ROYAL BANK OF CANADA REPORTS FOURTH QUARTER AND 2025 RESULTS

Executive Summary

• Royal Bank of Canada reported record full‑year net income of C$20.4 billion, up 25% YoY, and adjusted net income of C$20.9 billion (up 20%).
• Diluted EPS rose to C$14.07 (up 25%) for the year; Q4 diluted EPS was C$3.76 (up 29%).
• The bank returned C$11.3 billion to shareholders via dividends and share buybacks and declared a quarterly dividend of C$1.64 per share (↑6%).

Key Details

• Full‑Year Financial Highlights
• Net income: C$20.4 bn (+25% YoY)
• Adjusted net income: C$20.9 bn (+20%)
• Diluted EPS: C$14.07 (+25%)
• Adjusted diluted EPS: C$14.43 (+19%)
• Total PCL (provisions on credit losses): C$4.4 bn, PCL‑on‑loans ratio up 8 bps YoY
• CET1 capital ratio: 13.5% (above regulatory minimum)

• ROE: 16.3%, adjusted ROE 16.7%

• Quarterly (Q4 2025) Highlights

• Net income: C$5.434 bn (+29% YoY, flat QoQ)
• Adjusted net income: C$5.554 bn (+25% YoY)
• Diluted EPS: C$3.76 (+29% YoY)
• Adjusted diluted EPS: C$3.85 (+25% YoY)
• Pre‑provision, pre‑tax earnings (PPPT): C$7.835 bn (+30% YoY)

• Total revenue: C$17.209 bn (+11% YoY) – driven by higher net interest income and fee‑based revenues across all segments.

• Segment Performance

• Personal Banking: Net income C$1.887 bn; earnings growth 20%; NIM up to 2.70%.
• Commercial Banking: Net income C$0.810 bn; earnings growth 5%; NIM 3.99%.
• Wealth Management: Net income C$1.284 bn; earnings growth 33%; fee‑based client assets drove revenue increase.
• Insurance: Net income C$98 m (down 40% YoY) due to adverse actuarial updates.

• Capital Markets: Net income C$1.431 bn; earnings growth 45%; revenue up 24% from higher trading and advisory activity.

• Credit Quality

• Total PCL increased 20% YoY to C$1.007 bn, driven by higher provisions in Personal, Commercial, and Capital Markets.

• PCL‑on‑loans ratio rose to 39 bps (up 4 bps QoQ).

• Capital & Liquidity

• CET1 ratio 13.5%, up 30 bps YoY.

• LCR 127%, NSFR 112% – both comfortably above regulatory thresholds.

• Shareholder Returns

• Dividends declared: C$1.64 per share (↑6%).

• Total return to shareholders FY 2025: C$11.3 bn via dividends and buybacks.

• Guidance & Outlook

• Revised ROE target for fiscal 2026 to 17%+, reflecting expected revenue productivity and cost efficiencies from strategic initiatives.

Notable Quotes

“In 2025, we advanced our position as one of the world's most trusted and successful financial institutions… Looking to 2026, our financial strength remains one of our greatest advantages…” – Dave McKay, President & CEO, Royal Bank of Canada.