Royal Bank of Canada reported record quarterly earnings for the third fiscal quarter of 2026, posting net income of $6.02 billion, an 11% increase year-over-year, as revenue reached $18.54 billion, exceeding analyst expectations.
Adjusted diluted earnings per share stood at $4.28, surpassing estimates of $4.04, while return on equity reached 18.1% on an adjusted basis. Revenue growth accelerated 9% year-over-year, supported by a 5% rise in net interest income and a 13% increase in non-interest income. Operating leverage was reported at 3.1%, with adjusted operating leverage at 2.4%. The bank’s common equity tier 1 ratio remained stable at 13.5%, while risk-weighted assets expanded by $29 billion to $778 billion.
Shareholder returns totaled $4.0 billion during the quarter, comprising $2.4 billion in common dividends and $1.6 billion via the repurchase of 5.6 million shares. The total payout ratio was 69%, with a liquidity coverage ratio of 125% and a leverage ratio of 4.3%. Book value per share increased 10% year-over-year.
Segment performance showed broad strength. Wealth management delivered net income of $1.44 billion, up 32% year-over-year, with assets under administration climbing 19% to $5.8 trillion. Capital markets reported record revenue of $4.2 billion, a 12% increase, driven by a 23% rise in investment banking revenue and a 43% jump in equity trading performance. Commercial banking achieved record net income of $936 million, a 12% increase, while personal banking revenue reached $5.3 billion, up 4% year-over-year despite a 1% decline in net income.
Credit quality metrics reflected a modest deterioration. Gross impaired loans rose by $353 million to $10.14 billion, translating to 91 basis points of total loans. Provisions for credit losses totaled $1.0 billion, with the allowance for credit losses declining by $38 million to $7.77 billion. The average loan-to-value ratio for the Canadian residential mortgage portfolio stood at 56%.
Management reaffirmed guidance for full-year 2026, projecting mid-single-digit growth in net interest income and expense growth tracking at 5% year-to-date. The bank also outlined plans to expand AI initiatives, targeting $700 million to $1 billion in enterprise value by the end of fiscal 2027. The sale of Moneris, expected to close in the first quarter of 2027, is projected to add approximately 10 basis points to the CET1 ratio.
The bank’s shares were down 1.67% at $203.74, bringing year-to-date gains to nearly 24%, with a 52-week low of $143.13.
