RBC Posts Record $6.0 Billion Net Income
Wealth Management net income rose 32% year-over-year as fee-based client assets lifted the Canadian lender's $8.7 billion pre-provision, pre-tax earnings.
Royal Bank of Canada (RY) reported record net income of $6.0 billion for the quarter ended July 31, 2026, up 11% from a year earlier and 9% from the prior quarter. Diluted earnings were $4.23 a share, up 13% year-over-year and 10% quarter-over-quarter, and return on equity rose to 17.9%, up 60 bps from a year ago and 70 bps from the prior quarter.
Pre-provision, pre-tax earnings reached a record $8.7 billion, up $1.0 billion, or 13%, from a year earlier. The increase mainly reflected higher fee-based revenue in Wealth Management from market appreciation and net sales; higher Capital Markets revenue across Corporate & Investment Banking and Global Markets; and higher net interest income from average volume growth in Personal Banking, Commercial Banking and Wealth Management. Versus the prior quarter, PPPT rose $0.7 billion, or 9%, as revenue growth outpaced expense growth; total revenue was $18.5 billion versus $17.5 billion in the April 30 quarter.
Wealth Management was the largest earnings contributor among the reportable segments. Net income of $1,442 million increased 32% 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 from average volume growth in deposits and loans and higher spreads also contributed. Versus last quarter, Wealth Management net income rose 22% on higher fee-based client assets, higher spreads and lower provisions.
Capital Markets net income of $1,544 million increased 16% from a year ago, primarily due to higher Corporate & Investment Banking revenue, mainly from higher equity and debt origination and mergers and acquisitions activity across most regions, and higher Global Markets revenue, primarily from higher equity trading across all regions. Those gains were partly offset by higher provisions and ongoing technology investments. Versus last quarter, Capital Markets net income rose 4% on higher debt and equity origination and higher fixed-income trading, partly offset by higher provisions on a previously impaired other-services account and on impaired loans in consumer staples and industrial products.
Commercial Banking net income of $936 million increased 12% from a year ago, driven by higher net interest income from 9% average deposit volume growth and 4% loan volume growth and lower provisions. Versus last quarter, Commercial Banking net income rose 10% on three more days, 6% deposit average volume growth, 1% loan average volume growth and lower provisions on impaired loans. Personal Banking net income of $1,923 million decreased 1% from a year ago, as higher net interest income from 2% average volume growth and higher spreads, net of lower HSBC Canada fair-value accretion, plus higher fee-based client assets, were more than offset by higher non-interest expenses, higher provisions and lower service charges. Versus last quarter, Personal Banking net income rose 3% on three more days, 1% average volume growth and higher fee-based client assets. Insurance net income of $197 million decreased 20% from a year ago. Corporate Support recorded a net loss of $18 million.
Total provision for credit losses was $1.0 billion, up $119 million, or 14%, from a year ago. The PCL on loans ratio was 36 bps, up 1 bp year-over-year and 1 bp quarter-over-quarter. PCL on impaired loans was $979 million, up 7% year-over-year and 9% quarter-over-quarter, driven by higher provisions in Capital Markets and Personal Banking, partly offset by lower provisions in Commercial Banking. PCL on performing loans was $21 million versus a $28 million release a year earlier.
The CET1 ratio was 13.5%, unchanged from the prior quarter, as net internal capital generation was largely offset by business-driven risk-weighted asset growth and share repurchases. The bank returned $4.0 billion of capital, including $1.6 billion of share buybacks and $2.4 billion of common share dividends. Average LCR was 125%, with about a $98 billion surplus, versus 126% and about a $96 billion surplus in the prior quarter. NSFR was 112%, with about a $134 billion surplus.
Income before income taxes was $7.7 billion, up 13% from a year ago, with the effective income tax rate at 22.3%, up 110 bps year-over-year. Non-interest expense was $9.8 billion versus $9.4 billion in the April 30 quarter.