Royal Bank Of Canada RY 2025Q3 Earnings Preview Upside Ahead on Loan Growth and NII Expansion

Forward-Looking Analysis
Analysts expect Royal Bank of Canada to report Q3 2025 earnings of $2.31 per share, with revenue forecasted at $16.03 billion. This reflects a 22% increase in EPS expectations compared to the past 12 months. Net interest income (NII) excluding trading is expected to continue expanding, driven by strong loan volume growth and a widening net interest margin. Analysts have raised EPS estimates to $3.24 per share, reflecting confidence in the bank’s ability to maintain its guidance for high single to low double-digit NII growth. Morningstar maintains a wide economic moat rating for RBC, with a fair value estimate of C$157.

Historical Performance Review
In Q2 2025, Royal Bank of Canada reported net income of $4.39 billion and EPS of $3.03. Commercial banking saw strong loan growth of 22%, but higher provisioning costs—up 36% quarter-over-quarter and 55% year-over-year—limited net income growth to just 3%. Gross impaired loans rose 13% year-over-year to 0.88% of total loans, driven in part by a large retail client issue.

Additional News
Royal Bank of Canada is scheduled to report Q3 2025 earnings on August 27, 2025, before market open. The bank has not disclosed new product launches, M&A activity, or significant executive announcements. However, the Canadian banking sector has seen a recovery in valuations after a de-escalation in tariff tensions. RBC continues to monitor the prolonged impact of trade uncertainty, which could affect its 2026 impaired loan provisioning.

Summary & Outlook
Royal Bank of Canada remains in a strong financial position, with expanding net interest income and resilient loan growth. While provisioning costs remain elevated, the bank has maintained its 2025 impaired provisioning guidance. The upside for Q3 2025 earnings appears supported by continued NII expansion and stable loan demand. Risks remain tied to economic uncertainty and potential provisioning increases. With a wide economic moat and a fair value estimate of C$157, the outlook for RBC remains cautiously bullish, assuming stable macroeconomic conditions and successful resolution of key impaired loan exposures.