Royal Bank of Canada Reports Fourth Quarter and Record 2015 Results

All amounts are in Canadian dollars and are based on our audited Annual and unaudited Interim Consolidated Financial Statements for the year and quarter ended October 31, 2015 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2015 Annual Report (which includes our audited annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2015 Annual Information Form and our Supplementary Financial Information are available on our website at: http://www.rbc.com/investorrelations.

TORONTO, Dec. 2, 2015 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $10,026 million for the year ended October 31, 2015, up $1,022 million or 11% from the prior year. Excluding specified items(1) noted below and discussed on page 11 of this Earnings Release, net income was up $782 million or 9%. Results were driven by record earnings in Personal & Commercial Banking, Capital Markets, and Investor & Treasury Services, partially offset by lower earnings in Insurance and Wealth Management. Results also reflect strong credit quality, with a provision for credit loss (PCL) ratio of 0.24%, and the positive impact of foreign exchange translation.

As of October 31, 2015, our Basel III Common Equity Tier 1 (CET1) ratio was 10.6%, up 70 bps from the prior year, as we continued to strengthen our capital position for the acquisition of City National Corporation (City National), which we completed on November 2, 2015. In addition, we increased our quarterly dividend twice during 2015, for an annual dividend increase of 8%.

"We had record earnings of $10 billion in 2015, reflecting the strength of our diversified business model and our ability to execute our growth strategy in a changing environment," said Dave McKay, RBC President and CEO. "Looking ahead to 2016, while we face industry headwinds, we remain focused on delivering an exceptional client experience and driving long-term shareholder value, while contributing meaningfully to the success of our employees and communities."

         
2015 compared to 2014       Excluding specified items(1): 2015 compared to 2014
  • Net income of $10,026 million (up 11% from $9,004 million)
  • Diluted earnings per share (EPS) of $6.73 (up $0.73 from $6.00)
  • Return on common equity (ROE)(2) of 18.6% (down from 19.0%)
  • Basel III CET1 ratio of 10.6% (up from 9.9%)
     
  • Net income of $9,918 million (up 9% from $9,136 million)
  • Diluted EPS of $6.66 (up $0.57 from $6.09)
  • ROE of 18.4% (down from 19.3%)
         

2015 Business Segment Performance

  • 12% earnings growth in Personal & Commercial Banking, on improved trends in Caribbean Banking and solid results in Canadian Banking;
  • 4% lower earnings in Wealth Management, driven by higher costs in support of business growth, restructuring costs largely related to our U.S. & International Wealth Management business, and lower transaction volumes, partly offset by higher earnings from growth in average fee-based client assets;
  • 10% lower earnings in Insurance, mainly due to a change in Canadian tax legislation which became effective November 1, 2014;
  • 26% earnings growth in Investor & Treasury Services, reflecting higher earnings from our foreign exchange businesses, an additional month of earnings in Investor Services, and increased custodial fees; and,
  • 13% earnings growth in Capital Markets, driven by growth in our global markets businesses, continued solid performance in our corporate and investment banking businesses, and the favourable impact of foreign exchange translation.

Specified items(1) as detailed on page 11 comprise: In Q2 2015, a gain of $108 million (before- and after-tax) from the wind-up of a U.S.-based funding subsidiary that resulted in the release of foreign currency translation adjustment (CTA) that was previously booked in other components of equity (OCE); in Q3 2014, a loss of $40 million (before- and after-tax), related to the closing of the sale of RBC Jamaica on June 27, 2014; and in Q1 2014, a loss of $60 million (before- and after-tax) also related to the sale of RBC Jamaica, and a provision related to post-employment benefits and restructuring charges in the Caribbean of $40 million ($32 million after-tax).

         
Q4 2015 compared to Q4 2014       Q4 2015 compared to Q3 2015
  • Net income of $2,593 million (up 11% from $2,333 million)
  • Diluted EPS of $1.74 (up $0.17 from $1.57)
  • ROE of 17.9% (down from 19.0%)
     
  • Net income of $2,593 million (up 5% from $2,475 million)
  • Diluted EPS of $1.74 (up $0.08 from $1.66)
  • ROE of 17.9% (down from 18.1%)
         

Q4 2015 Performance

Record earnings of $2,593 million were up $260 million, or 11% from last year, driven by solid earnings growth in Capital Markets and Personal & Commercial Banking, and a lower effective tax rate reflecting net favourable tax adjustments in Corporate Support. These factors were partially offset by lower earnings in Investor & Treasury Services driven by lower funding and liquidity results due to widening credit spreads and unfavourable market conditions, lower earnings in Insurance mainly due to a change in Canadian tax legislation as noted above, and lower earnings in Wealth Management largely reflecting lower transaction volumes and restructuring costs largely related to our U.S. & International Wealth Management business, including the sale of RBC Suisse.

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1 These are non-GAAP measures. For further information, including a reconciliation, refer to the non-GAAP measures section on page 11 of this Earnings Release.
2 This measure does not have a standardized meaning under GAAP. For further information, refer to the Key performance and non-GAAP measures section on page 11 of this Earnings Release.

Earnings were up $118 million, or 5% from last quarter, largely due to net favourable tax adjustments as noted above, and higher earnings in Insurance reflecting favourable actuarial adjustments and lower net claims costs. These factors were partially offset by lower earnings in Investor & Treasury Services driven by lower funding and liquidity results as noted above, and lower earnings in Wealth Management largely reflecting restructuring costs as noted above.

Q4 2015 Business Segment Performance

Personal & Commercial Banking net income was $1,270 million, up $119 million or 10% compared to last year. Canadian Banking net income was $1,227 million, up $17 million or 1% compared to last year, primarily due to solid volume growth across most of our businesses and higher fee-based revenue growth, partly offset by lower spreads. The prior year included favourable net cumulative accounting adjustments of $55 million ($40 million after-tax). Caribbean & U.S. Banking net income was $43 million compared to a net loss of $59 million last year reflecting higher earnings driven by lower PCL, continuing benefits from our efficiency management activities, and the favourable impact of foreign exchange translation.

Compared to last quarter, Personal & Commercial Banking net income was down $11 million or 1%. Canadian Banking net income was down $12 million or 1% as strong volume growth across most businesses and lower PCL was more than offset by higher marketing and technology costs to support business growth. Caribbean & U.S. Banking net income was relatively flat compared to last quarter.

Wealth Management net income was $255 million, down $30 million or 11% compared to last year, mostly due to lower transaction volumes driven by unfavourable market conditions, and restructuring costs of $46 million ($38 million after-tax) largely related to our U.S. & International Wealth Management business, including the sale of RBC Suisse. These factors were partly offset by a lower effective tax rate reflecting income tax adjustments related to the current year, and higher earnings from growth in average fee-based client assets.

Compared to last quarter, net income was down $30 million or 11%, primarily due to restructuring costs as noted above, lower fee-based client assets and lower transaction volumes driven by unfavourable market conditions.

Insurance net income was $225 million, down $31 million or 12% from a year ago, mainly due to a change in Canadian tax legislation impacting certain foreign affiliates which became effective November 1, 2014.

Compared to last quarter, net income was up $52 million or 30% mainly due to favourable actuarial adjustments reflecting management actions and assumption changes, and lower net claims costs.

Investor & Treasury Services net income was $88 million, down $25 million or 22% from last year, largely reflecting lower funding and liquidity results due to widening credit spreads and unfavourable market conditions. This factor was partially offset by a lower effective tax rate mainly reflecting income tax adjustments, and higher net interest income from growth in client deposits.

Net income was down $79 million or 47% from a record in Q3 2015, mainly due to lower funding and liquidity results as noted above, and lower results in our foreign exchange businesses primarily due to lower volumes and client activity. In addition, the prior quarter included an additional month of earnings in Investor Services of $42 million ($28 million after-tax)(1).

Capital Markets net income was $555 million, up $153 million or 38% compared to last year, primarily due to a lower effective tax rate reflecting income tax adjustments related to the current year, growth in our global markets businesses, and the positive impact of foreign exchange translation. In addition, our results in the prior year included the unfavourable impact of the implementation of a one-time funding valuation adjustment (FVA) of $105 million ($51 million after-tax and variable compensation), and $75 million ($46 million after-tax and variable compensation) in lower trading revenue and costs associated with the exit from certain proprietary trading strategies.

Compared to last quarter, net income was up $10 million or 2%, as lower variable compensation, the income tax adjustments as noted above, and higher equity trading revenue were mostly offset by lower debt and equity origination reflecting decreased client issuance activity, and lower fixed income trading revenue due to unfavourable market conditions.

Corporate Support net income was $200 million, largely reflecting net favourable tax adjustments and asset/liability management activities, partially offset by transaction costs of $29 million ($23 million after-tax) related to our acquisition of City National. Net income last year was $126 million, largely reflecting gains on private equity investments related to the sale of a legacy portfolio, and asset/liability management activities.

Capital - As at October 31, 2015, Basel III CET1 ratio was 10.6%, up 50 bps from last quarter, mainly reflecting strong internal capital generation and lower risk-weighted assets.

Credit Quality - Total PCL of $275 million decreased $70 million or 20% from a year ago, mainly reflecting lower PCL in Caribbean banking. Compared to last quarter, PCL was up $5 million or 2% mainly due to higher PCL in Capital Markets, partially offset by lower provisions in Canadian Banking. Our PCL ratio was 0.23%, down 8 bps compared to last year and flat compared to last quarter.

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1 Effective Q3 2015, we aligned the reporting period of Investor Services, which resulted in an additional month of results being included in Q3 2015.

 
Selected financial and other highlights                                                                                                       
                                   
    As at or for the three months ended   For the year ended  
      October 31     July 31     October 31     October 31       October 31  
(Millions of Canadian dollars, except per share, number of and percentage amounts)   2015     2015     2014     2015       2014  
  Total revenue   $ 8,019   $ 8,828   $ 8,382   $ 35,321     $ 34,108  
  Provision for credit losses (PCL)   275     270     345     1,097       1,164  
  Insurance policyholder benefits, claims and acquisition expense (PBCAE)   292     656     752     2,963       3,573  
  Non-interest expense   4,647     4,635     4,340     18,638       17,661  
  Net income before income taxes   2,805     3,267     2,945     12,623       11,710  
Net income $ 2,593   $ 2,475   $ 2,333   $ 10,026     $ 9,004  
Segments - net income                                
  Personal & Commercial Banking $ 1,270   $ 1,281   $ 1,151   $ 5,006     $ 4,475  
  Wealth Management   255     285     285     1,041       1,083  
  Insurance   225     173     256     706       781  
  Investor & Treasury Services   88     167     113     556       441  
  Capital Markets   555     545     402     2,319       2,055  
  Corporate Support   200     24     126     398       169  
Net income $ 2,593   $ 2,475   $ 2,333   $ 10,026     $ 9,004  
Selected information                                
  Earnings per share (EPS) - basic $ 1.74   $ 1.66   $ 1.57   $ 6.75     $ 6.03  
    - diluted   1.74     1.66     1.57     6.73       6.00  
  Return on common equity (ROE) (1), (2)   17.9 %   18.1 %   19.0 %   18.6 %     19.0 %
  PCL on impaired loans as a % of average net loans and acceptances   0.23 %   0.23 %   0.31 %   0.24 %     0.27 %
  Gross impaired loans (GIL) as a % of loans and acceptances   0.47 %   0.50 %   0.44 %   0.47 %     0.44 %
  Liquidity coverage ratio   127 %   117 %   n.a.     127 %     n.a.  
Capital ratios and multiples (3)                                
  Common Equity Tier 1 (CET1) ratio (3)   10.6 %   10.1 %   9.9 %   10.6 %     9.9 %
  Tier 1 capital ratio (3)   12.2 %   11.7 %   11.4 %   12.2 %     11.4 %
  Total capital ratio (3)   14.0 %   13.4 %   13.4 %   14.0 %     13.4 %
  Assets-to-capital multiple (3)   n.a.     n.a.     17.0 X   n.a.       17.0 X
  Leverage ratio (3)   4.3 %   4.2 %   n.a.     4.3 %     n.a.  
Selected balance sheet and other information                                
  Total assets $ 1,074,208   $ 1,085,173   $ 940,550   $ 1,074,208     $ 940,550  
  Securities   215,508     235,515     199,148     215,508       199,148  
  Loans (net of allowance for loan losses)   472,223     462,599     435,229     472,223       435,229  
  Derivative related assets   105,626     112,459     87,402     105,626       87,402  
  Deposits   697,227     694,236     614,100     697,227       614,100  
  Common equity   57,048     55,153     48,615     57,048       48,615  
  Average common equity (1)   55,800     52,600     47,450     52,300       45,700  
  Total capital risk-weighted assets   413,957     421,908     372,050     413,957       372,050  
  Assets under management (AUM) (4)   498,400     508,700     457,000     498,400       457,000  
  Assets under administration (AUA) (4), (5)   4,609,100     5,012,900     4,647,000     4,609,100       4,647,000  
Common share information                                
  Shares outstanding (000s) - average basic   1,442,935     1,443,052     1,442,368     1,442,935       1,442,553  
    - average diluted   1,449,509     1,449,540     1,449,342     1,449,509       1,452,003  
    - end of period   1,443,423     1,443,192     1,442,233     1,443,423       1,442,233  
  Dividends declared per share $ 0.79   $ 0.77   $ 0.75   $ 3.08     $ 2.84  
  Dividend yield (6)   4.3 %   4.0 %   3.8 %   4.1 %     3.8 %
  Common share price (RY on TSX) (7) $ 74.77   $ 76.26   $ 80.01   $ 74.77     $ 80.01  
  Market capitalization (TSX) (7)   107,925     110,058     115,393     107,925       115,393  
Business information (number of)                                
  Bank branches   1,355     1,354     1,366     1,355       1,366  
  Automated teller machines (ATMs)   4,816     4,892     4,929     4,816       4,929  
Period average US$ equivalent of C$1.00 (7)     $ 0.758   $ 0.789   $ 0.900   $ 0.797     $ 0.914  
Period-end US$ equivalent of C$1.00 $ 0.765   $ 0.765   $ 0.887   $ 0.765     $ 0.887  
(1) Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes ROE and Average common equity.
For further details, refer to the How we measure and report our business segments section of our 2015 Annual Report.
(2) These measures may not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures disclosed by other
financial institutions. See the How we measure and report our business segments section and the Key performance and Non-GAAP Measures section of this Earnings Release, our
Q4 2014 Supplementary Financial Information and our 2015 Annual Report for additional information.
(3) Capital and Leverage ratios presented above are on an "all-in" basis. Effective the first quarter of 2015, the Leverage ratio has replaced the Assets-to-capital multiple (ACM). The
Leverage ratio is a regulatory measure under the Basel III framework and is n.a. for prior periods. The ACM is presented on a transitional basis for prior periods. For further details,
refer to the Capital management section.
(4)  Represents period-end spot balances.
(5) AUA are beneficially owned by clients and are reported based on the nature of the administrative services provided. AUA includes $21.0 billion and $8.0 billion, respectively (2014 -
$23.2 billion and $8.0 billion; 2013 - $25.4 billion and $7.2 billion) of securitized residential mortgages and credit card loans.
(6) Defined as dividends per common share divided by the average of the high and low share price in the relevant period.
(7) Average amounts are calculated using month-end spot rates for the period.
   

                     
Personal & Commercial Banking          
      As at or for the three months ended
        October 31     July 31     October 31  
(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted) 2015   2015   2014  
  Net interest income $ 2,569   $ 2,543   $ 2,447  
  Non-interest income   1,080     1,083     1,104  
Total revenue   3,649     3,626     3,551  
  PCL   240     257     314  
  Non-interest expense   1,717     1,648     1,686  
Net income before income taxes   1,692     1,721     1,551  
Net income $ 1,270   $ 1,281   $ 1,151  
Revenue by business                  
  Canadian Banking   3,409     3,390     3,346  
  Caribbean & U.S. Banking   240     236     205  
Selected balances and other information                  
  ROE   29.1%     30.3%     28.3%  
  NIM (1)   2.70%     2.72%     2.71%  
  Efficiency ratio (2)   47.1%     45.4%     47.5%  
  Operating leverage   1.0%     3.8%     2.1%  
  Operating leverage adjusted (3)   n.a.     1.2%     n.a.  
  Average total assets (5) $ 395,100   $ 388,100   $ 374,100  
  Average total earning assets (4)   377,300     370,700     357,600  
  Average loans and acceptances (4), (5)   375,400     369,100     357,200  
  Average deposits   307,000     299,200     285,200  
  AUA (6) $ 223,500   $ 227,900   $ 214,200  
  AUM   4,800     4,700     4,000  
  Number of employees (FTE)   35,007     35,598     36,113  
  Effective income tax rate   24.9%     25.6%     25.8%  
  Gross impaired loans as a % of average net loans and acceptances (5)   0.48%     0.52%     0.54%  
  PCL on impaired loans as a % of average net loans and acceptances   0.25%     0.28%     0.35%  
                     
          For the three months ended
Estimated impact of U.S. dollar and Trinidad & Tobago dollar (TTD) translation on key income statement items         Q4 2015 vs.     Q4 2015 vs.  
(Millions of Canadian dollars, except percentage amounts)         Q4 2014     Q3 2015  
Increase (decrease):                  
  Total revenue       $ 22   $ 5  
  Non-interest expense         12     3  
  Net income         6     1  
Percentage change in average US$ equivalent of C$1.00         (16)%     (4)%  
Percentage change in average TTD equivalent of C$1.00         (16)%     (4)%
(1)   Calculated as net interest income divided by average total earning assets.
(2)   Efficiency ratio is calculated as non-interest expense divided by total revenue.
(3)  Measures have been adjusted by excluding the loss related to the sale of RBC Jamaica and are non-GAAP. For further details, refer to the Non-GAAP
measures section on page 11 of this Earnings Release.
(4)  Average total earning assets and average loans and acceptances include average securitized residential mortgages and credit card loans for the three
months ended October 31, 2015 of $57.3 billion and $8.1 billion, respectively (July 31, 2015 - $56.6 billion and $8.4 billion; October 31, 2014 - $53.7 billion
and $8.0 billion).
(5)      Amounts have been revised from those previously presented.
(6)  AUA represents period-end spot balances and includes securitized residential mortgages and credit card loans as at October 31, 2015 of $21.0 billion and
$8.0 billion respectively (July 31, 2015 - $21.7 billion and $8.4 billion; October 31, 2014 - $23.2 billion and $8.0 billion).
   

Q4 2015 vs. Q4 2014
Net income of $1,270 million increased $119 million or 10% compared to the prior year, primarily due to solid volume growth across most of our businesses in Canada, higher fee-based revenue growth, and higher earnings in the Caribbean, partly offset by lower spreads. The prior year included favourable net cumulative accounting adjustments of $55 million ($40 million after-tax) in Canadian Banking.

Total revenue increased $98 million or 3%, reflecting solid volume growth of 6% across most businesses in Canada and the positive impact of foreign exchange translation. Higher fee-based revenue primarily attributable to strong mutual fund asset growth resulting in higher mutual fund distribution fees, as well as higher volumes driving higher card service revenue, also contributed to the increase. The prior year included favourable net cumulative accounting adjustments as noted above.

Net interest margin decreased 1 bp primarily due to the low interest rate environment and competitive pressures.

PCL decreased $74 million, with the PCL ratio improving 10 bps, largely reflecting lower provisions in our Caribbean portfolios as the prior year included provisions of $50 million on our impaired residential mortgage portfolio. Lower provisions in our Canadian commercial lending portfolio also contributed to the decrease.

Non-interest expense increased $31 million or 2%, mainly due to higher technology and staff costs to support business growth in Canadian Banking, and an increase due to the impact of foreign exchange translation, which were partially offset by continuing benefits from our efficiency management activities. The prior year included provisions related to restructuring charges of $17 million in the Caribbean.

Q4 2015 vs. Q3 2015
Net income decreased $11 million or 1% from the prior quarter, mainly driven by higher marketing and technology costs to support business growth in Canadian Banking, partially offset by strong volume growth across most of our businesses in Canada, and lower PCL.

                   
Canadian Banking         Table 19  
    As at or for the three months ended  
      October 31     July 31     October 31  
(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted) 2015   2015   2014  
  Net interest income $ 2,407   $ 2,381   $ 2,305  
  Non-interest income   1,002     1,009     1,041  
Total revenue   3,409     3,390     3,346  
  PCL   228     238     236  
  Non-interest expense   1,529     1,476     1,479  
Net income before income taxes   1,652     1,676     1,631  
Net income $ 1,227   $ 1,239   $ 1,210  
Revenue by business                  
  Personal Financial Services $ 1,956   $ 1,949   $ 1,843  
  Business Financial Services   774     780     869  
  Cards and Payment Solutions   679     661     634  
Selected balances and other information                  
  ROE   35.2%     36.5%     36.1%  
  NIM (1)   2.65%     2.66%     2.66%  
  Efficiency ratio (2)   44.9%     43.5%     44.2%  
  Operating leverage   (1.5)%     0.7%     1.8%  
  Average total assets $ 373,000   $ 366,500   $ 355,700  
  Average total earning assets (3)   360,200     354,600     343,400  
  Average loans and acceptances (3)   366,100     360,300     349,400  
  Average deposits   288,800     282,000     269,700  
  AUA (4)   213,700     217,700     205,200  
  Number of employees (FTE)   30,853     31,448     31,381  
  Effective income tax rate   25.7%     26.1%     25.8%  
  Gross impaired loans as a % of average net loans and acceptances   0.29%     0.31%     0.32%  
  PCL on impaired loans as a % of average net loans and acceptances   0.25%     0.26%     0.27%  
(1) Calculated as net interest income divided by average total earning assets.
(2) Efficiency ratio is calculated as non-interest expense divided by total revenue.
(3) Average total earning assets and average loans and acceptances include average securitized residential mortgages and credit card loans for the
three months ended October 31, 2015 of $57.3 billion and $8.1 billion, respectively (July 31, 2015 - $56.6 billion and $8.4 billion; October 31, 2014
- $53.7 billion and $8.0 billion).
(4) AUA represents period-end spot balances and includes securitized residential mortgages and credit card loans as at October 31, 2015 of $21.0
billion and $8.0 billion respectively (July 31, 2015 - $21.7 billion and $8.4 billion; October 31, 2014 - $23.2 billion and $8.0 billion).
   

Q4 2015 vs. Q4 2014
Net income increased $17 million or 1% compared to the prior year, primarily due to solid volume growth across most of our businesses and higher fee-based revenue growth, partly offset by lower spreads. The prior year included favourable net cumulative accounting adjustments of $55 million ($40 million after-tax).

Total revenue increased $63 million or 2%, mainly reflecting solid volume growth of 6% across most businesses and higher fee-based revenue primarily attributable to strong mutual fund asset growth resulting in higher mutual fund distribution fees, as well as higher volumes driving higher cards service revenue. The prior year included favourable net cumulative accounting adjustments as noted above.

Net interest margin decreased 1 bp primarily due to the low interest rate environment and competitive pressures.

PCL decreased $8 million, with the PCL ratio improving 2 bps, largely reflecting lower provisions in our commercial lending portfolio, partially offset by higher provisions in our personal lending portfolio and higher write-offs in our credit card portfolio.

Non-interest expense increased $50 million or 3%, mostly due to higher technology and staff costs to support business growth, partially offset by continuing benefits from our efficiency management activities.

Q4 2015 vs. Q3 2015
Net income decreased $12 million or 1% compared to the prior quarter, mainly driven by higher marketing and technology costs to support business growth, partially offset by strong volume growth across most businesses, and lower PCL.

           
Wealth Management          
    As at or for the three months ended
        October 31   July 31   October 31
(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted)   2015 2015   2014
  Net interest income   $ 118 $ 129 $ 123
  Non-interest income              
     Fee-based revenue     1,188   1,200   1,112
     Transactional and other revenue     347   379   404
Total revenue     1,653   1,708   1,639
  PCL     1   -   -
  Non-interest expense     1,317   1,302   1,245
Net income before income taxes     335   406   394
Net income   $ 255 $ 285 $ 285
Revenue by business              
  Canadian Wealth Management   $ 562 $ 561 $ 583
  U.S. & International Wealth Management     644   691   630
     U.S. & International Wealth Management (US$ millions)     488   545   565
  Global Asset Management     447   456   426
Selected balances and other information              
  ROE     17.0%   18.6%   19.6%
  Pre-tax margin (1)     20.3%   23.8%   24.0%
  Number of advisors (4)     3,954   4,044   4,245
  Average loans and acceptances     17,300   17,700   16,800
  Average deposits     37,300   40,500   37,900
  Revenue per advisor (000s) (2)   $ 1,091 $ 986 $ 1,030
  AUA - total (3)     749,700   778,400   717,500
     - U.S. & International Wealth Management (3)     461,900   488,500   432,400
     - U.S. & International Wealth Management (US$ millions) (3)     353,500   373,900   383,700
  AUM (3)     492,800   503,200   452,300
  Average AUA     748,000   764,700   714,000
  Average AUM     491,000   496,200   449,200
                 
      For the three months ended
Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items         Q4 2015 vs.     Q4 2015 vs.
(Millions of Canadian dollars, except percentage amounts)       Q4 2014   Q3 2015
Increase (decrease):              
  Total revenue       $ 99   $ 27
  Non-interest expense         88     24
  Net income         6     2
Percentage change in average US$ equivalent of C$1.00         (16)%     (4)%
Percentage change in average British pound equivalent of C$1.00         (10)%     (2)%
Percentage change in average Euro equivalent of C$1.00         (3)%     (5)%
(1)  Pre-tax margin is defined as net income before income taxes divided by total revenue.
(2)  Represents investment advisors and financial consultants of our Canadian and U.S. full-service wealth businesses.
(3)  Represents period-end spot balances.
(4)  Represents client-facing advisors across all our wealth management businesses.
   

Q4 2015 vs. Q4 2014
Net income decreased $30 million or 11% from a year ago, mostly due to lower transaction volumes driven by unfavourable market conditions, and restructuring costs of $46 million ($38 million after-tax) largely related to our U.S. & International Wealth Management business, including the sale of RBC Suisse. These factors were partly offset by a lower effective tax rate reflecting income tax adjustments related to the current year, and higher earnings from growth in average fee-based client assets.

Total revenue increased $14 million or 1%, mainly due to the positive impact of foreign exchange translation and higher revenue from growth in average fee-based client assets reflecting capital appreciation and strong net sales. These factors were partly offset by lower transaction volumes, and a change in the fair value of our U.S. share-based compensation plan, which was largely offset in non-interest expense.

Non-interest expense increased $72 million or 6%, mainly due to the impact of foreign exchange translation, restructuring costs as noted above, and higher costs in support of business growth. These factors were partly offset by lower variable compensation and a change in the fair value of our U.S shared-based compensation plan, which was largely offset in revenue.

Q4 2015 vs. Q3 2015
Net income decreased $30 million or 11% compared to the prior quarter, primarily due to restructuring costs as noted above, lower fee-based client assets and lower transaction volumes driven by unfavourable market conditions.

                     
Insurance                
    As at or for the three months ended
    October 31   July 31   October 31
(Millions of Canadian dollars, except percentage amounts)   2015   2015   2014
  Non-interest income                  
    Net earned premiums     $ 933   $ 843 $ 940
    Investment income (1)       (343)     52   159
    Fee income       127     126   75
  Total revenue       717     1,021   1,174
    Insurance policyholder benefits and claims (1)       237     610   657
    Insurance policyholder acquisition expense       55     46   95
    Non-interest expense       158     153   149
Net income before income taxes       267     212   273
Net income     $ 225   $ 173 $ 256
Revenue by business                  
  Canadian Insurance     $ 295   $ 603 $ 646
  International Insurance       422     418   528
Selected balances and other information                  
  ROE       53.4%     43.6%   61.5%
  Premiums and deposits (2)     $ 1,309   $ 1,252 $ 1,318
  Fair value changes on investments backing policyholder liabilities (1)       (462)     (37)   43
(1)  Investment income can experience volatility arising from fluctuation in the fair value of Fair Value Through Profit
or Loss (FVTPL) assets. The investments which support actuarial liabilities are predominantly fixed income assets
designated as FVTPL. Consequently changes in the fair values of these assets are recorded in investment income
in the consolidated statements of income and are largely offset by changes in the fair value of the actuarial liabilities,
the impact of which is reflected in insurance policyholder benefits and claims.
(2)  Premiums and deposits include premiums on risk-based insurance and annuity products, and individual and group
segregated fund deposits, consistent with insurance industry practices.
   

Q4 2015 vs. Q4 2014
Net income decreased $31 million or 12% from a year ago, mainly due to a change in Canadian tax legislation impacting certain foreign affiliates which became effective November 1, 2014.

Total revenue decreased $457 million or 39%, mainly due to the change in fair value of investments backing our policyholder liabilities resulting from the increase in long-term interest rates, and lower revenue related to our retrocession contracts, both of which were largely offset in PBCAE. These factors were partially offset by business growth primarily in our life, annuity, home and auto insurance businesses.

PBCAE decreased $460 million or 61%, largely reflecting the change in fair value of investments backing our policyholder liabilities, and a reduction of PBCAE related to our retrocession contracts, both of which were largely offset in revenue. These factors were partially offset by business growth as noted above.

Non-interest expense increased $9 million or 6%, primarily due to higher costs in support of business growth.

Q4 2015 vs. Q3 2015
Net income increased $52 million or 30% from the prior quarter, mainly due to favourable actuarial adjustments reflecting management actions and assumption changes, and lower net claims costs.

                 
 Investor & Treasury Services
    As at or for the three months ended
    October 31     July 31   October 31
(Millions of Canadian dollars, except percentage amounts) 2015   2015   2014
  Net interest income $ 220   $ 204 $ 183
  Non-interest income   228     352   293
Total revenue(1)   448     556   476
  Non-interest expense   342     331   321
Net income before income taxes   106     225   155
Net income $ 88   $ 167 $ 113
Selected balances and other information              
  ROE   10.9%     24.5%   19.5%
  Average Deposits   149,500     144,200   112,700
  Client deposits   56,500     52,000   45,000
  Wholesale funding deposits   93,000     92,200   67,700
  AUA   3,620,300     3,990,900   3,702,800
  Average AUA   3,783,700     3,924,300   3,565,500
                 
    For the three months ended
Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items         Q4 2015 vs.   Q4 2015 vs.
(Millions of Canadian dollars, except percentage amounts)         Q4 2014   Q3 2015
Increase (decrease):              
  Total revenue       $ 8 $ 9
  Non-interest expense         10   8
  Net income         (1)   1
Percentage change in average US$ equivalent of C$1.00         (16)%   (4)%
Percentage change in average British pound equivalent of C$1.00         (10)%   (2)%
Percentage change in average Euro equivalent of C$1.00         (3)%   (5)%
(1)  Effective Q3 2015, we aligned the reporting period of Investor Services, which resulted in an additional month of results being included in Q3 2015.
The net impact of the additional month was recorded in revenue.
   

Q4 2015 vs. Q4 2014
Net income decreased $25 million or 22%, largely reflecting lower funding and liquidity results due to widening credit spreads and unfavourable market conditions. This factor was partially offset by a lower effective tax rate mainly reflecting income tax adjustments, and higher net interest income from growth in client deposits.

Total revenue decreased $28 million or 6%, mainly related to lower funding and liquidity revenue as a result of widening credit spreads and unfavourable market conditions. This factor was partially offset by the positive impact of foreign exchange translation.

Non-interest expense increased $21 million or 7%, largely reflecting higher costs in support of business growth, and the impact of foreign exchange translation.

Q4 2015 vs. Q3 2015
Net income decreased $79 million or 47% as compared to record results last quarter, mainly due to lower funding and liquidity results in the current quarter as noted above, and lower results in our foreign exchange businesses primarily due to lower volumes and client activity. In addition, the prior quarter included an additional month of earnings in Investor Services of $42 million ($28 million after-tax).

 
Capital Markets
    As at or for the three months ended
      October 31     July 31   October 31
(Millions of Canadian dollars, except percentage amounts)   2015     2015   2014
  Net interest income (1) $ 1,098   $ 1,016 $ 877
  Non-interest income   639     1,030   622
Total revenue (1)   1,737     2,046   1,499
  PCL   36     15   32
  Non-interest expense   1,072     1,187   899
Net income before income taxes   629     844   568
Net income $ 555   $ 545 $ 402
Revenue by business              
  Corporate and Investment Banking $ 847   $ 1,006 $ 846
  Global Markets   935     1,070   721
  Other   (45)     (30)   (68)
Selected balances and other information              
  ROE   12.3%     12.9%   10.7%
  Average total assets $ 500,200   $ 465,200 $ 416,900
  Average trading securities   111,900     116,100   105,400
  Average loans and acceptances   85,900     81,300   68,500
  Average deposits   63,200     62,700   51,500
  PCL on impaired loans as a % of average net loans and acceptances   0.17 %     0.07 %   0.19 %
                 
      For the three months ended
Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items     Q4 2015 vs Q4 2015 vs
(Millions of Canadian dollars, except percentage amounts)     Q4 2014 Q3 2015
Increase (decrease):              
  Total revenue       $ 168 $ 38
  Non-interest expense         112   28
  Net income         33   7
Percentage change in average US$ equivalent of C$1.00         (16)%   (4)%
Percentage change in average British pound equivalent of C$1.00         (10)%   (2)%
Percentage change in average Euro equivalent of C$1.00         (3)%   (5)%
(1)      The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2015 was $213 million (July 31, 2015 - $133 million,
October 31, 2014 - $101 million).
   

Q4 2015 vs. Q4 2014
Net income increased $153 million or 38% from last year, primarily due to a lower effective tax rate reflecting income tax adjustments related to the current year, growth in our global markets businesses, and the positive impact of foreign exchange translation. These factors were partially offset by higher staff and support costs. In addition, our results in the prior year included the unfavourable impact of the implementation of a one-time funding valuation adjustment (FVA) of $105 million ($51 million after-tax and variable compensation), and $75 million ($46 million after-tax and variable compensation) in lower trading revenue and costs associated with the exit from certain proprietary trading strategies.

Total revenue increased $238 million or 16%, mainly due to the positive impact of foreign exchange translation, higher equity trading revenue reflecting increased client activity and more favourable market conditions, and higher M&A activity. These factors were largely offset by lower equity origination reflecting decreased client issuance activity primarily in Canada and the U.S.

PCL increased $4 million or 13%, mainly due to provisions taken in the oil & gas and consumer goods sectors.

Non-interest expense increased $173 million or 19%, mainly due to the impact of foreign exchange translation, and higher staff and support costs.

Q4 2015 vs. Q3 2015
Net income increased $10 million or 2% from the prior quarter. Lower variable compensation, income tax adjustments as noted above, and higher equity trading revenue were mostly offset by lower debt and equity origination reflecting decreased client issuance activity, lower fixed income trading revenue due to unfavourable market conditions, and lower loan syndication activity.

                   
Corporate Support                                                                                                                              
    As at or for the three months ended  
      October 31     July 31   October 31  
(Millions of Canadian dollars)   2015     2015   2014  
  Net interest income (loss) (1) $ (205)   $ (109) $ (70)  
  Non-interest income (loss)   20     (20)   113  
Total revenue   (185)     (129)   43  
  PCL   (2)     (2)   (1)  
  Non-interest expense   41     14   40  
Net income (loss) before income taxes   (224)     (141)   4  
  Income (recoveries) taxes (1)   (424)     (165)   (122)  
Net income (2) $ 200   $ 24 $ 126  
(1)      Teb adjusted.
(2)  Net income reflects income attributable to both shareholders and NCI. Net income attributable to NCI for the three months ended
October 31, 2015 was $25 million (July 31, 2015 - $24 million; October 31, 2014 - $24 million).
   

Due to the nature of activities and consolidated adjustments reported in this segment, we believe that a comparative period analysis is not relevant. The following identifies material items affecting the reported results in each period.

Net interest income (loss) and income taxes (recoveries) in each period in Corporate Support include the deduction of the teb adjustments related to the gross-up of income from Canadian taxable corporate dividends recorded in Capital Markets. The amount deducted from net interest income (loss) was offset by an equivalent increase in income taxes (recoveries). The teb amount for the three months ended October 31, 2015 was $213 million as compared to $133 million in the prior quarter and $101 million in the prior year period. For further discussion, refer to the How we measure and report our business segments section of our 2015 Annual Report.

In addition to the teb impacts noted above, the following identifies the other material items affecting the reported results in each period.

Q4 2015
Net income was $200 million largely reflecting favourable tax adjustments and asset/liability management activities. This quarter also included transaction costs of $29 million ($23 million after-tax) related to our acquisition of City National.

Q3 2015
Net income was $24 million largely reflecting asset/liability management activities.

Q4 2014
Net income was $126 million largely reflecting gains on private equity investments related to the sale of a legacy portfolio and asset/liability management activities.

KEY PERFORMANCE AND NON-GAAP MEASURES

Additional information about these and other key performance and non-GAAP measures can be found under the Key performance and Non-GAAP Measures section of our 2015 Annual Report.

Return on Equity
We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics such as net income and return on equity (ROE). ROE does not have a standardized meaning under GAAP. We use ROE as a measure of return on the capital invested in our business.  The following table provides a summary of our ROE calculations:

 
Calculation of Return on Equity                        
  For the three months ended For the year ended
.   October 31, 2015 October 31, 2015
  Personal &             Investor &                      
(Millions of Canadian dollars, except   Commercial   Wealth         Treasury   Capital   Corporate        
percentage amounts)   Banking   Management     Insurance   Services   Markets   Support   Total   Total
Net income available to common                                                  
   shareholders     $ 1,251   $ 252   $ 223   $ 85   $ 538   $ 166   $ 2,515   $ 9,734
Total average common equity     $ 17,050   $ 5,850   $ 1,650   $ 3,100   $ 17,350   $ 10,800   $ 55,800   $ 52,300
ROE     29.1%     17.0%     53.4%     10.9%     12.3%   n.m.   17.9%   18.6%
(1)  Average common equity represent rounded figures. ROE is based on actual balances before rounding.
(2)  The amounts for the segments are referred to as attributed capital or economic capital.
n.m not meaningful.
   

 

Non-GAAP measures
Results and measures excluding specified items are non-GAAP measures. Specified items comprise:

  • In Q2 2015, a gain of $108 million (before- and after-tax) from the wind-up of a U.S.-based funding subsidiary that resulted in the release of CTA that was previously booked in OCE.
  • In Q3 2014, a loss of $40 million (before- and after-tax), related to the closing of the sale of RBC Jamaica on June 27, 2014.
  • In Q1 2014, a loss of $60 million (before- and after-tax) also related to the sale of RBC Jamaica, and a provision related to post-employment benefits and restructuring charges in the Caribbean of $40 million ($32 million after-tax).

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined in and do not have a standardized meaning under GAAP, and may not be comparable with similar information disclosed by other financial institutions. We believe that excluding these specified items from our results is more reflective of our ongoing operating results, provides readers with a better understanding of our performance, and should enhance the comparability of our comparative periods. For further information, refer to the Key Performance and non-GAAP measures section of our 2015 Annual Report.

                               
Non-GAAP measures, excluding specified items
  For the year ended October 31, 2015   For the year ended October 31, 2014
(Millions of Canadian dollars, except per
share and percentage amounts)
Reported Release of CTA Adjusted   Reported Loss related to
sale
of RBC Jamaica
Provision for
post-employment
benefits and
restructuring charge
in the Caribbean
Adjusted
Net income  $ 10,026  $ (108)  $ 9,918    $ 9,004  $ 100  $ 32  $ 9,136
Basic earnings per share  $ 6.75  $ (0.07)  $ 6.68    $ 6.03  $ 0.07  $ 0.02  $ 6.12
Diluted earnings per share  $ 6.73  $ (0.07)  $ 6.66    $ 6.00  $ 0.07  $ 0.02  $ 6.09
ROE   18.6%       18.4%     19.0%           19.3% 
                               
                               
Personal & Commercial Banking net income, excluding specified items
                For the year ended October 31, 2014
(Millions of Canadian dollars)               Reported Loss related to
sale of RBC
Jamaica
Provision for
post-employment
benefits and
restructuring charge
in the Caribbean
Adjusted
Net income               $ 4,475  $ 100  $ 32  $ 4,607

 

 

                 
Consolidated Balance Sheets              
                 
    October 31     July 31 October 31
(Millions of Canadian dollars)   2015(1)     2015(2)   2014(1)
                 
Assets              
Cash and due from banks $ 12,452   $ 19,976 $ 17,421
Interest-bearing deposits with banks   22,690     10,731   8,399
Securities              
  Trading   158,703     172,370   151,380
  Available-for-sale   56,805     63,145   47,768
      215,508     235,515   199,148
Assets purchased under reverse repurchase agreements and securities borrowed   174,723     172,659   135,580
Loans              
  Retail   348,183     343,463   334,269
  Wholesale   126,069     121,214   102,954
      474,252     464,677   437,223
  Allowance for loan losses   (2,029)     (2,078)   (1,994)
      472,223     462,599   435,229
Segregated fund net assets   830     821   675
Other              
  Customers' liability under acceptances   13,453     12,761   11,462
  Derivatives   105,626     112,459   87,402
  Premises and equipment, net   2,728     2,667   2,684
  Goodwill    9,289     9,322   8,647
  Other intangibles     2,814     2,810   2,775
  Investments in joint ventures and associates   360     346   295
  Employee benefit assets   245     108   138
  Other assets   41,267     42,399   30,695
      175,782     182,872   144,098
Total assets $ 1,074,208   $ 1,085,173 $ 940,550
                 
Liabilities              
Deposits              
  Personal $ 220,566   $ 218,629 $ 209,217
  Business and government   455,578     449,397   386,660
  Bank   21,083     26,210   18,223
      697,227     694,236   614,100
Segregated fund net liabilities   830     821   675
Other              
  Acceptances   13,453     12,761   11,462
  Obligations related to securities sold short   47,658     55,656   50,345
  Obligations related to assets sold under repurchase agreements and securities loaned   83,288     83,236   64,331
  Derivatives   107,860     116,083   88,982
  Insurance claims and policy benefit liabilities   9,110     9,395   8,564
  Employee benefit liabilities   1,969     2,431   2,420
  Other liabilities    41,507     41,282   37,309
      304,845     320,844   263,413
Subordinated debentures   7,362     7,374   7,859
Total liabilities $ 1,010,264   $ 1,023,275 $ 886,047
                 
Equity attributable to shareholders              
  Preferred shares   5,100     4,950   4,075
  Common shares (shares issued - 1,443,423,151, 1,443,191,703 and 1,442,232,886)    14,573     14,561   14,511
  Treasury shares  - preferred (shares held - (63,179), (5,704) and 1,207)   (2)     -   -
                              - common (shares held - 531,638, 478,978 and 891,733)   38     37   71
  Retained earnings   37,811     35,795   31,615
  Other components of equity   4,626     4,760   2,418
      62,146     60,103   52,690
Non-controlling interests   1,798     1,795   1,813
Total equity   63,944     61,898   54,503
Total liabilities and equity $ 1,074,208   $ 1,085,173 $ 940,550
(1)  Derived from audited financial statements.
(2)  Derived from unaudited financial statements.
   

                           
Consolidated Statements of Income                        
                           
      For the three-months ended   For the year ended
  October 31   July 31 October 31   October 31 October 31
(Millions of Canadian dollars, except per share amounts) 2015(1)   2015(1) 2014(1)   2015(2) 2014(2)
                           
Interest income                        
  Loans $ 4,203   $ 4,241 $ 4,269   $ 16,882 $ 16,979
  Securities   1,159     1,177   933     4,519   3,993
  Assets purchased under reverse repurchase agreements and securities borrowed   333     319   253     1,251   971
  Deposits and other   20     18   21     77   76
      5,715     5,755   5,476     22,729   22,019
                           
Interest expense                        
  Deposits and other   1,375     1,387   1,463     5,723   5,873
  Other liabilities   486     525   390     1,995   1,784
  Subordinated debentures   54     60   63     240   246
      1,915     1,972   1,916     7,958   7,903
Net interest income   3,800     3,783   3,560     14,771   14,116
                           
Non-interest income                        
  Insurance premiums, investment and fee income   717     1,021   1,167     4,436   4,957
  Trading revenue   (203)     56   (153)     552   742
  Investment management and custodial fees   942     966   886     3,778   3,355
  Mutual fund revenue   731     739   691     2,881   2,621
  Securities brokerage commissions   352     358   347     1,436   1,379
  Service charges   404     405   386     1,592   1,494
  Underwriting and other advisory fees   350     531   428     1,885   1,809
  Foreign exchange revenue, other than trading   222     137   207     814   827
  Card service revenue   193     209   180     798   689
  Credit fees   308     320   239     1,184   1,080
  Net gain on available-for-sale securities   34     42   62     145   192
  Share of profit in joint ventures and associates   40     28   34     149   162
  Other   129     233   348     900   685
    4,219     5,045   4,822     20,550   19,992
Total revenue   8,019     8,828   8,382     35,321   34,108
Provision for credit losses   275     270   345     1,097   1,164
Insurance policyholder benefits, claims and acquisition expense   292     656   752     2,963   3,573
                           
Non-interest expense                        
  Human resources   2,682     2,890   2,581     11,583   11,031
  Equipment   342     327   288     1,277   1,147
  Occupancy   368     351   333     1,410   1,330
  Communications   253     213   259     888   847
  Professional fees   307     223   263     932   763
  Amortization of other intangibles   180     180   176     712   666
  Other   515     451   440     1,836   1,877
      4,647     4,635   4,340     18,638   17,661
Income before income taxes   2,805     3,267   2,945     12,623   11,710
Income taxes   212     792   612     2,597   2,706
Net income $ 2,593   $ 2,475 $ 2,333   $ 10,026 $ 9,004
                           
Net income attributable to:                        
  Shareholders $ 2,569   $ 2,449 $ 2,316   $ 9,925 $ 8,910
  Non-controlling interests   24     26   17     101   94
    $ 2,593   $ 2,475 $ 2,333   $ 10,026 $ 9,004
                           
Basic earnings per share (in dollars) $ 1.74   $ 1.66 $ 1.57   $ 6.75 $ 6.03
Diluted earnings per share (in dollars)   1.74     1.66   1.57     6.73   6.00
Dividends per common share (in dollars)   0.79     0.77   0.75     3.08   2.84
(1)  Derived from unaudited financial statements.
(2)  Derived from audited financial statements.
   
 
                             
Consolidated Statements of Comprehensive Income                        
                             
  For the three-months ended   For the year ended
October 31   July 31 October 31   October 31 October 31
(Millions of Canadian dollars)   2015(1)     2015(1)   2014(1)     2015(2)   2014(2)
                             
Net income $ 2,593   $ 2,475 $ 2,333   $ 10,026 $ 9,004
                             
Other comprehensive income (loss), net of taxes                        
Items that will be reclassified subsequently to income:                        
  Net change in unrealized gains (losses) on available-for-sale securities                        
    Net unrealized gains (losses) on available-for-sale securities   (176)     14   22     (76)   143
    Reclassification of net losses (gains) on available-for-sale securities to income   (12)     (9)   (16)     (41)   (58)
        (188)     5   6     (117)   85
  Foreign currency translation adjustments                        
    Unrealized foreign currency translation gains (losses)   (97)     3,542   924     5,885   2,743
    Net foreign currency translation gains (losses) from hedging activities   57     (1,771)   (470)     (3,223)   (1,585)
    Reclassification of losses (gains) on foreign currency translation to income   (42)     (4)   -     (224)   44
    Reclassification of losses (gains) on net investment hedging activities to income   42     -   -     111   3
        (40)     1,767   454     2,549   1,205
  Net change in cash flow hedges                        
    Net gains (losses) on derivatives designated as cash flow hedges   41     (236)   (32)     (541)   (108)
    Reclassification of losses (gains) on derivatives designated as cash flow hedges to income   54     46   36     330   28
        95     (190)   4     (211)   (80)
                         
Items that will not be reclassified subsequently to income:                        
  Remeasurements of employee benefit plans   456     203   (152)     582   (236)
  Net fair value change due to credit risk on financial liabilities designated as at fair value                        
    through profit or loss   189     165   51     350   (59)
      645     368   (101)     932   (295)
Total other comprehensive income (loss), net of taxes   512     1,950   363     3,153   915
Total comprehensive income $ 3,105   $ 4,425 $ 2,696   $ 13,179 $ 9,919
                             
Total comprehensive income attributable to:                        
  Shareholders $ 3,080   $ 4,392 $ 2,679   $ 13,065 $ 9,825
  Non-controlling interests   25     33   17     114   94
      $ 3,105   $ 4,425 $ 2,696   $ 13,179 $ 9,919
(1)  Derived from unaudited financial statements.
(2)  Derived from audited financial statements.
   
                                                   
Consolidated Statements of Changes in Equity                                          
                                                   
                            Other components of equity            
              Treasury Treasury   Available - Foreign Cash Total other Equity      
      Preferred Common shares - shares - Retained for-sale currency flow components attributable to Non-controlling  
(Millions of Canadian dollars) shares shares preferred common earnings securities translation hedges   of equity shareholders interests Total equity
Balance at November 1, 2012 (1) $ 4,813 $ 14,323 $ 1 $ 30 $ 23,162 $ 419 $ 196 $ 216 $ 831 $ 43,160 $ 1,761 $ 44,921
Changes in equity                                                
  Issues of share capital   -   121   -   -   -   -   -   -   -   121   -   121
  Common shares purchased for cancellation   -   (67)   -   -   (341)   -   -   -   -   (408)   -   (408)
  Preferred shares redeemed   (213)   -   -   -   (9)   -   -   -   -   (222)   -   (222)
  Sales of treasury shares   -   -   127   4,453   -   -   -   -   -   4,580   -   4,580
  Purchases of treasury shares   -   -   (127)   (4,442)   -   -   -   -   -   (4,569)   -   (4,569)
  Share-based compensation awards   -   -   -   -   (7)   -   -   -   -   (7)   -   (7)
  Dividends on common shares   -   -   -   -   (3,651)   -   -   -   -   (3,651)   -   (3,651)
  Dividends on preferred shares and other   -   -   -   -   (253)   -   -   -   -   (253)   (94)   (347)
  Other   -   -   -   -   (26)   -   -   -   -   (26)   30   4
  Net income   -   -   -   -   8,244   -   -   -   -   8,244   98   8,342
  Total other comprehensive income (loss), net of taxes   -   -   -   -   319   (72)   490   (41)   377   696   -   696
Balance at October 31, 2013 (1) $ 4,600 $ 14,377 $ 1 $ 41 $ 27,438 $ 347 $ 686 $ 175 $ 1,208 $ 47,665 $ 1,795 $ 49,460
Changes in equity                                                
  Issues of share capital   1,000   150   -   -   (14)   -   -   -   -   1,136   -   1,136
  Common shares purchased for cancellation   -   (16)   -   -   (97)   -   -   -   -   (113)   -   (113)
  Preferred shares redeemed   (1,525)   -   -   -   -   -   -   -   -   (1,525)   -   (1,525)
  Sales of treasury shares   -   -   124   5,333   -   -   -   -   -   5,457   -   5,457
  Purchases of treasury shares   -   -   (125)   (5,303)   -   -   -   -   -   (5,428)   -   (5,428)
  Share-based compensation awards   -   -   -   -   (9)   -   -   -   -   (9)   -   (9)
  Dividends on common shares   -   -   -   -   (4,097)   -   -   -   -   (4,097)   -   (4,097)
  Dividends on preferred shares and other   -   -   -   -   (213)   -   -   -   -   (213)   (94)   (307)
  Other   -   -   -   -   (8)   -   -   -   -   (8)   18   10
  Net income   -   -   -   -   8,910   -   -   -   -   8,910   94   9,004
  Total other comprehensive income (loss), net of taxes   -   -   -   -   (295)   85   1,205   (80)   1,210   915   -   915
Balance at October 31, 2014 (1) $ 4,075 $ 14,511 $ - $ 71 $ 31,615 $ 432 $ 1,891 $ 95 $ 2,418 $ 52,690 $ 1,813 $ 54,503
Changes in equity                                                
  Issues of share capital   1,350   62   -   -   (21)   -   -   -   -   1,391   -   1,391
  Preferred shares redeemed   (325)   -   -   -   -   -   -   -   -   (325)   -   (325)
  Sales of treasury shares   -   -   117   6,098   -   -   -   -   -   6,215   -   6,215
  Purchases of treasury shares   -   -   (119)   (6,131)   -   -   -   -   -   (6,250)   -   (6,250)
  Share-based compensation awards   -   -   -   -   (1)   -   -   -   -   (1)   -   (1)
  Dividends on common shares   -   -   -   -   (4,443)   -   -   -   -   (4,443)   -   (4,443)
  Dividends on preferred shares and other   -   -   -   -   (191)   -   -   -   -   (191)   (92)   (283)
  Other   -   -   -   -   (5)   -   -   -   -   (5)   (37)   (42)
  Net income   -   -   -   -   9,925   -   -   -   -   9,925   101   10,026
  Total other comprehensive income (loss), net of taxes   -   -   -   -   932   (117)   2,536   (211)   2,208   3,140   13   3,153
Balance at October 31, 2015 $ 5,100 $ 14,573 $ (2) $ 38 $ 37,811 $ 315 $ 4,427 $ (116) $ 4,626 $ 62,146 $ 1,798 $ 63,944
(1)  Derived from audited 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 filings with Canadian regulators or the U.S. Securities and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, and include our Chief Executive Officer's statements. 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, our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "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 financial performance objectives, vision and strategic goals 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, liquidity and funding, insurance, operational, regulatory compliance, strategic, reputation, legal and regulatory environment, competitive and systemic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2015 Annual Report; weak oil and gas prices; the high levels of Canadian household debt; exposure to more volatile sectors; cybersecurity; anti-money laundering; the business and economic conditions in Canada, the U.S. and certain other countries in which we operate; the effects of changes in government fiscal, monetary and other policies; tax risk and transparency; and environmental risk.

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. Material economic assumptions underlying the forward looking-statements contained in this earnings release are set out in the Overview and outlook section and for each business segment under the heading Outlook and priorities in our 2015 Annual Report. 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 management and Overview of other risks sections of our 2015 Annual Report.

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 2015 Annual Report, 2015 Annual Information Form (AIF) and Annual Report on Form 40-F (Form 40-F) on our website at: http://www.rbc.com/investorrelations. Shareholders may request a hard copy of our 2015 Annual Report, AIF and Form 40-F free of charge by contacting Investor Relations at (416) 955-7802. Our Form 40-F will be filed with the SEC.

Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for Wednesday, December 2nd, 2015 at 8:00 a.m. (EST) and will feature a presentation about our fourth quarter and 2015 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: http://www.rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (416-340-2217, 866-696-5910, passcode 7327857#). 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 p.m. (EST) on December 2nd, 2015 until February 22nd, 2016 at: http://www.rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 8589854#).

ABOUT RBC
Royal Bank of Canada is Canada's largest bank, and one of the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management, insurance, investor services and capital markets products and services on a global basis. We employ approximately 78,000 full- and part-time employees who serve more than 16 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 37 other countries. For more information, please visit rbc.com.

Trademarks used in this earnings 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 earnings release, which are not the property of Royal Bank of Canada, are owned by their respective holders. 

SOURCE RBC

For further information:

Media Relations Contacts
Claire Holland, Director, Financial and Corporate Communications, claire.holland@rbc.com, 416-974-2239 or 1-888-880-2173 (toll-free outside Toronto)
Sandra Nunes, Senior Manager, Financial Communications, sandra.nunes@rbc.com, 416-974-1794 or 1-888-880-2173 (toll-free outside Toronto)

Investor Relations Contacts
Amy Cairncross, VP & Head, Investor Relations, amy.cairncross@rbc.com, 416-955-7803
Lynda Gauthier, Managing Director, Investor Relations, lynda.gauthier@rbc.com, 416-955-7808
Stephanie Phillips, Director, Investor Relations, stephanie.phillips@rbc.com, 416-955-7809
Brendon Buckler, Associate Director, Investor Relations, brendon.buckler@rbc.com, 416-955-7807


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