Royal Bank of Canada Reports Fourth Quarter and 2021 Results

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Royal Bank of Canada Reports Fourth Quarter and 2021 Results

Canada NewsWire

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, 2021 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2021 Annual Report (which includes our audited Annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2021 Annual Information Form and our Supplementary Financial Information are available on our website at: http://www.rbc.com/investorrelations.

2021 Net Income
$16.1 Billion
Up 40% YoY

2021 Diluted EPS1
$11.06
Up 41% YoY

2021 PCL2
$(753) Million
PCL on loans ratio down
73 bps3 YoY

2021 ROE4
18.6%
Up from 14.2% last year

CET1 Ratio5
13.7 %
Robust capital levels, up
120 bps YoY

TORONTO, Dec. 1, 2021 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported net income of $16.1 billion for the year ended October 31, 2021, up $4.6 billion or 40% from the prior year. Our results this year included releases of provisions on performing loans of $1.4 billion, primarily driven by improvements in our macroeconomic and credit quality outlook. In comparison, the prior year reflected elevated provisions on performing loans of $2.6 billion due to the impact of the COVID-19 pandemic. Diluted EPS[6]was $11.06, up 41% from the prior year.

Earnings in Personal & Commercial Banking and Capital Markets were up from last year, largely due to the favourable impact of lower PCL. Higher results in Wealth Management and Insurance also contributed to the increase in net income. These factors were partially offset by lower earnings in Investor & Treasury Services.

Pre-provision, pre-tax earnings6 of $19.9 billion were up 6% from a year ago, mainly reflecting strong client-driven growth in volumes and fee-based assets, constructive markets, record investment banking revenue, and prudent management of discretionary spend. These factors were partially offset by lower spreads largely reflecting the impact of low interest rates, higher expenses driven by higher variable compensation and continued investments in our franchises, and lower trading revenue.

The PCL on loans ratio of (10) bps decreased by 73 bps from the prior year, due to lower provisions in Personal & Commercial Banking, Capital Markets and Wealth Management. The PCL on impaired loans ratio was 10 bps, down 14 bps from the prior year.

Our capital position remained robust, with a Common Equity Tier 1 (CET1) ratio of 13.7%, up 120 bps from the prior year. In addition, this year we returned $6.2 billion to our shareholders through common dividends. And today, we declared a quarterly dividend of $1.20 per share reflecting an increase of $0.12 or 11%. Also, we announced our intention, subject to the approval of the Office of the Superintendent of Financial Institutions (OSFI) and the TSX, to commence a normal course issuer bid and to repurchase for cancellation up to 45 million common shares.

"In a year defined by the continued effects of the pandemic, RBC employees around the world demonstrated incredible resilience, and a commitment to helping our clients thrive and communities prosper. Across our businesses, we saw elevated growth in client activity and our teams responded with differentiated ideas and offerings to meet our clients' needs and create long-term value. As a result, our overall performance in 2021 reflected strong earnings, premium shareholder performance, and highlighted our ability to successfully navigate a complex operating environment while continuing to invest in talent and innovations to support future growth. We are pleased to increase our quarterly dividend by 11% and announced today our intention to repurchase up to 45 million common shares, in line with our commitment to driving long-term value for our shareholders."
– Dave McKay, RBC President and Chief Executive Officer

2021 Full-Year Business Segment Performance

  • 54% earnings growth in Personal & Commercial Banking, primarily attributable to lower PCL. Earnings growth also reflected strong average volume growth of 10% (+7% in loans and +13% in deposits) in Canadian Banking, including record levels of mortgage originations. Higher non-interest income including strong growth in mutual fund balances and significant client activity in our Direct Investing business, also contributed to the increase. These factors were partially offset by lower spreads, mainly due to lower interest rates and changes in product mix. We continued to invest in digital solutions to further enhance the client experience and deliver differentiated advice, products and services.
  • 22% earnings growth in Wealth Management, mainly due to higher average fee-based client assets reflecting market appreciation from a strong rebound in equity markets, as well as net sales driven by the quality of our advice, the breadth of our investment and holistic wealth planning solutions and clients' trust in our brand. Strong average volume growth of 10% in loans and 17% in deposits, largely in U.S. Wealth Management (including City National), also contributed to the increase. These factors were partially offset by higher variable compensation and the impact of lower spreads, mainly due to lower interest rates and changes in average earning assets mix.
  • 7% earnings growth in Insurance, largely due to favourable annual actuarial assumption updates and lower claims costs. These factors were partially offset by lower favourable investment-related experience, including the impact of realized investment gains in the prior year, as well as a lower impact from reinsurance contract renegotiations.
  • 18% lower earnings in Investor & Treasury Services, primarily due to lower client deposit revenue largely driven by lower interest rates. Lower funding and liquidity revenue also contributed to the decrease, mainly reflecting net favourable impacts from market volatility and interest rate movements in the prior year, as well as the impact of lower interest rates and lower gains from the disposition of securities, partially offset by a greater impact in the prior year from elevated enterprise liquidity.
  • 51% earnings growth in Capital Markets, primarily driven by lower PCL. Record revenue in Corporate and Investment Banking also contributed to the increase as strong deal flow was underpinned by M&A, loan syndication and Equity Capital Markets fee pools reaching all-time highs during the fiscal year. These factors were partially offset by higher taxes reflecting an increase in the proportion of earnings from higher tax rate jurisdictions, as well as lower revenue in Global Markets largely due to spread compression in repo and secured financing products and reduced client activity in our Fixed income, currencies and commodities business.

___________________________

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

Pre-provision, pre-tax earnings is calculated as income (2021: $16,050 million; 2020: $11,437 million) before income taxes (2021: $4,581 million; 2020: $2,952 million) and PCL (2021: -$753 million; 2020: $4,351 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.

Q4 2021 Performance

Earnings of $3.9 billion were up $646 million or 20% from a year ago, largely due to lower PCL. Higher earnings in Personal & Commercial Banking reflected robust volume growth, and in Capital Markets were driven by strong M&A activity. Solid earnings growth in Investor & Treasury Services, Insurance and Wealth Management also contributed to the increase. Pre-provision, pre-tax earnings7 of $4.8 billion were up 4% from a year ago.

Earnings were down $404 million or 9% from last quarter due to lower earnings in Capital Markets, Wealth Management and Personal & Commercial Banking. These results were partially offset by higher earnings in Insurance and Investor & Treasury Services.







Q4 2021
Compared to
Q4 2020

Net income of $3,892 million


 

20%

Diluted EPS of $2.68


20%

ROE of 16.9%


90 bps

CET1 ratio of 13.7%


120 bps

Q4 2021
Compared to
Q3 2021

Net income of $3,892 million


9%

Diluted EPS of $2.68


10%

ROE of 16.9%


270 bps

CET1 ratio of 13.7%


 10 bps

 

___________________________

7

Pre-provision, pre-tax earnings is calculated as income (Q4 2021: $3,892 million; Q4 2020: $3,246 million) before income taxes (Q4 2021: $1,096 million; Q4 2020: $900 million) and PCL (Q4 2021: -$227 million; Q4 2020: $427 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.

Q4 2021 Business Segment Performance

Personal & Commercial Banking

Net income of $2,033 million increased $531 million or 35% from a year ago, primarily attributable to lower PCL. Earnings growth also reflected strong average volume growth in Canadian Banking of 9% in loans and 9% in deposits, including strong mortgage growth. Higher non-interest income, including higher mutual fund distribution fees and card service revenue, also contributed to the increase. These factors were partially offset by lower spreads, mainly due to the ongoing impact of the low interest rate environment, changes in product mix and competitive pricing pressures.

Compared to last quarter, net income decreased $80 million or 4%, primarily due to lower spreads. Lower card service revenue, the timing of professional fees as well as higher marketing and technology-related costs also contributed to the decrease. These factors were partially offset by average volume growth of 3% in Canadian Banking, lower PCL and higher average mutual fund balances driving higher distribution fees.

Wealth Management

Net income of $558 million increased $12 million or 2% from a year ago driven by higher average fee-based client assets reflecting market appreciation and net sales and average volume growth, largely in U.S. Wealth Management (including City National). These factors were largely offset by higher variable compensation commensurate with increased revenue, a legal provision in U.S. Wealth Management (including City National) and lower spreads.

Compared to last quarter, net income decreased $186 million or 25%, mainly due to a legal provision in U.S. Wealth Management (including City National). Revenue growth from higher average fee-based client assets reflecting market appreciation and net sales was more than offset by higher variable compensation, lower spreads, lower transactional revenue, mainly driven by decreased client activity, and higher staff-related costs.

Insurance

Net income of $267 million increased $13 million or 5% from a year ago, primarily due to favourable annual actuarial assumption updates, partially offset by lower favourable investment-related experience, including the impact of realized investment gains in the prior year.

Compared to last quarter, net income increased $33 million or 14%, largely due to favourable annual actuarial assumption updates, partially offset by lower favourable investment-related experience.

Investor & Treasury Services

Net income of $109 million increased $18 million or 20% from a year ago, primarily driven by higher revenue from our asset services business.

Compared to last quarter, net income increased $21 million or 24%, mainly driven by lower taxes due to favourable tax adjustments, and higher funding and liquidity revenue primarily reflecting the impact of interest rate movements.

Capital Markets

Net income of $920 million increased $80 million or 10% from a year ago, largely driven by higher revenue in Corporate and Investment Banking as a result of increased M&A activity across all regions and higher loan syndication activity in North America. Higher Other revenue and lower PCL also contributed to the increase. These factors were partially offset by lower revenue in Global Markets, including lower fixed income trading revenue across all regions and lower equity trading revenue in North America, and the impact of foreign exchange translation.

Compared to last quarter, net income decreased $209 million or 19%, mainly driven by lower releases of PCL on performing assets. Lower fixed income trading revenue across all regions due to reduced client activity and lower loan syndication activity across most regions also contributed to the decrease. These factors were partially offset by lower compensation.

Capital, Liquidity and Credit Quality

Capital – As at October 31, 2021, our CET1 ratio was 13.7%, up 10 bps from last quarter reflecting internal capital generation partially offset by strong risk-weighted assets growth supporting client-driven business activities.  

Liquidity – For the quarter ended October 31, 2021, the average LCR was 123%, which translates into a surplus of approximately $67 billion, compared to 125% and a surplus of approximately $69 billion in the prior quarter. LCR has remained relatively stable compared to the previous quarter as growth in retail and wholesale loans was offset by the issuance of term funding and increases in client deposits.

The Net Stable Funding Ratio (NSFR) as at October 31, 2021 was 116%, which translates into a surplus of approximately $114 billion, compared to 116% and a surplus of approximately $110 billion in the prior quarter. NSFR has remained stable compared to the previous quarter as growth in retail and wholesale loans was offset by the issuance of term funding and increases in client deposits.

Credit Quality

Q4 2021 vs. Q4 2020

Total PCL was $(227) million. PCL on loans of $(218) million decreased $616 million from a year ago, due to lower provisions in Personal & Commercial Banking, Capital Markets and Wealth Management. The PCL on loans ratio of (12) bps decreased 35 bps, and the PCL on impaired loans ratio of 7 bps decreased 8 bps.

PCL on loans in Personal & Commercial Banking decreased $523 million, primarily due to releases of provisions on performing loans in the majority of our Canadian Banking portfolios in the current quarter, driven by improvements in our macroeconomic and credit quality outlook, as compared to provisions taken in the prior year due to the impact of the COVID-19 pandemic. Lower provisions on impaired loans in the majority of our Canadian Banking retail portfolios and our Caribbean Banking portfolios also contributed to the decrease.

PCL on loans in Wealth Management decreased $46 million or 90%, due to lower provisions in U.S. Wealth Management (including City National). The decrease was largely due to releases of provisions on performing loans in the current quarter driven by improvements in our macroeconomic and credit quality outlook, as compared to provisions taken in the prior year due to the impact of the COVID-19 pandemic. This was partially offset by higher provisions on impaired loans.

PCL on loans in Capital Markets decreased $48 million, mainly due to recoveries on impaired loans in the current year as compared to provisions taken in the prior year, largely in the oil and gas sector. This was partially offset by lower releases of provisions on performing loans in the current quarter as the prior year reflected the impact of higher repayments.

Q4 2021 vs. Q3 2021

Total PCL was $(227) million, compared to $(540) million in the prior quarter, increasing $313 million or 58%. PCL on loans was $(218) million, compared to $(492) million in the prior quarter, increasing $274 million or 56%, due to lower releases of provisions in Capital Markets and higher provisions in Wealth Management partially offset by lower provisions in Personal & Commercial Banking. The PCL on loans ratio increased 16 bps, and the PCL on impaired loans ratio decreased 1 bp from last quarter.

PCL on loans in Personal & Commercial Banking decreased $33 million or 19%, primarily reflecting lower provisions on impaired loans in the majority of our Canadian Banking portfolios due to the economic recovery underway and the continued impact of the COVID-19 related government support programs, and recoveries in our Caribbean Banking portfolios in the current quarter. Higher releases of provisions on performing loans in our Canadian Banking commercial portfolios, partially offset by lower releases on performing loans in the majority of our Canadian Banking retail portfolios and our Caribbean Banking portfolios, also contributed to the decrease.

PCL on loans in Wealth Management increased $26 million, primarily in U.S. Wealth Management (including City National), largely reflecting provisions on impaired loans in the current quarter as compared to recoveries in the prior quarter. Lower releases of provisions on performing loans also contributed to the increase as the prior quarter reflected a higher impact from the continued improvements in our macroeconomic and credit quality outlook.

PCL on loans in Capital Markets increased $282 million or 94%, primarily due to lower releases of provisions on performing loans in the current quarter as the prior quarter reflected a higher impact from the continued improvements in our macroeconomic and credit quality outlook.


  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)


2021



2021



2020



2021



2020



Total revenue

$

12,376


$

12,756


$

11,092


$

49,693


$

47,181



Provision for credit losses (PCL)


(227)



(540)



427



(753)



4,351



Insurance policyholder benefits, claims and acquisition expense (PBCAE)


1,032



1,304



461



3,891



3,683



Non-interest expense


6,583



6,420



6,058



25,924



24,758



Income before income taxes


4,988



5,572



4,146



20,631



14,389


Net income

$

3,892


$

4,296


$

3,246


$

16,050


$

11,437


Segments - net income

















Personal & Commercial Banking

$

2,033


$

2,113


$

1,502


$

7,847


$

5,087



Wealth Management (1)


558



744



546



2,626



2,154



Insurance


267



234



254



889



831



Investor & Treasury Services


109



88



91



440



536



Capital Markets 


920



1,129



840



4,187



2,776



Corporate Support (1)


5



(12)



13



61



53


Net income

$

3,892


$

4,296


$

3,246


$

16,050


$

11,437


Selected information

















Earnings per share (EPS) - basic

$

2.68


$

2.97


$

2.23


$

11.08


$

7.84



                                  - diluted


2.68



2.97



2.23



11.06



7.82



Return on common equity (ROE) (2)


16.9%



19.6%



16%



18.6%



14.2%



Average common equity (2)

$

89,500


$

85,800


$

78,800


$

84,850


$

78,800



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


1.43%



1.51%



1.52%



1.48%



1.55%



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


(0.12)%



(0.28)%



0.23%



(0.10)%



0.63%



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


(0.19)%



(0.36)%



0.08%



(0.20)%



0.39%



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


0.07%



0.08%



0.15%



0.10%



0.24%



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


0.31%



0.35%



0.47%



0.31%



0.47%



Liquidity coverage ratio (LCR) (4)


123%



125%



145%



123%



145%



Net stable funding ratio (5)


116%



116%



n.a. 



116%



n.a. 


Capital ratios and Leverage ratio (6)

















Common Equity Tier 1 (CET1) ratio


13.7%



13.6%



12.5%



13.7%



12.5%



Tier 1 capital ratio


14.9%



15.0%



13.5%



14.9%



13.5%



Total capital ratio


16.7%



16.7%



15.5%



16.7%



15.5%



Leverage ratio


4.9%



5.0%



4.8%



4.9%



4.8%


Selected balance sheet and other information (7)

















Total assets

$

1,706,323


$

1,693,540


$

1,624,548


$

1,706,323


$

1,624,548



Securities, net of applicable allowance


284,724



271,950



275,814



284,724



275,814



Loans, net of allowance for loan losses


717,575



698,041



660,992



717,575



660,992



Derivative related assets


95,541



102,033



113,488



95,541



113,488



Deposits


1,100,831



1,084,878



1,011,885



1,100,831



1,011,885



Common equity


91,983



88,803



80,719



91,983



80,719



Total risk-weighted assets


552,541



543,047



546,242



552,541



546,242



Assets under management (AUM) (3)


1,008,700



983,500



843,600



1,008,700



843,600



Assets under administration (AUA) (3), (8)


6,347,300



6,369,400



5,891,200



6,347,300



5,891,200


Common share information

















Shares outstanding (000s) - average basic


1,424,534



1,424,614



1,422,578



1,424,343



1,423,915



                                           - average diluted


1,427,225



1,427,198



1,426,466



1,426,735



1,428,770



                                           - end of period


1,424,525



1,424,463



1,422,473



1,424,525



1,422,473



Dividends declared per common share

$

1.08


$

1.08


$

1.08


$

4.32


$

4.29



Dividend yield (9)


3.3%



3.5%



4.4%



3.8%



4.7%



Dividend payout ratio (3)


40%



36%



48%



39%



55%



Common share price (RY on TSX) (10)

$

128.82


$

126.18


$

93.16


$

128.82


$

93.16



Market capitalization (TSX) (10)


183,507



179,739



132,518



183,507



132,518


Business information (number of)

















Employees (full-time equivalent) (FTE)


85,301



85,887



83,842



85,301



83,842



Bank branches


1,295



1,303



1,329



1,295



1,329



Automated teller machines (ATMs)


4,378



4,374



4,557



4,378



4,557


Period average US$ equivalent of C$1.00 (11)

$

0.796


$

0.812


$

0.756


$

0.796


$

0.744


Period-end US$ equivalent of C$1.00

$

0.808


$

0.801


$

0.751


$

0.808


$

0.751


               

(1)

Effective Q4 2021, gains (losses) on economic hedges of our U.S. share-based compensation plans, which are reflected in revenue, and related variability in share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. share-based compensation plans have been reclassified from our Wealth Management segment to Corporate Support. Comparative amounts have been reclassified to conform with this presentation.

(2)

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.

(3)

See the Glossary section of our 2021 Annual Report for composition of this measure.

(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) guidance. For further details, refer to the Liquidity and funding risk section of our 2021 Annual Report.

(5)

Beginning in Q1 2021, OSFI requires Canadian Domestic Systemically Important Banks (D-SIBs) to disclose the NSFR on a prospective basis. The NSFR is calculated in accordance with OSFI's Liquidity Adequacy Requirements (LAR) guideline. For further details, refer to the Liquidity and funding risk section of our 2021 Annual Report.

(6)

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.

(7)

Represents period-end spot balances.

(8)

AUA includes $15 billion and $3 billion (July 31, 2021 – $15 billion and $3 billion, October 31, 2020 – $16 billion and $7 billion) of securitized residential mortgages and credit card loans, respectively.

(9)

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

(10)

Based on TSX closing market price at period-end.

(11)

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)

2021


2021


2020


Net interest income

$

3,169


$

3,206


$

3,114


Non-interest income


1,436



1,445



1,259

Total revenue 


4,605



4,651



4,373


PCL on performing assets


(342)



(341)



135


PCL on impaired assets


134



162



181

PCL


(208)



(179)



316


Non-interest expense


2,087



1,998



2,030

Income before income taxes


2,726



2,832



2,027

Net income

$

2,033


$

2,113


$

1,502

Revenue by business










Canadian Banking

$

4,414


$

4,463


$

4,165


Caribbean & U.S. Banking


191



188



208

Selected balances and other information










ROE


32.5%



33.6%



26.0%


NIM


2.42%



2.52%



2.59%


Efficiency ratio (1)


45.3%



43.0%



46.4%


Operating leverage(2)


2.5 %



6.3 %



(5.4)%


Average total assets

$

543,900


$

530,400


$

503,200


Average total earning assets, net


518,900



505,600



478,500


Average loans and acceptances, net


522,200



509,300



482,000


Average deposits


524,300



507,600



481,300


AUA (3), (4)


367,700



356,100



292,800


Average AUA


363,500



349,100



297,600


AUM (4)


5,400



5,400



5,300


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


0.10%



0.13%



0.15%

Other selected information - Canadian Banking










Net income

$

1,970


$

2,024


$

1,474


NIM


2.42%



2.51%



2.56%


Efficiency ratio


43.8%



41.4%



44.9%


Operating leverage


2.7 %



6.1 %



(6.8)%

(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, 2021 of $15 billion and $3 billion, respectively (July 31, 2021 – $15 billion and $3 billion, October 31, 2020 – $16 billion and $7 billion).

(4)

Represents period-end spot balances.

Q4 2021 vs. Q4 2020
Net income increased $531 million or 35% from a year ago, primarily attributable to lower PCL. Average volume growth in Canadian Banking and higher non-interest income also contributed to the increase. These factors were partially offset by lower spreads.

Total revenue increased $232 million or 5%, mainly due to average volume growth in Canadian Banking of 9% in loans and 9% in deposits, higher average mutual fund balances driving higher distribution fees, and higher card service revenue reflecting increased client activity. These factors were partially offset by lower spreads.

Net interest margin was down 17 bps compared to the same quarter last year, mainly due to the ongoing impact of the low interest rate environment, changes in product mix and competitive pricing pressures.

PCL decreased $524 million, primarily reflecting releases of provisions on performing loans in the current quarter as compared to provisions taken in the prior year. Lower provisions on impaired loans also contributed to the decrease, resulting in a decrease of 5 bps in the PCL on impaired loans ratio. For further details on PCL, refer to Capital, Liquidity and Credit Quality in the Q4 2021 Business Segment Performance section of this Earnings Release.  

Non-interest expense increased $57 million or 3%, mainly attributable to higher staff-related costs.

Q4 2021 vs. Q3 2021
Net income decreased $80 million or 4% from last quarter, primarily due to lower spreads. Lower card service revenue, the timing of professional fees as well as higher marketing and technology-related costs also contributed to the decrease. These factors were partially offset by average volume growth of 3% in Canadian Banking, lower PCL and higher average mutual fund balances driving higher distribution 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)


2021

2021


2020


Net interest income


$

675

$

682

$

686


Non-interest income (1)



2,769


2,691


2,375

Total revenue (1)



3,444


3,373


3,061


PCL on performing assets



(7)


(19)


51


PCL on impaired assets



12


(2)


-

PCL



5


(21)


51


Non-interest expense (1)



2,718


2,434


2,304

Income before income taxes (1)



721


960


706

Net income (1)


$

558

$

744

$

546

Revenue by business









Canadian Wealth Management


$

1,032

$

1,012

$

835


U.S. Wealth Management (including City National) (1)



1,628


1,592


1,532


   U.S. Wealth Management (including City National) (US$ millions) (1)



1,296


1,293


1,158


Global Asset Management



711


692


608


International Wealth Management



73


77


86

Selected balances and other information









ROE



13.1%


18.3%


13.0%


NIM



2.06%


2.25%


2.50%


Pre-tax margin (1), (2)



20.9%


28.5%


23.1%

Selected average balance sheet information









Average total assets


$

146,600

$

136,300

$

126,300


Average total earning assets, net



130,000


120,200


109,300


Average loans and acceptances, net



87,000


83,800


81,000


Average deposits



151,500


142,800


132,100

Other information









AUA - total (3)



1,322,300


1,292,800


1,100,000


        - U.S. Wealth Management (including City National) (3)



704,200


690,400


583,800


        - U.S. Wealth Management (including City National) (US$ millions) (3)



568,800


553,300


438,200


AUM (3)



1,000,600


975,600


836,400


Average AUA



1,314,100


1,265,200


1,107,700


Average AUM



997,400


956,300


839,600


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



0.05%


(0.01)%


0.00%


Number of advisors (4)



5,548


5,522


5,428



For the three months ended


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

Q4 2021 vs

Q4 2021 vs


(Millions of Canadian dollars, except percentage amounts)

Q4 2020

Q3 2021


Increase (decrease):







Total revenue

$

(95)

$

31



Non-interest expense


(91)


27



Net income


(4)


3


Percentage change in average US$ equivalent of C$1.00


5%


(2)%


Percentage change in average British pound equivalent of C$1.00


1%


1%


Percentage change in average Euro equivalent of C$1.00


7%


1%
















 

(1)

Effective Q4 2021, gains (losses) on economic hedges of our U.S. share-based compensation plans, which are reflected in revenue, and related variability in share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. share-based compensation plans have been reclassified from our Wealth Management segment to Corporate Support. Comparative amounts have been reclassified to conform with this presentation.

(2)

Pre-tax margin is defined as Income before income taxes divided by Total revenue.

(3)

Represents period-end spot balances.

(4)

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

Q4 2021 vs. Q4 2020
Net income increased $12 million or 2% from a year ago, as higher average fee-based client assets and average volume growth were largely offset by higher variable compensation, a legal provision, and lower spreads.

Total revenue increased $383 million or 13%, primarily due to higher average fee-based client assets reflecting market appreciation and net sales, and average volume growth of 7% in loans and 15% in deposits. These factors were partially offset by lower spreads and the impact of foreign exchange translation. 

PCL decreased $46 million or 90% in U.S. Wealth Management (including City National), largely due to releases of provisions on performing loans in the current quarter as compared to provisions taken in the prior year. This was partially offset by higher provisions on impaired loans, resulting in an increase of 5 bps in the PCL on impaired loans ratio. For further details on PCL, refer to Capital, Liquidity and Credit Quality in the Q4 2021 Business Segment Performance section of this Earnings Release.

Non-interest expense increased $414 million or 18%, largely due to higher variable compensation commensurate with increased revenue. A legal provision in U.S. Wealth Management (including City National) and higher staff-related costs also contributed to the increase. These factors were partially offset by the impact of foreign exchange translation.

Q4 2021 vs. Q3 2021
Net income decreased $186 million or 25% from last quarter, mainly due to a legal provision in U.S. Wealth Management (including City National). Revenue growth from higher average fee-based client assets reflecting market appreciation and net sales was more than offset by higher variable compensation, lower spreads, lower transactional revenue, mainly driven by decreased client activity, and higher staff-related costs.








  Insurance










As at or for the three months ended




October 31 

July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts)

2021

2021


2020


Non-interest income










Net earned premiums


$

1,569

$

1,094

$

986



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



(128)


613


(71)



Fee income



60


47


43

Total revenue



1,501


1,754


958


PCL



(1)


-


(1)


Insurance policyholder benefits and claims (1)



939


1,218


391


Insurance policyholder acquisition expense



93


86


70


Non-interest expense



152


155


151

Income before income taxes



318


295


347

Net income


$

267

$

234

$

254

Revenue by business









Canadian Insurance


$

796

$

1,136

$

299


International Insurance



705


618


659

Selected balances and other information









ROE



42.8%


39.5%


42.5%


Premiums and deposits (2)


$

1,795

$

1,321

$

1,129


Fair value changes on investments backing policyholder liabilities (1)



(266)


475


(235)

 

(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 insurance and annuity products, and individual and group segregated fund deposits, consistent with insurance industry practices.

Q4 2021 vs. Q4 2020
Net income increased $13 million or 5% from a year ago, primarily due to favourable annual actuarial assumption updates, partially offset by lower favourable investment-related experience, including the impact of realized investment gains in the prior year.

Total revenue increased $543 million or 57%, primarily due to higher group annuity sales, which is largely offset in PBCAE as indicated below. Business growth also contributed to the increase. These factors were partially offset by the impact of realized investment gains in the prior year.

PBCAE increased $571 million, primarily due to higher group annuity sales, which is largely offset in revenue. Lower favourable investment-related experience and business growth, primarily in longevity reinsurance, also contributed to the increase. These factors were partially offset by favourable annual actuarial assumption updates in the current year largely related to mortality and economic assumptions.

Non-interest expense remained relatively flat.

Q4 2021 vs. Q3 2021
Net income increased $33 million or 14% from last quarter, largely due to favourable annual actuarial assumption updates, 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)

2021

2021


2020


Net interest income

$

155

$

127

$

108


Non-interest income


393


390


413

Total revenue


548


517


521


PCL on performing assets


(1)


(3)


(4)


PCL on impaired assets


-


-


-

PCL


(1)


(3)


(4)


Non-interest expense


412


401


407

Income before income taxes


137


119


118

Net income

$

109

$

88

$

91

Selected balances and other information








ROE


15.2%


11.1%


10.1%


Average deposits

$

233,300

$

221,100

$

187,000



Average client deposits


65,700


64,600


63,300



Average wholesale funding deposits


167,600


156,500


123,700


AUA (1)


4,640,900


4,704,400


4,483,500


Average AUA


4,745,400


4,584,300


4,588,400

 

(1)

Represents period-end spot balances.

Q4 2021 vs. Q4 2020
Net income increased $18 million or 20% from a year ago, primarily driven by higher revenue from our asset services business.

Total revenue increased $27 million or 5%, mainly due to higher revenue from increased client activity in our asset services business.

Non-interest expense remained relatively flat.

Q4 2021 vs. Q3 2021
Net income increased $21 million or 24% from last quarter, mainly driven by lower taxes due to favourable tax adjustments, and higher funding and liquidity revenue primarily reflecting the impact of interest rate movements.


  Capital Markets





As at or for the three months ended






October 31 


July 31 


October 31 

(Millions of Canadian dollars, except percentage amounts)



2021


2021


2020


Net interest income (1)


$

1,111

$

1,122

$

1,183


Non-interest income (1)



1,187


1,341


1,092

Total revenue (1)



2,298


2,463


2,275


PCL on performing assets



(11)


(326)


(3)


PCL on impaired assets



(11)


(11)


68

PCL



(22)


(337)


65


Non-interest expense



1,155


1,363


1,165

Income before income taxes



1,165


1,437


1,045

Net income


$

920

$

1,129

$

840

Revenue by business









Corporate and Investment Banking


$

1,225

$

1,289

$

1,088


Global Markets



1,122


1,232


1,333


Other



(49)


(58)


(146)

Selected balances and other information









ROE



16.1%


19.7%


14.4%


Average total assets


$

717,000

$

685,600

$

709,000


Average trading securities



125,300


120,100


106,700


Average loans and acceptances, net



106,100


98,200


101,500


Average deposits



73,700


74,100


74,400


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



(0.04)%


(0.07)%


0.27%

 



For the three months ended

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

Q4 2021 vs

Q4 2021 vs

(Millions of Canadian dollars, except percentage amounts)

Q4 2020

Q3 2021

Increase (decrease):






Total revenue

$

(81)

$

24


Non-interest expense


(38)


10


Net income


(36)


10

Percentage change in average US$ equivalent of C$1.00


5%


(2)%

Percentage change in average British pound equivalent of C$1.00


1%


1%

Percentage change in average Euro equivalent of C$1.00


7%


1%



(1)

The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2021 was $125 million (July 31, 2021 – $130 million, October 31, 2020 - $127 million).

Q4 2021 vs. Q4 2020

Net income increased $80 million or 10% from a year ago, largely driven by higher revenue in Corporate and Investment Banking. Higher Other revenue and lower PCL also contributed to the increase. These factors were partially offset by lower revenue in Global Markets and the impact of foreign exchange translation.

Total revenue increased $23 million or 1%, mainly due to higher M&A activity across all regions and higher revenue associated with certain non-trading portfolios. Lower residual funding costs and higher loan syndication activity in North America also contributed to the increase. These factors were partially offset by lower fixed income trading revenue across all regions as the prior year benefitted from increased client activity amidst elevated market volatility, lower equity trading revenue in North America due to reduced client activity, and the impact of foreign exchange translation.

PCL decreased $87 million, primarily due to recoveries on impaired loans in the current year as compared to provisions taken in the prior year, resulting in a decrease of 31 bps in the PCL on impaired loans ratio. For further details on PCL, refer to Capital, Liquidity and Credit Quality in the Q4 2021 Business Segment Performance section of this Earnings Release.

Non-interest expense decreased $10 million or 1%, mainly due to the impact of foreign exchange translation, partially offset by higher compensation on improved results.

Q4 2021 vs. Q3 2021

Net income decreased $209 million or 19% from last quarter, mainly driven by lower releases of PCL on performing assets. Lower fixed income trading revenue across all regions due to reduced client activity and lower loan syndication activity across most regions also contributed to the decrease. These factors were partially offset by lower compensation.










  Corporate Support                                                                                                                      












As at or for the three months ended






October 31 


July 31 


October 31 


(Millions of Canadian dollars)



2021


2021


2020



Net interest income (loss) (1)


$

(49)

$

(85)

$

(81)



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



29


83


(15)


Total revenue (1), (2)



(20)


(2)


(96)



PCL



-


-


-



Non-interest expense (2)



59


69


1


Income (loss) before income taxes (1), (2)



(79)


(71)


(97)



Income taxes (recoveries) (1), (2)



(84)


(59)


(110)


Net income (loss) (2)


$

5

$

(12)

$

13


       

(1)

Teb adjusted.

(2)

Effective Q4 2021, gains (losses) on economic hedges of our U.S. share-based compensation plans, which are reflected in revenue, and related variability in share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. share-based compensation plans have been reclassified from our Wealth Management segment to Corporate Support. Comparative amounts have been reclassified to conform with this presentation.

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, 2021 was $125 million, compared to $130 million in the prior quarter and $127 million in the same quarter last year. For the three months ended October 31, 2021, revenue included gains of $41 million (gains of $51 million in the prior quarter and gains of $7 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 $42 million ($59 million in the prior quarter and $8 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. For further discussion, refer to the How we measure and report our business segments section of our 2021 Annual Report.

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

Q4 2021
Net income was $5 million.

Q3 2021
Net loss was $12 million, primarily due to net unfavourable tax adjustments, largely offset by asset/liability management activities and residual unallocated items.

Q4 2020
Net income was $13 million, mainly due to asset/liability management activities, partially offset by net unfavourable tax adjustments. 

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, 2021

October 31, 2021

(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



$

2,009

$

546

$

265

$

107

$

904

$

(12)

$

3,819


$

15,781

Total average common equity (1), (2)



$

24,550

$

16,550

$

2,450

$

2,750

$

22,300

$

20,900

$

89,500


$

84,850

ROE (3)




32.5%


13.1%


42.8%


15.2%


16.1%

n.m.


16.9%



18.6%

 

(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 2021 Annual Report.









  Consolidated Balance Sheets










As at



October 31 



July 31 

October 31 

(Millions of Canadian dollars)


2021 (1)



2021 (2)


2020 (1)










Assets








Cash and due from banks

$

113,846


$

115,407

$

118,888










Interest-bearing deposits with banks


79,638



80,389


39,013










Securities









Trading


139,240



133,894


136,071


Investment, net of applicable allowance


145,484



138,056


139,743




284,724



271,950


275,814










Assets purchased under reverse repurchase agreements and securities borrowed


307,903



319,896


313,015










Loans









Retail


503,598



491,890


457,976


Wholesale


218,066



210,739


208,655




721,664



702,629


666,631


Allowance for loan losses


(4,089)



(4,588)


(5,639)




717,575



698,041


660,992










Segregated fund net assets


2,666



2,526


1,922

Other









Customers' liability under acceptances


19,798



19,325


18,507


Derivatives


95,541



102,033


113,488


Premises and equipment


7,424



7,576


7,934


Goodwill 


10,854



10,925


11,302


Other intangibles  


4,471



4,490


4,752


Other assets


61,883



60,982


58,921




199,971



205,331


214,904

Total assets

$

1,706,323


$

1,693,540

$

1,624,548










Liabilities and equity








Deposits









Personal

$

362,488


$

358,500

$

343,052


Business and government


696,353



680,413


624,311


Bank


41,990



45,965


44,522




1,100,831



1,084,878


1,011,885










Segregated fund net liabilities


2,666



2,526


1,922

Other









Acceptances


19,873



19,392


18,618


Obligations related to securities sold short


37,841



34,760


29,285


Obligations related to assets sold under repurchase agreements and securities loaned


262,201



271,165


274,231


Derivatives


91,439



97,150


109,927


Insurance claims and policy benefit liabilities


12,816



12,496


12,215


Other liabilities 


70,301



65,813


69,831




494,471



500,776


514,107










Subordinated debentures


9,593



9,050


9,867

Total liabilities


1,607,561



1,597,230


1,537,781

Equity attributable to shareholders









Preferred shares and other equity instruments


6,684



7,416


5,945


Common shares


17,655



17,656


17,499


Retained earnings


71,795



68,951


59,806


Other components of equity


2,533



2,196


3,414




98,667



96,219


86,664

Non-controlling interests


95



91


103

Total equity


98,762



96,310


86,767

Total liabilities and equity

$

1,706,323


$

1,693,540

$

1,624,548

 

(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)

2021 (1)


2021 (1)

2020 (1)


2021 (2)

2020 (2)















Interest and dividend income














Loans

$

5,412


$

5,439

$

5,522


$

21,654

$

23,420


Securities


1,200



1,184


1,335



4,877


6,488


Assets purchased under reverse repurchase agreements and securities borrowed


307



291


550



1,309


4,668


Deposits and other


95



83


56



305


307




7,014



6,997


7,463



28,145


34,883















Interest expense














Deposits and other


1,270



1,278


1,588



5,448


8,783


Other liabilities


641



625


811



2,516


4,985


Subordinated debentures


42



42


54



179


280




1,953



1,945


2,453



8,143


14,048

Net interest income


5,061



5,052


5,010



20,002


20,835















Non-interest income














Insurance premiums, investment and fee income


1,501



1,754


958



5,600


5,361


Trading revenue


103



179


224



1,183


1,239


Investment management and custodial fees


1,888



1,830


1,577



7,132


6,101


Mutual fund revenue


1,142



1,095


961



4,251


3,712


Securities brokerage commissions


350



356


320



1,538


1,439


Service charges


475



465


456



1,858


1,842


Underwriting and other advisory fees


655



700


578



2,692


2,319


Foreign exchange revenue, other than trading


239



246


233



1,066


1,012


Card service revenue


247



278


211



1,078


969


Credit fees


418



412


361



1,530


1,321


Net gains on investment securities


20



8


23



145


90


Share of profit in joint ventures and associates


34



47


20



130


77


Other


243



334


160



1,488


864



7,315



7,704


6,082



29,691


26,346

Total revenue


12,376



12,756


11,092



49,693


47,181

Provision for credit losses


(227)



(540)


427



(753)


4,351

Insurance policyholder benefits, claims and acquisition expense


1,032



1,304


461



3,891


3,683















Non-interest expense














Human resources


3,988



4,111


3,587



16,539


15,252


Equipment


514



492


508



1,986


1,907


Occupancy


393



387


431



1,584


1,660


Communications


279



227


254



931


989


Professional fees


417



329


385



1,351


1,330


Amortization of other intangibles


330



320


330



1,287


1,273


Other


662



554


563



2,246


2,347




6,583



6,420


6,058



25,924


24,758

Income before income taxes


4,988



5,572


4,146



20,631


14,389

Income taxes


1,096



1,276


900



4,581


2,952

Net income

$

3,892


$

4,296

$

3,246


$

16,050

$

11,437

Net income attributable to:














Shareholders

$

3,887


$

4,292

$

3,247


$

16,038

$

11,432


Non-controlling interests


5



4


(1)



12


5



$

3,892


$

4,296

$

3,246


$

16,050

$

11,437

Basic earnings per share (in dollars)

$

2.68


$

2.97

$

2.23


$

11.08

$

7.84

Diluted earnings per share (in dollars)


2.68



2.97


2.23



11.06


7.82

Dividends per common share (in dollars)


1.08



1.08


1.08



4.32


4.29

 

(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)


2021 (1)



2021 (1)


2020 (1)



2021 (2)


2020 (2)
















Net income

$

3,892


$

4,296

$

3,246


$

16,050

$

11,437
















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


(183)



70


33



177


(24)



Provision for credit losses recognized in income


(1)



(21)


(9)



(9)


13



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















   comprehensive income to income


(11)



(4)


(40)



(117)


(161)





(195)



45


(16)



51


(172)


Foreign currency translation adjustments















Unrealized foreign currency translation gains (losses)


(613)



931


(426)



(4,316)


810



Net foreign currency translation gains (losses) from hedging activities


280



(367)


191



1,740


(397)



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


(2)



2


-



(7)


(21)



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


-



(1)


-



(1)


21





(335)



565


(235)



(2,584)


413


Net change in cash flow hedges















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


767



(190)


44



1,373


(1,145)



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


99



95


85



272


72





866



(95)


129



1,645


(1,073)

Items that will not be reclassified subsequently to income:














Remeasurements of employee benefit plans


456



76


498



2,251


(68)


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















through profit or loss


67



24


(152)



55


(263)


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















income


40



(1)


4



38


28




563



99


350



2,344


(303)

Total other comprehensive income (loss), net of taxes


899



614


228



1,456


(1,135)

Total comprehensive income (loss)

$

4,791


$

4,910

$

3,474


$

17,506

$

10,302

Total comprehensive income attributable to:














Shareholders

$

4,787


$

4,904

$

3,476


$

17,501

$

10,295


Non-controlling interests


4



6


(2)



5


7




$

4,791


$

4,910

$

3,474


$

17,506

$

10,302

  

(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, 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


-


-


(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

































For the three months ended October 31, 2020 (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

$

7,448

$

17,610

$

(1)

$

(129)

$

57,805

$

(123)

$

4,866

$

(1,208)

$

3,535

$

86,268

$

106

$

86,374

Changes in equity


























Issues of share capital and other equity instruments


-


18


-


-


(1)


-


-


-


-


17


-


17


Common shares purchased for cancellation


-


-


-


-


-


-


-


-


-


-


-


-


Redemption of preferred shares and other equity



























instruments


(1,500)


-


-


-


-


-


-


-


-


(1,500)


-


(1,500)


Sales of treasury shares and other equity instruments


-


-


22


658


-


-


-


-


-


680


-


680


Purchases of treasury shares and other equity instruments



























instruments


-


-


(24)


(658)


-


-


-


-


-


(682)


-


(682)


Share-based compensation awards


-


-


-


-


(2)


-


-


-


-


(2)


-


(2)


Dividends on common shares


-


-


-


-


(1,539)


-


-


-


-


(1,539)


-


(1,539)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(74)


-


-


-


-


(74)


(2)


(76)


Other


-


-


-


-


20


-


-


-


-


20


1


21


Net income


-


-


-


-


3,247


-


-


-


-


3,247


(1)


3,246


Total other comprehensive income (loss), net of taxes


-


-


-


-


350


(16)


(234)


129


(121)


229


(1)


228

Balance at end of period

$

5,948

$

17,628

$

(3)

$

(129)

$

59,806

$

(139)

$

4,632

$

(1,079)

$

3,414

$

86,664

$

103

$

86,767

 

(1)

Derived from unaudited financial statements.

 





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

































For the year ended October 31, 2020 (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

$

5,706

$

17,645

$

1

$

(58)

$

55,874

$

33

$

4,221

$

(6)

$

4,248

$

83,416

$

102

$

83,518

Changes in equity


























Issues of share capital and other equity instruments


1,750


80


-


-


(5)


-


-


-


-


1,825


-


1,825


Common shares purchased for cancellation


-


(97)


-


-


(717)


-


-


-


-


(814)


-


(814)


Redemption of preferred shares and other equity



























instruments


(1,508)


-


-


-


-


-


-


-


-


(1,508)


-


(1,508)


Sales of treasury shares and other equity instruments


-


-


110


4,668


-


-


-


-


-


4,778


-


4,778


Purchases of treasury shares and other equity



























instruments


-


-


(114)


(4,739)


-


-


-


-


-


(4,853)


-


(4,853)


Share-based compensation awards


-


-


-


-


(3)


-


-


-


-


(3)


-


(3)


Dividends on common shares


-


-


-


-


(6,111)


-


-


-


-


(6,111)


-


(6,111)


Dividends on preferred shares and distributions on



























other equity instruments


-


-


-


-


(268)


-


-


-


-


(268)


(6)


(274)


Other


-


-


-


-


(93)


-


-


-


-


(93)


-


(93)


Net income


-


-


-


-


11,432


-


-


-


-


11,432


5


11,437


Total other comprehensive income (loss), net of taxes


-


-


-


-


(303)


(172)


411


(1,073)


(834)


(1,137)


2


(1,135)

Balance at end of period

$

5,948

$

17,628

$

(3)

$

(129)

$

59,806

$

(139)

$

4,632

$

(1,079)

$

3,414

$

86,664

$

103

$

86,767

 

(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, 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, and climate related 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", "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 (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, legal and regulatory environment, and systemic risks and other risks discussed in the risk sections and Impact of COVID-19 pandemic section of our annual report for the fiscal year ended October 31, 2021 (the 2021 Annual Report); including business and economic conditions, information technology and cyber risks, environmental and social risk (including climate change), digital disruption and innovation, Canadian housing and household indebtedness, geopolitical uncertainty, privacy, data and third party related risks, regulatory changes, culture and conduct, 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 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. In addition, as we work to advance our climate goals, external factors outside of RBC's reasonable control may act as constraints on their achievement, including varying decarbonization efforts across economies, the need for thoughtful climate policies around the world, more and better data, reasonably supported methodologies, and technological advancements, the evolution of consumer behavior, the challenges of balancing interim emissions goals with an orderly and just transition, and other significant considerations such as legal and regulatory obligations.

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 2021 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 and Impact of COVID-19 pandemic section of our 2021 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 2021 Annual Report at rbc.com/investorrelations.

Quarterly conference call and webcast presentation
Our quarterly conference call is scheduled for December 1, 2021 at 8:00 a.m. (EST) and will feature a presentation about our fourth quarter and 2021 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 9281609#). 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 1, 2021 until February 23, 2022 at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 8026879#).

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 87,000+ 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 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

Cision View original content to download multimedia: http://www.newswire.ca/en/releases/archive/December2021/01/c8532.html

Copyright CNW Group 2021

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