RBC provides information on goodwill impairment
TORONTO, April 16, 2009 — Royal Bank of Canada
(RY on TSX and NYSE) today announced that it expects to record
a goodwill impairment charge (on both a pre and after tax
basis) of approximately US$850 million for the second quarter
ending April 30, 2009. While the charge will reduce second
quarter reported earnings by approximately US$850 million,
it is a non-cash item and an accounting adjustment, and will
not affect our ongoing operations, or our Tier 1 and Total
As described in our First Quarter 2009 Report to Shareholders,
we conducted the first of a two-step goodwill testing process
during the first quarter and determined that the goodwill
assigned to our International Banking reporting unit may be
impaired. We have now completed the second step of the testing
process and have determined that the International Banking
reporting unit goodwill is impaired, resulting in the expected
charge to second quarter earnings noted above.
This expected charge reflects the impact of prolonged challenging
economic conditions that have affected our International Banking
reporting unit; in particular declines in the U.S. housing
market, the deterioration in the overall U.S. economic environment
and the decline in the market value of U.S. banks.
RBC will release its second quarter results on May 29, 2009.
Information related to these results will be available at:
A conference call is scheduled for May 29, 2009 at 1:30 p.m.
(EDT) and will feature a presentation by RBC executives. Investors
are invited to submit questions by email to firstname.lastname@example.org.
Interested parties can access the call on a listen-only basis
or by telephone (416-340-2216 or 1-866-898-9626). Please call
between 1:20 p.m. and 1:25 p.m. (EDT).
Speaker's notes will be posted on RBC's website shortly following
the call. Also, a recording will be available by 5:00 p.m.
(EDT) on May 29 until August 2, 2009 at www.rbc.com/investorrelations/ir_quarterly.html
or by telephone (416-695-5800 or
1-800-408-3053, passcode 8321037#).
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For further information, please contact:
James Colburn, Investor Relations, (416) 955-7808
Jackie Braden, Media Relations, (416) 974-2124
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. Forward-looking
statements include, but are not limited to, statements with
respect to our goodwill impairment charge, earnings, ongoing
operations and capital ratios. The forward-looking information
contained in this press 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 the date of this release and may not be appropriate
for other purposes. Forward-looking statements are typically
identified by words such as "believe," "expect,"
"estimate" and similar expressions of future or
conditional verbs such as "will," "may,"
"should" 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 expectations or conclusions
will not prove to be accurate and that our assumptions may
not be correct. We caution readers not to place undue reliance
on these statements as a number of important 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 - include:
market environment impacts, including the impact from the
continuing volatility in the financial markets and lack of
liquidity in credit markets, and our ability to effectively
manage our liquidity and capital ratios, and implement effective
risk management procedures; general business and economic
conditions in Canada, the United States, and other countries
in which we conduct business; changes in accounting standards,
policies and estimates, including changes in our estimates
of provisions, allowances and valuations; the impact of the
movement of the Canadian dollar relative to other currencies,
particularly the U.S. dollar, British pound and Euro; the
effects of changes in government fiscal, monetary and other
policies; the impact of changes in laws and regulations including
tax laws; and changes to our credit ratings.
We caution that the foregoing list of important 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. 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 our First Quarter 2009 Report
to Shareholders and in our 2008 Annual Report to Shareholders.