Royal Bank of Canada reported a record quarterly net income of CAD 6 billion for its fiscal third quarter of 2026, an 11% increase from the same period a year earlier. Adjusted diluted earnings per share rose 11% to CAD 4.28, surpassing Wall Street expectations of CAD 4.04. Reported diluted EPS stood at CAD 4.23.
Revenue reached CAD 18.54 billion, up 9% year-over-year and exceeding analyst forecasts of CAD 18.07 billion. Return on equity stood at 17.9% on a reported basis, with adjusted ROE near 18%. The bank maintained a Common Equity Tier 1 capital ratio of 13.5%, unchanged from the prior quarter. The adjusted efficiency ratio was 52%, while internal capital generation totaled 80 basis points in the quarter.
RBC repurchased 5.6 million shares for approximately CAD 1.6 billion during the period. The bank’s shares traded at CAD 205.57, down 0.79% in the latest session but still 23.98% higher year-to-date. The stock remains 5.9% below its 52-week high of CAD 218.57 and 43.4% above its 52-week low of CAD 143.13.
Personal banking in Canada delivered record revenue, with sequential mortgage growth accelerating to 1.8%, the highest since the acquisition of HSBC Bank Canada. Credit card balances rose 7% year-over-year, while average retail deposits and mutual fund assets under administration increased by 8% to CAD 47 billion. Commercial banking generated record net income with an ROE of 18.6%, supported by 9% year-over-year deposit growth.
RBC Capital Markets reported record revenue and net income, with investment banking revenue up 23% year-over-year. Global markets revenue increased 11%, and equity financing volumes grew 40%. Wealth management assets under administration rose 20% in Canada and 14% in the U.S., while RBC iShares Alliance led the industry with CAD 10 billion in long-term ETF net sales for Q2 2026.
City National Bank, RBC’s U.S. subsidiary, posted net income of USD 184 million, driven by 8% loan growth and 5% deposit growth, with a year-to-date efficiency ratio of 75%.
Net interest income excluding trading rose 7% year-to-date, aligning with the bank’s mid-single-digit guidance. Expense growth of 5% year-to-date is consistent with management’s outlook for positive full-year operating leverage. The non-TEB effective tax rate is expected to trend toward the higher end of the 21% to 23% range.
RBC outlined plans to generate CAD 700 million to CAD 1 billion in enterprise value by the end of fiscal 2027 through AI investments leveraging its Borealis AI Research Institute. The sale of Moneris is anticipated to add roughly 10 basis points to the CET1 ratio in Q1 2027. The bank also noted that Section 338 tariffs could reduce Canadian GDP by approximately 40 basis points, though the average effective tariff rate remains low at around 6%.
