Royal Bank of Canada First Quarter 2017 Results

To view the PDF of this Report to Shareholders, please see the link below.

http://www.rns-pdf.londonstockexchange.com/rns/8549X_-2017-2-24.pdf 

All amounts are in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted.  

TORONTO, February 24, 2017 - Royal Bank of Canada (RY on TSX and NYSE) today reported net income of $3,027 million for the first quarter ended January 31, 2017, up $580 million or 24% from a year ago. Results reflect strong earnings in Personal & Commercial Banking, Wealth Management, Capital Markets and Investor & Treasury Services. Our performance also reflects benefits from our ongoing focus on efficiency management activities, driving strong operating leverage across most of our business segments. Excluding our share of a gain related to the sale of the U.S. operations of Moneris Solutions Corporation (Moneris), which was $212 million (before- and after-tax), net income of $2,815 million(1) was up $368 million or 15% from the prior year.  

Compared to last quarter, net income was up $484 million or 19%. Excluding the gain on sale as noted above, net income was up $272 million or 11%(1), mainly reflecting higher earnings across most of our business segments. Results reflect improved credit quality, with our provision for credit losses (PCL) ratio of 0.22%, down 5 basis points (bps), mainly due to lower provisions in Personal & Commercial Banking and recoveries in Capital Markets.  

Our capital position was strong with a Common Equity Tier 1 (CET1) ratio of 11.0%. In addition, today we announced an increase to our quarterly dividend of $0.04 or 5% to $0.87 per share.  

"RBC reported earnings of $3 billion for the first quarter reflecting strength across our businesses as we continued to invest in growth. We remain committed to returning capital to our shareholders and I'm pleased to announce a 5% increase to our quarterly dividend," said Dave McKay, RBC President and Chief Executive Officer. "As the operating landscape evolves, we are focused on our strategy of building a digitally-enabled relationship bank to meet the changing expectations of our clients."

Q1 2017 compared to Q1 2016  

• Net income of $3,027 million (up 24% from $2,447 million)  

• Diluted earnings per share (EPS) of $1.97 (up $0.39 from $1.58)  

• Return on common equity (ROE)(2) of 18.0% (up 270 bps from 15.3%)  

• CET1 ratio of 11.0% (up 110 bps from 9.9%)

Q1 2017 compared to Q4 2016  

• Net income of $3,027 million (up 19% from $2,543 million)  

• Diluted EPS of $1.97 (up $0.32 from $1.65)  

• ROE of 18.0% (up 250 bps from 15.5%)  

• CET1 ratio of 11.0% (up 20 bps from 10.8%)

Excluding specified item(1): Q1 2017 compared to Q1 2016  

• Net income of $2,815 million (up 15% from $2,447 million)  

• Diluted EPS of $1.83 (up $0.25 from $1.58)  

• ROE of 16.7% (up 140 bps from 15.3%)

Excluding specified item(1): Q1 2017 compared to Q4 2016  

• Net income of $2,815 million (up 11% from $2,543 million)  

• Diluted EPS of $1.83 (up $0.18 from $1.65)  

• ROE of 16.7% (up 120 bps from 15.5%)

The specified item comprises our share of a gain related to the sale of the U.S. operations of Moneris Solutions Corporation (Moneris) to Vantiv, Inc., which was $212 million (before- and after-tax).

(1)      These measures are non-GAAP. For further information, including a reconciliation, refer to the Key performance and non-GAAP measures section of this Q1 2017 Report to Shareholders.  

(2)      This measure does not have a standardized meaning under GAAP. For further information, refer to the Key performance and non-GAAP measures section of this Q1 2017 Report to Shareholders.

Table of contents  

1 First quarter highlights  

2 Management's Discussion and Analysis  

2 Caution regarding forward-looking statements  

2 Overview and outlook  

2 About Royal Bank of Canada  

3 Selected financial and other highlights  

4 Economic, market and regulatory review and outlook  

6 Key corporate events of 2017  

6 Financial performance  

6 Overview  

10 Business segment results  

10 How we measure and report our business segments  

10 Key performance and non-GAAP measures  

13 Personal & Commercial Banking  

15 Wealth Management  

16 Insurance  

17 Investor & Treasury Services  

18 Capital Markets  

19 Corporate Support  

19 Results by geographic segment  

20 Quarterly results and trend analysis  

22 Financial condition  

22 Condensed balance sheets  

23 Off-balance sheet arrangements  

25 Risk management  

25 Credit risk  

31 Market risk  

35 Liquidity and funding risk  

43 Capital management  

47 Additional financial information  

47 Accounting and control matters  

47 Controls and procedures  

47 Related party transactions  

48 Enhanced Disclosure Task Force recommendations index  

49 Interim Condensed Financial Statements (unaudited)  

54 Notes to the Interim Condensed Financial Statements (unaudited)  

68 Shareholder information  

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