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    RY   CA7800871021

ROYAL BANK OF CANADA

(RY)
  Report
Delayed Toronto Stock Exchange  -  04:00:00 2023-01-31 pm EST
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ROYAL BANK OF CANADA REPORTS FOURTH QUARTER AND 2022 RESULTS

11/30/2022 | 06:02am EST

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 October3 1, 2022 and related notes prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board, unless otherwise noted. Our 2022 Annual Report (which includes our audited Annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2022 Annual Information Form and our Supplementary Financial Information are available on our website at: http://www.rbc.com/investorrelations.

2022 Net Income
$15.8 Billion
Down 2% YoY

2022 Diluted EPS1

$11.06

Flat YoY

2022 PCL2

$484 Million

PCL on loans ratio up 16
bps
3 YoY

2022 ROE4

16.4%

Down 220 bps YoY

CET1 Ratio5

12.6%

Well above regulatory
requirements

Q4 2022 Net Income

$3.9 Billion

Flat YoY

Q4 2022 Diluted EPS

$2.74

Up 2% YoY

Q4 2022 PCL

$381 Million

PCL on loans ratio up 1
bp QoQ

Q4 2022 ROE

15.6%

Down 130 bps YoY

Leverage Ratio6

4.4%

Down 20 bps QoQ






TORONTO, Nov. 30, 2022 /CNW/ - Royal Bank of Canada7 (TSX: RY) (NYSE: RY) today reported net income of $15.8 billion for the year ended October 31, 2022, down $243 million or 2% from the prior year. Diluted EPS8of $11.06 remained unchanged from the prior year. Our consolidated results include total PCL of $484 million compared to $(753) million last year, primarily reflecting lower releases of provisions on performing loans in Personal & Commercial Banking and Capital Markets due to unfavourable changes in our macroeconomic outlook in the current year. Lower earnings in Capital Markets and Insurance were partly offset by higher results in Personal & Commercial Banking, Wealth Management and Investor & Treasury Services.

Pre-provision, pre-tax earnings8 of $20.6 billion were up 4% from a year ago, mainly reflecting higher net interest income driven by strong volume growth and higher spreads in Canadian Banking and Wealth Management. These factors were partially offset by lower revenue in Capital Markets, including the impact from loan underwriting markdowns in Q3 2022, largely driven by challenging market conditions. Results also reflected higher salaries, technology investments and discretionary costs to support strong client-driven growth.

The PCL on loans ratio of 6 bps increased 16 bps from the prior year. The PCL on impaired loans ratio was 10 bps, flat from the prior year.

Our capital position remained robust, with a Common Equity Tier 1 (CET1) ratio of 12.6% supporting strong client-driven organic growth. In addition, this year we returned $12.4 billion to our shareholders through common share buybacks and dividends. And today, we declared a quarterly dividend of $1.32 per share reflecting an increase of $0.04 or 3%.

"While market conditions continue to be tough, our 2022 results reflect a resilient bank that is well-positioned to pursue strategic growth and deliver long-term shareholder value. Our premium businesses, strong balance sheet, prudent risk management and diversified business model mean we can deliver advice and services that help our clients navigate all cycles. RBC colleagues remain focused on building more exceptional experiences for our clients and supporting sustainable and prosperous communities."

Dave McKay, RBC President and Chief Executive Officer

2022 Full-Year Business Segment Performance

  • 7% earnings growth in Personal & Commercial Banking, primarily attributable to higher net interest income, driven by average volume growth of 9% in both loans and deposits in Canadian Banking, and higher spreads. As a result of the rising interest rate environment (Bank of Canada raised the benchmark interest rate by 350 bps from March to October 2022), we saw higher spreads as compared to the prior year. Higher non-interest income, including higher foreign exchange revenue, card service revenue and service charges driven by increased client activity also contributed to the increase in earnings. These factors were partially offset by higher PCL, and higher staff and technology related costs. Our Canadian Banking franchise generated strong positive operating leverage of 3.8% while continuing to invest in digital initiatives to improve the client experience and deliver personalized advice.
  • 20% earnings growth in Wealth Management, mainly due to higher net interest income driven by average volume growth of 19% in loans and 11% in deposits largely in U.S. Wealth Management (including City National), and higher interest rates. Higher average fee-based client assets primarily reflecting net sales, as well as the impact of a legal provision taken in U.S. Wealth Management (including City National) in the prior year that was partially released in the first quarter of 2022, also contributed to the increase. These factors were partially offset by higher staff-related costs and variable compensation.
  • 4% lower earnings in Insurance, largely due to the impact of lower new longevity reinsurance contracts, partially offset by higher favourable investment-related experience.
  • 17% earnings growth in Investor & Treasury Services, mainly due to higher revenue from client deposits reflecting improved margins, partially offset by higher technology-related costs.
  • 30% lower earnings in Capital Markets, primarily driven by lower revenue in Corporate & Investment Banking, larger releases of provisions on performing assets in the prior year and lower revenue in Global Markets. Global investment banking fee pools were impacted by weakness in credit and equity markets beginning in the second fiscal quarter of 2022, resulting in an approximately 30% decline in global investment banking fee pools9 this fiscal year compared to record levels in fiscal 2021.

Q4 2022 Performance

Earnings of $3.9 billion remained relatively flat from a year ago, with diluted EPS growth of 2% over the same period. Our consolidated results reflect $381 million of provisions, primarily taken on loans in the current quarter, as compared to $(227) million in the prior year, due to releases of provisions on performing loans, primarily in Personal & Commercial Banking. Higher earnings in Wealth Management and Personal & Commercial Banking reflected higher interest rates and robust client-driven volume growth. Earnings in Insurance and Investor & Treasury Services were largely unchanged. These were offset by lower earnings in Capital Markets.

Pre-provision, pre-tax earnings[10] of $5.2 billion were up 10% from a year ago, mainly reflecting higher net interest income driven by higher spreads and strong volume growth in Canadian Banking and Wealth Management. This was partially offset by lower market-related revenue in Capital Markets and Wealth Management. Results were also impacted by higher staff-related costs, including higher salaries and variable compensation.

Earnings were up $305 million or 9% from last quarter due to higher earnings in Capital Markets, Personal & Commercial Banking, Insurance, and Wealth Management. These were partially offset lower earnings in Investor & Treasury Services. The PCL on loans ratio of 18 bps was up 1 bp from 17 bps last quarter. The PCL on impaired loans ratio of 12 bps was up 4 bps from last quarter.

Q4 2022

compared to

Q4 2021

  • Net income of $3,882 million
  • Diluted EPS of $2.74
  • ROE of 15.6%
  • CET1 ratio of 12.6%

→  0%

↑ 2%

↓ 130 bps

↓ 110 bps

Q4 2022

compared to

Q3 2022

  • Net income of $3,882 million
  • Diluted EPS of $2.74
  • ROE of 15.6%
  • CET1 ratio of 12.6%

9%

↑ 9%

↑ 100 bps

↓ 50 bps

 

Q4 2022 Business Segment Performance

Personal & Commercial Banking 

Net income of $2,139 million increased $106 million or 5% from a year ago, primarily attributable to higher net interest income reflecting higher spreads from higher interest rates and strong average volume growth of 10% in loans (including strong mortgage and business loan growth of 10% and 15%, respectively) and 9% in deposits in Canadian Banking. Higher non-interest income, including higher card service and foreign exchange revenue from increased client activity, also contributed to the increase. These factors were partially offset by higher PCL, higher staff and technology related costs, including digital initiatives, as well as higher marketing costs.

Compared to last quarter, net income increased $116 million or 6%, primarily due to higher net interest income reflecting higher spreads and volume growth. Lower PCL also contributed to the increase. These factors were partially offset by higher staff-related and marketing costs, as well as the timing of professional fees.

Wealth Management

Net income of $822 million increased $264 million or 47% from a year ago, primarily due to higher net interest income reflecting higher interest rates and average volume growth in loans and deposits, and the impact of a legal provision taken in U.S. Wealth Management (including City National) in the prior year. These factors were partially offset by lower fee-based revenues mainly driven by unfavourable market conditions.

Compared to last quarter, net income increased $45 million or 6%, mainly due to higher net interest income largely reflecting higher interest rates. This factor was partially offset by lower average fee-based client assets, largely driven by unfavourable market conditions.

Insurance

Net income of $268 million remained relatively flat, largely reflecting the impact of offsetting items between revenue and PBCAE (policyholder benefits, claims and acquisition expense). PBCAE also included the impact of favourable annual actuarial assumption updates.

Compared to last quarter, net income increased $82 million or 44%, mainly due to favourable annual actuarial assumption updates.

Investor & Treasury Services

Net income of $110 million remained relatively flat as the impact of higher revenue reflecting improved margins mainly driven by higher interest rates from client deposits, was largely offset by lower funding and liquidity revenue and lower revenue from our asset services business.

Compared to last quarter, net income decreased $54 million or 33%, mainly driven by lower funding and liquidity revenue, including the impact of a funding cost adjustment.

Capital Markets

Net income of $617 million decreased $303 million or 33% from a year ago, primarily due to the timing of true-ups related to our variable compensation plans. Lower revenue in Corporate & Investment Banking reflecting lower debt and equity origination as well as lower loan syndication revenue and higher PCL, also contributed to the decrease. These factors were partially offset by a lower effective tax rate reflecting changes in the earnings mix as well as higher fixed income trading revenue in Global Markets.

Compared to last quarter, net income increased $138 million or 29%, mainly due to higher fixed income trading revenue as the prior quarter included the impact from loan underwriting markdowns, primarily in the U.S., largely driven by challenging market conditions. This factor was partially offset by higher compensation on increased results and the timing of true-ups related to our variable compensation plans.

Capital, Liquidity and Credit Quality 

Capital – As at October 31, 2022, our CET1 ratio was 12.6%, down 110 bps from last year, mainly reflecting risk-weighted asset growth (excluding FX), share repurchases, the impact of our Brewin Dolphin acquisition, and the unfavourable impact of fair value other comprehensive income adjustments. These factors were partially offset by net internal capital generation, favourable net credit migration and model updates.             

Liquidity – For the quarter ended October 31, 2022, the average liquidity coverage ratio (LCR) was 125%, which translates into a surplus of approximately $73 billion, compared to 123% and a surplus of approximately $66 billion in the prior quarter. LCR has increased compared to last quarter as loan growth was more than offset by an increase in volume and change in mix of client deposits, as well as by issuances of term funding.

The Net Stable Funding Ratio (NSFR) as at October 31, 2022 was 112%, which translates into a surplus of approximately $95 billion, compared to 113% and a surplus of approximately $100 billion in the prior quarter. NSFR remained relatively flat compared to last quarter as growth in loans and securities was offset by issuance of term funding and increases in client deposits.

Credit Quality

Q4 2022 vs. Q4 2021

Total PCL was $381 million compared to $(227) million last year, reflecting provisions taken on performing loans and higher provisions on impaired loans in the current quarter, as compared to releases of provisions on performing loans in the prior year, primarily in Personal & Commercial Banking. The PCL on loans ratio of 18 bps compared to (12) bps last year increased 30 bps.

PCL on performing loans was $126 million compared to $(355) million last year, primarily attributable to releases of provisions in the prior year driven by improvements in our macroeconomic and credit quality outlook, as compared to provisions taken in the current quarter in our Canadian Banking portfolios mainly reflecting unfavourable changes in our macroeconomic and credit quality outlook.

PCL on impaired loans increased $117 million, primarily due to higher provisions in Personal & Commercial Banking, largely in our Canadian Banking portfolios.

Q4 2022 vs. Q3 2022

Total PCL was $381 million and increased $41 million or 12% from last quarter, largely due to higher provisions on loans in Wealth Management and Capital Markets, partially offset by lower provisions on loans in Personal & Commercial Banking. The PCL on loans ratio increased 1 bp.

PCL on performing loans decreased $51 million or 29%, primarily due to lower provisions in Personal & Commercial Banking, largely in our Caribbean Banking portfolios, mainly reflecting the recovery from the COVID-19 pandemic and model updates. This was partially offset by higher provisions in U.S. Wealth Management (including City National), mainly reflecting unfavourable changes in our credit outlook. 

PCL on impaired loans increased $84 million or 49%, largely due to higher provisions in Personal & Commercial Banking in our Canadian Banking portfolios, partially offset by lower provisions in our Caribbean Banking portfolios. Provisions taken in Capital Markets in the current quarter, mainly in the other services sector, as compared to recoveries last quarter, also contributed to the increase.

Selected financial and other highlights



As at or 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, number of and percentage amounts)


2022



2022



2021



2022



2021



Total revenue

$

12,567


$

12,132


$

12,376


$

48,985


$

49,693



Provision for credit losses (PCL)


381



340



(227)



484



(753)



Insurance policyholder benefits, claims and acquisition expense (PBCAE)


116



850



1,032



1,783



3,891



Non-interest expense


7,209



6,386



6,583



26,609



25,924



Income before income taxes


4,861



4,556



4,988



20,109



20,631


Net income

$

3,882


$

3,577


$

3,892


$

15,807


$

16,050


Segments - net income

















Personal & Commercial Banking

$

2,139


$

2,023


$

2,033


$

8,370


$

7,847



Wealth Management


822



777



558



3,144



2,626



Insurance


268



186



267



857



889



Investor & Treasury Services


110



164



109



513



440



Capital Markets 


617



479



920



2,921



4,187



Corporate Support


(74)



(52)



5



2



61


Net income

$

3,882


$

3,577


$

3,892


$

15,807


$

16,050


Selected information

















Earnings per share (EPS) - basic

$

2.75


$

2.52


$

2.68


$

11.08


$

11.08



                                          - diluted


2.74



2.51



2.68



11.06



11.06



Return on common equity (ROE) (1)


15.6 %



14.6 %



16.9 %



16.4 %



18.6 %



Average common equity (1)

$

97,150


$

95,750


$

89,500


$

94,700


$

84,850



Net interest margin (NIM) - on average earning assets, net (2)


1.56 %



1.52 %



1.43 %



1.48 %



1.48 %



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


0.18 %



0.17 %



(0.12) %



0.06 %



(0.10) %



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


0.06 %



0.09 %



(0.19) %



(0.04) %



(0.20) %



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


0.12 %



0.08 %



0.07 %



0.10 %



0.10 %



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


0.26 %



0.25 %



0.31 %



0.26 %



0.31 %



Liquidity coverage ratio (LCR) (3)


125 %



123 %



123 %



125 %



123 %



Net stable funding ratio (NSFR) (3)


112 %



113 %



116 %



112 %



116 %


Capital ratios and Leverage ratio (4)

















Common Equity Tier 1 (CET1) ratio


12.6 %



13.1 %



13.7 %



12.6 %



13.7 %



Tier 1 capital ratio


13.8 %



14.3 %



14.9 %



13.8 %



14.9 %



Total capital ratio


15.4 %



15.9 %



16.7 %



15.4 %



16.7 %



Leverage ratio


4.4 %



4.6 %



4.9 %



4.4 %



4.9 %



TLAC ratio (5)


26.4 %



27.6 %



n.a. 



26.4 %



n.a. 



TLAC leverage ratio (5)


8.5 %



8.8 %



n.a. 



8.5 %



n.a. 


Selected balance sheet and other information (6)

















Total assets

$

1,917,219


$

1,842,092


$

1,706,323


$

1,917,219


$

1,706,323



Securities, net of applicable allowance


318,223



298,795



284,724



318,223



284,724



Loans, net of allowance for loan losses


819,965



796,314



717,575



819,965



717,575



Derivative related assets


154,439



122,058



95,541



154,439



95,541



Deposits


1,208,814



1,178,604



1,100,831



1,208,814



1,100,831



Common equity


100,746



96,570



91,983



100,746



91,983



Total risk-weighted assets


609,879



589,050



552,541



609,879



552,541



Assets under management (AUM) (2)


999,700



937,700



1,008,700



999,700



1,008,700



Assets under administration (AUA) (2), (7)


5,649,700



5,748,900



6,347,300



5,649,700



6,347,300


Common share information

















Shares outstanding (000s) - average basic


1,386,925



1,396,381



1,424,534



1,403,654



1,424,343



                                           - average diluted


1,388,548



1,398,667



1,427,225



1,406,034



1,426,735



                                           - end of period


1,382,911



1,390,629



1,424,525



1,382,911



1,424,525



Dividends declared per common share

$

1.28


$

1.28


$

1.08


$

4.96


$

4.32



Dividend yield (2)


4.0 %



3.9 %



3.3 %



3.7 %



3.8 %



Dividend payout ratio (2)


47 %



51 %



40 %



45 %



39 %



Common share price (RY on TSX) (8)

$

126.05


$

124.86


$

128.82


$

126.05


$

128.82



Market capitalization (TSX) (8)


174,316



173,634



183,507



174,316



183,507


Business information (number of)

















Employees (full-time equivalent) (FTE)


91,427



88,541



85,301



91,427



85,301



Bank branches


1,271



1,283



1,295



1,271



1,295



Automated teller machines (ATMs)


4,368



4,364



4,378



4,368



4,378


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

$

0.739


$

0.783


$

0.796


$

0.774


$

0.796


Period-end US$ equivalent of C$1.00

$

0.734


$

0.781


$

0.808


$

0.734


$

0.808


(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 this Earnings Release.

(2)

See the Glossary section of our 2022 Annual Report for composition of this measure.

(3)

The LCR and NSFR are calculated in accordance with the Office of the Superintendent of Financial Institutions' (OSFI) Liquidity Adequacy Requirements (LAR) guideline. LCR is the average for the three months ended for each respective period. For further details, refer to the Liquidity and funding risk section. For further details, refer to the Liquidity and funding risk section of our 2022 Annual Report.

(4)

Capital ratios are calculated using OSFI's Capital Adequacy Requirements (CAR) guideline and the Leverage ratio is calculated using OSFI's Leverage Requirements (LR) guideline.

(5)

Effective Q1 2022, OSFI requires Canadian Domestic Systemically Important Banks (D-SIBs) to meet minimum risk-based TLAC ratio and TLAC leverage ratio requirements which are calculated using OSFI's TLAC guideline. For further details, refer to the Capital management section.

(6)

Represents period-end spot balances.

(7)

AUA includes $15 billion and $6 billion (July 31, 2022$14 billion and $5 billion, October 31, 2021$15 billion and $3 billion) of securitized residential mortgages and credit card loans, respectively.

(8)

Based on TSX closing market price at period-end.

(9)

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

n.a. 

not applicable

 

Personal & Commercial Banking 





As at or for the three months ended






October 31 

July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts and as otherwise noted)


2022

2022

2021


Net interest income


$

3,901

$

3,655

$

3,169


Non-interest income



1,518


1,527


1,436

Total revenue



5,419


5,182


4,605


PCL on performing assets



56


141


(342)


PCL on impaired assets



230


183


134

PCL



286


324


(208)


Non-interest expense



2,270


2,130


2,087

Income before income taxes



2,863


2,728


2,726

Net income


$

2,139

$

2,023

$

2,033

Revenue by business









Canadian Banking


$

5,179

$

4,974

$

4,414


Caribbean & U.S. Banking



240


208


191

Selected balances and other information









ROE



30.5 %


29.2 %


32.5 %


NIM



2.72 %


2.61 %


2.42 %


Efficiency ratio (1)



41.9 %


41.1 %


45.3 %


Operating leverage (2)



8.9 %


4.8 %


2.5 %


Average total assets


$

597,600

$

582,700

$

543,900


Average total earning assets, net



569,000


555,400


518,900


Average loans and acceptances, net



574,300


560,300


522,200


Average deposits



570,200


555,300


524,300


AUA (3), (4)



336,400


346,500


367,700


Average AUA



338,300


343,500


363,500


AUM (4)



5,600


5,400


5,400


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



0.16 %


0.13 %


0.10 %

Other selected information - Canadian Banking









Net income


$

1,999

$

1,971

$

1,970


NIM



2.70 %


2.60 %


2.42 %


Efficiency ratio



40.3 %


39.7 %


43.8 %


Operating leverage



9.2 %


4.5 %


2.7 %

(1)

Calculated as non-interest expense divided by total revenue.

(2)

Defined as the difference between our revenue growth rate and non-interest expense growth rate.

(3)

AUA includes securitized residential mortgages and credit card loans as at October 31, 2022 of $15 billion and $6 billion, respectively (July 31, 2022$14 billion and $5 billion, October 31, 2021$15 billion and $3 billion).

(4)

Represents period-end spot balances.

 

Q4 2022 vs. Q4 2021

Net income increased $106 million or 5% from a year ago, primarily attributable to higher net interest income reflecting higher spreads and average volume growth of 9% in Canadian Banking. Higher non-interest income also contributed to the increase. These factors were partially offset by higher PCL, higher staff and technology related costs, including digital initiatives, as well as higher marketing costs.

Total revenue increased $814 million or 18%.

Canadian Banking revenue increased $765 million or 17%, primarily due to higher net interest income reflecting higher spreads and average volume growth in Canadian Banking of 10% in loans and 9% in deposits. Increased client activity contributed to higher card service and foreign exchange revenue. These factors were partially offset by lower average mutual fund balances driving lower distribution fees.

Caribbean & U.S. Banking revenue increased $49 million or 26%, mainly due to higher net interest income reflecting higher spreads and the impact of foreign exchange translation.

Net interest margin was up 30 bps, mainly due to the impact of the rising interest rate environment.

PCL was $286 million compared to $(208) million last year, primarily attributable to releases of provisions on performing loans in the prior year reflecting the recovery from the COVID-19 pandemic as compared to provisions taken in the current quarter in our Canadian Banking portfolios, mainly reflecting unfavourable changes in our macroeconomic and credit quality outlook. Higher provisions on impaired loans, primarily in our Canadian Banking portfolios, also contributed to the increase, resulting in a 6 bps increase in the PCL on impaired loans ratio.

Non-interest expense increased $183 million or 9%, mainly attributable to higher staff and technology related costs, including digital initiatives, higher marketing costs, as well as professional fees.

Q4 2022 vs. Q3 2022

Net income increased $116 million or 6% from last quarter, primarily due to higher net interest income reflecting higher spreads. Lower PCL also contributed to the increase. These factors were partially offset by higher staff-related and marketing costs, as well as the timing of professional fees.

Net interest margin was up 11 bps, mainly due to the impact of the rising interest rate environment.

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)


2022

2022


2021


Net interest income


$

1,149

$

960

$

675


Non-interest income



2,827


2,695


2,769

Total revenue



3,976


3,655


3,444


PCL on performing assets



52


12


(7)


PCL on impaired assets



11


1


12

PCL



63


13


5


Non-interest expense



2,858


2,618


2,718

Income before income taxes



1,055


1,024


721

Net income


$

822

$

777

$

558

Revenue by business









Canadian Wealth Management


$

1,095

$

1,070

$

1,032


U.S. Wealth Management (including City National)



2,068


1,878


1,628


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



1,529


1,470


1,296


Global Asset Management



644


609


711


International Wealth Management



169


98


73

Selected balances and other information









ROE



15.6 %


16.0 %


13.1 %


NIM



3.08 %


2.75 %


2.06 %


Pre-tax margin (1)



26.5 %


28.0 %


20.9 %

Selected average balance sheet information









Average total assets


$

165,100

$

154,700

$

146,600


Average total earning assets, net



148,000


138,700


130,000


Average loans and acceptances, net



109,200


101,100


87,000


Average deposits



157,900


156,800


151,500

Other information









AUA - total (2), (3)



1,387,900


1,295,100


1,322,300


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



700,100


683,400


704,200


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



513,700


533,600


568,800


AUM (2)



991,500


929,600


1,000,600


Average AUA



1,316,500


1,278,700


1,314,100


Average AUM



942,000


922,000


997,400


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



0.04 %


0.01 %


0.05 %


Number of advisors (3)



6,158


5,622


5,548



For the three months ended


Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items

Q4 2022 vs

Q4 2022 vs


(Millions of Canadian dollars, except percentage amounts)

Q4 2021

Q3 2022


Increase (decrease):







Total revenue

$

121

$

112



Non-interest expense


99


90



Net income


12


14


Percentage change in average US$ equivalent of C$1.00


(7) %


(6) %


Percentage change in average British pound equivalent of C$1.00


11 %


2 %


Percentage change in average Euro equivalent of C$1.00


9 %


0 %
















(1)

Pre-tax margin is defined as 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 2022 vs. Q4 2021

Net income increased $264 million or 47% from a year ago, primarily due to higher net interest income reflecting higher interest rates.

Total revenue increased $532 million or 15%, primarily due to higher net interest income reflecting higher interest rates and average volume growth of 26% in loans and 4% in deposits. The impact of foreign exchange translation and higher revenue from sweep deposits also contributed to the increase. These factors were partially offset by lower average fee-based client assets, largely driven by unfavourable market conditions.

PCL increased $58 million, largely reflecting higher provisions on performing loans in U.S. Wealth Management (including City National), mainly driven by unfavourable changes in our macroeconomic outlook.

Non-interest expense increased $140 million or 5%, largely due to the impact of foreign exchange translation as well as the Brewin Dolphin acquisition and related costs in the current quarter. Higher staff and technology related costs also contributed to the increase. Partly offsetting these factors was the impact of a legal provision taken in U.S. Wealth Management (including City National) in the prior year that was partially released in the first quarter of 2022.

Q4 2022 vs. Q3 2022

Net income increased $45 million or 6% from last quarter, mainly due to higher net interest income largely reflecting higher interest rates. This factor was partially offset by lower average fee-based client assets, largely driven by unfavourable market conditions. 

Insurance   




As at or for the three months ended




October 31 

July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts)

2022

2022


2021


Non-interest income










Net earned premiums


$

908

$

936

$

1,569



Investment income, gains/(losses) on assets supporting insurance policyholder liabilities (1)



(334)


245


(128)



Fee income



70


52


60

Total revenue



644


1,233


1,501


PCL



-


-


(1)


Insurance policyholder benefits and claims (1)



42


773


939


Insurance policyholder acquisition expense



74


77


93


Non-interest expense



157


139


152

Income before income taxes



371


244


318

Net income


$

268

$

186

$

267

Revenue by business









Canadian Insurance


$

(130)

$

597

$

796


International Insurance



774


636


705

Selected balances and other information









ROE



46.7 %


32.3 %


42.8 %


Premiums and deposits (2)


$

1,071

$

1,155

$

1,795


Fair value changes on investments backing policyholder liabilities (1)



(440)


115


(266)

(1)

Includes unrealized gains and losses on investments backing policyholder liabilities attributable to fluctuation of assets designated as fair value through profit or loss (FVTPL). 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 Insurance premiums, investment and fee 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, claims and acquisition expense (PBCAE).

(2)

Premiums and deposits include premiums on risk-based individual and group insurance and annuity products as well as segregated fund deposits, consistent with insurance industry practices.

 

Q4 2022 vs. Q4 2021

Net income remained relatively flat largely reflecting the impact of offsetting items between revenue and PBCAE. PBCAE also included the impact of favourable annual actuarial assumption updates.

Total revenue decreased $857 million or 57%, primarily due to lower group annuity sales and the change in fair value of investments backing policyholder liabilities, both of which are largely offset in PBCAE as indicated below.

PBCAE decreased $916 million or 89%, primarily due to lower group annuity sales and the change in fair value of investments backing policyholder liabilities, both of which are largely offset in revenue. Higher favourable annual actuarial assumption updates largely related to economic assumption updates in the current year also contributed to the decrease.

Non-interest expense increased $5 million or 3%.

Q4 2022 vs. Q3 2022

Net income increased $82 million or 44% from last quarter, mainly due to favourable annual actuarial assumption updates.

Investor & Treasury Services 




As at or for the three months ended




October 31 

July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts)

2022

2022


2021


Net interest income

$

(1)

$

188

$

155


Non-interest income


504


394


393

Total revenue


503


582


548


PCL on performing assets


-


1


(1)


PCL on impaired assets


-


(4)


-

PCL


-


(3)


(1)


Non-interest expense


377


374


412

Income before income taxes


126


207


137

Net income

$

110

$

164

$

109

Selected balances and other information








ROE


13.5 %


20.2 %


15.2 %


Average deposits

$

252,800

$

243,800

$

233,300



Average client deposits


59,400


59,900


65,700



Average wholesale funding deposits


193,400


183,900


167,600


AUA (1)


3,906,900


4,089,900


4,640,900


Average AUA


4,138,000


4,262,100


4,745,400

 



For the three months ended

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items

Q4 2022 vs

Q4 2022 vs

(Millions of Canadian dollars, except percentage amounts)

Q4 2021

Q3 2022

Increase (decrease):






Total revenue

$

(15)

$

4


Non-interest expense


(18)


-


Net income


2


3

Percentage change in average US$ equivalent of C$1.00


(7) %


(6) %

Percentage change in average British pound equivalent of C$1.00


11 %


2 %

Percentage change in average Euro equivalent of C$1.00


9 %


0 %

(1)

Represents period-end spot balances.

 

Q4 2022 vs. Q4 2021

Net income remained relatively flat as the impact of higher revenue from client deposits was largely offset by lower funding and liquidity revenue and lower revenue from our asset services business.

Total revenue decreased $45 million or 8%, mainly due to lower funding and liquidity revenue including the impact of a funding cost adjustment. Funding and liquidity revenue, as reflected in net interest income, includes funding costs, which were unfavourably impacted by increasing rates and offset by gains on related economic hedges in non-interest income. Lower revenue from our asset services business, the impact of repositioning initiatives and foreign exchange translation also contributed to the decrease. These factors were partially offset by higher revenue from client deposits, reflecting improved margins.

Non-interest expense decreased $35 million or 8%, mainly due to the impact of foreign exchange translation and lower costs associated with ongoing efficiency initiatives.

Q4 2022 vs. Q3 2022

Net income decreased $54 million or 33% from last quarter, mainly driven by lower funding and liquidity revenue, including the impact of a funding cost adjustment.

Capital Markets     





As at or for the three months ended






October 31 


July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts)



2022


2022


2021


Net interest income (1)


$

1,140

$

1,136

$

1,111


Non-interest income (1)



1,173


513


1,187

Total revenue (1)



2,313


1,649


2,298


PCL on performing assets



19


19


(11)


PCL on impaired assets



13


(13)


(11)

PCL



32


6


(22)


Non-interest expense



1,616


1,123


1,155

Income before income taxes



665


520


1,165

Net income


$

617

$

479

$

920

Revenue by business









Corporate and Investment Banking


$

1,168

$

625

$

1,225


Global Markets



1,255


1,142


1,122


Other



(110)


(118)


(49)

Selected balances and other information









ROE



9.2 %


7.1 %


16.1 %


Average total assets


$

884,500

$

812,700

$

717,000


Average trading securities



126,800


128,400


125,300


Average loans and acceptances, net



130,800


126,000


106,100


Average deposits



81,300


75,700


73,700


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



0.03 %


(0.04) %


(0.04) %

 



For the three months ended

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items

Q4 2022 vs

Q4 2022 vs

(Millions of Canadian dollars, except percentage amounts)

Q4 2021

Q3 2022

Increase (decrease):






Total revenue

$

73

$

78


Non-interest expense


30


40


Net income


40


33

Percentage change in average US$ equivalent of C$1.00


(7) %


(6) %

Percentage change in average British pound equivalent of C$1.00


11 %


2 %

Percentage change in average Euro equivalent of C$1.00


9 %


0 %

(1)

The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2022 was $142 million (July 31, 2022$143 million, October 31, 2021 - $125 million).

 

Q4 2022 vs. Q4 2021

Net income decreased $303 million or 33% from a year ago, primarily due to the timing of true-ups related to our variable compensation plans. Lower revenue in Corporate & Investment Banking, and higher PCL also contributed to the decrease. These factors were partially offset by a lower effective tax rate reflecting changes in the earnings mix as well as higher revenue in Global Markets.

Total revenue increased $15 million or 1%, mainly due to higher fixed income trading revenue across most regions partially offset by lower debt origination across all regions.

PCL was $32 million compared to $(22) million last year, largely attributable to provisions on performing assets in the current year, reflecting unfavorable changes in our macroeconomic outlook as compared to releases in the prior year reflective of the recovery from the COVID-19 pandemic. Provisions taken on impaired loans in the current quarter, largely in the other services sector, as compared to recoveries in the prior year, mainly in the oil and gas sector, also contributed to the increase, resulting in an increase of 7 bps in the PCL on impaired loans ratio.

Non-interest expense increased $461 million or 40%, primarily due to the timing of true-ups related to our variable compensation plans. Higher technology-related costs and the impact of foreign exchange translation also contributed to the increase.

Q4 2022 vs. Q3 2022

Net income increased $138 million or 29% from last quarter, mainly due to higher fixed income trading revenue as the prior quarter included the impact from loan underwriting markdowns, primarily in the U.S., largely driven by challenging market conditions. This factor was partially offset by higher compensation on increased results and the timing of true-ups related to our variable compensation plans.

Corporate Support 




As at or for the three months ended






October 31 


July 31 


October 31 


(Millions of Canadian dollars)



2022


2022


2021



Net interest income (loss) (1)


$

93

$

(49)

$

(49)



Non-interest income (loss) (1), (2)



(381)


(120)


29


Total revenue (1), (2)



(288)


(169)


(20)



PCL



-


-


-



Non-interest expense (2)



(69)


2


59


Income (loss) before income taxes (1)



(219)


(171)


(79)



Income taxes (recoveries) (1)



(145)


(119)


(84)


Net income (loss)


$

(74)

$

(52)

$

5


(1)

Teb adjusted.

(2)

Revenue for the three months ended October 31, 2022, included losses of $98 million (losses of $22 million in the prior quarter and gains of $41 million in the same quarter last year) on economic hedges of our U.S. Wealth Management (including City National) share-based compensation plans, and non-interest expense included $(81) million ($(15) million in the prior quarter and $42 million in the same quarter last year) of share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. Wealth Management (including City National) share-based compensation plans.

 

Due to the nature of activities and consolidation adjustments reported in this segment, we believe that a comparative period analysis is not relevant.

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, 2022 was $142 million, compared to $143 million in the prior quarter and $125 million in the same quarter last year. For further discussion, refer to the How we measure and report our business segments section of our 2022 Annual Report.

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

Q4 2022
Net loss was $74 million, primarily due to residual unallocated items and unfavourable tax adjustments.

Q3 2022
Net loss was $52 million, primarily due to residual unallocated items and unfavourable tax adjustments.

Q4 2021
Net income was $5 million.

Key performance and non-GAAP measures

We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics, such as net income, ROE and non-GAAP measures, including pre-provision, pre-tax earnings. Certain financial metrics, including ROE and pre-provision, pre-tax earnings do not have any standardized meanings under GAAP and may not be comparable to similar measures disclosed by other financial institutions. We use ROE, at both the consolidated and business segment levels, as a measure of return on total capital invested in our business. We use pre-provision, pre-tax earnings to assess our ability to generate sustained earnings growth outside of credit losses, which are impacted by the cyclical nature of a credit cycle. We believe that certain non-GAAP measures are more reflective of our ongoing operating results and provide readers with a better understanding of management's perspective on our performance.

Calculation of ROE   


For the three months ended

For the year ended

.


October 31, 2022

October 31, 2022

(Millions of Canadian dollars, except

percentage amounts)

Personal & 

Commercial 

 Banking 

Wealth 

Management 

Insurance 

Investor & 

Treasury 

Services 

Capital 

Markets 

Corporate 

Support 









Total 


Total 

Net income available to common




















   shareholders



$

2,114

$

809

$

266

$

108

$

599

$

(87)

$

3,809


$

15,547

Total average common equity (1), (2)



$

27,550

$

20,550

$

2,250

$

3,200

$

25,950

$

17,650

$

97,150


$

94,700

ROE (3)




30.5 %


15.6 %


46.7 %


13.5 %


9.2 %

n.m.


15.6 %



16.4 %

(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

 

Additional information about key performance and non-GAAP measures can be found under the Key performance and non-GAAP measures section of our 2022 Annual Report.

Consolidated Balance Sheets



As at



October 31 



July 31 

October 31 

(Millions of Canadian dollars)


20221



20222


20211










Assets








Cash and due from banks

$

72,397


$

89,110

$

113,846










Interest-bearing deposits with banks


108,011



98,145


79,638










Securities









Trading


148,205



141,986


139,240


Investment, net of applicable allowance


170,018



156,809


145,484




318,223



298,795


284,724










Assets purchased under reverse repurchase agreements and securities borrowed


317,845



318,565


307,903










Loans









Retail


549,751



538,389


503,598


Wholesale


273,967



261,592


218,066




823,718



799,981


721,664


Allowance for loan losses


(3,753)



(3,667)


(4,089)




819,965



796,314


717,575










Segregated fund net assets


2,638



2,690


2,666

Other









Customers' liability under acceptances


17,827



17,360


19,798


Derivatives


154,439



122,058


95,541


Premises and equipment


7,214



7,142


7,424


Goodwill 


12,277



10,933


10,854


Other intangibles  


6,083



4,383


4,471


Other assets


80,300



76,597


61,883




278,140



238,473


199,971

Total assets

$

1,917,219


$

1,842,092

$

1,706,323










Liabilities and equity








Deposits









Personal

$

404,932


$

392,267

$

362,488


Business and government


759,870



739,467


696,353


Bank


44,012



46,870


41,990




1,208,814



1,178,604


1,100,831










Segregated fund net liabilities


2,638



2,690


2,666

Other









Acceptances


17,872



17,390


19,873


Obligations related to securities sold short


35,511



38,504


37,841


Obligations related to assets sold under repurchase agreements and securities loaned


273,947



281,149


262,201


Derivatives


153,491



119,868


91,439


Insurance claims and policy benefit liabilities


11,511



12,033


12,816


Other liabilities 


95,235



77,745


70,301




587,567



546,689


494,471










Subordinated debentures


10,025



10,111


9,593

Total liabilities


1,809,044



1,738,094


1,607,561

Equity attributable to shareholders









Preferred shares and other equity instruments


7,318



7,328


6,684


Common shares


16,984



17,092


17,655


Retained earnings


78,037



76,466


71,795


Other components of equity


5,725



3,012


2,533




108,064



103,898


98,667

Non-controlling interests


111



100


95

Total equity


108,175



103,998


98,762

Total liabilities and equity

$

1,917,219


$

1,842,092

$

1,706,323

(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)

2022 1


2022 1

2021 1


2022 2

2021 2















Interest and dividend income














Loans

$

8,540


$

6,761

$

5,412


$

26,565

$

21,654


Securities


2,465



1,822


1,200



7,062


4,877


Assets purchased under reverse repurchase agreements and securities borrowed


2,941



1,601


307



5,447


1,309


Deposits and other


952



553


95



1,697


305




14,898



10,737


7,014



40,771


28,145















Interest expense














Deposits and other


5,197



2,786


1,270



10,751


5,448


Other liabilities


3,308



1,984


641



7,015


2,516


Subordinated debentures


111



77


42



288


179




8,616



4,847


1,953



18,054


8,143

Net interest income


6,282



5,890


5,061



22,717


20,002















Non-interest income














Insurance premiums, investment and fee income


644



1,233


1,501



3,510


5,600


Trading revenue


451



(128)


103



926


1,183


Investment management and custodial fees


1,900



1,857


1,888



7,610


7,132


Mutual fund revenue


1,010



1,028


1,142



4,289


4,251


Securities brokerage commissions


349



344


350



1,481


1,538


Service charges


512



499


475



1,976


1,858


Underwriting and other advisory fees


481



369


655



2,058


2,692


Foreign exchange revenue, other than trading


266



250


239



1,038


1,066


Card service revenue


310



314


247



1,203


1,078


Credit fees


337



301


418



1,512


1,530


Net gains (losses) on investment securities


(23)



28


20



43


145


Share of profit in joint ventures and associates


24



33


34



110


130


Other


24



114


243



512


1,488



6,285



6,242


7,315



26,268


29,691

Total revenue


12,567



12,132


12,376



48,985


49,693

Provision for credit losses


381



340


(227)



484


(753)

Insurance policyholder benefits, claims and acquisition expense


116



850


1,032



1,783


3,891















Non-interest expense














Human resources


4,383



3,858


3,988



16,528


16,539


Equipment


571



514


514



2,099


1,986


Occupancy


401



381


393



1,554


1,584


Communications


319



277


279



1,082


931


Professional fees


472



373


417



1,511


1,351


Amortization of other intangibles


354



342


330



1,369


1,287


Other


709



641


662



2,466


2,246




7,209



6,386


6,583



26,609


25,924

Income before income taxes


4,861



4,556


4,988



20,109


20,631

Income taxes


979



979


1,096



4,302


4,581

Net income

$

3,882


$

3,577

$

3,892


$

15,807

$

16,050

Net income attributable to:














Shareholders

$

3,876


$

3,575

$

3,887


$

15,794

$

16,038


Non-controlling interests


6



2


5



13


12



$

3,882


$

3,577

$

3,892


$

15,807

$

16,050

Basic earnings per share (in dollars)

$

2.75


$

2.52

$

2.68


$

11.08

$

11.08

Diluted earnings per share (in dollars)


2.74



2.51


2.68



11.06


11.06

Dividends per common share (in dollars)


1.28



1.28


1.08



4.96


4.32

(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)


2022 1



2022 1


2021 1



2022 2


2021 2
















Net income

$

3,882


$

3,577

$

3,892


$

15,807

$

16,050
















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


(849)



(247)


(183)



(2,241)


177



Provision for credit losses recognized in income


(3)



(2)


(1)



(16)


(9)



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















   comprehensive income to income


22



(5)


(11)



(12)


(117)





(830)



(254)


(195)



(2,269)


51


Foreign currency translation adjustments















Unrealized foreign currency translation gains (losses)


3,878



(459)


(613)



5,091


(4,316)



Net foreign currency translation gains (losses) from hedging activities


(1,292)



213


280



(1,449)


1,740



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


-



-


(2)



(18)


(7)



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


-



-


-



17


(1)





2,586



(246)


(335)



3,641


(2,584)


Net change in cash flow hedges















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


963



(296)


767



1,634


1,373



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


-



46


99



194


272





963



(250)


866



1,828


1,645

Items that will not be reclassified subsequently to income:














Remeasurements of employee benefit plans


92



(319)


456



821


2,251


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















through profit or loss


390



324


67



1,747


55


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















income


(3)



10


40



50


38




479



15


563



2,618


2,344

Total other comprehensive income (loss), net of taxes


3,198



(735)


899



5,818


1,456

Total comprehensive income (loss)

$

7,080


$

2,842

$

4,791


$

21,625

$

17,506

Total comprehensive income attributable to:














Shareholders

$

7,068


$

2,841

$

4,787


$

21,604

$

17,501


Non-controlling interests


12



1


4



21


5




$

7,080


$

2,842

$

4,791


$

21,625

$

17,506

(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, 2022 1









Treasury -
preferred
shares and
other equity
instruments





Other components of equity











Preferred
shares and
other equity
instruments



Treasury -
common
shares



FVOCI

securities

and loans

Foreign
currency
translation

Cash flow
hedges

Total other
components
of equity

Equity
attributable to
shareholders

Non-
controlling
interests







Common
shares

Retained
earnings

Total equity

(Millions of Canadian dollars)

Balance at beginning of period

$

7,323

$

17,367

$

5

$

(275)

$

76,466

$

(1,527)

$

3,108

$

1,431

$

3,012

$

103,898

$

100

$

103,998

Changes in equity


























Issues of share capital and other equity instruments


-


49


-


-


-


-


-


-


-


49


-


49


Common shares purchased for cancellation


-


(98)


-


-


(884)


-


-


-


-


(982)


-


(982)


Redemption of preferred shares and other equity



























instruments


-


-


-


-


-


-


-


-


-


-


-


-


Sales of treasury shares and other equity instruments


-


-


50


1,034


-


-


-


-


-


1,084


-


1,084


Purchases of treasury shares and other equity



























instruments


-


-


(60)


(1,093)


-


-


-


-


-


(1,153)


-


(1,153)


Share-based compensation awards


-


-


-


-


-


-


-


-


-


-


-


-


Dividends on common shares


-


-


-


-


(1,774)


-


-


-


-


(1,774)


-


(1,774)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(67)


-


-


-


-


(67)


(1)


(68)


Other


-


-


-


-


(59)


-


-


-


-


(59)


-


(59)


Net income


-


-


-


-


3,876


-


-


-


-


3,876


6


3,882


Total other comprehensive income (loss), net of taxes


-


-


-


-


479


(830)


2,580


963


2,713


3,192


6


3,198

Balance at end of period

$

7,323

$

17,318

$

(5)

$

(334)

$

78,037

$

(2,357)

$

5,688

$

2,394

$

5,725

$

108,064

$

111

$

108,175

































For the three months ended October 31, 2021 1









Treasury -
preferred
shares and
other equity
instruments





Other components of equity











Preferred
shares and
other equity
instruments



Treasury -
common
shares



FVOCI

securities

and loans

Foreign
currency
translation

Cash flow
hedges

Total other
components
of equity

Equity
attributable to
shareholders

Non-
controlling
interests







Common
shares

Retained
earnings

Total equity

(Millions of Canadian dollars)

Balance at beginning of period

$

7,473

$

17,713

$

(57)

$

(57)

$

68,951

$

107

$

2,389

$

(300)

$

2,196

$

96,219

$

91

$

96,310

Changes in equity


























Issues of share capital and other equity instruments


-


15


-


-


-


-


-


-


-


15


-


15


Common shares purchased for cancellation


-


-


-


-


-


-


-


-


-


-


-


-


Redemption of preferred shares and other equity



























instruments


(750)


-


-


-


-


-


-


-


-


(750)


-


(750)


Sales of treasury shares and other equity instruments


-


-


205


994


-


-


-


-


-


1,199


-


1,199


Purchases of treasury shares and other equity instruments



























instruments


-


-


(187)


(1,010)


-


-


-


-


-


(1,197)


-


(1,197)


Share-based compensation awards


-


-


-


-


(2)


-


-


-


-


(2)


-


(2)


Dividends on common shares


-


-


-


-


(1,540)


-


-


-


-


(1,540)


-


(1,540)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(68)


-


-


-


-


(68)


-


(68)


Other


-


-


-


-


4


-


-


-


-


4


-


4


Net income


-


-


-


-


3,887


-


-


-


-


3,887


5


3,892


Total other comprehensive income (loss), net of taxes


-


-


-


-


563


(195)


(334)


866


337


900


(1)


899

Balance at end of period

$

6,723

$

17,728

$

(39)

$

(73)

$

71,795

$

(88)

$

2,055

$

566

$

2,533

$

98,667

$

95

$

98,762

(1)

Derived from unaudited financial statements.

 





For the year ended October 31, 2022 1









Treasury -
preferred
shares and
other equity
instruments





Other components of equity











Preferred
shares and
other equity
instruments



Treasury -
common
shares



FVOCI

securities

and loans

Foreign
currency
translation

Cash flow
hedges

Total other
components
of equity

Equity
attributable to
shareholders

Non-
controlling
interests







Common
shares

Retained
earnings

Total equity

(Millions of Canadian dollars)

Balance at beginning of period

$

6,723

$

17,728

$

(39)

$

(73)

$

71,795

$

(88)

$

2,055

$

566

$

2,533

$

98,667

$

95

$

98,762

Changes in equity


























Issues of share capital and other equity instruments


750


99


-


-


(1)


-


-


-


-


848


-


848


Common shares purchased for cancellation


-


(509)


-


-


(4,917)


-


-


-


-


(5,426)


-


(5,426)


Redemption of preferred shares and other equity



























instruments


(150)


-


-


-


(5)


-


-


-


-


(155)


-


(155)


Sales of treasury shares and other equity instruments


-


-


552


4,922


-


-


-


-


-


5,474


-


5,474


Purchases of treasury shares and other equity



























instruments


-


-


(518)


(5,183)


-


-


-


-


-


(5,701)


-


(5,701)


Share-based compensation awards


-


-


-


-


2


-


-


-


-


2


-


2


Dividends on common shares


-


-


-


-


(6,946)


-


-


-


-


(6,946)


-


(6,946)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(247)


-


-


-


-


(247)


(5)


(252)


Other


-


-


-


-


(56)


-


-


-


-


(56)


-


(56)


Net income


-


-


-


-


15,794


-


-


-


-


15,794


13


15,807


Total other comprehensive income (loss), net of taxes


-


-


-


-


2,618


(2,269)


3,633


1,828


3,192


5,810


8


5,818

Balance at end of period

$

7,323

$

17,318

$

(5)

$

(334)

$

78,037

$

(2,357)

$

5,688

$

2,394

$

5,725

$

108,064

$

111

$

108,175

































For the year ended October 31, 2021 1









Treasury -
preferred
shares and
other equity
instruments





Other components of equity











Preferred
shares and
other equity
instruments



Treasury -
common
shares



FVOCI

securities

and loans

Foreign
currency
translation

Cash flow
hedges

Total other
components
of equity

Equity
attributable to
shareholders

Non-
controlling
interests







Common
shares

Retained
earnings

Total equity

(Millions of Canadian dollars)

Balance at beginning of period

$

5,948

$

17,628

$

(3)

$

(129)

$

59,806

$

(139)

$

4,632

$

(1,079)

$

3,414

$

86,664

$

103

$

86,767

Changes in equity


























Issues of share capital and other equity instruments


2,250


100


-


-


(5)


-


-


-


-


2,345


-


2,345


Common shares purchased for cancellation


-


-


-


-


-


-


-


-


-


-


-


-


Redemption of preferred shares and other equity



























instruments


(1,475)


-


-


-


-


-


-


-


-


(1,475)


-


(1,475)


Sales of treasury shares and other equity instruments


-


-


647


4,116


-


-


-


-


-


4,763


-


4,763


Purchases of treasury shares and other equity



























instruments


-


-


(683)


(4,060)


-


-


-


-


-


(4,743)


-


(4,743)


Share-based compensation awards


-


-


-


-


(6)


-


-


-


-


(6)


-


(6)


Dividends on common shares


-


-


-


-


(6,158)


-


-


-


-


(6,158)


-


(6,158)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(257)


-


-


-


-


(257)


(3)


(260)


Other


-


-


-


-


33


-


-


-


-


33


(10)


23


Net income


-


-


-


-


16,038


-


-


-


-


16,038


12


16,050


Total other comprehensive income (loss), net of taxes


-


-


-


-


2,344


51


(2,577)


1,645


(881)


1,463


(7)


1,456

Balance at end of period

$

6,723

$

17,728

$

(39)

$

(73)

$

71,795

$

(88)

$

2,055

$

566

$

2,533

$

98,667

$

95

$

98,762

(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 reports to shareholders, and in other communications, including statements by our President and Chief Executive Officer. Forward-looking statements in this document include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals. 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", "commit", "target", "objective", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "might", "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, that our financial performance objectives, vision and strategic goals will not be achieved, and that our actual results may differ materially from such predictions, forecasts, projections, expectations or conclusions.

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 (which could lead to us being subject to various legal and regulatory proceedings, the potential outcome of which could include regulatory restrictions, penalties and fines), strategic, reputation, competitive, model, legal and regulatory environment, systemic risks and other risks discussed in the risk sections of our annual report for the fiscal year ended October 31, 2022 (the 2022 Annual Report); including business and economic conditions in the geographic regions in which we operate, Canadian housing and household indebtedness, information technology and cyber risks, geopolitical uncertainty, environmental and social risk (including climate change), digital disruption and innovation, privacy, data and third party related risks, regulatory changes, culture and conduct risks, the effects of changes in government fiscal, monetary and other policies, tax risk and transparency, and the emergence of widespread health emergencies or public health crises such as pandemics and epidemics, including the COVID-19 pandemic and its impact on the global economy, financial market conditions and our business operations, and financial results, condition and objectives. Additional factors that could cause actual results to differ materially from the expectations in such forward-looking statements can be found in the risk section of our 2022 Annual Report.

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 sections in our 2022 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 2022 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 2022 Annual Report at rbc.com/investorrelations.

Quarterly conference call and webcast presentation

Our quarterly conference call is scheduled for November 30, 2022 at 8:00 a.m. (EST) and will feature a presentation about our fourth quarter and 2022 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  6983188#). 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 November 30, 2022 until February 28, 2023 at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 4264780#).

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 95,000+ employees who leverage their imaginations and insights to 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 27 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 RBC LION & GLOBE Design, 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.

 

_________________________________________

1

Earnings per share (EPS).

2

Provision for credit losses (PCL).

3

Basis points (bps).

4

Return on equity (ROE). For further information, refer to the Key performance and non-GAAP measures section on page 11 of this Earnings Release.

5

This ratio is calculated by dividing Common Equity Tier 1 (CET1) by risk-weighted assets, in accordance with OSFI's Basel III Capital Adequacy Requirements guideline.

6

Leverage ratio is calculated using OSFI's Leverage Requirements guideline.

7

When we say "we", "us", "our", or "RBC", we mean Royal Bank of Canada and its subsidiaries, as applicable.

8

Pre-provision, pre-tax earnings is calculated as income (2022: $15,807 million; 2021: $16,050 million) before income taxes (2022: $4,302 million; 2021: $4,581 million) and PCL (2022: $484 million; 2021: $(753) million). This is a non-GAAP measure. For further information, refer to the Key performance and non-GAAP measures section on page 11 of this Earnings Release.

9

Dealogic, based on global investment bank fees, Fiscal 2022.

10

Pre-provision, pre-tax earnings is calculated as income (Q4 2022: $3,882 million; Q4 2021: $3,892 million) before income taxes (Q4 2022: $979 million; Q4 2021: $1,096 million) and PCL (Q4 2022: $381 million; Q4 2021: $(227) million). This is a Non-GAAP measure. For further information, refer to the Key Performance and Non-GAAP measures section on page 11 of this Earnings Release

 

SOURCE Royal Bank of Canada

© Canada Newswire, source Canada Newswire English

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Sales 2023 53 729 M 40 286 M 40 286 M
Net income 2023 15 836 M 11 874 M 11 874 M
Net Debt 2023 - - -
P/E ratio 2023 11,8x
Yield 2023 3,99%
Capitalization 187 B 140 B 140 B
Capi. / Sales 2023 3,48x
Capi. / Sales 2024 3,20x
Nbr of Employees 91 427
Free-Float 0,91%
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Number of Analysts 17
Last Close Price 135,07 CAD
Average target price 143,34 CAD
Spread / Average Target 6,12%
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David Ian McKay President, Chief Executive Officer & Director
Nadine Ahn Chief Financial Officer
Kathleen Taylor Chairman
Bruce Ross Group Head-Technology & Operations
Foteini Agrafioti Chief Science Officer
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