RBC CEO says lender has strategic needs to grow wealth and commercial bank in the U.S. and in Europe, has enough capital and prepared for acquisition if needed

RBC CEO says lender has strategic needs to grow wealth and commercial bank in the U.S. and in Europe, has enough capital and prepared for acquisition if needed

TORONTO, July 2, 2025 - Royal Bank of Canada (RBC) today reported its third-quarter 2025 earnings, showcasing a significant increase in net income and earnings per share (EPS). The bank's CEO, Dave McKay, also outlined strategic plans for growth in the U.S. and Europe, emphasizing the bank's strong capital position and preparedness for potential acquisitions [1].

Key Financial Highlights

- Net Income: RBC reported a record net income of $5.4 billion for the quarter ended July 31, 2025, up 21% year-over-year (YoY) [1].
- EPS: Diluted EPS was $3.75, up 21% YoY, reflecting growth across each of the bank's business segments [1].
- Adjusted Net Income: Adjusted net income of $5.5 billion was up 17% YoY, while adjusted diluted EPS was $3.84, up 18% YoY [1].
- ROE: Return on equity (ROE) was 17.3%, up 180 bps YoY, and 17.7% on an adjusted basis, up 130 bps YoY [1].
- CET1 Ratio: The Common Equity Tier 1 (CET1) ratio remained at 13.2%, above regulatory requirements, indicating a robust capital position [1].

Strategic Growth Plans

In a statement, CEO Dave McKay highlighted RBC's focus on growing its wealth and commercial banking businesses in the U.S. and Europe. "We see significant opportunities in these markets, and we have the capital and strategic preparedness to capitalize on them," McKay said. The bank's strong capital position, with a CET1 ratio of 13.2%, supports its ability to invest in growth and potential acquisitions [1].

Capital Management and Risk

RBC's capital management strategy includes returning capital to shareholders through dividends and share buybacks, totaling $3.1 billion in the third quarter. The bank's liquidity coverage ratio (LCR) was 129%, down from 131% last quarter, reflecting its ability to meet liquidity needs [1].

Outlook

Looking ahead, RBC expects continued growth across its business segments, driven by its diversified business model, investments in technology and talent, and disciplined approach to risk and expense management. The bank's robust capital position and strategic preparedness position it well for future opportunities in the U.S. and European markets [1].

References

[1] https://www.marketscreener.com/news/royal-bank-of-canada-2025-q3-report-to-shareholders-ce7c50deda8cfe27