Royal Bank of Canada Reports Fourth Quarter and Record 2016 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, 2016 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2016 Annual Report (which includes our audited annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2016 Annual Information Form and our Supplementary Financial Information are available on our website at: http://www.rbc.com/investorrelations.

TORONTO, Nov. 30, 2016 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $10,458 million for the year ended October 31, 2016, up $432 million or 4% from a year ago. Results were driven by strong results in Wealth Management, which includes City National Bank (City National), and higher earnings in Insurance, which includes the Q3/16 gain on the sale of our home and auto insurance manufacturing business. Solid results in Personal & Commercial Banking and record earnings in Investor & Treasury Services also contributed to the increase. These factors were partially offset by lower earnings in Capital Markets. Our performance also benefited from our ongoing efficiency management activities. In addition, our provision for credit losses (PCL) ratio of 0.29% was up 5 basis points (bps) primarily as a result of the low oil price environment.

As of October 31, 2016, our capital position was strong, with a Basel III Common Equity Tier 1 (CET1) of 10.8%. In 2016, we increased our quarterly dividend twice, for an annual dividend increase of 5%.

"We reported record earnings of $10.5 billion in 2016, driven by the strength of our diversified business model which is focused on our clients and their success. I'm pleased with our performance, which also reflects the successful integration of City National and our commitment to cost and risk management discipline," said Dave McKay, RBC President and CEO. "Looking ahead, while the industry faces headwinds and an accelerating pace of change, we believe we are well positioned to deliver long-term shareholder value by leveraging innovation, our values-based culture which supports strong client relationships, and prudent capital and risk management."

2016 compared to 2015

  • Net income of $10,458 million (up 4% from $10,026 million)
  • Diluted earnings per share (EPS) of $6.78 (up $0.05 from $6.73)
  • Return on common equity (ROE)(1) of 16.3% (down from 18.6%)
  • Basel III CET1 ratio of 10.8% (up from 10.6%)

2016 Business Segment Performance

  • 4% earnings growth in Personal & Commercial Banking, largely reflecting solid volume growth across most businesses partially offset by lower spreads, higher fee-based revenue in Canadian Banking, and higher earnings in the Caribbean. These factors were partially offset by higher costs in support of business growth and higher PCL in Canada. In Canadian Banking, we continued to improve our efficiency ratio to 43.4%, reflecting the benefits of our prudent cost management;
  • 41% earnings growth in Wealth Management, primarily reflecting the inclusion of our acquisition of City National, lower restructuring costs related to our International Wealth Management business, and benefits from our efficiency management activities;
  • 27% earnings growth in Insurance. Excluding the gain on sale of our home and auto insurance manufacturing business, earnings were down 6%(2) mainly due to lower earnings from new U.K. annuity contracts and the reduction in earnings from the sale of our home and auto insurance manufacturing business;
  • 10% earnings growth in Investor & Treasury Services primarily due to higher funding and liquidity earnings, and higher client deposit spreads; and
  • 2% lower earnings in Capital Markets, driven by higher PCL, and lower results in our Global Markets and Corporate and Investment Banking businesses, partially offset by lower variable compensation and the favourable impact of foreign exchange translation.

________________________
1 ROE 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.
2 Results and measures excluding the gain on the sale of our home and auto insurance manufacturing business are non-GAAP measures. For further information, including a reconciliation, refer to the Key performance and non-GAAP section on page 11 of this Earnings Release.

 

Q4 2016 compared to Q4 2015

Q4 2016 compared to Q3 2016

  • Net income of $2,543 million (down 2% from $2,593 million)
  • Diluted EPS of $1.65 (down $0.09 from $1.74)
  • ROE of 15.5% (down from 17.9%)
  • Net income of $2,543 million (down 12% from $2,895 million)
  • Diluted EPS of $1.65 (down $0.23 from $1.88)
  • ROE of 15.5% (down from 18.0%)



Excluding specified item: Q4 2016 compared to Q3 2016


  • Net income of $2,543 million(3) (down 4% from $2,660 million)
  • Diluted EPS of $1.65(3) (down $0.07 from $1.72)

Q4 2016 Performance

Earnings of $2,543 million were down $50 million or 2% from a year ago, as the prior year benefited from a lower effective tax rate reflecting favourable income tax adjustments mainly in Corporate Support and Capital Markets. This was mostly offset by strong earnings in Wealth Management, largely reflecting the inclusion of City National, and record earnings in Investor & Treasury Services. Results in Personal & Commercial Banking and Insurance were relatively flat.

Earnings were down $352 million, or 12% from last quarter. Excluding the Q3/16 after-tax gain of $235 million from the sale of our home and auto insurance manufacturing business, earnings were down $117 million or 4%(3) due to lower earnings in Capital Markets and Personal & Commercial Banking which were partially offset by strong earnings in Insurance and Investor & Treasury Services, and higher earnings in Wealth Management.

Q4 2016 Business Segment Performance

Personal & Commercial Banking net income of $1,275 million was up $5 million from a year ago. Canadian Banking net income was $1,246 million, up $19 million or 2% from a year ago, mainly reflecting solid volume growth across most businesses partially offset by lower spreads, and higher fee-based revenue. These factors were partially offset by higher PCL, higher technology spend and higher costs in support of business growth. Caribbean & U.S. Banking net income of $29 million was down $14 million or 33% from a year ago largely due to higher costs in support of business growth partially offset by higher fee-based revenue.

Compared to last quarter, Personal & Commercial Banking net income was down $47 million or 4%. Canadian Banking net income was down $38 million or 3%, mainly driven by higher initiatives and technology spend, and seasonally higher marketing costs. These factors were partially offset by volume growth across most businesses and fee-based revenue growth primarily attributable to higher mutual fund distribution fees. Caribbean & U.S. Banking net income was down $9 million.

Wealth Management net income of $396 million was up $141 million or 55% from a year ago, largely reflecting the inclusion of City National, which contributed $89 million to net income, lower restructuring costs and higher earnings due to growth in average fee-based client assets. Excluding amortization of intangibles and integration costs of $29 million ($49 million before-tax) and $9 million ($16 million before-tax) respectively, City National contributed $127 million(4) to net income.

Compared to last quarter, net income was up $8 million or 2%, primarily driven by higher earnings from growth in average fee-based client assets and a higher contribution from City National.

Insurance net income of $228 million was up $3 million or 1% from a year ago, mainly reflecting higher earnings from new U.K. annuity contracts. These factors were partially offset by lower results due to the sale of our home and auto insurance manufacturing business, as noted above, and the impact of foreign exchange translation.

Compared to last quarter, net income was down $136 million or 37%. Excluding the Q3/16 gain from the sale of our home and auto insurance manufacturing business, as noted above, net income increased $99 million(3), mainly due to favourable actuarial adjustments reflecting management actions and assumption changes, and growth in International insurance, including earnings from new U.K. annuity contracts.

Investor & Treasury Services net income of $174 million was up $86 million from a year ago, largely due to higher funding and liquidity earnings reflecting tightening credit spreads and favourable interest rate movements, and higher client deposit spreads. These factors were partially offset by higher staff costs, a higher effective tax rate and increased investment in technology initiatives.

Compared to last quarter, net income was up $17 million or 11%, primarily due to higher funding and liquidity earnings reflecting tightening credit spreads and favourable interest rate movements.

Capital Markets net income of $482 million was down $73 million or 13% from a year ago, as the prior year benefited from a lower effective tax rate reflecting income tax adjustments related to the prior periods. In the current quarter, higher results in our Corporate and Investment Banking and Global Markets businesses were partially offset by higher variable compensation on improved results.

Compared to last quarter, net income was down $153 million or 24%, mainly due to lower trading revenue and lower equity origination activity. These factors were partially offset by increased loan syndication revenue largely in the U.S.

Corporate Support net loss was $12 million largely reflecting net unfavourable tax adjustments, partially offset by asset/liability management activities. Net income last quarter was $29 million, largely reflecting asset/liability management activities.

Capital – As at October 31, 2016, Basel III CET1 ratio was 10.8%, up 30 bps compared to last quarter largely due to internal capital generation.

Credit Quality – Total PCL of $358 million was up $83 million or 30% from a year ago, largely due to Canadian Banking, Wealth Management reflecting the inclusion of City National, and Capital Markets. PCL was up $40 million or 13% compared to last quarter, largely due to higher PCL in Capital Markets, Personal & Commercial Banking and Wealth Management. Our PCL ratio of 0.27% increased 4 bps from a year ago and 3 bps compared to last quarter.

Total gross impaired loans (GIL) of $3,903 million were up $1,618 million from a year ago largely due to higher impaired oil and gas loans in Capital Markets and the inclusion of City National. GIL was up $187 million from last quarter due to higher impaired loans in Capital Markets. Our GIL ratio of 0.73% increased 26 bps from a year ago and 3 bps compared to last quarter.

________________________
3 Results and measures excluding the gain on the sale of our home and auto insurance manufacturing business are non-GAAP measures. For further information, including a reconciliation, refer to the Key performance and non-GAAP section on page 11 of this Earnings Release.
4 City National results excluding amortization of intangibles and integration costs is a non-GAAP measure that we believe provides readers with a better understanding of management's perspective on our performance. For further information, including a reconciliation, refer to the Key performance and non-GAAP section on page 11 of this Earnings Release.

 


Selected financial and other highlights





















As at or for the three months ended


For the year ended

 

(Millions of Canadian dollars, except per share, number of and percentage amounts)


October 31



July 31



October 31



October 31




October 31



2016



2016



2015



2016




2015



Total revenue  

$

9,265


$

10,255


$

8,019


$

38,405



$

35,321



Provision for credit losses (PCL)


358



318



275



1,546




1,097



Insurance policyholder benefits, claims and acquisition expense (PBCAE)


397



1,210



292



3,424




2,963



Non-interest expense


5,198



5,091



4,647



20,136




18,638



Net income before income taxes


3,312



3,636



2,805



13,299




12,623


Net income

$

2,543


$

2,895


$

2,593


$

10,458



$

10,026


Segments - net income


















Personal & Commercial Banking

$

1,275


$

1,322


$

1,270


$

5,184



$

5,006



Wealth Management


396



388



255



1,473




1,041



Insurance


228



364



225



900




706



Investor & Treasury Services


174



157



88



613




556



Capital Markets 


482



635



555



2,270




2,319



Corporate Support


(12)



29



200



18




398


Net income

$

2,543


$

2,895


$

2,593


$

10,458



$

10,026


Selected information


















Earnings per share (EPS)

- basic

$

1.66


$

1.88


$

1.74


$

6.80



$

6.75




- diluted


1.65



1.88



1.74



6.78




6.73



Return on common equity (ROE) (1), (2)


15.5

%


18.0

%


17.9

%


16.3

%



18.6

%


Net interest margin (on average earning assets) (3)


1.70

%


1.69

%


1.67

%


1.70

%



1.71

%


Total PCL as a % of average net loans and acceptances


0.27

%


0.24

%


0.23

%


0.29

%



0.24

%


PCL on impaired loans as a % of average net loans and acceptances


0.27

%


0.24

%


0.23

%


0.28

%



0.24

%


Gross impaired loans (GIL) as a % of loans and acceptances (4)


0.73

%


0.70

%


0.47

%


0.73

%



0.47

%


Liquidity coverage ratio (5)


127

%


126

%


127

%


127

%



127

%

Capital ratios and Leverage ratio (6)


















Common Equity Tier 1 (CET1) ratio


10.8

%


10.5

%


10.6

%


10.8

%



10.6

%


Tier 1 capital ratio


12.3

%


12.1

%


12.2

%


12.3

%



12.2

%


Total capital ratio


14.4

%


14.2

%


14.0

%


14.4

%



14.0

%


Leverage ratio


4.4

%


4.2

%


4.3

%


4.4

%



4.3

%

Selected balance sheet and other information


















Total assets

$

1,180,258


$

1,198,875


$

1,074,208


$

1,180,258



$

1,074,208



Securities


236,093



233,998



215,508



236,093




215,508



Loans (net of allowance for loan losses)


521,604



515,820



472,223



521,604




472,223



Derivative related assets


118,944



130,462



105,626



118,944




105,626



Deposits


757,589



754,415



697,227



757,589




697,227



Common equity


64,304



62,541



57,048



64,304




57,048



Average common equity (1)


63,100



61,800



55,800



62,200




52,300



Total capital risk-weighted assets


449,712



445,114



413,957



449,712




413,957



Assets under management (AUM) (7)


586,300



575,000



498,400



586,300




498,400



Assets under administration (AUA) (7), (8)


5,058,900



4,823,700



4,683,100



5,058,900




4,683,100


Common share information


















Shares outstanding (000s)

- average basic


1,483,869



1,485,915



1,443,992



1,485,876



1,442,935




- average diluted


1,491,872



1,494,126



1,450,405



1,494,137



1,449,509




- end of period


1,485,394



1,485,085



1,443,423



1,485,394



1,443,423



Dividends declared per share

$

0.83


$

0.81


$

0.79


$

3.24



$

3.08



Dividend yield (9)


4.0

%


4.1

%


4.3

%


4.3

%



4.1

%


Common share price (RY on TSX) (10)

$

83.80


$

79.59


$

74.77


$

83.80



$

74.77



Book value per share

$

43.32


$

42.15


$

39.51


$

43.32



$

39.51



Market capitalization (TSX) (10)


124,476



118,198



107,925



124,476




107,925


Business information (number of)


















Employees (full-time equivalent) (FTE)


75,510



76,941



72,839



75,510




72,839



Bank branches


1,419



1,422



1,355



1,419




1,355



Automated teller machines (ATMs)


4,905



4,901



4,816



4,905




4,816


Period average US$ equivalent of C$1.00 (11)

$

0.757


$

0.768


$

0.758


$

0.755



$

0.797


Period-end US$ equivalent of C$1.00

$

0.746


$

0.766


$

0.765


$

0.746



$

0.765


(1)

Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes Average common equity used in the calculation of ROE. For further details, refer to the Key performance and non-GAAP measures section of our 2016 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 2016 Supplementary Financial Information and our 2016 Annual Report for additional information.

(3)

Net interest margin (on average earning assets) is calculated as net interest income divided by average earning assets. Average amounts are calculated using methods intended to approximate the average of the daily balances for the period.

(4)

GIL includes $418 million (July 31, 2016 – $508 million, October 31, 2015 - n.a) related to the acquired credit impaired (ACI) loans portfolio from our acquisition of City National, with over 80% covered by loss-sharing agreements with the Federal Deposit Insurance Corporation. ACI loans added 8 bps to our 2016 GIL ratio (July 31, 2016 – 10 bps, October 31, 2015 – n.a). For further details, refer to Notes 2 and 5 of our 2016 Annual Report.

(5)

LCR is a regulatory measure under the Basel III Framework, and is calculated using the Liquidity Adequacy Requirements guideline. Effective in the second quarter of 2015, LCR was adopted prospectively. For further details, refer to the Liquidity and funding risk section of our 2016 Annual Report.

(6)

Capital and Leverage ratios presented above are on an "all-in" basis. The Leverage ratio is a regulatory measure under the Basel III Framework effective the first quarter of 2015.

(7)

Represents period-end spot balances.

(8)

AUA are beneficially owned by clients and are reported based on the nature of the administrative services provided. AUA includes $18.6 billion and $9.6 billion of securitized residential mortgages and credit card loans, respectively (July 31, 2016 – $18.8 billion and $9.4 billion; October 31, 2015 – $21.0 billion and $8.0 billion). Prior period figures have been revised from those previously disclosed.

(9)

Defined as dividends per common share divided by the average of the high and low share price in the relevant period.

(10)

Based on TSX closing market price at period-end.

(11)

Average amounts are calculated using month-end spot rates for the period.

 







Personal & Commercial Banking







As at or for the three months ended

(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted)


October 31

2016



July 31

2016



October 31

2015


Net interest income

$

2,640


$

2,598


$

2,569


Non-interest income


1,144



1,137



1,080

Total revenue


3,784



3,735



3,649


PCL


288



271



240


Non-interest expense


1,780



1,687



1,717

Net income before income taxes


1,716



1,777



1,692

Net income

$

1,275


$

1,322


$

1,270

Revenue by business










Canadian Banking


3,532



3,499



3,409


Caribbean & U.S. Banking


252



236



240

Selected balances and other information










ROE


27.1%



28.0%



29.1%


NIM (1)


2.69%



2.68%



2.70%


Efficiency ratio (2)


47.0%



45.2%



47.1%


Operating leverage


0.0%



0.6%



1.0%


Average total assets

$

409,000


$

405,000


$

395,100


Average total earning assets


391,000



386,000



377,300


Average loans and acceptances


390,000



384,700



375,400


Average deposits


329,700



321,300



307,000


AUA (3)

$

239,600


$

235,300


$

223,500


AUM


4,600



4,400



4,800


Number of employees (FTE) (4)


33,896



34,828



35,211


Effective income tax rate


25.7%



25.6%



24.9%


Gross impaired loans as a % of average net loans and acceptances


0.42%



0.43%



0.48%


PCL on impaired loans as a % of average net loans and acceptances


0.29%



0.28%



0.25%

(1)

Calculated as net interest income divided by average total earning assets.

(2)

Calculated as non-interest expense divided by total revenue.

(3)

AUA represents period-end spot balances and includes securitized residential mortgages and credit card loans as at October 31, 2016 of $18.6 billion and $9.6 billion, respectively (July 31, 2016 – $18.8 billion and $9.4 billion; October 31, 2015 – $21.0 billion and $8.0 billion).

(4)

Amounts have been revised from those previously presented.

 

Q4 2016 vs. Q4 2015
Net income of $1,275 million increased $5 million compared to a year ago, primarily due to solid volume growth across most of our businesses partially offset by lower spreads in Canada, and higher fee-based revenue. These factors were largely offset by higher PCL, higher technology spend and higher costs in support of business growth. 

Total revenue increased $135 million or 4%, reflecting volume growth of 6% across most businesses in Canada partially offset by lower spreads, and higher fee-based revenue.

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

PCL increased $48 million, with the PCL ratio increasing 4 bps, largely reflecting higher provisions in our Canadian personal and commercial lending portfolios and higher write-offs in our Canadian credit cards portfolio.

Non-interest expense increased $63 million or 4%, mainly due to higher technology spend and higher costs in support of business growth. These factors were partially offset by the continuing benefits from our efficiency management activities. 

Q4 2016 vs. Q3 2016
Net income decreased $47 million or 4% from the prior quarter, mainly driven by higher initiatives and technology spend, and seasonally higher marketing costs in support of business growth in Canadian Banking. These factors were partially offset by volume growth and higher fee-based revenue growth in Canadian Banking mainly attributable to strong mutual fund distribution fees reflecting higher average client fee-based assets due to strong net sales and capital appreciation.







Canadian Banking





Table 20



As at or for the three months ended

(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted)


October 31

2016



July 31

2016



October 31

2015


Net interest income

$

2,471


$

2,442


$

2,407


Non-interest income


1,061



1,057



1,002

Total revenue


3,532



3,499



3,409


PCL


276



265



228


Non-interest expense


1,578



1,503



1,529

Net income before income taxes


1,678



1,731



1,652

Net income

$

1,246


$

1,284


$

1,227

Revenue by business










Personal Financial Services

$

1,997


$

1,973


$

1,956


Business Financial Services


811



814



774


Cards and Payment Solutions


724



712



679

Selected balances and other information










ROE


32.5%



33.4%



35.2%


NIM(1)


2.63%



2.63%



2.65%


Efficiency ratio(2)


44.7%



43.0%



44.9%


Operating leverage


0.4%



1.4%



(1.5)%


Average total assets

$

386,500


$

382,300


$

373,000


Average total earning assets


374,300



368,900



360,200


Average loans and acceptances


380,900



375,600



366,100


Average deposits


311,400



302,700



288,800


AUA (3)


231,400



227,400



213,700


Number of employees (FTE) (4)


29,982



30,927



31,057


Effective income tax rate


25.7%



25.8%



25.7%


Gross impaired loans as a % of average net loans and acceptances


0.27%



0.28%



0.29%


PCL on impaired loans as a % of average net loans and acceptances


0.29%



0.28%



0.25%

(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)

AUA represents period-end spot balances and includes securitized residential mortgages and credit card loans as at October 31, 2016 of $18.6 billion and $9.6 billion, respectively (July 31, 2016 – $18.8 billion and $9.4 billion; October 31, 2015 – $21.0 billion and $8.0 billion).

(4)

Amounts have been revised from those previously presented.

 

Q4 2016 vs. Q4 2015
Net income increased $19 million or 2% compared to a year ago, primarily due to solid volume growth across most of our businesses partially offset by lower spreads, and higher fee-based revenue. These factors were partially offset by higher PCL, higher technology spend and higher costs in support of business growth.

Total revenue increased $123 million or 4%, mainly reflecting volume growth of 6% across most businesses partially offset by lower spreads, and higher fee-based revenue. Fee-based revenue growth is primarily due to higher transaction volumes driving card service revenue, and strong mutual fund distribution fees attributable to higher average client fee-based assets reflecting capital appreciation and strong net sales.

Net interest margin decreased 2 bps primarily due to the low interest rate environment.

PCL increased $48 million, with the PCL ratio increasing 4 bps, largely reflecting higher provisions in our personal and commercial lending portfolios and higher write-offs in our credit card portfolio.

Non-interest expense increased $49 million or 3%, mostly due to higher technology spend and increased costs in support of business growth, including marketing spend. These factors were partially offset by the continuing benefits from our efficiency management activities.

Q4 2016 vs. Q3 2016
Net income decreased $38 million or 3% from the prior quarter, mainly driven by higher initiatives and technology spend, and seasonally higher marketing costs in support of business growth. These factors were partially offset by volume growth across most businesses and fee-based revenue growth primarily attributable to higher mutual fund distribution fees reflecting higher average client fee-based assets due to strong net sales and capital appreciation.







Wealth Management







As at or for the three months ended

(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted)



October 31

2016


July 31

2016


October 31

2015


Net interest income


$

524

$

496

$

118


Non-interest income










Fee-based revenue



1,331


1,276


1,188



Transactional and other revenue



432


463


347

Total revenue



2,287


2,235


1,653


PCL



22


14


1


Non-interest expense



1,736


1,717


1,317

Net income before income taxes



529


504


335

Net income


$

396

$

388

$

255

Revenue by business









Canadian Wealth Management


$

648

$

606

$

583


U.S. Wealth Management (including City National)



1,081


1,064


499



U.S. Wealth Management (including City National) (US$ millions)



818


817


379


International Wealth Management



102


107


124


Global Asset Management



456


458


447

Selected balances and other information









ROE



11.6%


11.4%


17.0%


NIM (1)



2.8%


2.9%


2.5%


Pre-tax margin (2)



23.1%


22.6%


20.3%


Total assets


$

87,900

$

83,000

$

28,200


Number of advisors (3)



4,780


4,716


3,954


Average total earning assets



73,800


68,800


19,000


Average loans and acceptances



50,200


49,100


17,300


Average deposits



91,300


85,200


37,300


AUA - total (4),(5)



875,300


850,200


823,700



- U.S. Wealth Management (including City National) (4),(5)



394,200


389,600


356,800



- U.S. Wealth Management (including City National) (US$ millions) (4),(5)



293,900


298,500


272,900


AUM (4)



580,700


569,700


492,800


Average AUA (5)



864,400


842,500


820,100


Average AUM



578,700


559,300


491,000









For the three months ended

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items




Q4 2016 vs.

Q4 2016 vs.

(Millions of Canadian dollars, except percentage amounts)




Q4 2015

Q3 2016

Increase (decrease):









Total revenue




$

(22)

$

2


Non-interest expense





(22)


1


Net income





2


2

Percentage change in average US$ equivalent of C$1.00





-%


(1)%

Percentage change in average British pound equivalent of C$1.00





20%


6%

Percentage change in average Euro equivalent of C$1.00





-%


(1)%

(1)

  NIM is calculated as Net interest income divided by Average total earning assets.

(2)

  Pre-tax margin is defined as net income before income taxes divided by total revenue.

(3)

  Represents client-facing advisors across all our wealth management businesses. 

(4)

  Represents period-end spot balances.

(5)

  Amounts have been revised from those previously presented.

 

Q4 2016 vs. Q4 2015
Net income increased $141 million or 55% from a year ago, largely reflecting the inclusion of City National, which contributed $89 million to net income. Lower restructuring costs, higher earnings due to growth in average fee-based client assets, increased net interest income, and higher transactional volumes reflecting favourable market conditions also contributed to the increase.

Total revenue increased $634 million or 38%, mainly due to the inclusion of City National, which contributed $543 million (US$411 million) to revenue. Growth in average fee-based client assets reflecting stronger markets, higher transactional volumes and net interest income also contributed to the increase. These factors were partly offset by the impact from foreign exchange translation.

PCL increased $21 million mainly related to provisions recorded in City National.

Non-interest expense increased $419 million or 32%, mainly due to the inclusion of City National, which increased expenses by $440 million, including $49 million related to the amortization of intangibles and $16 million related to integration costs, and higher variable compensation. These factors were partially offset by the impact from foreign exchange translation. In addition, the prior year also included restructuring costs largely related to our International Wealth Management business, including the sale of  Royal Bank of Canada (Suisse) SA.

Q4 2016 vs. Q3 2016
Net income increased $8 million or 2% from the prior quarter, primarily due to higher earnings from growth in average fee-based client assets and a higher contribution from City National. These factors were partially offset by a higher effective tax rate.







Insurance








As at or for the three months ended




October 31

July 31


October 31

(Millions of Canadian dollars, except percentage amounts)


2016

2016


2015


Non-interest income










Net earned premiums


$

698

$

764

$

933



Investment income (1)



(51)


921


(343)



Fee income



176


133


127


Total revenue



823


1,818


717



Insurance policyholder benefits and claims (1)



349


1,158


237



Insurance policyholder acquisition expense



48


52


55


Non-interest expense



155


151


158

Net income before income taxes



271


457


267

Net income


$

228

$

364

$

225

Revenue by business









Canadian Insurance


$

295

$

1,437

$

295


International Insurance



528


381


422

Selected balances and other information









ROE



54.3%


75.7%


53.4%


Premiums and deposits (2)


$

1,065

$

1,131

$

1,309


Fair value changes on investments backing policyholder liabilities (1)



(172)


543


(462)














For the three months ended

Estimated impact of U.S. dollar and British pound translation on key income statement items




Q4 2016 vs.

Q4 2016 vs.

(Millions of Canadian dollars, except percentage amounts)




Q4 2015

Q3 2016

Increase (decrease):








Total revenue




$

(58)

$

(19)



PBCAE





(48)


(14)



Non-interest expense





-


-



Net income





(12)


(5)

Percentage change in average US$ equivalent of C$1.00





-%


(1)%

Percentage change in average British pound equivalent of C$1.00





20%


6%

(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.

 

On July 1, 2016, we completed the sale of RBC General Insurance Company to Aviva Canada Inc. (Aviva) as previously announced on January 21, 2016. The transaction involved the sale of our home and auto insurance manufacturing business and included a 15-year strategic distribution agreement between RBC Insurance and Aviva. As a result of the transaction, we recorded a gain of $287 million ($235 million after-tax) in the third quarter of 2016.

Q4 2016 vs. Q4 2015
Net income increased $3 million or 1% from a year ago, mainly reflecting higher earnings from new U.K. annuity contracts and growth in International insurance. These factors were partially offset by lower results due to the sale of our home and auto insurance manufacturing business, as noted above, and the impact from foreign exchange translation.

Total revenue increased $106 million or 15%, mainly due the change in fair value of investments backing our policyholder liabilities, largely offset in PBCAE, and business growth in International insurance. These factors were partly offset by lower premiums reflecting the impact of the sale of our home and auto insurance manufacturing business and the impact from foreign exchange translation.

PBCAE increased $105 million or 36%, largely reflecting the change in fair value of investments backing our policyholder liabilities, largely offset in revenue, and growth mainly in International insurance. These factors were partially offset by lower costs due to the sale of our home and auto insurance manufacturing business, as noted above, and the impact from foreign exchange translation.

Non-interest expense decreased $3 million or 2%, primarily due to lower costs as a result of the sale of our home and auto insurance manufacturing business, as noted above, and efficiency management activities, which were partially offset by higher costs to support business growth.

Q4 2016 vs. Q3 2016
Net income decreased $136 million or 37% from the prior quarter. Excluding the after-tax gain of $235 million from the sale of our home and auto insurance manufacturing business, as noted above, net income increased $99 million or 77%(1), mainly due to favourable actuarial adjustments reflecting management actions and assumption changes and growth in International insurance, including earnings from new U.K. annuity contracts.

(1)

Results and measures excluding the gain on the sale of our home and auto insurance manufacturing business are non-GAAP measures. For further information, including a reconciliation, refer to the Key performance and non-GAAP section on page 11 of this Earnings Release.

 


Investor & Treasury Services



As at or for the three months ended

(Millions of Canadian dollars, except percentage amounts)

October 31

2016



July 31

2016


October 31

2015


Net interest income

$

214


$

195

$

220


Non-interest income


390



382


228

Total revenue


604



577


448


Non-interest expense


376



368


342

Net income before income taxes


228



209


106

Net income

$

174


$

157

$

88

Selected balances and other information









ROE


21.0%



18.2%


10.9%


Average Deposits


124,400



123,200


149,500



Client deposits


50,900



53,000


56,500



Wholesale funding deposits


73,500



70,200


93,000


AUA(1)


3,929,400



3,724,300


3,620,300


Average AUA


3,886,900



3,699,300


3,783,700

(1)  Represents period-end spot balances.


 

Q4 2016 vs. Q4 2015
Net income increased $86 million or 98% from a year ago, largely due to higher funding and liquidity earnings reflecting tightening credit spreads and favourable interest rate movements, and higher client deposit spreads. These factors were partially offset by higher staff costs, a higher effective tax rate, and increased investment in technology initiatives.

Total revenue increased $156 million or 35%, mainly related to higher funding and liquidity revenue reflecting tightening credit spreads and favourable interest rate movements, and increased revenue on higher client deposit spreads.

Non-interest expense increased $34 million or 10%, largely reflecting higher staff costs and increased investment in technology initiatives.

Q4 2016 vs. Q3 2016
Net income increased $17 million or 11% from last quarter, mainly due to higher funding and liquidity earnings reflecting tightening credit spreads and favourable interest rate movements.


Capital Markets




As at or for the three months ended

(Millions of Canadian dollars, except percentage amounts)


October 31

2016


July 31

2016


October 31

2015


Net interest income (1)

$

857

$

892

$

1,098


Non-interest income (1)


1,036


1,195


639

Total revenue (1)


1,893


2,087


1,737


PCL


51


33


36


Non-interest expense


1,151


1,160


1,072

Net income before income taxes


691


894


629

Net income

$

482

$

635

$

555

Revenue by business








Corporate and Investment Banking

$

976

$

956

$

847


Global Markets


978


1,148


935


Other


(61)


(17)


(45)

Selected balances and other information








ROE


10.4%


14.2%


12.3%


Average total assets

$

496,700

$

514,500

$

500,200


Average trading securities


105,300


104,600


111,900


Average loans and acceptances


85,500


87,400


85,900


Average deposits


59,200


61,600


63,200


PCL on impaired loans as a % of average net loans and acceptances


0.24 %


0.15 %


0.17 %








For the three months ended

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items

Q4 2016 vs

Q4 2016 vs

(Millions of Canadian dollars, except percentage amounts)

Q4 2015

Q3 2016

Increase (decrease):








Total revenue



$

(12)

$

16


Non-interest expense




(37)


(3)


Net income




17


12

Percentage change in average US$ equivalent of C$1.00




-%


(1)%

Percentage change in average British pound equivalent of C$1.00




20%


6%

Percentage change in average Euro equivalent of C$1.00




-%


(1)%

(1)

The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2016 was $116 million (July 31, 2016 – $267 million, October 31, 2015 – $213 million).

 

Q4 2016 vs. Q4 2015
Net income decreased $73 million or 13% from a year ago, as the prior year benefited from a lower effective tax rate reflecting income tax adjustments related to the prior periods. In the current quarter, higher results in our Corporate and Investment Banking and Global Markets businesses were partially offset by higher variable compensation on improved results.

Total revenue increased $156 million or 9%, mainly due to higher fixed income trading revenue primarily in the U.S., as well as strong debt and equity origination activity and increased loan syndication revenue largely in the U.S. These factors were partially offset by lower equity trading revenue across most regions and lower lending revenue largely in the U.S.

PCL increased $15 million or 42%, mainly due to higher provisions, net of recoveries, in the energy sector.

Non-interest expense increased $79 million or 7%, mainly driven by higher variable compensation on improved results, partially offset by the impact from foreign exchange translation and lower litigation provisions.

Q4 2016 vs. Q3 2016
Net income decreased $153 million or 24% from the prior quarter mainly due to lower fixed income and equity trading revenue largely in Europe and the U.S., and higher capital taxes. Lower equity origination activity in Canada and lower foreign exchange trading revenue across all regions further contributed to the decrease. These factors were partly offset by increased loan syndication revenue largely in the U.S.

 









Corporate Support










As at or for the three months ended




October 31



July 31


October 31

(Millions of Canadian dollars)


2016



2016


2015


Net interest income (loss) (1)

$

(48)


$

(58)

$

(205)


Non-interest income (loss) (1)


(78)



(139)


20

Total revenue (1)


(126)



(197)


(185)


PCL


(1)



-


(2)


Non-interest expense


(2)



8


41

Net income (loss) before income taxes


(123)



(205)


(224)


Income (recoveries) taxes (1)


(111)



(234)


(424)

Net income (2)

$

(12)


$

29

$

200

(1)

Teb adjusted.

(2)

Net income reflects income attributable to both shareholders and Non-Controlling Interest (NCI). Net income attributable to NCI for the three months ended October 31, 2016 was $9 million (July 31, 2016 – $7 million; October 31, 2015 – $25 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.

Total revenue 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 and U.S. tax credit investment business recorded in Capital Markets. The amount deducted from revenue was offset by an equivalent increase in income taxes (recoveries). The teb amount for the three months ended October 31, 2016 was $115 million compared to $267 million in the prior quarter and $213 million in the prior year period. For further discussion, refer to the How we measure and report our business segments section of our 2016 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 2016
Net loss was $12 million largely reflecting net unfavourable tax adjustments, partially offset by asset/liability management activities.

Q3 2016
Net income was $29 million mainly reflecting asset/liability management activities.

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

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 2016 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, 2016

October 31, 2016



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


$

1,252

$

381

$

226

$

170

$

461

$

(32)

$

2,458


$

10,111

Total average common equity (1) (2)


$

18,350

$

13,000

$

1,650

$

3,200

$

17,600

$

9,300

$

63,100


$

62,200

ROE (3)


27.1%

11.6%

54.3%

21.0%

10.4%

n.m.

15.5%


16.3%

(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.

(3)

ROE is based on actual balances before rounding.

n.m. 

not meaningful.

 

Non-GAAP Measures
Results and measures excluding the items outlined below are non-GAAP measures:

  • A gain of $287 million ($235 million after-tax) in Q3 2016 from the sale of RBC General Insurance Company to Aviva; and
  • $49 million ($29 million after-tax) of amortization of intangibles and $16 million ($9 million after-tax) of integration costs in Q4 2016 related to our acquisition of City National.

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined, 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, will provide 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 2016 Annual Report.


Insurance net income, excluding specified items


For the three months ended July 31, 2016


For the twelve months ended October 31, 2016

(Millions of Canadian dollars)

Reported

RBC General
Insurance
Company 

Adjusted


Reported

RBC General
Insurance
Company 

Adjusted

Net income

$

364

$

235

$

129


$

900

$

235

$

665

 






Consolidated Balance Sheets







October 31


July 31

October 31

(Millions of Canadian dollars)


2016(1)


2016(2)


2015(1)

Assets







Cash and due from banks

$

14,929

$

19,501

$

12,452

Interest-bearing deposits with banks


27,851


22,008


22,690

Securities








Trading


151,292


157,446


158,703


Available-for-sale


84,801


76,552


56,805




236,093


233,998


215,508

Assets purchased under reverse repurchase agreements and securities borrowed


186,302


200,430


174,723

Loans








Retail


369,470


364,476


348,183


Wholesale


154,369


153,521


126,069




523,839


517,997


474,252


Allowance for loan losses


(2,235)


(2,177)


(2,029)




521,604


515,820


472,223

Segregated fund net assets


981


933


830

Other








Customers' liability under acceptances


12,843


13,152


13,453


Derivatives


118,944


130,462


105,626


Premises and equipment, net


2,836


2,872


2,728


Goodwill 


11,156


11,254


9,289


Other intangibles  


4,648


4,605


2,814


Other assets


42,071


43,840


41,872




192,498


206,185


175,782

Total assets

$

1,180,258

$

1,198,875

$

1,074,208

Liabilities







Deposits








Personal

$

250,550

$

250,128

$

220,566


Business and government


488,007


480,896


455,578


Bank


19,032


23,391


21,083




757,589


754,415


697,227

Segregated fund net liabilities


981


933


830

Other








Acceptances


12,843


13,152


13,453


Obligations related to securities sold short


50,369


46,679


47,658


Obligations related to assets sold under repurchase agreements and securities loaned


103,441


118,283


83,288


Derivatives


116,550


128,533


107,860


Insurance claims and policy benefit liabilities


9,164


9,305


9,110


Other liabilities 


47,947


47,974


43,476




340,314


363,926


304,845

Subordinated debentures


9,762


9,765


7,362

Total liabilities

$

1,108,646

$

1,129,039

$

1,010,264









Equity attributable to shareholders








Preferred shares


6,713


6,712


5,098


Common shares (shares issued - 1,484,234,375, 1,483,611,362 and 1,443,954,789) 


17,859


17,775


14,611


Retained earnings


41,519


40,424


37,811


Other components of equity


4,926


4,342


4,626




71,017


69,253


62,146

Non-controlling interests


595


583


1,798

Total equity


71,612


69,836


63,944

Total liabilities and equity

$

1,180,258

$

1,198,875

$

1,074,208

(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)

2016(1)

2016(1)

2015(1)


2016(2)

2015(2)

Interest income













Loans

$

4,574

$

4,494

$

4,203


$

17,876

$

16,882


Securities


1,091


1,180


1,159



4,593


4,519


Assets purchased under reverse repurchase agreements and securities borrowed


502


464


333



1,816


1,251


Deposits and other


44


46


20



167


77




6,211


6,184


5,715



24,452


22,729

Interest expense













Deposits and other


1,421


1,385


1,375



5,467


5,723


Other liabilities


538


612


486



2,227


1,995


Subordinated debentures


65


64


54



227


240




2,024


2,061


1,915



7,921


7,958

Net interest income


4,187


4,123


3,800



16,531


14,771

Non-interest income













Insurance premiums, investment and fee income


824


1,534


717



4,868


4,436


Trading revenue


119


311


(203)



701


552


Investment management and custodial fees


1,102


1,053


942



4,240


3,778


Mutual fund revenue


745


728


731



2,887


2,881


Securities brokerage commissions


350


352


352



1,429


1,436


Service charges


447


443


404



1,756


1,592


Underwriting and other advisory fees


509


524


350



1,876


1,885


Foreign exchange revenue, other than trading


217


189


222



964


814


Card service revenue


220


227


193



889


798


Credit fees


384


285


308



1,239


1,184


Net gain on available-for-sale securities


2


7


34



76


145


Share of profit in joint ventures and associates


44


44


40



176


149


Other


115


435


129



773


900



5,078


6,132


4,219



21,874


20,550

Total revenue


9,265


10,255


8,019



38,405


35,321

Provision for credit losses


358


318


275



1,546


1,097

Insurance policyholder benefits, claims and acquisition expense


397


1,210


292



3,424


2,963

Non-interest expense













Human resources


3,032


3,079


2,682



12,201


11,583


Equipment


378


346


342



1,438


1,277


Occupancy


406


387


368



1,568


1,410


Communications


278


240


253



945


888


Professional fees


312


279


307



1,078


932


Amortization of other intangibles


257


250


180



970


712


Other


535


510


515



1,936


1,836




5,198


5,091


4,647



20,136


18,638

Income before income taxes


3,312


3,636


2,805



13,299


12,623

Income taxes


769


741


212



2,841


2,597

Net income

$

2,543

$

2,895

$

2,593


$

10,458

$

10,026

Net income attributable to:













Shareholders

$

2,533

$

2,886

$

2,569


$

10,405

$

9,925


Non-controlling interests


10


9


24



53


101



$

2,543

$

2,895

$

2,593


$

10,458

$

10,026














Basic earnings per share (in dollars)

$

1.66

$

1.88

$

1.74


$

6.80

$

6.75

Diluted earnings per share (in dollars)


1.65


1.88


1.74



6.78


6.73

Dividends per common share (in dollars)


0.83


0.81


0.79



3.24


3.08

(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)


2016(1)



2016(1)


2015(1)



2016(2)


2015(2)

Net income

$

2,543


$

2,895

$

2,593


$

10,458

$

10,026

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


(92)



96


(176)



73


(76)



Reclassification of net losses (gains) on available-for-sale securities to income


-



5


(12)



(48)


(41)





(92)



101


(188)



25


(117)


Foreign currency translation adjustments















Unrealized foreign currency translation gains (losses)


979



1,301


(97)



147


5,885



Net foreign currency translation gains (losses) from hedging activities


(305)



(426)


57



113


(3,223)



Reclassification of losses (gains) on foreign currency translation to income


-



-


(42)



-


(224)



Reclassification of losses (gains) on net investment hedging activities to income


-



-


42



-


111





674



875


(40)



260


2,549


Net change in cash flow hedges















Net gains (losses) on derivatives designated as cash flow hedges


(56)



(120)


41



(35)


(541)



Reclassification of losses (gains) on derivatives designated as cash flow hedges to income


60



50


54



52


330





4



(70)


95



17


(211)

Items that will not be reclassified subsequently to income:














Remeasurements of employee benefit plans


25



(432)


456



(1,077)


582


Net fair value change due to credit risk on financial liabilities designated as at fair value















through profit or loss


(90)



(87)


189



(322)


350




(65)



(519)


645



(1,399)


932

Total other comprehensive income (loss), net of taxes


521



387


512



(1,097)


3,153

Total comprehensive income

$

3,064


$

3,282

$

3,105


$

9,361

$

13,179

Total comprehensive income attributable to:














Shareholders

$

3,052


$

3,270

$

3,080


$

9,306

$

13,065


Non-controlling interests


12



12


25



55


114




$

3,064


$

3,282

$

3,105


$

9,361

$

13,179

(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

Non-


to

controlling

Total

(Millions of Canadian dollars)

shares

shares

preferred

common

earnings

securities

translation

hedges

of equity

shareholders

interests

equity

Balance at November 1, 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 (1)

$

5,100

$

14,573

$

(2)

$

38

$

37,811

$

315

$

4,427

$

(116)

$

4,626

$

62,146

$

1,798

$

63,944

Changes in equity


























Issues of share capital


1,855


3,422


-


-


(16)


-


-


-


-


5,261


-


5,261


Common shares purchased for
cancellation


-


(56)


-


-


(306)


-


-


-


-


(362)


-


(362)


Preferred shares purchased for
cancellation


(242)


-


-


-


(22)


-


-


-


-


(264)


-


(264)


Redemption of trust capital securities


-


-


-


-


-


-


-


-


-


-


(1,200)


(1,200)


Sales of treasury shares


-


-


172


4,973


-


-


-


-


-


5,145


-


5,145


Purchases of treasury shares


-


-


(170)


(5,091)


-


-


-


-


-


(5,261)


-


(5,261)


Share-based compensation awards


-


-


-


-


(54)


-


-


-


-


(54)


-


(54)


Dividends on common shares


-


-


-


-


(4,817)


-


-


-


-


(4,817)


-


(4,817)


Dividends on preferred shares and
other


-


-


-


-


(294)


-


-


-


-


(294)


(63)


(357)


Other


-


-


-


-


211


-


-


-


-


211


5


216


Net income


-


-


-


-


10,405


-


-


-


-


10,405


53


10,458


Total other comprehensive income
(loss), net of taxes


-


-


-


-


(1,399)


25


258


17


300


(1,099)


2


(1,097)

Balance at October 31, 2016 (1)

$

6,713

$

17,939

$

-

$

(80)

$

41,519

$

340

$

4,685

$

(99)

$

4,926

$

71,017

$

595

$

71,612

(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, 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 President and 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, as well as 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 systematic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2016 Annual Report; global uncertainty, the Brexit vote to have the United Kingdom leave the European Union, weak oil and gas prices, cyber risk, anti-money laundering, exposure to more volatile sectors, such as lending related to commercial real estate and leveraged financing, technological innovation and new fintech entrants, increasing complexity of regulation, data management, litigation and administrative penalties; the business and economic conditions in the geographic regions 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 2016 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 2016 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 2016 Annual Report to Shareholders on our website at rbc.com/investorrelations.

Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for Wednesday November 30, 2016 at 8:00 a.m. (EDT) and will feature a presentation about our third quarter 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 (416-340-2217, 866-696-5910, passcode 9527507#). Please call between 7:50 a.m. and 7:55 a.m. (EDT).

Management's comments on results will be posted on RBC website shortly following the call. A recording will be available by 5:00 p.m. (EST) from November 30, 2016 until February 27, 2016 at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 7448996#).

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 have over 80,000 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 36 other countries. For more information, please visit rbc.com.‎ RBC helps communities prosper, supporting a broad range of community initiatives through donations, community investments and employee volunteer activities. For more information please see: http://www.rbc.com/community-sustainability/

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: Tanis Feasby, Senior Director, Communications, Wealth Management, Insurance & Finance, tanis.feasby@rbc.com, 416-955-5172 or 1-888-880-2173 (toll-free outside Toronto); Sandra Nunes, Director, Financial Communications, sandra.nunes@rbc.com, 416-974-1794 or 1-888-880-2173 (toll-free outside Toronto); Investor Relations Contacts: Dave Mun, SVP & Head, Investor Relations, dave.mun@rbc.com, 416-955-7803; Stephanie Phillips, Director, Investor Relations, stephanie.phillips@rbc.com, 416-955-7809; Asim Imran, Director, Investor Relations, asim.imran@rbc.com, 416-955-7804; Brendon Buckler, Associate Director, Investor Relations, brendon.buckler@rbc.com, 416-955-7807

RELATED LINKS
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