Yahoo Finance

• First Quarter Earnings: $5.1 billion, a record result.

• Adjusted Earnings: $5.3 billion, up 29% year over year.

• Return on Equity (ROE): 16.8%.

• Common Equity Tier 1 (CET1) Ratio: 13.2%.

• Net Interest Income: Up 26% this quarter.

• Operating Leverage: 13%, or 8% on an adjusted basis.

• Revenue Growth: Driven by net interest income and fee-based revenue.

• Wealth Management Revenue: Surpassed $5.5 billion.

• Assets Under Administration (AUA): Nearly US$700 billion in U.S. Wealth Management.

• Capital Markets Pre-Provision, Pre-Tax Earnings: $1.7 billion.

• Insurance Net Income: $272 million, up 24% from last year.

• Diluted Earnings Per Share (EPS): $3.54.

• Adjusted Diluted EPS: $3.62, up 27% from last year.

• Net Interest Margin (NIM): Canadian Banking NIM up 7 basis points from last quarter.

• Non-Interest Expenses: Up 11% from last year.

• Provisions on Performing Loans: $68 million this quarter.

• Gross Impaired Loans: $7.9 billion, up $2 billion this quarter.

• Provisions for Credit Losses (PCL) on Impaired Loans: 39 basis points, up 13 basis points quarter-over-quarter.

• Warning! GuruFocus has detected 4 Warning Signs with RY.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Royal Bank of Canada (NYSE:RY) reported record first quarter earnings of $5.1 billion, reflecting strong financial and strategic performance.

• The bank achieved a return on equity of 16.8% with a strong Common Equity Tier 1 ratio of 13.2%, indicating robust capital strength.

• Net interest income increased by 26% this quarter, driven by strong deposit growth in Personal Banking and loan growth in Commercial Banking.

• The acquisition of HSBC Canada contributed significantly to earnings, with cumulative adjusted pre-provision pre-tax earnings of over $950 million since the acquisition.

• Wealth Management revenues surpassed $5.5 billion for the first time, with strong growth in fee-based client assets and net new assets.

Negative Points

• Provisions for credit losses on impaired loans increased, reflecting the economic cycle and specific challenges in certain sectors.

• The macroeconomic environment remains uncertain, with potential impacts from tariffs and geopolitical risks affecting client activity.

• Canadian housing activity remains modest despite lower interest rates and changing mortgage rules.

• The bank's Commercial Banking loan growth may moderate due to clients delaying investment decisions amidst tariff-driven uncertainty.

• The HSBC Canada portfolio is expected to maintain elevated provisions for credit losses due to concentration in economically sensitive sectors.