RBC (RY) Q3 2026 Earnings Call Transcript

President and Chief Executive Officer - David McKay

Chief Financial Officer - Katherine Gibson

Group Head, Personal Banking - Erica Nielsen

Group Head Commercial Banking - Sean Amato-Gauci

Group Head, Wealth Management and Insurance - Neil McLaughlin

Group Head, Capital Markets - Derek Neldner

Operator: Good morning, ladies and gentlemen. Welcome to the RBC's 2026 Third Quarter Results Conference Call. Please be advised that this call is being recorded. [Operator Instructions] Thank you. I would now like to turn the meeting over to Asim Imran. Please go ahead.

Asim Imran: 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 and Insurance; and Derek Neldner, Group Head, Capital Markets. 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 remind listeners that the bank assesses its performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. [Operator Instructions] With that, I'll turn it over to Dave.

David McKay: Thank you, Asim. Good morning, everyone, and thank you for joining us. Today, we reported very strong results, including record earnings of $6 billion, up 11% year-over-year. Revenues grew by 9% year-over-year as we further increased our revenue productivity while also deploying our balance sheet for client-driven growth. Furthermore, our relatively equal weightings between noninterest revenue and net interest income provides us with an attractive business mix. We also improved our cost efficiency, generating an adjusted operating leverage of 2.4% and adjusted efficiency ratio of 52%. These results reflect 3 forces working together: diversified business model; strong client activity; and a favorable market backdrop.

This was enabled by a disciplined execution of well-articulated strategies, investments in talent and technology and deployment of our balance sheet. Our performance this quarter delivered a premium return on equity of nearly 18% and broad-based growth while maintaining a robust 13.5% Common Equity Tier 1 ratio. This combination continues to generate sustainable long-term shareholder value, and this was evidenced by the 10% year-over-year growth in book value per share and 80 basis points of internal capital generation this quarter, or 3 percentage points over the last 12 months. We deployed 85 basis points of capital in the quarter to grow our business, pay dividends and buy back our stock.