(EQNX::nobreakspace)

TORONTO, May 28, 2026 /CNW/ -(EQNX::nobreakspace)Royal Bank of Canada³ (TSX: RY) (NYSE: RY) today reported net income of $5.5 billion for the quarter ended April 30, 2026, up $1,119 million or 25% from the prior year. Diluted EPS was $3.85, up 27% over the same period, reflecting growth across each of our business segments. Adjusted net income² and adjusted diluted EPS² of $5.6 billion and $3.90 were up 23% and 25%, respectively, from the prior year.

"In a world that's constantly changing and becoming more complex, our commitment to delivering trusted advice and helping clients navigate risk continues to produce exceptional outcomes. Our second quarter earnings showcase our consistency in delivering premium profitability and long-term shareholder value, underpinned by solid growth across our diversified businesses and balance sheet strength. Looking ahead, we remain focused on building the bank of the future and evolving with the needs of those we serve."

(EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::nobreakspace) (EQNX::endash) Dave McKay, President and Chief Executive Officer of Royal Bank of Canada

Pre-provision, pre-tax earnings² of $8.0 billion were up $1.1 billion or 15% from last year, mainly due to higher revenue in Capital Markets, driven by strength across Global Markets and Corporate & Investment Banking, and higher fee-based revenue in Wealth Management, reflecting market appreciation and net sales. Higher net interest income in Personal Banking and Commercial Banking, reflecting average volume growth and higher spreads, also contributed to the increase. These factors were partially offset by higher compensation commensurate with increased results.

Our consolidated results reflect a decrease in total PCL of $512 million from a year ago, primarily due to lower provisions in Commercial Banking and Personal Banking. The PCL on loans ratio of 35 bps(EQNX::nobreakspace)decreased 23 bps(EQNX::nobreakspace)from the prior year. The PCL on impaired loans ratio¹ of 34 bps(EQNX::nobreakspace)decreased 1 bp, while the PCL on performing loans ratio¹ of 1 bp decreased 22 bps, as the same quarter last year reflected higher provisions primarily due to the impacts of trade disruptions (including tariffs). Income before income taxes of $7.1 billion was up $1.6 billion or 29% from last year.

Compared to last quarter, net income was down 5% reflecting lower results in Wealth Management, Personal Banking and Commercial Banking, which includes the impact of three fewer days in the current quarter, and in Corporate Support, partly offset by higher results in Capital Markets and Insurance. Adjusted net income² was down 5% over the same period. Pre-provision, pre-tax earnings² were down $0.5 billion or 6% on lower revenues and flat expenses. The PCL on loans ratio of 35 bps decreased 6 bps from the prior quarter. The PCL on impaired loans ratio was 34 bps, down 6 bps from the prior quarter, primarily due to lower provisions in Capital Markets, and in Personal Banking and Commercial Banking to a lesser extent, while the PCL on performing loans ratio was 1 bp, remaining flat from the prior quarter.

Our capital position remains robust, with a CET1 ratio¹ of 13.5%, supporting solid volume growth and $4.0 billion of capital returned to our shareholders, including $1.7 billion of share buybacks and $2.3 billion of common share dividends.

Today, we declared a quarterly dividend of $1.76 per share reflecting an increase of $0.12 or 7%. We also announced our intention, subject to the approval of the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions, to commence a normal course issuer bid and to repurchase for cancellation up to 45 million of our common shares, representing approximately 3% of the bank's outstanding common shares as at May 15, 2026.

Personal Banking

Net income of $1,870 million increased $268 million or 17% from a year ago, primarily driven by higher net interest income reflecting average volume growth of 2% and higher spreads, which included an unfavourable impact from lower accretion of fair value adjustments related to the acquisition of HSBC Bank Canada (HSBC Canada). Lower PCL, as the same quarter last year reflected higher provisions on performing loans primarily due to the impacts of trade disruptions (including tariffs), as well as higher fee-based client assets reflecting market appreciation and net sales also contributed to the increase.

Compared to last quarter, net income decreased $92 million or 5%, mainly driven by lower net interest income reflecting three fewer days in the current quarter.

Commercial Banking

Net income of $854 million increased $257 million or 43% from a year ago, primarily driven by lower PCL, as the same quarter last year reflected higher provisions on performing loans primarily due to the impacts of trade disruptions (including tariffs) and the current quarter reflected lower provisions on impaired loans. Higher net interest income reflecting average volume growth of 3% in both loans and deposits, and higher spreads also contributed to the increase.

Compared to last quarter, net income decreased $9 million or 1%, primarily driven by lower net interest income reflecting three fewer days in the current quarter. This was partially offset by lower PCL, largely due to lower provisions on impaired loans.

Wealth Management

Net income of $1,185 million increased $256 million or 28% from a year ago, mainly due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation. Higher net interest income reflecting average volume growth in loans and deposits and higher spreads also contributed to the increase.

Compared to last quarter, net income decreased $110 million or 8%, mainly due to changes in the fair value of seed capital investments, seasonally lower performance fees, and higher PCL mainly reflecting provisions taken on performing loans as compared to releases of provisions last quarter, and higher provisions on impaired loans. These factors were partially offset by lower staff costs.

Insurance

Net income of $218 million increased $7 million or 3% from a year ago, primarily due to higher insurance investment result reflecting lower capital funding costs. This was partially offset by lower insurance service result, as the favourable impact of reinsurance contract recaptures was more than offset by the impact of claims experience.

Compared to last quarter, net income increased $5 million or 2%, primarily due to higher insurance investment result driven by favourable investment-related experience. This was partially offset by lower insurance service result, as the favourable impact of reinsurance contract recaptures was more than offset by the impact of claims experience.

Capital Markets

Net income of $1,484 million increased $282 million or 23% from a year ago, primarily driven by higher revenue in Global Markets and Corporate & Investment Banking. These factors were partially offset by higher taxes reflecting changes in earnings mix and higher compensation on increased results.

Compared to last quarter, net income remained relatively flat. Lower PCL, primarily reflecting lower provisions on impaired loans in a few sectors, including the consumer discretionary and financial services sectors, and higher equity and debt origination across all regions were offset by lower fixed income trading revenue across all regions.

Corporate Support

Net loss was $102 million for the current quarter, primarily due to legal provisions and residual unallocated costs.

Net loss was $26 million in the prior quarter, primarily due to residual unallocated costs, partially offset by asset/liability management activities.

Net loss was $151 million in the same quarter last year, primarily due to residual unallocated items, including severance.

Capital, Liquidity and Credit Quality

Capital
As(EQNX::nobreakspace)at(EQNX::nobreakspace)April 30, 2026, our CET1 ratio4(EQNX::nobreakspace)of 13.5%(EQNX::nobreakspace)was(EQNX::nobreakspace)down 20 bps from last quarter,(EQNX::nobreakspace)as net internal capital generation was more than offset by share repurchases, business-driven RWA growth, the net impact of model updates and other items.

Liquidity
For the quarter ended April 30, 2026, the average LCR⁴ was 126%, which translates into a surplus of approximately $96 billion, compared to 124% and a surplus of approximately $91 billion in the prior quarter. Average LCR⁴ increased from the prior quarter, primarily due to changes in securities mix, partially offset by loan growth.

NSFR⁴ as at April 30, 2026 was 111%, which translates into a surplus of approximately $115 billion, compared to 111% and a surplus of approximately $113 billion in the prior quarter. NSFR⁴ remained flat compared to last quarter as growth in deposits and funding was offset by loan growth.

Credit Quality
Q2 2026 vs. Q2 2025
Total PCL of $912 million decreased $512 million or 36% from a year ago,(EQNX::nobreakspace)primarily due to lower provisions in Commercial Banking and Personal Banking. The PCL on loans ratio of 35 bps decreased 23 bps. The PCL on impaired loans ratio of 34 bps decreased 1 bp.

PCL on performing loans of $18 million decreased $550 million, as the same quarter last year reflected higher provisions primarily due to the impacts of trade disruptions (including tariffs).

PCL on impaired loans of $899 million increased $47 million or 6%, primarily due to higher provisions in Personal Banking, partially offset by lower provisions in Commercial Banking.

Q2 2026 vs. Q1 2026
Total PCL decreased $178 million(EQNX::nobreakspace)or 16%(EQNX::nobreakspace)from last quarter, primarily due to lower provisions in Capital Markets, Personal Banking and Commercial Banking, partially offset by higher provisions in Wealth Management. The PCL on loans ratio decreased 6 bps. The PCL on impaired loans ratio decreased 6 bps.

PCL on performing loans decreased $10 million or 36%, primarily due to changes in credit quality, partially offset by unfavourable changes to our macroeconomic forecast.

PCL on impaired loans decreased $169 million or 16%, primarily due to lower provisions in Capital Markets, Personal Banking and Commercial Banking.

Key performance and non-GAAP measures

Performance measures
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 ROE. Certain financial metrics, including ROE, do not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures disclosed by other financial institutions.

Non-GAAP measures
Non-GAAP measures and ratios do not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions.

The following discussion describes the non-GAAP measures and ratios we use in evaluating our operating results.

Pre-provision, pre-tax earnings
We use pre-provision, pre-tax earnings (PPPT) to assess our ability to generate sustained earnings growth outside of credit losses, which are impacted by the cyclical nature of the credit cycle. PPPT may enhance comparability of our financial performance and enable readers to better assess trends in the underlying businesses. The following table provides a reconciliation of our reported results to PPPT and illustrates the calculation of PPPT presented:

Adjusted results and ratios
We believe that adjusted results are more reflective of our ongoing operating results and provide readers with a better understanding of management's perspective on performance. Specified items discussed below can lead to variability that could obscure trends in underlying business performance and the amortization of acquisition-related intangibles can differ widely between organizations. Excluding the impact of specified items and amortization of acquisition-related intangibles may enhance comparability of our financial performance and enable readers to better assess trends in the underlying businesses.

Our results for the three and six months ended April 30, 2025 were adjusted for the following specified item:

• HSBC Canada transaction and integration costs.

Adjusted ratios, including adjusted EPS (basic and diluted), adjusted ROE and adjusted efficiency ratio, which are derived from adjusted results, are useful to readers because they may enhance comparability in assessing profitability on a per-share basis, how efficiently profits are generated from average common equity and how efficiently costs are managed relative to revenues. Adjusted results and ratios can also help inform and support strategic choices and capital allocation decisions.

Consolidated results, reported and adjusted
The following table provides a reconciliation of our reported results to our adjusted results and illustrates the calculation of adjusted measures presented. The adjusted results and ratios presented below are non-GAAP measures or ratios.

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