Royal Bank of Canada Reports Fourth Quarter and Record 2012 Results

All amounts are in Canadian dollars and are based on our audited Annual and unaudited Interim Consolidated Financial Statements for the year ended October 31, 2012 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2012 Annual Report (which includes our audited annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2012 Annual Information Form and our Supplementary Financial Information are available on our website at rbc.com/investorrelations.

TORONTO, Nov. 29, 2012 /CNW/ - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $7.5 billion for the year ended October 31, 2012, up $1.1 billion or 17% from the prior year. Earnings from continuing operations of $7.6 billion were up $620 million or 9% from the prior year. Our results reflected record earnings in Personal & Commercial Banking, Capital Markets and Insurance.

"Our record earnings from continuing operations of $7.6 billion this year were driven by exceptional growth in Canadian Banking, Capital Markets and Insurance, demonstrating the earnings power of our diversified business model," said Gord Nixon, RBC President and CEO. "This year, we extended our leadership position and executed our long-term growth strategy while maintaining our prudent risk and disciplined cost management."

Strong volume growth across all of our Canadian banking businesses, higher fixed income trading and corporate and investment banking results, and improved claims experience in Insurance drove our strong earnings this year. These results were partially offset by higher costs in support of business growth, moderated by our cost management initiatives, and increased provision for credit losses (PCL) in our wholesale and Caribbean portfolios.

2012 compared to 2011 Net income $7,539 million (up 17% from $6,444 million) Diluted earnings per share (EPS) of $4.93 (up $.74 from $4.19) Return on common equity (ROE) of 19.3% (up from 18.7%) Tier 1 capital ratio was 13.1%	Continuing operations: 2012 compared to 2011 Net income $7,590 million (up 9% from $6,970 million) Diluted EPS of $4.96 (up $.41 from $4.55) ROE of 19.5% (down from 20.3%)

Q4 2012 Performance

"We ended the year strongly with results of over $1.9 billion in the fourth quarter driven by solid earnings from most of our businesses including another quarter of over $1 billion in earnings from Canadian Banking," Nixon said. "While the financial industry is expected to face headwinds in 2013, we are confident in our ability to weather these challenges given our strong financial and competitive position."

Q4 2012 compared to Q4 2011 Net income $1,911 million (up 22% from $1,571 million) Diluted EPS of $1.25 (up $.23 from $1.02) ROE of 18.7% (up from 17.1%)	Continuing operations: Q4 2012 compared to Q4 2011 Net income $1,911 million (up 19% from $1,609 million) Diluted EPS of $1.25 (up $.20 from $1.05) ROE of 18.7% (up from 17.5%)

Earnings of $1,911 million were up $340 million or 22% from last year. Earnings from continuing operations were up $302 million or 19%, driven by stronger fixed income trading results reflecting improved market conditions as compared to challenging markets in the prior year. Solid volume growth across all our Canadian banking businesses, along with stable margins and positive operating leverage, and lower claims costs in Insurance also contributed to the increase. We had higher provisions this quarter, reflecting a single account in our wholesale portfolio and increased provisions in our Canadian personal and business lending portfolios.

Q4 2012 compared to Q3 2012 Net income $1,911 million (down 15% from $2,240 million) Diluted EPS of $1.25 (down $.22 from $1.47) ROE of 18.7% (down from 22.7%)	Q4 2012 compared to Q3 2012, excluding noted items^(1) Net income $1,911 million (down 3% from $1,978 million) Diluted EPS of $1.25 (down $.04 from $1.29) ROE of 18.7% (down from 19.9%)

Earnings were down $329 million or 15% from the prior record quarter. Excluding certain items which had a favourable net impact of $262 million last quarter, net income was down $67 million or 3%⁽¹⁾. We had higher earnings in all of our retail segments, including lower claims costs in Insurance, higher average fee-based client assets and transaction volumes in Wealth Management, and volume growth in Canadian Banking. These results were more than offset by other net favourable tax adjustments in Corporate Support in the prior quarter.

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^1

Q3/12 results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest, a release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid due to the settlement of several tax matters with the Canada Revenue Agency (CRA) and a loss of $12 million ($11 million after-tax) related to our acquisition of the remaining 50% interest in RBC Dexia (RBC Investor Services). These measures are non-GAAP. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.

Q4 2012 Business Segment Performance

Reflects the strategic realignment of certain business segments, announced on September 11, 2012 and effective October 31, 2012⁽¹⁾.

Personal & Commercial Banking net income was $1,034 million, up $87 million or 9% from last year driven by solid volume growth and a lower effective tax rate in Canada, partially offset by increased costs in support of business growth and higher PCL largely in our Canadian business lending portfolio. We also achieved positive operating leverage of 1.8% in Canadian Banking. Compared to last quarter, net income was down $68 million or 6%.  Excluding the prior quarter mortgage prepayment interest adjustment, net income was up $24 million or 2%⁽²⁾, driven by volume growth in Canadian Banking.

Wealth Management net income was $207 million, up $28 million or 16% from last year and up $51 million or 33% from the prior quarter. Our results were driven by higher average fee-based client assets, higher transaction volumes and the increase in the fair value of our U.S. share-based compensation plan. The prior year included a favourable accounting adjustment related to a deferred compensation plan of $27 million ($16 million after-tax). The prior quarter included an unfavourable impact of $29 million ($21 million after-tax) related to certain regulatory and legal matters.

Insurance net income was $194 million, down $6 million or 3% from last year, as lower claims costs in Canadian insurance products and reinsurance products were offset by lower net investment gains and no new U.K. annuity reinsurance contracts in the current quarter.  Compared to the prior quarter, net income was up $15 million or 8%, driven by lower claims costs in our reinsurance products and Canadian insurance products. The prior quarter included a favourable impact from the reduction of policy acquisition cost-related liabilities of $33 million ($24 million after-tax).

Investor & Treasury Services net income was $72 million, up $32 million from last year, largely due to higher funding and liquidity trading results reflecting improved market conditions as compared to the challenging market conditions in the prior year. A full quarter of earnings reflecting our 100% ownership of RBC Investor Services also contributed to the increase although lower spreads and decreased transaction volumes continued to impact our results. Compared to the prior quarter, net income was up $21 million due to higher funding and liquidity trading results and a full quarter of earnings related to RBC Investor Services, partially offset by lower custodial and securities lending fees.

Capital Markets net income was $410 million, up $285 million from the prior year, primarily reflecting higher fixed income trading results. Higher origination reflecting solid issuance activity and strong client growth in lending and increased loan syndication activity largely in the U.S. also contributed to the increase. These results were partially offset by higher PCL related to a single account and a higher effective tax rate reflecting increased earnings in the U.S. Compared to the prior quarter, net income was down $19 million or 4%, largely due to lower trading results particularly at the end of the quarter, lower loan syndication activity in the U.S. following a very strong third quarter and higher PCL as noted above. These factors were partially offset by higher equity origination volumes primarily in the U.S. and Canada.

Corporate Support net loss was $6 million, mainly due to net unfavourable tax adjustments. Net income in the prior year was $118 million, reflecting net favourable tax adjustments. In the prior quarter, net income was $323 million, largely due to the settlement of several tax matters with the CRA which resulted in the release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid. The prior quarter also included other net favourable tax adjustments.

Capital - As at October 31, 2012, Tier 1 capital ratio was 13.1% and Total capital ratio was 15.1%. Tier 1 capital was up 10 basis points from last quarter largely due to internal capital generation, partially offset by the phase-in of the transition impact of IFRS and higher risk-weighted assets reflecting growth in our wholesale credit portfolio. Our estimated pro-forma Basel III Common Equity Tier 1 ratio on a fully implemented basis was approximately 8.4%.

Credit Quality - In the fourth quarter, total PCL was $362 million, up $86 million from last year mainly due to increased provisions in our wholesale portfolio related to a single account and in our Canadian Banking business lending portfolio. Compared to the prior quarter, PCL was up $38 million due to the increased provisions noted above, offset by lower provisions in our Caribbean portfolios.

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^1	See our 2012 Annual Report for additional information.
^2	Q3/12 results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest. This measure is a non-GAAP measure. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.

SELECTED FINANCIAL AND OTHER HIGHLIGHTS
Selected financial and other highlights
		As at or for the three months ended									For the year ended
(Millions of Canadian dollars, except per share, number    of and percentage amounts)			October 31 2012			July 31 2012			October 31 2011			October 31 2012				October 31 2011
Continuing operations
	Total revenue	$	7,518		$	7,756		$	6,692		$	29,772			$	27,638
	Provision for credit losses (PCL)		362			324			276			1,301				1,133
	Insurance policyholder benefits, claims and acquisition    expense (PBCAE)		770			1,000			867			3,621				3,358
	Non-interest expense		3,873			3,759			3,530			15,160				14,167
	Net income before income taxes		2,513			2,673			2,019			9,690				8,980
Net income from continuing operations			1,911			2,240			1,609			7,590				6,970
Net loss from discontinued operations			-			-			(38)			(51)				(526)
Net income		$	1,911		$	2,240		$	1,571		$	7,539			$	6,444
Segments - net income from continuing operations
	Personal & Commercial Banking	$	1,034		$	1,102		$	947		$	4,088			$	3,740
	Wealth Management		207			156			179			763				811
	Insurance		194			179			200			714				600
	Investor & Treasury Services		72			51			40			85				230
	Capital Markets		410			429			125			1,581				1,292
	Corporate Support		(6)			323			118			359				297
Net income from continuing operations			1,911			2,240			1,609		$	7,590			$	6,970
Selected information
	Earnings per share (EPS) - basic	$	1.26		$	1.49		$	1.03		$	4.98			$	4.25
	- diluted		1.25			1.47			1.02			4.93				4.19
	Return on common equity (ROE) (1), (2)		18.7	%		22.7	%		17.1	%		19.3	%			18.7	%
Selected information from continuing operations
	EPS - basic	$	1.26		$	1.49		$	1.06		$	5.01			$	4.62
	- diluted		1.25			1.47			1.05			4.96				4.55
	ROE (1), (2)		18.7	%		22.7	%		17.5	%		19.5	%			20.3	%
	PCL on impaired loans as a % of average net loans and acceptances		0.37	%		0.34	%		0.31	%		0.35	%			0.33	%
	Gross impaired loans (GIL) as a % of loans and acceptances		0.58	%		0.55	%		0.65	%		0.58	%			0.65	%
Capital ratios and multiples (3)									-
	Tier 1 capital ratio		13.1	%		13.0	%		13.3	%		13.1	%			13.3	%
	Total capital ratio		15.1	%		15.0	%		15.3	%		15.1	%			15.3	%
	Assets-to-capital multiple		16.7	X		16.7	X		16.1	X		16.7	X			16.1	X
	Tier 1 common ratio (2)		10.5	%		10.3	%		10.6	%		10.5	%			10.6	%
Selected balance sheet and other information
	Total assets	$	825,100		$	824,394		$	793,833		$	825,100			$	793,833
	Securities		161,611			158,390			167,022			161,611				167,022
	Loans (net of allowance for loan losses)		378,244			373,216			347,530			378,244				347,530
	Derivative related assets		91,293			103,257			99,650			91,293				99,650
	Deposits		508,219			502,804			479,102			508,219				479,102
	Common equity		39,453			38,357			34,889			39,453				34,889
	Average common equity (1)		38,850			37,700			34,400			37,150				32,600
	Risk-weighted assets (RWA)		280,609			278,418			267,780			280,609				267,780
	Assets under management (AUM)		343,000			327,800			308,700			343,000				308,700
	Assets under administration (AUA) - RBC (4)		764,100			742,800			699,800			764,100				699,800
	- RBCIS (5)		2,886,900			2,670,900			2,744,400			2,886,900				2,744,400
Common share information
	Shares outstanding (000s) - average basic		1,444,189			1,443,457			1,437,023			1,442,167				1,430,722
	- average diluted		1,469,304			1,469,513			1,465,927			1,468,287				1,471,493
	- end of period		1,445,303			1,444,300			1,438,376			1,445,303				1,438,376
	Dividends declared per share	$	0.60		$	0.57		$	0.54		$	2.28			$	2.08
	Dividend yield (6)		4.4	%		4.3	%		4.5	%		4.5	%			3.9	%
	Common share price (RY on TSX)	$	56.94		$	51.38		$	48.62		$	56.94			$	48.62
	Market capitalization (TSX)		82,296			74,208			69,934			82,296				69,934
Business information from continuing operations (number of)									-
	Employees (full-time equivalent) (FTE)		74,377			75,139			68,480			74,377				68,480
	Bank branches		1,361			1,355			1,338			1,361				1,338
	Automated teller machines (ATMs)		5,065			4,948			4,626			5,065				4,626
Period average US$ equivalent of C$1.00 (7)		$	1.011		$	0.982		$	0.992		$	0.997			$	1.015
Period-end US$ equivalent of C$1.00		$	1.001		$	0.997		$	1.003		$	1.001			$	1.003

(1)	Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes ROE and Average common equity. For further details, refer to the How we measure and report our business segments section of our 2012 Annual Report.
(2)	These measures may not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures disclosed by other financial institutions. See the How we measure and report our business segments section and the Key performance and Non-GAAP Measures section of this Earnings Release, our Q4 2012 Supplementary Financial Information and our 2012 Annual Report for additional information.
(3)	2011 comparative amounts were determined under Canadian GAAP.
(4)	RBC AUA includes $38.4 billion (2011 - $36 billion) of securitized mortgages and credit card loans.
(5)	RBC Investor Services, formerly RBC Dexia, AUA represented the total AUA of the entity, of which we had a 50% ownership interest prior to July 27, 2012.
(6)	Defined as dividends per common share divided by the average of the high and low share price in the relevant period.
(7)	Average amounts are calculated using month-end spot rates for the period.

 

BUSINESS SEGMENT RESULTS
Personal & Commercial Banking
			As at or for the three months ended
			October 31			July 31			October 31
(Millions of Canadian dollars, except number of and percentage amounts and as otherwise noted)			2012			2012			2011
	Net interest income		$	2,302		$	2,391		$	2,176
	Non-interest income			927			909			872
Total revenue				3,229			3,300			3,048
	PCL			298			300			270
	Non-interest expense			1,526			1,508			1,469
Net income before income taxes				1,405			1,492			1,309
Net income			$	1,034		$	1,102		$	947
Revenue by business
		Personal Financial Services	$	1,680		$	1,768		$	1,571
		Business Financial Services		742			736			708
		Cards and Payment Solutions		598			589			572
	Canadian Banking			3,020			3,093			2,851
	Caribbean & U.S. Banking			209			207			197
Key ratios
	ROE			32.8%			34.2%			26.9%
	NIM (1)			2.82%			2.97%			2.84%
Selected average balance sheet information
	Total assets		$	340,500		$	335,200		$	318,400
	Total earning assets (2)			325,000			319,800			304,500
	Loans and acceptances (2)			323,700			318,000			303,500
	Deposits			250,200			245,800			233,300
	Attributed capital			12,300			12,550			13,550
	Risk capital			8,450			8,700			9,750
Other information
	AUA (3)		$	179,200		$	173,600		$	165,900
	AUM			3,100			2,900			2,700
	Number of employees (FTE)			38,213			38,657			38,216
Credit information
	Gross impaired loans as a % of average net loans and acceptances			0.56%			0.59%			0.68%
	PCL on impaired loans as a % of average net loans and acceptances			0.37%			0.38%			0.35%
Canadian Banking
Total revenue			$	3,020		$	3,093		$	2,851
	PCL			269			234			234
	Non-interest expense			1,357			1,330			1,303
Net income before income taxes				1,394			1,529			1,314
Net income				1,027			1,127			948
Key ratios
	ROE			41.1%			43.8%			33.3%
	ROE adjusted (4)			n.a.			38.9%			n.a.
	NIM (1)			2.74%			2.91%			2.75%
	NIM adjusted (1) (4)			n.a.			2.74%			n.a.
	Efficiency ratio			44.9%			43.0%			45.7%
	Efficiency ratio adjusted (4)			n.a.			44.8%			n.a.
	Operating leverage			1.8%			8.0%			n.a.
	Operating leverage adjusted (4)			n.a.			3.5%			n.a.
Credit information
	Gross impaired loans as a % of average net loans and acceptances			0.36%			0.37%			0.43%
	PCL on impaired loans as a % of average net loans and acceptances			0.34%			0.30%			0.31%

(1)	Calculated as net interest income divided by average total earning assets. For further discussion on NIM, see How we measure and report our business segments in our 2012 Annual Report.
(2)	Total earning assets and loans and acceptances include average securitized residential mortgage and credit card loans for the three months ended October 31, 2012, of $44.9 billion and $7.3 billion, respectively (July 31, 2012 - $46.1 billion and $6.1 billion; October 31, 2011 - $41.5 billion and $3.9 billion).
(3)	AUA includes securitized residential mortgage and credit card loans for the three months ended October 31, 2012, of $31.0 billion and $7.4 billion, respectively (July 31, 2012 - $31.8 billion and $6.1 billion; October 31, 2011 - $32.1 billion and $3.9 billion).
(4)	Measures for the three months ended July 31, 2012 have been adjusted for a gain from a change in estimate of mortgage prepayment interest. See the Key Performance and Non-GAAP Measures section of this Earning Release for additional information.

Q4 2012 vs. Q4 2011

Net income of $1,034 million increased $87 million or 9% compared to the prior year, driven by solid volume growth of 7% across all our Canadian businesses and a lower effective tax rate in Canada. These factors were partially offset by increased costs in support of business growth and higher PCL in Canada.

Total revenue increased $181 million or 6%, reflecting solid volume growth in our Canadian personal and business deposits, personal and business loans, as well as higher credit card transaction volumes.

PCL increased $28 million or 10%, mainly due to higher provisions in our Canadian business lending portfolio, offset by lower provisions in our Caribbean portfolio.

Non-interest expense increased $57 million or 4%, mainly due to higher costs in support of business growth and higher performance-related compensation in Canada, partially offset by our ongoing focus on cost management. In addition, the prior year included net favourable stamp tax and accounting adjustments in the Caribbean.

Q4 2012 vs. Q3 2012

Net income decreased $68 million or 6% compared to last quarter. Excluding a mortgage prepayment interest adjustment that favourably impacted our results last quarter, net income increased $24 million or 2%⁽¹⁾, largely due to volume growth in Canadian Banking.

Total revenue decreased $71 million or 2%. Excluding the mortgage prepayment interest adjustment, total revenue increased $54 million or 2%⁽¹⁾, reflecting continued volume growth in Canada in residential mortgages, business and personal deposits and loans and higher credit card transaction volumes.

PCL remained relatively flat compared to last quarter as lower provisions in our Caribbean portfolio were offset by higher provisions in our Canadian business lending portfolio.

Non-interest expense increased $18 million or 1%, mainly due to higher costs in support of business growth in Canada and seasonally higher domestic marketing spend partially offset by our ongoing focus on costs management.

On October 23, 2012 we announced a definitive agreement to acquire the Canadian auto finance and deposit business of Ally Financial Inc. which will add significant scale to our existing business and strengthen RBC's position as a leader in the Canadian auto finance industry. This transaction is subject to customary closing conditions and is expected to close in the first calendar quarter of 2013.

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^1	Q3/12 Canadian Banking results included a favourable adjustment of $125 million ($92 million after-tax) related to a change in estimate of mortgage prepayment interest. This measure is a non-GAAP measure. See Key Performance and Non-GAAP Measures section of this Earnings Release for additional information.

Wealth Management
		As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage    amounts and as otherwise noted)			October 31 2012		July 31 2012			October 31 2011
	Net interest income		$	95	$	98	$	96
	Non-interest income
	Fee-based revenue			769		742		726
	Transactional and other revenue			397		327		329
Total revenue				1,261		1,167		1,151
	Non-interest expense			972		944		893
Net income before income taxes				289		223		258
Net income			$	207	$	156	$	179
Revenue by business
	Canadian Wealth Management		$	463	$	422	$	426
	U.S. & International Wealth Management			509		474		466
	U.S. & International Wealth Management (US$ millions)			515		466		464
	Global Asset Management			289		271		259
Key ratios
	ROE			15.3%		11.3%		12.7%
	Pre-tax margin (1)			22.9%		19.1%		22.4%
Selected average balance sheet information
	Total assets		$	20,200	$	21,100	$	22,300
	Loans and acceptances			10,300		10,200		8,900
	Deposits			29,200		29,400		28,300
	Attributed capital			5,150		5,200		5,300
	Risk capital			1,400		1,400		1,400
Other information
	Revenue per advisor (000s) (2)		$	821	$	776	$	764
	AUA			577,800		562,200		527,200
	AUM			339,600		324,500		305,700
	Average AUA			568,100		562,000		526,800
	Average AUM			333,100		323,800		310,600
	Number of employees (FTE)			10,670		10,619		10,564
	Number of advisors (3)			4,388		4,339		4,281

(1)	Pre-tax margin is defined as net income before income taxes divided by total revenue.
(2)	Represents investment advisors and financial consultants of our Canadian and U.S. full-service wealth businesses.
(3)	Represents client-facing advisors across all our wealth management businesses.

Q4 2012 vs. Q4 2011

Net income of $207 million increased $28 million or 16% compared to the prior year, mainly due to higher average fee-based client assets and higher transaction volumes. The increase in fair value of our U.S. share-based compensation plan also contributed to the increase. The prior year results included a favourable accounting adjustment related to a deferred compensation plan of $27 million ($16 million after-tax).

Total revenue increased $110 million or 10%, mainly due to higher average fee-based client assets reflecting capital appreciation and net sales and higher transaction volumes reflecting improved market conditions. The increase in fair value of our U.S. share-based compensation plan also contributed to the increase.

Non-interest expense increased $79 million or 9%, mainly due to higher variable compensation driven by higher commission-based revenue and the increase in fair value of our U.S. share-based compensation plan. The prior year included a favourable accounting adjustment related to our deferred compensation plan as noted above.

Q4 2012 vs. Q3 2012

Net income increased $51 million or 33% from the prior quarter, mainly due to higher average fee-based client assets reflecting net sales and capital appreciation, higher transaction volumes, and the increase in fair value of our U.S. share-based compensation plan. These factors were partially offset by higher costs in support of business growth. The prior quarter included an unfavourable impact of $29 million ($21 million after-tax) related to certain regulatory and legal matters.

Insurance
		As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage amounts   and as otherwise noted)			October 31 2012				July 31 2012			October 31 2011
	Non-interest income
	Net earned premiums			$	914		$	902	$	897
	Investment income (1)				93			363		254
	Fee income				91			58		64
	Total revenue				1,098			1,323		1,215
	Insurance policyholder benefits and claims (1)				631			864		720
	Insurance policyholder acquisition expense				139			136		147
	Non-interest expense				134			126		129
Net income before income taxes					194			197		219
Net income				$	194		$	179	$	200
Revenue by business line
	Canadian insurance			$	616		$	873	$	757
	International & Other insurance				482			450		458
Key ratios
	ROE				50.7%			47.3%		40.3%
Selected average balance sheet information
	Total assets			$	11,900		$	11,700	$	10,800
	Attributed capital				1,500			1,500		1,950
	Risk capital				1,350			1,350		1,800
Other information
	Premiums and deposits (2)			$	1,215		$	1,213	$	1,205
	Canadian insurance				597			602		605
	International & Other insurance				618			611		600
	Insurance claims and policy benefit liabilities			$	7,921		$	7,965	$	7,119
	Fair value changes on investments backing policyholder liabilities (1)				(35)			256		123
	Embedded value (3)				5,861			5,774		5,327
	AUM				300			400		300
	Number of employees (FTE)				2,744			2,777		2,859

(1)	Investment income can experience volatility arising from fluctuation in the fair value of Fair Value Through Profit or Loss (FVTPL) assets. The investments which support actuarial liabilities are predominantly fixed income assets designated as FVTPL. Consequently changes in the fair values of these assets are recorded in investment income in the consolidated statements of income and are largely offset by changes in the fair value of the actuarial liabilities, the impact of which is reflected in insurance policyholder benefits and claims.
(2)	Premiums and deposits include premiums on risk-based insurance and annuity products, and individual and group segregated fund deposits, consistent with insurance industry practices.
(3)	Embedded value is defined as the sum of value of equity held in our Insurance segment and the value of in-force business policies (existing policies). For further details, refer to the Key performance and Non-GAAP Measures section of our 2012 Annual Report.

 

Q4 2012 vs. Q4 2011

Net income of $194 million decreased $6 million or 3% compared to the prior year as lower claims costs in Canadian insurance products and reinsurance products were offset by lower net investment gains and no new U.K. annuity reinsurance contracts in the current quarter.

Total revenue decreased $117 million or 10%, mainly due to the change in fair value of investments backing our policyholder liabilities, which was largely offset in policyholder benefits, claims and acquisitions expense (PBCAE). In addition, the prior year included higher net investment gains. These factors were partially offset by volume growth across most products.

PBCAE decreased $97 million or 11%, mainly due to the change in fair value of investments backing our policyholder liabilities as noted above, partially offset by higher costs commensurate with volume growth.

Non-interest expense increased $5 million or 4%, mainly due to higher costs in support of business growth, partially offset by our ongoing focus on cost management.

Q4 2012 vs. Q3 2012

Net income of $194 million increased $15 million or 8% from the prior quarter, mainly due to lower claims costs in our reinsurance products and Canadian insurance products. Our prior quarter results were favourably impacted by the reduction of policy acquisition cost-related liabilities of $33 million ($24 million after-tax).

Investor & Treasury Services
	As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage    amounts and as otherwise noted)	October 31 2012			July 31 2012				October 31 2011
Net interest income	$	172		$	152		$	163
Non-interest income		242			152			99
Total revenue		414			304			262
Non-interest expense		316			226			209
Net income before income taxes and NCI in subsidiaries		98			78			53
Net income	$	72		$	51		$	40
Key ratios
ROE		13.0%			13.9%			12.0%
Selected average balance sheet information
Total assets	$	81,400		$	69,300		$	77,100
Deposits		107,200			96,600			107,100
Attributed capital		2,100			1,400			1,200
Other information
Economic profit (1)	$	23		$	29		$	14
AUA		2,886,900			2,670,900			2,744,400
Average AUA		2,840,500			2,773,000			2,827,800
Number of employees (FTE) (2)		6,084			6,062			112

(1)	Economic profit is a non-GAAP measure. See the Key performance and Non-GAAP Measures section of our 2012 Annual Report for additional information.
(2)	Effective the third quarter of 2012, we completed our acquisition of the remaining 50% of RBC Dexia (RBC Investor Services). Prior to this acquisition, FTE numbers do not include our RBC Dexia joint venture.

Q4 2012 vs. Q4 2011

Net income of $72 million increased $32 million compared to the prior year, largely due to higher funding and liquidity trading results reflecting improved market conditions as compared to the challenging market conditions last year. A full quarter representing 100% ownership of RBC Investor Services earnings also contributed to the increase, although lower spreads and decreased transaction volumes negatively impacted our results.

Total revenue increased $152 million or 58%, primarily due to a full quarter of RBC Investor Services revenue, partially offset by lower spreads, decreased foreign exchange activity and lower custodial fees. Higher funding and liquidity trading, driven by greater market liquidity and improved market conditions also contributed to the increase in revenue.

Non-interest expense increased $107 million or 51%, mainly reflecting a full quarter of RBC Investor Services costs.  Higher variable compensation on improved results also contributed to the increase.

Q4 2012 vs. Q3 2012

Net income increased $21 million due to higher funding and liquidity trading results and a full quarter of RBC Investor Services earnings, partially offset by lower custodial fees, and lower securities lending as the prior quarter was favourably impacted by the European dividend season. The prior quarter was unfavourably impacted by a writedown of intangibles and costs related to the acquisition of the remaining 50% interest in RBC Dexia (RBC Investor Services) of $12 million ($11 million after-tax).

Capital Markets
		As at or for the three months ended
(Millions of Canadian dollars, except number of and percentage amounts    and as otherwise noted)			October 31 2012			July 31 2012		October 31 2011
	Net interest income (1)	$	663		$	631	$	560
	Non-interest income		893			982		408
Total revenue (1)			1,556			1,613		968
	PCL		63			24		5
	Non-interest expense		916			932		802
Net income before income taxes and NCI in subsidiaries			577			657		161
Net income		$	410		$	429	$	125
Revenue by business
	Global Markets	$	842		$	848	$	534
	Corporate and Investment Banking		687			732		548
	Other		27			33		(114)
Key ratios
	ROE		12.9%			14.3%		4.7%
Selected average balance sheet information
	Total assets	$	356,100		$	362,400	$	352,900
	Trading securities		91,800			89,600		101,300
	Loans and acceptances		51,300			49,400		38,900
	Deposits		32,000			32,000		26,700
	Attributed capital		12,050			11,350		8,950
Other information
	Number of employees (FTE)		3,533			3,712		3,510
Credit information
	Gross impaired loans as a % of average net loans and acceptances		0.76%			0.41%		0.59%
	PCL on impaired loans as a % of average net loans and acceptances		0.49%			0.20%		0.05%

(1)	The taxable equivalent basis (teb) adjustment for the three months ended October 31, 2012 was $104 million (July 31, 2012 - $88 million, October 31, 2011 - $85 million). See the How we measure and report our business segments section of our 2012 Annual Report for additional information.

Q4 2012 vs. Q4 2011

Net income of $410 million increased $285 million, primarily due to higher fixed income trading results reflecting improved market conditions compared to the challenging market conditions in the prior year. Higher corporate and investment banking results primarily in the U.S. also contributed to the increase. These factors were partially offset by higher PCL and a higher effective tax rate reflecting increased earnings in the U.S. Our prior year was unfavourably impacted by a loss of $105 million ($77 million after-tax) related to a consolidated special purpose entity from which we exited all transactions during the first quarter of 2012.

Total revenue of $1,556 million increased $588 million from the prior year, largely due to higher fixed income trading reflecting increased client activity, greater market liquidity and tightening credit spreads compared to the prior year. Higher equity and debt origination reflecting solid issuance activity, strong client growth in lending and increased loan syndication activity, mainly in the U.S. also contributed to the increase.

PCL of $63 million increased $58 million from the prior year, largely reflecting a provision taken this quarter for a single account.

Non-interest expense of $916 million increased $114 million or 14% from the prior year, largely due to higher variable compensation reflecting improved results and higher costs in support of business growth partially offset by our cost management initiatives.

Q4 2012 vs. Q3 2012

Net income of $410 million decreased $19 million or 4% from the prior quarter, mainly due to lower trading results particularly at the end of the quarter reflecting increased market uncertainty due to Hurricane Sandy and the U.S. presidential election, lower loan syndication activity primarily in the U.S. as compared to the robust activity in the prior quarter, and higher PCL related to a single account as noted above. These factors were partially offset by higher equity origination, primarily in the U.S. and Canada.

Corporate Support
				As at or for the three months ended
					October 31			July 31		October 31
(Millions of Canadian dollars)					2012			2012		2011
	Net interest (loss) income (1)			$	(57)		$	17	$	(38)
	Non-interest income				17			32		86
Total (loss) revenue (1)					(40)			49		48
	PCL				1			-		1
	Non-interest expense				9			23		28
	Income taxes (recoveries)				(44)			(297)		(99)
Net income (loss) (2)				$	(6)		$	323	$	118

(1)	Teb adjusted.
(2)	Net income (loss) reflects income attributable to both shareholders and non-controlling interest (NCI). Net income attributable to NCI for the three months ended October 31, 2012 was $23 million (July 31, 2012 - $24 million; October 31, 2011 - $25 million).

Due to the nature of activities and consolidated adjustments reported in this segment, we believe that a comparative period analysis is not relevant. The following identifies the material items affecting the reported results in each period.

Net interest income (loss) and income taxes (recoveries) in each quarter in Corporate Support include the deduction of the teb adjustments related to the gross-up of income from Canadian taxable corporate dividends recorded in Capital Markets. The amount deducted from net interest income (loss) was offset by an equivalent increase in income taxes (recoveries). The teb amount for the three months ended October 31, 2012 was $104 million as compared to $88 million in the prior quarter and $85 million in the prior year. For further discussion, refer to the How we measure and report our business segments section of our 2012 Annual Report.

In addition to the teb impacts noted above, the following paragraphs identify the other material items affecting the reported results in each quarter.

Q4 2012

Net loss was $6 million mainly due to net unfavourable tax adjustments and a loss attributed to an equity accounted for investment. These factors were largely offset by asset/liability management activities.

Q3 2012

Net income was $323 million largely due to the previously announced settlement of several tax matters with the CRA which resulted in the release of $128 million of tax uncertainty provisions and interest income of $72 million ($53 million after-tax) related to a refund of taxes paid. Our results benefitted from other net favourable tax adjustments and asset/liability management activities.

Q4 2011

Net income was $118 million mainly due to net favourable tax adjustments, partially offset by a loss attributed to an equity accounted for investment.

---

KEY PERFORMANCE AND NON-GAAP MEASURES

---

Additional information about these and other key performance and non-GAAP measures can be found under the Key performance and Non-GAAP Measures section of our 2012 Annual Report.

Return on Equity

We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics such as net income and return on equity (ROE). The following table provides a summary of our ROE calculations:

Calculation of Return on equity
		For the three months ended															For the year ended
		October 31 2012															October 31 2012
(Millions of Canadian dollars, except     percentage amounts)	Personal & Commercial Banking			Wealth Management		Insurance		Investor & Treasury Services		Capital Markets		Corporate Support		Total			Total
Net income available to common    shareholders from continuing operations		$	1,013	$	198	$	191	$	67	$	390	$	(36)	$	1,823		$	7,235
Net income available to common    shareholders from discontinued operations			-		-		-		-		-		-		-			(51)
Net income available to common shareholders			1,013		198		191		67		390		(36)		1,823			7,184
Average common equity from continuing     operations (1) (2)		$	12,300	$	5,150	$	1,500	$	2,100	$	12,050	$	5,750	$	38,850		$	36,750
Average common equity from discontinued    operations (1)			-		-		-		-		-		-		-			400
Total average common equity		$	12,300	$	5,150	$	1,500	$	2,100	$	12,050	$	5,750	$	38,850		$	37,150
ROE from continuing operations		32.8%		15.3%		50.7%		13.0%		12.9%		n.m.		18.7%				19.5%
ROE														18.7%				19.3%

(1)	Average common equity represent rounded figures. ROE is based on actual balances before rounding.
(2)	The amounts for the segments are referred to as attributed capital or economic capital.

n.m not meaningful 

Non-GAAP measures

Given the nature and purpose of our management reporting framework, we use and report certain non-GAAP financial measures, which are not defined nor do they have a standardized meaning under GAAP and may not be comparable with similar information disclosed by other financial institutions. We believe these measures provide readers with a better understanding of our performance and should enhance the comparability of our comparative periods.

Non-GAAP measures - Consolidated Results
		For the three months ended
						July 31, 2012 Items excluded
(Millions of Canadian dollars, except per share and percentage amounts)		As reported			Tax settlement (1)			Mortgage prepayment interest (2)			Loss related to the acquisition of RBC Dexia (3)			Sub-total			Results and measures excluding items
Net income		$	2,240		$	(181)		$	(92)		$	11		$	(262)		$	1,978
Average number of diluted common shares (thousands)			1,469,513															1,469,513
Diluted earnings per share (in dollars)		$	1.47		$	(.12)		$	(.06)		$	-		$	(.18)		$	1.29
Diluted earnings per share from continuing operations (in dollars)			1.47			(.12)			(.06)			-			(.18)			1.29
Average common equity		$	37,700														$	37,700
ROE from continuing operations (4)			22.7%															19.9%

(1)	The release of tax uncertainty provisions and interest income relates to the previously announced settlement of several tax matters with the CRA. For further details, refer to the Financial performance - Results from continuing operations of our 2012 Annual Report.
(2)	Relates to a change in estimate of mortgage prepayment interest. See the Key Corporate events of 2012 section of our 2012 Annual Report.
(3)	Comprised of a writedown of other intangibles of $7 million (before- and after-tax) and other costs of $5 million ($4 million after-tax).
(4)	Based on actual balances before rounding.

 

Non-GAAP measures - Canadian Banking
		For the three months ended
		July 31, 2012
(Millions of Canadian dollars)		As reported			Mortgage prepayment interest adjustments (1)		Adjusted
	Net interest income	$	2,248	$	(125)	$	2,123
	Non-interest income		845		-		845
Total revenue			3,093		(125)		2,968
	Revenue for Personal Financial Services		1,768		(125)		1,643
Net income before taxes			1,529		(125)		1,404
Net income		$	1,127	$	(92)	$	1,035
Selected average balances and other information
	Net income available to common shareholders	$	1,110	$	(92)	$	1,018
	Average common equity		10,050		-		10,050
	ROE		43.8%				38.9%
	Net interest income	$	2,248	$	(125)	$	2,123
	Average total earning assets		307,900		-		307,900
	NIM		2.91%				2.74%
	Non-interest expense	$	1,330	$	-	$	1,330
	Total revenue		3,093		(125)		2,968
	Efficiency ratio		43.0%				44.8%
	Revenue growth rate		10.5%				6.0%
	Non-interest expense growth rate		2.5%				2.5%
	Operating leverage		8.0%				3.5%

(1)	Relates to a change in estimate of mortgage prepayment interest. For further details, see the Accounting and control matters section of our 2012 Annual Report.

 

Consolidated Balance Sheets
		October 31				July 31			October 31
(Millions of Canadian dollars)			2012 (1)			2012 (2)			2011 (1)
Assets
Cash and due from banks		$	12,617		$	10,586		$	12,428
Interest-bearing deposits with banks			10,255			11,386			6,460
Securities
	Trading		120,783			117,050			128,128
	Available-for-sale		40,828			41,340			38,894
			161,611			158,390			167,022
Assets purchased under reverse repurchase agreements and securities borrowed			112,257			107,841			84,947
Loans
	Retail		301,185			297,637			284,745
	Wholesale		79,056			77,516			64,752
			380,241			375,153			349,497
	Allowance for loan losses		(1,997)			(1,937)			(1,967)
			378,244			373,216			347,530
Investments for account of segregated fund holders			383			357			320
Other
	Customers' liability under acceptances		9,385			9,115			7,689
	Derivatives		91,293			103,257			99,650
	Premises and equipment, net		2,691			2,672			2,490
	Goodwill		7,485			7,466			7,610
	Other intangibles		2,686			2,649			2,115
	Assets of discontinued operations		-			-			27,152
	Investments in associates		125			163			142
	Prepaid pension benefit cost		1,049			984			311
	Other assets		35,019			36,312			27,967
			149,733			162,618			175,126
Total assets		$	825,100		$	824,394		$	793,833
Liabilities
Deposits
	Personal	$	179,502		$	176,698		$	166,030
	Business and government		312,882			308,261			297,511
	Bank		15,835			17,845			15,561
			508,219			502,804			479,102
Insurance and investment contracts for account of segregated fund holders			383			357			320
Other
	Acceptances		9,385			9,115			7,689
	Obligations related to securities sold short		40,756			43,562			44,284
	Obligations related to assets sold under repurchase agreements and securities loaned		64,032			55,908			42,735
	Derivatives		96,761			108,819			100,522
	Insurance claims and policy benefit liabilities		7,921			7,965			7,119
	Liabilities of discontinued operations		-			-			20,076
	Accrued pension and other post-employment benefit expense		1,729			1,631			1,639
	Other liabilities		41,371			40,762			39,241
			261,955			267,762			263,305
Subordinated debentures			7,615			7,646			8,749
Trust capital securities			900			900			894
Total liabilities		$	779,072		$	779,469		$	752,370
Equity attributable to shareholders
	Preferred shares	$	4,813		$	4,813		$	4,813
	Common shares (shares issued - 1,445,302,600, 1,444,300,306 and 1,438,376,317)		14,323			14,279			14,010
	Treasury shares  - preferred (shares held - (41,632), 63,195 and 6,341)		1			(2)			-
	- common (shares held - (543,276), (261,419) and (146,075))		30			13			8
	Retained earnings		24,270			23,310			20,381
	Other components of equity		830			755			490
			44,267			43,168			39,702
Non-controlling interests			1,761			1,757			1,761
Total equity			46,028			44,925			41,463
Total liabilities and equity		$	825,100		$	824,394		$	793,833

(1)	Derived from audited financial statements.
(2)	Derived from unaudited financial statements.

 

Consolidated Statements of Income
		For the three-months ended								For the year ended
		October 31			July 31		October 31			October 31		October 31
(Millions of Canadian dollars, except per share amounts)		2012 (2)			2012 (2)		2011 (2)			2012 (1)		2011 (1)
Interest income
	Loans	$	4,026		$	4,170	$	3,874		$	15,972	$	15,236
	Securities		913			946		1,124			3,874		4,750
	Assets purchased under reverse repurchase agreements and securities borrowed		249			249		200			945		736
	Deposits		14			14		18			61		91
			5,202			5,379		5,216			20,852		20,813
Interest expense
	Deposits		1,468			1,502		1,527			6,017		6,334
	Other liabilities		475			505		635			1,977		2,723
	Subordinated debentures		84			83		97			360		399
			2,027			2,090		2,259			8,354		9,456
Net interest income			3,175			3,289		2,957			12,498		11,357
Non-interest income
	Insurance premiums, investment and fee income		1,098			1,323		1,214			4,897		4,474
	Trading revenue		258			295		(219)			1,298		655
	Investment management and custodial fees		566			515		497			2,074		1,999
	Mutual fund revenue		569			514		505			2,088		1,975
	Securities brokerage commissions		330			292		331			1,213		1,331
	Service charges		362			347		343			1,376		1,323
	Underwriting and other advisory fees		375			379		277			1,434		1,485
	Foreign exchange revenue, other than trading		203			129		181			655		684
	Card service revenue		234			243		221			920		882
	Credit fees		220			267		173			848		707
	Net gain (loss) on available-for-sale securities		80			42		(2)			120		104
	Share of (loss) profit in associates		(1)			9		(12)			24		(7)
	Securitization revenue		-			-		(1)			(1)		-
	Other		49			112		227			328		669
Non-interest income			4,343			4,467		3,735			17,274		16,281
Total revenue			7,518			7,756		6,692			29,772		27,638
Provision for credit losses			362			324		276			1,301		1,133
Insurance policyholder benefits, claims and acquisition expense			770			1,000		867			3,621		3,358
Non-interest expense
	Human resources		2,332			2,313		2,032			9,287		8,661
	Equipment		293			271		264			1,083		1,010
	Occupancy		288			281		268			1,107		1,026
	Communications		209			193		203			764		746
	Professional fees		216			167		213			695		692
	Outsourced item processing		55			64		64			254		266
	Amortization of other intangibles		142			130		126			528		481
	Impairment of goodwill and other intangibles		-			7		-			168		-
	Other		338			333		360			1,274		1,285
			3,873			3,759		3,530			15,160		14,167
Income before income taxes from continuing operations			2,513			2,673		2,019			9,690		8,980
Income taxes			602			433		410			2,100		2,010
Net income from continuing operations			1,911			2,240		1,609			7,590		6,970
Net loss from discontinued operations			-			-		(38)			(51)		(526)
Net income		$	1,911		$	2,240	$	1,571		$	7,539	$	6,444
Net income attributable to:
	Shareholders	$	1,888		$	2,216	$	1,546		$	7,442	$	6,343
	Non-controlling interests		23			24		25			97		101
		$	1,911		$	2,240	$	1,571		$	7,539	$	6,444
Basic earnings per share (in dollars)		$	1.26		$	1.49	$	1.03		$	4.98	$	4.25
Basic earnings per share from continuing operations (in dollars)			1.26			1.49		1.06			5.01		4.62
Basic loss per share from discontinued operations (in dollars)			-			-		(.03)			(.03)		(.37)
Diluted earnings per share (in dollars)			1.25			1.47		1.02			4.93		4.19
Diluted earnings per share from continuing operations (in dollars)			1.25			1.47		1.05			4.96		4.55
Diluted loss per share from discontinued operations (in dollars)			-			-		(.03)			(.03)		(.36)
Dividends per common share (in dollars)			.60			.57		.54			2.28		2.08

(1)	Derived from audited financial statements.
(2)	Derived from unaudited financial statements.

 

Consolidated Statements of Comprehensive Income
			For the three-months ended								For the year ended
			October 31			July 31		October 31			October 31		October 31
(Millions of Canadian dollars)				2012 (2)			2012 (2)		2011 (2)			2012 (1)		2011 (1)
Net income			$	1,911		$	2,240	$	1,571		$	7,539	$	6,444
Other comprehensive income (loss), net of taxes
	Net change in unrealized gains (losses) on available-for-sale securities
		Net unrealized gains (losses) on available-for-sale securities		83			121		(52)			193		(30)
		Reclassification of net (gains) losses on available-for-sale securities to income		(32)			(12)		(2)			(33)		13
				51			109		(54)			160		(17)
	Foreign currency translation adjustments
		Unrealized foreign currency translation gains (losses)		144			244		1,132			113		(625)
		Net foreign currency translation (losses) gains from hedging activities		(89)			(124)		(647)			-		717
		Reclassification of losses (gains) on foreign currency translation to income		-			11		(1)			11		(1)
				55			131		484			124		91
	Net change in cash flow hedges
		Net (losses) gains on derivatives designated as cash flow hedges		(20)			49		142			32		298
		Reclassification of (gains) losses on derivatives designated as cash flow hedges to income		(11)			9		47			25		132
				(31)			58		189			57		430
Total other comprehensive income, net of taxes				75			298		619			341		504
Total comprehensive income			$	1,986		$	2,538	$	2,190		$	7,880	$	6,948
Total comprehensive income attributable to:
	Shareholders		$	1,963		$	2,514	$	2,164		$	7,782	$	6,847
	Non-controlling interests			23			24		26			98		101
			$	1,986		$	2,538	$	2,190		$	7,880	$	6,948

(1)	Derived from audited financial statements.
(2)	Derived from unaudited financial statements.

	Consolidated Statements of Changes in Equity
														Other components of equity
(Millions of Canadian dollars)				Preferred shares		Common shares		Treasury shares - preferred		Treasury shares - common		Retained earnings		Available- for-sale securities		Foreign currency translation		Cash flow hedges			Total Other components of equity	Equity attributable Shareholder		Non- controlling interests		Total equity
Balance at November 1, 2010 (1)				$	4,813	$	13,378	$	(2)	$	(81)	$	17,287	$	277	$	(20)	$	(271)	$	(14)	$	35,381	$	2,094	$	37,475
Changes in equity
	Issues of share capital				-		632		-		-		-		-		-		-		-		632		-		632
	Sales of treasury shares				-		-		97		6,074		-		-		-		-		-		6,171		-		6,171
	Purchases of treasury shares				-		-		(95)		(5,985)		-		-		-		-		-		(6,080)		(324)		(6,404)
	Share-based compensation awards				-		-		-		-		(33)		-		-		-		-		(33)		-		(33)
	Dividends				-		-		-		-		(3,237)		-		-		-		-		(3,237)		(93)		(3,330)
	Other				-		-		-		-		21		-		-		-		-		21		(14)		7
	Net income				-		-		-		-		6,343		-		-		-		-		6,343		101		6,444
	Other components of equity																				-
		Net change in unrealized gains (losses) on																			-
			available-for-sale securities		-		-		-		-		-		(18)		-		-		(18)		(18)		(2)		(20)
		Foreign currency translation adjustments			-		-		-		-		-		-		91		-		91		91		(1)		90
		Net change in cash flow hedges			-		-		-		-		-		-		-		431		431		431		-		431
Balance at October 31, 2011				$	4,813	$	14,010	$	-	$	8	$	20,381	$	259	$	71	$	160	$	490	$	39,702	$	1,761	$	41,463
Changes in equity
	Issues of share capital				-		313		-		-		-		-		-		-		-		313		-		313
	Sales of treasury shares				-		-		98		5,186		-		-		-		-		-		5,284		-		5,284
	Purchases of treasury shares				-		-		(97)		(5,164)		-		-		-		-		-		(5,261)		-		(5,261)
	Share-based compensation awards				-		-		-		-		(1)		-		-		-		-		(1)		-		(1)
	Dividends				-		-		-		-		(3,549)		-		-		-		-		(3,549)		(92)		(3,641)
	Other				-		-		-		-		(3)		-		-		-		-		(3)		(6)		(9)
	Net income				-		-		-		-		7,442		-		-		-		-		7,442		97		7,539
	Other components of equity																				-
		Net change in unrealized gains (losses) on																			-
			available-for-sale securities		-		-		-		-		-		160		-		-		160		160		1		161
		Foreign currency translation adjustments			-		-		-		-		-		-		124		-		124		124		-		124
		Net change in cash flow hedges			-		-		-		-		-		-		-		56		56		56		-		56
Balance at October 31, 2012 (1)				$	4,813	$	14,323	$	1	$	30	$	24,270	$	419	$	195	$	216	$	830	$	44,267	$	1,761	$	46,028

 

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_{CAUTION REGARDING FORWARD-LOOKING STATEMENTS}

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From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this Q4 2012 Earnings Release, in other filings with Canadian regulators or the United Stated Securitized and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements in this document include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, the economic, market and regulatory review and outlook for Canadian, U.S., European and global economies, the outlook and priorities for each of our business segments, and the risk environment including our liquidity and funding management. The forward-looking information contained in this document is presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented and our financial performance objectives, vision, strategic goals and financial performance objectives, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and "project" and similar expressions of future or conditional verbs such as "will", "may", "should", "could" or "would".

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our financial performance objectives, vision and strategic goals will not be achieved. We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors - many of which are beyond our control and the effects of which can be difficult to predict - include: credit, market, liquidity and funding, operational, legal and regulatory compliance, insurance, reputation and strategic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2012 Annual Report; the impact of changes in laws and regulations, including relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the Basel Committee on Banking Supervision's global standards for capital and liquidity reform, over-the-counter derivatives reform, the payments system in Canada, consumer protection measures and regulatory reforms in the U.K. and Europe; general business and economic market conditions in Canada, the United States and certain other countries in which we operate, including the effects of the European sovereign debt crisis, and the high levels of Canadian household debt; cybersecurity; the effects of changes in government fiscal, monetary and other policies; the effects of competition in the markets in which we operate; our ability to attract and retain employees; the accuracy and completeness of information concerning our clients and counterparties; judicial or regulatory judgments and legal proceedings; development and integration of our distribution networks; and the impact of environmental issues.

We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Material economic assumptions underlying the forward-looking statements contained in this Q4 2012 Earnings Release are set out in the Overview and Outlook section and for each business segment under the heading Outlook and priorities in our 2012 Annual Report. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.

Additional information about these and other factors can be found in the Risk management and Overview of other risks sections of our 2012 Annual Report.

Information contained in or otherwise accessible through the websites mentioned does not form part of this earnings release. All references in this earnings release to websites are inactive textual references and are for your information only.

ACCESS TO QUARTERLY RESULTS MATERIALS

Interested investors, the media and others may review this Q4 2012 Earnings Release, quarterly results slides, Supplementary Financial Information and our 2012 Annual Report, 2012 Annual Information Form (AIF) and Annual Report on Form 40-F (Form 40-F) on our website at rbc.com/investorrelations. Shareholders may request a hard copy of our 2012 Annual Report, AIF and Form 40-F free of charge by contacting Investor Relations at [phone]. Our Form 40-F will be filed with the SEC.

Quarterly conference call and webcast presentation

Our conference call is scheduled for Thursday, November 29, 2012 at 8:00 a.m. (EDT) and will feature a presentation about our fourth quarter and 2012 results by RBC executives. It will be followed by a question and answer period with analysts.

Interested parties can access the call live on a listen-only basis at: www.rbc.com/investorrelations/ir_events_presentations.html or by telephone [phone] or 1-866-696-5910, passcode 1853457#). Please call between 7:50 a.m. and 7:55 a.m. (EDT).

Management's comments on results will be posted on our website shortly following the call. Also, a recording will be available by 5:00 p.m. (EDT) on November 29, 2012 until February 27, 2013 at: www.rbc.com/investorrelations/ir_quarterly.html or by telephone [phone] or 1-800-408-3053, passcode 3629188#).

ABOUT RBC

Royal Bank of Canada (RY on TSX and NYSE) and its subsidiaries operate under the master brand name RBC. We are Canada's largest bank as measured by assets and market capitalization, and among the largest banks in the world, based on market capitalization. We are one of North America's leading diversified financial services companies, and provide personal and commercial banking, wealth management services, insurance, investor services and wholesale banking on a global basis. We employ approximately 80,000 full- and part-time employees who serve more than 15 million personal, business, public sector and institutional clients through offices in Canada, the U.S. and 49 other countries. For more information, please visit rbc.com.

Trademarks used in this earnings release include the LION & GLOBE Symbol, ROYAL BANK OF CANADA, RBC and RBC INVESTOR SERVICES which are trademarks of Royal Bank of Canada used by Royal Bank of Canada and/or by its subsidiaries under license. All other trademarks mentioned in this report, which are not the property of Royal Bank of Canada, are owned by their respective holders.

 

SOURCE: RBC

Media Relations Contact
Tanis Feasby, Director, Financial Communications, [email protected], 416-955-5172 or 1-888-880-2173 (toll-free outside Toronto)
Rina Cortese, Media Relations, [email protected], 416-974-5506 or 1-888-880-2173 (toll-free outside Toronto)

Investor Relations Contacts
Amy Cairncross, VP & Head, Investor Relations, [email protected], 416-955-7803
Karen McCarthy, Director, Investor Relations, [email protected], 416-955-7809
Lynda Gauthier, Director, Investor Relations, [email protected], 416-955-7808
Robert Colangelo, Associate Director, Investor Relations, [email protected], 416-955-2049