RBC (RY) Q4 2025 earnings summary

Executive summary

• Net income for 2025 reached $20.4 billion, up 25% year-over-year, with diluted EPS of $14.07, also up 25%; Q4 net income was $5.4 billion, up 29% year-over-year, with record diluted EPS of $3.76.

• Adjusted net income was $20.9 billion and adjusted diluted EPS was $14.43, up 20% and 19% year-over-year, respectively.

• Return on equity (ROE) improved to 16.3% for the year and 16.8% for Q4; adjusted ROE was 16.7%.

• Record results were driven by strong performance across all major business segments, realized cost synergies from the HSBC Canada acquisition, and disciplined cost management.

• Over $11 billion was returned to shareholders through dividends and share buybacks, including a 6% dividend increase and $987 million in share repurchases in Q4.

Financial highlights

• Total revenue for 2025 was $66.6 billion, up from $57.3 billion in 2024; net interest income up 13% year-over-year, non-interest income up 16% year-over-year.

• Diluted EPS for Q4 was $3.76, up 29% year-over-year; adjusted EPS was $3.85, up 25% year-over-year.

• CET1 ratio at year-end was 13.5%, up 30 bps year-over-year and above regulatory requirements.

• Total provision for credit losses (PCL) for 2025 was $4.4 billion, with a PCL on loans ratio of 0.43%.

• Book value per share grew 9% for the year.

Outlook and guidance

• Fiscal 2026 ROE objective revised to 17%+ based on improved revenue productivity and cost efficiencies.

• Positive all-bank operating leverage expected for 2026; Canadian banking operating leverage guided at 1%-2%.

• All-bank net interest income growth (excluding trading) expected in mid-single digits; mortgage growth in low to mid-single digits.

• Commercial loan growth expected in mid to high single digits, contingent on macro conditions.

• Adjusted non-TEB effective tax rate expected at 21%-23%.