Basel II and III Disclosures

Basel II

Introduction

Basel II is an international accord on capital requirements that applies to banking institutions in various countries including Canada, United States of America and the United Kingdom (UK). It is intended to strengthen the measurement and monitoring of financial institutions' capital by adopting a more risk sensitive approach to capital management. The EU implemented the Basel II framework through the Capital Requirements Directive (CRD).

The Basel II framework is comprised of three complementary pillars:

Pillar 1 establishes rules for the calculation of minimum capital for Credit, Market and Operational Risk (capital adequacy requirements).

Pillar 2 is an internal discipline to evaluate the adequacy of the regulatory capital requirement under Pillar 1 and other non Pillar 1 risks. This pillar requires the competent authority to undertake a supervisory review to assess the robustness of the regulated entity's internal assessment (supervisory review).

Pillar 3 complements the other pillars and effects market discipline through public disclosure. Expanded disclosure about capital and risk enables interested parties to better understand the risk profile of individual banks and companies and to make comparisons (market discipline).

Pillar 3 Disclosures

RBC Finance BV group (“BV Group”) was a UK consolidated group until 28 November 2012 subject to consolidated supervision by the Financial Services Authority (“FSA”). The material entities consolidated within the BV Group were RBC Europe Limited (“RBCEL” – a UK bank authorised and regulated by the FSA) and the Royal Bank of Canada Channel Islands Limited (“RBCCIL” – a Guernsey regulated bank).

As part of the reorganisation of the RBC European corporate structure, BV Group transferred 100% of its interest in RBCEL to Royal Bank of Canada on 29 November 2012. As a result, RBCEL became a wholly-owned direct subsidiary of Royal Bank of Canada, and is no longer a part of the BV Group. Meanwhile BV Group also ceased to be supervised by the since that date.

On 1 April 2013, the FSA was abolished and the majority of its functions transferred to two new regulators: the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). As a result, RBCEL is now authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

The below disclosures are as of 31 October 2012, when RBCEL was still part of the FSA regulated BV Group. These disclosures are published on our website as a condition of the FSA Pillar 3 waiver which had been granted to the BV group and RBCEL and fulfils the requirement for publishing consolidated Pillar 3 disclosures for the BV Group. The disclosures are in accordance with the requirements of the FSA Prudential Sourcebook for Banks, Building Societies and Investment Firms, BIPRU 11 (Pillar 3).

The Capital Adequacy Reports (FSA003) and the Credit Risk disclosures detail the composition and amount of Capital Resources (CR) and also provide the analysis of the credit, market and operational risk, Capital Resources Requirements (CRR).

RBCEL Country by Country Reporting

Country by Country Reporting for the year ended 31 October 2013 (PDF)

RBCEL

• October 2012 (PDF)
• October 2011 (PDF)
• July 2011 (PDF)
• April 2011 (PDF)
• January 2011 (PDF)
• October 2010 (PDF)
• July 2010 (PDF)
• April 2010 (PDF)
• January 2010 (PDF)
• October 2009 (PDF)
• July 2009 (PDF)
• April 2009 (PDF)
• January 2009 (PDF)

RBCBV

• Remuneration 2012 (PDF)
• October 2012 (PDF)
• Additional disclosures on credit risk exposures October 2012 (PDF)
• Remuneration 2011 (PDF)
• October 2011 (PDF)
• Additional disclosures on credit risk exposures October 2011 (PDF)
• Remuneration 2010 (PDF)
• April 2011 (PDF)
• October 2010 (PDF)
• April 2010 (PDF)
• October 2009 (PDF)
• April 2009 (PDF)