ROYAL BANK OF CANADA RY

RBC is accelerating investments in strategic initiatives, including seeding growth across segments and geographies. This involves hiring senior coverage and relationship talent in Capital Markets and client-facing account managers in Commercial Banking, as well as attracting experienced financial advisors in Wealth Management, particularly in the U.S. The bank continues to invest in technology, leveraging its proprietary ATOM Foundation model and Lumina data platform to drive enterprise value from AI over the medium term^⏳. Expansion into transaction banking is on track, with RBC Clear receiving two industry awards.

Canadian Personal Banking saw average deposits up 2% year-over-year, with banking and savings accounts growing 7%. Average residential mortgages increased 3% year-over-year, adding $4 billion in balances, benefiting from higher switch-in volumes and increased retention rates. Credit card growth was solid at 7%, driven by account acquisition, higher revolve rates, and increased client engagement, with Canadian cardholder spending remaining resilient in retail and everyday categories. The bank expanded its partnership with Pattison Food Group and launched the WestJet RBC World Elite MasterCard for business clients.

Average loan growth in Commercial Banking moderated to 6% year-over-year, aligning with updated guidance. Growth was slower in tariff-sensitive sectors like manufacturing, transportation, and logistics, alongside cyclical headwinds in commercial real estate. Despite building pipelines in a competitive market, clients are holding back capital and inventory spend due to uncertainty. The bank is well-positioned to support clients when investment activity resumes, maintaining guidance of 1% to 1.5% sequential growth for Q4 with potential for the upper end of the range.

Wealth Management reported double-digit growth in assets under administration (AUA) in both Canadian ($935 billion) and U.S. (USD 718 billion) operations, benefiting from market appreciation and net new client assets. Assets under management (AUM) in RBC Global Asset Management increased 12% to a record $741 billion, driven by net sales into long-term institutional and retail mandates. The segment also launched RBC premium savings in the U.S., a new high-yield deposit product showing positive traction.

Capital Markets achieved record revenue of $3.8 billion, pre-provision pretax earnings of $1.7 billion, and net income of $1.3 billion. Global Markets revenue was over $1.9 billion, with strong results in FICC (Fixed Income, Currencies, and Commodities) and robust performance in cash equities and equity derivatives. Corporate Investment Banking generated over $1.7 billion in revenue, benefiting from increased M&A advisory mandates and higher lending revenue in the U.S. and Europe. Management expects higher transaction and deal closures over the next 12 months despite seasonal Q4 slowness.

City National Bank reported adjusted earnings of USD 139 million, an 81% increase year-over-year and 58% quarter-over-quarter. Its efficiency ratio improved by 6.6 percentage points year-over-year to 81.5%. Management noted significant financial resources allocated to platform remediation and building, with expenses expected to decrease on an absolute basis as the bank progresses through 2026. City National is actively recruiting commercial and private bankers and expanding into the Southeast U.S.

The Canadian economy has shown greater resilience than expected, with improved base case unemployment and GDP forecasts. The bank maintained elevated weightings to downside scenarios due to ongoing trade policy uncertainty. A total of $28 million or 1 basis point of provisions on performing loans were released, mainly due to favorable macroeconomic forecasts. Gross impaired loans decreased by $0.2 billion or 3 basis points to $8.8 billion, driven by wholesale portfolios. While retail delinquencies remain elevated, stabilizing trends in early delinquencies are observed, and the mortgage portfolio shows resilience despite refinancing pressures.