Royal Bank of Canada reports fourth quarter and 2009 results

    
    All amounts are in Canadian dollars unless otherwise noted and are based
    on our unaudited Interim Consolidated Financial Statements and related
    notes prepared in accordance with Canadian generally accepted accounting
    principles (GAAP). Our 2009 Annual Report to Shareholders (which includes
    our audited annual Consolidated Financial Statements and accompanying
    Management's Discussion & Analysis), our Annual Information Form and our
    supplementary financial information are available on our website at
    rbc.com/investorrelations.

    Fourth quarter 2009 compared to fourth quarter 2008

    -   Net income of $1,237 million (up from $1,120 million)
    -   Diluted earnings per share (EPS) of $0.82 (up from $0.81)
    -   ROE of 14.7% (down from 16.1%)
    -   Tier 1 capital ratio of 13.0%

    2009 compared to 2008

    -   Net income of $3,858 million (down from $4,555 million)
    -   Cash net income of $5,034 million (up from $4,677 million)(1)
    -   Diluted EPS of $2.57 (down from $3.38)
    -   Cash diluted EPS of $3.40 (down from $3.47)(1)
    -   ROE of 11.9% (down from 18.1%)
    -   Cash ROE of 15.2% (down from 18.3%)(1)
    

TORONTO, Dec. 4 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) reported net income of over $1.2 billion (EPS of $0.82) for the fourth quarter ended October 31, 2009, up $117 million or 10% from a year ago. Our fourth quarter net income, excluding the following items(1) was over $1.5 billion and our EPS was $1.03.

    
    -   Losses related to available-for-sale (AFS) securities of $150 million
        (EPS of $0.11)
    -   General provision for credit losses (PCL) of $104 million (EPS of
        $0.07)
    -   Provision related to the restructuring of certain Caribbean banking
        mutual funds of $39 million (EPS of $0.03)
    

These results reflect strong performances from Canadian Banking, Capital Markets, Wealth Management, and Insurance. We continued to have volume growth in Canadian Banking and we had very strong operating leverage driving earnings growth of 6%. Our Capital Markets business delivered strong results in the quarter and our Wealth Management businesses benefitted from the more favourable market conditions. Specific PCL remained elevated reflecting the economic environment but was stable compared to last quarter.

Our 2009 cash net income(1) was $5,034 million for the year ended October 31, 2009, up $357 million or 8% from last year reflecting strong performance across most of our businesses. We reported net income of $3,858 million, down $697 million or 15% from last year mainly reflecting a $1 billion goodwill impairment charge recorded in the second quarter of 2009.

Today we announced a first quarter 2010 quarterly common share dividend of $0.50.

"RBC stands apart as a globally significant, strong and stable institution at the end of a very challenging year. Our results through 2009 underscore the value of our diversified business model, ongoing cost discipline and client first approach to doing business," said Gordon M. Nixon, RBC President and CEO. "Looking forward, our robust capital base and solid financial profile should enable RBC to continue to extend our broad-based leadership position in Canada and strengthen our global capabilities," Nixon said.

    
    ------------------------------
    (1) We compute "cash" measures for 2009 by excluding the goodwill
        impairment charge in Q2 2009 and the after-tax impact of amortization
        of other intangibles from net income. We believe cash measures
        provide readers with a better understanding of management's
        perspective on our performance. For Q4 2009, we exclude specific
        items as noted above from current quarter net income. These are
        non-GAAP financial measures. See page 14 of this release for more
        information including reconciliations.
    

Fourth Quarter 2009 Business Segment Performance

Canadian Banking net income was $717 million, up $41 million or 6% from last year and up $48 million or 7% from last quarter. We had solid revenue growth over both periods and we are seeing the effects of our ongoing cost discipline. PCL was up from last year mainly due to recessionary economic conditions but down from last quarter reflecting lower business provisions. Net interest margin remained compressed resulting from the historically low interest rate environment.

"Canadian Banking performed extremely well throughout 2009 and generated double-digit volume growth of 11% and an efficiency ratio of 47.8%. These results highlight our ability to extend our leadership position and profitably grow market share by focusing on effectively managing costs, simplifying the way we do business and delivering a superior client experience. This strong performance was muted by the low interest rate environment and elevated cost of funding which are fully reflected in our results," Nixon said.

Wealth Management net income was $161 million, up $45 million, or 39% from last year as last year included provisions related to the Reserve Primary Fund and auction rate securities settlement. Higher transaction volumes reflecting improved market conditions were partially offset by spread compression and lower average fee-based client assets. Compared to last quarter, net income was down $7 million or 4% mainly due to a lower gain on our stock-based compensation plan in our U.S. brokerage business. This decrease was partially offset by higher average fee-based client assets and higher transaction volumes reflecting the improved market conditions.

"With our strategic acquisitions over the past few years and our record growth in the number of client facing advisors to over 4,500 worldwide, our Wealth Management business has never been in a better position to build momentum as asset values and investor confidence begin to return to the market," Nixon said.

Insurance net income was $104 million, up $45 million from last year largely reflecting investment losses in the prior year and solid business growth. Net income was down $63 million or 38% from last quarter, mainly due to unfavourable actuarial adjustments in the current quarter reflecting management actions and annual assumption changes.

"Insurance remains a strong contributor to our diversified earnings stream by offering a full suite of solutions for our clients. We are focused on building on our capabilities and streamlining all of our processes to ensure clients find it easy to do business with us," Nixon said.

International Banking net loss of $125 million compares to a net loss of $206 million last year and a net loss of $95 million last quarter. The net loss in the current quarter primarily reflects elevated PCL due to the weak economic environment and a provision related to the restructuring of certain Caribbean banking mutual funds. We also had lower losses on our AFS portfolio as compared to both periods.

"We are working hard to address the challenges in our U.S. banking operations by improving our operating model and building efficiencies to ensure that we are well positioned when the environment improves," Nixon said.

Capital Markets net income was $561 million, down $23 million from last year, as last year included the favourable impact of the reduction of the Enron-related litigation provision of $542 million ($252 million after-tax and related compensation adjustments). We also had stronger trading results, total market environment-related gains of $31 million ($25 million after-tax and related compensation) compared to losses of $217 million ($102 million after-tax and related compensation adjustments) last year and stronger equity origination activity. These factors were partially offset by higher variable compensation commensurate with strong results and higher PCL. Compared to last quarter, earnings were flat mainly due to lower trading results offset by total market environment-related gains, improved equity origination activity and higher M&A fees.

"It was an outstanding year for our Capital Markets business. Our investments are paying off and our strong brand has helped us attract new business and acquire high-quality talent from our global competitors. Our diverse platform coupled with the consistent financial strength of RBC are distinct competitive advantages that we are leveraging to deepen existing relationships and establish new client relationships," Nixon said.

Capital Ratios

The Tier 1 capital ratio of 13.0% increased 10 basis points (bps) from last quarter mainly due to internal capital generation. The Total capital ratio of 14.2% was down 20 bps from last quarter largely due to higher regulatory capital deductions.

"Our capital ratios remain at historically high levels and provide us with a competitive advantage along with substantial flexibility. We have tremendous opportunities to invest in our existing businesses and toward other opportunities consistent with our strategy," Nixon said.

For additional information including our 2009 financial performance, economic and market review, and progress on medium-term objectives, please refer to our 2009 Annual Report to Shareholders, beginning on page 8.

SELECTED FINANCIAL AND OTHER HIGHLIGHTS

    
    -------------------------------------------------------------------------
    CONSOLIDATED RESULTS
    -------------------------------------------------------------------------
    Selected financial highlights
    -------------------------------------------------------------------------
    (C$ millions,             As at or for the
     except per share,       three months ended          For the year ended
     number of and    --------------------------------- ---------------------
     percentage       October 31    July 31 October 31 October 31 October 31
     amounts)               2009       2009       2008       2009       2008
    --------------------------------------------------- ---------------------
      Total revenue    $   7,459  $   7,823  $   5,069  $  29,106  $  21,582
      Provision for
       credit losses
       (PCL)                 883        770        619      3,413      1,595
      Insurance
       policyholder
       benefits, claims
       and acquisition
       expense (PBCAE)     1,322      1,253        (86)     4,609      1,631
      Non-interest
       expense             3,606      3,755      2,989     14,558     12,351
      Goodwill
       impairment charge       -          -          -      1,000          -
      Net income before
       income taxes and
       non-controlling
       interest in
       subsidiaries        1,648      2,045      1,547      5,526      6,005
    Net income         $   1,237  $   1,561  $   1,120  $   3,858  $   4,555
    --------------------------------------------------- ---------------------
    Segments - net
     income (loss)
      Canadian Banking $     717  $     669  $     676  $   2,663  $   2,662
      Wealth Management      161        168        116        583        665
      Insurance              104        167         59        496        389
      International
       Banking              (125)       (95)      (206)    (1,446)      (153)
      Capital Markets        561        562        584      1,768      1,170
      Corporate Support     (181)        90       (109)      (206)      (178)
    Net income         $   1,237  $   1,561  $   1,120  $   3,858  $   4,555
    --------------------------------------------------- ---------------------
    Selected information
      Earnings per
       share (EPS) -
       basic           $     .83  $    1.06  $     .82  $    2.59  $    3.41
      Earnings per
       share (EPS) -
       diluted         $     .82  $    1.05  $     .81  $    2.57  $    3.38
      Return on common
       equity (ROE)(1)     14.7%      19.4%      16.1%      11.9%      18.1%
      Return on risk
       capital (RORC)(2)   26.0%      31.4%      26.3%      19.5%      29.6%
      Net interest
       margin (NIM)(3)     1.73%      1.73%      1.54%      1.65%      1.39%
      Specific PCL as a
       percentage of
       average net loans
       and acceptances     1.00%       .98%       .65%      0.97%       .53%
      Gross impaired
       loans (GIL) as a
       percentage of
       loans and
       acceptances         1.86%      1.77%       .96%      1.86%       .96%
    Capital ratios and
     multiples
      Tier 1 capital
       ratio               13.0%      12.9%       9.0%      13.0%       9.0%
      Total capital
       ratio               14.2%      14.4%      11.0%      14.2%      11.0%
      Assets-to-capital
       multiple            16.3X      16.3X      20.1X      16.3X      20.1X
      Tangible common
       equity (Tier 1
       common capital)
       ratio(4)             9.2%       9.1%       6.5%       9.2%       6.5%
    Selected balance
     sheet and other
     information
      Total assets     $ 654,989  $ 660,133  $ 723,859  $ 654,989  $ 723,859
      Securities         186,272    182,792    171,134    186,272    171,134
      Retail loans(5)    205,224    198,999    195,455    205,224    195,455
      Wholesale
       loans(5)           78,927     81,140     96,300     78,927     96,300
      Derivative-
       related assets     92,173    101,086    136,134     92,173    136,134
      Deposits           398,304    404,708    438,575    398,304    438,575
      Average common
       equity(1)          31,600     30,400     27,000     30,450     24,650
      Average risk
       capital(2)         17,900     18,800     16,500     18,600     15,050
      Risk-adjusted
       assets            244,837    243,009    278,579    244,837    278,579
      Assets under
       management (AUM)  249,700    243,700    226,900    249,700    226,900
      Assets under
       administration
       (AUA)
        - RBC            648,800    634,300    623,300    648,800    623,300
        - RBC Dexia
           IS(6)       2,484,400  2,197,500  2,585,000  2,484,400  2,585,000
    Common share
     information
      Shares
       outstanding
       (000s)
        - average
           basic       1,413,644  1,408,687  1,337,753  1,398,675  1,305,706
        - average
           diluted     1,428,409  1,422,810  1,353,588  1,412,126  1,319,744
        - end of
           period      1,417,610  1,412,235  1,341,260  1,417,610  1,341,260
      Dividends
       declared per
       share           $     .50  $     .50  $     .50  $    2.00  $    2.00
      Dividend yield(7)     3.7%       4.3%       4.4%       4.8%       4.2%
      Common share
       price (RY on
       TSX) - close,
       end of period   $   54.80  $   51.28  $   46.84  $   54.80  $   46.84
      Market
       capitalization
       (TSX)              77,685     72,419     62,825     77,685     62,825
    Business information
     (number of)
      Employees
       (full-time
       equivalent)        71,186     72,366     73,323     71,186     73,323
      Bank branches        1,761      1,759      1,741      1,761      1,741
      Automated teller
       machines (ATM)      5,030      5,046      4,964      5,030      4,964
    --------------------------------------------------- ---------------------
    Period average US$
     equivalent of
     C$1.00(8)         $    .924  $    .900  $    .901  $    .858  $    .969
    Period-end US$
     equivalent of
     C$1.00                 .924       .928       .830       .924       .830
    -------------------------------------------------------------------------
    (1) Average common equity and return on common equity (ROE) are
        calculated using methods intended to approximate the average of the
        daily balances for the period.
    (2) Average amounts are calculated using methods intended to approximate
        the average of the daily balances for the period. For further
        discussion on Average risk capital and Return on risk capital (RORC),
        refer to the Key performance and non-GAAP measures section.
    (3) Net interest margin (NIM) is calculated as Net interest income
        divided by Average assets. Average assets are calculated using
        methods intended to approximate the average of the daily balances for
        the period.
    (4) For further discussion, refer to the Key performance and non-GAAP
        measures section on page 61 of our 2009 Annual Report to
        Shareholders.
    (5) Retail and wholesale loans do not include allowance for loan losses.
    (6) Assets under administration (AUA) - RBC Dexia IS represents the total
        AUA of the joint venture, of which we have a 50% ownership interest,
        reported on a one-month lag.
    (7) Defined as dividends per common share divided by the average of the
        high and low share price in the relevant period.
    (8) Average amounts are calculated using month-end spot rates for the
        period.
    

BUSINESS SEGMENT RESULTS

    
    -------------------------------------------------------------------------
    CANADIAN BANKING
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2009        2009        2008
    -------------------------------------------------------------------------
      Net interest income                 $    1,811  $    1,740  $    1,701
      Non-interest income                        762         741         748
    Total revenue                         $    2,573  $    2,481  $    2,449
      PCL                                 $      314  $      340  $      225
      Non-interest expense                     1,213       1,169       1,220
    Net income before income taxes
     and non-controlling interest in
     subsidiaries                         $    1,046  $      972  $    1,004
    Net income                            $      717  $      669  $      676
    -------------------------------------------------------------------------
    Revenue by business
      Personal Financial Services         $    1,390  $    1,339  $    1,323
      Business Financial Services                628         618         630
      Cards and Payment Solutions                555         524         496
    -------------------------------------------------------------------------
    Selected average balances and
     other information
      ROE                                      37.0%       34.9%       37.7%
      RORC                                     50.5%       47.3%       50.8%
      NIM(1)                                   2.74%       2.71%       2.89%
      Specific PCL as a percentage of
       average net loans and acceptances        .48%        .54%        .38%
      Operating leverage                        5.6%        3.0%      (4.4)%
      Average total earning assets(2)     $  262,200  $  254,400  $  234,200
      Average loans and acceptances(2)       258,800     251,700     235,500
      Average deposits                       176,200     174,100     159,400
      AUA                                    133,800     130,800     109,500
    -------------------------------------------------------------------------
    (1) NIM is calculated as Net interest income divided by Average total
        earning assets.
    (2) Average total earning assets, and Average loans and acceptances
        include average securitized residential mortgage and credit card
        loans for the three months ended October 31, 2009, of $37 billion and
        $4 billion, respectively (July 31, 2009 - $37 billion and $4 billion;
        October 31, 2008 - $22 billion and $4 billion).
    

Q4 2009 vs. Q4 2008

Net income increased $41 million, or 6% compared to the prior year, driven mainly by revenue growth across most businesses and our ongoing focus on cost management, partially offset by increased PCL.

Total revenue increased $124 million, or 5% from last year, largely driven by strong volume growth in home equity and personal lending and personal and business deposits. We also had had a gain of $18 million on the sale of a portion of our remaining Visa shares in the current quarter. These factors were partially offset by spread compression resulting from the lower interest rate environment. Net interest margin decreased 15 bps from a year ago, largely reflecting the historically low interest rate environment and product mix changes resulting from stronger growth in lower margin products.

PCL increased $89 million or 40% as a result of a significant increase in loss rates on credit cards and unsecured personal loans resulting from recessionary economic conditions.

Non-interest expense decreased $7 million, or 1%, from ongoing cost management activities which more than offset higher costs from increased volumes and an expanding distribution network.

Q4 2009 vs. Q3 2009

Net income increased $48 million, or 7% mainly resulting from continued volume growth in most businesses, lower PCL in our business lending portfolio and the gain on the sale of a portion of our remaining Visa shares. These factors were partially offset by increased non-interest expense mainly due to higher performance-based compensation and pension and benefit costs. Net interest margin improved 3 bps over last quarter, largely reflecting improved lending spreads.

    
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    WEALTH MANAGEMENT
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2009        2009        2008
    -------------------------------------------------------------------------
      Net interest income                 $       85  $       84  $      133
      Non-interest income
        Fee-based revenue                        572         528         596
        Transactional and other revenue          417         406         296
    Total revenue                         $    1,074  $    1,018  $    1,025
      Non-interest expense                $      841  $      777  $      860
    Net income before income taxes
     and non-controlling interest
     in subsidiaries                      $      233  $      241  $      165
    Net income                            $      161  $      168  $      116
    -------------------------------------------------------------------------
    Revenue by business
      Canadian Wealth Management          $      360  $      326  $      369
      U.S. & International Wealth
       Management                                545         531         483
        U.S. & International Wealth
         Management (US$ millions)               504         479         434
      Global Asset Management                    169         161         173
    -------------------------------------------------------------------------
    Selected other information
      ROE                                      15.8%       16.5%       12.3%
      RORC                                     53.3%       59.2%       42.8%
      Pre-tax margin(1)                        21.7%       23.7%       16.1%
      Number of advisors(2)                    4,504       4,528       4,346
      AUA - Total                         $  502,300  $  491,300  $  495,100
        AUA - U.S. & International
         Wealth Management (US$ millions)    303,300     298,100     277,600
      AUM                                    245,700     239,700     222,600
    -------------------------------------------------------------------------


                                                           For the three
                                                            months ended
                                                      -----------------------
                                                         Q4 2009     Q4 2009
                                                              vs.         vs.
    Impact of US$ translation on selected items          Q3 2009     Q4 2008
    -------------------------------------------------------------------------
      Increased (decreased) total revenue             $      (12)    $   (12)
      Increased (decreased) non-interest expense             (10)        (11)
      Increased (decreased) net income                        (1)         (1)
    -------------------------------------------------------------------------
      Percentage change in average US$ equivalent
       of C$1.00                                              3%          3%
    -------------------------------------------------------------------------
    (1) Pre-tax margin is defined as net income before income taxes and
        non-controlling interest in subsidiaries divided by total revenue.
    (2) Includes client-facing advisors across all our wealth management
        businesses.
    

Q4 2009 vs. Q4 2008

Net income of $161 million increased $45 million, or 39% from last year, as last year included provisions related to the Reserve Primary Fund and auction rate securities settlement with U.S. regulators. Higher transaction volumes and a gain, as compared to a loss, in the prior year on our stock-based compensation plan in our U.S. brokerage business also contributed to the increase. These factors were partially offset by spread compression and lower average fee-based client assets.

Total revenue increased $49 million, or 5%, mainly due to a gain, as compared to a loss, in the prior year on our stock-based compensation plan in our U.S. brokerage business and higher transaction volumes reflecting improved investor confidence. These factors were partially offset by spread compression and lower average fee-based client assets largely resulting from capital depreciation in the early half of 2009.

Non-interest expense decreased $19 million, or 2% from last year as last year included provisions related to the Reserve Primary Fund and auction rate securities settlement. Our continued focus on cost management also contributed to the decrease. These factors were largely offset by the increase in fair value of our stock-based compensation plan liability and higher variable compensation due to higher commission-based revenue.

Q4 2009 vs. Q3 2009

Net income decreased $7 million, or 4% from the prior quarter, mainly due to a lower gain on our stock-based compensation plan in our U.S. brokerage business. This was partially offset by higher average fee-based client assets and higher transaction volumes reflecting improved capital market conditions, partially offset by higher commission-based variable compensation.

    
    -------------------------------------------------------------------------
    INSURANCE
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2009        2009        2008
    -------------------------------------------------------------------------
      Non-interest income
        Net earned premiums               $    1,098  $      986  $      752
        Investment income(1)                     396         522        (697)
        Fee income                                71          67          56
    Total revenue                         $    1,565  $    1,575  $      111
      Insurance policyholder benefits
       and claims(1)                      $    1,167  $    1,097  $     (230)
      Insurance policyholder
       acquisition expense                       155         156         144
      Non-interest expense                       145         135         154
    Net income before income taxes
     and non-controlling interest
     in subsidiaries                      $       98  $      187  $       43
    Net income                            $      104  $      167  $       59
    -------------------------------------------------------------------------
    Revenue by business
      Canadian Insurance                  $      677  $      726  $      (60)
      U.S. Insurance                             489         495        (118)
      International & Other Insurance            399         354         289
    -------------------------------------------------------------------------
    Selected other information
      ROE                                      32.3%       48.0%       20.1%
      RORC                                     37.7%       55.4%       23.0%
      Premiums and deposits(2)            $    1,388  $    1,267  $    1,004
      Fair value changes on investments
       backing policyholder liabilities(1)       229         338        (748)
    -------------------------------------------------------------------------
    (1) Investment income can experience volatility arising from quarterly
        fluctuation in the fair value of held-for-trading (HFT) assets. The
        investments which support actuarial liabilities are predominantly
        fixed income assets designated as HFT, and consequently changes in
        fair values of these assets are recorded in investment income in the
        consolidated statements of income. Changes in the fair values of
        these assets are largely offset by changes in the fair value of the
        actuarial liabilities.
    (2) Premiums and deposits include premiums on risk-based insurance and
        annuity products, and deposits on individual and group segregated
        fund deposits, consistent with insurance industry practices.
    

Q4 2009 vs. Q4 2008

Net income of $104 million increased $45 million, or 76% from last year as last year included investment losses of $110 million ($80 million after-tax). Business growth, largely in our European life business, the impact of a new U.K. annuity reinsurance arrangement in the current quarter and lower allocated funding costs on capital also contributed to the increase. These factors were partially offset by unfavourable actuarial adjustments and higher disability claims costs.

Total revenue increased $1,454 million, mainly due to the change in fair value of investments and an increase in annuity volumes in our U.S. Insurance business, both of which were largely offset in policyholder benefits, claims and acquisition expense (PBCAE). The prior year investment losses and current year growth mainly in our European Life and Canadian home and auto businesses also contributed to the increase in the current quarter.

PBCAE increased $1,408 million, primarily reflecting the change in fair value of investments backing our life and health policyholder liabilities and higher costs commensurate with increased annuity volumes and business growth. Unfavourable actuarial adjustments reflecting management actions and assumption changes also contributed to the increase.

Non-interest expense was down $9 million, or 6%, primarily reflecting our ongoing focus on cost management, largely offset by higher costs reflecting business growth.

Q4 2009 vs. Q3 2009

Net income decreased by $63 million, or 38% from last quarter largely reflecting unfavourable actuarial adjustments. Investment losses in the current quarter compared to gains in the previous quarter also contributed to the decrease.

    
    -------------------------------------------------------------------------
    INTERNATIONAL BANKING
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2009        2009        2008
    -------------------------------------------------------------------------
      Net interest income                 $      391  $      423  $      437
      Non-interest income                        193         230          35
    Total revenue                         $      584  $      653  $      472
      PCL                                 $      229  $      230  $      198
      Non-interest expense                       556         577         585
    Net loss before income taxes
     and non-controlling interest
     in subsidiaries                      $     (201) $     (154) $     (311)
    Net loss                              $     (125) $      (95) $     (206)
    -------------------------------------------------------------------------
    Revenue by business
      Banking(1)                          $      422  $      476  $      281
      RBC Dexia IS(1)                            162         177         191
    -------------------------------------------------------------------------
    Selected average balances and
     other information
      ROE                                     (8.3)%      (6.3)%     (11.4)%
      RORC                                   (19.4)%     (14.2)%     (34.9)%
      Specific PCL as a percentage of
       average net loans and acceptances       2.80%       2.69%       2.32%
      Average loans and acceptances       $   32,400  $   33,900  $   33,900
      Average deposits                        48,200      49,500      51,800
      AUA - RBC(2)                             7,700       7,400      11,200
          - RBC Dexia IS                   2,484,400   2,197,500   2,585,000
      AUM - RBC(2)                             3,800       3,800       3,900
    -------------------------------------------------------------------------


                                                           For the three
                                                            months ended
                                                      -----------------------
                                                         Q4 2009     Q4 2009
    Impact of US$ and Euro translation                        vs.         vs.
     on selected items                                   Q3 2009     Q4 2008
    -------------------------------------------------------------------------
      Increased (decreased) total revenue             $       (7)    $     -
      Increased (decreased) PCL                               (5)         (9)
      Increased (decreased) non-interest expense              (6)         (4)
      Increased (decreased) net income                         3           8
    -------------------------------------------------------------------------
      Percentage change in average US$ equivalent
       of C$1.00                                              3%          3%
      Percentage change in average Euro equivalent
       of C$1.00                                              -%        (3)%
    -------------------------------------------------------------------------
    (1) RBC Dexia IS and RBTT results are reported on a one-month lag.
    (2) These represent the AUA and AUM of RBTT on a one-month lag.
    

Q4 2009 vs. Q4 2008

Net loss of $125 million compares to a net loss of $206 million a year ago, mainly reflecting lower losses on our AFS portfolio.

Total revenue increased $112 million, or 24%, primarily due to lower losses on our AFS portfolio partly resulting from the reclassification of securities to loans. For further information on the reclassification, refer to the Reclassification of Debt Securities to Loans section on page 11 of this release. The increase was partially offset by a $52 million ($39 million after-tax) provision related to the restructuring of certain Caribbean banking mutual funds. These mutual funds are being transitioned from trading at a fixed par value to a floating net asset value (NAV). We have injected cash and provided a guarantee to the funds such that the underlying NAV will be valued at the fixed par value throughout the transition period. We also had lower revenue at RBC Dexia IS due to lower transaction volumes and reduced fee-based client assets, reflecting capital depreciation.

PCL of $229 million was up $31 million, or 16%, mainly attributable to certain AFS securities reclassified to loans in our U.S. banking business.

Non-interest expense decreased $29 million, or 5%, primarily reflecting cost savings related to the restructuring of our U.S. banking business and the impact of the stronger Canadian dollar relative to the U.S. dollar. These factors were partially offset by the increase in Federal Deposit Insurance Corporation (FDIC) costs.

Q4 2009 vs. Q3 2009

Net loss of $125 million compares to a net loss of $95 million last quarter, mainly reflecting the provision related to the restructuring of certain Caribbean banking mutual funds noted above. The decrease in earnings was partly offset by lower losses on our AFS portfolio and the decrease in FDIC costs due to the special assessment levied against all U.S. banks in the prior quarter.

    
    -------------------------------------------------------------------------
    CAPITAL MARKETS
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2009        2009        2008
    -------------------------------------------------------------------------
      Net interest income(1)               $     721   $     890   $     568
      Non-interest income                      1,113       1,224         622
    Total revenue(1)                       $   1,834   $   2,114   $   1,190
      PCL                                  $     220   $     177   $      77
      Non-interest expense                       826       1,085         124
    Net income before income taxes and
     non-controlling interest in
     subsidiaries(1)                       $     788   $     852   $     989
    Net income                             $     561   $     562   $     584
    -------------------------------------------------------------------------
    Revenue by business
      Capital Markets Sales and Trading    $   1,338   $   1,768   $     446
      Corporate and Investment Banking           496         346         744
    -------------------------------------------------------------------------
    Selected average balances and other
     information
      ROE                                      27.9%       26.1%       34.6%
      RORC                                     32.2%       29.9%       40.5%
      Average trading securities           $ 124,700   $ 118,600   $ 133,600
      Specific PCL as a percentage of
       average net loans and acceptances       2.63%       1.96%        .73%
      Average loans and acceptances           33,200      35,900      41,900
      Average deposits                        91,300      95,000     135,000
    -------------------------------------------------------------------------


                                                           For the three
                                                            months ended
                                                      -----------------------
                                                         Q4 2009     Q4 2009
    Impact of US$ and British pound translation on            vs.         vs.
     selected items                                      Q3 2009     Q4 2008
    -------------------------------------------------------------------------
      Increased (decreased) total revenue              $     (32)  $     (24)
      Increased (decreased) non-interest expense             (20)        (30)
      Increased (decreased) net income                        (6)          5
    -------------------------------------------------------------------------
      Percentage change in average US$ equivalent
       of C$1.00                                              3%          3%
      Percentage change in average British pound
       equivalent of C$1.00                                   4%          9%
    -------------------------------------------------------------------------
    (1) Taxable equivalent basis. For further discussion, refer to the How we
        measure and report our business segments section on page 16 of our
        2009 Annual Report to Shareholders.
    

Q4 2009 vs. Q4 2008

Net income of $561 million decreased $23 million from last year primarily due to the favourable impact of the reduction of the Enron Corp-related litigation provision of $542 million ($252 million after-tax and related compensation adjustments) in the prior year. Stronger trading, total market environment-related gains of $31 million ($25 million after-tax and related compensation) in the current quarter, compared to losses of $217 million ($102 million after-tax and related compensation adjustments) in the prior year, higher equity origination activity, and a lower effective income tax rate, were partially offset by higher variable compensation and higher PCL.

Total revenue of $1,834 million increased $644 million from the prior year, mainly driven by the improved market conditions. Stronger trading results in our U.S.-based equity and global fixed income businesses, largely contributed to the increase in revenue as these businesses capitalized on favourable market conditions, improved client activity and narrowing credit spreads. Higher equity origination activity, predominately in Canada, and improved revenue in our client securitization businesses also contributed to the increase. These positive factors were partially offset by lower revenue in our foreign exchange trading businesses which performed at a more moderate level resulting from lower interest rate volatility as compared to the prior year.

PCL increased $143 million mainly reflecting a few impaired loans.

Non-interest expense increased $702 million largely due to the reduction in the Enron-related litigation provision in the prior year as previously noted and increased variable compensation on higher results, primarily related to trading.

Q4 2009 vs. Q3 2009

Net income was flat from the prior quarter mainly reflecting lower trading results, specifically in our U.S.-based equity, global fixed income and money markets trading businesses reflecting reduced market volatility and tightening of bid/ask and credit spreads. Offsetting these factors were total market environment-related gains, as compared to losses of $142 million ($57 million after-tax and related compensation adjustments) in the prior quarter. We also had improved equity origination activity and higher M&A fees.

    
    -------------------------------------------------------------------------
    CORPORATE SUPPORT
    -------------------------------------------------------------------------
                                         As at or for the three months ended
                                        -------------------------------------
                                          October 31     July 31  October 31
    (C$ millions)                               2009        2009        2008
    -------------------------------------------------------------------------
      Net interest income(1)               $    (132)  $    (237)  $    (210)
      Non-interest income                        (39)        219          32
    Total revenue(1)                       $    (171)  $     (18)  $    (178)
      PCL(2)                                     120          23         119
      Non-interest expense                        25          12          46
    Net loss before income taxes and
     non-controlling interest in
     subsidiaries(1)                       $    (316)  $     (53)  $    (343)
    Net income (loss)                      $    (181)  $      90   $    (109)
    -------------------------------------------------------------------------
    Securitization
      Total securitizations sold and
       outstanding(3)                      $  32,685   $  32,155   $  19,316
      New securitization activity in the
       period(4)                               1,430       2,330       1,877
    -------------------------------------------------------------------------
    (1) Taxable equivalent basis. For further discussion, refer to the How we
        measure and report our business segments section on page 16 of our
        2009 Annual Report to Shareholders. These amounts included the
        elimination of the adjustments related to the gross-up of income from
        Canadian taxable corporate dividends recorded in Capital Markets. The
        amount for the three months ended October 31, 2009 was $76 million
        (July 31, 2009 - $127 million, October 31, 2008 - $102 million).
    (2) PCL in Corporate Support comprises the general provision and an
        adjustment related to PCL on securitized credit card loans managed by
        Canadian Banking. For further information, refer to the How we
        measure and report our business segments section on page 16 of our
        2009 Annual Report to Shareholders.
    (3) Total securitizations sold and outstanding comprises credit card
        loans and residential mortgages.
    (4) New securitization activity comprises Canadian residential mortgages
        and credit card loans securitized and sold in the year. For further
        details, refer to Note 5 to our Consolidated Financial Statements on
        page 99 of our 2009 Annual Report to Shareholders. This amount does
        not include Canadian residential mortgage and commercial mortgage
        securitization activity of Capital Markets.
    

Q4 2009

Net loss of $181 million included losses of $182 million ($125 million after-tax) on our AFS portfolio, a general PCL of $156 million ($104 million after-tax), losses related to the change in fair value of certain derivatives used to economically hedge our funding activities, and losses of $31 million ($22 million after-tax) on fair value adjustments on certain RBC debt designated as HFT reflecting the tightening of credit spreads. These factors were partially offset by securitization gains inclusive of new and re-investment related activity, net of economic hedging activities, totaling $97 million ($67 million after-tax). For further details on the general provision, refer to the Credit quality performance section.

Q3 2009

Net income was $90 million for the quarter. This mainly reflected securitization gains inclusive of new and re-investment related activity, net of economic hedging activities, totaling $154 million ($106 million after-tax). Income tax and accounting adjustments also contributed to the increase in net income. These factors were partially offset by losses on fair value adjustments of $83 million ($58 million after-tax) on certain RBC debt designated as HFT reflecting the tightening of credit spreads, and a general PCL of $61 million ($40 million after-tax) related to U.S. banking.

Q4 2008

Net loss of $109 million included a general PCL of $145 million ($98 million after-tax). The net loss also included market environment-related losses on certain AFS securities of $154 million ($107 million after-tax), and a foreign currency translation loss related to our U.S. dollar-denominated deposits used to fund certain AFS securities. These losses were largely offset by gains of $111 million ($76 million after-tax) on fair value adjustments on certain RBC debt designated as HFT, gains on securitization activity, gains of $50 million ($34 million after-tax) related to the change in fair value of certain derivatives used to economically hedge our funding activities, and net gains on income tax amounts largely related to enterprise funding activities that were not allocated to the business segments.

CREDIT QUALITY PERFORMANCE

    
    -------------------------------------------------------------------------
    Provision for credit losses
    -------------------------------------------------------------------------
                                                  For the three months ended
                                                 ----------------------------
                                                      October 31     July 31
    (C$ millions)                                           2009        2009
    -------------------------------------------------------------------------
    Canadian Banking                                   $     314   $     340
    International Banking                                    229         230
    Capital Markets                                          220         177
    Corporate Support(2)                                     120          23
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Canada(1)
      Residential mortgages                            $       1   $       5
      Personal                                               125         125
      Credit cards                                           108         107
      Small business                                          13          14
    -------------------------------------------------------------------------
      Retail                                                 247         251
      Wholesale                                               77         193
    -------------------------------------------------------------------------
      Specific PCL                                           324         444
    -------------------------------------------------------------------------
    United States(1)
      Retail                                                  64          56
      Wholesale                                              297         189
    -------------------------------------------------------------------------
      Specific PCL                                           361         245
    -------------------------------------------------------------------------
    Other International(1)
      Retail                                                   9           6
      Wholesale                                               33          14
    -------------------------------------------------------------------------
      Specific PCL                                            42          20
    -------------------------------------------------------------------------
    Total specific PCL                                       727         709
    -------------------------------------------------------------------------
    General provision(2)                                     156          61
    -------------------------------------------------------------------------
    Total PCL(1)                                       $     883   $     770
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Geographic information is based on residence of borrower.
    (2) PCL in Corporate Support is comprised of the general provision and an
        adjustment related to PCL on securitized credit card loans managed by
        Canadian Banking. For further information, refer to the How we
        measure and report our business segments section on page 16 of our
        2009 Annual Report to Shareholders.
    

Q4 2009 vs. Q3 2009

Total PCL increased $113 million from the prior quarter, mainly driven by an addition to the general provision of $156 million ($104 million after-tax) predominately related to U.S. banking, Canadian unsecured and business lending portfolios and to a lesser extent our Caribbean portfolio, compared to $61 million ($40 million after-tax) in the prior quarter. Higher specific provisions largely related to our corporate lending portfolio and $28 million due to certain AFS securities reclassified to loans as noted below also contributed to the increase.

Specific PCL in Canadian Banking decreased $26 million or 8%, largely due to lower provisions in our business lending portfolio.

Specific PCL in International Banking of $229 million was flat from the prior quarter, reflecting lower provisions in U.S. banking largely attributable to our commercial and residential builder finance portfolios as asset quality started stabilizing. This resulted from the early signs of U.S. economic recovery and lower new impaired residential builder finance loans reflecting the general reduction in this portfolio. These decreases were largely offset by increased PCL of $27 million related to certain impaired AFS securities reclassified to loans in our U.S. banking business. We also had higher provisions in our Caribbean portfolio and U.S. retail portfolios.

Specific PCL in Capital Markets was up $43 million or 24%, largely reflecting a few impaired accounts related to specific clients specializing in non-bank financial services, real estate and related, and other services.

    
    -------------------------------------------------------------------------
    Gross impaired loans
    -------------------------------------------------------------------------
                                                               As at
                                                     ------------------------
                                                      October 31     July 31
    (C$ millions)                                           2009        2009
    -------------------------------------------------------------------------
    Canadian Banking(2)                                $   1,253   $   1,204
    International Banking(2)                               3,149       3,030
    Capital Markets(2)                                       915         757
    Corporate Support(2)                                     140         140
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Canada(1)
      Retail                                           $     673   $     643
      Wholesale                                              839         716
    -------------------------------------------------------------------------
    United States(1)
      Retail                                                 227         265
      Wholesale                                            3,194       3,002
    -------------------------------------------------------------------------
    Other International(1)
      Retail                                                 209         202
      Wholesale                                              315         304
    -------------------------------------------------------------------------
    Total GIL                                          $   5,457   $   5,132
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Geographic information is based on residence of borrower.
    (2) Segments with significant GIL have been presented in the table above.
        Corporate Support includes an amount related to the reclassification
        of securities to loans.
    

Q4 2009 vs. Q3 2009

Total gross impaired loans (GIL) increased $325 million or 6%, from the prior quarter.

GIL in Canadian Banking increased $49 million or 4%, due to higher impaired loans in our residential mortgage and business lending portfolios partially offset by decreased impaired loans mainly in our agriculture portfolio.

GIL in International Banking increased $119 million or 4%, mainly attributable to U.S. banking reflecting increased impaired loans of $164 million related to certain AFS securities reclassified to loans and to a lesser extent increased impaired loans in our commercial portfolio. Higher impaired loans in our Caribbean portfolio also contributed to the increase. These factors were partially offset by lower impaired loans in our U.S. residential builder finance and retail portfolios.

GIL in Capital Markets increased $158 million or 21%, reflecting impaired loans in our corporate portfolio related to clients specializing in real estate and related and other services, partially offset by lower impaired loans in technology & media and non-bank financial services sectors.

Reclassification of Debt Securities to Loans

During 2009, we reclassified certain available-for-sale and held-for-trading debt securities to loans in accordance with the amendments to Canadian Institute of Chartered Accountants (CICA) section 3855. These securities, primarily Non-agency U.S. MBS, that were reclassified were deemed to be in non-active markets and where management has the intention not to sell them in the foreseeable future. For 2009, the impact of the reclassification increased net income by $64 million. The increase to PCL was $67 million ($50 million after tax) and the increase to GIL was $1,138 million.

In the first quarter the impact of these changes increased net income by $57 million ($44 million in International Banking and $13 million in Corporate Support), specific PCL by $39 million ($32 million in International Banking and $7 million in Corporate Support) and GIL by $974 million ($834 million in International Banking and $140 million in Corporate Support).

In the second and third quarter there was no impact to net income or PCL and the increase in GIL reflects the reclassification in the first quarter.

In the fourth quarter, the impact of these changes increased net income by $7 million, increased PCL by $28 million ($27 million in International Banking and $1 million in Corporate Support) and increased GIL by $164 million in the fourth quarter in International Banking. For additional information on the full year impact, please refer to page 58 of our 2009 Annual Report to Shareholders.

    
    -------------------------------------------------------------------------
    Reclassification of debt securities to loans
    -------------------------------------------------------------------------
                                                          2009
                                           ----------------------------------
                                               Impact of reclassification
                                           ----------------------------------
                                                Pre-       Post-
                                           reclassi-   reclassi-    Increase
                                            fication    fication   (decrease)
    -------------------------------------------------------------------------
    Gross impaired loans (C$ millions)     $   4,319   $   5,457   $   1,138
    GIL as a % of loans and acceptances      148 bps     186 bps      38 bps
    Total coverage ratio (Total ACL as a %
     of GIL)                                     72%         61%       (11)%
    Specific PCL as a % of average net
     loans and acceptances - 2009             95 bps      97 bps       2 bps
    Specific PCL as a % of average net
     loans and acceptances - Q4/09            96 bps     100 bps       4 bps
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

LOSSES RELATED TO AVAILABLE-FOR-SALE SECURITIES

Losses related to AFS securities in the quarter were $204 million ($134 million after-tax). Of this amount, $187 million ($123 million after-tax) relate to losses due to the market environment impact. For further details on our total available-for-sale portfolio, please refer to page 57 of our 2009 Annual Report to Shareholders.

During 2009, we reclassified certain available-for-sale securities to loans in accordance with the amendments to CICA Section 3855. In the fourth quarter, the impact of the reclassification increased PCL by $28 million ($16 million after-tax). For additional information on the full year impact, please refer to page 58 of our 2009 Annual Report to Shareholders

    
    -------------------------------------------------------------------------
    Losses related to AFS securities
    -------------------------------------------------------------------------
                                                  For the three months ended
                                                 ----------------------------
                                                                  October 31
    (C$ millions)                                                       2009
    -------------------------------------------------------------------------
    Revenue impacts
    Related to market environment                                  $    (187)
    Other AFS securities (not included in market environment)            (17)
    -------------------------------------------------------------------------
                                                                   $    (204)
    Income tax and compensation adjustments                               70
    -------------------------------------------------------------------------
    Revenue impacts, net of income taxes
     and related compensation adjustments                          $    (134)
    -------------------------------------------------------------------------

    Impact of reclassification of AFS securities (CICA
     Section 3855)
    Provision for credit losses (PCL)                              $     (28)
    Income tax recoveries                                                 12
    -------------------------------------------------------------------------
    Reclassification impacts, net of income taxes                  $     (16)
    -------------------------------------------------------------------------

    Total after-tax and related compensation adjustments           $    (150)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

KEY PERFORMANCE AND NON-GAAP MEASURES

Additional information about our annual key performance and non-GAAP measures can be found under the "Key performance and non-GAAP measures" section on page 61 of our 2009 Annual Report to Shareholders.

Return on Equity and Return on Risk Capital

We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics such as net income, return on equity (ROE) and return on risk capital (RORC). We use ROE and RORC, at both the consolidated and segment levels, as measures of return on total capital invested in our businesses. The business segment ROE and RORC measures are viewed as useful measures for supporting investment and resource allocation decisions because they adjust for certain items that may affect comparability between business segments and certain competitors. RORC does not have standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions.

Our consolidated ROE calculation is based on net income available to common shareholders divided by total average common equity for the period. Business segment ROE calculations are based on net income available to common shareholders divided by average attributed capital for the period. For each segment, average attributed capital, or Economic Capital, includes attributed risk capital required to underpin various risks as described in the Capital Management section and amounts invested in goodwill and intangibles(1).

RORC is used to measure returns on capital required to support the risks related to ongoing operations. Our RORC calculations are based on net income available to common shareholders divided by attributed risk capital (which excludes goodwill and intangibles and unattributed capital).

The attribution of capital and risk capital involves the use of assumptions, judgments and methodologies that are regularly reviewed and revised by management as necessary. Changes to such assumptions, judgments and methodologies can have a material effect on the segment ROE and RORC information that we report. Other companies that disclose information on similar attributions and related return measures may use different assumptions, judgments and methodologies.

See our 2009 Annual Report to Shareholders for further information. The following table provides a summary of our ROE and RORC calculations.

    
    -------------------------------------------------------------------------
                                   For the three months ended
    -------------------------------------------------------------------------
                                           October 31
                                              2009
    (C$ millions,  ----------------------------------------------------------
     except                                                Inter-
     percentage     Canadian      Wealth                national     Capital
     amounts)(1)     Banking  Management   Insurance     Banking     Markets
    -------------------------------------------------------------------------
    Net income
     available to
     common
     shareholders  $     702   $     153   $     101   $    (138)  $     545
    -------------------------------------------------------------------------
    Average risk
     capital(2)    $   5,500   $   1,150   $   1,050   $   2,850   $   6,700
      add:
        Under/(over)
         attribution
         of capital        -           -           -           -           -
        Goodwill and
         intangible
         capital(3)    2,000       2,700         200       3,800       1,050
    -------------------------------------------------------------------------
    Average
     equity(4)     $   7,500   $   3,850   $   1,250   $   6,650   $   7,750
    -------------------------------------------------------------------------
    ROE                37.0%       15.8%       32.3%      (8.3)%       27.9%
    RORC               50.5%       53.3%       37.7%     (19.4)%       32.2%
    -------------------------------------------------------------------------


    -------------------------------------------------------------
                       For the three           For the three
                        months ended            months ended
    -------------------------------------  ----------------------
                         October 31          July 31  October 31
                            2009                2009        2008
    (C$ millions, -----------------------  ----------------------
     except
     percentage    Corporate
     amounts)(1)     Support       Total       Total     Total(2)
    -------------------------------------  ----------------------
    Net income
     available to
     common
     shareholders  $    (190)  $   1,173   $   1,488   $   1,093
    -------------------------------------  ----------------------
    Average risk
     capital(2)    $   1,250   $  18,500   $  18,800   $  16,500
      add: Under/
       (over)
       attribution
       of capital      3,350       3,350       1,150          50
        Goodwill and
         intangible
         capital(3)        -       9,750      10,450      10,550
    -------------------------------------  ----------------------
    Average
     equity(4)     $   4,600   $  31,600   $  30,400   $  27,100
    -------------------------------------------------------------
    ROE                 n.m.       14.7%       19.4%       16.1%
    RORC                n.m.       26.0%       31.4%       26.3%
    --------------------------------------------------------------
    (1) Average risk capital, Goodwill and intangible capital, and Average
        common equity represent rounded figures. ROE and RORC are annualized
        measures based on actual balances before rounding. These are
        calculated using methods intended to approximate the average of the
        daily balances for the period.
    (2) Average risk capital includes Credit, Market (trading and non-
        trading), Operational and Business and fixed assets, and Insurance
        risk capital. For further details, refer to the Capital management
        section on page 48 of our 2009 Annual Report to Shareholders.
    (3) Corporate Support includes average software intangible assets as
        certain software was reclassified to intangible assets, with the
        adoption of CICA handbook Section 3064 effective in the first quarter
        of 2009. For further details, refer to the Accounting and control
        matters section on page 63 of our 2009 Annual Report to Shareholders.
    (4) The amounts for the segments are referred to as attributed capital or
        Economic Capital.
    n.m. not meaningful
    

Non-GAAP measures

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined nor do they have a standardized meaning under GAAP. As a result, these reported amounts and related ratios are not necessarily comparable with similar information disclosed by other financial institutions.

Cash Measures

We believe that excluding the goodwill impairment charge in Q2 2009 and the after-tax impact of amortization of other intangibles from net income will provide readers with a better understanding of management's perspective on our performance. The calculation of these measures can be found in the following table and may also enhance the comparability of our financial performance with the corresponding prior periods.

    
    -------------------------------------------------------------------------
    (C$ millions,
     except per       For the three months ended         For the year ended
     share and    ----------------------------------  -----------------------
     percentage   October 31     July 31  October 31  October 31  October 31
     amounts)           2009        2009        2008        2009        2008
    -------------------------------------------------------------------------
    Net income    $    1,237  $    1,561  $    1,120  $    3,858  $    4,555
      add:
        Goodwill
         impairment
         charge            -           -           -       1,000           -
        After-tax
         effect of
         amortization
         of other
         intangibles(1)   41          41          37         176         122
    -------------------------------------------------------------------------
    Cash net
     income       $    1,278  $    1,602  $    1,157  $    5,034  $    4,677
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted
     earnings per
     share(2)     $      .82  $     1.05         .81  $     2.57  $     3.38
      add:
        Impact of
         goodwill
         impairment
         charge            -           -           -         .71           -
        After-tax
         effect of
         amortization
         of other
         intangibles(1)  .03         .03         .03         .12         .09
    -------------------------------------------------------------------------
    Cash diluted
     earnings per
     share(2)     $      .85  $     1.07         .84  $     3.40  $     3.47
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    ROE(2)             14.7%       19.4%       16.1%       11.9%       18.1%
    Cash ROE(2)        14.5%       19.0%       16.4%       15.2%       18.3%
    -------------------------------------------------------------------------
    (1) Excludes the amortization of computer software intangibles.
    (2) Based on actual balances before rounding.
    

Net income and EPS excluding certain items

We believe that excluding the items noted below from current quarter net income which were incurred, will provide readers with a better understanding of management's perspective on our Q4 2009 performance.

    
    -------------------------------------------------------------------------
    (C$ millions, except per    For the three months ended October 31, 2009
     share and percentage     -----------------------------------------------
     amounts)                   Revenue       PCL     Net income Diluted EPS
    -------------------------------------------------------------------------
    Amounts as reported       $    7,459  $      883  $    1,237  $      .82
    Add:
      Related to market
       environment(1)                187           -         123         .09
      Other AFS portfolios
       (other than market
       environment)(1)                17           -          11         .01
      Reclassification - PCL
       related to Section
       3855(1)                                    28          16         .01
    -------------------------------------------------------------------------
      Losses related to AFS
       securities             $      204  $       28  $      150  $      .11
      General PCL                      -         156         104         .07
      Provision related to
       restructuring certain
       Caribbean mutual funds         52           -          39         .03
    -------------------------------------------------------------------------
    Total excluding items
     impacting net income     $    7,715  $    1,067  $    1,530  $     1.03
    -------------------------------------------------------------------------
    (1) Refer to Losses on AFS securities on page 12 for further information.



    -------------------------------------------------------------------------
    Consolidated Balance Sheets
    -------------------------------------------------------------------------
                                          October 31     July 31  October 31
                                                2009        2009        2008
    (C$ millions)                             (1),(2)     (2),(4) (1),(2),(3)
    -------------------------------------------------------------------------
    Assets

    Cash and due from banks               $    8,353  $    7,966  $   11,086
    -------------------------------------------------------------------------

    Interest-bearing deposits with banks       8,923       8,647      20,041
    -------------------------------------------------------------------------
    Securities
      Trading                                140,062     135,769     122,508
      Available-for-sale                      46,210      47,023      48,626
    -------------------------------------------------------------------------
                                             186,272     182,792     171,134
    -------------------------------------------------------------------------

    Assets purchased under reverse
     repurchase agreements and securities
     borrowed                                 41,580      43,652      44,818
    -------------------------------------------------------------------------

    Loans
      Retail                                 205,224     198,999     195,455
      Wholesale                               78,927      81,140      96,300
    -------------------------------------------------------------------------
                                             284,151     280,139     291,755
      Allowance for loan losses               (3,188)     (2,987)     (2,215)
    -------------------------------------------------------------------------
                                             280,963     277,152     289,540
    -------------------------------------------------------------------------

    Other
      Customers' liability under acceptances   9,024       9,155      11,285
      Derivatives                             92,173     101,086     136,134
      Premises and equipment, net(5)           2,367       2,312       2,471
      Goodwill                                 8,368       8,313       9,977
      Other intangibles(5)                     2,033       2,038       2,042
      Other assets                            14,933      17,020      25,331
    -------------------------------------------------------------------------
                                             128,898     139,924     187,240
    -------------------------------------------------------------------------
                                          $  654,989  $  660,133  $  723,859
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity

    Deposits
      Personal                            $  152,328  $  148,670  $  139,036
      Business and government                220,772     224,081     269,994
      Bank                                    25,204      31,957      29,545
    -------------------------------------------------------------------------
                                             398,304     404,708     438,575
    -------------------------------------------------------------------------

    Other
      Acceptances                              9,024       9,155      11,285
      Obligations related to securities
       sold short                             41,359      40,701      27,507
      Obligations related to assets sold
       under repurchase agreements and
       securities loaned                      35,150      30,423      32,053
      Derivatives                             84,390      91,963     128,705
      Insurance claims and policy benefit
       liabilities                             8,922       8,255       7,385
      Other liabilities                       31,007      29,105      35,809
    -------------------------------------------------------------------------
                                             209,852     209,602     242,744
    -------------------------------------------------------------------------
    Subordinated debentures                    6,461       6,486       8,131
    -------------------------------------------------------------------------
    Trust capital securities                   1,395       1,395       1,400
    -------------------------------------------------------------------------
    Non-controlling interest in subsidiaries   2,071       2,135       2,371
    -------------------------------------------------------------------------

    Shareholders' equity
      Preferred shares                         4,813       4,813       2,663
      Common shares (shares issued -
       1,417,609,720; 1,412,234,729; and
       1,341,260,229)                         13,075      12,864      10,384
      Contributed surplus                        246         238         242
      Treasury shares
        - preferred (shares held - 64,600;
         29,800; and 259,700)                     (2)         (1)         (5)
        - common (shares held - 2,126,699;
         2,113,099; and 2,258,047)               (95)        (97)       (104)
      Retained earnings                       20,585      20,120      19,816
      Accumulated other comprehensive
       (loss) income                          (1,716)     (2,130)     (2,358)
    -------------------------------------------------------------------------
                                              36,906      35,807      30,638
    -------------------------------------------------------------------------
                                          $  654,989  $  660,133  $  723,859
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Opening retained earnings as at November 1, 2006 has been restated.
        Refer to 'Accounting adjustments' in Note 1 to our 2009 Annual
        Consolidated Financial Statements.
    (2) Opening retained earnings as at November 1, 2008 has been restated
        due to the implementation of amendments to CICA Section 3855. Refer
        to Note 1 to our 2009 Annual Consolidated Financial Statements.
    (3) Derived from audited financial statements.
    (4) Unaudited.
    (5) Comparative information has been reclassified as a result of adopting
        CICA Handbook Section 3064. Refer to Note 1 to our 2009 Annual
        Consolidated Financial Statements.



    -------------------------------------------------------------------------
    Consolidated Statements of Income
    -------------------------------------------------------------------------
                        For the three months ended(1)  For they year ended(2)
                      -------------------------------- ----------------------
                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)           2009       2009       2008       2009       2008
    --------------------------------------------------- ---------------------
    Interest income
      Loans            $   3,350  $   3,259  $   3,843  $  13,504  $  14,983
      Securities           1,276      1,367      1,631      5,946      6,662
      Assets purchased
       under reverse
       repurchase
       agreements and
       securities
       borrowed              126        170        586        931      2,889
      Deposits with
       banks                  14         19        128        162        498
    --------------------------------------------------- ---------------------
                           4,766      4,815      6,188     20,543     25,032
    --------------------------------------------------- ---------------------

    Interest expense
      Deposits             1,288      1,424      2,792      6,762     12,158
      Other liabilities      516        420        666      1,925      3,472
      Subordinated
       debentures             86         71        101        350        354
    --------------------------------------------------- ---------------------
                           1,890      1,915      3,559      9,037     15,984
    --------------------------------------------------- ---------------------
    Net interest income    2,876      2,900      2,629     11,506      9,048
    --------------------------------------------------- ---------------------


    Non-interest income
      Insurance premiums,
       investment and fee
       income              1,565      1,575        111      5,718      2,609
      Trading revenue        910      1,027       (446)     2,671        (96)
      Investment
       management and
       custodial fees        424        392        449      1,619      1,759
      Mutual fund
       revenue               320        335        387      1,293      1,561
      Securities
       brokerage
       commissions           345        337        390      1,358      1,377
      Service charges        388        387        371      1,556      1,367
      Underwriting and
       other advisory
       fees                  339        299        253      1,050        875
      Foreign exchange
       revenue, other
       than trading          179        163        165        638        646
      Card service
       revenue               165        185        182        732        648
      Credit fees            133        151        124        530        415
      Securitization
       revenue               177        179        171      1,169        461
      Net loss on
       available-for
       -sale securities     (192)      (125)      (372)      (630)      (617)
      Other                 (170)        18        655       (104)     1,529
    --------------------------------------------------- ---------------------
    Non-interest
     income                4,583      4,923      2,440     17,600     12,534
    --------------------------------------------------- ---------------------
    Total revenue          7,459      7,823      5,069     29,106     21,582
    --------------------------------------------------- ---------------------
    Provision for
     credit losses           883        770        619      3,413      1,595
    --------------------------------------------------- ---------------------
    Insurance
     policyholder
     benefits, claims
     and acquisition
     expense               1,322      1,253        (86)     4,609      1,631
    --------------------------------------------------- ---------------------

    Non-interest
     expense
      Human resources      2,142      2,357      1,954      8,978      7,779
      Equipment(3)           235        262        270      1,025        934
      Occupancy              267        260        249      1,045        926
      Communications         196        192        230        761        749
      Professional
       fees                  170        133        169        559        562
      Outsourced item
       processing             72         75        105        301        341
      Amortization of
       other
       intangibles(3)        123        113        109        462        356
      Other                  401        363        (97)     1,427        704
    --------------------------------------------------- ---------------------
                           3,606      3,755      2,989     14,558     12,351
    --------------------------------------------------- ---------------------

    Goodwill impairment
     charge                    -          -          -      1,000          -
    --------------------------------------------------- ---------------------

    Income before
     income taxes          1,648      2,045      1,547      5,526      6,005
    Income taxes             389        449        428      1,568      1,369
    --------------------------------------------------- ---------------------

    Net income before
     non-controlling
     interest              1,259      1,596      1,119      3,958      4,636
    Non-controlling
     interest in net
     income of
     subsidiaries             22         35         (1)       100         81
    --------------------------------------------------- ---------------------

    Net income         $   1,237  $   1,561  $   1,120  $   3,858  $   4,555
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------

    Preferred
     dividends               (64)       (73)       (27)      (233)      (101)
    --------------------------------------------------- ---------------------

    Net income
     available to
     common
     shareholders      $   1,173  $   1,488  $   1,093   $  3,625  $   4,454
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------

    Average number
     of common
     shares (in
     thousands)        1,413,644  1,408,687  1,337,753  1,398,675  1,305,706
    Basic earnings
     per share (in
     dollars)          $     .83  $    1.06  $     .82  $    2.59  $    3.41

    Average number
     of diluted
     common shares
     (in thousands)    1,428,409  1,422,810  1,353,588  1,412,126  1,319,744
    Diluted earnings
     per share         $     .82  $    1.05  $     .81  $    2.57  $    3.38
    --------------------------------------------------- ---------------------
    Dividends per
     share (in
     dollars)          $     .50  $     .50  $     .50  $    2.00  $    2.00
    --------------------------------------------------- ---------------------
    (1) Unaudited.
    (2) Derived from audited financial statements.
    (3) Comparative information has been reclassified as a result of adopting
        CICA Handbook Section 3064. Refer to Note 1 to our 2009 Annual
        Consolidated Financial Statements.



    -------------------------------------------------------------------------
    Consolidated Statements of Comprehensive Income
    -------------------------------------------------------------------------
                        For the three months ended(1)  For they year ended(2)
                      -------------------------------- ----------------------
                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)           2009       2009       2008       2009       2008
    -------------------------------------------------------------------------
    Comprehensive
     income
      Net income       $   1,237  $   1,561  $   1,120  $   3,858  $   4,555

      Other
       comprehensive
       income, net of
       taxes
      Net unrealized
       gains (losses)
       on available-
       for-sale
       securities            309        603       (923)       662     (1,376)
      Reclassification
       of losses on
       available-for-
       sale securities
       to income             134         74        252        330        373
    -------------------------------------------------------------------------
      Net change in
       unrealized
       gains (losses)
       on available-for-
       sale securities       443        677       (671)       992     (1,003)
    -------------------------------------------------------------------------

      Unrealized
       foreign currency
       translation
       gains (losses)        103     (2,444)     3,581     (2,973)     5,080
      Reclassification
       of losses (gains)
       on foreign
       currency
       translation to
       income                  -          1          -          2         (3)
      Net foreign
       currency
       translation
       (losses) gains
       from hedging
       activities           (124)     1,929     (1,678)     2,399     (2,672)
    -------------------------------------------------------------------------
      Foreign currency
       translation
       adjustments           (21)      (514)     1,903       (572)     2,405
    -------------------------------------------------------------------------

      Net gains
       (losses) on
       derivatives
       designated as
       cash flow hedges        5        116       (125)       156       (603)
      Reclassification
       of (gains)
       losses on
       derivatives
       designated as
       cash flow hedges
       to income             (13)       (13)        36        (38)        49
    -------------------------------------------------------------------------
      Net change in
       cash flow hedges       (8)       103        (89)       118       (554)
    -------------------------------------------------------------------------
      Other
       comprehensive
       income (loss)         414        266      1,143        538        848
    -------------------------------------------------------------------------
    Total comprehensive
     income            $   1,651  $   1,827  $   2,263  $   4,396  $   5,403
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
    Consolidated Statements of Changes in Shareholders' Equity
    -------------------------------------------------------------------------

                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)         2009(3)    2009(3)    2008(3)    2009(3)    2008(3)
    -------------------------------------------------------------------------
    Preferred shares
      Balance at
       beginning of
       period          $   4,813  $   4,813  $   2,263  $   2,663  $   2,050
      Issued                   -          -        400      2,150        613
    -------------------------------------------------------------------------
      Balance at end
       of period           4,813      4,813      2,663      4,813      2,663
    -------------------------------------------------------------------------

    Common shares
      Balance at
       beginning of
       period             12,864     12,730     10,308     10,384      7,300
      Issued                 211        134         76      2,691      3,090
      Purchased for
       cancellation            -          -          -          -         (6)
    -------------------------------------------------------------------------
      Balance at end
       of period          13,075     12,864     10,384     13,075     10,384
    -------------------------------------------------------------------------

    Contributed
     surplus
      Balance at
       beginning of
       period                238        239        251        242        235
      Renounced stock
       appreciation
       rights                 (2)        (2)        (3)        (7)        (5)
      Stock-based
       compensation
       awards                  -         (3)         4        (11)        14
      Other                   10          4        (10)        22         (2)
    -------------------------------------------------------------------------
      Balance at end
       of period             246        238        242        246        242
    -------------------------------------------------------------------------

    Treasury shares
     - preferred
      Balance at
       beginning of
       period                 (1)        (2)       (10)        (5)        (6)
      Sales                    3          3         10         13         23
      Purchases               (4)        (2)        (5)       (10)       (22)
    -------------------------------------------------------------------------
      Balance at end
       of period              (2)        (1)        (5)        (2)        (5)
    -------------------------------------------------------------------------

    Treasury shares
     - common
      Balance at
       beginning of
       period                (97)       (78)       (98)      (104)      (101)
      Sales                    5         15          -         59         51
      Purchases               (3)       (34)        (6)       (50)       (54)
    -------------------------------------------------------------------------
      Balance at end
       of period             (95)       (97)      (104)       (95)      (104)
    -------------------------------------------------------------------------

    Retained earnings
      Balance at
       beginning of
       period(3)          20,120     19,352     19,397     19,816     18,047
      Transition
       adjustment -
       Financial
       instruments(4)          -          -          -         66          -
      Net income           1,237      1,561      1,120      3,858      4,555
      Preferred share
       dividends             (64)       (73)       (27)      (233)      (101)
      Common share
       dividends            (708)      (705)      (670)    (2,819)    (2,624)
      Premium paid on
       common shares
       purchased for
       cancellation            -          -          -          -        (49)
      Issuance costs
       and other               -        (15)        (4)      (103)       (12)
    -------------------------------------------------------------------------
      Balance at end
       of period          20,585     20,120     19,816     20,585     19,816
    -------------------------------------------------------------------------

    Accumulated other
     comprehensive
     (loss) income
      Transition
       adjustment -
       Financial
       instruments            59         59        (45)        59        (45)
      Unrealized
       gains and
       losses on
       available-for-
       sale securities       (76)      (519)    (1,068)       (76)    (1,068)
      Unrealized
       foreign
       currency
       translation
       gains and
       losses, net of
       hedging
       activities         (1,374)    (1,353)      (802)    (1,374)      (802)
      Gains and losses
       on derivatives
       designated as
       cash flow hedges     (325)      (317)      (443)      (325)      (443)
    -------------------------------------------------------------------------
      Balance at end
       of period          (1,716)    (2,130)    (2,358)    (1,716)    (2,358)
    -------------------------------------------------------------------------
    Retained earnings
     and Accumulated
     other comprehensive
     income               18,869     17,990     17,458     18,869     17,458
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Shareholders'
     equity at end of
     period            $  36,906  $  35,807  $  30,638  $  36,906  $  30,638
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1) Unaudited.
    (2) Derived from audited financial statements.
    (3) Opening retained earnings as at November 1, 2006 has been restated.
        Refer to 'Accounting adjustments' in Note 1 to our 2009 Annual
        Consolidated Financial Statements.
    (4) Opening retained earnings as at November 1, 2008 has been restated
        due to the implementation of amendments to CICA Section 3855. Refer
        to Note 1 to our 2009 Annual Consolidated Financial 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 securities legislation. We may make forward-looking statements in this earnings release, in other filings with Canadian regulators or the U.S. Securities Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements include, but are not limited to, statements relating to our medium-term objectives, our vision and strategic goals and our President and Chief Executive Officer's statements in this earnings release. The forward-looking information contained in this earnings 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 and for the periods ended on the dates presented, and our vision and strategic goals and medium-term objectives, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could", 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 predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our objectives, strategic goals and priorities will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk 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 and the effects of which can be difficult to predict - include: credit, market, operational, liquidity and funding risks, and other risks discussed in the Risk, capital and liquidity management, and Overview of other risks sections of our 2009 Management's Discussion and Analysis; general business, economic and financial market conditions, including the ongoing impact from the market environment, the lack of liquidity in certain markets, the level of activity and volatility of the capital markets and including recessionary conditions in Canada, the United States and certain 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 effects of changes in government fiscal, monetary and other policies; the effects of competition in the markets in which we operate; the impact of changes in laws and regulations, including tax laws; judicial or regulatory judgments and legal proceedings; the accuracy and completeness of information concerning our clients and counterparties; our ability to successfully execute our strategies and to complete and integrate strategic acquisitions and joint ventures successfully; and development and integration of our distribution networks.

We caution that the foregoing list of risk 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 the Risk, capital and liquidity management and Overview of other risks sections of our 2009 Management's Discussion and Analysis.

Information contained in or otherwise accessible through the websites mentioned does not form part of this earnings release. All references in this earnings release to websites are inactive textual references and are for your information only.

ACCESS TO QUARTERLY RESULTS MATERIALS

Interested investors, the media and others may review this quarterly earnings release, quarterly results slides, supplementary financial information and our 2009 Annual Report to Shareholders, Annual Report on Form 40-F (Form 40-F) and Annual Information Form on our website at rbc.com/investorrelations. Shareholders may request a hard copy of our 2009 Annual Report and 2009 Form 40-F free of charge by contacting Investor Relations at (416) 955-7802. Our 2009 Form 40-F will be filed with the SEC.

Quarterly conference call and webcast presentation

Our conference call is scheduled for Friday December 4, 2009 at 8:00 a.m. (EST) and will feature a presentation about our fourth quarter and 2009 results by RBC executives. It will be followed by a question and answer period with analysts.

Interested parties can access the call live on a listen-only basis at: www.rbc.com/investorrelations/ir_events_presentations.html or by telephone (416-695-7806 or 1-888-789-9572, passcode 4720565 followed by the number sign). Please call between 7:50 a.m. and 7:55 a.m. (EST).

Management's comments on results will be posted on our website shortly following the call. Also, a recording will be available by 5:00 pm (EST) on December 4 until March 3, 2010 at: www.rbc.com/investorrelations/ir_quarterly.html or by telephone (416-695-5800 or 1-800-408-3053, passcode 7856454 followed by the number sign).

ABOUT RBC

Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. We are Canada's largest bank as measured by assets and market capitalization, one of North America's leading diversified financial services companies and among the largest banks in the world, as measured by market capitalization. We provide personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services on a global basis. We employ approximately 80,000 full- and part-time employees who serve more than 18 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 53 other countries. For more information, please visit rbc.com.

    
    Trademarks used in this release include the LION & GLOBE Symbol, ROYAL
    BANK OF CANADA and RBC which are trademarks of Royal Bank of Canada used
    by Royal Bank of Canada and/or by its subsidiaries under license. All
    other trademarks mentioned in this release, which are not the property of
    Royal Bank of Canada, are owned by their respective holders. RBC Dexia IS
    and affiliated Dexia companies are licensed users of the RBC trademark.
    

SOURCE RBC

For further information: For further information: Media Relations Contact: Stephanie Lu, Head, Media & Public Relations, stephanie.lu@rbc.com, (416) 974-5506 (within Toronto) or 1-888-880-2173 (toll-free outside Toronto); Investor Relations Contacts: Josie Merenda, VP & Head, Investor Relations, josie.merenda@rbc.com, (416) 955-7803; Bill Anderson, Director, Investor Relations, william.anderson@rbc.com, (416) 955-7804; Amy Cairncross, Director, Investor Relations, amy.cairncross@rbc.com, (416) 955-7809


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