RY - Earnings call transcript Q3 2022

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Operator

Good morning ladies and gentlemen. Welcome to RBC’s Conference Call for the Third Quarter 2022 Financial Results. Please be advised that this call is being recorded. I would now like to turn the meeting over to Asim Imran, Head of Investor Relations. Please go ahead.

Asim Imran

morning, good and you everyone. Thank

us be Speaking Wealth Head, Personal Executive Chief and President questions, Management, joining Chief Commercial Group Banking; Group and McKay, Nadine today Risk McLaughlin, Ahn, Head, Head, Also Hepworth, Insurance will Neldner, Officer; Graeme Chief and and I&TS; Capital your Derek Guzman, Dave Markets. Financial Group for today Doug Officer. Neil Officer; and

inherent Slide ask X, also involve our considers comments and forward-looking re-queue. could contain to results business which have to everyone the Dave. to remind will bank would give that, that adjusted on may useful assumptions in your we I assesses over on statements, differ chance and its both questions noted and you performance. and risks that I Actual uncertainties. basis performance As materially. With turn limit then To reported a assessing underlying it a and questions, be ask listeners

Dave McKay

good volume you continued strength Asim of commercial solid tailwinds benefited the by driven you, U.S., we Canada for quarter both rising $X.X our strong double-digit billion, where everyone. personal earnings rates. in Today, today. and from banking in and reported Thank growth and us and a joining morning businesses from we Thank interest

in as we variable as offsets spend spreads growth to relatively valuations of the invest impacting financial asset was market-sensitive reported lower was year of for from Our markets. increased built-in flat sentiment of hedge environments heightened a results the set compensation volatility, This against challenging client credit last lower one underpinned businesses widening toughest the Expense experience. and backdrop higher client the continued activity. of uncertainty, and by

across potential build America. a given North of included macroeconomic recession a prudent of also results including the Our likelihood outcomes, range the reserve

monitor rising loans both to low resilience and we impaired despite demonstrate While early costs. on clients remained gross our warning indicators, loans PCL impaired as continue closely

environment headlined markets of to exacerbated constraints results tail provide labor related macro on Asia, inflation. uncertain, number chain the high quarter. by now persistently The remains my offer more operating environment geopolitical to challenges, this our by in tight context climate recently, being rising risk a droughts and tension, COVID-related will We change. thoughts are Supply for by characterized

strong While an cycle. we would policy believe inflationary This be pressures to continue to in inflation not we downturn. alone These try the unemployment towards is aggressive a beginning by severe central differentiating peaking, economic raising relative factor a monetary and the likely job to appear drive banks pushes to current are closer expect end us factors prior demand-driven require market of costs. higher That the also borrowing downturns. even as of rein to

going than corporate Although FICO with Canada. bands this forward. liquidity of am healthy Despite remains robust. there is drive sheets leverage macroeconomic competitive premium ratios. confident backdrop, the position entering stronger are prior system, complicated and and liquidity our including in cycle Consumer advantages personal also increased growth balance coverage allowance ones, clients are from across strength a high our our in in operating I we capital, savings across will spending the

Our capital growth per internal strong double-digit a in premium equity and book source on return generation share. was value of

will driving have building capital and in not later. growth, little to Our momentum our organic remain accretive priorities speak deploying our on I We focused on a changed. which

looking the priorities year. our later to of quarter. our our well of to We XX forward for and new dividends commitment long-term this and acquisitions they to requirements strategic following with strategic colleagues acquisition Brewin over this positioned paying while of bought delivering shareholders, via part $X.X should financial value meet close execute remain are back on anticipated shares key our As million billion we Dolphin working we

comfortable are the operating given in prudent higher uncertain we thing to the this environment. ratio believe do a with the is this at cycle. capital at We point Finally,

a million largest X%. our growth year-over-year commercial deposits benefit we provides Canadian from over our our the businesses minimum base. fund growth in Higher partly due revenue benefit a including franchise. ratio buffer through double-digit will to segments, personal trends interest loan with strength and In and coverage our speak growth of organic the liquidity higher seeing client rates year-over-year to cards, core commercial up saw $XX majority the across expect billion lending Our deposit the regulatory of mortgages, Banking, credit to to provided rates. and across continue we $XXX are banking now we large our I deposit to

coming Our share value pre-pandemic relationships client a mortgage And along around by dynamics these variable strategic product feel book. a balanced macro the loan slow grow mortgage base auto strong quarter, key strong Commercial and with client tiers risk our prices advantage yielding relationships a business including about which of to a housing our provides profitability levels base. Average in product recovery with in the our our this higher mortgage Super supported this was and and across broad-based were deepen logistics deepening higher stable in client RBC factors, proposition deposit of the market-leading this financing. in given Vantage we by growth balances a acquisition to loan strong moved this manufacturing, business We of profitably XX% over and be anchor decline expect Notwithstanding market our us deposits cost a services, specialist our with for good sales should and more Prime also volume to to than quarter listing retail stickiness Group, mortgage remained quarters given builds with The than offerings. levels. return approximately and have are the still higher activity into all to exception pre-pandemic cash offering. growth led ratio.

also capital, Growth recover. cost with card at in transactors above healthy by we continued clients and underpinned a are revolver levels. higher, seeing commercial spending start about pre-pandemic the utilization remain spend to of labor credit concerned to confidence tick pace, be balances their to XX% While our clients discretionary starting rates continue total as shortages with

also started and quarters. balances utilization from solid over we growth rates levels. And upside have in card time, revolver to in recovering growth towards recent We rates expect commercial see revolver pre-pandemic

As providing the including largest through does believe clients we organically we ourselves ask of our profitable to avenue growth is often how leading value a bank distribution in leader new propositions sales our Canada, And by differentiated add growing force. grow? channels, the market most

South to immigration into growth which collaboration the have expanding newcomer are to we substantial our by client levels further levels, we Asia a rise with record ICICI a attracts adding expected engine Bank population quarter, to agreement announced This of Canada. funnel. acquisition With proportion from Canada,

As agreement, refer by With our them upon credit our bank term to open will leading ICICI we for mortgage and these investments our a offer clients Bank part newcomer to RBC arrival. this all easier relationships of through it over account making longer clients will deepening Canada card partnership, to time, value businesses.

alerts the companion with everything will a launch drive shopping loyalty our Additionally, with soon proprietary have program and we for further about ability deliver seamlessly Canadians end-to-end it Plus, market to points. grown is experience will pay integrating Avion the an reimagining Rewards. Avion leading client Shop called proposition to searches, new generation of value Rewards program, engagement. appreciate offers, to next our commerce as price Avion product This

clients an have of We that new will pipeline to continue exciting relationships. innovations attract consolidate and

in be of to strength advice the and the these volatile diversity quality of Wealth continue our Turning Management, to our markets. portfolio

from higher nature This Card. Canadian XX quarter revenue strength bank-owned lower Brokerage market highlighted Management U.S. within and as balance to the net brokerage Management this This volatility, and rates year segment. of interest advisory over assets the in quarter benefited our our Canadian Wealth from for Canadian Securities also our more various last offset amongst Dominion holistic in the businesses according impact businesses of our the ranked streams. well new quarter across in Report management firms our of as than the row speaks to the on highest solutions fee-based Earlier Executive investment Investment Despite Tailwinds markets months. XXth the relationships. wealth a client RBC the Wealth

Management, traditional off the somewhat by have mix relative fixed more Global income a of a of and valuation largely rising balanced to same occurrence driven at XX-XX where management allocation, interest selling more time, the equities Asset American driven assets was bond under Moving unusual decline rates. to equities RBC largely North by AUM in and the

as and over the growth National. strong investment positive growth U.S., remained XX to months and loan by City at clients look expansion sales last actively margin managed net us continue retail revenue driven we reported for diversified the strategies. to our In growth long-term earnings Canadian However,

private investments and business, multiyear capacity, treasury our bankers. sales in commercial leveraging including are We technology, infrastructure, effectively and including management this

nor from potential strategy Management. and Wealth the with yield of fee reflect quarter further lower availability U.S. The an in in by this broader not balances of pools, premium of markets along disruption forward. results decline this the is do markets. our platform industry-wide Our the were impacted its performance of franchise supported going Results high by strength capital sweep cost a credit deposit

and this over includes year important at years teams market to strategically continue a remains client particular markets since of adding XX ROE we have business strategically in finance market coverage have has senior where with verticals to invest continues steady share every capital supporting business. relationships, on a to gained positive net we of advisory X%. our entered be leverage we business, our businesses, While This fiscal key It strategy our we marks broadly, in where higher a More share product, ago. deepening X% generated focus year-to-date. origination equity in revenue remained

remains and dialogue by around secular environment saw activity, technology energy the reshoring. upcoming muted and Although transition, trends disruption underpinned needs client robust, financing

to remain position needs. financing our remains conversion we maybe and their underpinned of conditions, from In difficult strong our reset. ratios. uncertainty meeting strength, healthy valuations liquidity cautious backlog financial this we pipeline and this momentum period and as capital, managing remain have of by coverage risk a and as their closing, with committed clients allowance Our entered though clients supporting extended Despite of

Our clients for creating scale. remain more point leading are the committed we are to We our our And in client delivering cycle. value at share to and through long-term franchises the next to efficiently prudently positioned to and shareholders. value operating take market well

over Let turn Nadine, over to our to for quarter. details more you. Nadine call now the about me

Nadine Ahn

this start Slide per X. Dave I $X.XX good from share of earnings We last and everyone. reported Thanks, on morning quarter, down XX% will year.

Our model backdrop, unfavorable which for amidst sheet balance credit and the macroeconomic on provisions performing losses diversified we in an loans. remained business resilient increased

strong revenue markdowns, had recognition down X%, flat clients. volume higher in significant and underpinned for non-compensation of underwriting revenue broad-based was and in this salaries with from was people conditions were offset markets. continue relatively a challenging Adjusting Expenses for compensation our more our the create financial In invest we year-over-year to by as these impact markdowns addition, higher cost and growth including to quarter, loan year, as across net markets results variable last our on from of PBCAE benefits interest X% technology rates. value up by capital lower

Before the XX. Slide of will focusing robust our on talk I earnings, about on drivers our capital levels

strong our basis XX.X%, dividends common remains billion ratio from capital, net to basis points points XX CETX generated quarter. Our this last of XX Earnings down $X.X of shareholders. quarter at of

issuer and total and historical Canadian We driven decline course by period. financing quarter the longer a continued support offset significant market bid. ratio Markets impact National as in the Banking, payout underwriting execution loan loan our from over dividend last buybacks. year-to-date, around following would our capital of close acquisition the reflected the volatility a across share City commitments was in Our largely This XXXX in and being CETX as is expect Capital to RWA has continue clients’ needs. Dolphin continuation of up XX% reduction of of strategy anticipated to our QX including be of markets Brewin due risk capital next in the a XX.X% no VAR we the and and RWA our to announced growth was strong previously increases return normal quarter ratio

ratios with flexibility client-driven supporting growth. with strong Our deployments, provide in our us capital leading

was checking into year-over-year net XX% NIM results. clients Moving primarily XX, and by higher was up and last growth interest was strong points underpinned an products. excluding inflows shift deposit Canadian across year-over-year XX% double-digit higher to basis due growth volume margin trading was volume as net Banking from from to Banking very portfolio, higher even yielding expansion. Canadian income segments. spreads platform our GIC which across up low-beta rates XX and seeing higher is broad-based Slide quarter, core interest income interest XX%, a up The benefit or

year higher drive in in hikes hikes rate expected the benefit turn NIM to accumulate Going expansion. and continued will expected forward, is announced revenue from This second rate the provide future are further. incrementally to

growth increase, core believe As retail mix interest large our And given we of will deposit rates matter more. positioned base and we low accounts. well checking even beta are

reflect to year volume with margins rates Canadian this interest and basis July’s quarter does U.S. higher also largely last from the in Services. also due quarter shift in net to revenue drove gain increase interest benefit rate of Wealth this deep We suite Management margins in loan expect NIM City income our not Wealth increased drove commercial funnel client market The National’s asset growth City Furthermore, widening client increase to in revenue the continue deposit acquisition deposits. higher its point portfolio, key client combined mix. Funds Management. to was in asset-sensitive higher the wealth strong Investor rate. in combined and Treasury from on National’s due higher deposit National through product at rates City interest management & up yields with Fed last value points basis increased XX% the fully from floating XX share NIM our higher net from interest XX proposition. Rising

share-based market-related relatively X% expenses expenses were non-interest excluding to up to decline compensation which up expenses, on of these from variable XX, largest revenue. down Turning salaries, was commensurate were variable X%. increase In and with year, compensation, The last with last year. the costs controllable higher contrast, Slide in XX%, were flat relative

our our capacity Marketing clients. to noted, costs As businesses. prospective Dave and highlighting client from low our our levels sales across in by to proposition we continue strategically we value continue efforts acquisition expand to invest as largest growing existing normalize

the upward also dollars, our supporting City were X businesses. as expenses the we have look trend clients infrastructure to Management National’s of We meet seen improve as operational U.S. year-over-year revenue-related in travel, our years. business XX% the past expansion development across to investments Wealth in an costs such needs complex up over U.S. including

year. share-based expense across compensation lower, growth enterprise in be the Next to year-over-year fourth quarter, last we provision expect to of and legal partly the taken excluding variable the due quarter

come the expenses controllable salary and year investments guidance. strategic than full growth in our business, XXXX higher slightly inflation grow prior given our However, in to will likely

XX% activity segment our Personal on largely to X.X% by card XX. from a strong Banking along higher revenue rebound of higher were card performance offset costs. increased Banking significant leverage X% above lows growth banking-related due income fees, including was this client $X partially revenue from in strong volumes. Moving an uptick higher in Canadian travel Commercial A Operating and in resulted pre-provision service bookings beginning last pre-tax reward quarter. driving pandemic foreign exchange with earnings charges. up Slide credit travel-related well of reported revenue up Higher Non-interest was was purchase billion this quarter. year-over-year, year to earnings XX%. service

next it fiscal investments. operating benefits from We to efficiency higher be leverage towards well this our than year X% driving We XX% quarter wider more full offset expect be spreads our above the as year even for historical full year. ratio will range, to X% growth-related anticipate the to

mainly clients of RBC RBC The lower good this income at to elevated strong fee-based to Canadian of long-term retail capital to period activity earnings earlier. was billion XX. of $XXX client primarily in assets mandates. largely and revenue a Wealth during decreased in $X a up flat. losses quarter. subdued as market unfavorable captured income by interest million. were shift Turning X% also Management uncertainty. GAM, driving redemptions net part fixed the In reported revenue to growth Global were year-over-year, balance and transactional client due mark-to-market sentiment supported Management contrast, Slide lower seed discussed risk-off Asset this the due relatively conditions. non-interest quarter Revenues GICs net market move revenue

impact Turning can longevity year, new Net prior contracts XX. to last magnitude income contracts be of decreased these of the in primarily $XXX reinsurance to million from due Insurance volatile Slide quarter-to-quarter. year. of on XX% The the

on revenue million I&TS revenue to $XX funding million from client $XXX Slide increased market increased higher higher ago to from Turning and of largely primarily a income due deposit XX. and year Net liquidity opportunities.

Turning earnings to Slide pre-tax Capital XX. reported Markets million. earnings year’s XX% of Pre-provision were down $XXX last results. strong from

the of the July well do in not recognition the in $XXX include During environment. weakening quarter, as credit XX% unrealized transaction. widening of Approximately of fees, as of recognized upon million close are resulted and yet an marks benefit markdowns markets spreads of loan the in are the underwriting which uncertain primary

growth issuers Excluding businesses. interest in The albeit should forward. in will to performed along strong from drive which, remain benefit relatively volatility and further our balance origination control, continue I we that, our and our operating on positive was over to uncertain is With global credit credit contrast, market will rates Equities businesses with Investment was softer leverage shareholders. markets. focus interest on to backdrop sheet last going well to part impacting revenue Graeme. activities. from increases sidelines, We to given impacted XX% value deploy Banking line by it fee client solid, activity well in expense conclude, To relatively by positioned turn widening FX deliver spreads drive rates sustainable with client-driven advisory, these volatility impacted larger of marks, higher in Lower revenue Markets year, in origination primarily down M&A and impact which decline Global pools. the kept the business. macro the was a driven our while of trading, trading our on In our revenue rates

Graeme Hepworth

XX, was points on loan basis loans a reflecting this our and balances gross ratio impaired continued XX impaired Thank portfolio points morning of down reduction quarter, good you, everyone. gross Nadine X basis Slide in modest Starting growth. and

million but The attributable real and low sector. quarter-over-quarter, this at pre-pandemic to increase remain quarter was impaired XX% of of and portfolio in less formations $XXX primarily wholesale related estate New a increased largely in the loan levels. loan in the new than two-thirds formations new

XX, primarily million quarter. or provisions by in impaired up last quarter, point PCL sectors. and In where reversal increases and in $X X we retail had reduction million modest to of The from with was the driven both consistent PCL of was loans to was of markets, capital $XX $XX utility are down this we PCL $XXX quarter, portfolios, this impairments gas basis Turning Canadian back expectations Slide net and on a PCL. trending on loans normal levels million commercial oil Banking, that and in the with more million

$XXX million in remains quarterly quarter Canadian the still though, below $XXX well XXXX average context, For of this of Banking million. the PCL

Moving to further context on allowances. Slide we provide XX, our some

operate to quarter, full I the down PCL levels economy low on continued impaired just of sustain During near impaired This has loans environment driving gross and levels. loans capacity, rates the highlighted. to helped unemployment low record the

increased conditions billion. provisions. with performing likelihood determine the uncertainty, action the outlook. Banks drove million Central have to strong substantial To increase interest our macroeconomic allowance this loans our Last by prompting prudently a quarter, for used the $XXX and we to exceptionally for take severity the credit increasing during With this to and losses have in pressures concerns $X growing increased $X.X both of scenarios around on we exacerbated our billion inflationary from on loans economic million rate provisions downside quarter, recessionary $XXX uncertainty which account increases

reflects increase credit a forecast. macroeconomic the and reserves weaker quarter, primarily This base outlook in case

XX% face average Canadian will house peak. moderate recession we over now the will a their For Canadian XXXX, example, from U.S. in decline economies assume prices on and and

spend well increased cards the rising couple the particularly Additionally, a composition, residential and commercial as with environment, rate in a and allowances impacted In discussing the part on Canadian Banking contributed as Slide this of in shift business quarter. portfolio mortgage some XX. growth, time a portfolios, did I starting in our of portfolios being want our context to portfolio interest to

through mortgages mortgages account than rate variable while still volume XXXX quarter, accounted growing XX% last highlighted of a rate and of I fixed our for XXXX, portfolio. more for our acquisitions As

at Thus, exceptionally variable until Overall, interest client a most addition, see rates is In not in rate to base the portfolio relatively rates renew, payment an and experience they at renewal. mortgage increase mortgages our rise. continue if modest increase primarily impact strong. mortgage are higher we’ll our will of RBC realized

of Our XX% Canadian has greater portfolio mortgages Banking billion with uninsured a current loan-to-value a loan-to-value mortgage XX%. than of only with $XX.X

analysis clients mortgage anticipated Our a average FICO score XXX. able payments have payment to absorb of these will clients be of internal majority that indicates And our an our increases.

payment that benefit addition strengths, for also before comes core increases. In to those from renewal the mortgage the they time comes with have borrowers and will flexibility our their up their

slides on on up the come by the mortgage highlighted of of XX% for XXXX. end slide, renewal As – balances only

the the in loan-to-value clients those deal in and majority Additionally, position mortgages highest our rising forward. that and puts or date experienced have generally rates were don’t expect we XXXX rates, XXXX have the and of prices home strong vast early to to in This are and renew beyond. XXXX our going declining originated until a that with lowest interest

impact We will benefit and adjust higher wage moderate income the time to have payments. behavior from of inflation and to

have rating mortgage through with cycle. ensure an our associated the designed risks portfolio standards are resilience economic our increasing, been While to

our the XX. high-yield and Turning leverage now I’ll markets impacted discuss environment. loans also to finance rising tells bonds leveraged which rate Slide has that by business, capital been

lien credit At X.X% X.X% purely capital for structure. lending down from both exposure a manage in total of our on market and to and from We first our our our XXXX. And origination, loan leverage borrowers’ business. portfolio, outstanding risk position this the loans only security our benefit continue leverage represents portfolio,

managed is our limits. a exposure no risk managed an while deal-specific supported realized $XX well the more and within is unrealized of card and than we cycles. and financial credit quarter, a the and improving with record and delinquency timing to strong underwriting In pleased consistent loans ultimately incurred rates Central levels risk The towards framework have normalization exceptional pre-pandemic To through towards track well-established per portfolio a on outstanding performance sustain the timing the business is of point success has performance like PCL XXXX. costs for by for strong by increased COVID-XX of average and depend syndication the consistent Overall, portfolio conclude, noted ongoing business. XX% by pricing started us the continue we our magnitude originally for borrower diversified we’ve Bank’s market credit to this Market sector creating landing with soft which increase risk allowed And borrower accounting million. very appetite, portfolio, generating portfolio Additionally, the underwriting the leading a losses of longer sector structure economy. appetite established in in through approximately portfolios, hedging. for was and this impaired risk be Nadine earlier, inflation, through are indicators this recovery we protections, with on exposure of credit than economic to our while and from performance anticipated. will That within said,

proactively the growing uncertainty. to economic We to risk continue manage

Q&A. test noted believe open we I rate severe for lines more with And are for let’s even risk and with operator, well yet that, capitalized As stand our quarter, last the macroeconomic outcomes. portfolios and we stress interest inflation

Operator

[Operator you. Poonawala first Please of Our Ebrahim Thank from with America. is Bank go question Instructions] ahead.

Ebrahim Poonawala

call uncertain, end solid. consumer But mentioned commercial Macro remains going of it you to economic cycle. remains you comments Dave, back morning. some guess underlying at the of the think I big environment closer picture the on sounds same be good Hey, to I earlier. a the time, question, the made momentum, like business just

could downside stress than in we are and in for quality get oil? in terms of means a growth Just how scenario credit that And where things give terms and should you. today? worse that what us deceleration in expect trends of quickly terms a your implications materially Thank just the things of perspective of

Dave McKay

and And closer of This to areas, maybe only demand with the monetary honestly number in. Maybe a scenarios. these with our one have I’ll you, to uncertainty. operating Ebrahim, forces a Thank And with now. in No the of economics agility as investment community get going once volatile number control word can’t can. going monetary for the That’s are calling you bring quick out. neutral to and new is the are to to government, we’re strong and to to of the I drive And Graeme, question. RBC think a That’s that’s think the sit inflation the second capability and markets they stress play ratio, I here inflation. stakeholders the And see that portfolios the economy in things to deal I that provisioning, the to short-term. now. the strong is I against it the with territory our CETX right word the aggressive down. tightening is at for constructs. struggling with funding that at very, that, enormous above. play stability calling above all to tightening, us comments, different And ranges, we And predict all part in rate uncertainty, think we’re my very strong way are uncertainty why uncertainty. therefore, tightening to of CEO for back until operating can’t. of rise we’re to we and inflation how deal read community Markets turn flexibility strength to continue why are expect as we’re net right trading therefore, important we The rates including targeted potentially slightly dealing aggressive from gives

North we In class but America of by demand, in activity bit inflation, asset that’s of affect you resell aggressive slowing have seeing a seen and already a slowing of little quarter-over-quarter see and demand a So bit down you’re card markets, a other a masked seeing some that year-over-year the slowing purchase of mortgages little levels. markets, and you’re activity. the in

driving recovery of levels muted. above remains Now keeps and that levels. double-digit some that will It pre-pandemic inflation into be

the strong in cushions I of and see monetary very going significant, we to rates low to that of closely. demand watch impairment as starting to that. corporates, produced still So The impacts sheets delinquency have But have suppression you’re which think, tightening, this. through our go from we’re we balance

serve we is other Canada, Canadian across payments significant top Canada talk the do, shock-absorber to quintile different as loss cash any analysis from spread Canada, at the and it the we to demand. what’s across and the provide the about which measurement us governments And the in U.S. in the potential cash how higher see or is provide more and in two again we In savings XXXX much broader-based evenly distributed, U.S. to inflation and quintiles. top it’s because surplus job So flow. much that concentrated all the how a FICO XXXX comes shock-absorber went, long bands a across and that between quintiles

sector to day into employees, technology sectors lay the every off paper. it You in starting see you other second read creeping are

impaired levels, this along incremental. So strong took performing that and Stage loans. thought of provision it we decreasing an you’re more begs on our starting prudent X, prudence is to with despite incremental see loans more Despite very to we quarter take strong end-of-cycle capital an which our signals very approach why having

absorb uncertainty for cycle cautious end economic sheet part opportunities of all it’s Ebrahim, more to and play able your growth quality our to of the but to to uncertainty, look a any of be to balance continue balance trying to point. rapid So for with

uncertainty. and in So I think those playing It off you ROI all hopefully, the what balance franchise sheet And helps. to provisioning get absorb and is outcomes. ability the that is

Ebrahim Poonawala

just the at level may. concerned is even that the elevated one of you repricing, So for really if like is quick means I that renewal. Do – what about rates and And mortgage helps. market follow-up

they period for worried just So are where Thank about remain decade? in if are today any at time, health point the consumer rates how last extended you. versus the an you of of the

Dave McKay

go and data lot an analysis we to and have That’s a question, Neil maybe because have important of on that. of done a lot I’ll

Neil McLaughlin

Yes. Thanks, if wants then Dave. anything. I’ll start to Graeme add and

up the a those the looking question. the they ‘XX When that we this book And risk topic the LTV don’t to of is really we small this flows landed on that at but of customers sort which mortgage made it, much at expected in and the had until we all should highest lowest to customers’ mortgage started piece We’ve concern of overlay absorb things break point of out that strong delta Graeme at and rate that deposit our year, couple time currently bring very, the on get rate what lot and really, will down – to contract home rates and a just we the Graeme’s sort Graeme And A the – when book. be with comes calculated cohorts obviously spot, and don’t last – internal mention inflation and of rates all, proprietary looking at renewal for down of that, get thanks is capacity, at we’ll particularly particularly costs. done in uninsured clients. see versus our the insured much throughout we’ve last view a the capacity. that what monitor into where the a those at And Dave with we next wage which to renew. of first what’s can work more look And segment incremental had they ‘XX – is modeling risk the our then touch had view where portion And have franchise. at of does cash the we’ll all risk. – is the the in the to Ebrahim, lowest on continue they’ll overlay. speech is continue to the mortgage capacity, looking part, we have we’ve breaking made point, There’s remainder a around lot spent on see as years taking the book, value have is kind down, customers, and their renewal? interest their who of look then factors, the ability the when also the that And So, be that for prices see our we given leaves And we that that those where very data we up? we When come mentioned of the year. would when risk Graeme now? are it couple to really, for next renewal pockets at of of together,

the liquidity in growth in we position When would we a still accounts see consumer look be on high book. view is where we’re mortgage and consumer slowing. that at the So credit, other

seen into We’ve checking GIC GIC things into pushed As the $XX of at have you billion like liquidity book. over we’ve look been a our about lot had book. pushed account, the

of that’s those starting and on Graeme’s the very So provides losses low sidelines point. for customers, cushion we’re from cash delinquencies to and credit point a additional that

starting Graeme. enact manage stresses, playbooks I’ll we’re We that a to point. and into end we but we good the get lot credit we work of have at profile. it if to pass from downturn a the a to So maybe that will do look there But

Graeme Hepworth

I don’t have elaborate. to

backdrop Dave think critical very, is is that captured why – now. uncertainty the is strong current the starter which see one. a a right what I strong against current portfolio, healthy X performance of there’s Neil Stage lot you of forward. spot, We flipside and the That’s losses. that’s early very the in And the macro loan lot reserving of we’re here, the because points and going a really

know, really into kind here going we’re to a X and strong uncertainty So out environment there is taking and uncertain prudent you of X, recession more X, But as lot a point. we this flag everyone, next of a healthy are over years. at from could a approach and more a scenarios look starting that do lot play of here the how different we

and and how that downside single why we look capital we consider adequacy assess It’s we that and we and we bring reserves try do the so of one And the our we then at, scenarios. that’s range through into uncertainty of not established play, all that we have.

strong So lot here. ahead And point, again, strong to portfolio really us. starting that’s of really and balance we’re really uncertainty a what trying a a of

Ebrahim Poonawala

very Okay, much. thank you

Operator

you. Thank

Please with Our next Meny ahead. Grauman Scotiabank. go question is from

Meny Grauman

the just a any I that referenced Dave, morning. outlook plays am in more your that outlook changes to outlook the pulling maybe and you in outlined outlined? good of or the capital wondering you’re on appetite, risk uncertain Specifically, even you that then Hi, thinking of outlook how capital the of interesting, changes impact any given lot out of in there terms remarks. sort levers your you opening just and sort your deployment? any given business? on deployment, that your terms uncertainty on And

Dave McKay

Therefore, as about, we’ve and Yes, think, from important can a never a we know, being consistency we’re and you let And we cycle. this I we’ll starts risk risk think it’s one. first, out. talked market cycle, consistent perspective, fall underpriced our is disciplined including appetite, strategy grow in appetite through very you and to as significantly or are time share when it

risk fall inflation, challenges with of that You at out that can coming loss and potential expect that more will with appetite. with consumers us, job customers more to

between it. or went saw it message capital doing consistent cycle. retail treat very franchise. We then strong point through through to you retreat key at think to as will Therefore, through organic how its not by be we U.S. want opportunity from RWA saw So the a you that. we a hard capital that say I as be your operations funded To customer and to you strong long-term that We’ve we capital, growth run our the continue don’t and growth from a global cycle. bank, That’s on – customers cycle. growth managed with operations, we the wealth markets, try

lack seeing serve corporate Therefore, continue seeing will markets. we the given client particularly to those demand, We’re some we’re of strong in of in clients. our book, loan liquidity that

client We book a strong risk within appetite. our very have

seen have XX% payout ratio. returning shareholders continue with capital You to and plus execute us to

We very the came continuing the have to prudent total apply capital our generating think shareholders. uncertainty, that strong stream have steady growth that a playbook confidence always to We to on with I flexibility pursued buybacks, and give continue the shareholder Therefore, given more for of and playbook returns strategic opportunities. don’t an to see Dolphin. lookout the shy that same. We them. agreement remain you you’ll away from a should lot of Brewin We for

excited that very opportunities the us about front and executing playbook. We’re of in

as to Brewin did risk we offer we we are within will It we to and does with just ever for return within – and our to Dolphin, dialogues. Brewin always look appetite the So – have the it appetite? You We cycles a demand. the Dolphin. And something it knew that’s on or made shareholders’ saw We lead just we the price having in our with When going over what’s but the world. going coming Ukraine. Ukraine suppressed long-term was in there not therefore, time, taking challenges, in on it war acquisitions. knew think in macro business our the these conflict through view be we’re we immediacy model, knew to of through

our revisions balance kind shareholders, front return the allocation, opportunity but sheet particularly and price of approach, in cautious cycle organic using this flexible, us. of capital at a helps see context when revisions of point strength that hopefully, prudent you and take growth, generally in to opportunity So to

Meny Grauman

clarify, And no just that to outlook is on particular, correct? so your in That’s change very back in clear. buy

Dave McKay

No, none.

Meny Grauman

Thanks.

Operator

you. Thank

Bank is Dechaine National go Financial. question next with Gabriel from ahead. Our Please

Gabriel Dechaine

morning. good Hi,

the one loan at the quick leverage Just wholesale, was on to a tied formations the estate that all, real loan? and book

Graeme Hepworth

No, division. real estate sort no, of leverage just it That as a wasn’t. of real not is think part the the speaking. big Leverage loans – I was estate

Gabriel Dechaine

Okay. expansion your is Could see which understandable. totally then also in deposit My we franchise, great you QX? bigger of margin the talk a this similar about picture increase question, And quarter. importance

large wondering just very about the effect. a got deposit I’m substitution one. You’ve

your the and is the product that Are Thank you you Maybe that billion or can $XX margin switching over have – that? customers so? upside you. something into You into moving talked where help customers GICs. could clarify accelerate you of into deposits starting about year eat cost that next term putting a trend zero might to or out

Nadine Ahn

in terms Thanks, Gabe. of to some and Neil, of over turn start it maybe the I’ll deposit dynamics. just

quarters. couple next So picking the but the looking terms XX quarters, of in NIM of up. we’re margin couple it of driven the And not expansion, I types between environment that Canada, we’re off XX through expansion going is of down if points break to that to seeing next similar see in the rate basis directly, over of what

our bring As on that deposits. we mentioned, from that low-beta value comes low-cost, And the we two perspectives. deposit

one, on a consider deposits then sensitivity deposits also the immediate invested there’s that in the of that short. invested of there’s the portion So are a of rate an But portion rates. bit you longer-term larger

benefit sustained have rates those rising. a as So continued been have

do And through so expect to we come QX. into that accretion

fully was hike As in. the July rate mentioned, not baked I

So the you the look is sheet. our National primarily we’ll proportion of of if U.S. floating in continue to given the of large the side, side margin And see particular, that pull into balance curve, the sensitive end which short City assets from at it the the in on through expansion. on that of rate XX%

low do of We well. expect, expansion a increase coming July of From low-cost again, have that sustain to primarily we similarly benefit to account. checking deposit as fund the end of the margin franchise to the that standpoint, through continue fourth into Fed off and the the quarter deposit beta,

GIC a as NIM is that generated into Maybe from and some opportunity, that us. of in our the back the But is it I relates some products. as – it the of low-cost clients importantly, we’ve from still out product, standpoint, capture their on Neil, I’ll have expansion and from around side to happening management their we’ve quarter. clients moved as product. savings have that market side. divested for the actually, what given wealth of And standpoint, most that we lending turn migrated there seeing concerns from over to our deposit they’re of seen have in would So what’s say, forming markets off this

Neil McLaughlin

rates as account the capital sort the between Yes, of guaranteed then in GIC get product an investor checking are terms with – growth we and seen return. now definitely, Nadine. in to slowing still in growth looking off are business. move they But and of retail year-over-year the preservation of market some uncertainty. core the mass Canadian we’ve have within retail for for terms have incentive stand the and of a to Thanks, risk They Yes. the looking

that the have of the increases other source terms some healthy move still has mutual excess liquidity. retail a from But We of as our business seen out fund liquidity we into GIC into that the core source would checking in swap So characterize a GIC. of account product. been

And back lot so clients financial of product. planners into the It’s and from still wait funds those very we’re our them out those to mutual uncertainty, just we’ll A parking it have them with then and retirement clients. capturing to out there sticky work fund now planners get investment product. the a

now, of think that the okay. feel I strong mentioned, are spreads as that GIC swap right some in the benefits Nadine made product one we actually have that seeing

Gabriel Dechaine

but similar the GICs, wealth But just see into out expansion markets in still money new effect, cost in either the overall. that’s that’s to as far margin reiterate, we your of or next substitution reducing the more quarters. could as then funding the business, couple of And

Nadine Ahn

quarter. for and Yes. this bit tempered but rate then and QX in as off for expansion expectation saw in for to City margin in growth Canada, taper we I what QX off, say will the a similar it higher particular, has start National the would

Gabriel Dechaine

and Neil. Nadine Alright. Thanks,

Operator

you. Thank

Mario with go ahead. TD Our from next Securities. question is Mendonca Please

Mario Mendonca

us lows? could long $X.X credit the go size like how outlook and book? around the market we little not on you the But I us If can maybe of leverage billion credit highs portfolio losses you or what Royal? morning. that – risk is – average the risk And bit, of and both been a could the this sort help some Good appreciate an what risk back Like has to you that loans on really for risk. is give history. have for Like positive and seen portfolio and credit

Graeme Hepworth

the to the growing provide does the start, and it loan chip grow Derek of overall will kind in on portfolio. been that I as as some we think what portfolio I of I over Yes, mean rest hasn’t size afterwards. can portfolio time, that fast at that tried context

portfolio. a is that we so to higher-risk it approach a And taken appreciating have prudent

from portfolio holds. a granular other that $XX seniority attention very relatively with is diversified portfolio to the draw inherent the we and get I think thing the we from really people’s million aside security, benefits with to want

at does there time. profile no is PCL PCL portion to – so dominant right. by profile contribute all, of And our it the overall wouldn’t over means I But our say

– over part it’s the five right. in it’s of you quarters, environment look that’s mean and at recovery I position So, capital inherently, last markets the a that, – in net performance can were we this

creating outcome or adding inherently high-risk despite very differentiated a not a it portfolio. it’s So, being PCL

on environments consistent to credit are risk and for and risk volatility maybe been of really on a it’s in we that bigger that think the in I again, turn the And with there, comfortable Derek side the market But approach us, it the I been very will give over creates business. it. bit we can have our So, context particularly dynamics this. more in like he quite

Derek Neldner

Thanks Sure. Mario, Graeme. And I the appreciate question.

covered lending very in holding We disciplined managing two portfolio, group diversified the broad Graeme on where risk, that borrowers. think well are very leads and closely. that are I of we a small to that watch that we off holes. and think that’s And credit I really has that

we that slide rated. leveraged comment, business on in the thought lending really been just as over often about And of would to have the well, that is time, are portfolio driven. for lower over I corporate this as you XX% Importantly But see decade. borrowers sponsor say, Dave’s can in the materials, of actually as a IR is

I We a history. think long have got,

quite how And managed over establish us an our we appetite. think in a And companies of did obviously as to, the PCL consistent what risk are our some their proven portfolio the ability that of clients that of are any importantly, run into we manageable it at periods And and that portfolio And sponsors sponsor-related times with good we names of some in gives been cycle. book, history companies challenge. with when have we sponsor their through track test. few has dealing on and do saw some obviously lending well COVID. went ago to stress and records of We it. out with work do we I you see that very was of And we disciplined very years that very how rise

the is As as very of closely think risk some that But that we environment on have position watching in. unrealized Again, market prudent that I Nadine that this XX% of time. is Again, Graeme market a point given obviously, we are at the book. area mentioned, more in period risk of we on taken the we is we have underwriting been has dislocation cycle. of how risk think that marks this consistent kind the market mentioned, are in over at we manage

their been M&A, very strategically that and it and whether has the and revenue last and for to out it’s important would decade, in markets business, or driving positive successful of refinancings And been business activity. a every a be ancillary each is important ECM contributor us Over terms debt IPO year. that

will like this believe where we very dislocation periods but be it’s for long-term. marks, of through some to over a continues well have been believe will we Unfortunately, you So, the run that we manage prudently I business it managed. into and important will us

Mario Mendonca

Is not in the size you that Can presentation, giving could something size. see disclose? I business, you the that like us you or are can

Derek Neldner

consistent. over our downturn have We we the below to reduced since underwriting slide, you XX% average, But period. market for We into in but our see the about our and haven’t the disclosed been term what is can above reasons. came materially, longer position there slightly as very share has not that the average competitive

Mario Mendonca

rate could put XXX follow-up the in I as much that Quick now. the basis were referring mortgages XXXX, as XXXX Okay. question basis then those points books for am rate The mortgages. Those XXX mortgages to points, Neil. variable be and on up on

the that in You is the made case, issue book? any concept isn’t renewal, covering In little only Royal’s which that principal. Royal renewal. but is that has the the payment trigger Does sooner exist to concept entire than a no where the act point there longer of this

Neil McLaughlin

It does.

months, we have over variable in that rate. couple trigger mortgages, And gone the through is analysis last rate Mario. of So, there

have couple about the will we we will XX,XXX that – hikes, that expect we mortgages next We reach of point. rate with

trigger the X.X% term deep require I materially have is than less think phone in longer again, risk we of terms through, we sort renewal The mentioned customers average call. gone – about similar that of even only – similar this effect. a will have less analysis $XXX. We to of had And a increase we

So, customers go and we vast that vast, can see of the XX,XXX start majority will capacity in the to out. mortgage communication

Mario Mendonca

it. you. Thank Got

Dave McKay

Graeme?

Graeme Hepworth

sure just you add understand the just construct will make I and though. there product

on a payment interest on. mean X% incremental hundred point As interest the to about that’s we material really average, it’s back and immediate, of clients right. to passed schedule couple in that’s that And trajectory deal until rate renewal. only through increases on I increases payment it’s cost of the for come do context, to that’s given continue expect that at XX% the the They that you dollars would why rates interest don’t saying increase, average, trigger renewal. the just reset are is amortization

Mario Mendonca

Thank you. understand I that.

Operator

you. Thank

ahead. Paul is Please Holden question CIBC. next with from go Our

Paul Holden

those clearly, mind, how have say, going candid are PCLs you would today some if a PCLs to trying not QX sensitivity And and to to to and you go on of increase peak you. in type may there run have at basis estimate the think ACL happened recessionary into what to a ACL the temptation differences as then environment ratios analysis, all may and loan a what type back key But early or guess between Thank to through look Appreciate in in there? to back XXXX? look back are are you the is differences an comments the do on highlight, the maybe be can outlook. there through much and us at similar And Good why ACL. ‘XX go we tried exercise all morning. get is XXXX. the your macro I on your

Graeme Hepworth

Graeme. will question. It’s I take Thanks. Yes. that

were maybe period QX period people was XXXX, shutdown of QX the would in to. what you period, economy unemployment the in right, say, difficult XXXX a sent conventional pretty in home I think recessionary position terms to if instantaneously. I in will. where spiked I mode, to are we mean was, more very compare a extraordinary were where pandemic at a globally we is mean I back complete a looking

facing recessionary that’s kind I very of the now. than situations are think different we

you Yes, are going from to, baseline unemployment that, at have And some highlighted our disclosures. and at look that and our forecasts looking so we X.X% when extraordinary macroeconomic put uncertainty, think the of again, in say, we starting X.X%. I and point we our around of

at of XXXX. have and incredible we about, same events that kind level again, recession the think we facing back QX So, the seen with thinking that on is an top situations, scenarios, up I rapid were testing the of our that, don’t we more look unemployment, are are even but in housing. we plausible looking Again, we severity at of in increase severe And more to severe X% more in housing, do get in at you unemployment. that are we looking range. more if stress Same thing

more back back that in we we that certainly way. commission more a consider stress really and lot housing So, play see were in out we do that, XXXX, didn’t with but come maybe around of harder expecting could what our

we at recession again, kind yes, baseline. So looking are a as a of

We just of are of we complete the that, level saw same that economy. when but don’t it’s looking facing at severity I XXXX around shutdown QX uncertainty we a think were the in

Paul Holden

consumer factor into your businesses you of that do like the that sensitivity earlier, analysis? how of general starting as for unemployment, well. scenarios then maybe were mentioned and the And the role health does point play Okay. rates the deposit the general health and What things in

Graeme Hepworth

Yes.

you right. So, there Graeme. The again, thesis, it’s – are is

current of taking kind always We and portfolio are in our it’s position. its

the are that health the represented consumer, you talking so in the of the clients. business situation, And about, the for are health those ratings typically items of our those

We have our wholesale retail and both risk our ratings borrowers. clients for

ratings kind up our these start of starting us And with projections that for overlay point so come that their to we forecasts. that then provide macroeconomic

looking were that period, at QX then, end at then. bearish even allowances we projecting as had kind where went we into different. scenarios because cycle, somewhat back where ‘XX, just actually well. bit loss quite we making were We the and now. headline, We are then back XXXX. quite And we a at thought a loan some similar versus we QX were about were actually were on severely before comparisons kind XXXX back little of asked in weighted are our of You a though weren’t of we we credit but so We are baseline recession dynamics then, our downside back QX

but base than Now, we a healthier a the did more have severe then, starting right. case point we one, is

to position back similar were back as in a about somewhat situation kind pieces we well. those that us mix then economic back we QX when so where get were of the And bearish ‘XX

Paul Holden

leave Thank it Okay. That’s there. helpful. I you. will

Operator

Thank you.

is ahead. question Movahedi go from Our BMO with Please next Markets. Capital Sohrab

Sohrab Movahedi

Yes. the Thank I credit of a these not whatever capital of because got your market just dislocation marks you missed questions. unfortunately so have the markets strategy Derek, this. in three clarification are months? couple you. or quick over kind changing in I dropped just have last the type confirming, of up, I may

Derek Neldner

not No, Sohrab. at all,

the products. at if think we revenue every financially, been mentioned, good underwriting been got contributor it’s I I important can and It’s our high you M&A it’s it business and other through and positive think a ancillary is business. as that off. business cycle. financing business, year, very clients an I a we Strategically, ROE apologies serve help area look the a drive When it cut back over other

like or and real in have it. So, products, it direction we executed grow our of said, talked business prior calls, That we some ECM. particular, around is has in focus and being no on a about pleased we share risk appetite the to our a our change strategy advisory continue non-balance to with that market feel very that. to And sheet been have how and in of we as

products. on years We lot that adding and a the last have few a the emphasis focus been bring and advisory over the of ECM people

that seeing both are share We translate those higher into in market of products. year-to-date

going, and with to that And will consistent we and along. so the focus direction that’s invest continue we very the path are strategic

Sohrab Movahedi

maybe the moderate X% you kind of I trajectory, quarters? look know, one you the excellent to Perfect. of total expense that just this or quarterly right on bottom think quick for the so I around have Like year-to-date. And next, a is comp it, have excluding variable like, a When expense, been the non-interest you where over call non-interest far Slide four Nadine, sort you averaged the I has charts or Okay. bank of at XX, expect and this, don’t where do on six growth growth Nadine. the quarters to that picture trending. show

Nadine Ahn

Thanks Sohrab.

investing of that, we have the in business. heavily So, in been for the terms outlook

continue So, with interest that the we path, are given of the associated down tailwinds continue rates, risk. adequately we that feeling that in seeing and terms are downside we provisioned

slowdown that we We that toggle business, into year our but do in have to to the and further we we continue are seeing to if just expect see salaries, next in investments on continue some inflationary the given of pressures any opportunity economy. the

Sohrab Movahedi

NII are the telling? line think taking you or is, the less lead what more So, from I

Nadine Ahn

we Yes, invest. continues continue Correct. – to

Sohrab Movahedi

Thank Okay. you.

Operator

[Operator Instructions] Our Genuity. next go Canaccord Chan question is with from Scott Please ahead.

Scott Chan

you. Thank morning. Good

want And the your how Neil, impacted mutual with product GICs about I partnership recent and recently? ETF your suite and positively am about funds. lineup BlackRock with Just or been has the you just product that management. and curious negatively dynamics talked ask to

Doug Guzman

It’s will take Doug. I that.

that for frankly. over our are that The we they was it share not was So, would it, a in if we ETFs, to of advisers and you our available product affirming suitable pleased to seen dramatically The a flow very as strategy. that assets their portfolio. market thought for that with have product have clients prediction but desire of recall, been initiation, will have gains concept the

RBC have on to happened client we actually spoken have and didn’t branded some been want is our RBC product because their not So, previously happily might as with have had with competitors mostly we dialogues of what’s to who us able statements. open advisers

to just we but has as been have with With different found add asset a those welcome also the and reception of iShares branded not alliance, able advisers. classes, some

to they them have dialogues maybe clients that able funds shelf And some us their maybe that buy elsewhere, that markets, classes first the maybe clients’ then, put mutual because and don’t conversation mutual or to our a advisers the categories. are have get We towards choice emerging them. with asset portfolios with at feel open well, we on an to have who of affords not opportunity bias been ETFs like in to also in maybe to frankly, outset debt difficult some home the for distressed product, want

with a some welcome those found have advisers. home of We

performance the a we it. in is short-term income. – bias fixed asset in The been to partnership What you it’s So, slight have with very the very see has worked happy management well.

asset management under – management last both in equity whether So, income asset that institutional parallel in net it’s over both individual markets, that positive the declines sales – single seen assets but America you back manager has have fixed of or on year, declined North and channel the every had Europe. or

are performance we across board. with the the happy So,

Scott Chan

Alright.

Doug. you, Thank Okay.

Operator

you. Thank

Securities. with Please question from Cormark go next Lemar ahead. is Persaud Our

Lemar Persaud

for Maybe clarification basis are deposit for talking your just quarters. points over then Nadine, XX Are next points points first, I you can a point XX margins it have XX – then, if And is Banking? mention Canadian talking heard points you I that And of you in you basis talk couple about the is of assumption to basis XX think sequential? about Banking to Canadian Nadine. about betas? basis

Nadine Ahn

Thank you.

QX through increases XX basis taper the off. points to be the down over to would rate quarter into as we the So, see start slowing points basis XX next range

they In well. terms betas, holding of are deposit quite

As beta. of I deposit mentioned, we our have is got XX% deposit base low-cost

is saw slightly. side things, up which staying – come low. muted off been of rate bit, so and It’s account from quite the tapered you our sensitivity a interest quite checking little that’s that And why

We really at migrating will it’s more. up very it from run move a that basis point longer probably term operating below high. this up increase However, XXX that rate not of the would been taper the been has We to start our average, expect to Canada to time. up Bank see next bit but

Lemar Persaud

quick a Okay. Great. That’s one for me, it there. just

Operator

you. Thank

from is with Kim Credit Suisse. Joo Ho question Please go ahead. next Our

Joo Ho Kim

Good my Hi. for taking question. morning and thanks

of in wondering and thought meaningful and pay-downs X% go if am you I there. And to any volumes Just was revolver quarter-over-quarter. utilization heard slowing I I wanted on credit card strong, the growth, we purchase comment pickup seeing could very about happened terms card up back to it if are what on side.

going could So, growth just some you cards forward. for wondering provide credit you. the if outlook Thank on

Neil McLaughlin

Sure. revolver with will Neil. the Thanks question. start It’s for question. the I

balances. Dave started in tick we have So mentioned, to revolve up see a

up the year-over-year slower portfolio. $X we portfolio transactor of but portion portion growing in revolvers So, the are billion the our revolving terms about of – the of is revolvers, than

to we are back So, peak of I say revolver in third would of trough terms way on a balances. about the

balances we what over timing we that feel uncertainty I of come So, back time billion is got revolver that $X about a little there will have and is, exactly think of bit still there.

think normal, that towards back about. the trending consumers the to have have still I but talked room that So, we to goes all back liquidity obviously just And go. that

the seeing disproportionately mentioned increase active a being in year-over-year. of purchase and we purchase consumer about driven benchmark if very Dave, volume, comments activity, back of activity we on spend we have consumer strong travel volume, go are pre-pandemic really WestJet I XX% credit to to products In our Avion terms XX% have portfolio think outside is travel or ago. our very strong XXXX strong couple purchase that against think that we calls well. quite by about cards. I of made things note, doing quarters And one of a previous seen of

have back actually XXXX. now We seen and travel above bounce actually it’s

we the the consumer say board. would really active is across So,

Joo Ho Kim

you. Thank

Operator

you. Thank

with Investment D’Souza Veritas from Research. is go Nigel next Our question Please ahead.

Nigel D’Souza

Thank of the on in less could analysis minority and than I quick appreciated? be forwards clarification to mentioned portfolio. just understand internal the payment comments for that I majority long your would analysis portfolio, specificity And had regarding of But than X% if absorb of the you wondering do a what payment borrower to you projected I Is of base question. point you size the would And the the you. projection so Good of morning. capacity increases. your Thanks that the those that have scenario be? mortgage was less X% change.

Graeme Hepworth

is this Nigel, Graeme. it’s a good question. Yes,

to. just wanted put out I again, something to balances not call of think – are that that Again, think I they we kind of one it’s highlighted we disclosure, analysis, the kind to highlight and renewal. number a insured the higher we set are LTVs the the risk could of for kind internal it’s in more that pieces that down was going higher through be just and of what balances the at-risk and our at balances the narrow of

to that’s time But on with just a going the or payment two. wanted internal high-quality of we that’s the size a, the And kind So, that’s FICO weren’t just and still that, kind but, of that, renewal some of to why some on analysis to of highlight that, b, that that the is we also number undertaken. put around we portfolio. the provided a insights

Nigel D’Souza

for me. Okay. That’s it Thanks.

Dave McKay

it here everybody. will and over I operator, thank Maybe take

to going it are up. wrap We

about I kind just to And all we of away you take that think messages wanted just Now got the we to summarize through from questions. quickly quarter. the

core seeing now low-beta deposits, and significant creating the pre-tax, quarterly customers investments made have franchise revenue and foremost, benefits investors, savings margin expansion, our pre-provision. the franchise, investment you it’s deposit we strategic for in our that. to grown are from have investments, And first in or long-term deposits Now core value it’s we our and growth, as

rate we As Banking mentioned, QX. Nadine see at similar a Canadian in to to margin expansion expect continued

rate NIMs see lifting CNB’s on similar in over a expansion continued honestly, of also customers risk that’s QX. at see And information decades It that us with and to two because value on heavy great to expect we almost provides now. did We important our the to out, has pointed and such have called and point to you Neil addition continue And always we on and as we in therefore, an why growth. on revenue deposit their of funding can needs consumers invest. why our core businesses, franchises

very You commercial and strong lending consumer saw prudent. growth a

of we ability to strong our about, bit underwriting seen. and And Graeme are continue exposures we reaffirmation we in for clients and very a Derek some little to attractive trend are to any see You the being manage more of capital have result shareholders drive a that coming above forward. the a talked is some senior that the the a opportunities marks TSR clients absorb balance and of and uncertain becoming to to that us, environment strategy success because took a and our to the return and of sheet of premium and is uncertainty long-term

playing of result in a vertical more MDs. out. our That’s it’s So, more expanding bankers, bringing coverage,

forward XX-year So, you, our operator. continue in it’s forward. just successful of very Thank therefore, next driving questions. positive it’s you. feel out great A our Look And a not strategy to business. footprint. responding And been and cycle. about ability of call our our we drive going profitability going It’s set consistent Thank to QX. to our to

Operator

Thank you everyone. The time, disconnect conference participation. this your has your now ended. you lines Please we thank at for and

Royal Bank of Canada (RY) 24 Aug 222022 Q3 Earnings call transcript