Royal Bank Of Canada · TSX:RY
Royal Bank Of Canada — Q2 2025 Earnings Presentation
57 slides from Royal Bank Of Canada's earnings presentation, May 29, 2025
Slide 1: Royal Bank of Canada Second Quarter Results
Royal Bank of Canada Second Quarter Results May 29, 2025 All amounts are in Canadian dollars unless otherwise indicated and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Totals may not add, and
Slide 2: Caution regarding forward looking statements
Caution regarding forward looking statements From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian
Slide 3: Overview
Overview Dave McKay President and Chief Executive Officer 3
Slide 4: Q2/25 Key Messages: Driving premium profitability and strong value creation
Q2/25 Key Messages: Driving premium profitability and strong value creation Reported NIAT Adjusted PPPT(1) (5) Reported Adjusted(1) Reported Adjusted(1) Strong underlying results, partly offset by elevated $3.02 $3.12 reserve build 11% 16% 10% 7% Earnings growth Diluted Earnings per Share (EPS) Dilu
Slide 5: Client assets and activity: Diversified growth across our businesses
Client assets and activity: Diversified growth across our businesses Average Loans & Acceptances and Deposits Average Loans & Acceptances and Deposits Loans and Market Share(2) Personal Banking | $BN Commercial Banking | $BN Capital Markets | $BN LTM(3) GIB(4) +13% +15% league ranking(5) +8% +22% +4
Slide 6: Changing key trends amidst a volatile macroeconomic backdrop
Changing key trends amidst a volatile macroeconomic backdrop Personal Banking - Canada: Cardholder spend Personal Banking - Canada: Average deposits Commercial Banking: Loan growth and volumes(2) | Indexed April 2024 = 100 MoM change | $ utilization rates | MoM Change ($) | % Utilization Core Deposi
Slide 7: Acquisition of HSBC Bank Canada: Execution of cost synergy initiatives is largely complete
Acquisition of HSBC Bank Canada: Execution of cost synergy initiatives is largely complete On track to deliver $740MM of targeted cost synergies – As at Q2/25, RBC has achieved ~85% of annualized targeted cost synergies F2024 (Oct-24) Year 1 (Mar-25) F2025 (Oct-25) Year 2 (Mar-26) Target 25% 60% 80%
Slide 8: Financial Review
Financial Review Katherine Gibson Chief Financial Officer 8
Slide 9: Q2/25: Strong pre-provision, pre-tax earnings more than offset a prudent reserve build
Q2/25: Strong pre-provision, pre-tax earnings(1) more than offset a prudent reserve build Financial Results Reported HBCA Earnings $ MM (except for EPS) Q2/2025 YoY QoQ impact Revenue 15,672 11% (6)% $649 ▪ Net income is up 11% YoY (ex-HBCA 5%) Net Interest Income 8,056 22% 1% 556 ▪ Adjusted net inc
Slide 10: Capital: Strong position supports continued investment in businesses and shareholder returns
Capital: Strong position supports continued investment in businesses and shareholder returns CET1(1) Movement ▪ CET1 ratio(1) of 13.2%, flat QoQ, reflecting: + Strong net internal capital generation 62 bps (31) bps (13) bps (7) bps (9) bps ‒ Higher RWA(1) (excluding FX), mainly from business growth
Slide 11: Net interest income: Solid volume growth and improved spreads in Canadian Banking
Net interest income: Solid volume growth and improved spreads in Canadian Banking All-Bank Net Interest Income | $ MM Average Earning Assets | $ BN All-Bank NIM (AEA)(1) Decomposition 1.60% 1.64% YoY +12% YoY 1.50% Q1/25 All Bank NIM ex Trading(3) 2.16% +14 bps 1,973 2,011 1,802 67 71 +42% Canadian
Slide 12: Non-interest expense: Higher staff-related costs supporting business momentum
Non-interest expense: Higher staff-related costs supporting business momentum Drivers of expense growth | $ MM Drivers of expense growth | $ MM % of LTM NIE Q2/24 Expenses 8,308 Q2/24 8,308 34% 335 Salaries & Benefits Salaries 29% Variable Compensation 177 YoY chg. includes: Variable & share- Core e
Slide 13: Personal Banking: Solid volume growth and higher spreads drove strong results
Personal Banking: Solid volume growth and higher spreads drove strong results Key Metrics(1) Q2/2025 Highlights Reported HBCA $ MM (unless otherwise stated) Q2/2025 Personal Banking Impact YoY QoQ Revenue 4,805 15% 0% 240 ▪ Net income up 14% or 16% adjusted(2) YoY; PPPT(2) up 20% YoY Net interest in
Slide 14: Commercial Banking: Strong volume growth & HBCA contribution partly offset by reserve build
Commercial Banking: Strong volume growth & HBCA contribution partly offset by reserve build Key Metrics(1) Q2/2025 Highlights Reported HBCA $ MM (unless otherwise stated) Q2/2025 Commercial Banking YoY QoQ Impact ▪ Net income up 3% or 5% YoY adjusted(2); PPPT(2) up 25% YoY Revenue 2,062 25% (3)% 333
Slide 15: Wealth Management: Revenue growth supported by strong growth in client assets
Wealth Management: Revenue growth supported by strong growth in client assets Key Metrics(1) Q2/2025 Highlights Reported $ MM (unless otherwise stated) Q2/2025 YoY QoQ ▪ Net income up 11% or 10% YoY adjusted(2); PPPT(2) up 22% YoY Revenue 5,397 13% (3)% Net interest income 1,301 6% (7)% ▪ Revenue up
Slide 16: Capital Markets: Strong Global Markets results underpin strong PPPT earnings
Capital Markets: Strong Global Markets results underpin strong PPPT(3) earnings Key Metrics(1) Q2/2025 Highlights Reported $ MM (unless otherwise stated) Q2/2025 ▪ Net income down 5% YoY; PPPT(3) down 1% YoY YoY QoQ Revenue 3,301 5% (12)% ▪ Revenue up 5% YoY Corporate & Investment Banking 1,589 (7)%
Slide 17: Insurance: Strong results reflecting favourable experience
Insurance: Strong results reflecting favourable experience Key Metrics(1) Q2/2025 Highlights Reported ▪ Net income up 19% YoY $ MM (unless otherwise stated) (1) Q2/2025 YoY QoQ ▪ Revenue up 13% YoY Revenue 338 13% (17)% Insurance Service Result 224 10% (22)% + Insurance service result up 10% YoY Ins
Slide 18: Risk Review
Risk Review Graeme Hepworth Chief Risk Officer 18
Slide 19: Allowance for Credit Losses: Prudent reserve increases on performing loans
Allowance for Credit Losses: Prudent reserve increases on performing loans Allowance for Credit Losses (ACL) on Loans & Acceptances (L&A) | $ MM L&A: $1,013BN 852 L&A: $1,014BN ACL to L&A: 0.68% PCL on Performing Loans of $568MM ACL to L&A: 0.74% 226 13 214 7,501 (872) 115 7,488 7,481 7,481 7,262 6,
Slide 20: Gross Impaired Loans: New formations trended lower
Gross Impaired Loans: New formations trended lower Gross Impaired Loans (GIL) | $ MM | BPS Key Drivers of GIL (QoQ) 88 ▪ Total GIL increased $1,063MM QoQ (up 10 bps) due to higher impaired loans in 78 Commercial Banking and Capital Markets ▪ Personal Banking: GIL of $1,848MM increased $26MM QoQ, mai
Slide 21: PCL on Impaired Loans: Trended lower across most segments
PCL on Impaired Loans: Trended lower across most segments Total RBC | $ MM | BPS Wealth Management (including CNB) | $ MM | BPS ▪ Wealth Management: Provisions were up $6MM QoQ, primarily driven by one account in the Average historical loss rate(1): 30 bps 16 16 Telecommunication & Media sector 15 3
Slide 22: Appendices
Appendices 22
Slide 23: Accelerating Our Ambitions: Client focused, Future Ready
Accelerating Our Ambitions: Client focused, Future Ready 1 2 3 4 5 Canada Global Innovation Risk Management OneRBC Extend our Expand in global fee Create value from data Maintain strong Connect our leadership position pools, including scale and artificial financial and non- businesses and in Canada
Slide 24: Driving strong value creation through the cycle
Driving strong value creation through the cycle Diversified Investing Disciplined risk and Reimagining business model for growth expense management Innovation As at Q2/2025 $62BN $2T ~1:1 LTM Q2/2025 Total Spot Assets 131% 74 bps ACL(3) to loans ratio Revenue (as at Q2/2025) Canadian Banking Liquidi
Slide 25: Net Interest Margin: Average rates and balances
Net Interest Margin: Average rates and balances Interest Income Yield(1) Average Assets | $ BN Q2/24 Q3/24 Q4/24 Q1/25 Q2/25 Q2/24 Q3/24 Q4/24 Q1/25 Q2/25 Loans 5.87% 5.96% 5.89% 5.69% 5.50% Loans 897 964 973 999 1,006 Securities 4.22% 4.20% 4.08% 3.82% 3.88% Securities 405 425 433 502 512 Repo & se
Slide 26: Net Interest Margin: Interest rate sensitivity
Net Interest Income: Interest rate sensitivity All-Bank: Impact of 100 bps change across the curve(1) | $ MM Impact of 25 bps decrease(2) | $ MM Q1/25 Q2/25 Revenue Short-term rates(2) Across the curve(2) Net Interest Income Increase Decrease Increase Decrease Q1/25 Q2/25 Q1/25 Q2/25 Canadian Dollar
Slide 27: Net Interest Margin: Canadian Banking and City National
Net Interest Margin: Canadian Banking and City National Canadian Banking NIM(1) QoQ Waterfall CNB NIM(1) QoQ Waterfall 0.03% 0.01% 0.01% 0.06% 0.02% (0.04)% 2.92% 2.87% 2.94% 2.98% Q1/25 NIM Rate Impacts Competitive Product Mix/Other Q2/25 NIM Q1/25 NIM Asset Yields Liabilities Cost Mix/Other Q2/25
Slide 28: Non-Interest Income: Higher Wealth Management results offset by WAP-related headwinds
Non-Interest Income: Higher Wealth Management results offset by WAP-related headwinds Non-Interest Income | $MM Q2/2025 Highlights Q2/24 Non-interest income 7,531 ▪ Non-interest income up 1% YoY; Adjusted non-interest income(5) up 3% YoY, excluding the prior year impact from management of closing ca
Slide 29: Canadian Banking: Strong operating leverage led to a 38% efficiency ratio
Canadian Banking: Strong operating leverage led to a 38% efficiency ratio Key Metrics – Q2/2025(1) Reported Personal Banking – Commercial Canadian HBCA $ millions (unless otherwise stated) Canada Banking Banking YoY QoQ Impact Revenue 4,483 2,062 6,545 18% (1)% 573 Net interest income 3,270 1,734 5,
Slide 30: Canadian Banking: Our ~16MM clients continue to adopt our digital channels
Canadian Banking: Our ~16MM clients continue to adopt our digital channels Active Digital Users(1) | ‘000 Digital Personal Adoption Rate(2) Active Mobile Users(1) | ‘000 +5% +120 bps +9% Pre- pandemic Pre- pandemic 9,681 10,016 10,176 63.0% 63.3% 64.2% 7,917 8,067 7,415 Pre- 7,354 pandemic 54.4% 4,6
Slide 31: U.S. Region: Improved underlying profitability at CNB more than offset by lower Capital Markets
U.S. Region: Improved underlying profitability at CNB more than offset by lower Capital Markets results Key Metrics Q2/2025 Highlights | US$ MM US$ MM (unless otherwise stated) Q2/2025 YoY QoQ ▪ Net income down 14% Net Income 496 (14)% (29)% Efficiency Ratio(2) 80.7% 2.9 pts 3.3 pts ▪ Revenue ROE(2)
Slide 32: Corporate Support
Corporate Support Financial Performance | $ MM Q2/2025 Highlights Reported Q2/2025 Q1/2025 Q2/2024 ▪ Net income of $(151)MM, up from $(309)MM a year ago, reflecting: Revenue (teb(1)) (231) 71 94 + HBCA transaction and integration costs $(24)MM after-tax versus $(282)MM after-tax in the prior U.S. WA
Slide 33: Non-Interest Expense: Market volatility led to swings in share-based compensation
Non-Interest Expense: Market volatility led to swings in share-based compensation SBC (incl. U.S. WM WAP) had a $(125)MM impact on YoY expense growth $ millions (unless otherwise stated) Q1/23 Q2/23 Q3/23 Q4/23 Q1/24 Q2/24 Q3/24 Q4/24 Q1/25 Q2/25 Share-based compensation 270 132 243 (17) 397 179 235
Slide 34: Market Risk Trading Revenue and Trading VaR
Market Risk Trading Revenue and Trading VaR $MM 30 29 25 24 60 50 40 30 20 10 0 -10 -20 -30 -40 -50 May 31, 2024 June 28, 2024 Aug 30, 2024 Sep 30, 2024 Nov 29, 2024 Dec 31, 2024 Feb 28, 2025 Mar 31, 2025 May 1, 2024 July 31, 2024 Oct 31, 2024 Jan 31, 2025 Apr 30, 2025 Trading Revenue (teb)(1) Tradi
Slide 35: Impact of foreign currency translation
Impact of foreign currency translation Estimated impact of foreign currency translation on key income statement items Relevant average exchange rates that impact our business For the three months ended Q2/25 vs. Q2/25 vs. For the three months ended ($ millions, except per share amounts) (Average for
Slide 36: Personal Banking - Canada: Strong client profile
Personal Banking - Canada: Strong client profile Personal Banking - Canada PCL on Impaired Loans and Gross Impaired Loans Personal Banking - Canada Retail Credit Bureau Score Distribution (Q2/25) Q2/25 PCL on Impaired Loans Gross Impaired Loans Avg Credit Avg Loan (bps)(1) (bps) Bureau 3.8% <636 Bal
Slide 37: Canadian Residential Portfolio: Strong underlying credit quality
Canadian Residential Portfolio: Strong underlying credit quality Canadian Residential Mortgage Portfolio(1) | $ BN Canadian Banking RESL Portfolio (1)(2) $224.8 Insured Uninsured Total $450BN Uninsured $388BN Mortgage Balance $412BN $350BN $90.1 $354.8 (20%) (80%) HELOC Balance $38BN $38BN LTV at Or
Slide 38: Allowance for Credit Losses: Prudently reserved
Allowance for Credit Losses: Prudently reserved Allocation of ACL by Product as a % of Loans & Acceptances Q2/24 Q1/25 Q2/25 Product Stage 1 & 2 Total Stage 1 & 2 Total Stage 1 & 2 Total Residential mortgages(1) 0.08% 0.12% 0.08% 0.13% 0.10% 0.15% Other Retail 1.73% 1.91% 1.82% 2.04% 1.93% 2.15% Per
Slide 39: Funding: Well-diversified
Funding: Well-diversified LCR (1) | $ BN | total adjusted value ▪ As at April 30, 2025, relationship-based deposits, which are the primary source of funding for retail and commercial lending, were High-quality Net Cash Surplus $982 billion or 55% of our total funding (including short-term repo Less
Slide 40: Items impacting results
Items impacting results 2025 | $ MM, except for EPS Adjusting Item Segments Line Item Before-Tax After-Tax Diluted EPS Q2/2025 Amortization of acquisition-related intangibles Yes Multiple Segments Expenses $(153) $(114) $(0.08) HSBC Canada transaction and integration costs Yes Corporate Support Expe
Slide 41: Items impacting results
Items impacting results 2024 | $ MM, except for EPS Adjusting Item Segments Line Item Before-Tax After-Tax Diluted EPS Q4/2024 Legal provisions No Capital Markets Expenses $(93) $(93) $(0.07) Purchase accounting accretion of fair value adjustments Personal Banking and No Net Interest Income $130 $94
Slide 42: Items impacting results
Items impacting results 2024 | $ MM, except for EPS Adjusting Item Segments Line Item Before-Tax After-Tax Diluted EPS Q1/2024 $(115)/ Cost of the FDIC special assessment No Wealth Management Expenses $(159) / US$(117) $(0.08) US$(85) Amortization of acquisition-related intangibles Yes Multiple Segm
Slide 43: Glossary & Additional Notes
Glossary & Additional Notes 43
Slide 44: Glossary
Glossary Assets under administration (AUA): ▪ Assets administered by us, which are beneficially owned by clients, unless otherwise noted. Services provided in respect of assets under administration are of an administrative nature, including safekeeping, collecting investment income, settling purchas
Slide 45: Glossary
Glossary Liquidity coverage ratio (LCR): ▪ The Liquidity Coverage Ratio is calculated using OSFI’s Liquidity Adequacy Requirements (LAR) guideline. The Liquidity Coverage Ratio is a Basel III metric designed to ensure banks hold a sufficient reserve of high-quality liquidity assets to allow them to
Slide 46: Additional Notes
Additional Notes Dealogic market share for Equity Capital Markets, Debt Capital Markets, loan syndications, and Advisory. Average loans outstanding includes wholesale loans, acceptances, and off Note 1 balance sheet letters of credit and guarantees for our Capital Markets portfolio, on a single name
Slide 47: Additional Notes
Additional Notes Loan yield is calculated as interest income on loans as a percentage of average total net loans. Securities yield is calculated as interest and dividend income on securities as a percentage of average securities, net of applicable allowance. Repo & securities lending yield is calcul
Slide 48: Non-GAAP Measures and Ratios
Non-GAAP Measures and Ratios 48
Slide 49: Non-GAAP measures and ratios
Non-GAAP measures and ratios We use a variety of financial measures and ratios to evaluate our performance. In addition to generally accepted accounting principles (GAAP) prescribed measures, we use certain key performance and non-GAAP measures and ratios we believe provide useful information to inv
Slide 50: Non-GAAP measures and ratios
Non-GAAP measures and ratios Non-GAAP measures Label Composition Usefulness Reconciliation Core expense growth is a useful measure to assess how efficiently costs are being managed and may enhance comparability of our financial performance and enable readers Non-interest expense year-over-year growt
Slide 51: Non-GAAP measures and ratios
Non-GAAP measures and ratios Non-GAAP ratios Label Composition Usefulness Reconciliation The adjusted all-bank efficiency ratio is useful because it may Adjusted all-bank efficiency Adjusted non-interest expense divided by adjusted total enhance comparability in assessing how efficiently costs are S
Slide 52: Reconciliation for non-GAAP financial measures
Reconciliation for non-GAAP financial measures Calculation of Adjusted Net Income and Adjusted Diluted EPS Calculation of Adjusted ROE $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 All-bank All-bank Net income 3,950 5,131 4,390 Net inco
Slide 53: Reconciliation for non-GAAP financial measures
Reconciliation for non-GAAP financial measures Calculation of Adjusted Effective Tax Rate (teb) Calculation of Core Expense Growth YoY $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 $ millions (unless otherwise stated) Q2/24 Q2/25 Change All-bank All-bank Income taxes Expenses 8,308 8,730 42
Slide 54: Reconciliation for non-GAAP financial measures
Reconciliation for non-GAAP financial measures Calculation of Adjusted Net Income Calculation of Adjusted Revenue, Non-interest Expense, PPPT, and Net Income $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 Corporate Support Personal Banki
Slide 55: Reconciliation for non-GAAP financial measures
Reconciliation for non-GAAP financial measures Calculation of PPPT Calculation of PPPT $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 $ millions (unless otherwise stated) Q2/24 Q1/25 Q2/25 All-Bank Wealth Management Net income 3,950 5,131 4,390 Net income 840 980 929 Income taxes 976 1,302 1
Slide 56: Reconciliation for non-GAAP financial measures
Reconciliation for non-GAAP financial measures Calculation of ex-HBCA amounts Total HBCA Excl. HBCA HBCA: Calculation of Adj. Net Income, NIE and PPPT $ millions (unless otherwise stated) Q2/25 Impact Impact $ millions (unless otherwise stated) Q2/25 All-bank Non-interest expense 239 Net interest in
Slide 57: Investor Relations Contacts
Investor Relations Contacts Asim Imran Senior Vice President, Head of Investor Relations (416) 955-7804 www.rbc.com/investorrelations ®/ Trademark(s) of Royal Bank of Canada. ‡ All other trademarks are the property of their respective owner(s). 57