Royal Bank of Canada (RY) investor relations material

Key achievements and integration progress

• Achieved $740 million in cost synergies from the HSBC integration ahead of schedule, with final conversion of complex commercial clients completed on target in March.

• Met year-one milestones for $300 million in revenue synergies and progressing into years two and three.

• Maintained strong capital and liquidity positions, reporting CET1 of 13.2% and LCR of 128% as of Q3.

• Hosted first all-bank strategy session at Investor Day since 2018, receiving positive feedback and planning to update targets at the Q4 analyst call.

Tariffs, credit, and macroeconomic outlook

• Canadian consumers remain resilient with higher liquidity and continued discretionary spending, though mortgage growth has slowed due to economic uncertainty.

• Commercial loan growth is slowing, with sector-specific impacts from tariffs, especially in aluminum and steel, while healthcare and professional services remain strong.

• Wholesale segment saw a rebound in M&A activity in Q3, with increasing client optimism heading into Q4.

• Q2 saw a $570 million increase in performing loan provisions, mainly due to scenario adjustments for tariff uncertainty and macro outlook updates; Q3 saw a small release as macro outlook improved.

• Future provision releases depend on reduced uncertainty around tariffs and trade agreements, with prudent provisioning maintained.

AI, technology, and operational efficiency

• AI is a strategic focus, with a target of $700 million to $1 billion in enterprise value by 2027, leveraging proprietary models and a large data infrastructure.

• AI-driven efficiencies and productivity gains are expected to become more apparent by 2026–2027.

• Expense growth in Q3 was driven by higher variable compensation and investments in technology and talent, with strong operating leverage expected in fiscal 2025.