Royal Bank of Canada Reports Fourth Quarter and Record 2012 Results
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 Continuing operations: 2012
compared to 2011
-- Net income $7,539 million
(up 17% from $6,444 -- Net income $7,590 million
million) (up 9% from $6,970 million)
-- Diluted earnings per share -- Diluted EPS of $4.96 (up
(EPS) of $4.93 (up $.74 $.41 from $4.55)
from $4.19) -- ROE of 19.5% (down from
-- Return on common equity 20.3%)
(ROE) of 19.3% (up from
18.7%)
-- Tier 1 capital ratio was
13.1%
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 Continuing operations: Q4 2012
compared to Q4 2011
-- Net income $1,911 million
(up 22% from $1,571 -- Net income $1,911 million
million) (up 19% from $1,609 million)
-- Diluted EPS of $1.25 (up -- Diluted EPS of $1.25 (up
$.23 from $1.02) $.20 from $1.05)
-- ROE of 18.7% (up from -- ROE of 18.7% (up from 17.5%)
17.1%)
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 Q4 2012 compared to Q3 2012,
excluding noted items((1))
-- Net income $1,911 million
(down 15% from $2,240 -- Net income $1,911 million
million) (down 3% from $1,978
-- Diluted EPS of $1.25 (down million)
$.22 from $1.47) -- Diluted EPS of $1.25 (down
-- ROE of 18.7% (down from $.04 from $1.29)
22.7%) -- 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 October October
of and percentage amounts) 31 July 31 31 October 31 October 31
2012 2012 2011 2012 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 2,886,900
2,744,400 (5) 2,886,900 2,670,900 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, 2012 2012 2011
except number of and percentage
amounts and as otherwise noted)
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, October 31 July 31 October 31
except number of and percentage 2012 2012 2011
amounts and as otherwise noted)
Net interest income $ 95 $ 98 $ 96
Non-interest income
Fee-based revenue 769 742 726
Transactional and other 397 327 329 revenue
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 509 474 466 Management
U.S. & International Wealth 515 466 464 Management (US$ millions)
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, October 31 July 31 October 31
except number of and percentage 2012 2012 2011
amounts
and as otherwise noted)
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 631 864 720 benefits and claims (1)
Insurance policyholder 139 136 147 acquisition expense
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 618 611 600 insurance
Insurance claims and policy $ 7,921 $ 7,965 $ 7,119 benefit liabilities
Fair value changes on (35) 256 123 investments backing policyholder liabilities (1)
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 October 31 July 31 October 31
dollars, except number of 2012 2012 2011
and percentage
amounts and as otherwise
noted)
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 98 78 53
taxes and NCI in
subsidiaries
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 6,084 6,062 112 (FTE) (2)
(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, July 31 October 31
except number of and percentage 2012 2011
amounts October 31
and as otherwise noted) 2012
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 657 161
and NCI in subsidiaries 577
Net income $ 410 $ 429 $ 125
Revenue by business
Global Markets $ 842 $ 848 $ 534
Corporate and Investment 687 732 548
Banking
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 0.76% 0.41% 0.59%
average net loans and
acceptances
PCL on impaired loans as a % of 0.49% 0.20% 0.05%
average net loans and
acceptances
(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 2012 2012 2011
dollars)
Net interest (loss) $ (57) $ 17 $ (38)
income (1)
Non-interest income 17 32 86
Total (loss) revenue (1) (40) 49 48
PCL 1 - 1
Non-interest expense 9 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
For the three months ended year ended
October 31
October 31 2012 2012
(Millions of
Canadian Investor
dollars, except Personal & &
percentage Commercial Wealth Treasury Capital Corporate amounts) Banking Management Insurance Services Markets 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 Loss
of Canadian related
dollars, to the
except per Mortgage acquisition Results and
share and Tax prepayment of measures
percentage settlement interest RBC Dexia excluding
amounts) As reported (1) (2) (3) Sub-total items
Net income $ 2,240 $ (181) $ (92) $ 11 $ (262) $ 1,978
Average 1,469,513
number of
diluted
common
shares
(thousands) 1,469,513
Diluted (.12) $ $ - $ (.18) $ 1.29
earnings
per share
(in
dollars) $ 1.47 $ (.06)
Diluted (.12) - (.18) 1.29
earnings
per share
from
continuing
operations
(in
dollars) 1.47 (.06)
Average $ 37,700
common
equity $ 37,700
ROE from 19.9%
continuing
operations
(4) 22.7%
(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
Mortgage
prepayment (Millions of Canadian interest dollars) As reported 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 1,768 1,643 Financial Services (125)
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 $ 1,110 $ $ 1,018 common shareholders (92)
Average common equity 10,050 - 10,050
ROE 43.8% 38.9%
Net interest income $ 2,248 $ (125) $ 2,123
Average total earning 307,900 307,900 assets -
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 2.5% 2.5% growth rate
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 112,257 107,841 84,947
repurchase agreements and securities
borrowed
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 383 357 320
fund holders
Other
Customers' liability under 9,385 9,115 7,689
acceptances
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 383 357 320
account of segregated fund holders
Other
Acceptances 9,385 9,115 7,689
Obligations related to securities 40,756 43,562 44,284
sold short
Obligations related to assets sold 64,032 55,908 42,735
under repurchase agreements and
securities loaned
Derivatives 96,761 108,819 100,522
Insurance claims and policy benefit 7,921 7,965 7,119
liabilities
Liabilities of discontinued - - 20,076
operations
Accrued pension and other 1,729 1,631 1,639
post-employment benefit expense
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 - 14,323 14,279 14,010
1,445,302,600, 1,444,300,306 and
1,438,376,317)
Treasury shares - preferred (shares 1 (2) -
held - (41,632), 63,195 and 6,341)
- common 30 13 8 (shares held - (543,276), (261,419) and (146,075))
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 July 31 October October October
31 31 31 31
(Millions of 2012 (2) 2012 (2) 2011 (2) 2012 (1)
Canadian dollars,
except per share
amounts) 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 249 249 200 945 736
under reverse
repurchase
agreements and
securities
borrowed
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 84 83 97 360 399
debentures
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 1,098 1,323 1,214 4,897 4,474
premiums,
investment and fee
income
Trading revenue 258 295 (219) 1,298 655
Investment 566 515 497 2,074 1,999
management and
custodial fees
Mutual fund 569 514 505 2,088 1,975
revenue
Securities 330 292 331 1,213 1,331
brokerage
commissions
Service charges 362 347 343 1,376 1,323
Underwriting and 375 379 277 1,434 1,485
other advisory
fees
Foreign exchange 203 129 181 655 684
revenue, other
than trading
Card service 234 243 221 920 882
revenue
Credit fees 220 267 173 848 707
Net gain (loss) on 80 42 (2) 120 104
available-for-sale
securities
Share of (loss) (1) 9 (12) 24 (7)
profit in
associates
Securitization - - (1) (1) -
revenue
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 1,301 1,133
losses 362 324 276
Insurance 3,621 3,358
policyholder
benefits, claims and
acquisition expense 770 1,000 867
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 55 64 64 254 266
processing
Amortization of 142 130 126 528 481
other intangibles
Impairment of - 7 - 168 -
goodwill and other
intangibles
Other 338 333 360 1,274 1,285
3,873 3,759 3,530 15,160 14,167
Income before income 9,690 8,980
taxes from
continuing
operations 2,513 2,673 2,019
Income taxes 602 433 410 2,100 2,010
Net income from 7,590 6,970
continuing
operations 1,911 2,240 1,609
Net loss from (51) (526)
discontinued
operations - - (38)
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 23 24 25 97 101
interests
$ 1,911 $ 2,240 $ 1,571 $ 7,539 $ 6,444
Basic earnings per $ $ $ $ 4.98 $ 4.25
share (in dollars) 1.26 1.49 1.03
Basic earnings per 5.01 4.62
share from
continuing
operations (in
dollars) 1.26 1.49 1.06
Basic loss per share (.03) (.37)
from discontinued
operations (in
dollars) - - (.03)
Diluted earnings per 4.93 4.19
share (in dollars) 1.25 1.47 1.02
Diluted earnings per 4.96 4.55
share from
continuing
operations (in
dollars) 1.25 1.47 1.05
Diluted loss per (.03) (.36)
share from
discontinued
operations (in
dollars) - - (.03)
Dividends per common 2.28 2.08
share (in dollars) .60 .57 .54
(1) Derived from audited financial statements.
(2) Derived from unaudited financial statements.
Consolidated Statements of Comprehensive Income
For the year
For the three-months ended ended
October July 31 October October October
31 31 31 31
(Millions of Canadian 2012 2012 2011 2012 2011
dollars) (2) (2) (2) (1) (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 121 (52) 193 (30)
gains (losses) on
available-for-sale
securities 83
Reclassification (12) (2) (33) 13
of net (gains)
losses on
available-for-sale
securities to
income (32)
51 109 (54) 160 (17)
Foreign currency
translation
adjustments
Unrealized foreign 244 1,132 113 (625)
currency
translation gains
(losses) 144
Net foreign (124) (647) - 717
currency
translation
(losses) gains
from hedging
activities (89)
Reclassification 11 (1) 11 (1)
of losses (gains)
on foreign
currency
translation to
income -
55 131 484 124 91
Net change in cash
flow hedges
Net (losses) gains 49 142 32 298
on derivatives
designated as cash
flow hedges (20)
Reclassification 9 47 25 132
of (gains) losses
on derivatives
designated as cash
flow hedges to
income (11)
(31) 58 189 57 430
Total other 298 619 341 504
comprehensive income,
net of taxes 75
Total comprehensive 2,538 $ 2,190 $ 7,880 $ 6,948
income $ 1,986 $
Total comprehensive
income attributable
to:
Shareholders $ 1,963 $ 2,514 $ 2,164 $ 7,782 $ 6,847
Non-controlling 23 24 26 98 101
interests
$ 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
Total
Treasury Treasury Available- Foreign Cash Other
Equity Non-(Millions of Canadian Preferred Common shares - shares - Retained for-sale currency flow components attributable controlling Total dollars) shares shares preferred common earnings securities translation hedges of equity Shareholder interests equity
Balance at November 1, $ $ (20) $ (271) $ (14) $
35,381 $ 2,094 $ 2010 (1) 4,813 $ 13,378 $ (2) $ (81) 17,287 $ 277 $
37,475
Changes in equity
Issues of share - - - -
632 - 632 capital - 632 - - -
Sales of treasury 6,074 - - -
6,171 - 6,171 shares - - 97 - -
Purchases of treasury - - -
(6,080) (324) shares - - (95) (5,985) - -
(6,404)
Share-based - - - -
(33) - (33) compensation awards - - - (33) -
Dividends - - - -
(3,237) (93)
- - - (3,237) -
(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 - (18) - - (18)
(18) (2) (20)
securities - - - -
Foreign currency
translation - 91 - 91
91 (1) 90
adjustments - - - - -
Net change in cash - - 431 431
431 - 431
flow hedges - - - - -
Balance at October 31, $ $ 71 $ 160 $ 490 $
39,702 $ 1,761 $ 2011 4,813 $ 14,010 $ - $ 8 20,381 $ 259 $
41,463
Changes in equity
Issues of share - - - -
313 - 313 capital - 313 - - -
Sales of treasury 5,186 - - -
5,284 - 5,284 shares - - 98 - -
Purchases of treasury - - -
(5,261) - shares - - (97) (5,164) - -
(5,261)
Share-based - - - -
(1) - (1) compensation awards - - - (1) -
Dividends - - - -
(3,549) (92)
- - - (3,549) -
(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 - 160 - - 160
160 1 161
securities - - - -
Foreign currency
translation - 124 - 124
124 - 124
adjustments - - - - -
Net change in cash - - 56 56
56 - 56
flow hedges - - - - -
Balance at October 31, $ $ 195 $ 216 $ 830 $
44,267 $ 1,761 $ 2012 (1) 4,813 $ 14,323 $ 1 $ 30 24,270 $ 419 $
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.
Media Relations Contact Tanis Feasby, Director, Financial Communications, tanis.feasby@rbc.com, 416-955-5172 or 1-888-880-2173 (toll-free outside Toronto) Rina Cortese, Media Relations, rina.cortese@rbc.com, 416-974-5506 or 1-888-880-2173 (toll-free outside Toronto)
Investor Relations Contacts Amy Cairncross, VP & Head, Investor Relations, amy.cairncross@rbc.com, 416-955-7803 Karen McCarthy, Director, Investor Relations, karen.mccarthy@rbc.com, 416-955-7809 Lynda Gauthier, Director, Investor Relations, lynda.gauthier@rbc.com, 416-955-7808 Robert Colangelo, Associate Director, Investor Relations, robert.colangelo@rbc.com, 416-955-2049
SOURCE: RBC
To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/November2012/29/c4555.html
CO: RRYIR ST: Ontario NI: FIN ERN CONF
-0- Nov/29/2012 11:00 GMT
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