Royal Bank of Canada (RBC) reported a record profit of US$20.4 billion, raising its profit target
Christine Dobie
(Bloomberg) — RBC Capital Markets and Wealth Management beat expectations with strong results, ending a brisk trading year and setting a higher target for shareholder capital returns.
Canada’s largest bank reported adjusted earnings of $3.85 per share in the fiscal fourth quarter, beating analysts’ average estimate of $3.54, according to a statement Wednesday.
RBC became the first Canadian bank to earn more than $20 billion in profit in a single fiscal year.
Net profit at Royal Bank’s capital markets business totaled $1.43 billion in the three months to October, above the $1.12 billion average forecast of three analysts polled by Bloomberg. Transaction volumes increased in the U.S., which accounts for more than half of RBC Capital Markets revenue.
“Royal Bank of Canada is a 24/7 bank,” Chief Executive Dave MacKay said in the company’s annual report, adding that the company demonstrated this by “delivering superior financial performance across our businesses in a year of significant macroeconomic uncertainty and market volatility.”
Net income from the wealth management business, which includes Los Angeles-based subsidiary City National Bank, was $1.28 billion, beating the average estimate of $1.02 billion.
Royal Bank reported a record profit of $20.4 billion for fiscal 2025, with a return on equity of 16.3%. In a strategic update, Royal Bank of Canada changed its medium-term ROE target, setting it at 17% or higher, after beating the 16% or higher target it set at its March investor day for several quarters.
credit terms
During the quarter, the bank set aside just over $1 billion in provisions for credit losses, above analysts’ expectations of $988 million.
Bank of America reported a series of credit problems in its October quarter results, following the high-profile bankruptcies of auto loan company Tricolor Holdings and auto parts supplier First Brands Group. Some analysts have warned that Royal Bank could be hit by similarly large provisions related to its business accounts.
Royal Bank has delivered solid results for most of the year, barring surprises in the fiscal second quarter when it set aside more funds than expected to fulfill loan obligations. It subsequently issued some of those terms as credit conditions improved.
The bank on Wednesday announced a 6% increase in its quarterly dividend, bringing its per-share payout by 10 cents to $1.64, with the dividend payable on February 24.
Bank of Nova Scotia analyst Mike Rizvanovic said performance in Royal Bank’s market-sensitive divisions “handily offset modest declines in other business lines.” He added that while credit provisions increased slightly, they were still under control.
“Overall, strong performance, dividend increases and improved return on equity guidance should be enough to gain market support,” Jefferies analyst John Aiken wrote in a note to clients.
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Last modified: December 3, 2025
