RY
$81.43
Royal Bank of Canada
$.72
.89%
Earnings Details
Quarter October 2019
Wednesday, December 04, 2019 6:00:00 AM
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Summary

Royal Bank of Canada (RY) Recent Earnings

Royal Bank of Canada (RY) reported Quarter October 2019 earnings of $1.68 per share on revenue of $12.6 billion. The consensus earnings estimate was $1.74 per share on revenue of $9.0 billion. Revenue grew 10.4% on a year-over-year basis.

Royal Bank Of Canada is a financial services company which provides personal and commercial banking, wealth management services, insurance, corporate and investment banking and transaction processing services.

Results
Reported Earnings
$1.68
Earnings Whisper
-
Consensus Estimate
$1.74
Reported Revenue
$12.62 Bil
Revenue Estimate
$8.97 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Royal Bank of Canada Reports Fourth Quarter and 2019 Results

All amounts are in Canadian dollars and are based on our audited Annual and unaudited Interim Consolidated Financial Statements for the year and quarter ended October 31, 2019 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2019 Annual Report (which includes our audited Annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2019 Annual Information Form and our Supplementary Financial Information are available on our website at: http://www.rbc.com/investorrelations.

2019 Net Income
$12.9 Billion
Record earnings 

2019 Diluted EPS1
$8.75
Solid 5% growth YoY 

2019 ROE2
16.8%
Balanced capital deployment 

CET1 Ratio
12.1%
Robust capital levels

 

TORONTO, Dec. 4, 2019 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $12,871 million for the year ended October 31, 2019, up $440 million or 4% from the prior year, with diluted EPS1 growth of 5%. Results reflected strong earnings growth in Personal & Commercial Banking and Wealth Management as we continued to leverage our scale and unique client value proposition to drive strong client-driven volumes. Solid results in Insurance were mainly driven by the impact of new longevity reinsurance contracts. These were partially offset by lower earnings in Investor & Treasury Services, primarily due to lower funding and liquidity revenue and severance and related costs associated with repositioning of the business, and in Capital Markets, due to a challenging market environment. Our results also reflect an increase due to foreign exchange translation. Provisions for credit losses (PCL) ratio on loans of 31 basis points (bps) increased by 8 bps from the prior year and the PCL on impaired loans ratio was 27 bps.

Our capital position remained robust with a Common Equity Tier 1 (CET1) ratio of 12.1%, up 60 bps from the prior year. In addition, we increased our quarterly dividend twice during 2019, for an annual dividend increase of 8%. In 2019, we repurchased 10.3 million shares for $1 billion.

"Against a challenging macroeconomic environment, we delivered solid results in 2019 and maintained a leading return on equity, a testament to the strength of our diversified business model, and the power of our Purpose to engage employees on our journey to transform the bank for the future. We have been investing significantly in talent, technology and our trusted global brand to offer differentiated advice and experiences across our businesses, and believe this positions us well to continue delivering long-term sustainable value for our clients, communities and shareholders."

Dave McKay, RBC President and Chief Executive Officer

 

_____________________________________

1 Earnings per share (EPS). 

2 Return on Equity (ROE). This measure does not have a standardized meaning under GAAP. For further information, refer to the Key Performance and non-GAAP measures section on page 11 of this Earnings Release.

 

2019 Full Year Business Segment Performance

  • 6% earnings growth in Personal & Commercial Banking, mainly due to average volume growth of 7% (average loan growth in Canadian Banking: +6% residential mortgages and +11% business loans; average deposits growth: +9% in both business and personal deposits) and higher spreads as higher interest rates more than offset the impact of competitive pricing pressures. These factors were partially offset by higher PCL. PCL on impaired loans ratio increased 4 bps, largely reflecting higher provisions on impaired loans in Canadian Banking. We generated positive operating leverage of 2.4%, while continuing to invest in the business to create more value for our >14 million Personal & Commercial Banking clients and build new client relationships. Higher staff-related costs were in part due to the addition of commercial account managers and investment advisors to deliver more advice and insights to our clients. We also continued our investments in technology, including in digital solutions for both our personal and business banking clients.

  • 13% earnings growth in Wealth Management, mainly due to higher average fee-based client assets reflecting market appreciation and net sales benefiting from our scale, talent and infrastructure advantage, as well as higher net interest income driven by average volume growth at City National Bank, which continued to add both teams and offices in key locations such as New York City and Washington D.C. Net income also included a gain on the sale of the private debt business of BlueBay ($134 million after-tax). These factors were partially offset by increased costs in support of business growth, higher variable compensation commensurate with revenue growth and higher PCL.

  • 4% earnings growth in Insurance, mainly due to the impact of new longevity reinsurance contracts, partially offset by higher claims costs.

  • 36% lower earnings in Investor & Treasury Services, primarily due to lower funding and liquidity revenue driven by the short-term interest rate environment and lower gains from the disposition of certain securities, as well as severance and related costs ($83 million after-tax) associated with repositioning of the business. Lower revenue from our asset services business largely driven by secular industry trends, also contributed to the decrease.

  • 4% lower earnings in Capital Markets, as Corporate and Investment Banking revenue saw headwinds from challenging market conditions driving lower industry-wide investment banking activity. Higher PCL and higher technology and related costs also contributed to the decrease. These factors were partially offset by a lower effective tax rate, largely reflecting changes in earnings mix, higher revenue in Global Markets and the impact of foreign exchange translation. Despite a challenging market environment, RBC Capital Markets® continues to be well positioned as a premier global investment bank. We have been successful in winning more and higher quality mandates, increasing our ranking to top 10 in U.S. M&A advisory for announced transactions, our highest ranking achieved to date.

Q4 2019 Performance
Earnings of $3,206 million were down $44 million or 1% from a year ago, due to lower results in Investor & Treasury Services, Capital Markets, Insurance and Corporate Support. These were partially offset by higher earnings in Wealth Management and Personal & Commercial Banking.

Earnings were down $57 million or 2% from last quarter, due to lower earnings in Investor & Treasury Services, Capital Markets, Personal & Commercial Banking and Corporate Support. These were partially offset by higher earnings in Wealth Management and Insurance.






Q4 2019
compared to
Q4 2018

Net income of $3,206 million

?

1%

Diluted EPS1 of $2.18

?

1%

ROE2 of 16.2%

?

140 bps

CET1 ratio of 12.1%

?

60 bps

Q4 2019
compared to
Q3 2019

Net income of $3,206 million

?

2%

Diluted EPS1 of $2.18

?

2%

ROE2  of 16.2%

?

50 bps

CET1 ratio of 12.1%

?

20 bps

 

_____________________________________

1 Earnings per share (EPS). 

2 Return on Equity (ROE). This measure does not have a standardized meaning under GAAP. For further information, refer to the Key Performance and non-GAAP measures section on page 11 of this Earnings Release.

 

Q4 2019 Business Segment Performance

Personal & Commercial Banking

Net income of $1,618 million increased $80 million or 5% from a year ago, mainly due to average volume growth of 6% in loans and 10% in deposits in Canadian Banking, benefiting from solid housing activity, our growing client-facing sales force as well as a favourable interest rate environment. These factors were partially offset by higher PCL. Total PCL increased $70 million or 22%. PCL on impaired loans ratio increased 4 bps, largely driven by higher provisions on impaired loans in Canadian Banking portfolios.

Compared to last quarter, net income decreased $46 million or 3%. Higher net interest income driven by average volume growth of 2%, partially offset by lower spreads, was more than offset by higher PCL and the timing of professional fees.

Wealth Management

Net income of $729 million increased $176 million or 32% from a year ago, mainly due to a gain on the sale of the private debt business of BlueBay ($134 million after-tax) as well as higher average fee-based client assets reflecting market appreciation and industry-leading net sales in Canada.

Compared to last quarter, net income increased $90 million or 14%, largely due to a gain on the sale of the private debt business of BlueBay and higher average fee-based client assets reflecting market appreciation and net sales. These factors were partially offset by a decrease in net interest income driven by lower spreads (mainly at City National Bank), increased costs in support of business growth and higher variable compensation commensurate with revenue growth.

Insurance

Net income of $282 million decreased $36 million or 11% from a year ago, primarily due to lower favourable reinsurance contract renegotiations and lower favourable annual actuarial assumption updates. Higher claims costs and lower favourable investment-related experience also contributed to the decrease. These factors were partially offset by the impact of new longevity reinsurance contracts.

Compared to last quarter, net income increased $78 million or 38%, primarily due to the impact of new longevity reinsurance contracts and favourable reinsurance contract renegotiations in the current quarter, partially offset by lower favourable investment-related experience.

Investor & Treasury Services

Net income of $45 million decreased $110 million or 71% from a year ago, primarily due to severance and related costs associated with repositioning of the business ($83 million after-tax), as well as lower funding and liquidity revenue driven by the short-term rate environment. Lower revenue from our asset services business due to reduced client activity and lower deposit margins also contributed to the decrease.

Compared to last quarter, net income decreased $73 million or 62%, mainly driven by severance and related costs associated with repositioning of the business.

Capital Markets

Net income of $584 million decreased $82 million or 12% from a year ago, largely driven by lower revenue in Corporate and Investment Banking, partly due to lower global investment banking fee pools and higher PCL. These factors were partially offset by a lower effective tax rate, largely reflecting changes in earnings mix. Global Markets generated higher revenue despite heightened market uncertainty.

Compared to last quarter, net income decreased $69 million or 11%, mainly due to lower M&A revenues, primarily in the U.S., lower equity origination, largely in the U.S. and Europe, as well as higher costs related to changes in the timing of deferred compensation. Lower fixed income trading, mainly in the U.S., and higher PCL also contributed to the decrease. These factors were partially offset by a lower effective tax rate, higher foreign exchange trading revenue, mainly in Europe, higher debt origination, largely in the U.S., and higher municipal banking activity.

Corporate Support

Net loss was $52 million in the current quarter, largely due to impact of an unfavourable accounting adjustment. Net loss was $15 million in the prior quarter, mainly due to net unfavourable tax adjustments, largely offset by asset/liability management activities. Net income was $20 million in the prior year, largely reflecting net favourable tax adjustments.

Capital and Credit Quality

Capital – As at October 31, 2019, Basel III CET1 ratio was 12.1%, up 20 bps from last quarter, mainly reflecting internal capital generation which was partially offset by higher risk-weighted assets due to continued business growth, and share buybacks. We continued to deliver a strong return of capital to shareholders with $2 billion returned to shareholders in the fourth quarter, including $474 million of net repurchases.

Credit Quality – Total PCL was $499 million. PCL on loans of $505 million increased $172 million or 52% from a year ago, due to higher provisions in Personal & Commercial Banking, Capital Markets and Wealth Management, as we returned to a more normalized level of credit losses towards the end of 2019. The PCL ratio on loans of 32 bps increased by 9 bps and the PCL on impaired loans ratio was 27 bps.

Total PCL in Personal & Commercial Banking increased $70 million or 22% from a year ago. PCL on impaired loans ratio increased 4 bps, largely driven by higher provisions on impaired loans in our Canadian Banking commercial portfolios and retail portfolios.

Total PCL in Wealth Management increased $30 million from a year ago. PCL on impaired loans ratio increased 17 bps, largely driven by higher provisions on impaired loans in U.S. Wealth Management (including City National), mainly in the consumer discretionary sector.

Total PCL in Capital Markets increased $46 million from a year ago. PCL on impaired loans ratio increased 17 bps, driven by higher provisions on impaired loans in the industrial products and oil & gas sectors.

Compared to last quarter, total PCL on loans increased $76 million or 18%, mainly due to higher provisions in Personal & Commercial Banking and Capital Markets. The PCL ratio on loans was up 5 bps and the PCL on impaired loans ratio was up 2 bps from last quarter.

PCL on loans in Personal & Commercial Banking increased $48 million from the prior quarter, reflecting higher provisions on performing loans largely in Canadian Banking, mainly driven by unfavourable changes in portfolio mix, partially offset by favourable changes in macroeconomic factors and model updates. Higher provisions on impaired loans in Canadian Banking, partially offset by lower provisions on impaired loans in Caribbean Banking, also contributed to the increase.

PCL on loans in Capital Markets increased $22 million from the prior quarter, driven by higher provisions on performing loans due to unfavourable changes in portfolio mix. Higher provisions on impaired loans also contributed to the increase.

Digitally Enabled Relationship Bank

90-day Active Mobile users increased 16% from a year ago to 4.5 million, resulting in a 20% increase in mobile sessions. Digital adoption increased to 52%.

In September 2019, RBC announced the launch of the RBC Insight Edge™ platform for its business banking clients across Canada. RBC Insight Edge™ is a first-of-its-kind Canadian platform that RBC advisors will use to provide clients with relevant insights about their industry performance, customers, and markets. RBC Insight Edge™ leverages the bank's expertise in information management and insight development which is safeguarded by rigorous privacy standards to help business owners and managers turn insights into actions that improve client loyalty and productivity and drive growth.













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
2019


July 31
2019


October 31
2018



October 31
2019


October 31
2018


Total revenue

$

11,370

$

11,544

$

10,669


$

46,002

$

42,576


Provision for credit losses (PCL)


499


425


353



1,864


1,307


Insurance policyholder benefits, claims and acquisition expense (PBCAE)


654


1,046


494



4,085


2,676


Non-interest expense


6,319


5,992


5,882



24,139


22,833


Income before income taxes


3,898


4,081


3,940



15,914


15,760

Net income

$

3,206

$

3,263

$

3,250


$

12,871

$

12,431

Segments - net income













Personal & Commercial Banking

$

1,618

$

1,664

$

1,538


$

6,402

$

6,028


Wealth Management


729


639


553



2,550


2,265


Insurance


282


204


318



806


775


Investor & Treasury Services


45


118


155



475


741


Capital Markets 


584


653


666



2,666


2,777


Corporate Support


(52)


(15)


20



(28)


(155)

Net income

$

3,206

$

3,263

$

3,250


$

12,871

$

12,431

Selected information













Earnings per share (EPS)

- basic

$

2.19

$

2.23

$

2.21


$

8.78

$

8.39



- diluted


2.18


2.22


2.20



8.75


8.36


Return on common equity (ROE)  (1) (2)


16.2%


16.7%


17.6%



16.8%


17.6%


Average common equity (1)

$

76,600

$

75,800

$

71,700


$

75,000

$

68,900


Net interest margin (NIM) - on average earning assets, net (3)


1.60%


1.61%


1.65%



1.61%


1.64%


PCL on loans as a % of average net loans and acceptances


0.32%


0.27%


0.23%



0.31%


0.23%


PCL on performing loans as a % of average net loans and acceptances


0.05%


0.02%


0.03%



0.04%


0.03%


PCL on impaired loans as a % of average net loans and acceptances


0.27%


0.25%


0.20%



0.27%


0.20%


Gross impaired loans (GIL) as a % of loans and acceptances


0.46%


0.47%


0.37%



0.46%


0.37%


Liquidity coverage ratio (LCR) (4)


127%


122%


123%



127%


123%

Capital ratios and Leverage ratio













Common Equity Tier 1 (CET1) ratio


12.1%


11.9%


11.5%



12.1%


11.5%


Tier 1 capital ratio


13.2%


13.0%


12.8%



13.2%


12.8%


Total capital ratio


15.2%


15.0%


14.6%



15.2%


14.6%


Leverage ratio


4.3%


4.4%


4.4%



4.3%


4.4%

Selected balance sheet and other information (5)













Total assets

$

1,428,935

$

1,406,902

$

1,334,734


$

1,428,935

$

1,334,734


Securities, net of applicable allowance


249,004


240,661


222,866



249,004


222,866


Loans, net of allowance for loan losses


618,856


612,393


576,818



618,856


576,818


Derivative related assets


101,560


98,774


94,039



101,560


94,039


Deposits (3)


886,005


880,239


836,197



886,005


836,197


Common equity


77,816


76,550


73,552



77,816


73,552


Total capital risk-weighted assets


512,856


510,664


496,459



512,856


496,459


Assets under management (AUM)


762,300


744,800


671,000



762,300


671,000


Assets under administration (AUA) (6)


5,678,000


5,588,600


5,533,700



5,678,000


5,533,700

Common share information













Shares outstanding (000s)

- average basic


1,432,685


1,434,276


1,440,207



1,434,779


1,443,894



- average diluted


1,438,257


1,440,130


1,446,514



1,440,682


1,450,485



- end of period


1,430,096


1,433,954


1,438,794



1,430,096


1,438,794


Dividends declared per common share

$

1.05

$

1.02

$

0.98


$

4.07

$

3.77


Dividend yield (7)


4.0%


3.9%


3.8%



4.1%


3.7%


Common share price (RY on TSX) (8)

$

106.24

$

104.22

$

95.92


$

106.24

$

95.92


Market capitalization (TSX) (8)


151,933


149,447


138,009



151,933


138,009

Business information (number of)













Employees (full-time equivalent) (FTE)


82,801


84,087


81,870



82,801


81,870


Bank branches


1,327


1,328


1,333



1,327


1,333


Automated teller machines (ATMs)


4,600


4,586


4,537



4,600


4,537

Period average US$ equivalent of C$1.00 (9)

$

0.755

$

0.754

$

0.767


$

0.752

$

0.776

Period-end US$ equivalent of C$1.00

$

0.759

$

0.757

$

0.760


$

0.759

$

0.760



(1)

Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes Average common equity used in the calculation of ROE. For further details, refer to the Key performance and non-GAAP measures section of our 2019 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 2019 Supplementary Financial Information and our 2019 Annual Report for additional information.

(3)

Commencing Q4 2019, the interest component and the accrued interest payable recorded on certain deposits carried at Fair Value Through Profit and Loss (FVTPL) previously presented in trading revenue and deposits, respectively, are presented in net interest income and other liabilities respectively. Comparative amounts have been reclassified to conform with this presentation.

(4)

LCR is the average for the three months ended for each respective period and is calculated in accordance with the Office of the Superintendent of Financial Institutions' (OSFI) Liquidity Adequacy Requirements (LAR) guideline. For further details, refer to the Liquidity and funding risk section of our 2019 Annual Report.

(5)

Represents period-end spot balances.

(6)

AUA includes $15.5 billion and $8.1 billion (July 31, 2019$15.7 billion and $8.3 billion; October 31, 2018$16.7 billion and $9.6 billion) of securitized residential mortgages and credit card loans, respectively.

(7)

Defined as dividends per common share divided by the average of the high and low share price in the relevant period.

(8)

Based on TSX closing market price at period-end.

(9)

Average amounts are calculated using month-end spot rates for the period.

 


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)

2019

2019

2018


Net interest income

$

3,238

$

3,221

$

3,067


Non-interest income


1,330


1,325


1,297

Total revenue


4,568


4,546


4,364


PCL on performing assets


50


15


25


PCL on impaired assets


337


326


292

Total PCL


387


341


317


Non-interest expense


2,007


1,959


1,987

Net income before income taxes


2,174


2,246


2,060

Net income

$

1,618

$

1,664

$

1,538

Revenue by business








Canadian Banking


4,321


4,304


4,132


Caribbean & U.S. Banking


247


242


232

Selected balances and other information








ROE


27.0%


28.0%


26.7%


NIM


2.82%


2.86%


2.82%


Efficiency ratio (1)


43.9%


43.1%


45.5%


Operating leverage


3.7%


3.5%


2.5%


Average total assets

$

477,900

$

468,400

$

451,100


Average total earning assets, net


456,100


447,200


431,500


Average loans and acceptances, net


458,900


449,500


432,200


Average deposits


405,200


396,300


368,700


AUA (2) (3)


283,800


282,200


266,500


Average AUA


281,800


280,600


274,900


AUM (3)


5,000


4,900


4,700


PCL on impaired loans as a % of average net loans and acceptances


0.29%


0.29%


0.25%

Other selected information - Canadian Banking








Net income

$

1,555

$

1,609

$

1,463


NIM


2.76%


2.80%


2.77%


Efficiency ratio (1)


42.0%


41.5%


43.8%


Operating leverage


4.3%


1.7%


2.3%



(1)

Calculated as non-interest expense divided by total revenue.

(2)

AUA includes $15.5 billion and $8.1 billion (July 31, 2019$15.7 billion and $8.3 billion; October 31, 2018$16.7 billion and $9.6 billion) of securitized residential mortgages and credit card loans, respectively.

(3)

Represents period-end spot balances.

 

Q4 2019 vs. Q4 2018
Net income of $1,618 million increased $80 million or 5% compared to the prior year, largely reflecting average volume growth of 8%, partially offset by higher PCL.

Total revenue increased $204 million or 5%, mainly due to average volume growth of 6% in loans and 10% in deposits in Canadian Banking.

Net interest margin was flat compared to prior year, as higher interest rates were offset by the impact of competitive pricing pressures.

Total PCL increased $70 million or 22%. PCL on impaired loans ratio increased 4 bps, largely driven by higher provisions on impaired loans in our Canadian Banking portfolios. For further details on PCL, refer to Credit quality in the Q4 2019 Business Segment Performance section on page 3 of this Earnings Release.  

Non-interest expense increased $20 million or 1%, primarily attributable to an increase in staff-related costs, partially offset by lower marketing costs.

Q4 2019 vs. Q3 2019
Net income decreased $46 million or 3% from the prior quarter. Higher net interest income driven by average volume growth of 2%, partially offset by lower spreads, was more than offset by higher PCL and the timing of professional fees.



Wealth Management




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)

2019

2019

2018


Net interest income

$

745

$

773

$

679


Non-interest income








   Fee-based revenue


1,786


1,740


1,662


   Transactional and other revenue


656


516


399

Total revenue


3,187


3,029


2,740


PCL on performing assets


(1)


10


(3)


PCL on impaired assets


35


17


7

Total PCL


34


27


4


Non-interest expense


2,262


2,183


2,061

Net income before income taxes


891


819


675

Net income

$

729

$

639

$

553

Revenue by business








Canadian Wealth Management

$

823

$

821

$

796


U.S. Wealth Management (including City National)


1,556


1,546


1,345


   U.S. Wealth Management (including City National) (US$ millions)


1,175


1,168


1,031


Global Asset Management


713


567


513


International Wealth Management


95


95


86

Selected balances and other information








ROE


19.5%


17.2%


15.9%


NIM


3.30%


3.59%


3.49%


Pre-tax margin (1)


28.0%


27.0%


24.6%


Average total assets

$

103,900

$

99,700

$

91,300


Average total earning assets, net


89,500


85,500


77,100


Average loans and acceptances, net


66,700


64,400


57,800


Average deposits


100,700


95,300


91,800


AUA - total (2)


1,062,200


1,050,800


970,500


        - U.S. Wealth Management (including City National) (2)


543,300


538,800


483,000


        - U.S. Wealth Management (including City National) (US$ millions) (2)


412,600


408,100


367,100


AUM (2)


755,700


738,300


664,900


Average AUA


1,055,700


1,039,700


988,900


Average AUM


753,300


729,300


679,900


PCL on impaired loans as a % of average net loans and acceptances


0.21%


0.11%


0.04%


Number of advisors (3)


5,296


5,222


5,042









(1)

Pre-tax margin is defined as net income before income taxes divided by total revenue.

(2)

Represents period-end spot balances.

(3)

Represents client-facing advisors across all our wealth management businesses.

 

Q4 2019 vs. Q4 2018
Net income increased $176 million or 32% from the prior year, mainly due to a gain on the sale of the private debt business of BlueBay of $134 million (after-tax) and higher average fee-based client assets.

Total revenue increased $447 million or 16%, mainly due to a gain on the sale of the private debt business of BlueBay of $151 million, higher average fee-based client assets reflecting market appreciation and net sales, and the change in the fair value of the hedges related to our U.S. share-based compensation plans, which was largely offset in non-interest expense. Higher net interest income driven by average loan growth of 15%, partially offset by lower spreads, also contributed to the increase.

Total PCL increased $30 million. PCL on impaired loans ratio increased 17 bps, largely driven by higher provisions on impaired loans in U.S. Wealth Management (including City National), mainly in one sector. For further details on PCL, refer to Credit quality in the Q4 2019 Business Segment Performance section on page 3 of this Earnings Release.

Non-interest expense increased $201 million or 10%, primarily due to the change in the fair value our U.S. share-based compensation plans, which was largely offset in revenue, increased costs in support of business growth, largely reflecting higher staff-related costs, and higher variable compensation commensurate with revenue growth.

Q4 2019 vs. Q3 2019
Net income increased $90 million or 14% from the prior quarter, largely due to a gain on the sale of the private debt business of BlueBay of $134 million (after-tax) and higher average fee-based client assets reflecting market appreciation and net sales. These factors were partially offset by a decrease in net interest income driven by lower spreads, increased costs in support of business growth and higher variable compensation commensurate with revenue growth.







Insurance








As at or for the three months ended



October 31

July 31

October 31

(Millions of Canadian dollars, except percentage amounts)

2019

2019

2018


Non-interest income








     Net earned premiums

$

944

$

914

$

1,222


     Investment income (1)


168


505


(230)


     Fee income


41


44


47


Total revenue


1,153


1,463


1,039


     Insurance policyholder benefits and claims (1)


572


971


416


     Insurance policyholder acquisition expense


82


75


78


     Non-interest expense


153


149


159

Net income before income taxes


346


268


386

Net income

$

282

$

204

$

318

Revenue by business








Canadian Insurance

$

609

$

991

$

536


International Insurance


544


472


503

Selected balances and other information








ROE


50.3%


39.2%


57.2%


Premiums and deposits (2)

$

1,105

$

1,079

$

1,374


Fair value changes on investments backing policyholder liabilities (1)


(28)


385


(342)



(1)

Investment income can experience volatility arising from fluctuation 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 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, claims and acquisition expense.

(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.

 

Q4 2019 vs. Q4 2018
Net income decreased $36 million or 11% from a year ago, primarily due to lower favourable reinsurance contract renegotiations and lower favourable annual actuarial assumption updates. Higher claims costs and lower favourable investment-related experience also contributed to the decrease. These factors were partially offset by the impact of new longevity reinsurance contracts.

Total revenue increased $114 million or 11%, largely due to the change in fair value of investments backing our policyholder liabilities, which is largely offset in PBCAE as indicated below and realized investment gains. Business growth, largely in longevity reinsurance, also contributed to the increase. These factors were partially offset by lower group annuity sales, which is largely offset in PBCAE as indicated below.

PBCAE increased $160 million or 32%, mainly due to the change in fair value of investments backing our policyholder liabilities, lower favourable investment-related experience, business growth and lower favourable reinsurance contract negotiations. Lower favourable annual actuarial assumption updates, largely related to unfavourable mortality, morbidity and commission experience, partially offset by favourable economic assumptions, and higher claims costs also contributed to the increase. These factors were partially offset by lower group annuity sales and the favourable impact of new longevity reinsurance contracts.

Non-interest expense decreased $6 million or 4%, driven by cost management initiatives.                                                                 

Q4 2019 vs. Q3 2019
Net income increased $78 million or 38% from the prior quarter, primarily due to the impact of new longevity reinsurance contracts and favourable reinsurance contract renegotiations in the current quarter, partially offset by lower favourable investment-related experience.


Investor & Treasury Services



As at or for the three months ended



October 31

July 31

October 31

(Millions of Canadian dollars, except percentage amounts)

2019

2019


2018


Net interest income

$

37

$

(16)

$

19


Non-interest income


529


577


605

Total revenue


566


561


624


PCL


(1)


1


-


Non-interest expense


508


411


421

Net income before income taxes


59


149


203

Net income

$

45

$

118

$

155

Selected balances and other information








ROE


4.8%


13.2%


19.2%


Average deposits

$

175,200

$

179,300

$

163,600


Average client deposits


57,600


60,100


59,200


Average wholesale funding deposits


117,600


119,200


104,400


AUA (1)


4,318,100


4,242,100


4,283,100


Average AUA


4,296,300


4,290,900


4,295,200



(1)

Represents period-end spot balances.

 

Q4 2019 vs. Q4 2018
Net income decreased $110 million or 71% from a year ago, primarily due to severance and related costs, as well as lower funding and liquidity revenue.

Total revenue decreased $58 million or 9%, mainly reflecting lower funding and liquidity revenue, primarily driven by the short-term rate environment and lower gains from the disposition of certain securities, as well as lower revenue from our asset services business due to reduced client activity. Lower client deposit revenue, largely driven by margin compression reflecting spread tightening, also contributed to the decrease.

Non-interest expense increased $87 million or 21%, largely driven by severance and related costs associated with repositioning of the business.

Q4 2019 vs. Q3 2019
Net income decreased $73 million or 62% from last quarter, mainly driven by severance and related costs associated with repositioning of the business.


Capital Markets



As at or for the three months ended




October 31


July 31


October 31

(Millions of Canadian dollars, except percentage amounts)


2019


2019


2018


Net interest income (1), (2)

$

1,063

$

1,018

$

885


Non-interest income (1), (2)


924


1,016


1,171

Total revenue (1)


1,987


2,034


2,056


PCL on performing assets


18


3


17


PCL on impaired assets


60


53


15

Total PCL


78


56


32


Non-interest expense


1,308


1,269


1,244

Net income before income taxes


601


709


780

Net income

$

584

$

653

$

666

Revenue by business








Corporate and Investment Banking

$

934

$

962

$

1,087


Global Markets


1,095


1,106


1,035


Other


(42)


(34)


(66)

Selected balances and other information








ROE


10.0%


11.1%


11.8%


Average total assets

$

696,100

$

676,700

$

591,700


Average trading securities


103,800


101,400


88,000


Average loans and acceptances, net


98,100


101,100


90,700


Average deposits (2)


76,800


75,900


73,700


PCL on impaired loans as a % of average net loans and acceptances


0.24%


0.21%


0.07%



(1)

The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2019 was $112 million (July 31, 2019 – $111 million, October 31, 2018 - $142 million).

(2)

Commencing Q4 2019, the interest component and the accrued interest payable recorded on certain deposits carried at FVTPL previously presented in trading revenue and deposits, respectively, are presented in net interest income and other liabilities respectively. Comparative amounts have been reclassified to conform with this presentation.

 

Q4 2019 vs. Q4 2018
Net income decreased $82 million or 12% from a year ago, largely driven by lower revenue in Corporate and Investment Banking and higher PCL. These factors were partially offset by a lower effective tax rate largely reflecting changes in earnings mix, as well as higher revenue in Global Markets.

Total revenue decreased $69 million or 3%, mainly due to lower M&A activity across all regions and lower equity trading revenue primarily in the U.S. These factors were partially offset by higher fixed income trading revenue, largely in North America.

Total PCL increased $46 million. PCL on impaired loans ratio increased 17 bps, driven by higher provisions on impaired loans in a couple of sectors. For further details on PCL, refer to Credit quality in the Q4 2019 Business Segment Performance section on page 3 of this Earnings Release.

Non-interest expense increased $64 million or 5%, mainly driven by higher costs related to changes in the timing of deferred compensation and higher technology and related costs.

Q4 2019 vs. Q3 2019
Net income decreased $69 million or 11% from the prior quarter, mainly due to lower M&A revenues, primarily in the U.S., lower equity origination, largely in the U.S. and Europe, as well as higher costs related to changes in the timing of deferred compensation. Lower fixed income trading, mainly in the U.S. and higher PCL also contributed to the decrease. These factors were partially offset by a lower effective tax rate, higher foreign exchange trading revenue, mainly in Europe, higher debt origination, largely in the U.S., and higher municipal banking activity.








Corporate Support









As at or for the three months ended




October 31


July 31


October 31

(Millions of Canadian dollars)


2019


2019


2018


Net interest income (loss) (1)

$

28

$

22

$

17


Non-interest income (loss) (1)


(119)


(111)


(171)

Total revenue (1)


(91)


(89)


(154)


PCL


1


-


-


Non-interest expense


81


21


10

Net income (loss) before income taxes (1)


(173)


(110)


(164)


Income (recoveries) taxes (1)


(121)


(95)


(184)

Net income (2)

$

(52)

$

(15)

$

20



(1)

Teb adjusted.

(2)

Net income (loss) reflects income attributable to both shareholders and Non-Controlling Interests (NCI). Net income attributable to NCI for the three months ended October 31, 2019 was $(1) million (July 31, 2019$(1) million; October 31, 2018$(1) million).

 

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

Total revenue and income taxes (recoveries) in each period in Corporate Support include the deduction of the teb adjustments related to the gross-up of income from Canadian taxable corporate dividends and the U.S. tax credit investment business recorded in Capital Markets. The amount deducted from revenue was offset by an equivalent increase in income taxes (recoveries).

The teb amount for the three months ended October 31, 2019 was $112 million, $111 million in the prior quarter and $142 million last year. For further discussion, refer to the How we measure and report our business segments section of our 2019 Annual Report.

The following identifies the material items, other than the teb impacts noted previously, affecting the reported results in each period.

Q4 2019
Net loss was $52 million in the current quarter, largely due to impact of an unfavourable accounting adjustment.

Q3 2019
Net loss was $15 million in the prior quarter, mainly due to net unfavourable tax adjustments, largely offset by asset/liability management activities.

Q4 2018
Net income was $20 million in the prior year, largely reflecting net unfavourable tax adjustments. 

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 2019 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 ROE. ROE does not have a standardized meaning under GAAP. We use ROE as a measure of return on total capital invested in our business. The following table provides a summary of our ROE calculations:


Calculation of ROE



For the three months ended

For the year ended


October 31, 2019

October 31, 2019


Personal &



Investor &





(Millions of Canadian dollars, except

Commercial

Wealth


Treasury

Capital

Corporate



percentage amounts)

 Banking

Management

Insurance

Services

Markets

Support

Total

Total

Net income available to common


















shareholders

$

1,593

$

717

$

280

$

41

$

565

$

(59)

$

3,137

$

12,591

Total average common equity (1) (2)

$

23,400

$

14,600

$

2,200

$

3,450

$

22,350

$

10,600

$

76,600

$

75,000

ROE  (3)

27.0%

19.5%

50.3%

4.8%

10.0%

n.m.

16.2%

16.8%



(1)

Total average common equity represents rounded figures.

(2)

The amounts for the segments are referred to as attributed capital.

(3)

ROE is based on actual balances of average common equity before rounding.

n.m.

not meaningful

 

Non-GAAP Measures
There were no specified items for the three months ended October 31, 2019, July 31, 2019 and October 31, 2018 as well as for the years ended October 31, 2019 and October 31, 2018.

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined, do not have a standardized meaning under GAAP, and may not be comparable with similar information disclosed by other financial institutions. We believe that excluding these specified items from our results is more reflective of our ongoing operating results, will provide readers with a better understanding of management's perspective on our performance, and enhance the comparability of our comparative periods. For further information, refer to the Key performance and non-GAAP measures section of our 2019 Annual Report.



Consolidated Balance Sheets




As at




October 31


July 31

October 31

(Millions of Canadian dollars)


2019 (1)


2019 (2)


2018 (1)









Assets







Cash and due from banks

$

26,310

$

26,863

$

30,209









Interest-bearing deposits with banks


38,345


31,553


36,471









Securities








Trading


146,534


140,421


128,258


Investment, net of applicable allowance


102,470


100,240


94,608




249,004


240,661


222,866









Assets purchased under reverse repurchase agreements and securities borrowed


306,961


309,640


294,602









Loans








Retail


426,086


416,583


399,452


Wholesale


195,870


198,941


180,278




621,956


615,524


579,730


Allowance for loan losses


(3,100)


(3,131)


(2,912)




618,856


612,393


576,818









Segregated fund net assets


1,663


1,602


1,368

Other








Customers' liability under acceptances


18,062


17,101


15,641


Derivatives


101,560


98,774


94,039


Premises and equipment


3,191


3,058


2,832


Goodwill 


11,236


11,115


11,137


Other intangibles  


4,674


4,735


4,687


Other assets


49,073


49,407


44,064




187,796


184,190


172,400

Total assets

$

1,428,935

$

1,406,902

$

1,334,734









Liabilities and equity







Deposits








Personal

$

294,732

$

287,929

$

270,154


Business and government


565,482


562,371


533,522


Bank


25,791


29,939


32,521




886,005


880,239


836,197









Segregated fund net liabilities


1,663


1,602


1,368

Other








Acceptances


18,091


17,124


15,662


Obligations related to securities sold short


35,069


33,602


32,247


Obligations related to assets sold under repurchase agreements and securities loaned


226,586


220,027


206,814


Derivatives


98,543


96,857


90,238


Insurance claims and policy benefit liabilities


11,401


11,480


10,000


Other liabilities 


58,137


53,799


53,122




447,827


432,889


408,083









Subordinated debentures


9,815


9,818


9,131

Total liabilities


1,345,310


1,324,548


1,254,779









Equity attributable to shareholders








Preferred shares


5,707


5,705


6,309


Common shares


17,587


17,593


17,617


Retained earnings


55,981


54,692


51,112


Other components of equity


4,248


4,265


4,823




83,523


82,255


79,861

Non-controlling interests


102


99


94

Total equity


83,625


82,354


79,955

Total liabilities and equity

$

1,428,935

$

1,406,902

$

1,334,734



(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)


2019 (1)

2019 (1)

2018 (1)


2019 (2)

2018 (2)














Interest and dividend income













Loans

$

6,186

$

6,394

$

5,733


$

24,863

$

21,249


Securities


1,659


1,770


1,434



6,827


5,670


Assets purchased under reverse repurchase agreements and securities borrowed


2,268


2,353


1,642



8,960


5,536


Deposits and other


329


93


181



683


566




10,442


10,610


8,990



41,333


33,021














Interest expense













Deposits and other


3,175


3,284


2,825



12,988


9,842


Other liabilities


2,066


2,218


1,411



8,231


4,905


Subordinated debentures


90


90


87



365


322




5,331


5,592


4,323



21,584


15,069

Net interest income


5,111


5,018


4,667



19,749


17,952














Non-interest income













Insurance premiums, investment and fee income


1,153


1,463


1,039



5,710


4,279


Trading revenue


116


170


185



995


1,150


Investment management and custodial fees


1,477


1,440


1,387



5,748


5,377


Mutual fund revenue


932


924


896



3,628


3,551


Securities brokerage commissions


323


324


349



1,305


1,372


Service charges


493


480


459



1,907


1,800


Underwriting and other advisory fees


428


488


514



1,815


2,053


Foreign exchange revenue, other than trading


242


252


267



986


1,098


Card service revenue


252


272


264



1,072


1,054


Credit fees


344


322


371



1,269


1,394


Net gains on investment securities


16


26


33



125


147


Share of profit (loss) in joint ventures and associates


26


21


8



76


21


Other


457


344


230



1,617


1,328



6,259


6,526


6,002



26,253


24,624

Total revenue


11,370


11,544


10,669



46,002


42,576

Provision for credit losses


499


425


353



1,864


1,307

Insurance policyholder benefits, claims and acquisition expense


654


1,046


494



4,085


2,676














Non-interest expense













Human resources


3,720


3,615


3,429



14,600


13,776


Equipment


452


449


419



1,777


1,593


Occupancy


424


409


400



1,635


1,558


Communications


296


281


316



1,090


1,049


Professional fees


382


328


418



1,305


1,379


Amortization of other intangibles


309


299


279



1,197


1,077


Other


736


611


621



2,535


2,401




6,319


5,992


5,882



24,139


22,833

Income before income taxes


3,898


4,081


3,940



15,914


15,760

Income taxes


692


818


690



3,043


3,329

Net income

$

3,206

$

3,263

$

3,250


$

12,871

$

12,431

Net income attributable to:













Shareholders

$

3,201

$

3,263

$

3,247


$

12,860

$

12,400


Non-controlling interests


5


-


3



11


31



$

3,206

$

3,263

$

3,250


$

12,871

$

12,431

Basic earnings per share (in dollars)

$

2.19

$

2.23

$

2.21


$

8.78

$

8.39

Diluted earnings per share (in dollars)


2.18


2.22


2.20



8.75


8.36

Dividends per common share (in dollars)


1.05


1.02


0.98



4.07


3.77



(1)

Derived from unaudited financial statements.

(2)

Derived from audited 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)

2019 (1)

2019 (1)

2018 (1)


2019 (2)

2018 (2)















Net income

$

3,206

$

3,263

$

3,250


$

12,871

$

12,431















Other comprehensive income (loss), net of taxes












Items that will be reclassified subsequently to income:













Net change in unrealized gains (losses) on debt securities and loans at fair value














 through other comprehensive income














Net unrealized gains (losses) on debt securities and loans at fair value through other














comprehensive income



(26)


79


(75)



192


(70)



Provision for credit losses recognized in income


(2)


(2)


(24)



(14)


(9)



Reclassification of net losses (gains) on debt securities and loans at fair value through other














comprehensive income to income


(58)


(15)


(18)



(133)


(94)





(86)


62


(117)



45


(173)


Foreign currency translation adjustments














Unrealized foreign currency translation gains (losses)


180


(1,246)


453



65


840



Net foreign currency translation gains (losses) from hedging activities


(121)


590


(107)



5


(237)



Reclassification of losses (gains) on foreign currency translation to income


-


-


-



2


-



Reclassification of losses (gains) on net investment hedging activities to income


(1)


-


-



1


-





58


(656)


346



73


603


Net change in cash flow hedges














Net gains (losses) on derivatives designated as cash flow hedges


57


(118)


(12)



(559)


150



Reclassification of losses (gains) on derivatives designated as cash flow hedges to income


(47)


11


88



(135)


107





10


(107)


76



(694)


257

Items that will not be reclassified subsequently to income:













Remeasurements of employee benefit plans


125


(581)


127



(942)


724


Net fair value change due to credit risk on financial liabilities designated as at fair value














through profit or loss


(41)


118


10



51


123


Net gains (losses) on equity securities designated at fair value through other comprehensive














income


(2)


(10)


(3)



25


(2)




82


(473)


134



(866)


845

Total other comprehensive income (loss), net of taxes


64


(1,174)


439



(1,442)


1,532

Total comprehensive income (loss)

$

3,270

$

2,089

$

3,689


$

11,429

$

13,963

Total comprehensive income attributable to:













Shareholders

$

3,266

$

2,090

$

3,686


$

11,419

$

13,931


Non-controlling interests


4


(1)


3



10


32




$

3,270

$

2,089

$

3,689


$

11,429

$

13,963



(1)

Derived from unaudited financial statements.

(2)

Derived from audited financial statements.


 


Consolidated Statements of Changes in Equity


For the three months ended October 31, 2019 (1)



Other components of equity







(Millions of Canadian dollars)

Preferred
shares

Common
shares

Treasury
shares -
preferred

Treasury
shares -
common

Retained
earnings

FVOCI
securities and
loans

Foreign
currency
translation

Cash flow
hedges

Total other
components
of equity

Equity
attributable to
shareholders

Non-

controlling

interests

Total

equity

Balance at beginning of period

$

5,706

$

17,652

$

(1)

$

(59)

$

54,692

$

119

$

4,162

$

(16)

$

4,265

$

82,255

$

99

$

82,354

Changes in equity


























Issues of share capital


-


49


-


-


-


-


-


-


-


49


-


49


Common shares purchased for cancellation


-


(56)


-


-


(418)


-


-


-


-


(474)


-


(474)


Redemption of preferred shares


-


-


-


-


-


-


-


-


-


-


-


-


Sales of treasury shares


-


-


37


1,500


-


-


-


-


-


1,537


-


1,537


Purchases of treasury shares


-


-


(35)


(1,499)


-


-


-


-


-


(1,534)


-


(1,534)


Share-based compensation awards


-


-


-


-


(8)


-


-


-


-


(8)


-


(8)


Dividends on common shares


-


-


-


-


(1,503)


-


-


-


-


(1,503)


-


(1,503)


Dividends on preferred shares and other


-


-


-


-


(64)


-


-


-


-


(64)


(1)


(65)


Other


-


-


-


-


(1)


-


-


-


-


(1)


-


(1)


Net income


-


-


-


-


3,201


-


-


-


-


3,201


5


3,206


Total other comprehensive income (loss), net of taxes


-


-


-


-


82


(86)


59


10


(17)


65


(1)


64

Balance at end of period

$

5,706

$

17,645

$

1

$

(58)

$

55,981

$

33

$

4,221

$

(6)

$

4,248

$

83,523

$

102

$

83,625



























For the three months ended October 31, 2018 (1)












Other components of equity







(Millions of Canadian dollars)

Preferred
shares

Common
shares

Treasury
shares -
preferred

Treasury
shares -
common

Retained
earnings

FVOCI
securities and
loans

Foreign
currency
translation

Cash flow
hedges

Total other
components of
equity

Equity
attributable to
shareholders

Non-

controlling

interests

Total

equity

Balance at beginning of period

$

6,306

$

17,642

$

-

$

(109)

$

49,424

$

105

$

3,801

$

612

$

4,518

$

77,781

$

91

$

77,872

Changes in equity


























Issues of share capital


-


23


-


-


-


-


-


-


-


23


-


23


Common shares purchased for cancellation


-


(30)


-


-


(217)


-


-


-


-


(247)


-


(247)


Redemption of preferred shares


-


-


-


-


-


-


-


-


-


-


-


-


Sales of treasury shares


-


-


57


1,418


-


-


-


-


-


1,475


-


1,475


Purchases of treasury shares


-


-


(54)


(1,327)


-


-


-


-


-


(1,381)


-


(1,381)


Share-based compensation awards


-


-


-


-


(4)


-


-


-


-


(4)


-


(4)


Dividends on common shares


-


-


-


-


(1,412)


-


-


-


-


(1,412)


-


(1,412)


Dividends on preferred shares and other


-


-


-


-


(71)


-


-


-


-


(71)


-


(71)


Other


-


-


-


-


11


-


-


-


-


11


-


11


Net income


-


-


-


-


3,247


-


-


-


-


3,247


3


3,250


Total other comprehensive income (loss), net of taxes


-


-


-


-


134


(117)


346


76


305


439


-


439

Balance at end of period

$

6,306

$

17,635

$

3

$

(18)

$

51,112

$

(12)

$

4,147

$

688

$

4,823

$

79,861

$

94

$

79,955

(1)

Derived from unaudited financial statements.

 

 

 


For the year ended October 31, 2019 (1)












Other components of equity







(Millions of Canadian dollars)


Preferred
shares


Common
shares


Treasury
shares -
preferred


Treasury
shares -
common


Retained
earnings


FVOCI
securities and
loans


Foreign
currency
translation


Cash flow
hedges


Total other
components
of equity


Equity
attributable to
shareholders


Non-
controlling
interests


Total equity

Balance at beginning of period

$

6,306

$

17,635

$

3

$

(18)

$

51,112

$

(12)

$

4,147

$

688

$

4,823

$

79,861

$

94

$

79,955

Transition adjustment


-


-


-


-


(94)


-


-


-


-


(94)


-


(94)

Adjusted balance at beginning of period

$

6,306

$

17,635

$

3

$

(18)

$

51,018

$

(12)

$

4,147

$

688

$

4,823

$

79,767

$

94

$

79,861

Changes in equity


























Issues of share capital


350


136


-


-


-


-


-


-


-


486


-


486


Common shares purchased for cancellation


-


(126)


-


-


(904)


-


-


-


-


(1,030)


-


(1,030)


Redemption of preferred shares


(950)


-


-


-


-


-


-


-


-


(950)


-


(950)


Sales of treasury shares


-


-


182


5,340


-


-


-


-


-


5,522


-


5,522


Purchases of treasury shares


-


-


(184)


(5,380)


-


-


-


-


-


(5,564)


-


(5,564)


Share-based compensation awards


-


-


-


-


(23)


-


-


-


-


(23)


-


(23)


Dividends on common shares


-


-


-


-


(5,840)


-


-


-


-


(5,840)


-


(5,840)


Dividends on preferred shares and other


-


-


-


-


(269)


-


-


-


-


(269)


(2)


(271)


Other


-


-


-


-


5


-


-


-


-


5


-


5


Net income


-


-


-


-


12,860


-


-


-


-


12,860


11


12,871


Total other comprehensive income (loss), net of taxes


-


-


-


-


(866)


45


74


(694)


(575)


(1,441)


(1)


(1,442)

Balance at end of period

$

5,706

$

17,645

$

1

$

(58)

$

55,981

$

33

$

4,221

$

(6)

$

4,248

$

83,523

$

102

$

83,625



























For the year ended October 31, 2018 (1)












Other components of equity







(Millions of Canadian dollars)

Preferred
shares

Common
shares

Treasury
shares -
preferred

Treasury
shares -
common

Retained
earnings

FVOCI
securities and
loans

Foreign
currency
translation

Cash flow
hedges

Total other
components of
equity

Equity
attributable to
shareholders

Non-
controlling
interests

Total equity

Balance at beginning of period

$

6,413

$

17,730

$

-

$

(27)

$

44,801

$

299

$

3,545

$

431

$

4,275

$

73,192

$

599

$

73,791

Changes in equity


























Issues of share capital


-


92


-


-


-


-


-


-


-


92


-


92


Common shares purchased for cancellation


-


(187)


-


-


(1,335)


-


-


-


-


(1,522)


-


(1,522)


Redemption of preferred shares


(107)


-


-


-


2


-


-


-


-


(105)


-


(105)


Redemption of trust capital securities


-


-


-


-


-


-


-


-


-


-


(500)


(500)


Sales of treasury shares


-


-


259


5,479


-


-


-


-


-


5,738


-


5,738


Purchases of treasury shares


-


-


(256)


(5,470)


-


-


-


-


-


(5,726)


-


(5,726)


Share-based compensation awards


-


-


-


-


(10)


-


-


-


-


(10)


-


(10)


Dividends on common shares


-


-


-


-


(5,442)


-


-


-


-


(5,442)


-


(5,442)


Dividends on preferred shares and other


-


-


-


-


(285)


-


-


-


-


(285)


(37)


(322)


Other


-


-


-


-


136


(138)


-


-


(138)


(2)


-


(2)


Net income


-


-


-


-


12,400


-


-


-


-


12,400


31


12,431


Total other comprehensive income (loss), net of taxes


-


-


-


-


845


(173)


602


257


686


1,531


1


1,532

Balance at end of period

$

6,306

$

17,635

$

3

$

(18)

$

51,112

$

(12)

$

4,147

$

688

$

4,823

$

79,861

$

94

$

79,955

(1) Derived from audited financial statements.

 

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 Earnings Release, in other filings with Canadian regulators or the SEC, in other 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, and include our President and Chief Executive Officer's statements. The forward-looking information contained in this Earnings Release 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, as well as our financial performance objectives, vision and strategic goals, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could" or "would".

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors – many of which are beyond our control and the effects of which can be difficult to predict – include: credit, market, liquidity and funding, insurance, operational, regulatory compliance, strategic, reputation, legal and regulatory environment, competitive and systemic risks and other risks discussed in the risk sections of our annual report for the fiscal year ended October 31, 2019 (the 2019 Annual Report); including information technology and cyber risk, privacy, data and third party related risk, geopolitical uncertainty, Canadian housing and household indebtedness, regulatory changes, digital disruption and innovation, climate change, the business and economic conditions in the geographic regions in which we operate, the effects of changes in government fiscal, monetary and other policies, tax risk and transparency, and environmental and social risk.

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 Earnings Release are set out in the Economic, market and regulatory review and outlook section and for each business segment under the Strategic priorities and Outlook headings in our 2019 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 sections of our 2019 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 quarterly Earnings Release, quarterly results slides, supplementary financial information and our 2019 Annual Report at rbc.com/investorrelations.

Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for December 4, 2019 at 8:00 a.m. (EST) and will feature a presentation about our fourth quarter and 2019 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 rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (416-340-2217, 866-696-5910, passcode 3486214#). Please call between 7:50 a.m. and 7:55 a.m. (EST).

Management's comments on results will be posted on our website shortly following the call. A recording will be available by 5:00 p.m. (EST) from December 4, 2019 until February 20, 2020 at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 5654710#).

ABOUT RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 85,000+ employees who bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank, and one of the largest in the world based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 34 other countries. Learn more at rbc.com.?

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.  

Trademarks used in this earnings release include the LION & GLOBE Symbol, ROYAL BANK OF CANADA and RBC 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 earnings release, which are not the property of Royal Bank of Canada, are owned by their respective holders.

SOURCE Royal Bank of Canada