RBC Financial Group 2005 Corporate Responsibility Report and Public Acountability Statement

RBC’s vision is “always earning the right to be our clients’ first choice,” and our entire company is focused on that vision, from remaining vigilant about protecting the privacy of our clients to developing innovative product and service solutions that meet evolving needs.

CLIENTS FIRST
Client satisfaction and feedback
RBC encourages clients to tell us what they think, so we can evaluate how well we are “earning the right” to be their first choice. Each RBC business tracks client satisfaction as a key measure of performance and uses feedback to make improvements.

In the U.S., RBC Centura conducted 98,000 surveys in 2005 that demonstrated a steady increase in client satisfaction and loyalty. In Canada, RBC Royal Bank conducted 150,000 surveys, indicating our client satisfaction levels are also improving.

We record all problems noted by clients in a central database, and we interview a sampling directly to find out how well their issues were resolved.

In 2005, based on client feedback, we improved our account opening process, introduced a number of new products, streamlined our problem resolution process and enhanced our financial planning services. We’ve also piloted new methods to better observe, understand and improve the quality of service in our branches, giving us real-time benchmarks for client experiences such as wait times.

Consumer education
We believe that consumer education is our responsibility, and produce a series of brochures covering topics such as privacy, fraud protection, and the practices RBC employees are expected to follow. For example:

• Our home buying and renovating guides help consumers make informed financial and real estate decisions.

• RBC Asset Management is focused on keeping mutual fund investors and advisors informed about our policies as well as industry issues and regulatory developments. In 2005, RBC Asset Management published an educational brochure on mutual fund governance to help mutual fund investors understand what independent governance is and to illustrate the benefits of strong fund governance to both them and RBC Asset Management.

Fraud prevention and education
No one wants their bank account to become a crime scene. That’s why RBC has stringent security policies and practices, backed up by a dedicated team of employees and specialized systems working around the clock to prevent and detect potential fraudulent activity in clients’ accounts.

RBC stays on top of the latest security measures and technology to protect clients from potential fraud.

• In 2005, we adapted our online banking log-on screen with more advanced technology that better protects client information and client card numbers.

• We are also vigilant about spotting, tracking and shutting down emerging scams, such as “phishing,” where fraudsters impersonate real companies in e-mails or websites asking for client account numbers and passwords.

Security is a responsibility we share with our clients, and we have developed a number of fraud-education initiatives, from providing tips and alerts on our websites and brochures, to making presentations to clients. We update our public websites to include information on the latest fraud, privacy and security scams and threats.

A resolve to make it right
No company is perfect. While we always strive to provide our clients with excellent service, sometimes we don’t get it right.

Our formal process for handling client concerns is outlined on our website and in one of our Straight Talk brochures. We make every effort to resolve concerns at the first point of contact. If that’s not possible, the issue is referred to RBC’s Customer Relations Centre. If an issue cannot be resolved there, the final point of appeal is the Office of the Ombudsman, which provides an impartial process for discussion and resolution. Every year, our Ombudsman publishes a statistical and qualitative report on cases and how they were resolved (available at rbc.com).

RESPONDING TO CHANGING NEEDS
Responsible products and services
A growing number of consumers are choosing to do business with organizations that offer “socially responsible” products. While RBC does not have specific products that are marketed as “socially responsible,” all our products and services must align with our Code of Conduct; our existing, rigorous risk assessment discipline; and the voluntary consumer protection codes of conduct that we have signed.

Product innovation
Client feedback from formal and informal sources is the foundation for many product improvements and innovations:

• In 2005, RBC Insurance launched two new term life insurance products that extend coverage to a broader range of clients and include new optional features such as coverage for children and accidental death; and

• We also enhanced our vacation home mortgages and RBC Homeline Plan, which provides clients with flexibility and ease of access of up to 75 per cent of the equity in their home at a low cost of borrowing, with one easy application.

Account opening
Pressured by time constraints and information overload, clients seek simple solutions. RBC is committed to ensuring the process of opening an account is as straightforward as possible, while still meeting regulatory requirements.

In plain language, and available in multiple languages, our documents clearly outline the requirements to open an account and disclose our verification of funds policy. In 2005, we made it easier for clients to open an account with us by reducing paperwork and waiting time from about 45 minutes to as little as five minutes.

Help in times of crisis
RBC offers flexibility and options that help our clients cope when their lives and communities are disrupted by unexpected crises such as floods and hurricanes. Depending on the situation, this can involve rapid recovery loans, extended payment due dates, skip-a-payment options and links to assistance programs. For instance, following several major hurricanes in the southeastern U.S., RBC Centura’s efforts included a customer assistance program, loan payment deferrals and special rate loans.

Diversity
We believe that unlocking the power of diversity will enable RBC to be more competitive and our communities more dynamic. This belief guides us in developing our business strategies, products and services.

Having a diverse workforce is the first step to ensuring we can best serve an increasingly multi-ethnic client base. Wherever possible, our employees reflect the makeup of the communities they serve. For example:

• In Canada, we have more than 160 units staffed with employees who speak a number of Chinese dialects;

• In other key markets, we have managers dedicated to serving the growing South Asian and Middle Eastern populations. Combined, RBC call centre staff speak 60 languages; and

• In the U.S., RBC Centura has increased our hiring of Spanish-speaking and Asian employees to better meet the needs of the burgeoning Hispanic and Asian populations. We have also increased the number of African-American mortgage originators, reflecting our market demographics.

ACCESS TO FINANCIAL SERVICES
RBC has led the way in introducing convenient alternatives for people to access their money and finances anywhere, anytime. We continue to expand and improve our branch networks, online and telephone banking, and full-service banking machines. We also provide banking access to a host of previously underserved groups through customized products and services.

Technology
Technology has made it possible for people to access their banking anywhere, anytime and RBC is constantly innovating to make it easier. Today, RBC boasts 2.4 million telephone banking clients and almost one-quarter of our customers bank online. More than seven per cent of RBC’s banking transactions are completed online and another two per cent via telephone banking. In the U.S., more than 100,000 RBC Centura clients are enrolled in web banking. In 2005, we launched “My Voice,” a technology that allows clients to do their telephone banking by saying what they want to do, instead of pressing buttons on their telephones.

Online banking
RBC has a solid record of online banking innovations. For instance, we were the first bank in Canada to enable clients to access a variety of accounts with a single log-on and the first to offer cheque imaging through online banking. In 2005, we introduced a number of enhancements including:

•	Online access to a wider variety of imaged items such as bill payment stubs, cheques written by non-RBC clients, and vouchers of cash deposits. Clients also now have the option to stop receiving monthly statements and cheques via mail, with the option of viewing and printing cheque images online, without the usual fee.
•	A web tool that lets insurance clients view policies, billing and other documents online.
•	Interac Online, which enables Internet shoppers to pay for goods and services directly from their RBC account, eliminating the need to use a credit card online.

Remote communities
RBC is trying innovative ways to deliver services to remote communities. Through agency arrangements, we enable access to banking services and improved financial management skills. The agency works with a host RBC branch to provide basic banking services. Agency management decides on its own hours, language of service and business objectives, and it can reinvest the revenue it earns in the community. This means community members no longer need to travel long distances to do their banking and more money stays in the community for economic development. All of RBC’s agencies are located on Aboriginal reserves.

Low-income and underserved clients

• In Canada, our low-cost deposit account is one of the industry’s most flexible, offering 15 debit transactions for a low, flat fee.

• We continue to pilot a new banking concept for inner-city urban markets in Toronto, called Cash & Save, offering specific banking services in smaller premises to people who may not have a bank account. Cash & Save focuses on a few key services that were identified by community residents as being necessary: real-time cheque cashing, bill payments, wire transfers and money orders.

• RBC Centura was the first bank to partner with the North Carolina Treasurer’s Office in support of North Carolina Saves, a state-wide effort by a coalition of not-for-profit, corporate and government groups that encourages North Carolinians to gain financial stability by promoting savings and banking access, especially among the “un-banked.” The combination of no-fee savings accounts and encouragement through coaching and education act as catalysts for low to moderate wealth citizens to start saving and build assets. By the end of October 2005, North Carolinians had pledged to save US$270,000 under the program.

• RBC Royal Bank eliminated the biggest barrier for would-be homeowners in Canada by providing a
no-down-payment mortgage.

• In the U.S., RBC Centura promotes home ownership by offering several affordable mortgage options and by actively sourcing and participating in a variety of government loan programs aimed at low-income home buyers. We also conduct first-time buyer workshops in partnership with local not-for-profits, businesses or government entities.

Seniors
RBC is sensitive to the specific banking needs and concerns of the growing senior population.

• In Canada, we offer a deposit account rebate to seniors 60 years and older, representing a savings of $4.00 monthly or 25 per cent of the monthly package fee, whichever is greater. In 2005, the rebate was applied to the primary account holder rather than the account, meaning seniors can maintain their rebate even if they become joint account holders with younger spouses or parents for estate planning purposes.

• RBC has provided training and presentation material to its employees across Canada, enabling them to meet with groups of seniors to discuss financial fraud. Our brochure Straight Talk about Financial Fraud is a popular handout at these presentations.

• RBC Insurance has enhanced our line of TravelCare^® products for seniors and long-stay snowbirds, so that travel insurance will be available to a wider range of travelers.

Students and youth
RBC’s affordable student banking and credit card options give full-time students access to banking and credit services that are customized for their needs. For clients under 19 in Canada, our Leo Young Savers Account includes 15 free debit transactions monthly. We also contribute a $5 deposit into accounts opened for children under 12, giving kids a head start on saving and everyday banking.

For an overview of programs we support that promote financial literacy among youth,
see The ABCs of Money, page 20.

People with disabilities
For clients with special needs, RBC’s goal is to ensure equal access to premises and services. We have a strong record of making accessibility improvements and involving our clients and other stakeholders in the process.

• We worked with the Canadian Standards Association (CSA) to shape their industry standard for barrier-free ATMs, and we were the first bank worldwide to provide audio enabled ATMs – our prototype is being adopted as the de facto standard by both the CSA and other standards’ bodies around the world.

• Our physical locations are audited periodically for accessibility, to identify and remove barriers to people with disabilities. Every new RBC branch must be wheelchair accessible and, wherever possible, we exceed legal requirements for access. All U.S. banking and administrative facilities built or renovated since the 1990s have met or exceeded ADA (Americans with Disabilities Act) requirements. Today, approximately 90 per cent of RBC Royal Bank and RBC Centura branches are wheelchair accessible.

• In 2005, clients had access to 400 “talking” bank machines across Canada, and more than 525 machines ergonomically designed for easier access to those in a wheelchair.

• Royal Direct has a special number that can be accessed using a Teletype Writer (TTY) device, giving hearingimpaired clients 24/7 access to our telephone banking services.

• Alternate formats for our print materials include large type, audio cassettes, Braille and e-text. Over 800 RBC clients receive Braille statements.

In 2005, RBC and other major Canadian financial institutions, together with the Canadian Human Rights Commission signed an agreement that outlines future accessibility standards for branches, ATMs, web-based applications, alternate format print material, and complaint resolution. This agreement supports our ongoing commitment to improve accessibility for people with disabilities.

Aboriginal communities
In addition to seven Canadian branches located on reserves, RBC has established four agency banking outlets with Aboriginal communities in Alberta, Manitoba and Ontario, enabling remote areas to access financial services using RBC systems and infrastructure. In 2006, we plan to open two new agencies.

Our dedicated team of specialized Aboriginal Banking Market Managers, Account Managers and Risk Managers understands the unique lending issues and financial service needs of Aboriginal governments, businesses and communities. The team harnesses its expertise to proactively provide financial advice and solutions to our Aboriginal banking clients across Canada.

In 2005, RBC enhanced our On-Reserve Housing Loan Program, which was first developed in 1999 to help more families enjoy the long-term benefits of home ownership. While the original program only provided financing on new or existing houses and certificates of possession, borrowers can now obtain financing for mobile homes and investor loans. Also, the down payment requirement has decreased from 5 per cent to 2.5 per cent of the lesser of the purchase price or cost of construction. Forty First Nations had the program in place in 2004.

For an overview of programs we support to promote economic development in Aboriginal communities,
see page 18.

New immigrants
If current trends continue, immigration will account for three-quarters of total Canadian population growth by 2011, and 100 per cent by 2025. Currently, about 15 per cent of RBC’s clients in Canada represent a “cultural market” comprising new Canadians and visible minorities. We expect much of our future growth to come from cultural markets, so our goal is to put the right products and people in place now so that we can serve diverse markets better.

We believe banks have a unique role to play in helping ease the integration of immigrants and, in 2005, RBC Royal Bank developed a Welcome to Canada program, including:

• A secured Visa card so that new immigrants can build their credit histories;

• Account opening online that lets new immigrants start the process of setting up their bank accounts before arriving in Canada;

• Simplified credit solutions that enable more immigrants to qualify for loans, mortgages and credit cards;

• Easy-to-understand applications and information in multiple languages; and

• A “Newcomer to Canada” website, providing relevant information on education, employment, housing and RBC solutions.

In the U.S., RBC Centura hosted a Connecting Immigrants to Financial Services Forum in conjunction with the Federal Reserve Bank and the Federal Deposit Insurance Corporation. Stakeholders gathered to discuss a full scope of issues surrounding this topic.