Q2 2025 Royal Bank of Canada Earnings Call Transcript
Key Points
- Royal Bank of Canada (RY) reported strong second quarter earnings of $4.4 billion, with adjusted earnings of $4.5 billion, including $260 million from the acquisition of HSBC Bank Canada.
- Revenue growth of 11% year over year was driven by strong volume growth in Personal and Commercial Banking, as well as robust fee-based revenue growth in Wealth Management.
- The bank announced a $0.06, or 4%, increase in its quarterly dividend, reflecting confidence in its earnings power and capital strength.
- The common equity Tier 1 ratio stood at 13.2%, well above regulatory minimums, indicating a strong capital position.
- The bank's diversified business model and strong balance sheet provide a resilient foundation to navigate economic uncertainties and create value for clients and shareholders.
- The allowance for credit loss ratio increased to 74 basis points due to a prudent reserve build amidst heightened economic uncertainty.
- Gross impaired loans increased by $1.1 billion, primarily driven by Commercial Banking and Capital Markets, reflecting ongoing challenges in certain sectors.
- The macroeconomic environment remains uncertain, with potential structural disruptions to global supply chains and capital flows due to changes in trade policies.
- Investment banking activity was muted this quarter due to market volatility, impacting revenue in the Capital Markets segment.
- The bank's cautious outlook on mortgage growth and commercial loan demand reflects ongoing uncertainty and cautious business sentiment in certain sectors.
(Operator Instructions)
Good morning, ladies and gentlemen, and welcome to the RBC's 2025 second-quarter results conference call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Asim Imran, Senior Vice President, Investor Relations. Please go ahead, sir.
Thank you, and good morning, everyone. Speaking today will be Dave McKay, President and Chief Executive Officer; Katherine Gibson, Chief Financial Officer; and Graeme Hepworth, Chief Risk Officer. Also joining us today for your questions Erica Nielsen, Group Head, Personal Banking; Sean Amato-Gauci, Group Head Commercial Banking; Neil McLaughlin, Group Head, Wealth Management; Derek Neldner, Group Head Capital Markets; and Jennifer Publicover, Group Head Insurance.
As noted on slide 2, our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results could differ materially. I would also
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