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Royal Bank of Canada reports first quarter 2018 results

All amounts are in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Effective November 1, 2017, we adopted IFRS 9 Financial Instruments. Prior period amounts are in accordance with IAS 39 Financial Instruments: Recognition and Measurement. Our Q1 2018 Report to Shareholders and Supplementary Financial Information are available at: www.rbc.com/investorrelations.

TORONTO, February 23, 2018 - Royal Bank of Canada (RY on TSX and NYSE) today reported net income of $3,012 million for the first quarter ended January 31, 2018, which includes the impact of the U.S. Tax Reform(1) of $178 million, or $0.12 per share, primarily related to the write-down of net deferred tax assets. Net income was down $15 million from a year ago and diluted EPS(2) of $2.01 was up 2%. Excluding last year’s specified item related to the gain on sale of the U.S. operations of Moneris(3), net income was up 7% and EPS was up 10% from a year ago.

Results in the quarter were driven by strong earnings in Personal & Commercial Banking, Capital Markets, Wealth Management, and Investor & Treasury Services. This quarter’s strong performance also reflects stable credit quality, with a provision for credit losses (PCL) on impaired loans ratio of 23 basis points (bps) compared to 22 bps a year ago, and a total PCL ratio of 24 bps this quarter.

Compared to last quarter, net income was up $175 million or 6%, mainly reflecting higher earnings in Capital Markets, Personal & Commercial Banking, Wealth Management and Investor & Treasury Services, partially offset by lower earnings in Insurance and the write-down associated with the U.S. Tax Reform(1).

“Strong client activity and volume growth across most businesses drove our first quarter earnings of $3 billion while we absorbed the write-down related to the U.S. Tax Reform. We invested in our businesses to support clients, and repurchased over $920 million of common shares. In addition, I am pleased to announce a 3% increase to our quarterly dividend,' said Dave McKay, RBC President and Chief Executive Officer. “Our strategy for sustainable growth is built on prudently managing risks and effectively deploying capital for strong returns through the cycle. We will continue to invest smartly and work hard to earn the trust of our clients, employees and communities.”

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(1)In December 2017, the U.S. H.R. 1 (U.S. Tax Reform) was passed into law.
(2)Earnings per share (EPS).
(3)The specified item reflects our share of a gain in Q1 2017 related to the sale of the U.S. operations of Moneris Solutions Corporation (Moneris) to Vantiv, Inc., which was $212 million (before- and after-tax). Results and measures excluding the specified item are non-GAAP measures. For further information, including a reconciliation, refer to the Non-GAAP Measures section on page 3 of this Earnings Release.