Supplementary Financial Information Q 0 For the period ended January, 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 4 Risk-weighted assets 5 Regulatory capital generation 4 Financial Highlights 5 Attributed capital Consolidated Results Credit Quality 7 Statements of income 6 Loans and acceptances 8 Revenue from trading activities 7 Gross impaired loans 8 Gains (losses) on certain market and credit related items 0 Provision for credit losses 9 Non-interest expense Allowance for credit losses Credit quality ratios Segment Details 0 Canadian Banking Credit Risk Exposure Wealth Management 4 Gross credit risk exposure by geography and portfolio Insurance 5 Exposure covered by credit risk mitigation International Banking 5 Credit exposure by residual contractual maturity 4 Capital Markets 6 Credit exposure of portfolios under the standardized approach 5 Corporate Support by risk weight 6 Discontinued operations 6 Actual losses vs. estimated losses 7 Retail credit exposure by portfolio and risk category On- and Off-Balance Sheet 7 Wholesale credit exposure by portfolio and risk rating 7 Balance sheets (period-end balances) 8 Realized gains and losses on available-for-sale securities 8 Selected average balance sheet items 8 Trading credit derivatives 8 Assets under administration and management 8 Other than trading credit derivatives positions 8 Statements of comprehensive income 9 Fair value of derivative instruments 9 Statements of changes in equity 9 Derivative-related credit risk 0 Securitization 40 Calculation of ROE and RORC Capital Capital 4 Glossary
Notes to Users The financial information in this document is in Canadian dollars and is based on unaudited interim financial statements 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 to Shareholders. Certain comparative amounts have been reclassified to conform to the current period's presentation. Impact of on Net Income and Key Performance Measures RBC adopted effective November, 0 (Transition date) and provided comparative results for 0 under. The following information provides a summary of the key impacts to our 0 financial position and results of operations from our adoption of. Note: Under, Accumulated Other Comprehensive Income (loss) is named Other Components of Equity. As well, held-for-trading is referred to as fair value through profit or loss (FVTPL). Non-controlling interests Under Canadian generally accepted accounting principles (GAAP), the portion of income attributable to non-controlling interests (NCI) is deducted prior to the presentation of net income from continuing operations in the Consolidated Statement of Income. Under, net income from continuing operations reflects income attributable to both shareholders and NCI. Net income under is apportioned between our shareholders and NCI after the effects of all continuing and discontinued operations have been presented. Employee benefits, First Time Adoption of ( ) provides the option to recognize cumulative actuarial gains and losses on employee benefit plans that are deferred under Canadian GAAP in opening retained earnings at the Transition date. We have elected this option for our employee defined benefit pension plans and other post-retirement benefit plans. Under, this election eliminated the amortization of previously deferred actuarial liabilities and reduced our pension costs. The reduced pension costs are expected to continue on a declining balance basis over the average remaining service lives of our employees which is approximately 5 years, with most of the impact expected in the first few years. Hedge accounting Certain cash flow hedges which qualify for hedge accounting under Canadian GAAP do not qualify for hedge accounting under. Upon transition to, we have re-designated all hedge programs to ensure they qualify for hedge accounting, and the deferred amount related to non-qualifying hedges was reallocated from Other Components of Equity to retained earnings as a reduction. Therefore, amortization charges related to non-qualifying hedge relationships under Canadian GAAP are eliminated under. The transition adjustment amount would have continued to amortize on a declining balance basis under Canadian GAAP. Classification of financial instruments provides the option to designate a previously recognized financial asset or liability as a financial asset or financial liability at FVTPL or a financial asset as available-for-sale (AFS) at Transition date provided the asset or liability meets certain criteria specified under at that date. Differences between the fair value and carrying value at the Transition date are recorded in opening retained earnings. We have applied this election and designated certain financial assets previously held at FVTPL as AFS and certain liabilities as FVTPL. Valuation adjustments on financial instruments previously held at FVTPL under Canadian GAAP and designated as AFS under would be classified as Other Comprehensive Income (OCI) rather than as Trading revenue. Securitization (Derecognition) Under, the criteria to transfer assets off-balance sheet is based on risks and rewards as well as control. Most assets transferred in our securitization transactions, which are mainly Canadian residential mortgages, do not qualify for derecognition under. Under, these transactions are recognized as funding, secured by residential mortgages which results in the securitized assets and a related funding liability being reported on our balance sheet on transition to. Under, we will no longer recognize gains on these securitization activities. Income and expenses from transferred assets and related funding will be recognized over their remaining term, net of impairment losses. This mainly impacts Corporate Support. Special purpose entities (Consolidation) Under, Special Purpose Entities (SPEs) are consolidated when the substance of the relationship between the reporting entity and the SPE indicates that the SPE is controlled by the reporting entity. Certain entities not consolidated under Canadian GAAP will be consolidated under, while others previously consolidated under Canadian GAAP will be deconsolidated. Under, we will no longer recognize earnings of deconsolidated entities and we will recognize earnings of newly consolidated SPEs. This change will largely impact Capital Markets and Corporate Support on a recurring basis. Foreign currency translation impact on AFS debt securities Under Canadian GAAP, foreign currency translation gains or losses incurred on AFS debt securities denominated in a non-functional currency are reported in Other Components of Equity, while they are recognized in the income statement under. Income taxes Under Canadian GAAP, income taxes paid on intercompany transactions are deferred on the balance sheet until the related transferred assets are transferred to a third party. Under, income taxes paid on intercompany transfers are reported in the income statement immediately. This largely impacts International Banking. Securities impairment Under, the impairment assessment framework requires a security to be written down to fair value when there is objective evidence of impairment and must continue to be written down thereafter as long as the fair value is lower than the book value, whether or not the security will continue to be held. Customer loyalty reward program Under Canadian GAAP, customer loyalty reward points are expensed when clients credit card sales occur and a corresponding liability is created. The reward liability is based on an estimate of the points expected to be redeemed and the average cost of the points. Under, when reward points are earned, a portion of interchange revenue is deferred based on the fair value of the points granted. When the points are redeemed, deferred revenue is recognized in income and a corresponding expense charged based on actual costs incurred. Diluted earnings per share (EPS) Under, financial instruments which may be settled in common shares or cash at our option must be treated as though they are settled in common shares for the purpose of the calculation of diluted EPS, while under Canadian GAAP the inclusion or exclusion of such instruments in the calculation of diluted EPS is based on past experience and expectations of whether these instruments will be settled in cash rather than shares. Refer to definition in the "Key performance and Non-GAAP measures" section of this document. --
Notes to Users (continued) Shareholders' Equity Adjustment We prepared an opening Consolidated Balance Sheet as at November, 00 (Transition date), which forms the starting point for our financial reporting in accordance with. Any differences between the carrying values of assets, liabilities and equity determined in accordance with Canadian GAAP and, as at November, 00, were recorded as an adjustment to opening retained earnings. The quarterly differences in Shareholders equity for 0 were primarily due to the opening balance sheet differences noted above as well as the impacts to Other Components of Equity and quarterly earnings previously described above. Impact on Regulatory Capital from Adoption of Capital levels for Canadian banks are regulated pursuant to guidelines issued by Office of the Superintendent of Financial Institutions (OSFI), based on standards issued by the Bank for International Settlements, Basel Committee on Banking Supervision. Regulatory capital reporting under commenced with our conversion to on November, 0. As per OSFI's Capital Adequacy Guidelines, financial institutions may elect a phase-in of the impact of the conversion to on their regulatory capital reporting. We elected to make use of this option and phase-in the conversion impact over a five-quarter period starting with Q 0. This phase-in amount is based on the impact to retained earnings of our conversion as at November, 0, and is recognized on a straight-line basis. 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 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. Other Changes Significant reporting changes made to this document effective Q/ Cash and Other assets Effective November, 00, we reclassified certain amounts on the Balance Sheet relating 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 Effective Q/, we reclassified certain amounts on the Statement of Income relating to non-associates, which were reported in the Share of profit in associates category, to the Other category. Gains (Losses) on Certain Market and Credit Related Items Effective Q/, 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/write-downs. 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, 5, and 8. 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 0 Annual Report to Shareholders. 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. Performance measures 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. Risk capital Risk capital includes credit, market (trading and non-trading), insurance-specific, operational, business and fixed assets risk capital. Average risk capital Calculated using methods intended to approximate the average of the daily risk capital balances for the period. 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. Non-GAAP measures Cash basis measures Cash basis measures such as cash net income available to common shareholders, cash diluted earnings per share (EPS) and cash ROE are calculated by adding back to net income the after-tax amount of amortization of other intangibles and any goodwill impairment. These non-cash charges do not deplete our cash reserves, and excludes the amortization of computer software intangibles. 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. Common equity Common equity includes common shares, common treasury shares, retained earnings and other components of equity. Diluted EPS Diluted EPS is net income from continuing operations attributable to common shareholders divided by the average diluted shares outstanding. Both net income and number of shares outstanding have been adjusted for the impact of exchangeable shares. 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. 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 (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 SELECTED INCOME STATEMENT INFORMATION Total revenue 7,574 6,69 6,897 6,8 7,8 6,778 6,50 6,8 6,77 7,68 6,08 6,44 Provision for credit losses (PCL) 67 76 0 7 64 8 77 4 46,,40,67 Insurance policyholder benefits, claims and acquisition expense, 867,08 84 567,047 978 7 800,58,546,04 Non-interest expense (NIE),67,50,47,55,669,58,46,44,97 4,67,469,46 Net income from continuing operations,876,609,68,68,996 n.a. n.a. n.a. n.a. 6,970 n.a. n.a. Net income from continuing operations - n.a. n.a. n.a. n.a. n.a.,7,79,4,560 n.a. 5,7 5,68 Net loss from discontinued operations () (8) (89) (5) (48) (5) (0) (9) (6) (56) (509) (,8) Net income,855,57,94,6,948,,76,9,497 6,444 5,,858 Net income available to common shareholders,766,48,05,54,857,057,,64,4 6,085 4,965,65 Add: Dilutive impact of exchangeable shares 0 n.a. n.a. n.a. n.a. 78 n.a. n.a. Net income available to common shareholders including dilutive impact of exchangeable shares,779,494,5,564,880 n.a. n.a. n.a. n.a. 6,6 n.a. n.a. PROFITABILITY MEASURES CONSOLIDATED Earnings per share (EPS) - basic $. $.0 $0.84 $.08 $.0 $0.74 $0.85 $0.89 $.0 $4.5 $.49 $.59 - diluted $. $.0 $0.8 $.06 $.7 $0.74 $0.84 $0.88 $.00 $4.9 $.46 $.57 Return on common equity (ROE) 9.7 % 7. % 4.5 % 9.9 %.7%.% 4.% 5.8% 7.5% 8.7 % 4.9%.9% Return on risk capital (RORC) 7.5 % 4. %.4 %. % 7.5% 0.6% 4.% 6.7% 0.8% 8.4 % 5.4% 9.5% Return on assets 0.9 % 0.76 % 0.67 % 0.88 %.0% 0.6% 0.7% 0.8% 0.90% 0.8 % 0.76% 0.55% Return on risk-weighted assets (RWA).58 %.9 %.9 %.60 %.98%.7%.96%.9%.9%.44 %.0%.50% CONTINUING OPERATIONS Earnings per share (EPS) - basic $.4 $.06 $. $. $.4 $0.9 $0.9 $0.96 $.05 $4.6 $.85 $.90 - diluted $. $.05 $.0 $.0 $. $0.9 $0.9 $0.95 $.04 $4.55 $.8 $.86 Return on common equity (ROE) 0.0 % 7.5 % 9. % 0.5 % 4.4% 5.% 5.6% 6.9% 8.% 0. % 6.5% 7.9% Return on risk capital (RORC) 9. % 6. %.% 5.8% 4.% 9.0% 9.8%.% 6.0%.7 %.5%.% Return on assets 4 0.95 % 0.80 % 0.90% 0.95%.08% 0.79% 0.8% 0.94% 0.99% 0.9 % 0.88% 0.87% Efficiency ratio 48.5% 5.7% 49.5% 5.0% 50.8% 5.8% 5.% 5.4% 50.% 5.% 5.6% 50.8% CASH BASIS MEASURES - CONSOLIDATED Net income available to common shareholders,766,48,05,54,857,057,,64,4 6,085 4,965,65 Add: After-tax effect of amortization of other intangibles and goodwill impairment 9 4 4 4 40 9 9 4 40 66 59,76 Cash net income available to common shareholders,805,5,47,584,897,096,50,05,47 6,5 5,4 4,80 Cash diluted EPS $.4 $.05 $0.86 $.09 $.0 $0.76 $0.87 $0.9 $.0 $4.0 $.57 $.40 Cash ROE 6 0.% 7.6% 5.0% 0.4% 4.%.8% 4.8% 6.% 8.0% 9.% 5.4% 5.8% ECONOMIC PROFIT - CONSOLIDATED Cash net income available to common shareholders,805,5,47,584,897,096,50,05,47 6,5 5,4 4,80 Add: Preferred dividends 64 65 64 64 65 64 65 65 64 58 58 Less: Capital charge 94 9 897 840 847 965 95 905 9,55,745,58 Economic Profit 955 657 44 808,5 95 6 465 64,994,67,45 KEY RATIOS Diluted EPS growth 7 (6.)% n.a. n.a. n.a. n.a. (5.)% (.4)% (5.9)% 4. % n.a. (.0)% n.a. Revenue growth 7 4.9 % n.a. n.a. n.a. n.a. 0.7 % (.)%.9 % 4.7 % n.a. (.4)% n.a. NIE growth 7 0. % n.a. n.a. n.a. n.a. 7. % (9.5)%.0 %.7 % n.a. 0. % n.a. PCL on impaired loans as a % of Average net loans and acceptances 0.9 % 0. % 0.7 % 0. % 0. % 0.40 % 0.40 % 0.5 % 0.5 % 0. % 0.45 % 0.7 % Net interest margin (total average assets).5 %.47 %.55 %.5 %.5%.50 %.56 %.67 %.66 %.5 %.59 %.64 % Net interest margin (total average assets) excluding Trading Assets, Trading NII and Insurance Assets.6 %.9 %.4 %.4 %.9%.9 %.40 %.5 %.50 %.4 %.45 %. % Non-interest income as % of total revenue 60.4 % 55.8 % 58. % 60. % 6. % 6.5 % 57.9 % 60.4 % 6.4 % 58.9 % 60.4 % 59.5 % Effective tax rate.6 % 0. % 9.0 %. % 6.6 % 5.0 % 9.7 % 7. % 9.0 %.4 % 5.5 % 5.8 % SELECTED BALANCE SHEET INFORMATION Average loans and acceptances 8 6,00 5,00 4,700 5,00 50,00 80,400 75,00 68,600 66,00 40,600 7,700 64,400 Total assets 9 85,06 79,8 77,4 768,49 76,97 76,06 704,44 655,6 659,499 79,8 76,06 654,989 Average assets 9 84,450 8,600 767,00 758,900 764,500 75,00 69,900 65,500 660,400 778,700 68,000 695,00 Average earning assets 8 6,800 6,500 6,00 6,500 69,900 54,700 50,600 50,000 499,500 67,600 58,900 489,00 Deposits 8 50,046 489,69 484,0 486,805 485,94 44,56 400,77 79,65 75,99 489,69 44,56 78,457 Common equity 9 6,59 4,889,49,90,65 4,40,70,5,8 4,889 4,40,095 Average common equity 9 5,600 4,400,050,850,000 4,000,500,850,450,600,50 0,450 Average risk capital 9 5,500 4,00,400 0,00 9,600 0,50 9,800 9,450 8,450,400 9,500 8,600 Amounts represent continuing operations unless otherwise noted. Impacts continuing operations only. Defined in the "Key performance and Non-GAAP measures" section. 4 Return on assets calculation is based on annualized net income divided by average assets from continuing operations. 5 The after-tax amount related to continuing operations for Q/ is $9 million (Q4/ - $ million; Q/ - $9 million). 6 Cash ROE calculation is based on adjusted cash net income divided by average capital. 7 Growth rates are calculated based on earnings from continuing operations in the same period a year ago. 8 The classification of our U.S. Retail Banking operations as discontinued operations will be reflected in our Consolidated Balance Sheets beginning in the quarter ending July, 0. The sale of Liberty Life Insurance Company announced in October 00 will be reflected as discontinued operations under from the Transition date. 9 Amounts represent consolidated (combined continuing and discontinued) operations. n.a. Not applicable. -4-
FINANCIAL HIGHLIGHTS continued (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 CAPITAL MEASURES - CONSOLIDATED Tier capital ratio.%.%.%.6%.%.0%.9%.4%.7%.%.0%.0% Total capital ratio 4.5% 5.% 5.% 5.7% 5.% 4.4% 4.% 4.4%.6% 5.% 4.4% 4.% Assets-to-capital multiple 6.6X 6.X 6.4X 6.X 6.5X 6.5X 6.5X 6.0X 6.X 6.X 6.5X 6.X Tier common ratio 9.6% 0.6% 0.% 0.% 9.9% 9.8% 9.6% 9.7% 9.% 0.6% 9.8% 9.% Risk-weighted assets ($ billions) 85.5 67.8 6.0 5. 56.0 60.5 58.8 49. 59.0 67.8 60.5 44.8 Gross-adjusted assets ($ billions) 77.5 684.6 675.0 67.4 668.0 647.5 6.0 599.9 600.4 684.6 647.5 59. SHARE INFORMATION - CONSOLIDATED Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 First preferred shares outstanding (000s) - end of period Non-cumulative series W,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AA,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AB,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AC 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Non-cumulative series AD 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 Non-cumulative series AE 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 Non-cumulative series AF 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 Non-cumulative series AG 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 0,000 Non-cumulative series AH 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 8,500 Non-cumulative series AJ 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Non-cumulative series AL,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AN 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 Non-cumulative series AP,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AR 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Non-cumulative series AT,000,000,000,000,000,000,000,000,000,000,000,000 Non-cumulative series AV 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Non-cumulative series AX,000,000,000,000,000,000,000,000,000,000,000,000 Common shares outstanding (000s) - end of period,440,857,48,76,46,757,48,80,45,90,44,9,4,744,4,44,4,44,48,76,44,9,47,60 - average (basic),49,5,47,0,45,,46,504,44,094,4,565,4,777,40,75,48,46,40,7,40,79,98,675 - average (diluted),467,57,465,97,474,6,47,44,47,955,44,5,44,79,44,,4,79,47,49,4,754,4,6 Treasury shares held - preferred (000s) (4) 6 (50) 67 60 86 80 4 8 6 86 65 - common (000s) (95) (46),79 0,05,79,546,887,88 (46),79,7 Stock options outstanding (000s) 4,4 4,4 4,97 5,584 6,945 5,659 6,856 7,9 9,74 4,4 5,659 7,877 Stock options exercisable (000s) 8,557 8,688 9,75 9,78,4 0,70,48,654,65 8,688 0,70,806 COMMON SHARE PERFORMANCE - CONSOLIDATED Book value per share $5.09 $4.5 $.8 $.5 $. $.99 $.70 $.9 $. $4.5 $.99 $.67 Common share price (RY on TSX) - High $54.87 $5.06 $60.5 $6.5 $56. $56.96 $6.75 $6.89 $58.66 $6.5 $6.89 $58.50 - Low $4.0 $44.8 $50.94 $5.77 $50.78 $48.85 $50.8 $5.6 $5.0 $44.8 $48.85 $5.5 - Close, end of period $5.7 $48.6 $5.40 $59.60 $5.68 $54.9 $5.7 $6.59 $5.8 $48.6 $54.9 $54.80 Market capitalization (TSX) ($ MM) 75,458 69,94 7,849 85,58 76,54 77,50 76,484 87,669 74, 69,94 77,50 77,685 P/E ratio (4-quarters trailing earnings).7.6 n.a. n.a. n.a. 5.7 5. 6.4 8.7.6 5.7. Market price to book value.09.00..65.4.7.7.6.6.00.7.4 DIVIDEND INFORMATION - CONSOLIDATED Dividends declared per common share $0.54 $0.54 $0.54 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $.08 $.00 $.00 Dividend yield 4.4% 4.5%.9%.5%.7%.8%.5%.5%.6%.9%.6% 4.8% Dividend payout ratio from continuing operations 44% 5% 49% 45 % 7% 54% 54% 5% 47% 45% 5% 5% Common dividends ($ MM) 778 777 776 7 7 7 70 7 70,979,84,89 Preferred dividends ($ MM) 64 65 64 64 65 64 65 65 64 58 58 Amounts represent continuing operations unless otherwise noted. 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. Closing share price divided by diluted earnings per share for the most recent month period. n.a. Not applicable. -5-
FINANCIAL HIGHLIGHTS continued (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 MARKET RISK MEASURES - NON TRADING BANKING ACTIVITIES Before tax impact of % increase in rates on: Net interest income risk 07 9 04 9 4 60 07 07 9 9 Economic value of equity (8) (454) (47) (90) (94) (484) (5) (0) (8) (454) (484) (0) Before tax impact of % decrease in rates on: Net interest income risk (7) (6) (58) (0) (47) (98) (57) (40) (8) (6) (98) () Economic value of equity 5 4 44 09 45 84 55 55 4 45 4 OTHER INFORMATION Number of employees (full time equivalent) Canada 50,97 50,9 50,80 50,40 50,808 49,79 49,84 48,77 48,49 50,9 49,79 48,79 US 7,4 7,588 7,650 7,46 7,480 7,449 7,45 7,6 7,85 7,588 7,449 7,409 Other 0,77 0,67 0,585 0,47 0,08 9,906 9,7 9,665 9,687 0,67 9,906 9,778 Total 68,7 68,480 69,065 68,40 68,7 67,47 67,05 65,754 65,50 68,480 67,47 65,980 Number of banking branches Canada,,4,,,0,09,05,0,00,4,09,97 Other 4 4 4 4 0 7 5 5 6 4 7 6 Total,45,8,5,6,40,6,0,7,6,8,6, Number of automated teller machines (ATM) 4,704 4,66 4,60 4,59 4,57 4,557 4,57 4,566 4,554 4,66 4,557 4,544 Amounts represent continuing operations unless otherwise noted. Amounts represent the -month Net interest income exposure to an instantaneous and sustained shift in interest rates. -6-
STATEMENTS OF INCOME (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Net interest income Interest income 5,7 5,6 5,49 5,098 5,50 4,66 4,48 4, 4,40 0,8 7,746 9,7 Interest expense,68,59,60,8,455,006,80,78,789 9,456 7,408 8,567 Total,00,957,889,76,795,60,588,58,6,57 0,8 0,705 Non-interest income Accounts 56 6 49 47 49 64 48 48 49,008,009 99 Other payment services 78 80 80 77 78 80 79 78 75 5 08 Service charges 4 4 9 4 7 44 7 6 4,,,99 Insurance premiums, investment and fee income,550,4,49,086 85,8,49 90,0 4,474 4,485 4,067 Trading revenue 96 (9) () 85 7 79 (0) 6 66 655,,80 Investment management and custodial fees 497 497 507 490 505 457 447 4 49,999,774,65 Mutual fund revenue 499 505 59 50 44 40 88 76 97,975,57,400 Securities brokerage commissions 87 07 44 49 05 5 8,,7,57 Underwriting and other advisory fees 94 77 6 5 495 7 95 50,485,9,049 Foreign exchange revenue, other than trading 46 8 6 7 69 64 75 40 9 684 608 65 Card service revenue 7 5 0 4 9 7 88 5 78 Credit fees 88 7 96 50 88 56 56 7 7 707 6 5 Securitization revenue () () () - 06 4 47 97-764,69 Net gain (loss) on available-for-sale securities 5 () 64 58 (6) 7 7 04 8 (6) Share of profit in associates 0 () - n.a. n.a. n.a. n.a. (7) n.a. n.a. Other 9 7 0 7 85 85 69 60 0 669 44 6 Total 4,57,75 4,008 4,5 4,4 4,68,56,85 4,6 6,8 5,744 5,76 Total revenue 7,574 6,69 6,897 6,8 7,8 6,778 6,50 6,8 6,77 7,68 6,08 6,44 Provision for credit losses 67 76 0 7 64 8 77 4 46,,40,67 Insurance policyholder benefits, claims and acquisition expense, 867,08 84 567,047 978 7 800,58,546,04 Non-interest expense,67,50,47,55,669,58,46,44,97 4,67,469,46 Income taxes 549 40 96 48 7 467 44 58 647,00,996,05 Net income from continuing operations,876,609,68,68,996 n.a. n.a. n.a. n.a. 6,970 n.a. n.a. Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. 7 6 n.a. 99 00 Net income from continuing operations - n.a. n.a. n.a. n.a. n.a.,7,79,4,560 n.a. 5,7 5,68 Net loss from discontinued operations () (8) (89) (5) (48) (5) (0) (9) (6) (56) (509) (,8) Net income,855,57,94,6,948,,76,9,497 6,444 5,,858 Net income (loss) attributable to: Shareholders,80,546,69,606,9 n.a. n.a. n.a. n.a. 6,4 n.a. n.a. Non-controlling interests 5 5 5 5 6 n.a. n.a. n.a. n.a. 0 n.a. n.a. Net income,855,57,94,6,948 n.a. n.a. n.a. n.a. 6,444 n.a. n.a. Net income,855,57,94,6,948,,76,9,497 6,444 5,,858 Non-controlling interests (5) (5) (5) (5) (6) n.a. n.a. n.a. n.a. (0) n.a. n.a. Preferred dividends (64) (65) (64) (64) (65) (64) (65) (65) (64) (58) (58) () Net income available to common shareholders,766,48,05,54,857,057,,64,4 6,085 4,965,65 Amounts represent continuing operations unless otherwise noted. Effective Q/, we reclassified certain amounts relating to non-associates, which were reported in the Share of profit in associates category, to the Other category. Under Canadian GAAP, income attributable to NCI is deducted prior to the presentation of Net income from continuing operations. n.a. Not applicable. -7-
REVENUE FROM TRADING ACTIVITIES (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Total trading revenue Net interest income 88 86 9 7 8 4 68 44 90,77,44,6 Non-interest income 96 (9) () 85 7 79 (0) 6 66 655,,80 Total 784 67 59 60,004 60 48 957,05,0,776 4,696 Trading revenue by product Interest rate and credit 56 (6) 4 4 705 446 8 709 84,46,997,078 Equities 0 79 64 9 99 00 5 07 4 45 64 965 Foreign exchange and commodities 8 94 8 76 00 74 05 4 95 5 45 65 Total 784 67 59 60,004 60 48 957,05,0,776 4,696 Trading revenue (teb) by product Interest rate and credit 56 (6) 4 4 705 446 8 709 84,46,997,078 Equities 6 48 8 4 57 98 6 89 85,9 Foreign exchange and commodities 8 94 8 76 00 74 05 4 95 5 45 65 Total (teb) 905 5 4 747,48 777,08,7,489,6 5,060 Trading revenue (teb) by product - Capital Markets Interest rate and credit 495 (6) 74 89 656 44 () 666 777,08,854,87 Equities 6 56 50 5 6 56 7 70 877 876,50 Foreign exchange and commodities 6 9 8 75 00 69 0 4 95 49 407 659 Total (teb) 847 05 699,09 79,044,4,09,7 4,86 GAINS (LOSSES) ON CERTAIN MARKET AND CREDIT RELATED ITEMS Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 (C$ MM) Fair Value Adjustments on RBC debt Capital markets 9 50 () (9) 5 (6) 4 8 6 8 (69) Other segments 4 () 4 (4) (4) () - 0 () 8 (7) Total 8 74 (7) () (6) 5 5 66 6 (586) Credit Valuation Adjustments (CVA) - MBIA, 5 - - - - 0 99 (00) 8 (44) 0 7 (40) CVA - other 58 47 (4) 5 (49) (74) () 50 () 46 Credit default swaps (CDS) 4 (5) 9 (8) (6) (7) (9) (4) 6 (69) (00) BOLI (5) (6) (66) (6) 66 (7) 8 54 (5) 75 () Consolidated SPE in Capital Markets 6 () (05) (48) 9 9 - - - - (95) - - Total revenue impact 5 (46) 4 55 6 (9) 80 (6) 4 46 (,7) Amounts represent continuing operations unless otherwise noted. Includes precious metals. Reported as Trading revenue. 4 Reported as Non- Interest Income - Other. 5 Q/ amounts included a gain related to MBIA settlement. 6 SPE consolidated due to adoption of. -8-
NON-INTEREST EXPENSE (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Human resources Salaries,060,060,05 990 999 978 947 95 97 4,074,777,87 Variable compensation 9 684 699 87,045 850 64 86 98,00,5,505 Benefits and retention compensation 76 57 75 9 78 79 85 90,099,,085 Stock-based compensation 47 48 46 8 47 9 67 88 86 7 Total Human resources,9,0,09,8,47,5,90,0,75 8,66 8,40 8,480 Equipment Depreciation 6 6 58 6 59 6 6 57 59 4 8 Computer rental and maintenance 90 97 85 86 80 76 7 67 70 748 686 70 Office equipment rental and maintenance 5 5 6 6 4 6 5 5 4 0 Total Equipment 58 64 49 54 4 4 9 9,00 944 958 Occupancy Premises rent 5 0 09 06 05 0 98 00 49 404 89 Premises repairs and maintenance 8 98 8 85 79 87 7 75 7 44 08 Depreciation 8 40 8 5 44 4 46 4 Property taxes 8 7 0 8 4 8 7 6 07 05 0 Total Occupancy 64 68 6 57 40 60 6,06 960 94 Communications Telecommunications 45 46 45 4 40 4 44 44 45 74 76 85 Postage and courier 6 5 8 6 4 6 6 0 99 98 Marketing and public relations 8 04 89 7 4 78 00 80 75 7 07 Stationery and printing 5 0 8 4 8 6 7 95 0 96 Total Communications 77 0 94 88 6 09 7 97 7 746 750 686 Professional fees 54 59 57 6 88 46 8 0 69 57 484 Outsourced item processing 65 64 6 7 66 68 66 76 68 66 78 8 Amortization of other intangibles Computer software 94 87 85 8 78 85 7 70 68 95 6 Other 5 9 8 8 4 5 6 7 7 49 45 57 Total Amortization of other intangibles 9 6 0 0 08 07 05 48 440 9 Other Business and capital taxes 5 6 4 5 5 8 4 9 4 75 Travel and relocation 6 44 44 7 5 4 7 4 0 60 4 Employee training 8 9 9 8 7 7 6 9 4 Donations 7 6 0 59 55 5 Other 5 59 47 7 9 5 84 8 94 7 84 Total Other 95 60 9 9 67 4 79 7 0,85,095,8 Total non-interest expense,67,50,47,55,669,58,46,44,97 4,67,469,46 Amounts represent continuing operations unless otherwise noted. 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. -9-
CANADIAN BANKING (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Income Statement Net interest income,064,06,000,9,99,94,865,80,879 7,960 7,488 6,947 Non-interest income 8 85 80 8 8 764 76 78 759,9,067,94 Total revenue,885,85,80,745,80,698,68,59,68,99 0,555 9,890 Provision for credit losses (PCL) 4 4 67 60 7 87 84 0 8,0,9,75 Non-interest expense,94,0,98,44,7,,4,4,05 5,08 4,995 4,79 Income taxes 54 66 48 46 60 5 9 8,40,5, Net income 994 948 888 895 9 765 766 76 777,664,044,66 Total revenue by business Personal Financial Services,575,57,547,5,55,50,4,40,46 6,9 5,760 5,05 Business Financial Services 7 708 696 66 68 654 644 6 67,750,557,457 Cards and Payment Solutions 589 57 558 560 567 54 56 567 565,57,8,8 Total,885,85,80,745,80,698,68,59,68,99 0,555 9,890 Financial ratios Return on equity (ROE) 6.6%.% 6.0% 40.6% 4.7% 4.% 4.7% 4.6% 9.6% 8.0% 5.6% 5.9% Return on risk capital (RORC) 45.8% 4.5% 46.4% 5.% 57.7% 44.4% 45.4% 45.0% 5.8% 48.8% 46.9% 48.4% Net interest margin (average earning assets).75%.75%.75%.79%.80%.75%.70%.76%.80%.77%.75%.76% Efficiency ratio 44.9% 45.7% 46.% 45.% 44.% 48.7% 47.% 47.6% 45.7% 45.4% 47.% 47.8% Operating leverage (.6)% n.a. n.a. n.a. n.a. (.4)% (0.4)%.9% 4.5% n.a..%.8% Average balances Total assets 08,000 0,800 97,000 9,400 9,000 87,000 8,00 76,700 7,600 96,00 79,900 58,900 Total earning assets 98,600 94,00 88,00 8,800 8,400 79,000 74,400 68,800 66,00 87,00 7,00 5,600 Loans and acceptances 00,600 95,800 89,00 8,600 80,500 76,800 7,700 66,400 6,00 87,00 69,500 49,600 Residential mortgages 67,00 64,500 60,600 57,500 56,00 54,00 5,900 49,400 48,500 59,700 5,000 4,800 Personal 74,400 7,000 7,00 69,500 68,00 67,00 64,700 6,700 60,400 70,500 6,700 5,000 Credit cards,800,800,800,800,00,000,600,900,00,900,500,500 Small business,600,600,600,700,700,700,700,800,800,600,700,800 Total Retail 56,900 5,900 47,00 4,500 40,400 7,000,900 6,800 4,000 45,700 9,900 0,00 Wholesale 4,700 4,900 4,000 4,00 40,00 9,800 9,800 9,600 9,00 4,600 9,600 9,500 Deposits 5,500 9,500,000 0,400 0,00 97,400 9,000 87,700 87,500 08,600 9,400 76,000 Attributed capital 0,600,050 9,550 8,850 8,00 8,700 8,550 8,550 7,650 9,450 8,50 7,50 Risk capital 8,450 8,850 7,450 6,800 6,00 6,700 6,550 6,550 5,600 7,50 6,50 5,400 Credit quality Gross impaired loans / Average net loans and acceptances 0.4% 0.4% 0.45% 0.49% 0.50% 0.5% 0.48% 0.49% 0.47% 0.44% 0.5% 0.50% PCL / Average net loans and acceptances 0.% 0.% 0.7% 0.8% 0.8% 0.4% 0.4% 0.47% 0.48% 0.6% 0.44% 0.5% Net write-offs / Average net loans and acceptances 0.0% 0.% 0.5% 0.7% 0.4% 0.4% 0.40% 0.47% 0.45% 0.5% 0.4% 0.47% Business information Assets under administration 6,500 58,000 58,600 6,00 54,600 48,00 4,00 4,00 6,000 58,000 48,00,800 Other earnings measures Net income 994 948 888 895 9 765 766 76 777,664,044,66 Add: After-tax effect of amortization of other intangibles - - - - - - - 5-6 6 Cash net income 4 994 948 888 895 9 765 766 74 778,664,050,669 Less: Capital charge 75 0 60 7 49 44 5 7,0 945 84 Economic profit 79 647 68 66 706 56 5 506 56,64,05,85 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 $4. billion and $.9 billion, respectively. Securitized residential mortgages and credit card loans are included in Total assets, Total earning assets, Loans and acceptances, Residential mortgage, Credit cards and AUA. Under, these transactions are being reported on our balance sheet. 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. As at Q/, average personal secured loans was $4.5 billion and average personal unsecured loans was $0.9 billion. 4 Defined in the "Key performance and Non-GAAP measures" section. n.a. Not applicable. -0-
WEALTH MANAGEMENT (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Income Statement Net interest income 0 96 9 88 90 80 75 7 78 65 05 97 Fee-based revenue 7 76 74 70 659 65 594 579 574,8,6,54 Transactional and other revenue 65 9 46 46 40 75 4 4,5,5,59 Total revenue,88,5,56,6,85,05,044 975,064 4,708 4,88 4,080 Provision for credit losses (PCL) - - - - - - - - - - Non-interest expense 99 89 895 94 884 855 806 88 806,586,95,6 Income taxes 6 79 69 75 88 75 50 57 9 5 Net income 88 79 9 7 75 85 90 9 8 669 58 Total revenue by business Canadian Wealth Management 4 46 4 444 4 99 68 68 67,74,50,65 U.S. & International Wealth Management 486 466 45 5 59 59 490 45 55,948,949,08 Global Asset Management 80 59 84 60 87 86 8 8,06 77 64 Total,88,5,56,6,85,05,044 975,064 4,708 4,88 4,080 Financial ratios Return on equity (ROE).8%.7% 4.% 7.8% 9.5% 8.7% 9.9% 9.6%.8% 5.9% 7.6% 4.% Return on risk capital (RORC) 5.9% 47.9% 59.9% 77.% 8.9% 70.9% 75.9% 6.% 7.9% 65.% 64.6% 49.% Pre-tax margin.0%.4%.6% 4.8% 5.4%.6%.5% 5.% 4.%.8%.% 0.0% Average balances Total assets,00,00,400 0,600 9,400 8,000 8,00 8,00 9,00 0,900 8,400 0,500 Loans and acceptances 9,400 8,900 8,00 7,900 7,600 7,400 7,000 6,400 6,00 8,00 6,800 5,800 Deposits 9,000 8,00 7,00 8,600 8,500 8,700 8,900 8,800 9,400 8,00 9,000,500 Attributed capital 5,50 5,00 5,050 5,000 4,50,550,550,550,850 4,850,650,900 Risk capital,50,400,00,50,000 950 950 950,50,00,000,00 Credit quality Gross impaired loans / Average net loans and acceptances 0.0% 0.0% 0.0% 0.% 0.04% 0.04% 0.09% 0.09% 0.00% 0.% 0.04% 0.00% PCL / Average net loans and acceptances (0.0)% 0.00% 0.00% 0.00% 0.00% (0.0)% 0.7% 0.00% 0.00% 0.00% 0.04% 0.00% Net write-offs / Average net loans and acceptances (0.0)% 0.00% 0.00% 0.00% 0.00% 0.5% 0.00% 0.00% 0.00% 0.00% 0.04% 0.00% Business information Assets under administration Canadian Wealth Management 6,00 09,700,600 5,000 09,700 0,00 9,400 9,600 86,00 09,700 0,00 8,000 U.S. & International Wealth Management 8,000 7,500,700,900,00 0,400 08,600 07,000,900 7,500 0,400 0,00 Total 54,00 57,00 55,00 57,900 54,000 5,600 50,000 500,600 50,000 57,00 5,600 50,00 Assets under management Canadian Wealth Management,500,700,000,700,500 9,700 7,900 7,500 6,000,700 9,700 5,000 U.S. & International Wealth Management 7,800 6,800 4,000,800,600,900,600,500,000 6,800,900,000 Global Asset Management, 5,900 47,00 54,00 5,800 50,00 09,00 0,600 0,000 0,400 47,00 09,00 99,700 Total,00 05,700 0,00 08,00 05,00 6,800 5,00 5,000 48,400 05,700 6,800 45,700 Other earnings measures Net income 88 79 9 7 75 85 90 9 8 669 58 Add: After-tax effect of amortization of other intangibles 5 8 8 7 5 68 49 48 Cash net income 0 97 0 44 8 87 97 0 879 78 6 Less: Capital charge 44 7 0 0 99 09 55 40 447 Economic profit 70 5 7 5 86 96 4 54 08 84 (US$ MM) Revenue by business U.S. & International Wealth Management 480 464 468 5 56 50 470 49 487,980,878,794 Business information Assets under administration U.S. & International Wealth Management 7,58 8,600 8,400 4,00,800 4,000 00,00 0,00 0,900 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 $. billion of these assets. --
INSURANCE (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Income Statement Net earned premiums 957 897 89 864 88 89 95 754 795,5,,88 Investment income 5 54 99 66 (6) 8 76 0 6 70 98 940 Fee income 6 64 59 56 60 66 48 68 66 9 48 4 Total revenue,550,5,49,086 85,86,49 9,0 4,475 4,489 4,06 Insurance policyholder benefits, claims and acquisition expense (PBCAE), 867,08 84 567,047 978 7 800,58,546,04 Non-interest expense 9 9 6 4 0 6 08 498 468 457 Income taxes 0 9 () - (9) () 9 (6) 7 Net income 90 00 4 6 4 48 06 600 49 57 Total revenue by business Canadian Insurance,054 757 875 65 9 88 70 56 67,676,756,664 International and Other Insurance 496 458 474 44 4 448 59 7 95,799,7,99 Total,550,5,49,086 85,86,49 9,0 4,475 4,489 4,06 Financial ratios Return on equity (ROE) 48.5% 40.% 4.5% 4.8% 40.5% 8.6% 40.5% 0.8% 9.% 7.6% 7.% 45.7% Return on risk capital (RORC) 5.% 4.% 7.7% 8.5% 45.7% 44.% 45.9% 4.9% 46.% 4.% 4.7% 5.9% Average balances Total assets,00 0,800 0,600 0,00 0,500 0,500 9,900 9,800 9,500 0,500 9,900 8,500 Attributed capital,550,950,600,400,00,50,400,400,00,550,00,50 Risk capital,400,800,450,00,50,00,50,00 950,400,50 950 Additional information Premiums and deposits, 4,,05,,8,47,,,00,09 4,70 4,457,880 Canadian Insurance 59 605 605 568 577 547 567 58 59,55,9,977 International and Other Insurance 64 600 606 570 570 576 654 48 554,46,66,90 Insurance policyholder benefits and claims,065 70 9 695 409 908 87 589 665,757,989,50 Insurance policyholder acquisition expense 46 47 48 48 58 9 5 5 60 557 5 Insurance claims and policy benefit liabilities 7,68 7,9 7,7 6,896 6,740 6,7 5,847 5,54 5,44 7,9 6,7 5, Fair value changes on investments backing policyholder liabilities 5 85 80 54 (4) 47 (8) 49 4 89 458 Embedded value 5,458 5,7 5,084 4,94 4,97 5,466 5,57 5,08 5,5 5,7 5,466 5,6 Business information Assets under management 00 00 00 00 00 00 00 00 00 00 00 00 Other earnings measures Net income 90 00 4 6 4 48 06 600 49 57 Add: After-tax effect of amortization of other intangibles - - - - - - - - - - - - Cash net income 90 00 4 6 4 48 06 600 49 57 Less: Capital charge 40 5 4 7 6 6 40 8 69 46 0 Economic profit 50 47 98 86 00 88 08 68 8 4 45 97 Amounts represent continuing operations unless otherwise noted. 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. 4 Premiums and deposits include premiums on risk-based insurance and annuity products, and individual and group segregated fund deposits, consistent with insurance industry practices. 5 The revenue impact of the change in fair value on investments backing policyholder liabilities is reflected in Investment income and largely offset in PBCAE. --
INTERNATIONAL BANKING (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Income Statement Net interest income 59 6 49 57 7 66 66 65 7 68 669 80 Non-interest income 4 4 4 6 6 7 6 99 84 74 Total revenue 7 85 9 8 407 89 8 97 4,567,50,57 Provision for credit losses (PCL) 8 6 44 5 4 46 40 5 09 4 7 Non-interest expense 6 9 07 9 00 89 89,49,0,8 Income taxes 5-9 4 6 8 67 57 4 Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. () - n.a. 9 Net income (loss) 4 0 8 46 68 (7) 6 5 4 9 Total revenue by business Banking 0 97 98 98 8 4 75 86 846 87 RBC Dexia IS 7 88 94 85 74 7 7 56 59 74 657 70 Total 7 85 9 8 407 89 8 97 4,567,50,57 Financial ratios Return on equity (ROE).0% 0.%.4% 5.% 7.7% (.6)%.8% 6.0% 0.8%.5%.%.0% Return on risk capital (RORC) 5.% 0.6%.4%.7% 0.9% (4.7)% 0.9% 6.6%.5% 8.7% 6.4% 9.% Net interest margin (average earning assets) 4 5.5% 5.4% 5.5% 5.50% 5.77% 5.44% 5.40% 5.98% 5.6% 5.5% 5.60% 5.% Average balances Total assets 5,00 6,700 6,900 6,500 6,00 7,000 6,800 4,00 4,500 6,600 5,600 7,00 Total earning assets 4 0,000 0,00 9,700 9,900 0,400,000,00 0,00 0,900 0,000 0,900,00 Loans and acceptances 8,400 8,400 8,000 8,000 8,500 9,00 9,400 8,500 8,500 8,00 8,900 9,900 Deposits 8,000 9,800 4,900 6,00 4,800 7,000 7,700 5,400 7,400 6,400 6,900 9,00 Attributed capital,00,400,50,00,00,00,00,050,050,00,050,50 Risk capital,50,500,00,50,50,00,00,00,000,00,050,050 Credit quality Gross impaired loans / Average net loans and acceptances 9.50% 9.% 9.05% 7.94% 7.68% 7.87% 7.% 7.6% 6.7% 9.55% 8.9% 4.49% PCL / Average net loans and acceptances 0.6%.70%.0% 0.75% 0.68%.96%.%.95%.4%.%.59% 0.7% Net write-offs / Average net loans and acceptances 0.47%.97% 0.96% 0.96%.80%.0% 0.4% 0.97% 0.4%.70% 0.7% 0.8% Business information Assets under administration - RBC 7,900 7,900 7,00 7,00 7,500 7,800 7,900 7,00 7,400 7,900 7,800 7,700 - RBC Dexia IS,709,800,744,400,8,900,89,700,88,00,779,500,65,500,48,900,58,800,744,400,779,500,484,400 Assets under management - RBC,800,700,600,600,600,600,600,600,700,700,600,800 Other earnings measures Net income (loss) 4 0 8 46 68 (7) 6 5 4 9 Non-controlling interests () () () () () n.a. n.a. n.a. n.a. (4) n.a. n.a. Add: After-tax effect of amortization of other intangibles and goodwill impairment 7 6 6 8 49 67 74 Cash net income 4 0 57 79 0 5 67 0 87 59 97 Less: Capital charge 8 9 87 8 84 88 88 84 87 46 47 75 Economic loss (48) (7) (57) (5) (5) (78) (6) (7) (57) (59) (88) (78) (US$ MM) Revenue by business Banking 99 94 06 07 0 0 0 5 66 87 84 70 Amounts represent continuing operations unless otherwise noted. 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. RBC Dexia Investor Services (RBC Dexia IS), of which we have a 50% ownership interest. Results are reported on a one-month lag. AUA - RBC Dexia IS represents the total AUA of the joint venture. 4 Calculated based on Banking information and excludes RBC Dexia IS amounts. n.a.. Not applicable. --
CAPITAL MARKETS (C$ MM) Q/ Q4/ Q/ Q/ Q/ Q4/0 Q/0 Q/0 Q/0 0 00 009 Income Statement Net interest income (teb) 764 70 666 664 655 69 68 660 79,687,79,99 Non-interest income 85 40 467 85,96 80 6 940,,08,68,54 Total revenue (teb),66,04,,499,05,49 954,600,840 5,75 5,887 6,9 Provision for credit losses (PCL) 7 5 9 () (5) () (9) 0 (4) 0 70 Non-interest expense 978 88 77 98, 9 674 86 95,659,40,68 Income taxes 7 45 9 68 8 04 87 6 88 64 795 86 Non-controlling interest in net income of subsidiaries n.a. n.a. n.a. n.a. n.a. 5 () - n.a. 5 () Net income 448 54 59 406 67 7 0 50 57,456,647,768 Total revenue (teb) Total revenue,66,04,,499,05,49 954,600,840 5,75 5,887 6,9 Revenue related to VIEs offset in non-controlling interests - - - - 4 0-4 4 () Total revenue excluding VIEs,66,04,,499,047,48 954,598,88 5,7 5,87 6,945 Total revenue by business Global Markets,090 564 59 95,0 85 478,6,8,7,80 6,09 Corporate and Investment Banking 566 59 66 574 7 558 565 44 56,540,08,697 Other (40) () () 0 6 0 (89) (40) (4) (88) () (8) Total,66,04,,499,05,49 954,600,840 5,75 5,887 6,9 Financial ratios Return on equity (ROE) 4.9% 5.8%.5% 0.% 0.7% 7.0% 9.% 5.8% 6.4% 6.5% 9.5%.0% Return on risk capital (RORC) 6.4% 6.5%.%.% 5.% 9.% 0.5% 9.6% 0.% 8.8%.% 4.% Average balances Total assets 407,700 47,800 7,600 6,00 67,900 59,000,900 04,00,00 79,800 7,500 47,900 Trading securities 0,600 6,500 5,000 46,700 7,500 9,600,00 6,00,00 4,900 0,700,00 Loans and acceptances 45,00 4,600 9,700 7,700 8,600 9,000 9,00 9,000,400 9,700 9,600 9,500 Deposits 0,00 8,400,00,500 6,000 0,400 95,900 89,900 89,800 4,600 94,800 08,00 Attributed capital,450 9,50 8,50 7,850 8,000 8,00 8,050 7,750 8,50 8,50 8,00 8,00 Risk capital 0,400 8,50 7,50 6,850 7,000 7,50 7,050 6,750 7,00 7,50 7,00 7,000 Credit quality Gross impaired loans / Average net loans and acceptances 0.50 % 0.6 % 0.66 % 0.5 % 0.6 %.4 %.70 %. %.7 % 0.66 %.8 %. % PCL / Average net loans and acceptances 0.5 % 0.05 % 0.09 % (0.0)% (0.6)% (0.)% (0.)% 0.9 % 0.8 % (0.0)% 0.07 %.78 % Net write-offs / Average net loans and acceptances 0.09 % 0.09 % (0.08)% 0.0 % (0.6)% 0.5 %.8 % 0.45 % 0.90 % (0.06)% 0.8 %.4 % Business information Assets under administration 6,00 6,700 6,00 6,00 6,00 6,00 5,800 4,800 5,00 6,700 6,00 5,000 Other earnings measures Net income 448 54 59 406 67 7 0 50 57,456,647,768 Non-controlling interests () - () () n.a. n.a. n.a. n.a. (5) n.a. n.a. Add: After-tax effect of amortization of other intangibles - 5 5 Cash net income 450 54 6 407 64 74 0 50 57,456,65,78 Less: Capital charge 97 5 8 08 6 7 8 8 905 96 9 Economic profit (loss) 5 (99) 99 48 7 (6) 90 5 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 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 and an increase in attributed capital for Capital Markets. n.a. Not applicable. -4-