Royal Bank of Canada (RBC) Q3 2024 Financial Results

Royal Bank of Canada (RBC) announced its financial results for the third quarter of 2024, showcasing a solid performance with earnings of CAD 4.5 billion and adjusted earnings of CAD 4.7 billion.

The bank’s net interest income in Canadian banking increased significantly by 26% year over year, fueled by rising interest rates and volume growth. RBC’s wealth management and asset management divisions also reported revenue growth, with a 15% rise in fee-based assets.

The capital markets division contributed CAD 3 billion in revenue, with pretax pre-provision earnings reaching CAD 1.2 billion. The bank’s recent acquisition of HSBC Canada has already started to pay off, adding CAD 239 million to earnings and achieving cost synergies.

Key Takeaways

• RBC’s Q3 earnings stood at CAD 4.5 billion; adjusted figure: CAD 4.7 billion.
• A 26% year-over-year increase in Canadian banking net interest income.
• Asset and wealth management revenues grew, with fee-based assets up by 15%.
• Strong capital markets revenue at CAD 3 billion; pretax pre-provision earnings: CAD 1.2 billion.
• HSBC Canada acquisition contributed CAD 239 million to earnings; annual synergy goal of CAD 740 million.
• RBC maintains target CET1 ratio at or above 11% post-IFRS 9.

Company Outlook

• Capital deployment focused on client-driven growth and shareholder returns, with increased share buybacks expected.

Bearish Highlights

• Anticipated peak of retail credit losses expected beyond 2025.

Bullish Highlights

• Generated 70 basis points of capital in Q3; ROE at 15.5%.
• Operating leverage at 2%; strong business model.

Misses

• No specific misses were identified in the call.

Q&A Highlights

• RBC aims for consistent CET1 ratio target of ≥11% despite IFRS 9.
• Cautious capital allocation approach; focus on core customer segments.

Royal Bank of Canada continues to demonstrate resilience with a focus on strategic growth amid an evolving economic landscape and aims to deliver value to shareholders.