2014

Royal Bank of Canada Reports Fourth Quarter and Record 2012 Results

All amounts are in Canadian dollars and are based on our audited Annual and unaudited Interim Consolidated Financial Statements for the year ended October 31, 2012 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2012 Annual Report (which includes our audited annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2012 Annual Information Form and our Supplementary Financial Information are available on our website at rbc.com/investorrelations.

TORONTO, Nov. 29, 2012 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $7.5 billion for the year ended October 31, 2012, up $1.1 billion or 17% from the prior year. Earnings from continuing operations of $7.6 billion were up $620 million or 9% from the prior year. Our results reflected record earnings in Personal & Commercial Banking, Capital Markets and Insurance.

"Our record earnings from continuing operations of $7.6 billion this year were driven by exceptional growth in Canadian Banking, Capital Markets and Insurance, demonstrating the earnings power of our diversified business model," said Gord Nixon, RBC President and CEO. "This year, we extended our leadership position and executed our long-term growth strategy while maintaining our prudent risk and disciplined cost management."

Strong volume growth across all of our Canadian banking businesses, higher fixed income trading and corporate and investment banking results, and improved claims experience in Insurance drove our strong earnings this year. These results were partially offset by higher costs in support of business growth, moderated by our cost management initiatives, and increased provision for credit losses (PCL) in our wholesale and Caribbean portfolios.

   
2012 compared to 2011

  • Net income $7,539 million (up 17% from $6,444 million)
  • Diluted earnings per share (EPS) of $4.93 (up $.74 from $4.19)
  • Return on common equity (ROE) of 19.3% (up from 18.7%)
  • Tier 1 capital ratio was 13.1%
Continuing operations: 2012 compared to 2011

  • Net income $7,590 million (up 9% from $6,970 million)
  • Diluted EPS of $4.96 (up $.41 from $4.55)
  • ROE of 19.5% (down from 20.3%)
   

Q4 2012 Performance

"We ended the year strongly with results of over $1.9 billion in the fourth quarter driven by solid earnings from most of our businesses including another quarter of over $1 billion in earnings from Canadian Banking," Nixon said. "While the financial industry is expected to face headwinds in 2013, we are confident in our ability to weather these challenges given our strong financial and competitive position."

   
Q4 2012 compared to Q4 2011

  • Net income $1,911 million (up 22% from $1,571 million)
  • Diluted EPS of $1.25 (up $.23 from $1.02)
  • ROE of 18.7% (up from 17.1%)
Continuing operations: Q4 2012 compared to Q4 2011

  • Net income $1,911 million (up 19% from $1,609 million)
  • Diluted EPS of $1.25 (up $.20 from $1.05)
  • ROE of 18.7% (up from 17.5%)
   

Earnings of $1,911 million were up $340 million or 22% from last year. Earnings from continuing operations were up $302 million or 19%, driven by stronger fixed income trading results reflecting improved market conditions as compared to challenging markets in the prior year. Solid volume growth across all our Canadian banking businesses, along with stable margins and positive operating leverage, and lower claims costs in Insurance also contributed to the increase. We had higher provisions this quarter, reflecting a single account in our wholesale portfolio and increased provisions in our Canadian personal and business lending portfolios.

   
Q4 2012 compared to Q3 2012

  • Net income $1,911 million (down 15% from $2,240 million)
  • Diluted EPS of $1.25 (down $.22 from $1.47)
  • ROE of 18.7% (down from 22.7%)
Q4 2012 compared to Q3 2012, excluding noted items(1)

  • Net income $1,911 million (down 3% from $1,978 million)
  • Diluted EPS of $1.25 (down $.04 from $1.29)
  • ROE of 18.7% (down from 19.9%)
   

Earnings were down $329 million or 15% from the prior record quarter. Excluding certain items which had a favourable net impact of $262 million last quarter, net income was down $67 million or 3%(1). We had higher earnings in all of our retail segments, including lower claims costs in Insurance, higher average fee-based client assets and transaction volumes in Wealth Management, and volume growth in Canadian Banking. These results were more than offset by other net favourable tax adjustments in Corporate Support in the prior quarter.


1   Q3/12 results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest, a release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid due to the settlement of several tax matters with the Canada Revenue Agency (CRA) and a loss of $12 million ($11 million after-tax) related to our acquisition of the remaining 50% interest in RBC Dexia (RBC Investor Services). These measures are non-GAAP. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.
   

Q4 2012 Business Segment Performance

Reflects the strategic realignment of certain business segments, announced on September 11, 2012 and effective October 31, 2012(1).

Personal & Commercial Banking net income was $1,034 million, up $87 million or 9% from last year driven by solid volume growth and a lower effective tax rate in Canada, partially offset by increased costs in support of business growth and higher PCL largely in our Canadian business lending portfolio. We also achieved positive operating leverage of 1.8% in Canadian Banking. Compared to last quarter, net income was down $68 million or 6%.  Excluding the prior quarter mortgage prepayment interest adjustment, net income was up $24 million or 2%(2), driven by volume growth in Canadian Banking.

Wealth Management net income was $207 million, up $28 million or 16% from last year and up $51 million or 33% from the prior quarter. Our results were driven by higher average fee-based client assets, higher transaction volumes and the increase in the fair value of our U.S. share-based compensation plan. The prior year included a favourable accounting adjustment related to a deferred compensation plan of $27 million ($16 million after-tax). The prior quarter included an unfavourable impact of $29 million ($21 million after-tax) related to certain regulatory and legal matters.

Insurance net income was $194 million, down $6 million or 3% from last year, as lower claims costs in Canadian insurance products and reinsurance products were offset by lower net investment gains and no new U.K. annuity reinsurance contracts in the current quarter.  Compared to the prior quarter, net income was up $15 million or 8%, driven by lower claims costs in our reinsurance products and Canadian insurance products. The prior quarter included a favourable impact from the reduction of policy acquisition cost-related liabilities of $33 million ($24 million after-tax).

Investor & Treasury Services net income was $72 million, up $32 million from last year, largely due to higher funding and liquidity trading results reflecting improved market conditions as compared to the challenging market conditions in the prior year. A full quarter of earnings reflecting our 100% ownership of RBC Investor Services also contributed to the increase although lower spreads and decreased transaction volumes continued to impact our results. Compared to the prior quarter, net income was up $21 million due to higher funding and liquidity trading results and a full quarter of earnings related to RBC Investor Services, partially offset by lower custodial and securities lending fees.

Capital Markets net income was $410 million, up $285 million from the prior year, primarily reflecting higher fixed income trading results. Higher origination reflecting solid issuance activity and strong client growth in lending and increased loan syndication activity largely in the U.S. also contributed to the increase. These results were partially offset by higher PCL related to a single account and a higher effective tax rate reflecting increased earnings in the U.S. Compared to the prior quarter, net income was down $19 million or 4%, largely due to lower trading results particularly at the end of the quarter, lower loan syndication activity in the U.S. following a very strong third quarter and higher PCL as noted above. These factors were partially offset by higher equity origination volumes primarily in the U.S. and Canada.

Corporate Support net loss was $6 million, mainly due to net unfavourable tax adjustments. Net income in the prior year was $118 million, reflecting net favourable tax adjustments. In the prior quarter, net income was $323 million, largely due to the settlement of several tax matters with the CRA which resulted in the release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid. The prior quarter also included other net favourable tax adjustments.

Capital - As at October 31, 2012, Tier 1 capital ratio was 13.1% and Total capital ratio was 15.1%. Tier 1 capital was up 10 basis points from last quarter largely due to internal capital generation, partially offset by the phase-in of the transition impact of IFRS and higher risk-weighted assets reflecting growth in our wholesale credit portfolio. Our estimated pro-forma Basel III Common Equity Tier 1 ratio on a fully implemented basis was approximately 8.4%.

Credit Quality - In the fourth quarter, total PCL was $362 million, up $86 million from last year mainly due to increased provisions in our wholesale portfolio related to a single account and in our Canadian Banking business lending portfolio. Compared to the prior quarter, PCL was up $38 million due to the increased provisions noted above, offset by lower provisions in our Caribbean portfolios.


1 See our 2012 Annual Report for additional information.
2 Q3/12 results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest. This measure is a non-GAAP measure. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.
   

 
SELECTED FINANCIAL AND OTHER HIGHLIGHTS  
Selected financial and other highlights                                                                                                             
    As at or for the three months ended   For the year ended  
(Millions of Canadian dollars, except per share, number
   of and percentage amounts)
  October 31
2012
    July 31
2012
    October 31
2011
    October 31
2012
      October 31
2011
   
Continuing operations                                  
  Total revenue   $ 7,518   $ 7,756   $ 6,692   $ 29,772     $ 27,638     
  Provision for credit losses (PCL)   362     324     276     1,301       1,133     
  Insurance policyholder benefits, claims and acquisition
   expense (PBCAE)
  770     1,000     867     3,621        3,358     
  Non-interest expense   3,873     3,759     3,530     15,160        14,167     
  Net income before income taxes   2,513     2,673     2,019     9,690        8,980     
Net income from continuing operations   1,911     2,240     1,609     7,590        6,970     
Net loss from discontinued operations   -     -     (38)     (51)       (526)    
Net income $ 1,911   $ 2,240   $ 1,571   $ 7,539      $ 6,444     
Segments - net income from continuing operations                                  
  Personal & Commercial Banking $ 1,034   $ 1,102   $ 947   $ 4,088      $ 3,740     
  Wealth Management   207     156     179     763        811     
  Insurance   194     179     200     714        600     
  Investor & Treasury Services   72     51     40     85        230     
  Capital Markets   410     429     125     1,581        1,292     
  Corporate Support   (6)     323     118     359        297     
Net income from continuing operations   1,911     2,240     1,609   $ 7,590      $ 6,970     
Selected information                                  
  Earnings per share (EPS) - basic $ 1.26   $ 1.49   $ 1.03   $ 4.98      $ 4.25     
                                           - diluted   1.25     1.47     1.02     4.93        4.19     
  Return on common equity (ROE) (1), (2)   18.7 %   22.7 %   17.1 %   19.3  %     18.7  %
Selected information from continuing operations                                  
  EPS - basic $ 1.26   $ 1.49   $ 1.06   $ 5.01      $ 4.62     
          - diluted   1.25     1.47     1.05     4.96        4.55     
  ROE (1), (2)   18.7 %   22.7 %   17.5 %   19.5  %     20.3  %
  PCL on impaired loans as a % of average net loans and acceptances   0.37 %   0.34 %   0.31 %   0.35  %     0.33  %
  Gross impaired loans (GIL) as a % of loans and acceptances   0.58 %   0.55 %   0.65 %   0.58  %     0.65  %
Capital ratios and multiples (3)               -                  
  Tier 1 capital ratio   13.1 %   13.0 %   13.3 %   13.1  %     13.3  %
  Total capital ratio   15.1 %   15.0 %   15.3 %   15.1  %     15.3  %
  Assets-to-capital multiple   16.7 X   16.7 X   16.1 X   16.7  X     16.1  X
  Tier 1 common ratio (2)   10.5 %   10.3 %   10.6 %   10.5  %     10.6  %
Selected balance sheet and other information                                  
  Total assets $ 825,100   $ 824,394   $ 793,833   $ 825,100      $ 793,833     
  Securities   161,611     158,390     167,022     161,611        167,022     
  Loans (net of allowance for loan losses)   378,244     373,216     347,530     378,244        347,530     
  Derivative related assets   91,293     103,257     99,650     91,293        99,650     
  Deposits   508,219     502,804     479,102     508,219        479,102     
  Common equity   39,453     38,357     34,889     39,453        34,889     
  Average common equity (1)   38,850     37,700     34,400     37,150        32,600     
  Risk-weighted assets (RWA)   280,609     278,418     267,780     280,609        267,780     
  Assets under management (AUM)   343,000     327,800     308,700     343,000        308,700     
  Assets under administration (AUA) - RBC (4)   764,100     742,800     699,800     764,100        699,800     
                                                          - RBCIS (5)   2,886,900     2,670,900     2,744,400     2,886,900        2,744,400     
Common share information                                  
  Shares outstanding (000s) - average basic   1,444,189     1,443,457     1,437,023     1,442,167        1,430,722     
                                              - average diluted   1,469,304     1,469,513     1,465,927     1,468,287        1,471,493     
                                              - end of period   1,445,303     1,444,300     1,438,376     1,445,303        1,438,376     
  Dividends declared per share $ 0.60   $ 0.57   $ 0.54   $ 2.28      $ 2.08     
  Dividend yield (6)   4.4 %   4.3 %   4.5 %   4.5  %     3.9  %
  Common share price (RY on TSX) $ 56.94   $ 51.38   $ 48.62   $ 56.94      $ 48.62     
  Market capitalization (TSX)   82,296     74,208     69,934     82,296        69,934     
Business information from continuing operations (number of)               -                  
  Employees (full-time equivalent) (FTE)   74,377     75,139     68,480     74,377        68,480     
  Bank branches   1,361     1,355     1,338     1,361        1,338     
  Automated teller machines (ATMs)   5,065     4,948     4,626     5,065        4,626     
Period average US$ equivalent of C$1.00 (7)     $ 1.011   $ 0.982   $ 0.992   $ 0.997      $ 1.015     
Period-end US$ equivalent of C$1.00 $ 1.001   $ 0.997   $ 1.003   $ 1.001      $ 1.003     
                                   
(1) Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes ROE and Average common equity. For further details, refer to the How we measure and report our business segments section of our 2012 Annual Report.
(2) These measures may not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures disclosed by other financial institutions. See the How we measure and report our business segments section and the Key performance and Non-GAAP Measures section of this Earnings Release, our Q4 2012 Supplementary Financial Information and our 2012 Annual Report for additional information.
(3) 2011 comparative amounts were determined under Canadian GAAP.
(4) RBC AUA includes $38.4 billion (2011 - $36 billion) of securitized mortgages and credit card loans.
(5) RBC Investor Services, formerly RBC Dexia, AUA represented the total AUA of the entity, of which we had a 50% ownership interest prior to July 27, 2012.
(6) Defined as dividends per common share divided by the average of the high and low share price in the relevant period.
(7) Average amounts are calculated using month-end spot rates for the period.

 

 
BUSINESS SEGMENT RESULTS
Personal & Commercial Banking          
  As at or for the three months ended
  October 31   July 31   October 31
(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted) 2012   2012   2011
  Net interest income $ 2,302   $ 2,391   $ 2,176
  Non-interest income   927     909     872
Total revenue   3,229     3,300     3,048
  PCL   298     300     270
  Non-interest expense   1,526     1,508     1,469
Net income before income taxes   1,405     1,492     1,309
Net income $ 1,034   $ 1,102   $ 947
Revenue by business                
    Personal Financial Services $ 1,680   $ 1,768   $ 1,571
    Business Financial Services   742     736     708
    Cards and Payment Solutions   598     589     572
  Canadian Banking   3,020     3,093     2,851
  Caribbean & U.S. Banking   209     207     197
Key ratios                
  ROE   32.8%     34.2%     26.9%
  NIM (1)   2.82%     2.97%     2.84%
Selected average balance sheet information                
  Total assets $ 340,500   $ 335,200   $ 318,400
  Total earning assets (2)   325,000     319,800     304,500
  Loans and acceptances (2)   323,700     318,000     303,500
  Deposits   250,200     245,800     233,300
  Attributed capital   12,300     12,550     13,550
  Risk capital   8,450     8,700     9,750
Other information                
  AUA (3) $ 179,200   $ 173,600   $ 165,900
  AUM   3,100     2,900     2,700
  Number of employees (FTE)   38,213     38,657     38,216
Credit information                
  Gross impaired loans as a % of average net loans and acceptances   0.56%     0.59%     0.68%
  PCL on impaired loans as a % of average net loans and acceptances   0.37%     0.38%     0.35%
                 
Canadian Banking                
                 
Total revenue $ 3,020   $ 3,093   $ 2,851
  PCL   269     234     234
  Non-interest expense   1,357     1,330     1,303
Net income before income taxes   1,394     1,529     1,314
Net income   1,027     1,127     948
Key ratios                
  ROE   41.1%     43.8%     33.3%
  ROE adjusted (4)   n.a.     38.9%     n.a.
  NIM (1)   2.74%     2.91%     2.75%
  NIM adjusted (1) (4)   n.a.     2.74%     n.a.
  Efficiency ratio   44.9%     43.0%     45.7%
  Efficiency ratio adjusted (4)   n.a.     44.8%     n.a.
  Operating leverage   1.8%     8.0%     n.a.
  Operating leverage adjusted (4)   n.a.     3.5%     n.a.
Credit information                
  Gross impaired loans as a % of average net loans and acceptances   0.36%     0.37%     0.43%
  PCL on impaired loans as a % of average net loans and acceptances   0.34%     0.30%     0.31%
   
(1) Calculated as net interest income divided by average total earning assets. For further discussion on NIM, see How we measure and report our business segments in our 2012 Annual Report.
(2) Total earning assets and loans and acceptances include average securitized residential mortgage and credit card loans for the three months ended October 31, 2012, of $44.9 billion and $7.3 billion, respectively (July 31, 2012 - $46.1 billion and $6.1 billion; October 31, 2011 - $41.5 billion and $3.9 billion).
(3) AUA includes securitized residential mortgage and credit card loans for the three months ended October 31, 2012, of $31.0 billion and $7.4 billion, respectively (July 31, 2012 - $31.8 billion and $6.1 billion; October 31, 2011 - $32.1 billion and $3.9 billion).
(4) Measures for the three months ended July 31, 2012 have been adjusted for a gain from a change in estimate of mortgage prepayment interest. See the Key Performance and Non-GAAP Measures section of this Earning Release for additional information.
   

Q4 2012 vs. Q4 2011

Net income of $1,034 million increased $87 million or 9% compared to the prior year, driven by solid volume growth of 7% across all our Canadian businesses and a lower effective tax rate in Canada. These factors were partially offset by increased costs in support of business growth and higher PCL in Canada.

Total revenue increased $181 million or 6%, reflecting solid volume growth in our Canadian personal and business deposits, personal and business loans, as well as higher credit card transaction volumes.

PCL increased $28 million or 10%, mainly due to higher provisions in our Canadian business lending portfolio, offset by lower provisions in our Caribbean portfolio.

Non-interest expense increased $57 million or 4%, mainly due to higher costs in support of business growth and higher performance-related compensation in Canada, partially offset by our ongoing focus on cost management. In addition, the prior year included net favourable stamp tax and accounting adjustments in the Caribbean.

Q4 2012 vs. Q3 2012

Net income decreased $68 million or 6% compared to last quarter. Excluding a mortgage prepayment interest adjustment that favourably impacted our results last quarter, net income increased $24 million or 2%(1), largely due to volume growth in Canadian Banking.

Total revenue decreased $71 million or 2%. Excluding the mortgage prepayment interest adjustment, total revenue increased $54 million or 2%(1), reflecting continued volume growth in Canada in residential mortgages, business and personal deposits and loans and higher credit card transaction volumes.

PCL remained relatively flat compared to last quarter as lower provisions in our Caribbean portfolio were offset by higher provisions in our Canadian business lending portfolio.

Non-interest expense increased $18 million or 1%, mainly due to higher costs in support of business growth in Canada and seasonally higher domestic marketing spend partially offset by our ongoing focus on costs management.

On October 23, 2012 we announced a definitive agreement to acquire the Canadian auto finance and deposit business of Ally Financial Inc. which will add significant scale to our existing business and strengthen RBC's position as a leader in the Canadian auto finance industry. This transaction is subject to customary closing conditions and is expected to close in the first calendar quarter of 2013.

_____________________________

1 Q3/12 Canadian Banking results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest. This measure is a non-GAAP measure. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.
   

                 
Wealth Management          
    As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage
   amounts and as otherwise noted)
  October 31
2012
July 31
2012
  October 31
2011
  Net interest income   $ 95 $ 98 $ 96
  Non-interest income              
      Fee-based revenue     769   742   726
      Transactional and other revenue     397   327   329
Total revenue     1,261   1,167   1,151
  Non-interest expense     972   944   893
Net income before income taxes     289   223   258
Net income   $ 207 $ 156 $ 179
Revenue by business              
  Canadian Wealth Management   $ 463 $ 422 $ 426
  U.S. & International Wealth Management     509   474   466
      U.S. & International Wealth Management (US$ millions)     515   466   464
  Global Asset Management     289   271   259
Key ratios              
  ROE     15.3%   11.3%   12.7%
  Pre-tax margin (1)     22.9%   19.1%   22.4%
Selected average balance sheet information              
  Total assets   $ 20,200 $ 21,100 $ 22,300
  Loans and acceptances     10,300   10,200   8,900
  Deposits     29,200   29,400   28,300
  Attributed capital     5,150   5,200   5,300
  Risk capital     1,400   1,400   1,400
Other information              
  Revenue per advisor (000s) (2)   $ 821 $ 776 $ 764
  AUA     577,800   562,200   527,200
  AUM     339,600   324,500   305,700
  Average AUA     568,100   562,000   526,800
  Average AUM     333,100   323,800   310,600
  Number of employees (FTE)     10,670    10,619    10,564
  Number of advisors (3)     4,388    4,339    4,281
                 
(1)  Pre-tax margin is defined as net income before income taxes divided by total revenue.
(2)  Represents investment advisors and financial consultants of our Canadian and U.S. full-service wealth businesses.
(3)  Represents client-facing advisors across all our wealth management businesses.
   

Q4 2012 vs. Q4 2011

Net income of $207 million increased $28 million or 16% compared to the prior year, mainly due to higher average fee-based client assets and higher transaction volumes. The increase in fair value of our U.S. share-based compensation plan also contributed to the increase. The prior year results included a favourable accounting adjustment related to a deferred compensation plan of $27 million ($16 million after-tax).

Total revenue increased $110 million or 10%, mainly due to higher average fee-based client assets reflecting capital appreciation and net sales and higher transaction volumes reflecting improved market conditions. The increase in fair value of our U.S. share-based compensation plan also contributed to the increase.

Non-interest expense increased $79 million or 9%, mainly due to higher variable compensation driven by higher commission-based revenue and the increase in fair value of our U.S. share-based compensation plan. The prior year included a favourable accounting adjustment related to our deferred compensation plan as noted above.

Q4 2012 vs. Q3 2012

Net income increased $51 million or 33% from the prior quarter, mainly due to higher average fee-based client assets reflecting net sales and capital appreciation, higher transaction volumes, and the increase in fair value of our U.S. share-based compensation plan. These factors were partially offset by higher costs in support of business growth. The prior quarter included an unfavourable impact of $29 million ($21 million after-tax) related to certain regulatory and legal matters.

                     
    Insurance                
    As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage amounts
  and as otherwise noted)
  October 31
2012
  July 31
2012
  October 31
2011
  Non-interest income                  
       Net earned premiums     $ 914   $ 902 $ 897
       Investment income (1)       93     363   254
       Fee income       91     58   64
  Total revenue       1,098     1,323   1,215
       Insurance policyholder benefits and claims (1)       631     864   720
       Insurance policyholder acquisition expense       139     136   147
       Non-interest expense       134     126   129
Net income before income taxes       194     197   219
Net income     $ 194   $ 179 $ 200
Revenue by business line                  
  Canadian insurance     $ 616   $ 873 $ 757
  International & Other insurance       482     450   458
Key ratios                  
  ROE       50.7%     47.3%   40.3%
Selected average balance sheet information                  
  Total assets     $ 11,900   $ 11,700 $ 10,800
  Attributed capital       1,500     1,500   1,950
  Risk capital       1,350     1,350   1,800
Other information                  
  Premiums and deposits (2)     $ 1,215   $ 1,213 $ 1,205
       Canadian insurance       597     602   605
       International & Other insurance       618     611   600
  Insurance claims and policy benefit liabilities     $ 7,921   $ 7,965 $ 7,119
  Fair value changes on investments backing policyholder liabilities (1)       (35)     256   123
  Embedded value (3)       5,861     5,774   5,327
  AUM       300     400   300
  Number of employees (FTE)       2,744     2,777   2,859
                     
(1) Investment income can experience volatility arising from fluctuation in the fair value of Fair Value Through Profit or Loss (FVTPL) assets. The investments which support actuarial liabilities are predominantly fixed income assets designated as FVTPL. Consequently changes in the fair values of these assets are recorded in investment income in the consolidated statements of income and 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.
(2) Premiums and deposits include premiums on risk-based insurance and annuity products, and individual and group segregated fund deposits, consistent with insurance industry practices.
(3) Embedded value is defined as the sum of value of equity held in our Insurance segment and the value of in-force business policies (existing policies). For further details, refer to the Key performance and Non-GAAP Measures section of our 2012 Annual Report.

 

Q4 2012 vs. Q4 2011

Net income of $194 million decreased $6 million or 3% compared to the prior year as lower claims costs in Canadian insurance products and reinsurance products were offset by lower net investment gains and no new U.K. annuity reinsurance contracts in the current quarter.

Total revenue decreased $117 million or 10%, mainly due to the change in fair value of investments backing our policyholder liabilities, which was largely offset in policyholder benefits, claims and acquisitions expense (PBCAE). In addition, the prior year included higher net investment gains. These factors were partially offset by volume growth across most products.

PBCAE decreased $97 million or 11%, mainly due to the change in fair value of investments backing our policyholder liabilities as noted above, partially offset by higher costs commensurate with volume growth.

Non-interest expense increased $5 million or 4%, mainly due to higher costs in support of business growth, partially offset by our ongoing focus on cost management.

Q4 2012 vs. Q3 2012

Net income of $194 million increased $15 million or 8% from the prior quarter, mainly due to lower claims costs in our reinsurance products and Canadian insurance products. Our prior quarter results were favourably impacted by the reduction of policy acquisition cost-related liabilities of $33 million ($24 million after-tax).

 
   Investor & Treasury Services
  As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage
   amounts and as otherwise noted)
October 31
2012
  July 31
2012
    October 31
2011
    Net interest income $ 172   $ 152   $ 163
    Non-interest income   242     152     99
Total revenue   414     304     262
    Non-interest expense   316     226     209
Net income before income taxes and NCI in subsidiaries   98     78     53
Net income $ 72   $ 51   $ 40
Key ratios                
    ROE   13.0%     13.9%     12.0%
Selected average balance sheet information                
    Total assets $ 81,400   $ 69,300   $ 77,100
    Deposits   107,200     96,600     107,100
    Attributed capital   2,100     1,400     1,200
Other information                
    Economic profit (1) $ 23   $ 29   $ 14
    AUA   2,886,900     2,670,900     2,744,400
    Average AUA   2,840,500     2,773,000     2,827,800
    Number of employees (FTE) (2)   6,084     6,062     112
                 
(1) Economic profit is a non-GAAP measure. See the Key performance and Non-GAAP Measures section of our 2012 Annual Report for additional information.
(2) Effective the third quarter of 2012, we completed our acquisition of the remaining 50% of RBC Dexia (RBC Investor Services). Prior to this acquisition, FTE numbers do not include our RBC Dexia joint venture.
   

Q4 2012 vs. Q4 2011

Net income of $72 million increased $32 million compared to the prior year, largely due to higher funding and liquidity trading results reflecting improved market conditions as compared to the challenging market conditions last year. A full quarter representing 100% ownership of RBC Investor Services earnings also contributed to the increase, although lower spreads and decreased transaction volumes negatively impacted our results.

Total revenue increased $152 million or 58%, primarily due to a full quarter of RBC Investor Services revenue, partially offset by lower spreads, decreased foreign exchange activity and lower custodial fees. Higher funding and liquidity trading, driven by greater market liquidity and improved market conditions also contributed to the increase in revenue.

Non-interest expense increased $107 million or 51%, mainly reflecting a full quarter of RBC Investor Services costs.  Higher variable compensation on improved results also contributed to the increase.

Q4 2012 vs. Q3 2012

Net income increased $21 million due to higher funding and liquidity trading results and a full quarter of RBC Investor Services earnings, partially offset by lower custodial fees, and lower securities lending as the prior quarter was favourably impacted by the European dividend season. The prior quarter was unfavourably impacted by a writedown of intangibles and costs related to the acquisition of the remaining 50% interest in RBC Dexia (RBC Investor Services) of $12 million ($11 million after-tax).

 
    Capital Markets
    As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage amounts
   and as otherwise noted)
  October 31
2012
    July 31
2012
  October 31
2011
  Net interest income (1) $ 663   $ 631 $ 560
  Non-interest income   893     982   408
Total revenue (1)   1,556     1,613   968
  PCL   63     24   5
  Non-interest expense   916     932   802
Net income before income taxes and NCI in subsidiaries   577     657   161
Net income $ 410   $ 429 $ 125
Revenue by business              
  Global Markets $ 842   $ 848 $ 534
  Corporate and Investment Banking   687     732   548
  Other   27     33   (114)
Key ratios              
  ROE   12.9%     14.3%   4.7%
Selected average balance sheet information              
  Total assets $ 356,100   $ 362,400 $ 352,900
  Trading securities   91,800     89,600   101,300
  Loans and acceptances   51,300     49,400   38,900
  Deposits   32,000     32,000   26,700
  Attributed capital   12,050     11,350   8,950
Other information              
  Number of employees (FTE)   3,533     3,712   3,510
Credit information              
  Gross impaired loans as a % of average net loans and acceptances   0.76%     0.41%   0.59%
  PCL on impaired loans as a % of average net loans and acceptances   0.49%     0.20%   0.05%
                 
(1) The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2012 was $104 million (July 31, 2012 - $88 million, October 31, 2011 - $85 million). See the How we measure and report our business segments section of our 2012 Annual Report for additional information. 

Q4 2012 vs. Q4 2011

Net income of $410 million increased $285 million, primarily due to higher fixed income trading results reflecting improved market conditions compared to the challenging market conditions in the prior year. Higher corporate and investment banking results primarily in the U.S. also contributed to the increase. These factors were partially offset by higher PCL and a higher effective tax rate reflecting increased earnings in the U.S. Our prior year was unfavourably impacted by a loss of $105 million ($77 million after-tax) related to a consolidated special purpose entity from which we exited all transactions during the first quarter of 2012.

Total revenue of $1,556 million increased $588 million from the prior year, largely due to higher fixed income trading reflecting increased client activity, greater market liquidity and tightening credit spreads compared to the prior year. Higher equity and debt origination reflecting solid issuance activity, strong client growth in lending and increased loan syndication activity, mainly in the U.S. also contributed to the increase.

PCL of $63 million increased $58 million from the prior year, largely reflecting a provision taken this quarter for a single account.

Non-interest expense of $916 million increased $114 million or 14% from the prior year, largely due to higher variable compensation reflecting improved results and higher costs in support of business growth partially offset by our cost management initiatives.

Q4 2012 vs. Q3 2012

Net income of $410 million decreased $19 million or 4% from the prior quarter, mainly due to lower trading results particularly at the end of the quarter reflecting increased market uncertainty due to Hurricane Sandy and the U.S. presidential election, lower loan syndication activity primarily in the U.S. as compared to the robust activity in the prior quarter, and higher PCL related to a single account as noted above. These factors were partially offset by higher equity origination, primarily in the U.S. and Canada.

                     
Corporate Support                  
      As at or for the three months ended
        October 31     July 31   October 31  
(Millions of Canadian dollars)       2012     2012   2011  
  Net interest (loss) income (1)     $ (57)   $ 17  $ (38)  
  Non-interest income       17      32    86   
Total (loss) revenue (1)       (40)     49    48   
  PCL             1   
  Non-interest expense           23    28   
  Income taxes (recoveries)       (44)     (297)   (99)  
Net income (loss) (2)     $ (6)   $ 323  $ 118 
       
(1) Teb adjusted.
(2) Net income (loss) reflects income attributable to both shareholders and non-controlling interest (NCI).
Net income attributable to NCI for the three months ended October 31, 2012 was $23 million (July 31,
2012 - $24 million; October 31, 2011 - $25 million).

Due to the nature of activities and consolidated adjustments reported in this segment, we believe that a comparative period analysis is not relevant. The following identifies the material items affecting the reported results in each period.

Net interest income (loss) and income taxes (recoveries) in each quarter in Corporate Support include the deduction of the teb adjustments related to the gross-up of income from Canadian taxable corporate dividends recorded in Capital Markets. The amount deducted from net interest income (loss) was offset by an equivalent increase in income taxes (recoveries). The teb amount for the three months ended October 31, 2012 was $104 million as compared to $88 million in the prior quarter and $85 million in the prior year. For further discussion, refer to the How we measure and report our business segments section of our 2012 Annual Report.

In addition to the teb impacts noted above, the following paragraphs identify the other material items affecting the reported results in each quarter.

Q4 2012

Net loss was $6 million mainly due to net unfavourable tax adjustments and a loss attributed to an equity accounted for investment. These factors were largely offset by asset/liability management activities.

Q3 2012

Net income was $323 million largely due to the previously announced settlement of several tax matters with the CRA which resulted in the release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid. Our results benefitted from other net favourable tax adjustments and asset/liability management activities.

Q4 2011

Net income was $118 million mainly due to net favourable tax adjustments, partially offset by a loss attributed to an equity accounted for investment.


KEY PERFORMANCE AND NON-GAAP MEASURES


Additional information about these and other key performance and non-GAAP measures can be found under the Key performance and Non-GAAP Measures section of our 2012 Annual Report.

Return on Equity

We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics such as net income and return on equity (ROE). The following table provides a summary of our ROE calculations:

 
Calculation of Return on equity
    For the three months ended   For the year ended
    October 31 2012   October 31 2012
(Millions of Canadian dollars, except
    percentage amounts)
Personal &
Commercial
Banking
Wealth
Management
Insurance Investor &
Treasury
Services
Capital
Markets
Corporate
Support
Total   Total  
Net income available to common
   shareholders from continuing operations
  $ 1,013  $ 198 $ 191 $ 67 $ 390 $ (36) $ 1,823   $ 7,235  
Net income available to common
   shareholders from discontinued operations
    -   -   -   -   -   -   -     (51)  
Net income available to common shareholders     1,013   198   191   67   390   (36)   1,823     7,184  
Average common equity from continuing 
   operations (1) (2)
  $ 12,300 $ 5,150 $ 1,500 $ 2,100 $ 12,050 $ 5,750 $ 38,850   $ 36,750  
Average common equity from discontinued
   operations (1)
    -   -   -   -   -   -       400  
Total average common equity   $ 12,300 $ 5,150 $ 1,500 $ 2,100 $ 12,050 $ 5,750 $ 38,850   $ 37,150  
ROE from continuing operations   32.8% 15.3% 50.7% 13.0% 12.9% n.m. 18.7%     19.5%  
ROE               18.7%     19.3%  
                         
(1) Average common equity represent rounded figures. ROE is based on actual balances before rounding.
(2) The amounts for the segments are referred to as attributed capital or economic capital.

n.m not meaningful 

Non-GAAP measures

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined nor do they have a standardized meaning under GAAP and may not be comparable with similar information disclosed by other financial institutions. We believe these measures provide readers with a better understanding of our performance and should enhance the comparability of our comparative periods.

                                     
Non-GAAP measures - Consolidated Results                            
    For the three months ended
        July 31, 2012
Items excluded
         
(Millions of Canadian dollars, except per share and
percentage amounts)
  As reported   Tax
settlement (1)
  Mortgage
prepayment
interest (2)
    Loss related
to the
acquisition of
RBC Dexia (3)
    Sub-total   Results and
measures
excluding
items
Net income   $ 2,240   $ (181)   $ (92)   $ 11   $ (262)   $ 1,978
Average number of diluted common shares (thousands)     1,469,513                             1,469,513
Diluted earnings per share (in dollars)   $ 1.47   $ (.12)   $ (.06)   $ -   $ (.18)   $ 1.29
Diluted earnings per share from continuing operations (in dollars)     1.47     (.12)     (.06)     -     (.18)     1.29
Average common equity   $ 37,700                           $ 37,700
ROE from continuing operations (4)     22.7%                             19.9%
                                   
(1) The release of tax uncertainty provisions and interest income relates to the previously announced settlement of several tax matters with the CRA. For further details, refer to the Financial performance - Results from continuing operations of our 2012 Annual Report.
(2) Relates to a change in estimate of mortgage prepayment interest. See the Key Corporate events of 2012 section of our 2012 Annual Report.
(3) Comprised of a writedown of other intangibles of $7 million (before- and after-tax) and other costs of $5 million ($4 million after-tax).
(4) Based on actual balances before rounding.
   

 

 
Non-GAAP measures - Canadian Banking
    For the three months ended
    July 31, 2012  
                 
(Millions of Canadian dollars) As reported   Mortgage
prepayment
interest
adjustments (1)
  Adjusted  
  Net interest income $ 2,248 $ (125) $ 2,123  
  Non-interest income   845     845  
Total revenue   3,093   (125)   2,968  
  Revenue for Personal Financial Services   1,768   (125)   1,643  
Net income before taxes   1,529   (125)   1,404  
Net income $ 1,127 $ (92) $ 1,035  
Selected average balances and other information              
  Net income available to common shareholders $ 1,110 $ (92) $ 1,018  
  Average common equity   10,050     10,050  
  ROE   43.8%       38.9%  
  Net interest income $ 2,248 $ (125) $ 2,123  
  Average total earning assets   307,900     307,900  
  NIM   2.91%       2.74%  
  Non-interest expense $ 1,330 $ $ 1,330  
  Total revenue   3,093   (125)   2,968  
  Efficiency ratio   43.0%       44.8%  
  Revenue growth rate   10.5%       6.0%  
  Non-interest expense growth rate   2.5%       2.5%  
  Operating leverage   8.0%       3.5%  
                 
(1) Relates to a change in estimate of mortgage prepayment interest. For further details, see the Accounting and control matters
section of our 2012 Annual Report.

 

                   
Consolidated Balance Sheets            
    October 31     July 31   October 31
(Millions of Canadian dollars)   2012 (1)     2012 (2)     2011 (1)
                   
Assets                
Cash and due from banks $ 12,617    $ 10,586    $ 12,428 
Interest-bearing deposits with banks   10,255      11,386      6,460 
Securities                
  Trading   120,783      117,050      128,128 
  Available-for-sale   40,828      41,340      38,894 
      161,611      158,390      167,022 
Assets purchased under reverse repurchase agreements and securities borrowed   112,257      107,841      84,947 
Loans                
  Retail   301,185      297,637      284,745 
  Wholesale   79,056      77,516      64,752 
      380,241      375,153      349,497 
  Allowance for loan losses   (1,997)     (1,937)     (1,967)
      378,244      373,216      347,530 
Investments for account of segregated fund holders   383      357      320 
Other                
  Customers' liability under acceptances   9,385      9,115      7,689 
  Derivatives   91,293      103,257      99,650 
  Premises and equipment, net   2,691      2,672      2,490 
  Goodwill    7,485      7,466      7,610 
  Other intangibles    2,686      2,649      2,115 
  Assets of discontinued operations           27,152 
  Investments in associates   125      163      142 
  Prepaid pension benefit cost   1,049      984      311 
  Other assets   35,019      36,312      27,967 
      149,733      162,618      175,126 
Total assets $ 825,100    $ 824,394    $ 793,833 
                   
Liabilities                
Deposits                
  Personal $ 179,502    $ 176,698    $ 166,030 
  Business and government   312,882      308,261      297,511 
  Bank   15,835      17,845      15,561 
      508,219      502,804      479,102 
Insurance and investment contracts for account of segregated fund holders   383      357      320 
Other                
  Acceptances   9,385      9,115      7,689 
  Obligations related to securities sold short   40,756      43,562      44,284 
  Obligations related to assets sold under repurchase agreements and securities loaned   64,032      55,908      42,735 
  Derivatives   96,761      108,819      100,522 
  Insurance claims and policy benefit liabilities   7,921      7,965      7,119 
  Liabilities of discontinued operations           20,076 
  Accrued pension and other post-employment benefit expense   1,729      1,631      1,639 
  Other liabilities    41,371      40,762      39,241 
      261,955      267,762      263,305 
Subordinated debentures   7,615      7,646      8,749 
Trust capital securities   900      900      894 
Total liabilities $ 779,072    $ 779,469    $ 752,370 
                   
Equity attributable to shareholders                
  Preferred shares $ 4,813    $ 4,813    $ 4,813 
  Common shares (shares issued - 1,445,302,600, 1,444,300,306 and 1,438,376,317)    14,323      14,279      14,010 
  Treasury shares  - preferred (shares held - (41,632), 63,195 and 6,341)       (2)    
                              - common (shares held - (543,276), (261,419) and (146,075))   30      13     
  Retained earnings   24,270      23,310      20,381 
  Other components of equity   830      755      490 
      44,267      43,168      39,702 
Non-controlling interests   1,761      1,757      1,761 
Total equity   46,028      44,925      41,463 
Total liabilities and equity $ 825,100    $ 824,394    $ 793,833 
               
(1) Derived from audited financial statements.
(2) Derived from unaudited financial statements.

 

 
Consolidated Statements of Income
  For the three-months ended   For the year ended
  October 31   July 31 October 31   October 31 October 31
(Millions of Canadian dollars, except per share amounts) 2012 (2)   2012 (2) 2011 (2)   2012 (1) 2011 (1)
                           
Interest income                        
  Loans $ 4,026    $ 4,170  $ 3,874    $ 15,972  $ 15,236 
  Securities   913      946    1,124      3,874    4,750 
  Assets purchased under reverse repurchase agreements and securities borrowed   249      249    200      945    736 
  Deposits   14      14    18      61    91 
      5,202      5,379    5,216      20,852    20,813 
                           
Interest expense                        
  Deposits   1,468      1,502    1,527      6,017    6,334 
  Other liabilities   475      505    635      1,977    2,723 
  Subordinated debentures   84      83    97      360    399 
      2,027      2,090    2,259      8,354    9,456 
Net interest income   3,175      3,289    2,957      12,498    11,357 
                           
Non-interest income                        
  Insurance premiums, investment and fee income   1,098      1,323    1,214      4,897    4,474 
  Trading revenue   258      295    (219)     1,298    655 
  Investment management and custodial fees   566      515    497      2,074    1,999 
  Mutual fund revenue   569      514    505      2,088    1,975 
  Securities brokerage commissions   330      292    331      1,213    1,331 
  Service charges   362      347    343      1,376    1,323 
  Underwriting and other advisory fees   375      379    277      1,434    1,485 
  Foreign exchange revenue, other than trading   203      129    181      655    684 
  Card service revenue   234      243    221      920    882 
  Credit fees   220      267    173      848    707 
  Net gain (loss) on available-for-sale securities   80      42    (2)     120    104 
  Share of (loss) profit in associates   (1)       (12)     24    (7)
  Securitization revenue         (1)     (1)  
  Other   49      112    227      328    669 
Non-interest income   4,343      4,467    3,735      17,274    16,281 
Total revenue   7,518      7,756    6,692      29,772    27,638 
Provision for credit losses   362      324    276      1,301    1,133 
Insurance policyholder benefits, claims and acquisition expense   770      1,000    867      3,621    3,358 
                           
Non-interest expense                        
  Human resources   2,332      2,313    2,032      9,287    8,661 
  Equipment   293      271    264      1,083    1,010 
  Occupancy   288      281    268      1,107    1,026 
  Communications   209      193    203      764    746 
  Professional fees   216      167    213      695    692 
  Outsourced item processing   55      64    64      254    266 
  Amortization of other intangibles   142      130    126      528    481 
  Impairment of goodwill and other intangibles              168   
  Other   338      333    360      1,274    1,285 
      3,873      3,759    3,530      15,160    14,167 
Income before income taxes from continuing operations   2,513      2,673    2,019      9,690    8,980 
Income taxes   602      433    410      2,100    2,010 
Net income from continuing operations   1,911      2,240    1,609      7,590    6,970 
Net loss from discontinued operations         (38)     (51)   (526)
Net income $ 1,911    $ 2,240  $ 1,571    $ 7,539  $ 6,444 
                           
Net income attributable to:                        
  Shareholders $ 1,888    $ 2,216  $ 1,546    $ 7,442  $ 6,343 
  Non-controlling interests   23      24    25      97    101 
    $ 1,911    $ 2,240  $ 1,571    $ 7,539  $ 6,444 
                           
Basic earnings per share (in dollars) $ 1.26    $ 1.49  $ 1.03    $ 4.98  $ 4.25 
Basic earnings per share from continuing operations (in dollars)   1.26      1.49    1.06      5.01    4.62 
Basic loss per share from discontinued operations (in dollars)         (.03)     (.03)   (.37)
Diluted earnings per share (in dollars)   1.25      1.47    1.02      4.93    4.19 
Diluted earnings per share from continuing operations (in dollars)   1.25      1.47    1.05      4.96    4.55 
Diluted loss per share from discontinued operations (in dollars)         (.03)     (.03)   (.36)
Dividends per common share (in dollars)   .60      .57   .54     2.28    2.08
(1) Derived from audited financial statements.
(2) Derived from unaudited financial statements.

 

 
Consolidated Statements of Comprehensive Income
      For the three-months ended   For the year ended
      October 31   July 31 October 31   October 31 October 31
(Millions of Canadian dollars)   2012 (2)     2012 (2)   2011 (2)     2012 (1)   2011 (1)
Net income $ 1,911   $ 2,240  $ 1,571    $ 7,539  $ 6,444 
Other comprehensive income (loss), net of taxes                        
  Net change in unrealized gains (losses) on available-for-sale securities                        
    Net unrealized gains (losses) on available-for-sale securities   83      121    (52)     193    (30)
    Reclassification of net (gains) losses on available-for-sale securities to income   (32)     (12)   (2)     (33)   13 
        51      109    (54)     160    (17)
  Foreign currency translation adjustments                        
    Unrealized foreign currency translation gains (losses)   144      244    1,132      113    (625)
    Net foreign currency translation (losses) gains from hedging activities   (89)     (124)   (647)       717 
    Reclassification of losses (gains) on foreign currency translation to income       11    (1)     11    (1)
        55      131    484      124    91 
  Net change in cash flow hedges                        
    Net (losses) gains on derivatives designated as cash flow hedges   (20)     49    142      32    298 
    Reclassification of (gains) losses on derivatives designated as cash flow hedges to income   (11)       47      25    132 
        (31)     58    189      57    430 
Total other comprehensive income, net of taxes   75      298    619      341    504 
Total comprehensive income $ 1,986    $ 2,538  $ 2,190    $ 7,880  $ 6,948 
Total comprehensive income attributable to:                        
  Shareholders $ 1,963    $ 2,514  $ 2,164    $ 7,782  $ 6,847 
  Non-controlling interests   23      24    26      98    101 
      $ 1,986    $ 2,538  $ 2,190    $ 7,880  $ 6,948 
   
(1) Derived from audited financial statements.
(2) Derived from unaudited financial statements.

                                       
  Consolidated Statements of Changes in Equity                                    
                             Other components of equity                 
(Millions of Canadian dollars) Preferred
shares
Common
shares
Treasury
shares -
preferred
Treasury
shares -
common
Retained
earnings
Available-
for-sale
securities
Foreign
currency
translation
Cash
flow
hedges
  Total Other
components
of equity
 Equity
attributable
Shareholder
Non-
controlling
interests
Total equity
Balance at November 1, 2010 (1) $ 4,813 $   13,378 $ (2) $ (81) $   17,287 $ 277 $ (20) $ (271) $ (14) $   35,381 $ 2,094 $   37,475
Changes in equity                                                
  Issues of share capital   -   632   -   -   -   -   -   -   -   632   -   632
  Sales of treasury shares   -   -   97   6,074   -   -   -   -   -   6,171   -   6,171
  Purchases of treasury shares   -   -   (95)     (5,985)   -   -   -   -   -     (6,080)   (324)     (6,404)
  Share-based compensation awards   -   -   -   -   (33)   -   -   -   -   (33)   -   (33)
  Dividends    -   -   -   -     (3,237)   -   -   -   -     (3,237)   (93)     (3,330)
  Other   -   -   -   -   21   -   -   -   -   21   (14)   7
  Net income   -   -   -   -   6,343   -   -   -   -   6,343   101   6,444
  Other components of equity                                   -            
    Net change in unrealized gains (losses) on                                    -            
      available-for-sale securities   -   -   -   -   -   (18)   -   -   (18)   (18)   (2)   (20)
    Foreign currency translation adjustments   -   -   -   -   -   -   91   -   91   91   (1)   90
    Net change in cash flow hedges   -   -   -   -   -   -   -   431   431   431   -   431
Balance at October 31, 2011 $ 4,813 $   14,010 $ - $ 8 $   20,381 $ 259 $ 71 $ 160 $ 490 $   39,702 $ 1,761 $   41,463
Changes in equity                                                
  Issues of share capital   -   313   -   -   -   -   -   -   -   313   -   313
  Sales of treasury shares   -   -   98   5,186   -   -   -   -   -   5,284   -   5,284
  Purchases of treasury shares   -   -   (97)     (5,164)   -   -   -   -   -     (5,261)   -     (5,261)
  Share-based compensation awards   -   -   -   -   (1)   -   -   -   -   (1)   -   (1)
  Dividends    -   -   -   -     (3,549)   -   -   -   -     (3,549)   (92)     (3,641)
  Other   -   -   -   -   (3)   -   -   -   -   (3)   (6)   (9)
  Net income   -   -   -   -   7,442   -   -   -   -   7,442   97   7,539
  Other components of equity                                   -            
    Net change in unrealized gains (losses) on                                    -            
      available-for-sale securities   -   -   -   -   -   160   -   -   160   160   1   161
    Foreign currency translation adjustments   -   -   -   -   -   -   124   -   124   124   -   124
    Net change in cash flow hedges   -   -   -   -   -   -   -   56   56   56   -   56
Balance at October 31, 2012 (1) $ 4,813 $   14,323 $ 1 $ 30 $   24,270 $ 419 $ 195 $ 216 $ 830 $   44,267 $ 1,761 $   46,028

 


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 Q4 2012 Earnings Release, in other filings with Canadian regulators or the United Stated Securitized and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements in this document include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, the economic, market and regulatory review and outlook for Canadian, U.S., European and global economies, the outlook and priorities for each of our business segments, and the risk environment including our liquidity and funding management. The forward-looking information contained in this document 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, strategic goals and financial performance objectives, 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, operational, legal and regulatory compliance, insurance, reputation and strategic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2012 Annual Report; the impact of changes in laws and regulations, including relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the Basel Committee on Banking Supervision's global standards for capital and liquidity reform, over-the-counter derivatives reform, the payments system in Canada, consumer protection measures and regulatory reforms in the U.K. and Europe; general business and economic market conditions in Canada, the United States and certain other countries in which we operate, including the effects of the European sovereign debt crisis, and the high levels of Canadian household debt; cybersecurity; the effects of changes in government fiscal, monetary and other policies; the effects of competition in the markets in which we operate; our ability to attract and retain employees; the accuracy and completeness of information concerning our clients and counterparties; judicial or regulatory judgments and legal proceedings; development and integration of our distribution networks; 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 forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Material economic assumptions underlying the forward-looking statements contained in this Q4 2012 Earnings Release are set out in the Overview and Outlook section and for each business segment under the heading Outlook and priorities in our 2012 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 Overview of other risks sections of our 2012 Annual Report.

Information contained in or otherwise accessible through the websites mentioned does not form part of this earnings release. All references in this earnings release to websites are inactive textual references and are for your information only.

ACCESS TO QUARTERLY RESULTS MATERIALS

Interested investors, the media and others may review this Q4 2012 Earnings Release, quarterly results slides, Supplementary Financial Information and our 2012 Annual Report, 2012 Annual Information Form (AIF) and Annual Report on Form 40-F (Form 40-F) on our website at rbc.com/investorrelations. Shareholders may request a hard copy of our 2012 Annual Report, AIF and Form 40-F free of charge by contacting Investor Relations at (416) 955-7802. Our Form 40-F will be filed with the SEC.

Quarterly conference call and webcast presentation

Our conference call is scheduled for Thursday, November 29, 2012 at 8:00 a.m. (EDT) and will feature a presentation about our fourth quarter and 2012 results by RBC executives. It will be followed by a question and answer period with analysts.

Interested parties can access the call live on a listen-only basis at: www.rbc.com/investorrelations/ir_events_presentations.html or by telephone (416-340-2217 or 1-866-696-5910, passcode 1853457#). Please call between 7:50 a.m. and 7:55 a.m. (EDT).

Management's comments on results will be posted on our website shortly following the call. Also, a recording will be available by 5:00 p.m. (EDT) on November 29, 2012 until February 27, 2013 at: www.rbc.com/investorrelations/ir_quarterly.html or by telephone (905-694-9451 or 1-800-408-3053, passcode 3629188#).

ABOUT RBC

Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. We are Canada's largest bank as measured by assets and market capitalization, and among the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and wholesale banking on a global basis. We employ approximately 80,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 49 other countries. For more information, please visit rbc.com.

Trademarks used in this earnings release include the LION & GLOBE Symbol, ROYAL BANK OF CANADA, RBC and RBC INVESTOR SERVICES which are trademarks of Royal Bank of Canada used by Royal Bank of Canada and/or by its subsidiaries under license. All other trademarks mentioned in this report, which are not the property of Royal Bank of Canada, are owned by their respective holders.

 

SOURCE RBC



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