TORONTO, April 16 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today
announced that it expects to record a goodwill impairment charge (on both a
pre and after tax basis) of approximately US$850 million for the second
quarter ending April 30, 2009. While the charge will reduce second quarter
reported earnings by approximately US$850 million, it is a non-cash item and
an accounting adjustment, and will not affect our ongoing operations, or our
Tier 1 and Total capital ratios.
As described in our First Quarter 2009 Report to Shareholders, we
conducted the first of a two-step goodwill testing process during the first
quarter and determined that the goodwill assigned to our International Banking
reporting unit may be impaired. We have now completed the second step of the
testing process and have determined that the International Banking reporting
unit goodwill is impaired, resulting in the expected charge to second quarter
earnings noted above.
This expected charge reflects the impact of prolonged challenging
economic conditions that have affected our International Banking reporting
unit; in particular declines in the U.S. housing market, the deterioration in
the overall U.S. economic environment and the decline in the market value of
RBC will release its second quarter results on May 29, 2009. Information
related to these results will be available at: www.rbc.com/investorrelations.
A conference call is scheduled for May 29, 2009 at 1:30 p.m. (EDT) and will
feature a presentation by RBC executives. Investors are invited to submit
questions by email to firstname.lastname@example.org. Interested parties can access the call
on a listen-only basis at:
www.rbc.com/investorrelations/ir_events_presentations.html or by telephone
(416-340-2216 or 1-866-898-9626). Please call between 1:20 p.m. and 1:25 p.m.
Speaker's notes will be posted on RBC's website shortly following the
call. Also, a recording will be available by 5:00 p.m. (EDT) on May 29 until
August 2, 2009 at www.rbc.com/investorrelations/ir_quarterly.html or by
telephone (416-695-5800 or 1-800-408-3053, passcode 8321037 followed by the
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 securities legislation. Forward-looking
statements include, but are not limited to, statements with respect to our
goodwill impairment charge, earnings, ongoing operations and capital ratios.
The forward-looking information contained in this press release is presented
for the purpose of assisting the holders of our securities and financial
analysts in understanding our financial position and results of operations as
at the date of this release and may not be appropriate for other purposes.
Forward-looking statements are typically identified by words such as
"believe," "expect," "estimate" and similar expressions of future or
conditional verbs such as "will," "may," "should" or "would". By their very
nature, forward-looking statements require us to make assumptions, and are
subject to inherent risks and uncertainties, which give rise to the
possibility that our expectations or conclusions will not prove to be accurate
and that our assumptions may not be correct. We caution readers not to place
undue reliance on these statements as a number of important factors could
cause our actual results to differ materially from the expectations expressed
in such forward-looking statements.
These factors - many of which are beyond our control - include: market
environment impacts, including the impact from the continuing volatility in
the financial markets and lack of liquidity in credit markets, and our ability
to effectively manage our liquidity and capital ratios, and implement
effective risk management procedures; general business and economic conditions
in Canada, the United States, and other countries in which we conduct
business; changes in accounting standards, policies and estimates, including
changes in our estimates of provisions, allowances and valuations; the impact
of the movement of the Canadian dollar relative to other currencies,
particularly the U.S. dollar, British pound and Euro; the effects of changes
in government fiscal, monetary and other policies; the impact of changes in
laws and regulations including tax laws; and changes to our credit ratings.
We caution that the foregoing list of important factors is not exhaustive
and other factors could also adversely affect our results. When relying on our
forward-looking statements to make decisions with respect to us, investors and
others should carefully consider the foregoing factors and other uncertainties
and potential events. Except as required by law, we do not undertake to update
any forward-looking statement, whether written or oral, that may be made from
time to time by us or on our behalf.
Additional information about these and other factors can be found in our
First Quarter 2009 Report to Shareholders and in our 2008 Annual Report to
For further information:
For further information: Investor contact: James Colburn, Investor
Relations, (416) 955-7808; Media contact: Jackie Braden, Media Relations,