Royal Bank of Canada reports solid fourth quarter and record 2007 results



    The financial information in this earnings release is in Canadian dollars
    and is based on financial statements prepared in accordance with Canadian
    generally accepted accounting principles (GAAP), unless otherwise noted.
    Further information about RBC and our 2007 results can be found in our
    2007 Annual Report to Shareholders (which includes our audited annual
    Consolidated Financial Statements and accompanying Management's
    Discussion & Analysis) and in our Annual Information Form and
    supplementary financial information, and all are available on our website
    at rbc.com/investorrelations.

    
    2007 compared to 2006

    -   Net income of $5,492 million, up 16%.
    -   Diluted earnings per share (EPS) of $4.19, up 17%.
    -   Revenue of $22,462 million, up 9%.
    -   Return on common equity (ROE) of 24.6%, up 110 basis points.
    -   Tier 1 capital ratio of 9.4%, down 20 basis points.

    Fourth quarter 2007 compared to fourth quarter 2006

    -   Net income of $1,324 million, up 5%.
    -   Diluted EPS of $1.01, up 5%.
    -   Revenue of $5,615 million, up 5%.
    -   ROE of 23%, down 90 basis points.
    

    TORONTO, Nov. 30 /CNW/ - Royal Bank of Canada (RY on TSX & NYSE) today
reported net income of $5,492 million for the year ended October 31, 2007, up
$764 million, or 16%, from a year ago. Diluted EPS were $4.19, up 17%. Revenue
of $22,462 million was up 9%. ROE was 24.6%, an increase of 110 basis points.
    "In 2007, our shareholders benefited from record financial results that
reflect leadership in our core Canadian businesses and growth in our
non-domestic operations," said Gordon M. Nixon, President and CEO. "Our solid
performance in a year marked by challenges in the financial markets reflects
the diversity of our businesses across multiple products, markets and
geographies. Looking forward, we believe our targeted investments will extend
our Canadian leadership and enable continued growth of our businesses outside
our domestic market."
    Strong performance across most of our businesses drove record results for
the year. In Canadian Banking, we profitably grew lending volumes by 11% and
deposit balances by 6%. In Wealth Management, our sales momentum continued to
support strong growth in client assets. Canadian Wealth Management grew assets
under administration by 9% and Global Asset Management grew assets under
management by 13%. U.S. & International Wealth Management increased revenue by
15%, or 19% in U.S. dollars. RBC Dexia Investor Services increased assets
under administration by 12%. Favourable economic and market conditions for the
first part of 2007 and a lower effective tax rate also contributed to our
results.
    Some business lines were affected by specific challenges. Capital Markets
recorded a significant valuation charge resulting from the severe dislocation
of the credit markets and we had higher provisions for credit losses in U.S. &
International Banking due to the U.S. housing market downturn. Notwithstanding
these factors, Capital Markets had impressive results with broad based revenue
generation across many businesses, and U.S. & International Banking showed
solid increases in loans and deposits through acquisitions and organic growth.
    In 2007, we invested significantly in our businesses for the future. In
Canadian Banking, we added client-facing staff and branches, and introduced
our new personal banking product suite, while generating profitable revenue
growth. We continued to build on our solid foundation in U.S. & International
Wealth Management by investing in infrastructure and people. In our U.S.
banking business, we grew our branch network by 24% over last year through
acquisitions and de novo branches, and invested in our technology platform to
support our expanding network. Finally, in Capital Markets, we integrated
three acquisitions, which expanded our client base and enhanced our
capabilities in cash equities, municipal finance and U.S. mergers and
acquisitions.

    Fourth Quarter 2007 Performance

    Fourth quarter net income of $1,324 million was up 5% from last year and
down 5% from last quarter. Diluted EPS were $1.01, up 5% from last year and
down 5% from last quarter. ROE was 23.0%, compared to 23.9% last year and
24.4% last quarter.
    Our results for the quarter were affected by certain items. In our
Canadian banking-related operations, we recorded a gain of $326 million
pre-tax ($269 million after-tax) from the exchange of our membership interest
in Visa Canada Association for shares of Visa Inc., and an adjustment of
$121 million pre-tax ($79 million after-tax) to increase our credit card
customer loyalty reward program liability, which was recorded against revenue.
This adjustment to our loyalty reward liability reflects higher redemption
rate assumptions, consistent with our strategy of encouraging our clients to
more fully use the RBC Reward points they accumulate by providing them with a
broader range of redemption options. We expect no significant change in
run-rate costs as a result of this charge. For further discussion and a
reconciliation of Canadian Banking and Banking-related net income excluding
the Visa Inc. restructuring gain and the adjustment to loyalty reward
liability, refer to "Key performance and non-GAAP measures". In Capital
Markets, we recorded a charge of $357 million pre-tax ($160 million after-tax
and reflecting compensation adjustments) consisting of write downs on the fair
value of our direct holdings of U.S. subprime residential mortgage-backed
securities (RMBS) and collateralized debt obligations of asset-backed
securities (CDOs of ABS) and related credit default swaps.

    Canadian Banking net income was $899 million, up 33% over last year and
29% over the third quarter (excluding the Visa Inc. restructuring gain and the
adjustment to loyalty reward liability, net income was $709 million, up 5% and
1% from last year and last quarter, respectively).
    "Our growth initiatives and strong national retail presence across all
products and markets have produced profitable volume growth across all our
banking-related business lines. When you combine our broad capabilities with
our investments in client-facing staff, branches and other infrastructure, we
believe we are well positioned for future success," Nixon said.
    Banking-related net income increased by 40% over last year and 34% over
the third quarter (excluding the Visa Inc. restructuring gain and the
adjustment to loyalty reward liability, net income was $607 million, up 7% and
2% from last year and last quarter, respectively) due to strong volume growth
across all business lines, particularly mortgages and personal deposits.
Non-interest expense grew from the fourth quarter of 2006, reflecting
significant reinvestments in our business over the past year, and was flat
compared to the third quarter of 2007 as the pace of our investment moderated.
Our provision for credit losses was up from both last year and the third
quarter, partially reflecting higher loss rates in personal and business
banking as well as volume growth in our loan portfolio. We also experienced
some margin compression over both the previous year and previous quarter due
to changes in product mix as well as narrower spreads on prime based lending
products resulting from the dislocation in the credit markets.
    We had solid results in Global Insurance this quarter. Business growth
was offset by claims experience, which was less favourable than a year ago. As
a result, net income was down 4% over last year, but was consistent with the
third quarter.

    Wealth Management net income was $180 million, up 10% over last year and
2% over last quarter. Appreciation of the Canadian dollar against the U.S.
dollar reduced earnings by 4% compared to last year and 2% compared to last
quarter.
    "We continued to deliver robust results in our domestic businesses with
strong growth in client assets, and our performance in U.S. & International
Wealth Management demonstrates that our targeted initiatives to grow these
businesses are succeeding. With our solid foundation in Canada and a growing
presence in U.S. and international markets, we believe we are well positioned
to take full advantage of the opportunities provided by the favourable long
term economic and demographic trends supporting the wealth management
business," Nixon said.
    Earnings increased over last year due to strong performance across all of
our business lines. Canadian Wealth Management increased revenue on higher
fee-based assets. Revenue in U.S. & International Wealth Management increased
largely due to solid growth in fee-based client assets, the inclusion of our
J.B. Hanauer acquisition, and loan and deposit growth in our international
wealth management business. Global Asset Management continued to lead the
Canadian mutual fund industry in long term net sales and benefited from
capital appreciation. Compared to the third quarter, earnings growth was
slower primarily because of a lower net foreign exchange translation gain on
certain deposits related to implementation of the new financial instrument
accounting standards, as well as lower brokerage transaction volumes due to
uncertainty in the market.
    Non-interest expense grew from last year on higher variable compensation
commensurate with higher commission-based revenue, costs related to the
J.B. Hanauer acquisition and investments for future growth. These include
adding investment advisors and other client-facing professionals and opening
international offices. Compared to the third quarter, non-interest expense was
lower due to reduced variable compensation on lower commission-based revenue.

    U.S. & International Banking net income of $21 million decreased 73% over
last year and 76% over last quarter primarily reflecting systemic
deterioration in the U.S. housing market, which accelerated in the fourth
quarter. This led to higher provisions for credit losses, which increased by
$67 million from the prior year and $55 million from the third quarter, the
bulk of which originated in our U.S. residential builder finance business. We
believe we are well equipped to manage through this challenging environment.
Over the past 12 to 18 months, we actively reduced our builder finance
business production in certain regions that we viewed as potentially
problematic. Also, U.S. residential builder finance loans comprise less than
20% of our U.S. banking loan portfolio and the remainder of our portfolio
remains stable. Notwithstanding the demanding market conditions, our U.S.
banking operations delivered solid increases in loans and deposits from both
acquisitions and organic growth. In RBC Dexia IS, revenue increased 20% over
last year from a growing client base and higher transactional business, and
declined over last quarter due to higher seasonal results in the third
quarter.
    Non-interest expense was up over the prior year as we continued to invest
in our U.S. Southeast footprint by adding 56 branches through acquisitions and
10 de novo branches. Business growth in both Banking and RBC Dexia IS also
contributed to higher expenses. Compared to the third quarter, non-interest
expense was down due to the favorable impact of the stronger Canadian dollar
on U.S. dollar-denominated expenses, and lower expenses in RBC Dexia IS
reflecting seasonally lower business activity.
    "I am encouraged by the progress of our U.S. Banking operations and we
remain committed to our long-term strategy of building a strong retail bank in
the U.S. Southeast," Nixon said. "Our pending acquisition of Alabama National
BanCorporation (ANB) is evidence of our commitment and will extend our branch
network by one-third in key states. ANB fits extremely well with our existing
footprint, and their risk management and loan underwriting practices are
excellent. Also, our pending acquisition of RBTT Financial Group will create
one of the most expansive banking networks in the Caribbean, with a presence
in 18 countries and territories," Nixon said.

    Capital Markets net income was $186 million, down 38% from last year and
48% from the third quarter due to $357 million pre-tax ($160 million after-tax
and reflecting compensation adjustments) of valuation write downs related to
U.S. subprime RMBS and CDOs of ABS. Appreciation of the Canadian dollar
against the U.S dollar and British pound also reduced earnings by $28 million
from last year and $19 million from the third quarter.
    The strength of our diversified portfolio helped mitigate the impact to
revenues from the valuation write downs noted above. Many businesses performed
well, including equity derivatives and foreign exchange trading, mergers and
acquisitions (M&A) and our daily cash equities business. Non-interest expense
decreased over last year and last quarter largely due to lower variable
compensation.
    "I am pleased with how we managed through the challenging market
conditions this quarter. We delivered solid performance in a number of trading
businesses and our M&A advisory business. Looking ahead, we remain committed
to leveraging our leadership in Canada to continue to build our U.S.
mid-market franchise and strategically grow our global capabilities in areas
where we have competitive strength, including fixed income, infrastructure,
energy and mining," Nixon said.
    Nixon added, "I'll make a few comments on topical areas to alleviate any
concerns our investors may have. We do not originate U.S. subprime loans and
have $216 million of net exposure to U.S. subprime collateralized debt
obligations of asset-backed securities. We also have $388 million of exposure
to U.S. subprime residential mortgage-backed securities, which is classified
as available-for-sale and which we intend to hold until maturity. Combined,
these amounts represent less than 0.1% of our total assets. Our dealings with
structured investment vehicles and Canadian non-bank sponsored asset-backed
commercial paper conduits with general market disruption facilities are
nominal. Our exposure to hedge funds is modest and predominantly
collateralized, and our loan underwriting commitments to pre-correction
leveraged buy-outs are minimal. Even in aggregate, these areas are not
significant to RBC."

    2007 Performance

    We succeeded in delivering solid returns to our shareholders in 2007,
while funding future growth opportunities in our businesses and managing the
strength of our balance sheet. The table below shows our 2007 performance
compared to our objectives for the year.

    
    -------------------------------------------------------------------------
                                          2007 Objectives   2007 Performance
                                        -------------------------------------
    1.  Diluted earnings per
         share growth                           10%+               17%
    2.  Defined operating leverage(1)     greater than 3%          2.6%
    3.  Return on common equity (ROE)           20%+              24.6%
    4.  Tier 1 capital ratio(2)                  8%+               9.4%
    5.  Dividend payout ratio                 40%-50%              43%
    -------------------------------------------------------------------------
    (1) The difference between our revenue growth rate (as adjusted) and
        non-interest expense growth rate (as adjusted). Revenue is based on a
        taxable equivalent basis and excludes consolidated variable interest
        entities (VIEs), accounting adjustments related to the new financial
        instruments accounting standards and Global Insurance revenue.
        Non-interest expense excludes Global Insurance expense. This is a
        non-GAAP measure. For further information, including reconciliation,
        refer to the Key performance and non-GAAP measures in our 2007 Annual
        Report .
    (2) Calculated using guidelines issued by the Office of the
        Superintendent of Financial Institutions Canada (OSFI).
    

    Our diluted EPS growth, ROE and dividend payout ratio compared favourably
to our annual objectives, largely reflecting strong performance across our
Canadian retail and global insurance businesses. We also increased our
dividend by $.38, or 26% in 2007. Our defined operating leverage ratio was
below our annual objective, reflecting higher costs in support of our growing
business as well as investment in future growth initiatives, including
acquisitions. Our capital position remained strong, with a Tier 1 capital
ratio comfortably above our target. Our total shareholder return was 16% for
the year ended October 31, and our 3-, 5- and 10-year total shareholder
returns were 25%, 19% and 15% respectively. Relative to our peer group, we
delivered top quartile shareholder returns over the past 3 and 10 years, and
second quartile returns over the past 5 years.

    2008 Outlook and Objectives

    The Canadian economy has grown year-to-date, with domestic demand being
the key driver. Robust economic growth in the early part of the year weakened
slightly in the latter part, primarily due to slowing U.S. demand and a
tightening of credit conditions due to U.S. subprime mortgage market concerns.
Based on these conditions combined with a strong Canadian dollar, we expect
the pace of growth in 2008 to moderate. The U.S. economy grew strongly in the
middle quarters of 2007, though weakness emerged late in the year primarily
due to U.S. subprime mortgage market concerns. We expect the U.S. economy to
continue to grow moderately in 2008. We anticipate that financial market
volatility will persist into early 2008 as investors and lenders will remain
cautious and risk averse amid a slowdown in the housing market. However,
economic growth is expected to pick up in the latter part of the year. Growth
in other global economies remains solid year-to-date. Central banks in the
United Kingdom, Eurozone and Japan have put their tightening monetary policies
on hold to avoid an economic slowdown, taking into account the financial
market volatility triggered by U.S. subprime mortgage market concerns. Growth
in other global economies is expected to ease moderately in 2008, with the
highest growth projected for China and other emerging Asian economies.

    
    -------------------------------------------------------------------------
                                    Medium-term         2007 Performance
                                     Objective     3-year TSR     5-year TSR
                                  -------------------------------------------
    Total shareholder return            Top            Top           Second
     (in home currency)(1)            quartile       quartile       quartile
    -------------------------------------------------------------------------
    (1) Calculated for period ended October 31, 2007, based on share price
        appreciation plus reinvested dividend income versus the TSR of seven
        Canadian financial institutions (Manulife Financial Corporation, Bank
        of Nova Scotia, Toronto-Dominion Bank, Bank of Montreal, Sun Life
        Financial Inc., Canadian Imperial Bank of Commerce and National Bank
        of Canada) and TSR (in U.S. dollars) of 13 U.S. financial
        institutions (Bank of America, JP Morgan Chase & Co., Wells Fargo &
        Company, Wachovia Corporation, US Bancorp, Sun Trust Banks, Inc., The
        Bank of New York Mellon, BB&T Corporation, Fifth Third Bancorp,
        National City Corporation, The PNC Financial Services Group, KeyCorp
        and Northern Trust Corporation).


    -------------------------------------------------------------------------
                                                             2008 Objectives
                                                           ------------------
    1.  Diluted earnings per share growth                         7%-10%
    2.  Defined operating leverage(1)                        greater than 3%
    3.  Return on common equity (ROE)                              20%+
    4.  Tier 1 capital ratio(2)                                     8%+
    5.  Dividend payout ratio                                    40%-50%
    -------------------------------------------------------------------------
    (1) The difference between our revenue growth rate (as adjusted) and
        non-interest expense growth rate (as adjusted). Revenue is based on a
        taxable equivalent basis and excludes consolidated variable interest
        entities (VIEs), accounting adjustments related to the new financial
        instruments accounting standards and Global Insurance revenue.
        Non-interest expense excludes Global Insurance expense. This is a
        non-GAAP measure. For further information, including reconciliation,
        refer to the Key performance and non-GAAP measures in our 2007 Annual
        Report.
    (2) Calculated using guidelines issued by the Office of the
        Superintendent of Financial Institutions Canada (OSFI) under the new
        Basel II framework, which changes the methodology for the
        determination of risk-adjusted assets and regulatory capital.
    

    For 2008, our financial objectives have been established based on our
three strategic goals and our economic and business outlooks as outlined in
this section. Objectives for our defined operating leverage, ROE, Tier 1
capital ratio and dividend payout ratio remain unchanged, reflecting our
continued commitment to strong revenue growth and cost containment, as well as
sound and effective management of capital resources. Our 2008 diluted EPS
growth objective is 7% to 10%. Our objectives factor in the effect of our
pending acquisitions of ANB and RBTT, which will be funded partly through
issuance of our common shares, as well as the related integration costs. The
ANB acquisition is expected to close in early 2008 and the RBTT acquisition is
expected to close in the middle of the year. We expect our provision for
credit loss ratio to trend upward toward historical averages, in line with our
view of the overall credit environment.


    
    -------------------------------------------------------------------------
    CONSOLIDATED RESULTS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER HIGHLIGHTS
    -------------------------------------------------------------------------
    (C$ millions,
     except per                                           For the twelve
     share, number    For the three months ended           months ended
     of and       ----------------------------------- -----------------------
     percentage   October 31     July 31  October 31  October 31  October 31
     amounts)           2007        2007        2006        2007        2006
    ------------------------------------------------- -----------------------

      Total
       revenue    $    5,615  $    5,480  $    5,349  $   22,462  $   20,637
      Non-interest
       expense         3,093       3,165       2,955      12,473      11,495
      Provision for
       credit losses     263         178         159         791         429
      Insurance
       policyholder
       benefits,
       claims and
       acquisition
       expense           637         343         611       2,173       2,509
      Net income
       before income
       taxes and non-
       controlling
       interest in
       subsidiaries    1,622       1,794       1,624       7,025       6,204
      Net loss from
       discontinued
       operations          -           -          (1)          -         (29)
    Net income    $    1,324  $    1,395  $    1,262  $    5,492  $    4,728
    ------------------------------------------------- -----------------------
    Selected
     information
      Earnings per
       share (EPS)
       - basic    $     1.02  $     1.07  $     0.97  $     4.24  $     3.65
      Earnings per
       share (EPS)
       - diluted  $     1.01  $     1.06  $     0.96  $     4.19  $     3.59
      Return on
       common equity
       (ROE)(1)        23.0%       24.4%       23.9%       24.6%       23.5%
      Return on
       risk capital
       (RORC)(1)       35.8%       36.9%       37.3%       37.4%       36.7%
      Net interest
       margin(2)       1.21%       1.32%       1.31%       1.30%       1.35%
    Capital ratios(3)
      Tier 1 capital
       ratio            9.4%        9.3%        9.6%        9.4%        9.6%
      Total capital
       ratio           11.5%       11.4%       11.9%       11.5%       11.9%
    Selected balance
     sheet and other
     information
      Total
       assets     $  600,346  $  604,582  $  536,780  $  600,346  $  536,780
      Securities     178,255     190,219     184,869     178,255     184,869
      Retail loans   169,462     165,554     151,050     169,462     151,050
      Wholesale
       loans          69,967      67,245      58,889      69,967      58,889
      Deposits       365,205     376,325     343,523     365,205     343,523
      Risk-adjusted
       assets(3)     247,635     250,197     223,709     247,635     223,709
      Assets under
       management    161,500     159,900     143,100     161,500     143,100
      Assets under
       administration
        - RBC        548,200     563,100     525,800     548,200     525,800
        - RBC Dexia
           IS(4)   2,713,100   2,843,400   2,421,100   2,713,100   2,421,100

    Common share
     information
      Shares
       outstanding
       (000s)
        - average
           basic   1,273,005   1,272,913   1,274,697   1,273,185   1,279,956
        - average
           diluted 1,287,442   1,288,227   1,293,864   1,289,314   1,299,785
        - end of
           period  1,276,260   1,275,780   1,280,890   1,276,260   1,280,890
      Dividends
       declared
       per share  $     0.50  $     0.46  $     0.40  $     1.82  $     1.44
      Dividend
       yield            3.7%        3.2%        3.3%        3.3%        3.1%
      Common share
       price (RY on
       TSX) - close,
       end of
       period     $    56.04  $    54.09  $    49.80  $    56.04  $    49.80
      Market
       capitaliz-
       ation (TSX)    71,522      69,007      63,788      71,522      63,788
    ------------------------------------------------- -----------------------
    Period average
     USD equivalent
     of C$1.00(5)      1.001        .937        .897        .915        .883
    Period-end USD
     equivalent
     of C$1.00         1.059        .937        .890       1.059        .890
    ------------------------------------------------- -----------------------
    ------------------------------------------------- -----------------------

    (1) Average amounts are calculated using methods intended to approximate
        the average of the daily balances for the period. For further
        discussion on Average risk capital and Return on risk capital, refer
        to the Key performance and non-GAAP measures section.
    (2) Net interest margin (NIM) is calculated as Net interest income,
        divided by Average assets. Average assets are calculated using
        methods intended to approximate the average of the daily balances for
        the period.
    (3) Calculated in accordance with guidelines issued by the Office of the
        Superintendent of Financial Institutions Canada (OSFI).
    (4) AUA - RBC Dexia IS represents the total AUA of the joint venture as
        at September 30, 2007. We have updated the prior periods to reflect
        the amount reported by RBC Dexia IS, as we had previously disclosed
        only the assets under custody amount related to our joint venture.
    (5) Average amounts are calculated using month-end spot rates for the
        period.
    

    Impact of U.S. vs. Canadian dollar: Fluctuations in the U.S.
dollar/Canadian dollar exchange rate affect the translated value of our U.S.
dollar-denominated consolidated results. The table below shows the impact of
translating the current three- and twelve-month periods' U.S.
dollar-denominated results at the current exchange rate compared to the
corresponding historical periods' exchange rates. We believe this enables
readers to better assess our financial performance, particularly given the
magnitude of the exchange rate change over the comparable periods. On average,
the Canadian dollar appreciated against the U.S. dollar by 12% compared to the
fourth quarter of 2006, 7% compared to the third quarter of 2007, and 4% from
2006.

    
    -------------------------------------------------------------------------

                                            --------------------- -----------
                                                 Q4  2007 vs.
                                            --------------------- -----------
                                                                    2007 vs.
    (C$ millions, except per share amounts) Q3 2007     Q4 2006       2006
    ------------------------------------------------------------- -----------

    Reduced total revenue                  $     107   $     181   $     230
    Reduced non-interest expense                  61         102         139
    Reduced net income                            29          48          47
    ------------------------------------------------------------- -----------
    Reduced basic EPS                      $    0.02   $    0.04   $    0.04
    Reduced diluted EPS                    $    0.02   $    0.04   $    0.04
    ------------------------------------------------------------- -----------
    Percentage change in average US$
     equivalent of C$1.00(1)                      7%         12%          4%
    ------------------------------------------------------------- -----------
    (1) Average amounts are calculated using month-end spot rates for the
        period.


    -------------------------------------------------------------------------
    BUSINESS SEGMENT RESULTS
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    CANADIAN BANKING
    -------------------------------------------------------------------------
                                              For the three months ended
                                         ------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2007        2007        2006
    -------------------------------------------------------------------------
      Net interest income                  $   1,642   $   1,605   $   1,530
      Non-interest income                      1,811       1,302       1,518
    Total revenue                          $   3,453   $   2,907   $   3,048
      Non-interest expense                 $   1,359   $   1,356   $   1,286
      Provision for credit losses                212         190         173
      Insurance policyholder benefits,
       claims and acquisition
       expense (PBCAE)                           637         343         611
    Net income before income taxes and
     non-controlling interest in
     subsidiaries                          $   1,245   $   1,018   $     978
    Net income                             $     899   $     699   $     675
    -------------------------------------------------------------------------

    Revenue by business line
      Personal Financial Services          $   1,299   $   1,284   $   1,201
      Business Financial Services                609         585         559
      Cards and Payment Solutions                658         448         425
      Global Insurance                           887         590         863
    -------------------------------------------------------------------------

    Selected other information
      Return on equity (2)                     40.6%       31.6%       32.6%
      Net interest margin(3)                   3.10%       3.15%       3.24%
      Operating leverage
       (Banking-related operations)(4)         10.6%      (0.9)%        4.2%
    -------------------------------------------------------------------------
    Banking-related operations(1)
      Total revenue                        $   2,566   $   2,317   $   2,185
      Provision for credit losses                212         190         173
      Non-interest expense                     1,222       1,219       1,144
      Net income                                 797         596         569

    Global Insurance
      Total revenue                        $     887   $     590   $     863
      Insurance policyholder benefits,
       claims and acquisition
       expense (PBCAE)                           637         343         611
      Non-interest expense                       137         137         142
      Net income                                 102         103         106
    -------------------------------------------------------------------------

    (1) The banking-related operations of Canadian Banking comprise Personal
        Financial Services, Business Financial Services, and Cards and
        Payment Solutions.
    (2) Segment Return on equity is a key performance measures and is
        calculated using methods intended to approximate the average of the
        daily balances for the period. For further discussion, refer to the
        Key performance and non-GAAP measures section.
    (3) Net interest margin (NIM) is calculated as Net interest income
        divided by Average earning assets. Average earning assets are
        calculated using methods intended to approximate the average earning
        asset balances for the period.
    (4) Defined as the difference between revenue growth rate and
        non-interest expense growth rate for Banking-related operations.

    -------------------------------------------------------------------------
    WEALTH MANAGEMENT
    -------------------------------------------------------------------------
                                              For the three months ended
                                         ------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2007        2007        2006
    -------------------------------------------------------------------------
      Net interest income                  $     109   $     106   $     101
      Non-interest income
        Fee-based revenue                        538         545         462
        Transactional and other revenue          339         355         340
    Total revenue                          $     986   $   1,006   $     903
      Non-interest expense                 $     731   $     747   $     671
      Provision for credit losses                  1           -           -
    Net income before income taxes and
     non-controlling interest
     in subsidiaries                       $     254   $     259   $     231
    Net income                             $     180   $     177   $     164
    -------------------------------------------------------------------------

    Revenue by business line
      Canadian Wealth Management           $     369   $     369   $     334
      U.S. & International
       Wealth Management                         479         493         448
      Global Asset Management                    138         144         121
    -------------------------------------------------------------------------

    Selected other information
      Return on equity(1)                      31.7%       29.4%       28.7%
      Assets under administration          $ 488,500   $ 505,100   $ 476,500
      Assets under management                161,200     159,600     142,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            For the three
                                                            months ended
                                                      -----------------------
                                                      Q4 2007 vs. Q4 2007 vs.
    Impact of US$ translation on selected items         Q3 2007     Q4 2006
                                                      -----------------------
      Reduced total revenue                                   28          47
      Reduced non-interest expense                            22          37
      Reduced net income                                       4           7
    -------------------------------------------------------------------------
      Percentage change in average
       US$ equivalent of C$1.00(2)                            7%         12%
    -------------------------------------------------------------------------

    (1) Segment Return on equity is a key performance measures and is
        calculated using methods intended to approximate the average of the
        daily balances for the period. For further discussion, refer to the
        Key performance and non-GAAP measures section.
    (2) Average amounts are calculated using month-end spot rates for the
        period.

    -------------------------------------------------------------------------
    U.S. & INTERNATIONAL BANKING
    -------------------------------------------------------------------------
                                              For the three months ended
                                         ------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2007        2007        2006
    -------------------------------------------------------------------------
      Net interest income                  $     239   $     263   $     238
      Non-interest income                        216         259         191
    Total revenue                          $     455   $     522   $     429
      Non-interest expense                 $     363   $     389   $     312
      Provision for credit losses                 72          17           5
    Net income before income taxes and
     non-controlling interest
     in subsidiaries                       $      20   $     116   $     112
    Net income                             $      21   $      87   $      79
    -------------------------------------------------------------------------
    Revenue by business line
      Banking                              $     269   $     302   $     274
      RBC Dexia Investor Services(1)             186         220         155
    -------------------------------------------------------------------------

    Selected other information
      Return on equity(2)                       2.2%        9.0%       11.9%
      Assets under administration
       - RBC Dexia IS(3)                   2,713,100   2,843,400   2,421,100
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            For the three
                                                            months ended
                                                      -----------------------
    Impact of US$ and Euro translation                Q4 2007 vs. Q4 2007 vs.
     on selected items                                  Q3 2007     Q4 2006
                                                      -----------------------
      Reduced total revenue                                   20          29
      Reduced non-interest expense                            16          23
      Increased net income                                     1           2
    -------------------------------------------------------------------------
      Percentage change in average
       US$ equivalent of C$1.00(4)                            7%         12%
      Percentage change in average
       Euro equivalent of C$1.00(4)                           3%          1%
    -------------------------------------------------------------------------

    (1) As RBC Dexia IS reports on a calendar quarter, there is a one-month
        lag in the reporting of its earnings.
    (2) Segment Return on equity is a key performance measures and is
        calculated using methods intended to approximate the average of the
        daily balances for the period. For further discussion, refer to the
        Key performance and non-GAAP measures section.
    (3) AUA - RBC Dexia IS represents the total AUA of the joint venture as
        at September 30, 2007. We have updated the prior periods to reflect
        the amount reported by RBC Dexia IS, as we had previously disclosed
        only the assets under custody amount related to our joint venture.
    (4) Average amounts are calculated using month-end spot rates for the
        period.

    -------------------------------------------------------------------------
    CAPITAL MARKETS
    -------------------------------------------------------------------------
                                              For the three months ended
                                         ------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2007        2007        2006
    -------------------------------------------------------------------------
      Net interest income(1)               $      53   $     175   $      (7)
      Non-interest income                        766         983       1,015
    Total revenue(1)                       $     819   $   1,158   $   1,008
      Non-interest expense                 $     584   $     693   $     644
      Provision for (recovery of)
       credit losses                              (2)         (7)          -
    Net income before income taxes and
     non-controlling interest
     in subsidiaries(1)                    $     237   $     472   $     365
    Net income                             $     186   $     360   $     300
    -------------------------------------------------------------------------
    Revenue by business line
      Global Markets                       $     347   $     622   $     607
      Global Investment Banking
       and Equity Markets                        402         456         353
      Other                                       70          80          48
    -------------------------------------------------------------------------
    Selected other information
      Return on equity(2)                      15.4%       29.3%       27.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            For the three
                                                            months ended
                                                      -----------------------
    Impact of US$ and GBP translation                 Q4 2007 vs. Q4 2007 vs.
     on selected items(1)                                Q3 2007     Q4 2006
                                                      -----------------------
      Reduced total revenue(1)                                58          84
      Reduced non-interest expense                            24          34
      Reduced net income                                      19          28
    -------------------------------------------------------------------------
      Percentage change in average
       US$ equivalent of C$1.00(3)                            7%         12%
      Percentage change in average British
       pound equivalent of C$1.00(3)                          5%          4%
    -------------------------------------------------------------------------
    (1) Taxable equivalent basis.
    (2) Segment Return on equity is a key performance measures and is
        calculated using methods intended to approximate the average of the
        daily balances for the period.. For further discussion, refer to the
        Key performance and non-GAAP measures section.
    (3) Average amounts are calculated using month-end spot rates for the
        period.

    -------------------------------------------------------------------------
    CORPORATE SUPPORT
    -------------------------------------------------------------------------
                                              For the three months ended
                                         ------------------------------------
    (C$ millions, except percentage       October 31     July 31  October 31
     amounts)                                   2007        2007        2006
    -------------------------------------------------------------------------
      Net interest income(1)               $    (215)  $    (184)  $    (131)
      Non-interest income                        117          71          92
    Total revenue(1)                       $     (98)  $    (113)  $     (39)
      Non-interest expense                        56         (20)         42
      Recovery of credit losses                  (20)        (22)        (19)
    Net loss before income taxes and
     non-controlling interest
     in subsidiaries(1)                    $    (134)  $     (71)  $     (62)
    Net income                             $      38   $      72   $      45
    -------------------------------------------------------------------------
    (1) Taxable equivalent basis. These amounts included the elimination of
        adjustments in Capital Markets related to the gross up of certain
        tax-advantaged income (Canadian taxable corporate dividends). The
        amount for the three months ended October 31, 2007, was $117 million
        (July 31, 2007 - $ 79 million; October 31, 2006 - $50 million).
    

    Q4 2007: Net income of $38 million in the quarter mainly related to
enterprise funding activities that were not allocated to the business segments
and was partially offset by higher capital taxes which were also not allocated
to the business segments.

    Q3 2007: Net income of $72 million primarily reflected income tax amounts
largely related to enterprise funding activities that were not allocated to
the business segments, and a favourable tax settlement related to prior years.
These factors were partially offset by losses related to securitization
activity in the quarter.

    Q4 2006: Net income of $45 million in the quarter mainly related to
income tax amounts which were largely related to enterprise funding activities
not allocated to the business segments and mark-to-market gains on derivatives
related to certain economic hedges. These factors were partially offset by an
amount accrued related to a leased space which we will not occupy and expect
to sub-lease at a rate lower than our contracted rate.

    -------------------------------------------------------------------------
    Key performance and non-GAAP measures
    -------------------------------------------------------------------------

    Key performance measures - Return on Equity (ROE) and Return on Risk
Capital (RORC): We measure and evaluate the performance of consolidated
results and each business segment using a number of financial metrics such as
net income, ROE and RORC. We use our ROE and RORC as a measure of return on
total capital invested in our businesses. RORC does not have standardized
meaning under GAAP and may not be comparable to similar measures used by other
financial institutions. See our 2007 Annual Report for further information.
The following table provides a summary of the ROE and RORC calculations.

    
    -------------------------------------------------------------------------
                                         For the three months ended
                                ---------------------------------------------
                                                 October 31
                                                    2007
                                ---------------------------------------------
                                                           U.S. &
                                                           Inter-
    (C$ millions, except         Canadian      Wealth    national    Capital
     percentage amounts)(1),(2)   Banking  Management     Banking    Markets
    -------------------------------------------------------------------------
    Net income available to
     common shareholders        $     890   $     178   $      17  $     181
    -------------------------------------------------------------------------
    Average risk capital(2)     $   6,650   $   1,150   $   1,900  $   3,750
      add: Unattributed capital         -           -           -          -
      add: Goodwill and
       intangible capital           2,050       1,100       1,400        900
    Average equity              $   8,700   $   2,250   $   3,300  $   4,650
    -------------------------------------------------------------------------
    Return on equity (ROE)(3)       40.6%       31.7%        2.2%      15.4%
    Return on risk
     capital (RORC)(4)              52.9%       62.4%        3.8%      19.3%
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                    For the three            For the three
                                    months ended             months ended
                                ----------------------- ---------------------
                                      October 31          July 31 October 31
                                         2007                2007       2006
                                ----------------------- ---------------------
    (C$ millions, except        Corporate
     percentage amounts)(1),(2)   Support       Total       Total    Total(2)
    --------------------------------------------------- ---------------------
    Net income available to
     common shareholders        $      34   $   1,300   $   1,369  $   1,236
    -------------------------------------------------------------------------
    Average risk capital(2)     $     950   $  14,400   $  14,700  $  13,150
      add: Unattributed capital     2,600       2,600       1,800      2,650
      add: Goodwill and
       intangible capital               -       5,450       5,750      4,700
    Average equity              $   3,550   $  22,450   $  22,250  $  20,500
    --------------------------------------------------- ---------------------
    Return on equity (ROE)(3)        3.7%       23.0%       24.4%      23.9%
    Return on risk
     capital (RORC)(4)                n.m.      35.8%       36.9%      37.3%
    --------------------------------------------------- ---------------------

    (1) Represent rounded figures. These amounts are calculated using methods
        intended to approximate the average of the daily balances for the
        period. The ROE and RORC measures are based on actual balances before
        rounding.
    (2) Average risk capital includes Credit, Market (trading and non-
        trading), Insurance, Operational, Business and fixed asset risk
        capital. For further details, refer to the Capital management section
        in our 2007 Annual Report.
    (3) Our quarterly consolidated ROE calculation is based on annualized
        quarterly net income available to common shareholders divided by
        total average common equity for the period. Our quarterly segment ROE
        calculations are based on annualized quarterly net income available
        to common shareholders divided by capital attributed to the segment
        for the period.
    (4) Our quarterly RORC calculations are based on annualized quarterly net
        income available to common shareholders divided by attributed
        (average) risk capital.
    n.m. not meaningful

    -------------------------------------------------------------------------
    Canadian Banking, Banking-related results excluding the impacts of
    certain items
    -------------------------------------------------------------------------
                                                  For the three months ended
                                                          October 31, 2007
                                                  ---------------------------
                                                         Canadian   Banking-
    (C$ millions)                                         Banking    related
    -------------------------------------------------------------------------

    GAAP reported net income                            $     899  $     797
    Exclude:
      Visa Inc. restructuring                                 269        269
      Increase to credit card customer
       loyalty reward program liability                       (79)       (79)
    -------------------------------------------------------------------------
    Net income excluding the impacts
     of items noted above                               $     709  $     607
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-GAAP measures: We use certain non-GAAP financial measures that are not
defined and do not have standardized meaning under GAAP. Hence these reported
amounts and related ratios are not necessarily comparable with similar
measures reported by other financial institutions. In the fourth quarter of
2007, the Visa Inc. restructuring gain and the adjustment to the credit card
customer loyalty reward liability impacted our results, and the following
table provides a reconciliation of net income for Canadian Banking and
Banking-related results excluding these items. Management believes identifying
and adjusting for these items helps readers understand our financial
performance in the fourth quarter of 2007 and provides for a more meaningful
measure for comparison to other periods.


    -------------------------------------------------------------------------
    CONSOLIDATED BALANCE SHEETS
    -------------------------------------------------------------------------
                                          October 31     July 31  October 31
    (C$ millions)                             2007(1)     2007(2)     2006(1)
    -------------------------------------------------------------------------

    Assets

    Cash and due from banks                $   4,226   $   5,091   $   4,401
    -------------------------------------------------------------------------

    Interest-bearing deposits with banks      11,881      10,159      10,502
    -------------------------------------------------------------------------

    Securities
      Trading                                148,246     163,907     147,237
      Available-for-sale                      30,009      26,312           -
      Investments                                  -           -      37,632
    -------------------------------------------------------------------------
                                             178,255     190,219     184,869
    -------------------------------------------------------------------------
    Assets purchased under reverse
     repurchase agreements and
     securities borrowed                      64,313      77,183      59,378
    -------------------------------------------------------------------------

    Loans
      Retail                                 169,462     165,554     151,050
      Wholesale                               69,967      67,245      58,889
    -------------------------------------------------------------------------
                                             239,429     232,799     209,939
      Allowance for loan losses               (1,493)     (1,449)     (1,409)
    -------------------------------------------------------------------------
                                             237,936     231,350     208,530
    -------------------------------------------------------------------------

    Other
      Customers' liability under
       acceptances                            11,786      10,463       9,108
      Derivatives                             66,585      54,279      37,729
      Premises and equipment, net              2,131       2,055       1,818
      Goodwill                                 4,752       5,055       4,304
      Other intangibles                          628         702         642
      Assets of operations held for
       sale                                        -           -          82
      Other assets                            17,853      18,026      15,417
    -------------------------------------------------------------------------
                                             103,735      90,580      69,100
    -------------------------------------------------------------------------
                                           $ 600,346   $ 604,582   $ 536,780
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and shareholders' equity

    Deposits
      Personal                             $ 116,557   $ 119,405   $ 114,040
      Business and government                219,886     214,036     189,140
      Bank                                    28,762      42,884      40,343
    -------------------------------------------------------------------------
                                             365,205     376,325     343,523
    -------------------------------------------------------------------------

    Other
      Acceptances                             11,786      10,463       9,108
      Obligations related to
       securities sold short                  44,689      51,157      38,252
      Obligations related to assets
       sold under repurchase
       agreements and securities loaned       37,033      39,842      41,103
      Derivatives                             72,010      58,128      42,094
      Insurance claims and policy
       benefit liabilities                     7,283       7,534       7,337
      Liabilities of operations
       held for sale                               -           -          32
      Other liabilities                       28,483      27,142      22,649
    -------------------------------------------------------------------------
                                             201,284     194,266     160,575
    -------------------------------------------------------------------------
    Subordinated debentures                    6,235       6,204       7,103
    -------------------------------------------------------------------------
    Trust capital securities                   1,400       1,382       1,383
    -------------------------------------------------------------------------
    Preferred share liabilities                  300         298         298
    -------------------------------------------------------------------------
    Non-controlling interest in
     subsidiaries                              1,483       1,560       1,775
    -------------------------------------------------------------------------

    Shareholders' equity
      Preferred shares                         2,050       2,050       1,050
      Common shares (shares issued
       - 1,276,260,033; 1,275,779,949;
       and 1,280,889,745)                      7,300       7,283       7,196
      Contributed surplus                        235         235         292
      Treasury shares
       - preferred (shares held
          -248,800; 121,600; and
          93,700)                                 (6)         (3)         (2)
       - common (shares held -
          2,444,320; 2,743,937; and
          5,486,072)                            (101)       (116)       (180)
      Retained earnings                       18,167      17,517      15,771
      Accumulated other comprehensive
       income (loss)                          (3,206)     (2,419)     (2,004)
    -------------------------------------------------------------------------
                                              24,439      24,547      22,123
    -------------------------------------------------------------------------
                                           $ 600,346   $ 604,582   $ 536,780
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Derived from audited financial statements
    (2) Unaudited


    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENTS OF INCOME
    -------------------------------------------------------------------------
                       For the three months ended (1)  For the year ended (2)
                      --------------------------------- ---------------------
                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)           2007       2007       2006       2007       2006
    --------------------------------------------------- ---------------------
    Interest income
      Loans             $  3,895   $  3,755   $  3,395   $ 14,724   $ 12,708
      Securities           1,891      1,893      1,650      7,665      6,189
      Assets purchased
       under reverse
       repurchase
       agreements and
       securities
       borrowed              684        980        909      3,450      2,827
      Deposits with
       banks                 141        117        166        538        480
    --------------------------------------------------- ---------------------
                           6,611      6,745      6,120     26,377     22,204
    --------------------------------------------------- ---------------------

    Interest expense
      Deposits             3,568      3,512      3,041     13,770     10,708
      Other liabilities    1,130      1,187      1,247      4,737      4,281
      Subordinated
       debentures             85         81        101        338        419
    --------------------------------------------------- ---------------------
                           4,783      4,780      4,389     18,845     15,408
    --------------------------------------------------- ---------------------
    Net interest income    1,828      1,965      1,731      7,532      6,796
    --------------------------------------------------- ---------------------

    Non-interest income
      Insurance premiums,
       investment and
       fee income            887        590        863      3,152      3,348
      Trading revenue        337        546        620      2,261      2,574
      Investment
       management and
       custodial fees        412        403        345      1,579      1,301
      Mutual fund
       revenue               373        385        337      1,473      1,242
      Securities
       brokerage
       commissions           324        368        296      1,353      1,243
      Service charges        330        327        326      1,303      1,216
      Underwriting and
       other advisory
       fees                  301        309        293      1,217      1,024
      Foreign exchange
       revenue, other
       than trading          139        138        106        533        438
      Card service
       revenue                43        165        147        491        496
      Credit fees             74         71         63        293        241
      Securitization
       revenue                39         34         86        261        257
      Net gain (loss) on
       sale of available-
       for-sale
       securities            (24)        34          -         63          -
      Net gain on sale
       of investment
       securities              -          -         16          -         88
      Other                  552        145        120        951        373
    --------------------------------------------------- ---------------------
    Non-interest income    3,787      3,515      3,618     14,930     13,841
    --------------------------------------------------- ---------------------
    Total revenue          5,615      5,480      5,349     22,462     20,637
    --------------------------------------------------- ---------------------
    Provision for
     credit losses           263        178        159        791        429
    --------------------------------------------------- ---------------------
    Insurance
     policyholder
     benefits, claims
     and acquisition
     expense                 637        343        611      2,173      2,509
    --------------------------------------------------- ---------------------

    Non-interest expense
      Human resources      1,839      1,992      1,808      7,860      7,268
      Equipment              267        251        257      1,009        957
      Occupancy              226        200        225        839        792
      Communications         203        186        200        723        687
      Professional fees      157        124        141        530        546
      Outsourced item
       processing             75         77         75        308        298
      Amortization of
       other intangibles      24         25         22         96         76
      Other                  302        310        227      1,108        871
    --------------------------------------------------- ---------------------
                           3,093      3,165      2,955     12,473     11,495
    --------------------------------------------------- ---------------------

    Income from
     continuing
     operations before
     income taxes          1,622      1,794      1,624      7,025      6,204
    Income taxes             255        349        342      1,392      1,403
    --------------------------------------------------- ---------------------

    Net income before
     non-controlling
     interest              1,367      1,445      1,282      5,633      4,801
    Non-controlling
     interest in net
     income of
     subsidiaries             43         50         19        141         44
    --------------------------------------------------- ---------------------

    Net income from
     continuing
     operations            1,324      1,395      1,263      5,492      4,757
    Net loss from
     discontinued
     operations                -          -         (1)         -        (29)
    --------------------------------------------------- ---------------------
    Net income          $  1,324   $  1,395   $  1,262   $  5,492   $  4,728
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------


    Preferred dividends      (24)       (26)       (26)       (88)       (60)
    --------------------------------------------------- ---------------------
    Net income
     available to common
     shareholders       $  1,300   $  1,369   $  1,236   $  5,404   $  4,668
    --------------------------------------------------- ---------------------

    Average number of
     common shares
     (in thousands)    1,273,005  1,272,913  1,274,697  1,273,185  1,279,956
    Basic earnings per
     share (in
     dollars)           $   1.02   $   1.07   $   0.97   $   4.24   $   3.65
    Basic earnings per
     share from
     continuing
     operations (in
     dollars)           $   1.02   $   1.07   $   0.97   $   4.24   $   3.67
    Basic earnings
     (loss) per share
     from discontinued
     operations (in
     dollars)           $      -   $      -   $      -   $      -   $  (0.02)

    Average number of
     diluted common
     shares (in
     thousands)        1,287,442  1,288,227  1,293,864  1,289,314  1,299,785
    Diluted earnings
     per share (in
     dollars)           $   1.01   $   1.06   $   0.96   $   4.19   $   3.59
    Diluted earnings
     per share from
     continuing
     operations (in
     dollars)           $   1.01   $   1.06   $   0.96   $   4.19   $   3.61
    Diluted earnings
     (loss) per share
     from discontinued
     operations (in
     dollars)           $      -   $      -   $      -   $      -   $  (0.02)
    --------------------------------------------------- ---------------------

    Dividends per share
     (in dollars)       $   0.50   $   0.46   $   0.40   $   1.82   $   1.44
    --------------------------------------------------- ---------------------

    (1) Unaudited
    (2) Derived from audited financial statements


    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    -------------------------------------------------------------------------
                        For the three months ended (1) For the year ended (2)
                      --------------------------------- ---------------------
                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)           2007       2007       2006       2007       2006
    --------------------------------------------------- ---------------------
    Net income          $  1,324   $  1,395   $  1,262   $  5,492   $  4,728

    Other comprehensive
     income, net of taxes
      Net unrealized
       gains (losses) on
       available-for-sale
       securities             48       (157)         -        (93)         -
      Reclassification
       of (gains)
       losses on
       available-for-sale
       securities to
       income                 10          9         -          28          -
    --------------------------------------------------- ---------------------
                              58       (148)        -         (65)         -
    --------------------------------------------------- ---------------------
      Unrealized foreign
       currency
       translation gains
       (losses)           (2,107)      (701)        91     (2,965)      (501)
      Reclassification
       of (gains) losses
       on foreign currency
       translation to
       income                 (1)         -          -        (42)         2
      Net foreign
       currency
       translation gains
       (losses) from
       hedging
       activities          1,370        405         17      1,804        269
    --------------------------------------------------- ---------------------
                            (738)      (296)       108     (1,203)      (230)
    --------------------------------------------------- ---------------------
      Net gains (losses)
       on derivatives
       designated as cash
       flow hedges          (110)       144          -         80          -
      Reclassification
       to income of
       (gains) losses on
       derivatives
       designated as cash
       flow hedges             3          7          -         31          -
    --------------------------------------------------- ---------------------
                            (107)       151          -        111          -
    --------------------------------------------------- ---------------------
      Other
       comprehensive
       income (loss)        (787)      (293)       108     (1,157)      (230)
    --------------------------------------------------- ---------------------
    Total comprehensive
     income             $    537   $  1,102   $  1,370   $  4,335   $  4,498
    --------------------------------------------------- ---------------------
    --------------------------------------------------- ---------------------


    -------------------------------------------------------------------------
    CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
    -------------------------------------------------------------------------
                        For the three months ended (1) For the year ended (2)
                      --------------------------------- ---------------------
                      October 31    July 31 October 31 October 31 October 31
    (C$ millions)           2007       2007       2006       2007       2006
    --------------------------------------------------- ---------------------
    Preferred shares
      Balance at
       beginning of
       period           $  2,050   $  2,050   $  1,300   $  1,050   $    700
      Issued                   -          -          -      1,150        600
      Redeemed for
       cancellation            -          -       (250)      (150)      (250)
    --------------------------------------------------- ---------------------
      Balance at end
       of period           2,050      2,050      1,050      2,050      1,050
    --------------------------------------------------- ---------------------

    Common shares
      Balance at
       beginning of
       period              7,283      7,250      7,176      7,196      7,170
      Issued                  18         39         30        170        127
      Purchased for
       cancellation           (1)        (6)       (10)       (66)      (101)
    --------------------------------------------------- ---------------------
      Balance at end
       of period           7,300      7,283      7,196      7,300      7,196
    --------------------------------------------------- ---------------------

    Contributed surplus
      Balance at
       beginning of
       period                235        241        287        292        265
      Renounced stock
       appreciation
       rights                 (1)        (1)        (1)        (6)        (2)
      Stock-based
       compensation
       awards                  2          1          2        (46)       (18)
      Other                   (1)        (6)         4         (5)        47
    --------------------------------------------------- ---------------------
      Balance at end
       of period             235        235        292        235        292
    --------------------------------------------------- ---------------------

    Treasury shares -
     preferred
      Balance at beginning
       of period              (3)       (21)       (43)        (2)        (2)
      Sales                    1         25         44         33         51
      Purchases               (4)        (7)        (3)       (37)       (51)
    --------------------------------------------------- ---------------------
      Balance at end
       of period              (6)        (3)        (2)        (6)        (2)
    --------------------------------------------------- ---------------------

    Treasury shares -
     common
      Balance at
       beginning of
       period               (116)       (99)      (181)      (180)      (216)
      Sales                   42         15         48        175        193
      Purchases              (27)       (32)       (47)       (96)      (157)
    --------------------------------------------------- ---------------------
      Balance at end of
       period               (101)      (116)      (180)      (101)      (180)
    --------------------------------------------------- ---------------------

    Retained earnings
      Balance at
       beginning of
       period             17,517     16,786     15,120     15,771     13,704
      Transition
       adjustment -
       Financial
       instruments(3)          -          -          -        (86)         -
      Net income           1,324      1,395      1,262      5,492      4,728
      Preferred share
       dividends             (24)       (26)       (26)       (88)       (60)
      Common share
       dividends            (637)      (587)      (511)    (2,321)    (1,847)
      Premium paid on
       common shares
       purchased for
       cancellation          (14)       (52)       (80)      (580)      (743)
      Issuance costs
       and other               1          1          6        (21)       (11)
    --------------------------------------------------- ---------------------
      Balance at end
       of period          18,167     17,517     15,771     18,167     15,771
    --------------------------------------------------- ---------------------

    Accumulated other
     comprehensive
     income (loss)
      Transition
       adjustment -
       Financial
       instruments(3)        (45)       (45)         -        (45)         -
      Unrealized gains
       and losses on
       available-for-sale
       securities            (65)      (123)         -        (65)         -
      Unrealized foreign
       currency
       translation gains
       and losses, net
       of hedging
       activities         (3,207)    (2,469)    (2,004)    (3,207)    (2,004)
      Gains and losses
       on derivatives
       designated as
       cash flow hedges      111        218          -        111          -
    --------------------------------------------------- ---------------------
      Balance at end
       of period          (3,206)    (2,419)    (2,004)    (3,206)    (2,004)
    --------------------------------------------------- ---------------------
    Retained earnings
     and Accumulated
     other comprehensive
     income               14,961     15,098     13,767     14,961     13,767
    --------------------------------------------------- ---------------------

    Shareholders' equity
     at end of period   $ 24,439   $ 24,547   $ 22,123   $ 24,439   $ 22,123
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Unaudited
    (2) Derived from audited financial statements
    (3) The transition adjustment relates to the implementation of the new
        financial instruments accounting standards. Refer to Note 1 to our
        Consolidated Financial Statements of our 2007 Annual Report.
    

    -------------------------------------------------------------------------
    CAUTION REGARDING FORWARD-LOOKING STATEMENTS
    -------------------------------------------------------------------------

    From time to time, we make written or oral forward-looking statements
within the meaning of certain securities laws, including the "safe harbour"
provisions of the United States Private Securities Litigation Reform Act of
1995 and any applicable Canadian securities legislation. We may make forward-
looking statements in this earnings release, in other filings with Canadian
regulators or the United States 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 medium-
term and 2008 objectives, our strategic goals and priorities and the economic
and business outlook for us, for each of our business segments and for the
Canadian, United States and international economies. Forward-looking
statements are typically identified by words such as "believe", "expect",
"forecast", "anticipate", "intend", "estimate", "plan" and "project" and
similar expressions of future or conditional verbs such as "will", "may",
"should", "could", or "would".
    By their very nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties, which give
rise to the possibility that our predictions, forecasts, projections,
expectations or conclusions will not prove to be accurate, that our
assumptions may not be correct and that our objectives, strategic goals and
priorities will not be achieved. We caution readers not to place undue
reliance on these statements as a number of important factors could cause our
actual results to differ materially from the expectations expressed in such
forward-looking statements. These factors include credit, market, operational,
liquidity and funding risks, and other risks discussed in our 2007
management's discussion and analysis; general business and economic conditions
in Canada, the United States and other countries in which we conduct business,
including the impact from the continuing volatility in the U.S. subprime and
related markets and lack of liquidity in various of the financial markets; the
impact of the movement of the Canadian dollar relative to other currencies,
particularly the U.S. dollar, British pound and Euro; the effects of changes
in government monetary and other policies; the effects of competition in the
markets in which we operate; the impact of changes in laws and regulations;
judicial or regulatory judgments and legal proceedings; the accuracy and
completeness of information concerning our clients and counterparties; our
ability to successfully execute our strategies and to complete and integrate
strategic acquisitions and joint ventures successfully; changes in accounting
standards, policies and estimates, including changes in our estimates of
provisions and allowances; and our ability to attract and retain key employees
and executives.
    We caution that the foregoing list of important factors is not exhaustive
and other factors could also adversely affect our results. When relying on our
forward-looking statements to make decisions with respect to us, investors and
others should carefully consider the foregoing factors and other uncertainties
and potential events. Unless 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 under
the Risk management section and the Additional risks that may affect future
results section of our 2007 management's discussion and analysis.
    Information contained in or otherwise accessible through the websites
mentioned does not form part of this document. All references in this document
to websites are inactive textual references and are for your information only.

    ACCESS TO QUARTERLY AND YEAR-END RESULTS MATERIALS

    Interested investors, the media and others may review this quarterly
earnings release, quarterly results slides, supplementary financial
information and our 2007 Annual Report and our Annual Information Form on our
website at rbc.com/investorrelations. Shareholders may request a hard copy of
our 2007 Annual Report free of charge by contacting Shareholder Services at
(416) 955-7806, or by visiting our website at rbc.com/investorrelations. Our
2007 Annual Report on Form 40-F has been filed with the U.S. Securities and
Exchange Commission.

    Quarterly and year-end conference call and webcast presentation

    The conference call is scheduled for Friday, November 30, 2007 at
1:30 p.m. (EST). At that time, senior executives will comment on the results
for the fourth quarter and 2007 and respond to questions from analysts and
institutional investors. Interested parties can listen to our fourth quarter
results conference call with analysts and institutional investors live, and
archived, via the Internet and toll-free telephone:

    via the Internet at:
    rbc.com/investorrelations/ir_events_presentations.html

    via telephone at:
    416-340-2216 (within Toronto) or 1-866-898-9626 (toll-free outside
Toronto). Please call between 1:20 and 1:25 p.m. (EST). A recording of the
conference call can be accessed after 5:00 p.m. (EST) on November 30 until
February 28, 2008, at 416-695-5800 or 1-800-408-3053, by entering passcode
3241686 followed by the number sign.

    ABOUT RBC

    Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate
under the master brand name of RBC. We are Canada's largest bank as measured
by assets and market capitalization and one of North America's leading
diversified financial services companies. We provide personal and commercial
banking, wealth management services, insurance, corporate and investment
banking, and transaction processing services on a global basis. We employ
approximately 70,000 full- and part-time employees who serve more than
15 million personal, business, public sector and institutional clients
throughout offices in Canada, the U.S. and 36 other countries. For more
information, please visit rbc.com.

    Trademarks used in this report include the LION & GLOBE Symbol, ROYAL
    BANK OF CANADA, ROYAL BANK, RBC and RBC REWARDS 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. RBC Dexia IS and affiliated Dexia
    companies are licensed users of the RBC trademark.





For further information:

For further information: Media Relations Contact: Beja Rodeck, Media
Relations, beja.rodeck@rbc.com, (416) 974-5506 (within Toronto) or
1-888-880-2173 (toll-free outside Toronto); Investor Relations Contacts:
Marcia Moffat, Head, Investor Relations, marcia.moffat@rbc.com, (416)
955-7803; Bill Anderson, Director, Investor Relations,
william.anderson@rbc.com, (416) 955-7804; Amy Cairncross, Director, Investor
Relations, amy.cairncross@rbc.com, (416) 955-7809


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