Royal Bank of Canada (RY)
Market Price (7/8/2026): $209.11 | Market Cap: $291.4 BilSector: Financials | Industry: Diversified Banks
Royal Bank of Canada (RY)
Market Price (7/8/2026): $209.11Market Cap: $291.4 BilSector: FinancialsIndustry: Diversified Banks
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 7.6%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 3.3%, FCF Yield is 24% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 106%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 103%, CFO LTM is 73 Bil, FCF LTM is 71 Bil Stock buyback supportStock Buyback 3Y Total is 36 Bil Low stock price volatilityVol 12M is 15% Megatrend and thematic driversMegatrends include Fintech & Digital Payments, AI in Financial Services, and Sustainable Finance. Themes include Digital Payments, Show more. | Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% | Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 70% Key risksRY key risks include [1] significant exposure to the Canadian housing market through its residential mortgage portfolio. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 7.6%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 3.3%, FCF Yield is 24% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 106%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 103%, CFO LTM is 73 Bil, FCF LTM is 71 Bil |
| Stock buyback supportStock Buyback 3Y Total is 36 Bil |
| Low stock price volatilityVol 12M is 15% |
| Megatrend and thematic driversMegatrends include Fintech & Digital Payments, AI in Financial Services, and Sustainable Finance. Themes include Digital Payments, Show more. |
| Trading close to highsDist 52W High is 0.0%, Dist 3Y High is 0.0% |
| Debt is significantNet D/ENet Debt/Equity. Debt net of cash. Negative indicates net cash. Equity is taken as the Market Capitalization is 70% |
| Key risksRY key risks include [1] significant exposure to the Canadian housing market through its residential mortgage portfolio. |
Qualitative Assessment
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Royal Bank of Canada (RY) stock has gained about 30% since 3/31/2026 because of the following key factors:
1. Royal Bank of Canada reported strong fiscal Q2 2026 results, surpassing analyst expectations. The bank announced net income of $5.5 billion for the quarter ended April 30, 2026, marking a 25% increase year-over-year. Diluted earnings per share (EPS) rose 27% year-over-year to $3.85, with adjusted diluted EPS reaching $3.90, exceeding analyst forecasts of $3.77-$3.78. Additionally, revenue increased by 11% year-over-year to $17.45 billion, surpassing the estimated $17.15 billion. This robust performance was driven by growth across its diversified business segments, including a 17% increase in Personal Banking net income, a 43% increase in Commercial Banking operations, a 28% rise in Wealth Management net profit to $1.19 billion, and a 23% increase in Capital Markets net profit to $1.48 billion.
2. The company enhanced shareholder returns through a significant dividend increase and a share repurchase program. Concurrent with its strong fiscal Q2 2026 earnings, Royal Bank of Canada raised its quarterly dividend to $1.76 per share, an increase of $0.12 from the previous $1.64 per share. The bank also declared its intention to repurchase up to 45 million of its common shares, representing approximately 3% of outstanding common shares. These actions signal strong financial health and a commitment to returning capital to shareholders.
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Royal Bank of Canada (RY) stock has gained about 30% since 3/31/2026 because of the following key factors:
1. Royal Bank of Canada reported strong fiscal Q2 2026 results, surpassing analyst expectations. The bank announced net income of $5.5 billion for the quarter ended April 30, 2026, marking a 25% increase year-over-year. Diluted earnings per share (EPS) rose 27% year-over-year to $3.85, with adjusted diluted EPS reaching $3.90, exceeding analyst forecasts of $3.77-$3.78. Additionally, revenue increased by 11% year-over-year to $17.45 billion, surpassing the estimated $17.15 billion. This robust performance was driven by growth across its diversified business segments, including a 17% increase in Personal Banking net income, a 43% increase in Commercial Banking operations, a 28% rise in Wealth Management net profit to $1.19 billion, and a 23% increase in Capital Markets net profit to $1.48 billion.
2. The company enhanced shareholder returns through a significant dividend increase and a share repurchase program. Concurrent with its strong fiscal Q2 2026 earnings, Royal Bank of Canada raised its quarterly dividend to $1.76 per share, an increase of $0.12 from the previous $1.64 per share. The bank also declared its intention to repurchase up to 45 million of its common shares, representing approximately 3% of outstanding common shares. These actions signal strong financial health and a commitment to returning capital to shareholders.
3. A notable reduction in provisions for credit losses (PCLs) contributed positively to profitability. Royal Bank of Canada's profit growth was significantly aided by a decline in loan loss provisions, which decreased to $912 million in fiscal Q2 2026 from $1.42 billion in the prior year's comparable quarter. This reduction reflects improved credit quality and effective risk management within the bank's operations.
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Stock Movement Drivers
Fundamental Drivers
The 30.1% change in RY stock from 3/31/2026 to 7/7/2026 was primarily driven by a 23.1% change in the company's P/E Multiple.| (LTM values as of) | 3312026 | 7072026 | Change |
|---|---|---|---|
| Stock Price ($) | 160.68 | 209.07 | 30.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 67,735 | 69,508 | 2.6% |
| Net Income Margin (%) | 31.0% | 31.8% | 2.6% |
| P/E Multiple | 10.7 | 13.2 | 23.1% |
| Shares Outstanding (Mil) | 1,399 | 1,393 | 0.4% |
| Cumulative Contribution | 30.1% |
Market Drivers
3/31/2026 to 7/7/2026| Return | Correlation | |
|---|---|---|
| RY | 30.1% | |
| Market (SPY) | 15.0% | 45.9% |
| Sector (XLF) | 13.5% | 51.7% |
Fundamental Drivers
The 24.3% change in RY stock from 12/31/2025 to 7/7/2026 was primarily driven by a 13.5% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 7072026 | Change |
|---|---|---|---|
| Stock Price ($) | 168.14 | 209.07 | 24.3% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 66,532 | 69,508 | 4.5% |
| Net Income Margin (%) | 30.6% | 31.8% | 4.1% |
| P/E Multiple | 11.6 | 13.2 | 13.5% |
| Shares Outstanding (Mil) | 1,404 | 1,393 | 0.7% |
| Cumulative Contribution | 24.3% |
Market Drivers
12/31/2025 to 7/7/2026| Return | Correlation | |
|---|---|---|
| RY | 24.3% | |
| Market (SPY) | 9.9% | 58.2% |
| Sector (XLF) | 2.9% | 52.6% |
Fundamental Drivers
The 63.7% change in RY stock from 6/30/2025 to 7/7/2026 was primarily driven by a 33.0% change in the company's P/E Multiple.| (LTM values as of) | 6302025 | 7072026 | Change |
|---|---|---|---|
| Stock Price ($) | 127.68 | 209.07 | 63.7% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 62,127 | 69,508 | 11.9% |
| Net Income Margin (%) | 29.3% | 31.8% | 8.6% |
| P/E Multiple | 9.9 | 13.2 | 33.0% |
| Shares Outstanding (Mil) | 1,411 | 1,393 | 1.3% |
| Cumulative Contribution | 63.7% |
Market Drivers
6/30/2025 to 7/7/2026| Return | Correlation | |
|---|---|---|
| RY | 63.7% | |
| Market (SPY) | 22.0% | 54.6% |
| Sector (XLF) | 8.3% | 51.7% |
Fundamental Drivers
The 143.9% change in RY stock from 6/30/2023 to 7/7/2026 was primarily driven by a 57.7% change in the company's P/E Multiple.| (LTM values as of) | 6302023 | 7072026 | Change |
|---|---|---|---|
| Stock Price ($) | 85.73 | 209.07 | 143.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 50,392 | 69,508 | 37.9% |
| Net Income Margin (%) | 28.3% | 31.8% | 12.5% |
| P/E Multiple | 8.3 | 13.2 | 57.7% |
| Shares Outstanding (Mil) | 1,388 | 1,393 | -0.4% |
| Cumulative Contribution | 143.9% |
Market Drivers
6/30/2023 to 7/7/2026| Return | Correlation | |
|---|---|---|
| RY | 143.9% | |
| Market (SPY) | 74.6% | 56.3% |
| Sector (XLF) | 73.7% | 60.1% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| RY Return | 34% | -8% | 12% | 24% | 46% | 24% | 210% |
| Peers Return | 47% | -13% | 18% | 43% | 41% | 12% | 236% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | 10% | 101% |
Monthly Win Rates [3] | |||||||
| RY Win Rate | 67% | 42% | 50% | 50% | 75% | 71% | |
| Peers Win Rate | 70% | 43% | 53% | 65% | 72% | 51% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 57% | |
Max Drawdowns [4] | |||||||
| RY Max Drawdown | -8% | -26% | -22% | -6% | -12% | -10% | |
| Peers Max Drawdown | -13% | -35% | -24% | -13% | -27% | -19% | |
| S&P 500 Max Drawdown | -5% | -25% | -10% | -8% | -19% | -9% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: JPM, BAC, WFC, MS, GS.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 7/7/2026 (YTD)
How Low Can It Go
| Event | RY | S&P 500 |
|---|---|---|
| 2025 US Tariff Shock | ||
| % Loss | -10.1% | -18.8% |
| % Gain to Breakeven | 11.2% | 23.1% |
| Time to Breakeven | 21 days | 79 days |
| Summer-Fall 2023 Five Percent Yield Shock | ||
| % Loss | -19.8% | -9.5% |
| % Gain to Breakeven | 24.7% | 10.5% |
| Time to Breakeven | 48 days | 24 days |
| 2023 SVB Regional Banking Crisis | ||
| % Loss | -13.6% | -6.7% |
| % Gain to Breakeven | 15.7% | 7.1% |
| Time to Breakeven | 215 days | 31 days |
| 2022 Inflation Shock & Fed Tightening | ||
| % Loss | -17.9% | -24.5% |
| % Gain to Breakeven | 21.8% | 32.4% |
| Time to Breakeven | 112 days | 427 days |
| 2020 COVID-19 Crash | ||
| % Loss | -39.1% | -33.7% |
| % Gain to Breakeven | 64.3% | 50.9% |
| Time to Breakeven | 239 days | 140 days |
| Q4 2018 Fed Policy Error / Growth Scare | ||
| % Loss | -16.4% | -19.2% |
| % Gain to Breakeven | 19.6% | 23.8% |
| Time to Breakeven | 113 days | 105 days |
In The Past
Royal Bank of Canada's stock fell -10.1% during the 2025 US Tariff Shock. Such a loss loss requires a 11.2% gain to breakeven.
Preserve Wealth
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Asset Allocation
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| Event | RY | S&P 500 |
|---|---|---|
| 2020 COVID-19 Crash | ||
| % Loss | -39.1% | -33.7% |
| % Gain to Breakeven | 64.3% | 50.9% |
| Time to Breakeven | 239 days | 140 days |
| 2015-2016 China Devaluation / Global Growth Scare | ||
| % Loss | -20.6% | -12.2% |
| % Gain to Breakeven | 26.0% | 13.9% |
| Time to Breakeven | 56 days | 62 days |
| 2014-2016 Oil Price Collapse | ||
| % Loss | -36.0% | -6.8% |
| % Gain to Breakeven | 56.2% | 7.3% |
| Time to Breakeven | 323 days | 15 days |
| 2011 US Debt Ceiling Crisis & European Contagion | ||
| % Loss | -22.5% | -17.9% |
| % Gain to Breakeven | 29.1% | 21.8% |
| Time to Breakeven | 146 days | 123 days |
| 2010 Eurozone Sovereign Debt Crisis / Flash Crash | ||
| % Loss | -23.4% | -15.4% |
| % Gain to Breakeven | 30.6% | 18.2% |
| Time to Breakeven | 245 days | 125 days |
| 2008-2009 Global Financial Crisis | ||
| % Loss | -57.0% | -53.4% |
| % Gain to Breakeven | 132.4% | 114.4% |
| Time to Breakeven | 154 days | 1085 days |
In The Past
Royal Bank of Canada's stock fell -10.1% during the 2025 US Tariff Shock. Such a loss loss requires a 11.2% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Royal Bank of Canada (RY)
Royal Bank of Canada (RBC) is a diversified global financial services company providing a broad range of banking, wealth management, and capital markets services. At its core, RBC serves individual consumers and small to medium-sized commercial businesses with everyday banking needs. This includes offering checking and savings accounts, various lending products like home equity and auto financing, credit cards, mutual funds, and cash management solutions for businesses. These services are delivered through a widespread network of branches, ATMs, and mobile platforms.
Beyond personal and commercial banking, RBC provides comprehensive wealth management advice and solutions to high-net-worth and ultra-high-net-worth individuals, as well as institutional clients. The company also operates an insurance segment, offering a full suite of life, health, home, auto, travel, and business insurance products to individuals and groups. Additionally, through its Investor & Treasury Services segment, RBC provides asset servicing, custody, payments, and treasury services to financial and other institutional investors globally.
RBC's Capital Markets segment caters to corporations, institutional investors, asset managers, private equity firms, and governments worldwide. This segment specializes in corporate and investment banking, including the origination and distribution of equity and debt, advisory services, and sales and trading activities. Founded in 1864 and headquartered in Toronto, Canada, RBC has grown into a major financial institution serving a diverse client base across multiple financial sectors.
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Canada's J.P. Morgan Chase
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- Deposit Accounts: Offers checking, savings accounts, and guaranteed investment certificates for individuals and businesses.
- Lending & Credit: Provides personal loans, home equity financing, auto financing, credit cards, commercial loans, and leasing services.
- Wealth Management Solutions: Delivers advice-based solutions and strategies for high net worth, ultra-high net worth, and institutional clients.
- Insurance Products: Offers life, health, home, auto, travel, wealth, annuities, and reinsurance advice and solutions.
- Asset Servicing & Custody: Provides asset servicing, custody, and fund and investment administration to financial and institutional investors.
- Treasury & Transaction Services: Offers payments, cash and liquidity management, foreign exchange, and global securities finance services.
- Corporate & Investment Banking: Delivers corporate and investment banking, equity and debt origination, distribution, advisory, sales, and trading services.
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Royal Bank of Canada primarily serves a diversified customer base, including individuals, small and medium-sized businesses, corporations, and institutional clients. However, as the company does not sell primarily to a small number of identifiable, named corporate customers, its major individual customer categories are described below:
- Retail/Mass Market Individuals: This category includes individuals who utilize services such as checking and savings accounts, home equity financing, personal lending, credit cards, payment products, and basic investment products like mutual funds and self-directed brokerage accounts.
- High Net Worth and Ultra-High Net Worth Individuals: These are individuals seeking comprehensive, advice-based solutions and strategies for wealth management, including investment advice, estate planning, and other sophisticated financial services.
- Individuals Seeking Insurance: This segment comprises individuals purchasing various insurance products and solutions, including life, health, home, auto, travel, and wealth-related insurance, as well as annuities.
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David McKay, President & Chief Executive Officer
David McKay is the President and CEO of Royal Bank of Canada (RBC), a position he has held since 2014. He joined RBC in 1983 as a co-op student in computer programming and progressed through various senior roles in retail and business banking, group risk management, and corporate banking. Prior to becoming CEO, he served as Group Head of Canadian Banking (2008-2012) and then Group Head of Personal and Commercial Banking worldwide (2012-2014), where he was instrumental in reinventing the bank's retail operations for the digital age. Under his leadership, RBC has pursued strategic acquisitions, including City National Corporation in the U.S., Brewin Dolphin in the U.K., and most recently, HSBC Bank Canada, expanding the bank's global presence and capabilities. He is recognized as a passionate advocate for Canada's global competitiveness and for preparing the next generation for the future of work.
Katherine Gibson, Chief Financial Officer
Katherine Gibson was appointed Chief Financial Officer of Royal Bank of Canada, effective September 2024, after serving as interim CFO since April 2024. As CFO, she oversees RBC's Finance, Controllership, Corporate Treasury, Taxation, Investor Relations, Performance Management, and Corporate Development teams globally. Gibson has been with RBC for over two decades, holding a range of senior positions within the CFO Group, including Senior Vice President, Enterprise Finance & Controller. In this prior role, she was responsible for global head office finance, encompassing external, board, and management reporting, as well as accounting policy and financial management systems. Before joining RBC, she spent six years with an international accounting firm in Canada and Australia.
Maria Douvas, Chief Legal and Administrative Officer
Maria Douvas is the Chief Legal and Administrative Officer at RBC, a role in which she oversees the bank's global Legal, Regulatory Compliance, Government Affairs, Enterprise Strategy & Transformation, Corporate Development & Corporate Venture Capital teams, and the Enterprise Chief Operating Officer Group. She joined RBC in 2016 and has held increasingly senior positions, including Executive Vice President & General Counsel, U.S. General Counsel, and Global Head of Litigation. Prior to her tenure at RBC, Maria was a partner at a prominent international law firm and a federal prosecutor in the U.S. Attorney's Office for the Southern District of New York.
Neil McLaughlin, Group Head, RBC Wealth Management
Neil McLaughlin serves as the Group Head of RBC Wealth Management, where he has global oversight and strategic leadership of RBC's wealth management businesses. This includes wealth advisory businesses across Canada, the U.S., Europe, and Asia, as well as RBC Global Asset Management, RBC Investor Services, and RBC Direct Investing. He joined RBC in 1998 and has held various senior management and executive roles, including Group Head, Personal & Commercial Banking, and Executive Vice President, Business Financial Services. Neil played a critical role in RBC's acquisition and integration of HSBC Bank Canada.
Erica Nielsen, Group Head, RBC Personal Banking
Erica Nielsen is the Group Head of RBC Personal Banking, responsible for RBC's personal banking businesses in Canada, the Caribbean, and the U.S. Her previous roles at RBC, which she joined in 2013, include Executive Vice President of Personal Financing Products, where she set the strategic direction for consumer lending businesses. Erica was instrumental in the successful acquisition of HSBC Bank Canada due to her deep business experience and strategic vision. Before joining RBC, she was an Associate Partner with Oliver Wyman.
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The most significant risks include:
- Credit Risk: As a major financial institution with over $780 billion in gross loans, Royal Bank of Canada is highly exposed to credit risk. This risk stems from the potential for borrowers to default on their loan obligations, which can significantly impact the bank's profitability, especially during economic downturns, periods of rising interest rates, or increased unemployment.
- Regulatory Compliance, Legal, and Reputational Risk: Operating as a global financial institution, RBC is subject to extensive and evolving regulations across various jurisdictions. Changes in regulatory requirements, non-compliance, legal proceedings, and associated penalties or fines pose substantial threats. Additionally, any actions or events that damage the bank's reputation can lead to a loss of client trust, business, and market value.
- Operational Risk, including Cybersecurity Risk: Given the extensive use of technology across all its business segments, Royal Bank of Canada faces significant operational risks. This includes the potential for system failures, errors in processing transactions, or disruptions to services. Cybersecurity threats, such as data breaches and cyberattacks, are particularly critical, as they can lead to financial losses, compromise sensitive customer information, and severely damage the bank's reputation.
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Competition from digital-first financial service providers (Fintechs, Neo-banks, Insurtechs, and Robo-advisors) poses an emerging threat. These companies leverage technology to offer specific financial products such as payments, lending, investments, and insurance with lower fees, greater convenience, and superior digital user experiences. This directly competes with Royal Bank of Canada's Personal & Commercial Banking, Wealth Management, and Insurance segments, potentially eroding market share and placing pressure on traditional banking margins.
The potential for disintermediation by blockchain and decentralized finance (DeFi) in capital markets and investor services represents another emerging threat. While still evolving, these technologies offer the possibility of more efficient, transparent, and direct peer-to-peer transactions, asset tokenization, and settlement without the reliance on traditional intermediaries like banks. This could impact Royal Bank of Canada's Investor & Treasury Services and Capital Markets segments by reducing the demand for their conventional custodial, settlement, and trading infrastructure.
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The addressable markets for Royal Bank of Canada's (RY) main products and services are as follows:
-
Personal & Commercial Banking (Canada):
- The Canadian retail banking market generated revenue of approximately USD 102.1 billion in 2024.
- The Canadian commercial banking market size was approximately USD 488.6 billion in 2025.
- Wealth Management (Canada): The Canadian wealth management market manages approximately USD 6.5 trillion in client assets as of a recent historical assessment (around 2024), with projections to reach approximately USD 10 trillion by 2030.
-
Insurance (Canada):
- The Canada General Insurance Market was valued at approximately USD 59.98 billion in 2024.
- Total Canadian life insurance new annualized premium reached a record-high of approximately CAD 2.04 billion in 2024. Group life insurance generated over CAD 33 billion, and individual life insurance contributed slightly more than CAD 29 billion in 2024. The Canadian Gross Written Premium for insurance is projected to climb to $87.9 billion by 2028, up from $87.5 billion in 2023.
- Investor & Treasury Services (Global): The global asset servicing market size was valued at approximately USD 97.61 billion in 2024. North America dominated the asset servicing market share in 2022.
- Capital Markets (North America): The North America Investment Banking Market size was approximately USD 54.05 billion in 2024.
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Royal Bank of Canada (RY) is expected to drive future revenue growth over the next 2-3 years through several key areas:
- Continued Expansion in Wealth Management: This segment consistently demonstrates strong performance, with growth in fee-based client assets, market appreciation, and net sales contributing significantly to revenue. For instance, Q1 2026 saw Wealth Management net income increase by 32% year-over-year, reflecting record revenue. Additionally, Canadian Wealth Management assets under administration surpassed CAD 1 trillion for the first time, up 13% year-over-year.
- Growth in Personal and Commercial Banking Volumes and Spreads: Revenue growth in Personal Banking is being driven by higher net interest income, reflecting increased margins and volume growth. Personal Banking loan growth was 4% across all portfolios in Q1 2026. Commercial Banking also reported record net income, up 11% year-over-year, driven by higher volumes.
- Robust Performance in Capital Markets: Royal Bank of Canada's Capital Markets segment has reported record revenue and pre-provision pre-tax earnings. Revenue in Global Markets has been particularly strong, driven by higher equity and fixed income trading revenue across various regions. In Q1 2026, Capital Markets delivered a record CAD 1.5 billion in net income.
- Strategic Acquisitions and Fintech Integration: Recent acquisitions, such as HSBC Bank Canada, have already contributed to the bank's profits. Furthermore, the bank is actively pursuing fintech acquisitions, like Pinch, to leverage new technologies for enhanced client experiences and operational efficiency, thereby supporting future revenue growth.
- Optimized Net Interest Income (NII) and Margin Management: The bank's all-bank net interest income grew 8% year-over-year, driven by higher spreads and average asset growth. While there are competitive pressures in deposit pricing, strategic management of spreads and continued average volume growth in loans and deposits are key contributors to NII, which directly impacts revenue.
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Share Repurchases
- Royal Bank of Canada announced a normal course issuer bid to repurchase up to 45 million common shares, which commenced on December 8, 2021, and continued until December 7, 2022.
- The company announced plans to buy back up to 30 million common shares, with repurchases expected to begin on June 12, 2024, and run until June 11, 2025.
- A normal course issuer bid was approved to purchase up to 35 million common shares, commencing on June 12, 2025, and continuing until June 11, 2026. As of January 31, 2026, the company had repurchased 11.396 million shares for CAD 2,358 million under this program.
Outbound Investments
- In September 2022, Royal Bank of Canada completed its acquisition of Brewin Dolphin, a wealth-management firm in the U.K., for £1.6 billion.
- The company acquired HSBC Canada for C$13.5 billion in March 2024.
Capital Expenditures
- Royal Bank of Canada's capital expenditures for fiscal years ending October 2021 to 2025 averaged 2.388 billion.
- Capital expenditures peaked in October 2023 at 2.73 billion.
- The latest twelve months' capital expenditures for fiscal year 2025 amounted to 2.243 billion. The company is targeting the generation of $700 million to $1 billion in incremental enterprise value from Artificial Intelligence (AI) by 2027, indicating a focus on digital innovation.
Latest Trefis Analyses
| Title | Date | |
|---|---|---|
| DASHBOARDS | ||
| With Royal Bank of Canada Stock Surging, Have You Considered The Downside? | 10/17/2025 | |
| Fundamental Metrics: ... | 06/19/2024 |
| Title | |
|---|---|
| ARTICLES |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 215.56 |
| Mkt Cap | 331.7 |
| Rev LTM | 77,126 |
| Op Inc LTM | - |
| FCF LTM | -1,386 |
| FCF 3Y Avg | -5,162 |
| CFO LTM | 84 |
| CFO 3Y Avg | -3,528 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 9.7% |
| Rev Chg 3Y Avg | 10.2% |
| Rev Chg Q | 10.6% |
| QoQ Delta Rev Chg LTM | 2.5% |
| Op Inc Chg LTM | - |
| Op Inc Chg 3Y Avg | - |
| Op Mgn LTM | - |
| Op Mgn 3Y Avg | - |
| QoQ Delta Op Mgn LTM | - |
| CFO/Rev LTM | -0.0% |
| CFO/Rev 3Y Avg | -8.8% |
| FCF/Rev LTM | -2.2% |
| FCF/Rev 3Y Avg | -11.5% |
Segment Financials
Revenue by Segment| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Wealth Management | 22,378 | 19,626 | 17,544 | 14,849 | 13,296 |
| Personal Banking | 19,854 | 17,342 | |||
| Capital Markets | 14,426 | 12,012 | 11,051 | 9,120 | 10,187 |
| Commercial Banking | 8,562 | 7,382 | |||
| Insurance | 1,321 | 1,224 | 5,675 | 3,510 | 5,600 |
| Corporate Support | 64 | -242 | -261 | -860 | 100 |
| Personal & Commercial Banking | 22,120 | 20,143 | 18,346 | ||
| Investor & Treasury Services | 2,223 | 2,164 | |||
| Total | 66,605 | 57,344 | 56,129 | 48,985 | 49,693 |
| $ Mil | 2015 | 2014 | 2013 | 2012 |
|---|---|---|---|---|
| Personal & Commercial Banking | 6,718 | 6,064 | 5,986 | 5,544 |
| Insurance | 3,823 | 812 | 595 | 4,382 |
| Capital Markets | 3,296 | 2,978 | 2,548 | 2,307 |
| Wealth Management | 1,437 | 1,494 | 1,235 | 1,040 |
| Investor & Treasury Services | 738 | 598 | 461 | 191 |
| Corporate Support | -426 | -236 | -208 | -153 |
| Total | 15,586 | 11,710 | 10,617 | 13,311 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Personal Banking | 7,105 | 5,921 | |||
| Capital Markets | 5,393 | 4,573 | 4,139 | 2,921 | 4,187 |
| Wealth Management | 4,289 | 3,422 | 2,427 | 3,144 | 2,626 |
| Commercial Banking | 3,020 | 2,818 | |||
| Insurance | 828 | 729 | 803 | 857 | 889 |
| Corporate Support | -266 | -1,223 | -769 | 2 | 61 |
| Personal & Commercial Banking | 8,266 | 8,370 | 7,847 | ||
| Investor & Treasury Services | 513 | 440 | |||
| Total | 20,369 | 16,240 | 14,866 | 15,807 | 16,050 |
| $ Mil | 2025 | 2024 | 2023 | 2022 | 2021 |
|---|---|---|---|---|---|
| Capital Markets | 1,223,853 | 1,127,661 | 1,100,172 | 1,025,892 | 692,278 |
| Personal Banking | 574,456 | 555,029 | |||
| Commercial Banking | 196,254 | 187,142 | |||
| Wealth Management | 196,129 | 184,503 | 179,227 | 206,466 | 148,990 |
| Corporate Support | 101,909 | 87,959 | 66,956 | 60,119 | 52,574 |
| Insurance | 32,405 | 29,288 | 24,130 | 21,918 | 22,724 |
| Personal & Commercial Banking | 636,046 | 602,824 | 549,702 | ||
| Investor & Treasury Services | 240,055 | ||||
| Total | 2,325,006 | 2,171,582 | 2,006,531 | 1,917,219 | 1,706,323 |
Price Behavior
| Market Price | $209.07 | |
| Market Cap ($ Bil) | 291.3 | |
| First Trading Date | 10/16/1995 | |
| Distance from 52W High | 0.0% | |
| 50 Days | 200 Days | |
| DMA Price | $191.52 | $167.01 |
| DMA Trend | up | up |
| Distance from DMA | 9.2% | 25.2% |
| 3M | 1YR | |
| Volatility | 14.8% | 15.1% |
| Downside Capture | 6.63 | 56.99 |
| Upside Capture | 91.10 | 101.97 |
| Correlation (SPY) | 47.4% | 55.1% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.25 | 0.34 | 0.51 | 0.67 | 0.66 | 0.62 |
| Up Beta | -0.20 | 0.31 | 0.66 | 0.62 | 0.53 | 0.56 |
| Down Beta | 0.39 | 0.27 | 0.23 | 0.46 | 0.44 | 0.51 |
| Up Capture | 89% | 82% | 90% | 90% | 102% | 59% |
| Bmk +ve Days | 11 | 24 | 40 | 67 | 140 | 429 |
| Stock +ve Days | 13 | 24 | 40 | 68 | 146 | 415 |
| Down Capture | -15% | -4% | 3% | 65% | 64% | 84% |
| Bmk -ve Days | 10 | 17 | 23 | 58 | 112 | 321 |
| Stock -ve Days | 8 | 17 | 23 | 57 | 106 | 335 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RY | |
|---|---|---|---|---|
| RY | 62.7% | 15.1% | 3.01 | - |
| Sector ETF (XLF) | 6.7% | 14.7% | 0.22 | 51.5% |
| Equity (SPY) | 20.7% | 12.5% | 1.22 | 54.8% |
| Gold (GLD) | 23.0% | 27.8% | 0.73 | 23.3% |
| Commodities (DBC) | 22.9% | 18.6% | 0.97 | -12.1% |
| Real Estate (VNQ) | 13.6% | 13.8% | 0.68 | 36.6% |
| Bitcoin (BTCUSD) | -41.8% | 42.8% | -1.14 | 25.3% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RY | |
|---|---|---|---|---|
| RY | 19.8% | 18.0% | 0.89 | - |
| Sector ETF (XLF) | 10.7% | 18.6% | 0.44 | 68.2% |
| Equity (SPY) | 13.3% | 17.1% | 0.60 | 62.6% |
| Gold (GLD) | 17.8% | 18.3% | 0.79 | 17.2% |
| Commodities (DBC) | 7.6% | 19.5% | 0.29 | 19.1% |
| Real Estate (VNQ) | 3.1% | 18.9% | 0.06 | 55.9% |
| Bitcoin (BTCUSD) | 13.2% | 53.5% | 0.43 | 26.0% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with RY | |
|---|---|---|---|---|
| RY | 17.8% | 19.7% | 0.79 | - |
| Sector ETF (XLF) | 14.1% | 22.1% | 0.58 | 74.6% |
| Equity (SPY) | 15.7% | 17.9% | 0.75 | 69.8% |
| Gold (GLD) | 11.6% | 16.1% | 0.59 | 10.2% |
| Commodities (DBC) | 6.2% | 18.0% | 0.27 | 30.7% |
| Real Estate (VNQ) | 5.6% | 20.7% | 0.23 | 60.8% |
| Bitcoin (BTCUSD) | 57.9% | 66.2% | 0.98 | 19.0% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Updated 6/2/2026| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| SUMMARY STATS | |||
| # Positive | 0 | 0 | 0 |
| # Negative | 0 | 0 | 0 |
| Median Positive | |||
| Median Negative | |||
| Max Positive | |||
| Max Negative | |||
| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| SUMMARY STATS | |||
| # Positive | 0 | 0 | 0 |
| # Negative | 0 | 0 | 0 |
| Median Positive | |||
| Median Negative | |||
| Max Positive | |||
| Max Negative | |||
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 04/30/2021 | 05/27/2021 | 6-K |
| 01/31/2021 | 02/24/2021 | 6-K |
| 10/31/2020 | 12/02/2020 | 40-F |
| 07/31/2020 | 08/26/2020 | 6-K |
| 04/30/2020 | 05/27/2020 | 6-K |
| 10/31/2019 | 12/04/2019 | 40-F |
| 07/31/2019 | 08/21/2019 | 6-K |
| 04/30/2019 | 05/23/2019 | 6-K |
| 01/31/2019 | 02/22/2019 | 6-K |
| 10/31/2018 | 11/28/2018 | 40-F |
| 07/31/2018 | 08/22/2018 | 6-K |
| 04/30/2018 | 05/24/2018 | 6-K |
| 01/31/2018 | 02/23/2018 | 6-K |
| 10/31/2017 | 11/29/2017 | 40-F |
| 07/31/2017 | 08/23/2017 | 6-K |
| 04/30/2017 | 05/25/2017 | 6-K |
| Report Date | Filing Date | Filing |
|---|---|---|
| 04/30/2021 | 05/27/2021 | 6-K |
| 01/31/2021 | 02/24/2021 | 6-K |
| 10/31/2020 | 12/02/2020 | 40-F |
| 07/31/2020 | 08/26/2020 | 6-K |
| 04/30/2020 | 05/27/2020 | 6-K |
| 10/31/2019 | 12/04/2019 | 40-F |
| 07/31/2019 | 08/21/2019 | 6-K |
| 04/30/2019 | 05/23/2019 | 6-K |
| 01/31/2019 | 02/22/2019 | 6-K |
| 10/31/2018 | 11/28/2018 | 40-F |
| 07/31/2018 | 08/22/2018 | 6-K |
| 04/30/2018 | 05/24/2018 | 6-K |
| 01/31/2018 | 02/23/2018 | 6-K |
| 10/31/2017 | 11/29/2017 | 40-F |
| 07/31/2017 | 08/23/2017 | 6-K |
| 04/30/2017 | 05/25/2017 | 6-K |
| 01/31/2017 | 02/24/2017 | 6-K |
| 10/31/2016 | 11/30/2016 | 40-F |
| 07/31/2016 | 08/24/2016 | 6-K |
| 04/30/2016 | 05/26/2016 | 6-K |
| 01/31/2016 | 02/24/2016 | 6-K |
| 10/31/2015 | 12/02/2015 | 40-F |
| 07/31/2015 | 08/26/2015 | 6-K |
| 04/30/2015 | 05/28/2015 | 6-K |
| 01/31/2015 | 02/25/2015 | 6-K |
| 10/31/2014 | 12/03/2014 | 40-F |
| 07/31/2014 | 08/22/2014 | 6-K |
| 04/30/2014 | 05/22/2014 | 6-K |
RY Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The investment thesis presents a highly attractive, probability-adjusted risk/reward. The potential upside from a structural, company-specific catalyst (HSBC acquisition) significantly outweighs the downside from a well-understood cyclical headwind (credit normalization). The moat is widening, justifying a high probability of the bull case materializing, making this a high-conviction opportunity.
STOCK ARCHETYPE
Cyclical / CommodityAs a universal bank, Royal Bank of Canada's core business of lending is intrinsically tied to the macroeconomic cycle, including interest rates, loan demand, and credit quality. Therefore, valuing it based on normalized, mid-cycle earnings power rather than peak/trough metrics is the most appropriate approach.
INVESTMENT THESIS
The primary driver for outperformance is the successful integration of the recently acquired HSBC Canada assets, which adds 780,000 customers and provides a clear path to market share gains and revenue synergies in a mature domestic market. This is supplemented by a strategic mix-shift towards the higher-margin, less capital-intensive Wealth Management business, where RBC already holds a dominant 32% market share.
- The completed acquisition of HSBC Canada provides a clear, near-term catalyst for revenue and market share growth.
- Management has signaled confidence by raising its ROE target to 17%+ for fiscal 2026.
- The business is experiencing a positive mix shift towards higher-margin Wealth Management and Capital Markets fee income.
- RBC Wealth Management is the largest player in Canada with a 32% market share.
PRIMARY RISK
The most significant friction to the thesis is a cyclical deterioration in credit quality, driven by a slowing macroeconomic environment. Rising consumer insolvencies and stress in commercial loan portfolios are forcing the bank to increase its Provision for Credit Losses (PCL), which acts as a direct headwind to earnings growth.
- Provision for Credit Losses (PCL) on impaired loans ratio increased to 37 bps for the full year 2025, a year-over-year increase of 9 bps.
- The PCL on loans ratio for Q4 2025 was 39 bps, an increase of 4 bps from the previous quarter, indicating an accelerating trend.
- Canadian consumer insolvencies rose 20.5% in January 2025 compared to the previous month.
| KPI | Threshold | Rationale |
|---|---|---|
| Provision for Credit Losses (PCL) on Impaired Loans Ratio | > 45 bps | The primary risk indicator. A sustained breach of this threshold would signal that credit deterioration is worse than anticipated, threatening consensus earnings estimates and triggering a potential de-rating. |
| Net Interest Margin (NIM) | Sequential decline > 3 bps | A core driver of profitability. A sequential decline of this magnitude would suggest pressure on loan pricing or rising funding costs, weakening the bank's core earnings power. |
| Wealth Management Assets Under Administration (AUA) Growth | < 6% YoY | A key leading indicator for the 'Alpha Driver'. Growth below this rate would indicate that the high-margin mix-shift story is weakening, making the growth thesis more reliant on the slower-growing traditional banking segment. |
Credit Normalization vs. Strategic Growth
BULL VIEW
The HSBC acquisition provides a step-change in market share and synergies, while a mix-shift to wealth management boosts margins and overall ROE to 17%+.
CORE TENSION
Can earnings growth from the HSBC acquisition and wealth management outpace the drag from rising Provision for Credit Losses (PCL) in a slowing economy?
PREVAILING SENTIMENT
The PCL on loans ratio rose to 39 bps in Q4 2025, a 4 bps sequential increase, showing the credit deterioration trend is accelerating and challenging the bull case.
BEAR VIEW
Accelerating consumer insolvencies and commercial loan stress will force PCLs above 45 bps, causing earnings misses and multiple compression.
| Timeline | Event & Metric To Watch |
|---|---|
February 26, 2026 | Q1 2026 Earnings Call Watch: Provision for Credit Losses (PCL) on loans ratio. The key debate hinges on whether this exceeds the 45 bps bear-case threshold. |
H1 2026 | OSFI Regulatory Updates on CRE & Basel III Watch: Disclosures on impaired loans in the Commercial Real Estate (CRE) portfolio and any negative change to the CET1 ratio guidance. |
Monthly | Statistics Canada Consumer Insolvency Report Watch: Month-over-month percentage change in Canadian consumer insolvencies. A continued double-digit increase confirms consumer strain. |
| Date | Event | Stock Impact |
|---|---|---|
8/27/2025 | Q3 2025 Earnings Release Details: Reported record net income of $5.4B, with EPS of $3.75 beating estimates by $0.42. Strong performance was driven by Capital Markets and Personal Banking. PCLs increased to $881M. | Surged +5.50% $135.68 -> $143.16 |
9/9/2025 | Barclays Global Financial Services Conference Details: RBC presented at the Barclays conference, discussing its strategy and outlook. The market reaction was minimal. | Muted (-0.43%) $142.51 -> $141.90 |
12/3/2025 | Q4 2025 Earnings Release Details: Reported record Q4 profit of $5.4B, beating estimates with EPS of $3.85. Increased dividend by 6%. PCLs rose to over $1B, but strong capital markets and wealth results drove a positive reaction. | Modest 1.46% gain $153.33 -> $155.57 |
1/6/2026 | RBC Capital Markets Canadian Bank CEO Conference Details: RBC participated in its own CEO conference, providing an outlook for the banking sector. The stock experienced a slight pullback following the event. | Slight -1.55% pullback $171.88 -> $169.21 |
1/27/2026 | Capital Notes Issue & Scholarship Program Details: RBC announced a US$1.0 billion NVCC AT1 capital notes issue and a new $1.5 million annual scholarship program to address Canada's skills gap. Market reaction was muted. | Changed Little (0.91%) $167.32 -> $168.84 |
1/29/2026 | Strategic Partnership with REALTOR.ca Details: RBC announced a partnership with REALTOR.ca to integrate financial literacy resources into the homebuying process, aiming to capture clients earlier. The stock saw a modest gain. | Modest 1.32% gain $166.58 -> $168.78 |
Position Sizing
4%-6%
NORMAL
Volatility is stable and low relative to the market. While sentiment is Neutral due to credit cycle risk and visibility is medium, the fair valuation and resilient moat justify a standard allocation.
Diversification Alternatives
TD
SECTOROffers a higher dividend yield and greater exposure to the U.S. market, providing geographic diversification away from the concentrated Canadian economy. Recent buybacks are substantial.
BMO
SECTORStrong 2025 earnings growth was driven by diversification in Wealth Management and Capital Markets. The bank has a robust CET1 ratio, suggesting surplus capital for buybacks.
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Repricing Catalyst
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$0.0B TTM (% of Total) · % MarginWhat It Is
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Who Pays & How
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Competition
Industry Resources
| Financials Resources |
| Federal Reserve Economic Data |
| Federal Reserve |
| FDIC Data |
| American Banker |
| The Banker |
| Banking Technology |
| Diversified Banks Resources |
| Retail Banker International |
| International Banker |
| Global Finance Magazine |
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
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