.94 and said it planned to buy back more shares.

($1 = 1.2706 Canadian dollars) (Reporting by Matt Scuffham; editing by Jason Neely and Jane Merriman)