Royal Bank Of Canada

Record Earnings and Strong Financial Performance: RBC reported first-quarter earnings of $5.1 billion, representing a record result. Adjusted earnings increased by 29% year-over-year, indicating strong underlying business performance. The return on equity was 16.8%, supported by a robust common equity tier 1 ratio of 13.2%, suggesting strong capital generation and book value growth of 13% year-over-year.

NII Growth and Margin Dynamics: All-bank net interest income rose by 26% year-over-year, aided by the acquisition of HSBC Canada, strong deposit growth in Personal Banking, and improved higher spreads. Adjusted net interest income guidance for 2025 has increased to high-single-digit to low-double-digit growth, with positive results from non-maturity deposits and better-than-expected spreads on mortgages and GICs.

Provisions for Credit Losses (PCL) and Impaired Loans: Both PCL and impaired loans rose this quarter, driven primarily by a few large impairments, particularly in the Capital Markets sector, including a $1.5 billion borrower in the utility sector. This highlights potential challenges in credit quality, with higher provisions needed in the face of ongoing economic uncertainties, particularly related to tariffs and geopolitical risks.