Royal Bank Of Canada

Strong earnings / profitability beats expectations (good): RBC reported $5.5B net income and $5.6B adjusted earnings (second-highest quarter on record). Pre-provision pretax earnings +15% YoY driven by 11% revenue growth and all-bank operating leverage >3%. ROE 17.2% with CET1 13.5% (foundation of strong capital). Segment highlights: Capital Markets record, Wealth Management +28% net income, Personal Banking +18% YoY, Commercial Banking ROE >17%.

Capital Markets and Wealth momentum (good): - Capital Markets: record net income $1.5B (+23% YoY); global investment banking market share improved (last 12 months) to >2%, helped by strong fee-based M&A and debt/equity origination; Global Markets benefited from strength in cash equities/derivatives and improved credit trading (with some Europe rates headwinds). - Wealth Management: $1.2B net income (+28% YoY); net new assets +$10B in Canada; AUA nearly USD $800B in the U.S. with USD $5B net new assets and USD $2B recruited assets; Global Asset Management AUM >$800B.

Macro outlook: resilient Canada, but elevated uncertainty (mixed; investors should watch risks): Management described “competing signals” (equity optimism vs. bond/yield caution). Canadian GDP growth tracking ~1.7% annualized in Q1 2026; near-term outlook depends on CUSMA negotiations and duration of Middle East conflict. They increased downside severity and retained elevated downside weights in scenarios—suggesting investors should assume continued volatility in credit and markets, even if current fundamentals look stable.