Royal Bank of Canada Investor Presentation Q4/2013 Financial information is presented on a continuing operations basis for 2010 and 2011 and on a consolidated basis for 2012 and 2013. All information is presented in Canadian dollars and is based on International Financial Reporting Standards (IFRS), unless otherwise indicated.
Caution regarding forward-looking statements From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this Investor Presentation, in filings with Canadian regulators or the United States (U.S.) Securities and Exchange Commission, in reports to shareholders and in other communications. Forward-looking statements in this presentation include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, the Canadian economy and the Canadian housing market. The forward-looking information contained in this presentation is presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, and our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as believe, expect, foresee, forecast, anticipate, intend, estimate, goal, plan and project and similar expressions of future or conditional verbs such as will, may, should, could or would. By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors many of which are beyond our control and the effects of which can be difficult to predict include: credit, market, liquidity and funding, insurance, regulatory compliance, operational, strategic, reputation and competitive risks and other risks discussed in the Risk management and Overview of other risks sections of our 2013 Annual Report; the impact of regulatory reforms, including relating to the Basel Committee on Banking Supervision s (BCBS) global standards for capital and liquidity reform, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, over-the-counter derivatives reform, the payments system in Canada, the U.S. Foreign Account Tax Compliance Act (FATCA), and regulatory reforms in the United Kingdom (U.K.) and Europe; the high levels of Canadian household debt; cybersecurity; the business and economic conditions in Canada, the U.S. and certain other countries in which we operate; the effects of changes in government fiscal, monetary and other policies; our ability to attract and retain employees; the accuracy and completeness of information concerning our clients and counterparties; the development and integration of our distribution networks; model, information technology and social media risk; and the impact of environmental issues. We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forwardlooking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Material economic assumptions underlying the forward looking-statements contained in this Q4 presentation are set out in the Overview and outlook section and for each business segment under the heading Outlook and priorities in our 2013 Annual Report. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf. Additional information about these and other factors can be found in the Risk management and the Overview of other risks sections in our 2013 Annual Report. 1
Royal Bank of Canada SECTION I
RBC Among the largest banks globally Canada s largest bank by market capitalization, with broad leadership in financial services Offices in Canada, United States and 44 other countries ~79,000 full- and part-time employees who serve more than 15 million clients worldwide 233 214 North American ranking (1) (Market capitalization, US$ billion) Global ranking (1,2) (Market capitalization, US$ billion) 168 160 #5 233 230 214 208 202 168 160 145 133 #12 95 91 84 80 73 72 113 100 95 93 92 92 91 91 84 61 45 41 39 34 32 24 Wells Fargo JP Morgan Bank of America Citigroup RBC American Express TD Goldman Sachs Scotiabank US Bancorp Morgan Stanley BMO PNC Financial Bank of NY Mellon CIBC State Street BB&T Wells Fargo ICBC JP Morgan HSBC CCB Bank of America Citigroup ABC Bank of China CBA Santander RBC BNP Paribas Westpac Lloyds American Express Mitsubishi TD Extending our lead in Canada and selectively growing globally (1) Market data from Bloomberg as at December 2, 2013. (2) ICBC: Industrial and Commercial Bank of China; CCB: China Construction Bank Corporation; ABC: Agriculture Bank of China; CBA: Commonwealth Bank of Australia; Santander: Banco Santander, S.A. 3
RBC s key strengths Diversified business mix, with the right balance of retail and wholesale Almost two-thirds of revenue from Canada Strategic approach in key businesses in the U.S. and select international markets Earnings by business segment (1)(2) Year ended October 31, 2013 Revenue by geography (1) Year ended October 31, 2013 Investor & Treasury Services Capital Markets 21% 4% Insurance 8% Personal & Commercial Banking 56% International 18% U.S. 18% Canada 64% Wealth Management 11% (1) Amounts exclude Corporate Support. For further information, see the Business segment results and Results by geographic segment sections of our 2013 Annual Report. (2) These are non-gaap measures. For additional information, see slide 24. 4
Strong financial profile Revenue ($ billions) Net Income ($ billions) 26.1 27.6 29.8 30.9 7.0 7.5 8.4 5.7 * Based on Canadian GAAP. * Based on Canadian GAAP. Continuing operations basis. Return on Equity 2013 Basel III Capital ratios All-in basis (1) Common Equity Tier 1 9.6% 16.5% 20.3% 19.3% 19.4% Tier 1 Capital Total Capital 11.7% 14.0% Credit ratings (2) * Based on Canadian GAAP. Continuing operations basis. Moody s S&P Fitch DBRS Aa3 AA- AA AA Stable Stable Stable Stable (1) Capital calculated to include all regulatory adjustments that will be required by 2019 but retaining the phase-out rules for non-qualifying capital. Refer to the Capital Management section of our 2013 Annual Report for details on Basel III requirements. (2) Based on long-term senior debt ratings. 5
History of delivering value to our shareholders Total shareholder return (TSR) (1) 3 Year 5 Year Dividend RBC 13% 13% Peer Avg. 11% 9% Current quarterly dividend: $0.67 Q4/2013 payout ratio of 47%; FY2013 payout ratio of 45%, both in line with our target of 40-50% Share buybacks Repurchase of 6.8 million common shares, or $408 million during FY 2013 2014 normal course issuer bid to repurchase up to 30 million common shares Dividend history* ($ per share) 34% total increase to RBC s dividends in less than 3 years $1.01 $1.18 $1.44 CAGR +9.6% $1.82 $2.00 $2.00 $2.00 $2.08 $2.28 $2.53 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 * Dividends declared per common share. Our goal is to maximize shareholder returns by achieving top quartile TSR over 3-5 years (1) Annualized TSR as at October 31, 2013. Based on the global peer group approved by our Board of Directors. For the list of peers, refer to our 2013 Annual Report. 6
Strategic priorities Strategic goals In Canada, to be the undisputed leader in financial services Globally, to be a leading provider of capital markets, investor, and wealth management solutions In targeted markets, to be a leading provider of select financial services complementary to our core strengths Strategic priorities Personal & Commercial Banking Wealth Management Insurance Investor & Treasury Services Capital Markets Offering a differentiated experience: value for money, advice, access and service Making it easier to do business with us and be the lower cost producer Converging into an integrated multi-channel network Enhancing client experience and improving efficiency in the Caribbean and U.S. Building a highperforming global asset management business Focusing on high net worth and ultra-high net worth clients to build global leadership Leveraging RBC and RBC Wealth Management strengths and capabilities Improving distribution efficiency and deepening client relationships Making it easier for clients to do business with us Pursuing select international opportunities to grow our reinsurance business Providing excellence in custody and asset servicing, with an integrated funding and liquidity management business Focusing on organic growth through client relationships, crossselling and promoting the RBC brand Leveraging I&TS as a driver of enterprise growth strategies Maintaining our leadership position in Canada Expanding and strengthening client relationships in the U.S. Building on core strengths and capabilities in Europe and Asia Optimizing capital use to earn high riskadjusted returns on assets and equity 7
Business Segments SECTION II
Personal & Commercial Banking RBC is the market leader and the largest and most profitable retail bank in Canada #1 or #2 market share in all product categories Overview Second largest bank by assets in English Caribbean, with branches in 19 countries and territories Offering a broad range of financial products and services In the U.S., our cross-border banking business serves the needs of Canadian clients, through online channels, as well as U.S. Wealth Management clients 11.4 0.8 2.2 2.6 5.8 3.1 Revenue and Net Income ($ billions) 12.0 0.8 2.3 2.7 6.2 3.7 12.6 0.8 2.3 2.9 2.5 6.6 6.9 4.1 13.2 0.8 3.0 4.4 Business metrics FY 2013 Canada Caribbean & U.S. Clients (million) 11.7 1.3 Branches 1,255 116 ATMs 4,622 351 Employees (FTE) 31,956 6,041 Loans & acceptances (1) ($ billion) 330.4 7.3 PFS BFS CPS Caribbean & U.S. Banking Net Income * Based on Canadian GAAP. Deposits (1) ($ billion) 248.1 14.2 (1) Based on average balances. PFS: Personal Financial Services; BFS: Business Financial Services; CPS: Cards and Payment Solutions, and; FTE: Full-time equivalent. 9
Personal & Commercial Banking Canada Recent awards 2013 Best Retail Bank in North America for 2 nd consecutive year and 2013 Innovation in Customer Service (Retail Banker International) Best Bank in North America and Canada 2013 and Best Trade Finance Bank in Canada 2013 (Global Finance) Best Commercial Bank in Canada 2013 (World s Finance) Offering a differentiated experience Be the undisputed leader in Canada and continue to grow volume at a minimum 25% premium to peers Continue to differentiate our client experience: lead with value for money, strengthen confidence in us by providing clients with relevant advice, and maintain industry-leading convenience/access and service Build on the acquisition of Ally to extend our leadership in Canadian auto financing Making it easier to do business with us Make it simpler and easier for clients to do business with us through self, assisted and full-serve options Invest in skills, accreditation and engagement of our employees to enable us to compete more effectively Continue digitization of the bank and simplification of end-to-end processes Converging into an integrated multi-channel network Leverage our unparalleled distribution breadth, e.g., most branches and ATMs in Canada Leverage strategic partnerships, distribution innovations and sales power Continue to innovate our distribution while adapting to changing needs of consumers and businesses Best Canadian Private Bank in 2013 (Euromoney for 6 th consecutive year, Professional Wealth Management for 2 nd consecutive year) Best Online Banking (Forrester for 6 th consecutive year, Surviscor for 3 rd consecutive years) #1 RBC Visa Infinite Avion in overall satisfaction 2013 (MLM and Maritz) 10
Personal & Commercial Banking Canada 461 191 496 209 Volume ($ billions) CAGR 8% 538 230 578 248 Cross-selling (Households with transaction accounts, investments and borrowing products) (1) 22% Superior cross-sell ability 270 287 308 330 14% * Based on Canadian GAAP. Loans and acceptances Deposits RBC Peer Average Market share (2) Efficiency ratio (%) Product Market share Rank Consumer lending 23.7% 1 49.3% 49.8% 49.0% 49.1% Peer Average (3) Personal core deposits + GIC s 20.0% 2 47.3% Long-Term Mutual Funds 14.1% 1 Business loans ($0-$250M) 28.1% 1 45.4% 44.5% 44.5% Business loans ($250M-$25MM) 24.6% 1 Business deposits & investments 25.3% 1 * Based on Canadian GAAP. 11 (1) Canadian Financial Monitor by Ipsos Reid 12,000 Canadian households annually data based on Financial Group for the 12 month period ending June 2013. Peers include: BMO, BNS, CIBC and TD. (2) Market share is calculated using most current data available from OSFI (M4), Investment Funds Institute of Canada (IFIC) and Canadian Bankers Association (CBA). OSFI, IFIC and Consumer Lending CBA data is at August 2013, Business Loans CBA data is at June 2013. Market share is of total Chartered Banks except for Business Loans which is of total 7 Banks (RBC, BMO, BNS, CIBC, TD, NBC, CWB). (3) Peer Average based on YTD Q3 2013 results. BMO, BNS, CIBC & TD. (3) Efficiency ratio excluding our Ally Canada acquisition is a non-gaap measure. For additional information, see slide 24.
Wealth Management Leveraging Canadian strengths to build global leadership Building a high performing global asset management business Top 50 global asset manager (1) Second fastest growing asset manager, AUM more than doubled from 2007 to 2012 (1) Focusing on HNW and UHNW client segment to extend our industryleading share of HNW client assets in Canada and expand share globally Growing our credit and deposit business by leveraging RBC strengths and capabilities Client assets surpassed $1 trillion in 2013, a 12% YoY increase Grew AUA by 7% and AUM by 14% CAGR since 2010 Recent awards / rankings Top 6 Global Wealth Manager by assets (Scorpio) Private Bank of the Year (Spear s) Outstanding Wealth Manager Customer Relationship Service and Engagement (Private Banker International) Best Overall Fund Group (Lipper, Canada) Best Private Banking Services Overall Canada, Caribbean and Cayman Islands (Euromoney) Best Trust Company & Best UK Private Bank International Client Team (WealthBriefing, Europe) Ranked Highest in Investor Satisfaction among full service brokerage firms in the U.S. (J.D. Power & Associates) 4,188 737 1,949 1,502 Revenue and Net Income ($ millions) 4,708 1,036 4,835 1,117 1,948 1,977 1,724 1,741 5,487 1,373 2,225 1,889 $ millions 718 Cash Earnings ($ millions) CAGR: 10% 879 829 966 $ billions 522 262 AUA and AUM AUA CAGR: 7% AUM CAGR: 14% 527 306 578 340 639 387 669 811 763 899 Canadian WM U.S. & International WM GAM Net Income * Based on Canadian GAAP. * Based on Canadian GAAP. 2010 2011 2012 2013 AUA AUM (1) Based on the Pensions & Investments and Towers Watson 2013 Global Asset Manager Ranking Report. HNW: High net worth; UHNW: Ultra-high net worth; AUA: Assets under administration; and, AUM: Assets under management. 12
Wealth Management Canada Extending our industry leadership in a challenging environment Extending our #1 position Grew HNW market share by ~400 bps to 19% in the last four years (1) with momentum to reach 20% market share by 2015 Delivering profitable growth in a challenging market Generating 35% of RBC Wealth Management earnings with strong pre-tax margin, highest among Canadian peers (2) Driving strong advisor productivity Canadian leader in fee-based assets per advisor (3) Consistently driving revenue per advisor of over $1 million per year, 42% above Canadian industry average (3) Competitive hires delivering strong new asset growth Investing to enhance productivity and the client experience Fee-based assets per advisor (3) ($ millions) $49 RBC Over 2.2x the peer average $22 Cdn Peer Average U.S. & International United States At scale, focusing on improving advisor productivity and efficiency Continuing to shift from transaction-based to fee-based model 12% YoY growth in average fee-based client assets Loans & Deposits Strong growth in our credit and deposit taking businesses, with loans up 22% YoY and deposits up 9% YoY Average Balances ($ billions) 28.2 29.2 31.9 Outside North America Building on our global leadership in international trust solutions to grow HNW / UHNW assets Positioning RBC for long-term growth with a focus on serving emerging market HNW / UHNW clients through key international centers (1) Investor Economics as of October 2013. (2) As per BCG Global Wealth Manager Benchmarking 2012, based on 2011 results. (3) Investor Economics as of September 30, 2013. (4) Total of average loans, acceptances, letters of credit and guarantees. 8.2 9.9 12.1 2011 2012 2013 Loans Deposits 13
Wealth Management Global Asset Management Building a high-performing global asset management business Driving top-tier profitability in our largest Wealth Management business Generating over 50% of RBC Wealth Management earnings with top tier profitability 1.5x above the industry (1) Extending our #1 retail position in Canada The leader in industry long-term fund sales, capturing 19% of the market over the last 12 months (2) Top quartile fund performance over 10-year term, with 77% of AUM in 1 st or 2 nd quartile (3) Leader in all-in mutual fund market share, up 547 bps to 14.5% over last 10 years (4) ~50% organic, ~50% acquisitions Expanding our global solutions and capabilities Leveraging BlueBay s expertise through new retail and institutional mandates in Canada and the U.S. Winning high-profile international mandates and industry awards Focusing on strategic acquisitions to further enhance our global asset management capabilities Canadian mutual fund balances and market share (2) 180 14.4% 14.6% 14.5% 16.0% $ billions 150 120 90 60 30 13.7% 10 97 14.1% 8 113 14.1% 7 129 12.0% 8.0% 4.0% Money Market Funds Long-term Funds All-in Market Share LT Market Share 0 Sep-11 Sep-12 Sep-13 0.0% (1) Operating margin as defined by BCG Global Wealth Asset Manager Benchmarking 2013, based on 2012 results. (2) Investment Funds Institute of Canada as at September 30, 2013 and RBC reporting. (3) As of September 2013. Based on RBC Global Asset Management peer group. (4) Investment Funds Institute of Canada from October 1, 2003 to September 30, 2013. 14
Insurance We provide a wide range of life, health, home, auto, travel and wealth accumulation solutions to individual and group clients across Canada and offer reinsurance solutions for clients globally. Increasing sales through proprietary distribution channels Revenue and Net Income Premiums and Deposits (1) ($ millions) ($ millions) 4,897 16.8% 17.0% 15.3% 12.5% 2,346 2,487 2,580 2,266 2,191 2,355 2,362 1,100 1,300 1,500 1,700 1,900 2,100 2,300 2,500 2,700 2,900 3,100 3,300 3,500 3,700 3,900 4,100 4,300 4,500 4,700 4,900 5,100 5,300 5,500 5,700 5,900 6,100 6,300 6,500 0 4,489 4,475 1,905 1,733 1,799 3,928 4,457 4,701 4,849 4,924 2,344 (100) 100 300 500 700 900 (0) 1,966 2,992 2,756 2,676 1,423 1,962 491 600 714 597 Canada International & Other Net Income Canadian Insurance International Insurance Acquisition Expense Ratio * Based on Canadian GAAP. Improving distribution efficiency Strengthening our position in profitable third-party distribution channels Deepening client relationships Providing a comprehensive suite of RBC Insurance products and services to continue to meet our clients unique needs Simplifying the way we do business Enhancing and streamlining all processes to ensure that clients find it easy to do business with us Pursuing select international opportunities to grow our reinsurance business Executing on a higher volume of profitable transactions that fit within RBC s overall risk framework * Based on Canadian GAAP. (1) 2013 Acquisition Expense Ratio calculated as Total Acquisition Expense/Net Premiums. 15
Investor & Treasury Services Providing institutional clients with excellence in custody and asset servicing, alongside RBC s integrated funding and liquidity management business Leading specialist provider of global custody, fund administration and asset servicing to institutional investors Top 10 global custodian by AUA Market leader for asset servicing in Canada and strong offshore offering for international asset managers Execution excellence globally from key operating centres in Canada, Luxembourg and Malaysia Funding and liquidity management for RBC Responsible for managing the enterprise liquidity portfolio on behalf of RBC Canadian leader in cash management, correspondent banking and trade finance for financial institutions Process more than 50% of all payments into Canada Industry recognition for products, capabilities and dedication to client service excellence Best Custodian Overall and #1 for Service (1) #1 overall in FX and Securities Lending (2) Revenue and Net Income ($ millions) Assets under administration ($ billions) 1,121 1,142 1,325 1,804 2,780 2,744 2,887 3,209 222 230 298 85 343 (3) Revenue Net Income Adjusted Net Income * Based on Canadian GAAP. * Based on Canadian GAAP. (1) Global Investor/ISF magazine s Global Custody Survey 2013. (2) R&M Survey 2013. (3) Adjusted net income excludes a loss of $213MM after-tax ($224MM before-tax) related to our acquisition of the remaining 50% stake of RBC Dexia. This is a non-gaap measure, for additional information see slide 24. 16
Capital Markets The premier Canadian investment bank with select global reach Full suite of integrated Corporate & Investment Banking and Global Markets services Strategically positioned in the largest financial centers, covering 85% of global investment banking fee pool Top talent with expertise and track record of excellence Canada United States U.K. & Europe Asia Pacific Full suite of products and services across all sectors Full service investment bank with equity and fixed income sales & trading M&A advisory and origination in key sectors with fixed income, equity and FX sales & trading Primarily distribution with select M&A advisory and origination Revenue and Net Income (1) ($ millions) Revenue by geography (2013) 6,188 6,580 Asia Pacific 5,423 5,324 1,952 2,371 2,533 3,014 U.K. & Europe 3% 12% 3,495 3,143 3,635 3,492 Canada U.S. 54% 31% 1,462 1,292 1,581 1,710 Global Markets Corporate & Investment Banking Net Income * Based on Canadian GAAP. (1) Other revenue not depicted on the graph, but included in Total revenue and Net Income. 17
Capital Markets Maintaining our leadership position in Canada Focus on long-term client relationships and leverage our strong cross-border capabilities Increase market share in mid-market range of resource sectors Expanding and strengthening client relationships in the U.S. Build on our momentum and leverage broader relationships and client investments Expand origination, advisory, distribution and drive cross-sell through our diversified high quality loan book Building on core strengths and capabilities in Europe and Asia In the U.K., selectively build our investment bank, adding capabilities and extending key sector strengths Expand distribution capabilities in Hong Kong and selectively grow investment banking in Sydney Optimizing capital use to earn high risk-adjusted returns on assets and equity Continue to rebalance revenue mix towards client based lending and fee based activities in our target sectors and geographies Maintaining disciplined diligence on the risks and costs of our business Recent awards / Rankings 11 th largest global investment bank by net revenue (Thomson Reuters, YTD Q3/2013) Best Investment Bank in Canada across Equity, Debt and M&A for 6 th consecutive year (Euromoney, 2013) Best Project Finance House in North America (Euromoney, 2013) Best FX Research & Strategy, and Best Emerging Markets Research & Strategy (Technical Analyst Awards, 2013) Top Equity Research franchise in Canada - ranked #1 for four consecutive years (Brendan Wood International) Recognized as Canadian fixed income sales & trading quality leader, Canadian fixed income market share leader (Greenwich Associates) Leading Canadian Equities platform - ranked #1 in 2013 for Overall Trading Quality and #1 for Sales Quality (Greenwich Associates) 18
Capital Markets 3,495 502 960 Global Markets Revenue ($ million) 3,143 526 1,033 3,635 656 927 3,492 669 989 Corporate & Investment Banking Revenue ($ million) 1,952 2,371 1,065 2,533 1,195 3,014 1,440 2,033 1,584 2,052 1,834 931 1,021 1,306 1,338 1,574 FICC Global Equities Repo and secured financing Investment Banking Lending and Other 89 Capital Markets trading securities ($ billion, average) 92 90 92 100 104 101 99 Loans Outstanding by Region (1) ($ billion, average wholesale loan and acceptances) 40 41 6 6 17 18 45 45 48 48 49 7 7 6 6 6 21 21 22 23 24 53 7 26 17 17 17 18 19 19 19 20 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Q1/2012 Q2/2012 Q3/2012 Q4/2012 Q1/2013 Q2/2013 Q3/2013 Q4/2013 Canada U.S. Other International * Based on Canadian GAAP. FICC: Fixed income currencies and commodities. (1) Average loans and acceptances, and letters of credit and guarantees for our wholesale portfolio (which excludes Global Financial Institutions loans), on single name basis, mortgage investments, securitized mortgages and other non-core items). 19
Capital Markets Recent marquee transactions has agreed to be acquired by has acquired has merged with has acquired have acquired Foresight Solar Fund Limited US$2,200,000,000 US$2,900,000,000 US$1,400,000,000 234,000,000 US$24,900,000,000 US$6,000,000,000 150,000,000 Financial Advisor Announced June 2013 Financial Advisor and Joint Lead Arranger & Joint Bookrunner on Acquisition Financing November 2013 Financial Advisor November 2013 Initial Public Offering Ordinary Shares Joint Global Coordinator & Joint Bookrunner November 2013 Financial Advisor and Joint Lead Arranger & Joint Bookrunner on Acquisition Financing October 2013 Financial Advisor and Joint Lead Arranger & Joint Bookrunner on Acquisition Financing October 2013 Initial Public Offering Global Coordinator, Sponsor & Bookrunner C$280,400,000 October 2013 1,720,000,000 Initial Public Offering Co-Lead Manager October 2013 US$3,000,225,000 Cross Border Follow- On Offering of Common Shares Global Coordinator & Joint Bookrunner October 2013 C$303,025,000 Initial Public Offering Lead Left Bookrunner C$200,000,000 Senior Unsecured Revolving Credit Facility Sole Lead Arranger, Sole Bookrunner & Admin. Agent October 2013 US$6,500,000,000 7.250% Senior Notes due 2021 7.875% Senior Notes due 2023 Joint Bookrunner September 2013 US$49,000,000,000 Senior Unsecured Notes Joint Bookrunner September 2013 260,000,000 Initial Public Offering Sole Sponsor, Global Coordinator & Joint Bookrunner March 2013 C$280,400,000 Initial Public Offering Common Shares Joint Bookrunner November 2012 20
Canadian economy SECTION III
Strong fiscal position Strong rating as a result of fiscal prudence, conservative bank lending practices and solid economy Lowest net debt to GDP ratio among G-7 peers #1 for soundness of banks for the 6 th consecutive year (1) 0.4 Italy 0.9 Japan 3 6 14 20 G7 Real GDP Growth (%) (2) 2000-2012 1.3 Germany 1.3 France Canadian Government Budget Balance (3) ($ billion) 8 7 9 2 2.2 1.9 1.7 1.7 U.K. 13 14 10 U.S. 4 5 6 10 Japan x 140% Canada lowest net debt of all G7 countries (4) (as a % of nominal GDP, 2012) France USA x x S&P Rating UK x AAA AA+ AA x Germany 100% 75 50% 35 % % A+ Gov Net Debt (% of GDP) -9-30 -6-6 -26-19-18-33 -56 Italy x A BBB+ '95-96 '97-98 '99-00 '01-02 '03-04 '05-06 '07-08 '09-10 x Canada '11-12 '13-14F '15-16F '17-18F Canada Cda 2013F 2.6 Cda 2014F (1) World Economic Forum, 2013. (2) National statistics offices, RBC Economics Research. (3) Department of Finance Canada, RBC Economics Research. (4) S&P, International Monetary Fund (IMF), RBC Economics Research. 22
Attractive economic fundamentals A diversified economy resulting in balanced economic growth Stable inflation remaining close to lower level of the 1-3% target range Canada s unemployment rates are trending favorably and have shown less volatility to global shocks Canadian GDP by Industry (1) (August 2013) 13 12 Unemployment (%) (2) Canada U.S. 11 10 Finance, Insurance & Real Estate 9 8 13% 20% Manufacturing 7 6 7% 4% 11% Wholesale and Retail Trade Scientific, Technical & Educational Serv. 5 4 3 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 7% Public Administration and Utilities Labour Force Participation Rate (2) 8% 11% Mining, Oil & gas extractions 69 Canada U.S. 68 9% 11% Construction 67 Health Care 66 65 Transportation, Warehousing 64 Other 63 62 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 (1) Source: Statistics Canada, RBC Economics Research. (2) Statistics Canada, Bureau of Labor Statistics, RBC Economics Research. 23
Note to users We use a variety of financial measures to evaluate our performance. In addition to generally accepted accounting principles (GAAP) prescribed measures, we use certain non-gaap measures we believe provide useful information to investors regarding our financial condition and result of operations. Readers are cautioned that non-gaap measures, such as results excluding the loss related to the acquisition of the remaining 50% stake of RBC Dexia and earnings and revenue excluding Corporate Support do not have any standardised meanings prescribed by GAAP, and therefore are unlikely to be comparable to similar measures disclosed by other financial institutions. Additional information about our non-gaap measures can be found under the Key performance and non-gaap measures section of our 2013 Annual Report. Definitions can be found under the Glossary sections in our 2013 Annual Report and our Q4 2013 Supplementary Financial Information. Contacts Karen McCarthy, Director (416) 955-7809 Lynda Gauthier, Director (416) 955-7808 Robert Colangelo, Associate Director (416) 955-2049 www.rbc.com/investorrelations 24