Supplementary Financial Information Q 0 For the period ended July, 0 (UNAUDITED) For further information, please contact: Amy Cairncross Vice-President & Head, Investor Relations (46) 955-780 amy.cairncross@rbc.com Karen McCarthy Director, Investor Relations (46) 955-7809 karen.mccarthy@rbc.com Robert Colangelo Associate Director, Investor Relations (46) 955-049 robert.colangelo@rbc.com www.rbc.com/investorrelations
Table of Contents Page Page Notes to Users Capital (continued) Key performance and Non-GAAP measures Risk-weighted assets Regulatory capital generation Financial Highlights Attributed capital Consolidated Results Credit Quality 5 Statements of income 4 Loans and acceptances 6 Revenue from trading activities 5 Gross impaired loans 6 Gains (losses) on certain market and credit related items 8 Provision for credit losses 7 Non-interest expense 9 Allowance for credit losses Credit quality ratios Segment Details 8 Canadian Banking Credit Risk Exposure 9 Wealth Management Gross credit risk exposure by geography and portfolio 0 Insurance Exposure covered by credit risk mitigation International Banking Credit exposure by residual contractual maturity Capital Markets 4 Credit exposure of portfolios under the standardized approach Corporate Support by risk weight 4 Discontinued operations 4 Actual losses vs. estimated losses 5 Retail credit exposure by portfolio and risk category On- and Off-Balance Sheet 5 Wholesale credit exposure by portfolio and risk rating 5 Balance sheets (period-end balances) 6 Realized gains and losses on available-for-sale securities 6 Selected average balance sheet items 6 Trading credit derivatives 6 Assets under administration and management 6 Other than trading credit derivatives positions 6 Statements of comprehensive income 7 Fair value of derivative instruments 7 Statements of changes in equity 7 Derivative-related credit risk 8 Securitization 8 Calculation of ROE and RORC Capital Capital 9 Glossary
Notes to Users The financial information in this document is in Canadian dollars and is based on unaudited Interim Condensed Consolidated Financial Statements for the quarter ended July, 0 prepared in accordance with International Financial Reporting Standards (), unless otherwise noted. This document is not audited and should be read in conjunction with our Q 0 Report to Shareholders and our 0 Annual Report. Certain comparative amounts have been reclassified to conform to the current period's presentation. RBC adopted effective November, 00 (Transition date) and provided comparative results for 0 under. RBC Investor Services, formerly RBC Dexia IS, Caribbean banking units, formerly operating as RBTT Financial Group (RBTT) and Blue Bay results are reported on a one-month lag. Presentation Changes - Discontinued operations Under, Balance Sheet adjustments related to discontinued operations are made prospectively from the date of classification as discontinued operations. The results of discontinued operations are reported as a separate component of income or loss for both current and all comparative periods. The classification of our U.S. Retail Banking operations as discontinued operations has been reflected in our Consolidated Balance Sheets beginning in the quarter ending July, 0. The sale of Liberty Life Insurance Company announced in October 00 has also been reflected as discontinued operations under from the Transition date. Significant reporting changes made to this document effective Q/ We completed the acquisition of the remaining 50% stake in the joint venture RBC Dexia from Banque Internationale à Luxembourg S.A. (formerly Dexia Banque Internationale à Luxembourg S.A.). As a result of this transaction, we own 00% of RBC Dexia which has been subsequently rebranded RBC Investor Services (RBCIS). For further details, refer to the "Key corporate events of 0" section of our Q 0 RTS. Effective the third quarter of 0, we no longer have discontinued operations as the sale of our U.S. regional retail banking operations closed in the second quarter. Residual amounts are not material and have been included in Corporate Support. Significant reporting changes made to this document effective Q/ Sale of U.S. regional retail banking operations On March, 0, we completed the disposition of our U.S. regional retail banking operations to PNC Financial Services Group, Inc. These operations were classified as discontinued operations. For further details, refer to the "Key corporate events of 0" section of our Q 0 Report to Shareholders. Announced acquisition of the other 50% stake in RBC Dexia Investor Services Limited (RBC Dexia) On April, 0, we announced a definitive agreement to acquire the other 50 per cent stake in the joint venture RBC Dexia. As a result, we recorded in the second quarter of 0 a loss of $ million ($0 million after-tax). The transaction is subject to regulatory approvals and other customary closing conditions and is expected to be completed in the third quarter of 0. For further details, refer to the "Key corporate events" of 0 section of our Q 0 Report to Shareholders. Cash collateral for derivatives and margin deposits with exchanges During the quarter, we retrospectively reclassified cash collateral paid from Interest bearing deposits with banks and loans - Wholesale to Other assets and Cash collateral received from Deposits to Other liabilities to better reflect the nature of the balances. These changes are reflected in average balances and credit quality ratios. The reclassification does not include cash collateral that is received or paid on securities borrowed and securities loaned, which is currently classified in Assets purchased under reverse repurchase agreements and securities borrowed and Obligations related to assets sold under repurchase agreements and securities loaned, respectively. Significant reporting changes made to this document effective Q/ Cash and Other assets We reclassified certain amounts on the Balance Sheet from Cash to Other assets to align to the definition of cash equivalents, which treats precious metals as commodities rather than cash. Share of profit in associates We reclassified certain amounts on the Statement of Income relating to non-associates, which were reported in the Share of profit in associates category under Canadian GAAP, to the Other category. Gains (Losses) on Certain Market and Credit Related Items We updated the 'Fair value adjustments on RBC debt - Other segments' amounts reported in the Gains (Losses) on Certain Market and Credit Related Items table to capture amounts previously omitted. Embedded value Effective Q4/0, we updated the embedded value amounts reported in Insurance to capture dividend payments previously omitted. Realized gains/losses on AFS Securities We updated realized gains and realized losses/writedowns. No net impact to the net gain and losses reported. Allowance for credit losses We updated the individually and collectively assessed amounts. Selected average balances We have updated certain average balances reported on pages 4,, and 6. Financial Highlight changes We updated certain financial highlights measures to correct amounts previously reported. --
Key performance and Non-GAAP measures Management measures and evaluates the performance of our consolidated operations and each of our segments based on a number of different measures including net income and non-gaap measures. For details, refer to the 'How we measure and report our business segments' section in our Q 0 Report to Shareholders and 0 Annual Report. Readers are cautioned that key performance measures and non-gaap measures do not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies. Adjusted basis measures Adjusted basis measures such as adjusted net income available to common shareholders, adjusted diluted earnings per share (EPS) and adjusted ROE are calculated by adding back to net income the after-tax amount of amortization of other intangibles, any goodwill impairment, the dilutive impact of exchangeable shares, and significant items. These adjusting charges exclude the amortization of computer software intangibles. Attributed capital (Economic capital) An estimate of the amount of equity capital required to underpin risks. It is calculated by estimating the level of capital that is necessary to support our various businesses, given their risks, consistent with our desired solvency standard and credit ratings. Economic profit Economic profit is net income (loss) after non-controlling interests excluding the after-tax effect of amortization of other intangibles, less a capital charge for use of attributed capital. Return on equity (ROE) Business segment return on equity is calculated as net income available to common shareholders divided by Average attributed capital for the period and using methods that are intended to approximate the average of the daily balances for the period. Corporate Support also includes average unattributed capital. Return on risk capital (RORC) Net income available to common shareholders divided by average risk capital. Business segment RORC is calculated as net income available to common shareholders divided by average risk capital for the period. Risk capital Risk capital includes credit, market (trading and non-trading), insurance-specific, operational, business and fixed assets risk capital. Unattributed capital Unattributed capital represents common equity in excess of common equity attributed to our business segments and is reported in the Corporate Support segment. --
FINANCIAL HIGHLIGHTS (Millions of Canadian dollars, except percentage and per share amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 SELECTED INCOME STATEMENT INFORMATION Net interest income,89,0,00,957,889,76,795,60,588 9, 8,400,57 0,8 0,705 Non-interest income 4,467,89 4,57,75 4,008 4,5 4,4 4,68,56,9,546 6,8 5,744 5,76 Total revenue 7,756 6,94 7,574 6,69 6,897 6,8 7,8 6,778 6,50,54 0,946 7,68 6,08 6,44 Provision for credit losses (PCL) 4 48 67 76 0 7 64 8 77 99 857,,40,67 Insurance policyholder benefits, claims and acquisition expense,000 640, 867,08 84 567,047 978,85,49,58,546,04 Non-interest expense (NIE),759,857,67,50,47,55,669,58,46,87 0,67 4,67,469,46 Net income from continuing operations,40,56,876,609,68,68,996 n.a. n.a. 5,679 5,6 6,970 n.a. n.a. Net income from continuing operations - n.a. n.a. n.a. n.a. n.a. n.a. n.a.,7,79 n.a. n.a. n.a. 5,7 5,68 Net loss from discontinued operations - (0) () (8) (89) (5) (48) (5) (0) (5) (488) (56) (509) (,8) Net income,40,5,855,57,94,6,948,,76 5,68 4,87 6,444 5,,858 Less: Non-controlling interest (4) (5) (5) (5) (5) (5) (6) n.a. n.a. (74) (76) (0) n.a. n.a. Preferred dividends (64) (65) (64) (65) (64) (64) (65) (64) (65) (9) (9) (58) (58) () Net income available to common shareholders,5,44,766,48,05,54,857,057, 5,6 4,604 6,085 4,965,65 Add: Dilutive impact of exchangeable shares 4 0 n.a. n.a. 40 65 78 n.a. n.a. Net income available to common shareholders including dilutive impact of exchangeable shares,66,456,779,494,5,564,880 n.a. n.a. 5,40 4,669 6,6 n.a. n.a. PROFITABILITY MEASURES CONSOLIDATED Earnings per share (EPS) - basic $.49 $.00 $. $.0 $0.84 $.08 $.0 $0.74 $0.85 $.7 $. $4.5 $.49 $.59 - diluted $.47 $0.99 $. $.0 $0.8 $.06 $.7 $0.74 $0.84 $.68 $.7 $4.9 $.46 $.57 Return on common equity (ROE).7 % 6. % 9.7 % 7. % 4.5% 9.9%.7%.% 4.% 9.6% 9.% 8.7 % 4.9%.9% Return on risk capital (RORC) 5. % 4. % 7.5 % 4. %.4%.% 7.5% 0.6% 4.% 9.0% 0.% 8.4 % 5.4% 9.5% Return on assets.09 % 0.79 % 0.9 % 0.76 % 0.67 % 0.88%.0% 0.6% 0.7% 0.9% 0.85% 0.8 % 0.76% 0.55% Return on risk-weighted assets (RWA).0 %. %.58 %.9 %.9 %.60%.98%.7%.96%.7%.50%.44 %.0%.50% CONTINUING OPERATIONS Earnings per share (EPS) - basic $.49 $.0 $.4 $.06 $. $. $.4 $0.9 $0.9 $.75 $.56 $4.6 $.85 $.90 - diluted $.47 $.0 $. $.05 $.0 $.0 $. $0.9 $0.9 $.7 $.50 $4.55 $.8 $.86 Return on common equity (ROE).7 % 6.5 % 0.0 % 7.5 % 9.% 0.5% 4.4% 5.% 5.6% 9.7%.% 0. % 6.5% 7.9% Return on risk capital (RORC) 5. % 5. % 9. % 6.%.% 5.8% 4.% 9.0% 9.8% 9.9% 6.8%.7 %.5%.% Return on assets.09 % 0.8 % 0.95 % 0.80% 0.90% 0.95%.08% 0.79% 0.8% 0.95% 0.98% 0.9 % 0.88% 0.87% Efficiency ratio 48.5% 55.7% 48.5% 5.7% 49.5% 5.0% 50.8% 5.8% 5.% 50.7% 50.8% 5.% 5.6% 50.8% KEY RATIOS Diluted EPS growth.6 % (8.)% (6.)% n.a. n.a. n.a. n.a. (5.)% (.4)% 6.0 % n.a. n.a. (.0)% n.a. Revenue growth.5 %.4 % 4.9 % n.a. n.a. n.a. n.a. 0.7 % (.)% 6.0 % n.a. n.a. (.4)% n.a. NIE growth, 0.0 % 8.6 % 0. % n.a. n.a. n.a. n.a. 7. % (9.5)% 6.0 % n.a. n.a. 0. % n.a. PCL on impaired loans as a % of Average net loans and acceptances 0.4 % 0.9 % 0.0 % 0. % 0.7 % 0.4 % 0. % 0.40 % 0.40 % 0.4 % 0.4 % 0. % 0.40 % 0.7 % Net interest margin (total average assets).6 %.58 %.5 %.47 %.55 %.5%.5 %.50 %.56 %.57 %.5 %.5 %.59 %.64 % Net interest margin (total average assets) excluding Trading Assets, Trading NII and Insurance Assets.4 %.8 %.6 %.9 %.4%.4 %.9 %.9 %.40 %. %.6 %.4 %.45 %. % Non-interest income as % of total revenue 57.6 % 56. % 60.4 % 55.8 % 58. % 60. % 6. % 6.5 % 57.9 % 58. % 59.9 % 58.9 % 60.4 % 59.5 % Effective tax rate 6. % 4.8 %.6 % 0. % 9.0 %. % 6.6 % 5.0 % 9.7 % 0.9 %.0 %.4 % 5.5 % 5.8 % SHARE INFORMATION Common shares outstanding (000s) - end of period,444,00,44,84,440,857,48,76,46,757,48,80,45,90,44,9,4,744,444,00,46,757,48,76,44,9,47,60 - average (basic),44,457,44,76,49,5,47,0,45,,46,504,44,094,4,565,4,777,44,488,48,599,40,77,40,79,98,675 - average (diluted),469,5,467,06,467,57,465,97,474,6,47,44,47,955,44,5,44,79,467,964,47,505,47,49,4,754,4,6 Treasury shares held - preferred (000s) 6 (4) 6 (50) 67 60 86 80 6 (50) 6 86 65 - common (000s) (6) 8 (95) (46),79 0,05,79,546 (6),79 (46),79,7 Stock options outstanding (000s),06,5 4,4 4,4 4,97 5,584 6,945 5,659 6,856,06 4,97 4,4 5,659 7,877 Stock options exercisable (000s) 7,546 7,74 8,557 8,688 9,75 9,78,4 0,70,48 7,546 9,75 8,688 0,70,806 Dividends declared per common share $ 0.57 $ 0.57 $ 0.54 $ 0.54 $ 0.54 $ 0.50 $ 0.50 $ 0.50 $ 0.50 $.68 $.54 $.08 $.00 $.00 Dividend yield 4.% 4.% 4.4% 4.5%.9%.5%.7%.8%.5% 4.4%.7%.9%.6% 4.8% Dividend payout ratio from continuing operations 8% 56% 44% 5% 49% 45% 7% 54% 54% 45% 4% 45% 5% 5% Common dividends - 84 8 778 777 776 7 7 7 70,44,0,979,84,89 Preferred dividends - 64 65 64 65 64 64 65 64 65 9 9 58 58 Book value per share $ 6.56 $ 5.8 $ 5.09 $ 4.5 $.8 $.5 $. $.99 $.70 $ 6.56 $.8 $ 4.5 $.99 $.67 Common share price (RY on TSX) - High $ 57.09 $ 59. $ 54.87 $ 5.06 $ 60.5 $ 6.5 $ 56. $ 56.96 $ 6.75 $ 59. $ 6.5 $ 6.5 $ 6.89 $ 58.50 - Low $ 48.70 $ 5.45 $ 4.0 $ 44.8 $ 50.94 $ 5.77 $ 50.78 $ 48.85 $ 50.8 $ 4.0 $ 50.78 $ 44.8 $ 48.85 $ 5.5 - Close, end of period $ 5.8 $ 57.09 $ 5.7 $ 48.6 $ 5.40 $ 59.60 $ 5.68 $ 54.9 $ 5.7 $ 5.8 $ 5.40 $ 48.6 $ 54.9 $ 54.80 Market capitalization (TSX) 74,08 8,7 75,458 69,94 7,849 85,58 76,54 77,50 76,484 74,08 7,849 69,94 77,50 77,685 Market price to book value.9.5.09.00..65.4.7.7.9..00.7.4 Growth rates are calculated based on earnings from continuing operations in the same period a year ago. Q, 0 includes the goodwill and intangibles writedown of $6 million (before- and after- tax) as well as the other acquisition cost of $5 million (before- and after-tax) related to our previously announced acquisition of RBC Dexia. Excluding these items, NIE growth was.7%. Common shares outstanding at the end of the period does not include treasury shares held. Average common shares outstanding does not include treasury shares held. --
FINANCIAL HIGHLIGHTS continued (Millions of Canadian dollars, except percentage and per share amounts or otherwise noted) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 CAPITAL MEASURES - CONSOLIDATED Tier capital ratio.0%.%.%.%.%.6%.%.0%.9%.0%.%.%.0%.0% Total capital ratio 5.0% 5.% 4.5% 5.% 5.% 5.7% 5.% 4.4% 4.% 5.0% 5.% 5.% 4.4% 4.% Assets-to-capital multiple 6.7X 6.8X 6.6X 6.X 6.4X 6.X 6.5X 6.5X 6.5X 6.7X 6.4X 6.X 6.5X 6.X Tier common ratio 0.% 0.4% 9.6% 0.6% 0.% 0.% 9.9% 9.8% 9.6% 0.% 0.% 0.6% 9.8% 9.% Risk-weighted assets ($ billions) 78.4 67. 85.5 67.8 6.0 5. 56.0 60.5 58.8 78.4 6.0 67.8 60.5 44.8 Gross-adjusted assets ($ billions) 79.0 74.6 77.5 684.6 675.0 67.4 668.0 647.5 6.0 79.0 675.0 684.6 647.5 59. Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 SELECTED BALANCE SHEET INFORMATION Average loans and acceptances 77,700 66,00 59,00 5,000 9,000 49,00 47,00 80,400 75,00 67,700 45,00 46,900 7,700 64,400 Total assets 84,94 800,7 85,06 79,8 77,4 768,49 76,97 76,06 704,44 84,94 77,4 79,8 76,06 654,989 Average assets 85,000 787,800 84,500 8,700 767,600 759,000 764,600 75,00 69,900 805,900 76,800 778,900 68,000 695,00 Average earning assets 64,400 69,900 68,800 6,800 6,500 65,00 6,00 54,700 50,600 60,700 69,900 60,900 58,900 489,00 Deposits 50,804 495,875 489,87 479,0 47,767 478,508 477,789 44,56 400,77 50,804 47,767 479,0 44,56 78,457 Common equity 8,57 6,65 6,59 4,889,49,90,65 4,40,70 8,57,49 4,889 4,40,095 Average common equity 7,700 6,400 5,600 4,400,050,850,000 4,000,500 6,600,950,600,50 0,450 MARKET RISK MEASURES - NON TRADING BANKING ACTIVITIES Before-tax impact of % increase in rates on: Net interest income risk 9 40 07 9 04 9 4 9 9 07 9 9 Economic value of equity (59) (46) (8) (454) (47) (90) (94) (484) (5) (59) (47) (454) (484) (0) Before-tax impact of % decrease in rates on: Net interest income risk (40) () (7) (6) (58) (0) (47) (98) (57) (40) (58) (6) (98) () Economic value of equity 46 74 5 4 44 09 45 84 46 44 4 45 4 OTHER INFORMATION Number of employees (full-time equivalent) Canada 5,85 50,64 50,97 50,9 50,80 50,40 50,808 49,79 49,84 5,85 50,80 50,9 49,79 48,79 US 7,75 7,98 7,4 7,588 7,650 7,46 7,480 7,449 7,45 7,75 7,650 7,588 7,449 7,409 Other 4,55 0,69 0,77 0,67 0,585 0,47 0,08 9,906 9,7 4,55 0,585 0,67 9,906 9,778 Total 75,9 68,0 68,7 68,480 69,065 68,40 68,7 67,47 67,05 75,9 69,065 68,480 67,47 65,980 Number of banking branches Canada,,7,,4,,,0,09,05,,,4,09,97 Other 4 4 4 4 4 0 7 5 4 4 7 6 Total,55,5,45,8,5,6,40,6,0,55,5,8,6, Number of automated teller machines (ATM) 4,948 4,89 4,704 4,66 4,60 4,59 4,57 4,557 4,57 4,948 4,60 4,66 4,557 4,544 ADJUSTED BASIS MEASURES - Continuing Ops Net income available to common shareholders including dilutive impact of exchangeable shares,66,456,779,494,5,564,880,057, 5,40 4,669 6,6 4,965,65 Less: Net loss from discontinued operations - (0) () (8) (89) (5) (48) (5) (0) (5) (488) (56) (509) (,8) Net income available to common shareholders from continuing operations including dilutive impact of exchangeable shares,66,486,800,5,64,65,98,08,4 5,45 5,57 6,689 5,474 5,448 Adjustments Add: After-tax effect of amortization of other intangibles 9 8 9 9 0 86 9 7 4 Loss on announced acquisition of RBC Dexia Investor Services Limited 0 - - - - - - - - - - - Release of tax uncertainty provisions (8) - - - - - - - - (8) - - - - Mortgage prepayment interest (9) - - - - - - - - (9) - - - - Adjusted net income available to common shareholders,9,76,89,56,646,646,957,8,45 5,478 5,49 6,8 5,60 5,589 Adjusted EPS $. $.8 $.6 $.08 $. $.4 $.6 $ 0.94 $ 0.95 $.77 $.6 $ 4.7 $.94 $ 4.00 Adjusted diluted EPS $. $.7 $.5 $.07 $. $. $. $ 0.9 $ 0.94 $.7 $.56 $ 4.6 $.9 $.96 Adjusted ROE 0.% 9.0% 0.% 7.9% 9.5% 0.9% 4.8% 5.6% 5.9% 9.8%.7% 0.7% 6.9% 8.4% ECONOMIC PROFIT - Continuing Ops Net income from continuing operations,40,56,876,609,68,68,996,7,79 5,679 5,6 6,970 5,7 5,68 Non-controlling interests (4) (5) (5) (5) (5) (5) (6) n.a. n.a. (74) (76) (0) n.a. n.a. After-tax effect of amortization of other intangibles 9 8 9 9 0 86 9 7 4 Goodwill and intangibles writedown 7 6 - - - - - - - 68 - - - - Capital Charge (966) (904) (88) (89) (84) (749) (747) (85) (84) (,75) (,0) (,) (,8) (,046) Economic Profit,86 8 998 7 866 99,5 55 567,07,057,779,54,776 The classification of our U.S. Retail Banking operations as discontinued operations will be reflected in our Consolidated Balance Sheets beginning in the quarter ending July, 0 The sale of Liberty Life Insurance Company announced in October 00 will be reflected as discontinued operations under from the Transition date. Amounts represent the -month Net interest income exposure to an instantaneous and sustained shift in interest rates. -4-
STATEMENTS OF INCOME (Millions of Canadian dollars) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Net interest income Interest income 5,79 5,00 5,7 5,6 5,49 5,098 5,50 4,66 4,48 5,650 5,597 0,8 7,746 9,7 Interest expense,090,069,68,59,60,8,455,006,80 6,7 7,97 9,456 7,408 8,567 Total,89,0,00,957,889,76,795,60,588 9, 8,400,57 0,8 0,705 Non-interest income Accounts 6 54 56 6 49 47 49 64 48 77 745,008,009 99 Other payment services 84 79 78 80 80 77 78 80 79 4 5 5 08 Service charges 47 4 4 9 4 7 44 7,04 980,,,99 Insurance premiums, investment and fee income, 96,550,4,49,086 85,8,49,799,60 4,474 4,485 4,067 Trading revenue 95 49 96 (9) () 85 7 79 (0),040 874 655,,80 Investment management and custodial fees 55 496 497 497 507 490 505 457 447,508,50,999,774,65 Mutual fund revenue 54 506 499 505 59 50 44 40 88,59,470,975,57,400 Securities brokerage commissions 9 04 87 07 44 49 05 88,000,,7,57 Underwriting and other advisory fees 79 86 94 77 6 5 495 7 95,059,08,485,9,049 Foreign exchange revenue, other than trading 9 77 46 8 6 7 69 64 75 45 50 684 608 65 Card service revenue 4 06 7 5 0 4 9 686 66 88 5 78 Credit fees 67 7 88 7 96 50 88 56 56 68 54 707 6 5 Securitization revenue - - () () () - 06 4 () - 764,69 Net gain (loss) on available-for-sale securities 4 (7) 5 () 64 58 (6) 7 40 06 04 8 (6) Share of profit in associates 9 6 0 () - n.a. n.a. 5 5 (7) n.a. n.a. Other 48 9 7 0 7 85 85 69 79 44 669 44 6 Total 4,467,89 4,57,75 4,008 4,5 4,4 4,68,56,9,546 6,8 5,744 5,76 Total revenue 7,756 6,94 7,574 6,69 6,897 6,8 7,8 6,778 6,50,54 0,946 7,68 6,08 6,44 Provision for credit losses 4 48 67 76 0 7 64 8 77 99 857,,40,67 Insurance policyholder benefits, claims and acquisition expense,000 640, 867,08 84 567,047 978,85,49,58,546,04 Non-interest expense,759,857,67,50,47,55,669,58,46,87 0,67 4,67,469,46 Income taxes 4 56 549 40 96 48 7 467 44,498,600,00,996,05 Net income from continuing operations,40,56,876,609,68,68,996 n.a. n.a. 5,679 5,6 6,970 n.a. n.a. Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 6 n.a. n.a. n.a. 99 00 Net income from continuing operations - n.a. n.a. n.a. n.a. n.a. n.a. n.a.,7,79 n.a. n.a. n.a. 5,7 5,68 Net loss from discontinued operations - (0) () (8) (89) (5) (48) (5) (0) (5) (488) (56) (509) (,8) Net income,40,5,855,57,94,6,948,,76 5,68 4,87 6,444 5,,858 Net income (loss) attributable to: Shareholders,6,508,80,546,69,606,9 n.a. n.a. 5,554 4,797 6,4 n.a. n.a. Non-controlling interests 4 5 5 5 5 5 6 n.a. n.a. 74 76 0 n.a. n.a. Net income,40,5,855,57,94,6,948 n.a. n.a. 5,68 4,87 6,444 n.a. n.a. Net income,40,5,855,57,94,6,948,,76 5,68 4,87 6,444 5,,858 Non-controlling interests (4) (5) (5) (5) (5) (5) (6) n.a. n.a. (74) (76) (0) n.a. n.a. Preferred dividends (64) (65) (64) (65) (64) (64) (65) (64) (65) (9) (9) (58) (58) () Net income available to common shareholders,5,44,766,48,05,54,857,057, 5,6 4,604 6,085 4,965,65 Under Canadian GAAP, income attributable to NCI is deducted prior to the presentation of Net income from continuing operations. -5-
REVENUE FROM TRADING ACTIVITIES (Millions of Canadian dollars) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Total trading revenue Net interest income 65 4 88 86 9 7 8 4 68,65 99,77,44,6 Non-interest income 95 49 96 (9) () 85 7 79 (0),040 874 655,,80 Total 660 76 784 67 59 60,004 60 48,05,865,0,776 4,696 Trading revenue by product Interest rate and credit 46 495 56 (6) 4 4 705 446 8,467,5,46,997,078 Equities 80 0 79 64 9 99 00 5 4 56 45 64 965 Foreign exchange and commodities 9 86 8 94 8 76 00 74 05 5 57 5 45 65 Total 660 76 784 67 59 60,004 60 48,05,865,0,776 4,696 Trading revenue (teb) by product Interest rate and credit 46 495 56 (6) 4 4 705 446 8,467,5,46,997,078 Equities 98 6 48 8 4 57 98 750 79 89 85,9 Foreign exchange and commodities 9 86 8 94 8 76 00 74 05 5 57 5 45 65 Total (teb) 748 879 905 5 4 747,48 777,5,8,489,6 5,060 Trading revenue (teb) by product - Capital Markets Interest rate and credit 4 444 495 (6) 74 89 656 44 (),70,9,08,854,87 Equities 0 94 6 56 50 5 6 56 70 7 877 876,50 Foreign exchange and commodities 89 85 6 9 8 75 00 69 0 0 56 49 407 659 Total (teb) 740 8 847 05 699,09 79,40,096,09,7 4,86 GAINS (LOSSES) ON CERTAIN MARKET AND CREDIT RELATED ITEMS Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 (Millions of Canadian dollars) Fair Value Adjustments on RBC debt Capital markets 9 () 9 50 () (9) 5 (6) 4 6 6 8 (69) Other segments () () 4 (4) (4) () - () () 8 (7) Total 40 (5) 8 74 (7) () (6) 5 (8) 66 6 (586) Credit Valuation Adjustments (CVA) - MBIA, - - - - - - 0 99 (00) - 0 0 7 (40) CVA - other (9) 4 58 47 (4) 5 (49) (74) 50 () 46 Credit default swaps (CDS) (8) () (5) 9 (8) (6) (7) (45) (5) 6 (69) (00) BOLI 8 () (5) (6) (66) (6) 66 (7) (0) (79) (5) 75 () Consolidated SPE in Capital Markets 4 - - () (05) (48) 9 9 - - () 0 (95) - - Total revenue impact (46) 5 (46) 4 55 6 (9) (0) 4 46 (,7) Reported as Trading revenue. Reported as Non- Interest Income - Other. Q/ amounts included a gain related to MBIA settlement. 4 SPE consolidated due to adoption of. -6-
NON-INTEREST EXPENSE (Millions of Canadian dollars) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Human resources Salaries,077,044,060,060,05 990 999 978 947,8,04 4,074,777,87 Variable compensation 907 948 9 684 699 87,045 850 64,766,66,00,5,505 Benefits and retention compensation 8 97 76 57 75 9 78 79 889 8,099,,085 Stock-based compensation 48 4 47 48 46 8 47 9 76 88 86 7 Total Human resources,,,9,0,09,8,47,5,90 6,955 6,69 8,66 8,40 8,480 Equipment Depreciation 65 6 6 6 58 6 59 6 6 90 79 4 8 Computer rental and maintenance 0 94 90 97 85 86 80 76 7 586 55 748 686 70 Office equipment rental and maintenance 4 5 5 5 6 6 4 6 5 4 6 0 Total Equipment 7 6 58 64 49 54 4 4 9 790 746,00 944 958 Occupancy Premises rent 7 5 0 09 06 05 0 54 6 49 404 89 Premises repairs and maintenance 86 89 8 98 8 85 79 87 7 58 46 44 08 Depreciation 40 8 8 40 8 5 44 4 6 06 46 4 Property taxes 0 8 7 0 8 4 8 9 80 07 05 0 Total Occupancy 8 74 64 68 6 57 40 60 6 89 758,06 960 94 Communications Telecommunications 47 45 45 46 45 4 40 4 44 7 8 74 76 85 Postage and courier 4 8 6 5 8 6 4 78 79 0 99 98 Marketing and public relations 96 9 8 04 89 7 4 78 70 64 75 7 07 Stationery and printing 6 9 5 0 8 4 8 6 70 7 95 0 96 Total Communications 9 85 77 0 94 88 6 09 7 555 54 746 750 686 Professional fees 67 58 54 59 57 6 88 46 479 479 69 57 484 Outsourced item processing 64 70 65 64 6 7 66 68 66 99 0 66 78 8 Amortization of other intangibles Computer software 96 9 94 87 85 8 78 85 7 8 45 95 6 Other 4 5 5 9 8 8 4 5 6 04 0 49 45 57 Total Amortization of other intangibles 0 7 9 6 0 0 08 86 55 48 440 9 Impairment of goodwill and other intangibles 7 6 - - - - - - - 68 - - - - Other Business and capital taxes 9 7 5 6 4 5 5 8 7 9 4 75 Travel and relocation 9 8 6 44 44 7 5 4 7 6 60 4 Employee training 9 8 8 9 9 8 7 5 6 9 4 Donations 6 7 6 40 7 59 55 5 Other 50 5 59 47 7 9 5 84 677 675 94 7 84 Total Other 08 95 60 9 9 67 4 79 96 95,85,095,8 Total non-interest expense,759,857,67,50,47,55,669,58,46,87 0,67 4,67,469,46 Stock-based compensation includes the cost of stock options, stock appreciation rights, performance deferred shares, deferred compensation plans and the impact of related economic hedges. As a result of our announced acquisition of the other 50 percent interest in RBC Dexia Investor Services Limited, that we did not already own, we were required to revalue our existing 50 percent interest in the joint venture. This revaluation resulted in a total writedown of $68 (before- and after-tax) of goodwill and intangibles. -7-
CANADIAN BANKING (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income,48,07,064,06,000,9,99,94,865 6,9 5,94 7,960 7,488 6,947 Non-interest income 845 800 8 85 80 8 8 764 76,466,44,9,067,94 Total revenue,09,87,885,85,80,745,80,698,68 8,795 8,48,99 0,555 9,890 Provision for credit losses (PCL) 4 7 4 4 67 60 7 87 84 748 799,0,9,75 Non-interest expense,0,77,94,0,98,44,7,,4,90,779 5,08 4,995 4,79 Income taxes 40 54 66 48 46 60 5,088,054,40,5, Net income,7 97 994 948 888 895 9 765 766,058,76,664,044,66 Total revenue by business Personal Financial Services,768,568,575,57,547,5,55,50,4 4,9 4,6 6,9 5,760 5,05 Business Financial Services 76 695 7 708 696 66 68 654 644,5,04,750,557,457 Cards and Payment Solutions 589 554 589 57 558 560 567 54 56,7,685,57,8,8 Total,09,87,885,85,80,745,80,698,68 8,795 8,48,99 0,555 9,890 Financial ratios Return on equity (ROE), 4 4.8% 6.0% 6.6%.% 6.0% 40.6% 4.7% 4.% 4.7% 8.7% 9.9% 8.0% 5.6% 5.9% Return on risk capital (RORC) 55.8% 45.% 45.8% 4.5% 46.4% 5.% 57.7% 44.4% 45.4% 48.9% 5.% 48.8% 46.9% 48.4% Net interest margin (average earning assets) 4.9%.7%.75%.75%.75%.79%.80%.75%.70%.79%.78%.77%.75%.76% Efficiency ratio 4 4.0% 45.% 44.9% 45.7% 46.% 45.% 44.% 48.7% 47.% 44.4% 45.% 45.4% 47.% 47.8% Operating leverage 4 8.0 % 0.0 % (.6)% n.a. n.a. n.a. n.a. (.4)% -0.4%. % n.a. n.a..%.8% Average balances Total assets 8,00,500 08,000 0,800 97,000 9,400 9,000 87,000 8,00,500 9,500 96,00 79,900 58,900 Total earning assets 07,900 0,700 98,600 94,00 88,00 8,800 8,400 79,000 74,400 0,700 84,800 87,00 7,00 5,600 Loans and acceptances 0,500 04,00 00,600 95,800 89,00 8,600 80,500 76,800 7,700 05,00 84,500 87,00 69,500 49,600 Residential mortgages 7,700 68,600 67,00 64,500 60,600 57,500 56,00 54,00 5,900 69,00 58,00 59,700 5,000 4,800 Personal 5 76,800 75,00 74,400 7,000 7,00 69,500 68,00 67,00 64,700 75,500 69,700 70,500 6,700 5,000 Credit cards,000,500,800,800,800,800,00,000,600,800,900,900,500,500 Small business,700,600,600,600,600,700,700,700,700,600,600,600,700,800 Total Retail 64,00 59,000 56,900 5,900 47,00 4,500 40,400 7,000,900 60,000 4,400 45,700 9,900 0,00 Wholesale 46,00 45,00 4,700 4,900 4,000 4,00 40,00 9,800 9,800 45,00 4,00 4,600 9,600 9,500 Deposits,800 7,00 5,500 9,500,000 0,400 0,00 97,400 9,000 8,00 04,900 08,600 9,400 76,000 Attributed capital 0,050 0,400 0,600,050 9,550 8,850 8,00 8,700 8,550 0,50 8,900 9,450 8,50 7,50 Risk capital 7,900 8,50 8,450 8,850 7,450 6,800 6,00 6,700 6,550 8,00 6,850 7,50 6,50 5,400 Credit quality Gross impaired loans / Average net loans and acceptances 0.7% 0.4% 0.4% 0.4% 0.45% 0.49% 0.50% 0.5% 0.48% 0.7% 0.46% 0.44% 0.5% 0.50% PCL / Average net loans and acceptances 0.0% 0.6% 0.% 0.% 0.7% 0.8% 0.8% 0.4% 0.4% 0.% 0.8% 0.6% 0.44% 0.5% Net write-offs / Average net loans and acceptances 0.% 0.% 0.0% 0.% 0.5% 0.7% 0.4% 0.4% 0.40% 0.% 0.5% 0.5% 0.4% 0.47% Business information Assets under administration 6 65,600 64,500 6,500 58,000 58,600 6,00 54,600 48,00 4,00 65,600 58,600 58,000 48,00,800 Other earnings measures Net income,7 97 994 948 888 895 9 765 766,058,76,664,044,66 Add: After-tax effect of amortization of other intangibles - - - - - - - - - - - - 6 6 Cash net income,7 97 994 948 888 895 9 765 766,058,76,664,050,669 Less: Capital charge 6 6 75 0 60 7 49 44 799 70,0 945 84 Economic profit 866 674 79 647 68 66 706 56 5,59,996,64,05,85 Reported results include securitized residential mortgage and credit card loans and related amounts for income and provision for credit losses. As at Q/, the average securitized residential mortgage and credit card loans included were $46. billion and $6. billion, respectively. Securitized residential mortgages and credit card loans are included in Total assets, Total earning assets, Loans and acceptances, Residential mortgage, Credit cards. Under, these transactions are being reported on our balance sheet. Q/ results include a favourable mortgage prepayment adjustment of $5 million ($9 million after-tax). Q/ includes a gain on the sale of the remaining VISA shares of $9 million ($ million after-tax). Effective Q/, we prospectively revised our capital allocation methodology to further align our allocation processes with evolving regulatory capital requirements. The revised methodology replaced the pro-rata allocation of unallocated capital that was used in 0 and the impacts are being phased-in over fiscal 0 in anticipation of our requirement to report under Basel III requirements in 0. The revised methodology resulted in a reduction in attributed capital for Canadian Banking and an increase in attributed capital for Capital Markets. 4 Excluding the adjustment noted in () above, Q/ ROE was 8.9%, NIM was.74%, efficiency ratio was 44.8% and operating leverage was.5%. 5 As at Q/, average personal secured loans was $45. billion and average personal unsecured loans was $.6 billion. 6 RBC AUA includes $7.9 billion (April 0, 0 - $6.5 billion, July, 0 - $4.7 billion) of securitized mortgages and credit card loans. -8-
WEALTH MANAGEMENT (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income 98 98 0 96 9 88 90 80 75 98 69 65 05 97 Fee-based revenue 74 7 7 76 74 70 659 65 594,95,095,8,6,54 Transactional and other revenue 7 89 65 9 46 46 40 75,08,9,5,5,59 Total revenue,67,9,88,5,56,6,85,05,044,574,557 4,708 4,88 4,080 Provision for credit losses (PCL) - () - - - - - - () - - - Non-interest expense 944 94 99 89 895 94 884 855 806,84,69,586,95,6 Income taxes 67 67 6 79 69 75 88 75 50 95 5 Net income 56 88 79 9 7 75 85 556 6 8 669 58 Total revenue by business Canadian Wealth Management 4 44 4 46 4 444 4 99 68,78,98,74,50,65 U.S. & International Wealth Management 474 508 486 466 45 5 59 59 490,468,48,948,949,08 Global Asset Management 7 77 80 59 84 60 87 86 88 777,06 77 64 Total,67,9,88,5,56,6,85,05,044,574,557 4,708 4,88 4,080 Financial ratios Return on equity (ROE).% 6.%.8%.7% 4.% 7.8% 9.5% 8.7% 9.9%.7% 7.% 5.9% 7.6% 4.% Return on risk capital (RORC) 4.8% 6.8% 5.9% 47.9% 59.9% 77.% 8.9% 70.9% 75.9% 5.6% 7.6% 65.% 64.6% 49.% Pre-tax margin 9.%.9%.0%.4%.6% 4.8% 5.4%.6%.5%.0% 4.%.8%.% 0.0% Average balances Total assets,00,000,00,00,400 0,600 9,400 8,000 8,00,00 0,400 0,900 8,400 0,500 Loans and acceptances 0,00 9,700 9,400 8,900 8,00 7,900 7,600 7,400 7,000 9,800 7,900 8,00 6,800 5,800 Deposits 9,400 9,00 9,000 8,00 7,00 8,600 8,500 8,700 8,900 9,00 8,00 8,00 9,000,500 Attributed capital 5,00 5,50 5,50 5,00 5,050 5,000 4,50,550,550 5,50 4,750 4,850,650,900 Risk capital,400,50,50,400,00,50,000 950 950,50,00,00,000,00 Credit quality Gross impaired loans / Average net loans and acceptances 0.0% 0.0% 0.0% 0.0% 0.0% 0.% 0.04% 0.04% 0.09% 0.0% 0.% 0.% 0.04% 0.00% PCL / Average net loans and acceptances 0.00 % (0.04)% (0.0)% 0.00 % 0.00 % 0.00 % 0.00 % (0.0)% 0.7 % (0.0)% 0.00 % 0.00% 0.04% 0.00% Net write-offs / Average net loans and acceptances 0.00 % (0.04)% (0.0)% 0.00 % 0.00 % 0.00 % 0.00 % 0.5 % 0.00 % (0.0)% 0.00 % 0.00% 0.04% 0.00% Business information Assets under administration Canadian Wealth Management,500 5,00 6,00 09,700,600 5,000 09,700 0,00 9,400,500,600 09,700 0,00 8,000 U.S. & International Wealth Management 9,700 5,000 8,000 7,500,700,900,00 0,400 08,600 9,700,700 7,500 0,400 0,00 Total 56,00 560,00 54,00 57,00 55,00 57,900 54,000 5,600 50,000 56,00 55,00 57,00 5,600 50,00 Assets under management Canadian Wealth Management 4,700 4,400,500,700,000,700,500 9,700 7,900 4,700,000,700 9,700 5,000 U.S. & International Wealth Management 0,000 9,00 7,800 6,800 4,000,800,600,900,600 0,000 4,000 6,800,900,000 Global Asset Management, 59,800 58,800 5,900 47,00 54,00 5,800 50,00 09,00 0,600 59,800 54,00 47,00 09,00 99,700 Total 4,500,00,00 05,700 0,00 08,00 05,00 6,800 5,00 4,500 0,00 05,700 6,800 45,700 Other earnings measures Net income 56 88 79 9 7 75 85 556 6 8 669 58 Add: After-tax effect of amortization of other intangibles 8 6 5 8 8 7 5 49 50 68 49 48 Adjusted net income 74 8 0 97 0 44 8 87 97 605 68 879 78 6 Less: Capital charge 5 0 44 7 0 0 98 8 55 40 447 Economic profit 9 98 70 5 7 5 86 96 07 0 54 08 84 (US$ millions, except percentage and per share amounts) Revenue by business U.S. & International Wealth Management 466 5 480 464 468 5 56 50 470,458,56,980,878,794 Business information Assets under administration U.S. & International Wealth Management 8,700 9,00 7,58 8,600 8,400 4,00,800 4,000 00,00 8,700 8,400 8,600 4,000 96,000 BlueBay Asset Management plc results are reported on a one-month lag. Excludes assets held by clients of Phillips, Hager & North Investment Management Ltd. for which we earn either a nominal or no management fee. Q/ AUM excludes $0.7 billion of these assets. -9-
INSURANCE (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net earned premiums 90 9 957 897 89 864 88 89 95,79,66,5,,88 Investment income 6 (59) 5 54 99 66 (6) 8 76 86 449 70 98 940 Fee income 58 5 6 64 59 56 60 66 48 7 75 9 48 4 Total revenue, 96,550,5,49,086 85,86,49,799,60 4,475 4,489 4,06 Insurance policyholder benefits, claims and acquisition expense (PBCAE),000 640, 867,08 84 567,047 978,85,49,58,546,04 Non-interest expense 6 6 9 9 6 4 0 8 69 498 468 457 Income taxes 8 9 0 9 () - (9) 47-9 (6) 7 Net income 79 5 90 00 4 6 4 48 50 400 600 49 57 Total revenue by business Canadian Insurance 87 449,054 757 875 65 9 88 70,76,99,676,756,664 International and Other Insurance 450 477 496 458 474 44 4 448 59,4,4,799,7,99 Total, 96,550,5,49,086 85,86,49,799,60 4,475 4,489 4,06 Financial ratios Return on equity (ROE) 47.% 40.6% 48.5% 40.% 4.5% 4.8% 40.5% 8.6% 40.5% 45.5% 6.4% 7.6% 7.% 45.7% Return on risk capital (RORC) 5.6% 45.% 5.% 4.% 7.7% 8.5% 45.7% 44.% 45.9% 50.4% 40.% 4.% 4.7% 5.9% Average balances Total assets,700,400,00 0,800 0,600 0,00 0,500 0,500 9,900,400 0,400 0,500 9,900 8,500 Attributed capital,500,500,550,950,600,400,00,50,400,500,450,550,00,50 Risk capital,50,50,400,800,450,00,50,00,50,50,00,400,50 950 Additional information Premiums and deposits,,,89,,05,,8,47,,,64,496 4,70 4,457,880 Canadian Insurance 60 57 59 605 605 568 577 547 567,765,750,55,9,977 International and Other Insurance 6 67 64 600 606 570 570 576 654,869,746,46,66,90 Insurance policyholder benefits and claims 864 495,065 70 9 695 409 908 87,44,07,757,989,50 Insurance policyholder acquisition expense 6 45 46 47 48 48 58 9 5 47 454 60 557 5 Insurance claims and policy benefit liabilities 7,965 7,6 7,68 7,9 7,7 6,896 6,740 6,7 5,847 7,965 7,7 7,9 6,7 5, Fair value changes on investments backing policyholder liabilities 4 56 (96) 85 80 54 (4) 47 445 9 4 89 458 Embedded value 5,707 5,507 5,458 5,7 5,084 4,94 4,97 5,466 5,57 5,707 5,084 5,7 5,466 5,6 Business information Assets under management 400 400 00 00 00 00 00 00 00 400 00 00 00 00 Other earnings measures Net income 79 5 90 00 4 6 4 48 50 400 600 49 57 Add: After-tax effect of amortization of other intangibles - - - - - - - - - - - - - - Adjusted net income 79 5 90 00 4 6 4 48 50 400 600 49 57 Less: Capital charge 9 7 40 5 4 7 6 6 40 6 6 69 46 0 Economic profit 40 4 50 47 98 86 00 88 08 404 84 4 45 97 Premium and deposits equals net earned premiums excluding the cost of premiums to other institutions for reinsurance coverage, plus segregated fund deposits. Investment income can experience volatility arising from fluctuation in the fair value through profit or loss assets. The investments which support actuarial liabilities are predominantly fixed income assets designated as fair value through profit or loss and consequently changes in fair values of these assets are recorded in investment income in the consolidated statements of income. Changes in fair values of these assets 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. Premiums and deposits include premiums on risk-based insurance and annuity products, and individual and group segregated fund deposits, consistent with insurance industry practices. 4 The revenue impact of the change in fair value on investments backing policyholder liabilities is reflected in Investment income and largely offset in PBCAE. -0-
INTERNATIONAL BANKING (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income 60 66 59 6 49 57 7 66 66 485 477 68 669 80 Non-interest income 5 7 4 4 4 6 6 7 6 705 99 84 74 Total revenue 85 9 7 85 9 8 407 89 8,097,8,567,50,57 Provision for credit losses (PCL) 66 47 8 6 44 5 4 46 7 09 4 7 Non-interest expense 55 499 6 9 07 9 00,80 90,49,0,8 Income taxes (5) () 5-9 4 () 67 67 57 4 Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. n.a. n.a. () n.a. n.a. n.a. 9 Net income (loss) () (96) 4 0 8 46 68 (7) 6 (0) 4 9 Total revenue by business Banking 07 0 97 98 98 8 69 69 86 846 87 RBC Dexia IS 78 8 7 88 94 85 74 7 7 478 55 74 657 70 Total 85 9 7 85 9 8 407 89 8,097,8,567,50,57 Financial ratios Return on equity (ROE) (5.0)% (6.9)%.0% 0.%.4% 5.% 7.7% (.6)%.8% (9.7)% 4.7%.5%.%.0% Return on risk capital (RORC) (.5)% (69.)% 5.% 0.6%.4%.7% 0.9% (4.7)% 0.9% (4.5)%.0% 8.7% 6.4% 9.% Net interest margin (average earning assets) 4 4.78% 5.7% 5.5% 5.4% 5.5% 5.50% 5.77% 5.44% 5.40% 5.% 5.55% 5.5% 5.60% 5.% Average balances Total assets 8,000 6,400 5,00 6,700 6,900 6,500 6,00 7,000 6,800 6,500 6,500 6,600 5,600 7,00 Total earning assets 4,900 0,500 0,000 0,00 9,700 9,900 0,400,000,00 0,800 0,000 0,000 0,900,00 Loans and acceptances 8,00 8,00 8,400 8,400 8,000 8,000 8,500 9,00 9,400 8,00 8,00 8,00 8,900 9,900 Deposits 0,800 8,600 8,000 9,800 6,600 6,00 4,800 7,000 7,700 9,00 5,900 6,400 6,900 9,00 Attributed capital,000,050,00,400,50,00,00,00,00,050,50,00,050,50 Risk capital,00,00,50,500,00,50,50,00,00,00,50,00,050,050 Credit quality Gross impaired loans / Average net loans and acceptances 8.86% 9.6% 9.50% 9.% 9.05% 7.94% 7.68% 7.87% 7.% 8.8% 8.87% 9.55% 8.9% 4.49% PCL / Average net loans and acceptances.7%.% 0.6%.70%.0% 0.75% 0.68%.96%.%.95%.0%.%.59% 0.7% Net write-offs / Average net loans and acceptances.96% 0.78% 0.47%.97% 0.96% 0.96%.80%.0% 0.4%.07%.6%.70% 0.7% 0.8% Business information Assets under administration - RBC 8,000 7,800 7,900 7,900 7,00 7,00 7,500 7,800 7,900 8,000 7,00 7,900 7,800 7,700 - RBC Dexia IS,670,900,808,800,709,800,744,400,8,900,89,700,88,00,779,500,65,500,670,900,8,900,744,400,779,500,484,400 Assets under management - RBC,900,700,800,700,600,600,600,600,600,900,600,700,600,800 Other earnings measures Net income (loss) () (96) 4 0 8 46 68 (7) 6 (0) 4 9 Non-controlling interests () - () () () () () n.a. n.a. () () (4) n.a. n.a. Add: After-tax effect of amortization of other intangibles and goodwill impairment 8 7 7 6 0 7 49 67 74 Adjusted net income (4) () 4 0 57 79 0 5 () 66 87 59 97 Less: Capital charge 78 77 8 9 87 8 84 88 88 7 5 46 47 75 Economic loss (9) (00) (48) (7) (57) (5) (5) (78) (6) (40) (87) (59) (88) (78) (US$ millions, except percentage and per share amounts) Revenue by business Banking 0 99 94 06 07 0 0 0 64 64 87 84 70 Results reflect the previously announced loss of $4 million ($ after-tax) related to our announced acquisition of the other 50 percent interest in RBC Dexia. For further information, refer to the Key corporate events of the 0 section of our Q 0 Report to Shareholders. Includes Caribbean banking businesses. RBTT Financial Group (RBTT) results are reported on a one-month lag. AUA - RBC and AUM - RBC include the AUA and AUM of RBTT. The acquisition of the remaining 50% stake in RBC Dexia closed on July 7, 0 and was subsequently rebranded RBC Investor Services (RBCIS). Our third quarter reflects 00% of RBCIS's results from July 7, 0 to July, 0. 4 Calculated based on Banking information and excludes RBC Dexia IS amounts. --
CAPITAL MARKETS (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income (teb) 766 807 764 70 666 664 655 69 68,7,985,687,79,99 Non-interest income 97 90 85 40 467 85,96 80 6,78,698,08,68,54 Total revenue (teb),79,70,66,04,,499,05,49 954 5,065 4,68 5,75 5,887 6,9 Provision for credit losses (PCL) 4 7 5 9 () (5) () (9) 7 (9) (4) 0 70 Non-interest expense 98,04 978 88 77 98, 9 674,97,8,659,40,68 Income taxes 48 6 7 45 9 68 8 04 87 67 579 64 795 86 Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 n.a. n.a. n.a. 5 () Net income 486 449 448 54 59 406 67 7 0,8,0,456,647,768 Total revenue (teb) Total revenue,79,70,66,04,,499,05,49 954 5,065 4,68 5,75 5,887 6,9 Revenue related to VIEs offset in non-controlling interests - - - - - - 4 0 - - 4 4 4 () Total revenue excluding VIEs,79,70,66,04,,499,047,48 954 5,065 4,679 5,7 5,87 6,945 Total revenue by business Global Markets 9,07,090 564 59 95,0 85 478,094,809,7,80 6,09 Corporate and Investment Banking 774 68 566 59 66 574 7 558 565,978,949,540,08,697 Other - (40) () () 0 6 0 (89) (7) (75) (88) () (8) Total,79,70,66,04,,499,05,49 954 5,065 4,68 5,75 5,887 6,9 Financial ratios Return on equity (ROE) 5.% 4.9% 4.9% 5.8%.5% 0.% 0.7% 7.0% 9.% 5.0% 0.7% 6.5% 9.5%.0% Return on risk capital (RORC) 6.% 6.% 6.4% 6.5%.%.% 5.% 9.% 0.5% 6.%.7% 8.8%.% 4.% Average balances Total assets 40,800 9,000 407,700 47,800 7,600 6,00 67,900 59,000,900 407,00 67,000 79,800 7,500 47,900 Trading securities,600 8,00 0,600 6,500 5,000 46,700 7,500 9,600,00 7,00 45,000 4,900 0,700,00 Loans and acceptances 50,600 46,400 4,00 4,00 5,900 4,700 5,500 9,000 9,00 46,700 5,400 6,800 9,600 9,500 Deposits,800 7,00 7,900 7,800,000 4,00 8,600 0,400 95,900 5,700 4,600 5,400 94,800 08,00 Attributed capital,50,600,450 9,50 8,50 7,850 8,000 8,00 8,050,750 8,050 8,50 8,00 8,00 Risk capital,00 0,650 0,400 8,50 7,50 6,850 7,000 7,50 7,050 0,800 7,050 7,50 7,00 7,000 Credit quality Gross impaired loans / Average net loans and acceptances 0.4 % 0.68 % 0.5 % 0.6 % 0.7 % 0.56 % 0.68 %.4 %.70 % 0.44 % 0.74 % 0.67 %.8 %. % PCL / Average net loans and acceptances 0.9 % 0.7 % 0.6 % 0.05 % 0.0 % (0.04)% (0.8)% (0.)% (0.)% 0. % (0.07)% (0.04)% 0.07 %.78 % Net write-offs / Average net loans and acceptances 0.76 % 0.00 % 0.0 % 0.09 % (0.09)% 0.0 % (0.9)% 0.5 %.8 % 0.0 % (0.)% (0.06)% 0.8 %.4 % Business information Assets under administration 7,000 6,800 6,00 6,700 6,00 6,00 6,00 6,00 5,800 7,000 6,00 6,700 6,00 5,000 Other earnings measures Net income 486 449 448 54 59 406 67 7 0,8,0,456,647,768 Non-controlling interests - () () - () () n.a. n.a. () (4) (5) n.a. n.a. Add: After-tax effect of amortization of other intangibles - - 4 5 5 Adjusted net income 486 448 450 54 6 407 64 74 0,84,0,456,65,78 Less: Capital charge 8 94 97 5 8 08 6 7 8 909 65 905 96 9 Economic profit (loss) 68 54 5 (99) 99 48 7 (6) 475 650 55 76 848 Effective Q/, we prospectively revised our capital allocation methodology to further align our allocation processes with evolving regulatory capital requirements. The revised methodology replaced the pro-rata allocation of unallocated capital that was used in 0 and the impacts are being phased-in over fiscal 0 in anticipation of our requirement to report under Basel III requirements in 0. The revised methodology resulted in a reduction in attributed capital for Canadian Banking and an increase in attributed capital for Capital Markets. --
CORPORATE SUPPORT (Millions of Canadian dollars) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income (teb) 7 (57) (86) (8) (7) (6) () (6) (56) (6) (55) (9) (84) (84) Non-interest income (0) 48 86 8 8 60 69 48 50 7 57 0 799 Total revenue (teb) 49 (87) (8) 48 66 (98) (5) (9) (08) (76) (84) (6) (540) (4) Provision for (recovery of) credit losses (PCL) - - () - (8) () () 4 5 (6) 8 Non-interest expense - 5 8 9 5 8 65 9 8 79 Income taxes (97) (97) (74) (99) (8) (7) (77) (55) (45) (468) () (4) (86) (48) Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. n.a. n.a n.a. n.a. n.a. 9 9 Net income (loss) 0 8 85 (5) 9 (58) 4 65 79 97 () 7 Additional information teb adjustment (88) (8) () (85) (84) (46) (44) (58) (8) (7) (74) (459) (489) (66) Average balances Total assets 5,00 6,400 4,700 4,500,600 6,700 6,500 (0,600) (,500) 5,600 5,700 5,00 (,600) (8,00) Attributed capital 5,700 4,00,400,050,600,50,500 5,00 5,000 4,50,50,400 5,000,50 Other earnings measures Net income (loss) 0 8 85 (5) 9 (58) 4 65 79 97 () 7 Non-controlling interests () () (4) () (4) () () n.a. n.a. (70) (69) (9) n.a. n.a. Add: After-tax effect of amortization of other intangibles - () - () - - - Adjusted net (loss) income 00 (4) 9 95 60 (8) () (58) 46 95 06 (0) 8 Less: Capital charge 5 0 55 49 69 58 7 40 4 9 98 47 554 7 Economic profit (loss) 65 (7) (46) 46 9 (96) (8) (98) (96) (87) (4) (764) (09) Under Canadian GAAP, this amount comprises of the PCL for loans not yet identified as impaired and an adjustment related to losses on securitized card loans managed by Canadian Banking. In Q/ and 009, PCL also included an amount related to the reclassification of certain AFS securities to loans. Net income reflects income attributable to both shareholders and NCI. Net income attributable to NCI for the three months ended July 0 was $4 millions (April 0, 0 - $ million; July, 0 - $ million). For the nine months ended July, 0, net income attributable to NCI was $70 millions (July, 0 - $69 millions). Average assets under Canadian GAAP included adjustments relating to securitized assets managed by Canadian Banking. --
DISCONTINUED OPERATIONS (Millions of Canadian dollars, except percentage amounts) Q/ Q/ Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 0 0 0 00 009 Income Statement Net interest income - 46 54 60 6 7 89 7 60 00 5 68 69 86 Non-interest income - 0 58 (0) 5 0 67 57 68 8 8,75,80 Total revenue - 56 50 64 88 09 540 677 68 86,0,64,666 Provision for credit losses (PCL) - 4 8 5 9 08 49 55 7 6 6,46 Insurance policyholder benefits, claims and acquisitions expense (PBCAE) - - - - - 78 6 76 48-40 40,56,567 Non-interest expense - 7 85 99 06 08 6 58 65 84 9,4 Goodwill impairment charge - - - - - - - - - - - - -,000 Income taxes - (8) (8) (0) (5) (46) (7) (86) (87) (46) (5) (55) (48) (448) Net (loss) - () (8) (44) (8) (60) (48) (5) (0) (6) (90) (4) (9) (,8) Gain (loss) on sale - 7 6 (07) 9 - (6) - 0 (98) (9) (6) - Net loss from discontinued operations - (0) () (8) (89) (5) (48) (5) (0) (5) (488) (56) (509) (,8) Average balances Total assets - 8,00 6,450 7,700 6,00,00,900 4,400,00,500 0,00 9,500 4,00 40,600 Total earning assets - 6,400 0,990 5,000,600 8,000 9,00 8,600 7,400 9,00 6,900 6,400 8,00 4,400 Loans and acceptances - 5,00 6,00 7,00 6,600 7,00 8,00 9,00 9,400 7,00 7,400 7,00 0,00 5,400 Deposits - 5,600 7,900,00 9,600 9,000 9,00 8,700 8,500 7,800 9,00 9,700 8,900,400 Credit quality Gross impaired loans / Average net loans and acceptances 0.00%.% 7.68% 7.58% 8.5% 8.9% 8.87%.89%.00% 0.00% 7.78% 7.47%.8% 0.7% PCL / Average net loans and acceptances 0.00%.75%.04% 0.6%.0%.57%.9%.0%.% 0.00%.9%.88%.0% 4.78% Net write-offs / Average net loans and acceptances 0.00%.%.4%.99%.96%.46%.97%.55%.88% 0.00%.%.84%.0%.05% Other information Number of employees (full-time equivalent) - 5 4,756 4,76 4,80 4,86 5,000 4,979 4,957-4,80 4,76 4,979 5,06 Number of banking branches - - 4 44 44 4 46 46 46-44 44 46 48 Number of automated teller machines (ATM) - - 469 469 470 470 476 476 476-470 469 476 486 U.S. banking loans Retail Residential mortgages - -,96,897,85,8,9,04,05 -,85,897,04,85 Home equity - -,578,579,474,448,689,88,868 -,474,579,88 4,08 Lot loans - - 484 50 506 54 587 6 654-506 50 6 80 Credit cards - - 4 97 90 94 9 99-97 4 9 9 Other - - 9 6 6 08 6-6 6 6 8 Total retail - - 6,450 6,47 6,44 6,8 6,6 6,89 6,985-6,44 6,47 6,89 7,55 Wholesale Commercial loans - - 9,989 0,49 9,988 0,40 0,897,5,475-9,988 0,49,5,54 Residential builder finance loans - - 40 46 505 554 6 699 775-505 46 699,40 RBC Real Estate Finance Inc. (REFI) - 84 94 44 66 5 5-44 5 64 Other - - - - - - - 688 77 - - - 688,9 Total wholesale - 84 0,5 0,8 0,67 0,860,755,789,44-0,67 0,8,789 5,57 Total U.S. banking loans - 84 6,96 7,50 6,88 7,04 8,78 9,680 0,9-6,88 7,50 9,680,0 Capital Ratios for Significant Banking Subsidiary RBC Bank (USA) Tier capital ratio 0.0% 0.0%.9%.8%.0%.7%.%.6%.% 0.0%.0%.8%.6% 9.9% Total capital ratio 0.0% 0.0% 6.% 5.9% 5.9% 5.8% 5.4% 5.8% 6.% 0.0% 5.9% 5.9% 5.8%.% On April 9, 0, we completed the divestiture of Liberty Life Insurance Company (Liberty Life), our U.S. life insurance business, to Athene Holding Ltd for US$68 million (C$ 64 million). As a result of this transaction, we classified the results of Liberty Life as discontinued operations. As well, on June 0, 0, we announced a definitive agreement to sell our U.S. regional retail banking operations to PNC Financial Services Group, Inc. Discontinued operations also includes the results of our U.S. builder finance loans portfolio, as this loan portfolio is being wound down. Comparative financial information, starting from 009, has been restated to reflect these results of operations as discontinued operations. Under, Balance Sheet adjustments related to discontinued operations are made prospectively from the date of classification as discontinued operations (U.S. Retail Banking in Q/, Liberty Life at November, 00). The results of discontinued operations are reported as a separate component of income or loss for both current and all comparative periods. Our estimated loss on sale of our U.S. regional retail banking operations was $04 million after taxes. Goodwill impairment was taken on transition to, which decreased Retained Earnings by $. billion This table is a Basel II Pillar disclosure requirement. Ratios have been calculated using guidelines issued by the U.S. Federal Reserve Board under Basel I. RBC Bank USA was sold and the sale transaction was completed in Q/. -4-