The performance of Royal Bank of Canada in the past year reflected the ingenuity and commitment of management and employees in living up to our clients’ highest expectations.

The Board of Directors is pleased with the tremendous performance of the organization in 2005, especially in light of significant strategic and organizational changes undertaken during the year. As active participants in the major decisions guiding the organization’s strategy and business activities, your board has an important role to play in ensuring management’s plans and tactics are prudent and focused on generating shareholder value without exposure to undue risk.

In today’s marketplace of continually evolving regulatory and investor expectations, your board has focused on corporate objectives and performance in the context of doing what is right and ethical. The board has provided a critical eye on management activities, evaluating matters through a shareholder’s lens. My fellow directors have demonstrated a strong sense of integrity, corporate responsibility and a willingness to work hard on all issues.

We believe that good governance, in its broadest sense, is a competitive advantage. To maximize shareholder value on a sustainable basis, principles of good governance must extend beyond the Board of Directors into every segment of business activity. Indeed, a foundation of ethics, integrity and good governance guides all of our activities across our diverse operations.

While we are proud contributors to management’s success, your board takes seriously its independence, and does not hesitate to challenge management when warranted. In a world where both regulations and opportunities are increasing in volume and complexity, this sound foundation of good governance allows your board to oversee management in a manner that assesses and mitigates risk without stifling management’s creativity and ability to grow shareholder value.

As Chairman, my goal is to provide leadership that will enable the Board of Directors to continue to add value to the company’s performance. In the coming year, we remain committed to providing independent and constructive advice to management in their efforts to enhance long-term shareholder value.

I want to thank the directors and management for their efforts in 2005. I also want to extend my appreciation to all 69,000 employees of Royal Bank of Canada around the world for their strong commitment to doing what’s best for clients and shareholders. On behalf of the Board of Directors, I wish all of them every success for 2006.

David O'Brien (signed)

David O'Brien
Chairman of the Board



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