6-K - RY - Equibles

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August 2024

Commission File Number: 001-13928

Royal Bank of Canada

(Translation of registrant’s name into English)

200 Bay Street	1 Place Ville Marie
Royal Bank Plaza	Montreal, Quebec
Toronto, Ontario	Canada H3B 3A9
Canada M5J 2J5	Attention: Senior Vice-President,
Attention: Senior Vice-President,	Deputy General Counsel
Deputy General Counsel	& Secretary
& Secretary

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☒

This report on Form 6-K, management’s discussion and analysis and unaudited interim condensed consolidated financial statements included in exhibit 99.2, and exhibit 99.3 hereto are incorporated by reference as exhibits into the Registration Statement on Form F-3 (File No. 333-275898) and the Registration Statements on Form S-8 (File Nos. 333-12036,

333-12050,

333-13052,

333-13112,

333-117922,

333-207754,

333-207750,

333-207748,

333-252536 and 333-268715).

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ROYAL BANK OF CANADA
Date: August 28, 2024	By:	/s/ Katherine Gibson
	Name:	Katherine Gibson
	Title:	Interim Chief Financial Officer

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EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Third Quarter 2024 Earnings Release
99.2	Third Quarter 2024 Report to Shareholders (which includes management’s discussion and analysis and unaudited interim condensed consolidated financial statements)
99.3	Return on Equity and Assets Ratios
	Rule <br>13a-14(a)/15d-14(a)<br> Certifications
31.1	- Certification of the Registrant’s Chief Executive Officer
31.2	- Certification of the Registrant’s Interim Chief Financial Officer
101	Interactive Data File (formatted as Inline XBRL)
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Table of Contents

EX-99.1

Exhibit 99.1
THIRD QUARTER 2024<br><br><br>EARNINGS RELEASE
ROYAL BANK OF CANADA REPORTS THIRD QUARTER 2024 RESULTS
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All amounts are in Canadian dollars and are based on financial statements presented in compliance with International Accounting Standard 34 Interim Financial Reporting, unless otherwise noted. Effective November 1, 2023, we adopted IFRS 17 Insurance Contracts (IFRS 17). Comparative amounts have been restated from those previously presented. Our Q3 2024 Report to Shareholders and Supplementary Financial Information are available at http://www.rbc.com/investorrelations and on https://www.sedarplus.com/.

Net income<br> <br><br><br><br>$4.5 Billion<br> <br><br><br><br>Up 16% YoY	Diluted EPS^1^<br><br><br><br> <br>$3.09<br><br><br><br> <br>Up 13% YoY	Total PCL^2^<br><br><br><br> <br>$659 Million<br><br><br><br> <br>PCL on loans ratio^3^<br> <br>down 14bps^4^ QoQ	ROE^5^<br><br><br><br> <br>15.5%<br><br><br><br> <br>Up 60 bps YoY	CET1 ratio^6^<br><br><br><br> <br>13.0%<br><br><br><br> <br>Above regulatory<br><br><br>requirements
Adjusted net income^7^<br> <br><br><br><br>$4.7 Billion<br><br><br><br> <br>Up 18% YoY	Adjusted diluted EPS^7^<br><br><br><br> <br>$3.26<br><br><br><br> <br>Up 15% YoY	Total ACL^8^<br><br><br><br> <br>$6.2 Billion<br><br><br><br> <br>ACL on loans ratio^9^<br> <br>up 1bp QoQ	Adjusted ROE^7^<br><br><br><br> <br>16.4%<br><br><br><br> <br>Up 100 bps YoY	LCR^10^<br><br><br><br> <br>126%<br><br><br><br> <br>Down from 128% last<br><br><br>quarter
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TORONTO, August 28, 2024 — Royal Bank of Canada^11^ (RY on TSX and NYSE) today reported net income of $4.5 billion for the quarter ended July 31, 2024, up $626 million or 16% from the prior year. Diluted EPS was $3.09, up 13% over the same period. Higher results in Personal & Commercial Banking, Capital Markets and Wealth Management were partially offset by lower results in Corporate Support and Insurance. The inclusion of HSBC Bank Canada (HSBC Canada) results^12^ increased net income by $239 million. Adjusted net income^7^ and adjusted diluted EPS^7^of $4.7 billion and $3.26 were up 18% and 15%, respectively, from the prior year.

Results also reflected the impact of the specified item relating to HSBC Canada transaction and integration costs (Q3 2024: $160 million before-tax and $125 million after-tax; Q3 2023: $110 million before-tax and $84 million after-tax) and amortization of acquisition-related intangibles (Q3 2024: $154 million before-tax and $116 million after-tax; Q3 2023: $81 million before-tax and $61 million after-tax).

Pre-provision, pre-tax earnings^7^ of $6.0 billion were up $820 million or 16% from last year. The inclusion of HSBC Canada results increased pre-provision, pre-tax earnings^7^ by $412 million. Excluding HSBC Canada results, pre-provision, pre-tax earnings^7^ increased 8% from last year, mainly due to higher net interest income reflecting higher spreads and solid average volume growth in Canadian Banking. Higher fee-based revenue in Wealth Management reflecting market appreciation and net sales, as well as higher Corporate & Investment Banking revenue in Capital Markets, also contributed to the increase. These factors were partially offset by higher expenses driven by higher variable compensation on improved results and continued investments in our franchises.

Compared to last quarter, net income was up 14% reflecting higher results in Personal & Commercial Banking, Corporate Support and Wealth Management, partially offset by lower results in Capital Markets. Adjusted net income^7^ was up 13% over the same period. Pre-provision, pre-tax earnings^7^ were up 3% as higher revenue more than offset expense growth. The PCL on loans ratio of 27 bps decreased 14 bps from the prior quarter mainly reflecting the prior quarter’s 9 bps impact of initial PCL on performing loans purchased in the HSBC Canada transaction. The PCL on impaired loans ratio^13^ was 26 bps, down 4 bps from the prior quarter.

Our capital position remained robust, with a CET1 ratio^6^ of 13.0%, up 20 bps from the prior quarter. On June 10, 2024, we announced that the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions had approved our normal course issuer bid to purchase, for cancellation, up to 30 million of our common shares. In Q3 2024, we repurchased 0.5 million shares for $73 million.

“Our Q3 results demonstrate that RBC continues to operate from a position of strategic and financial strength with solid revenue growth and momentum underpinned by a strong balance sheet, robust capital position and prudentrisk management. Combined with our recently announced changes to the executive leadership team and business segments, RBC is better positioned than ever to accelerate our next phase of growth and deliver long-term value to clients, communities andshareholders.”<br> <br><br> <br>– Dave McKay, President and Chief Executive Officer of Royal Bank of Canada
1	Earnings per share (EPS).
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2	Provision for credit losses (PCL).
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3	PCL on loans ratio is calculated as PCL on loans as a percentage of average net loans and acceptances.<br>
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4	Basis points (bps).
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5	Return on equity (ROE) is calculated as net income available to common shareholders divided by average common equity. For<br>further information, refer to the Key performance and non-GAAP measures section on pages 4 to 5 of this Earnings Release.
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6	This ratio is calculated by dividing Common Equity Tier 1 (CET1) by risk-weighted assets (RWA), in accordance with Office<br>of the Superintendent of Financial Institutions’ (OSFI) Basel III Capital Adequacy Requirements (CAR) guideline.
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7	These are non-GAAP measures. For further information, including a reconciliation,<br>refer to the Key performance and non-GAAP measures section on pages 4 to 5 of this Earnings Release.
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8	Allowance for credit losses (ACL).
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9	ACL on loans ratio is calculated as ACL on loans as a percentage of total loans and acceptances.
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10	The liquidity coverage ratio (LCR) is calculated in accordance with OSFI’s Liquidity Adequacy Requirements (LAR)<br>guideline. For further details, refer to the Liquidity and funding risk section of our Q3 2024 Report to Shareholders.
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11	When we say “we”, “us”, “our”, “the bank” or “RBC”, we mean Royal Bank<br>of Canada and its subsidiaries, as applicable.
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12	On March 28, 2024, we completed the acquisition of HSBC Canada (HSBC Canada transaction). HSBC Canada results reflect<br>revenue, PCL, non-interest expenses and income taxes associated with the acquired operations and clients, which include the acquired assets, assumed liabilities and employees with the exception of assets and<br>liabilities relating to treasury and liquidity management activities. For further details, refer to the Key corporate events section of our Q3 2024 Report to Shareholders.
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13	PCL on impaired loans ratio is calculated as PCL on impaired loans as a percentage of average net loans and acceptances.<br>
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Q3 2024<br><br><br>Compared to<br><br><br>Q3 2023	Reported:<br><br><br>• Net income of $4,486 million<br><br><br>• Diluted EPS of $3.09<br><br><br>• ROE of 15.5%<br><br><br>• CET1 ratio^14^ of 13.0%	h 16%<br><br> <br>h 13%<br><br> <br>h 60<br>bps<br><br><br>i 110<br>bps	Adjusted^15^:<br><br><br>• Net income of $4,727 million<br><br><br>• Diluted EPS of $3.26<br><br><br>• ROE of 16.4%	h 18%<br> <br>h 15%<br> <br>h 100 bps
Q3 2024<br><br><br>Compared to<br><br><br>Q2 2024	• Net income of $4,486 million<br><br><br>• Diluted EPS^^of $3.09<br><br><br>• ROE of 15.5%<br><br><br>• CET1 ratio^14^ of 13.0%	h14%<br><br><br><br>h 13%<br><br> <br>h 100<br>bps<br><br><br>h 20<br>bps	• Net income of $4,727 million<br><br><br>• Diluted EPS^^of $3.26<br><br><br>• ROE of 16.4%	h 13%<br><br> <br>h 12%<br><br> <br>h 90<br>bps
	YTD 2024<br><br><br>Compared to<br><br><br>YTD 2023	• Net income of $12.018 million<br><br><br>• Diluted EPS of $8.34<br><br><br>• ROE of 14.4%	h13%<br><br><br><br>h 10%<br><br> <br>h****30<br> bps	• Net income of $12,991 million<br><br><br>• Diluted EPS^^of $9.03<br><br><br>• ROE of 15.6%	h 8%<br><br> <br>h 6%<br><br> <br>i 40<br>bps
Personal & Commercial Banking
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Net income of $2,490 million increased $356 million or 17% from a year ago. The inclusion of HSBC Canada results increased net income by $198 million. Excluding HSBC Canada results, net income increased $158 million or 7%, primarily driven by higher net interest income reflecting higher spreads and average volume growth of 10% in deposits and 6% in loans in Canadian Banking, partially offset by higher PCL.

Compared to last quarter, net income increased $439 million or 21%. The inclusion of HSBC Canada results increased net income by $259 million, as the current quarter includes a full quarter of net income and the prior quarter reflected the initial PCL on the performing loans purchased in the HSBC Canada transaction. Excluding HSBC Canada results, net income increased $180 million or 9%, primarily driven by higher net interest income reflecting average volume growth of 2% in Canadian Banking, the impact of two more days in the current quarter and higher spreads in Canadian Banking. These factors were partially offset by higher staff-related costs.

Wealth Management

Net income of $862 million increased $199 million or 30% from a year ago, mainly due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation. Higher transactional revenue and lower PCL also contributed to the increase. The prior year also included the gain on the sale of RBC Investor Services operations.

Compared to last quarter, net income increased $93 million or 12%, primarily due to higher fee-based client assets reflecting market appreciation, which also drove higher variable compensation.

Insurance

Net income of $170 million decreased $45 million or 21% from a year ago, largely due to lower insurance investment result from lower favourable investment-related experience, partially offset by lower capital funding costs. This was partially offset by higher insurance service result, largely attributable to improved claims experience in life retrocession and business growth across the majority of our products. The results in the prior period are not fully comparable as we were not managing our asset and liability portfolios under IFRS 17.

Compared to last quarter, net income decreased $7 million or 4%, largely due to lower insurance investment result from lower favourable investment-related experience. This factor was largely offset by higher insurance service result, mainly due to business growth across the majority of our products.

Capital Markets

Net income of $1,172 million increased $223 million or 23% from a year ago, primarily driven by higher revenue in Corporate & Investment Banking, primarily due to higher municipal banking activity, higher loan syndication activity in the U.S., higher debt origination in North America and the impact of foreign exchange translation. Lower PCL also contributed to the increase. These factors were partially offset by higher taxes reflecting changes in earnings mix and higher compensation on increased results.

Compared to last quarter, net income decreased $90 million or 7% from record levels, mainly due to lower M&A activity in the U.S., partially offset by lower PCL on impaired loans in a few sectors.

14	This ratio is calculated by dividing CET1 by RWA, in accordance with OSFI’s Basel III CAR guideline.<br>
15	These are non-GAAP measures. For further information, including a reconciliation,<br>refer to the Key performance and non-GAAP measures section on pages 4 to 5 of this Earnings Release.
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Corporate Support

Net loss was $208 million for the current quarter, primarily due to the after-tax impact of the HSBC Canada transaction and integration

costs of $125 million, which is treated as a specified item. Unallocated costs also contributed to the net loss.

Net loss was $309 million in the prior quarter, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $282 million, partially offset by the after-tax impact of management of closing capital volatility related to the HSBC Canada transaction of $112 million, both of which are treated as specified items. Unallocated costs also contributed to the net loss.

Net loss was $101 million in the prior year, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $84 million, which is treated as a specified item.

Capital, Liquidity and Credit Quality

Capital – As at July 31, 2024, our CET1 ratio^16^ was 13.0%, up 20 bps from last quarter, mainly reflecting net internal capital generation, partially offset by RWA growth (excluding FX).

Liquidity – For the quarter ended July 31, 2024, the average LCR^17^ was 126%, which translates into a surplus of approximately $81 billion, compared to 128% and a surplus of approximately $83 billion in the prior quarter. Average LCR^17^ remained relatively stable from the prior quarter reflecting loan growth and an increase in on-balance sheet securities, largely offset by growth in retail deposits.

The Net Stable Funding Ratio^18^ (NSFR) as at July 31, 2024 was 114%, which translates into a surplus of approximately $136 billion, compared to 111% and a surplus of approximately $105 billion in the prior quarter. NSFR increased compared to the previous quarter, mainly due to higher available stable funding driven by an increase in the weighted value of retail deposits and wholesale funding.

Credit Quality

Q3 2024 vs. Q3 2023

Total PCL of $659 million increased $43 million or 7% from a year ago, mainly reflecting higher provisions in Personal & Commercial Banking, partially offset by lower provisions in Capital Markets and Wealth Management. The PCL on loans ratio of 27 bps decreased 2 bps. The PCL on impaired loans ratio of 26 bps increased 3 bps.

PCL on performing loans of $42 million decreased $78 million or 65%, mainly due to favourable changes to our scenario weights, partially offset by unfavourable changes to our macroeconomic forecast and credit quality.

PCL on impaired loans of $623 million increased $124 million or 25%, mainly due to higher provisions in our Canadian Banking portfolios, partially offset by lower provisions in Capital Markets.

Q3 2024 vs. Q2 2024

Total PCL decreased $261 million or 28% from last quarter, primarily reflecting lower provisions in Personal & Commercial Banking and Capital Markets. The PCL on loans ratio decreased 14 bps. The PCL on impaired loans ratio decreased 4 bps.

PCL on performing loans decreased $202 million or 83%, mainly reflecting higher provisions in the prior quarter driven by the initial PCL on performing loans purchased in the HSBC Canada transaction.

PCL on impaired loans decreased $49 million or 7%, mainly due to lower provisions in Capital Markets and Wealth Management, partially offset by higher provisions in our Canadian Banking commercial portfolio in a few sectors, including the real estate and related sector.

16	This ratio is calculated by dividing CET1 by RWA, in accordance with OSFI’s Basel III CAR guideline.<br>
17	The LCR is calculated in accordance with OSFI’s LAR guideline. For further details, refer to the Liquidity and<br>funding risk section of our Q3 2024 Report to Shareholders.
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18	The NSFR is calculated in accordance with OSFI’s LAR guideline. For further details, refer to the Liquidity and<br>funding risk section of our Q3 2024 Report to Shareholders.
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Key Performance and Non-GAAP Measures

Performance measures

We measure and evaluate the performance of our consolidated operations and each business segment using a number of financial metrics, such as net income and ROE. Certain financial metrics, including ROE, do not have a standardized meaning under generally accepted accounting principles (GAAP) and may not be comparable to similar measures disclosed by other financial institutions.

Non-GAAP measures

We believe that certain non-GAAP measures (including non-GAAP ratios) are more reflective of our ongoing operating results and provide readers with a better understanding of management’s perspective on our performance. These measures enhance the comparability of our financial performance for the three and nine months ended July 31, 2024 with the corresponding periods in the prior year and the three months ended April 30, 2024. Non-GAAP measures do not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions.

The following discussion describes the non-GAAP measures we use in evaluating our operating results.

Pre-provision, pre-tax earnings

We use pre-provision, pre-tax earnings to assess our ability to generate sustained earnings growth outside of credit losses, which are impacted by the cyclical nature of the credit cycle. The following table provides a reconciliation of our reported results to pre-provision, pre-tax earnings and illustrates the calculation of pre-provision, pre-tax earnings presented:

	For the three months ended						For the nine months ended
	July 31		April 30		July 31		July 31		July 31
(Millions of Canadian dollars)	2024		2024		2023 (1)		2024		2023 (1)
Net income	$	4,486	$	3,950	$	3,860	$	12,018	$	10,673
Add: Income taxes	****	887		976		736	****	2,629		3,604
Add: PCL	****	659		920		616	****	2,392		1,748
Pre-provision, pre-tax earnings (2)	$	6,032	$	5,846	$	5,212	$	17,039	$	16,025
(1)	Prior period amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective<br>November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
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(2)	For the three months ended July 31, 2024, pre-provision, pre-tax earnings excluding HSBC Canada results of $5,620 million is calculated as pre-provision, pre-tax earnings of<br>$6,032 million less net income of $239 million, income taxes of $90 million, and PCL of $83 million.
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Adjusted results

We believe that providing adjusted results as well as certain measures and ratios excluding the impact of the specified items discussed below and amortization of acquisition-related intangibles enhances comparability with prior periods and enables readers to better assess trends in the underlying businesses.

Our results for all reported periods were adjusted for the following specified item:

•	HSBC Canada transaction and integration costs.

Our results for the nine months ended July 31, 2024 and the three months ended April 30, 2024 were adjusted for the following specified item:

•	Management of closing capital volatility related to the HSBC Canada transaction. For further details, refer to the Key corporate events section of our Q3 2024 Report to Shareholders.

Our results for the nine months ended July 31, 2023 were adjusted for the following specified item:

•	Canada Recovery Dividend (CRD) and other tax related adjustments: reflects the impact of the CRD and the 1.5% increase in the Canadian corporate tax rate applicable to fiscal 2022, net of deferred tax adjustments, which<br>were announced in the Government of Canada’s 2022 budget and enacted in the first quarter of 2023.

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The following table provides a reconciliation of our reported results to our adjusted results and illustrates the calculation of adjusted measures presented. The adjusted results and measures presented below are non-GAAP measures or ratios.

Consolidated results, reported and adjusted
	As at or for the three months<br>ended							As at or for the nine months ended
(Millions of Canadian dollars,<br><br><br>except per share, number of and percentage amounts)	July 31<br><br><br>2024		April 30<br><br><br>2024			July 31<br><br><br>2023 (1)		July 31<br><br><br>2024		July 31<br><br><br>2023 (1)
Total revenue	$	14,631	$	14,154		$	12,977	$	42,270	$	38,779
PCL	****	659		920			616	****	2,392		1,748
Non-interest expense	****	8,599		8,308			7,765	****	25,231		22,754
Income before income taxes	****	5,373		4,926			4,596	****	14,647		14,277
Income taxes	****	887		976			736	****	2,629		3,604
Net income	$	4,486	$	3,950		$	3,860	$	12,018	$	10,673
Net income available to common shareholders	$	4,377	$	3,881		$	3,800	$	11,780	$	10,499
Average number of common shares (thousands)	****	1,414,194		1,412,651			1,393,515	****	1,411,044		1,388,217
Basic earnings per share (in dollars)	$	3.09	$	2.75		$	2.73	$	8.35	$	7.56
Average number of diluted common shares (thousands)	****	1,416,149		1,414,166			1,394,939	****	1,412,644		1,389,857
Diluted earnings per share (in dollars)	$	3.09	$	2.74		$	2.73	$	8.34	$	7.55
ROE (2)	****	15.5%		14.5%			14.9%	****	14.4%		14.1%
Effective income tax rate	****	16.5%		19.8%			16.0%	****	17.9%		25.2%
Total adjusting items impacting net income(before-tax)	$	314	$	309		$	191	$	1,254	$	426
Specified item: HSBC Canada transaction and integration costs (3), (4)	****	160		358			110	****	783		177
Specified item: Management of closing capital volatility related to the
HSBC Canada transaction (3), (5)	****	-		(155	)		-	****	131		-
Amortization of acquisition-related intangibles (6)	****	154		106			81	****	340		249
Total income taxes for adjusting items impacting net income	$	73	$	61		$	46	$	281	$	(957	)
Specified item: HSBC Canada transaction and integration costs (3)	****	35		76			26	****	158		42
Specified item: Management of closing capital volatility related to the
HSBC Canada transaction (3), (5)	****	-		(43	)		-	****	36		-
Specified item: CRD and other tax related adjustments (3), (7)	****	-		-			-	****	-		(1,050	)
Amortization of acquisition-related intangibles (6)	****	38		28			20	****	87		51
Adjusted results (8)
Income before income taxes - adjusted	$	5,687	$	5,235		$	4,787	$	15,901	$	14,703
Income taxes - adjusted	****	960		1,037			782	****	2,910		2,647
Net income - adjusted	****	4,727		4,198			4,005	****	12,991		12,056
Net income available to common shareholders - adjusted	****	4,618		4,129			3,945	****	12,753		11,882
Average number of common shares (thousands)	****	1,414,194		1,412,651			1,393,515	****	1,411,044		1,388,217
Basic earnings per share (in dollars) - adjusted (8)	$	3.26	$	2.92		$	2.83	$	9.04	$	8.56
Average number of diluted common shares (thousands)	****	1,416,149		1,414,166			1,394,939	****	1,412,644		1,389,857
Diluted earnings per share (in dollars) - adjusted (8)	$	3.26	$	2.92		$	2.83	$	9.03	$	8.55
ROE - adjusted (8)	****	16.4%		15.5%			15.4%	****	15.6%		16.0%
Effective income tax rate - adjusted (8)	****	16.9%		19.8%			16.3%	****	18.3%		18.0%
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective<br>November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
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(2)	ROE is calculated as net income available to common shareholders divided by average common equity. ROE is based on<br>actual balances of average common equity before rounding.
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(3)	These amounts have been recognized in Corporate Support.
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(4)	As at July 31, 2024, the cumulative HSBC Canada transaction and integration costs<br>(before-tax) incurred were $1.2 billion and it is currently estimated that an additional $0.3 billion will be incurred, for a total of approximately $1.5 billion.
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(5)	For the nine months ended July 31, 2024 and the three months ended April 30, 2024, we included management of<br>closing capital volatility related to the HSBC Canada transaction as a specified item for non-GAAP measures and non-GAAP ratios. For further details, refer to the Key<br>corporate events section of our Q3 2024 Report to Shareholders.
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(6)	Represents the impact of amortization of acquisition-related intangibles (excluding amortization of software), and any<br>goodwill impairment.
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(7)	The impact of the CRD and other tax related adjustments does not include $0.2 billion recognized in other<br>comprehensive income.
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(8)	See the Glossary section of our interim Management’s Discussion and Analysis dated August 27, 2024, for the<br>three and nine months ended July 31, 2024, available at https://www.sedarplus.com/, for an explanation of the composition of these measures. Such explanation is incorporated by reference hereto.
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Additional information about ROE and other key performance and non-GAAP measures and ratios can be found under the Key performance and non-GAAP measures section of our Q3 2024 Report to Shareholders.

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CAUTION REGARDING FORWARD-LOOKING STATEMENTS

From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this document, in other filings with Canadian regulators or the SEC, in reports to shareholders, and in other communications. In addition, our representatives may communicate forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements in this document include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals and the expected impacts of the HSBC Canada transaction, including transaction and integration costs, and includes statements made by our President and Chief Executive Officer. The forward-looking statements contained in this document represent the views of management and are presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our financial performance objectives, vision, strategic goals and priorities and anticipated financial performance, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as “believe”, “expect”, “suggest”, “seek”, “foresee”, “forecast”, “schedule”, “anticipate”, “intend”, “estimate”, “goal”, “commit”, “target”, “objective”, “plan”, “outlook”, “timeline” and “project” and similar expressions of future or conditional verbs such as “will”, “may”, “might”, “should”, “could”, “can” or “would” or negative or grammatical variations thereof.

By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct, that our financial performance, environmental & social or other objectives, vision and strategic goals will not be achieved and that our actual results may differ materially from such predictions, forecasts, projections, expectations or conclusions.

We caution readers not to place undue reliance on our forward-looking statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors – many of which are beyond our control and the effects of which can be difficult to predict – include, but are not limited to: credit, market, liquidity and funding, insurance, operational, regulatory compliance (which could lead to us being subject to various legal and regulatory proceedings, the potential outcome of which could include regulatory restrictions, penalties and fines), strategic, reputation, legal and regulatory environment, competitive, model, systemic risks and other risks discussed in the risk sections of our 2023 Annual Report and the Risk management section of our Q3 2024 Report to Shareholders, including business and economic conditions in the geographic regions in which we operate, Canadian housing and household indebtedness, information technology, cyber and third-party risks, geopolitical uncertainty, environmental and social risk (including climate change), digital disruption and innovation, privacy and data related risks, regulatory changes, culture and conduct risks, the effects of changes in government fiscal, monetary and other policies, tax risk and transparency, and our ability to anticipate and successfully manage risks arising from all of the foregoing factors. Additional factors that could cause actual results to differ materially from the expectations in such forward-looking statements can be found in the risk sections of our 2023 Annual Report and the Risk management section of our Q3 2024 Report to Shareholders, as may be updated by subsequent quarterly reports.

We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events, as well as the inherent uncertainty of forward-looking statements. Material economic assumptions underlying the forward-looking statements contained in this document are set out in the Economic, market and regulatory review and outlook section and for each business segment under the Strategic priorities and Outlook sections in our 2023 Annual Report, as updated by the Economic, market and regulatory review and outlook section of our Q3 2024 Report to Shareholders. Such sections may be updated by subsequent quarterly reports. Assumptions about costs related to post-close consolidation and integration activities were considered in the estimation of transaction and integration costs. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.

Additional information about these and other factors can be found in the risk sections of our 2023 Annual Report and the Risk management section of our Q3 2024 Report to Shareholders, as may be updated by subsequent quarterly reports. Information contained in or otherwise accessible through the websites mentioned does not form part of this document. All references in this document to websites are inactive textual references and are for your information only.

ACCESS TO QUARTERLY RESULTS MATERIALS

Interested investors, the media and others may review this quarterly Earnings Release, quarterly results slides, supplementary financial information and our Q3 2024 Report to Shareholders at rbc.com/investorrelations.

Quarterly conference call and webcast presentation

Our quarterly conference call is scheduled for August 28, 2024 at 8:00 a.m. (EST) and will feature a presentation about our third quarter results by RBC executives. It will be followed by a question and answer period with analysts. Interested parties can access the call live on a listen-only basis at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (416-340-2217 or 866-696-5910, passcode 3369122#). Please call between 7:50 a.m. and 7:55 a.m. (EST).

Management’s comments on results will be posted on our website shortly following the call. A recording will be available by 5:00 p.m. (EST) from August 28, 2024 until December 3, 2024 at rbc.com/investorrelations/quarterly-financial-statements.html or by telephone (905-694-9451 or 800-408-3053, passcode 3148244#).

Media Relations Contacts

Gillian McArdle, Vice President, Corporate Communications, gillian.mcardle@rbccm.com, 416-842-4231

Fiona McLean, Director, Financial Communications, fiona.mclean@rbc.com, 437-778-3506

Investor Relations Contacts

Asim Imran, Senior Vice President, Head of Investor Relations, asim.imran@rbc.com, 416-955-7804

Marco Giurleo, Senior Director, Investor Relations, marco.giurleo@rbc.com, 437-239-5374

ABOUT RBC

Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 100,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada’s biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 18 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.

^®^ Registered Trademarks of Royal Bank of Canada.

- 6 -

EX-99.2

Exhibit 99.2

Royal Bank of Canada third quarter 2024 results

All amounts are in Canadian dollars and are based on financial statements presented in compliance with International Accounting Standard 34 Interim Financial Reporting , unless otherwise noted. Effective November 1, 2023, we adopted IFRS 17 Insurance Contracts (IFRS 17). Comparative amounts have been restated from those previously presented. Our Q3 2024 Report to Shareholders and Supplementary Financial Information are available at http://www.rbc.com/investorrelations and on https://www.sedarplus.com/.

Net income<br><br>$4.5 Billion<br><br>Up 16% YoY	Diluted EPS<br>1<br><br>$3.09<br><br>Up 13% YoY	Total PCL<br>1<br><br>$659 Million<br><br>PCL on loans ratio<br><br>1<br><br>down 14 bps<br><br>1<br><br>QoQ	ROE<br>1, 2<br><br>15.5%<br><br>Up 60 bps YoY	CET1 ratio<br>1<br><br>13.0%<br><br>Above regulatory<br><br>requirements
Adjusted<br><br>net income<br>3<br><br>$4.7 Billion<br><br>Up 18% YoY	Adjusted<br><br>diluted EPS<br>3<br><br>$3.26<br><br>Up 15% YoY	Total ACL<br>1<br><br>$6.2 Billion<br><br>ACL on loans ratio<br>1<br><br>up 1 bp QoQ	Adjusted ROE<br>3<br><br>16.4%<br><br>Up 100 bps YoY	LCR<br>1<br><br>126%<br><br>Down from 128%<br><br>last<br><br><br><br>quarter

TORONTO, August

28, 2024 – Royal Bank of Canada 4 (RY on TSX and NYSE) today reported net income of $4.5 billion for the quarter ended July 31, 2024, up $626 million or 16% from the prior year. Diluted EPS was $3.09, up 13% over the same period. Higher results in Personal & Commercial Banking, Capital Markets and Wealth Management were partially offset by lower results in Corporate Support and Insurance. The inclusion of HSBC Bank Canada (HSBC Canada) results 5 increased net income by $239 million. Adjusted net income 3 and adjusted diluted EPS 3 of $4.7 billion and $3.26 were up 18% and 15%, respectively, from the prior year.

Pre-provision, pre-tax earnings 6 of $6.0 billion were up $820 million or 16% from last year. The inclusion of HSBC Canada results increased pre-provision, pre-tax earnings 6 by $412 million. Excluding HSBC Canada results, pre-provision, pre-tax earnings 6 increased 8% from last year, mainly due to higher net interest income reflecting higher spreads and solid average volume growth in Canadian Banking. Higher fee-based revenue in Wealth Management reflecting market appreciation and net sales, as well as higher Corporate & Investment Banking revenue in Capital Markets, also contributed to the increase. These factors were partially offset by higher expenses driven by higher variable compensation on improved results and continued investments in our franchises.

pre-tax earnings 6 were up 3% as higher revenue more than offset expense growth. The PCL on loans ratio of 27 bps decreased 14 bps from the prior quarter mainly reflecting the prior quarter’s 9 bps impact of initial PCL on performing loans purchased in the HSBC Canada transaction. The PCL on impaired loans ratio was 26 bps, down 4 bps from the prior quarter.

Our capital position remained robust, with a CET1 ratio of 13.0%, up 20 bps from the prior quarter. On June 10, 2024, we announced that the Toronto Stock Exchange and the Office of the Superintendent of Financial Institutions had approved our normal course issuer bid to purchase, for cancellation, up to 30 million of our common shares. In Q3 2024, we repurchased 0.5 million shares for $73 million.

“Our Q3 results demonstrate that RBC continues to operate from a position of strategic and financial strength with solid revenue growth and momentum underpinned by a strong balance sheet, robust capital position and prudent risk management. Combined with our recently announced changes to the executive leadership team and business segments, RBC is better positioned than ever to accelerate our next phase of growth and deliver long-term value to clients, communities and shareholders.<br><br>”<br><br>– Dave McKay, President and Chief Executive Officer of Royal Bank of Canada
Q3 2024<br><br>Compared to<br><br>Q3 2023	Reported:<br><br>• Net income of $4,486 million<br><br>• Diluted EPS of $3.09<br><br>• ROE of 15.5%<br><br>• CET1 ratio of 13.0%	h<br><br><br><br><br> 16%<br><br>h<br><br><br><br><br> 13%<br><br>h<br><br><br><br><br> 60 bps<br><br>i<br><br><br><br><br>110 bps	Adjusted<br>3<br>:<br><br>• Net income of $4,727 million<br><br>• Diluted EPS of $3.26<br><br>• ROE of 16.4%	h<br><br><br><br><br> 18%<br><br>h<br><br><br><br><br> 15%<br><br>h<br><br><br><br><br> 100 bps
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Q3 2024<br><br>Compared to<br><br>Q2 2024	• Net income of $4,486 million<br><br>• Diluted EPS<br><br>of $3.09<br><br>• ROE of 15.5%<br><br>• CET1 ratio of 13.0%	h<br><br><br><br><br> 14%<br><br>h<br><br><br><br><br> 13%<br><br>h<br> 100 bps<br><br>h<br> 20 bps	• Net income of $4,727 million<br><br>• Diluted EPS<br><br>of $3.26<br><br>• ROE of 16.4%	h<br><br><br><br><br> 13%<br><br>h<br><br><br><br><br> 12%<br><br>h<br><br><br><br><br> 90 bps
YTD 2024<br><br>Compared to<br><br>YTD 2023	• Net income of $12,018 million<br><br>• Diluted EPS of $8.34<br><br>• ROE of 14.4%	h<br><br><br><br><br> 13%<br><br>h<br><br><br><br><br> 10%<br><br>h<br><br><br><br><br> 30 bps	• Net income of $12,991 million<br><br>• Diluted EPS<br><br>of $9.03<br><br>• ROE of 15.6%	h<br><br><br><br><br> 8%<br><br>h<br><br><br><br><br> 6%<br><br>i<br> 40 bps
(1)	See Glossary section of this Q3 2024<br><br>Report to Shareholders for composition of these measures.
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(2)	Return on equity (ROE). This measure does not have a standardized meaning under generally accepted accounting principles (GAAP). For further information, refer to the Key performance and <br>non-GAAP<br> measures section of this Q3 2024<br><br>Report to Shareholders.
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(3)	These are <br>non-GAAP<br> measures. For further information, including a reconciliation, refer to the Key performance and <br>non-GAAP<br> measures section of this Q3 2024<br><br>Report to Shareholders.
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(4)	When we say “we”, “us”, “our”, “the bank” or “RBC”, we mean Royal Bank of Canada and its subsidiaries, as applicable.
---	---
(5)	On March 28, 2024, we completed the acquisition of HSBC Canada (HSBC Canada transaction). HSBC Canada results reflect revenue, PCL, <br>non-interest<br> expenses and income taxes associated with the acquired operations and clients, which include the acquired assets, assumed liabilities and employees with the exception of assets and liabilities relating to treasury and liquidity management activities. For further details, refer to the Key corporate events section of this Q3 2024 Report to Shareholders.
---	---
(6)	Pre-provision,<br> <br>pre-tax<br> (PPPT) earnings is calculated as income (July 31, 2024: $4,486 million; April 30, 2024: $3,950 million; July 31, 2023: $3,860 million) before income taxes (July 31, 2024: $887 million; April 30, 2024: $976 million; July 31, 2023: $736 million) and PCL (July 31, 2024: $659 million; April 30, 2024: $920 million; July 31, 2023: $616 million). For the three months ended July 31, 2024, pre-provision, pre-tax earnings excluding HSBC Canada results of $5,620 million is calculated as pre-provision, pre-tax earnings of $6,032 million less net income of $239 million, income taxes of $90 million, and PCL of $83 million. This is a <br>non-GAAP<br> measure. PPPT earnings do not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions. We use PPPT earnings to assess our ability to generate sustained earnings growth outside of credit losses, which are impacted by the cyclical nature of a credit cycle. We believe that certain <br>non-GAAP<br> measures are more reflective of our ongoing operating results and provide readers with a better understanding of management’s perspective on our performance.
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Table of Contents

2 Royal Bank of Canada Third Quarter 2024

Table of contents

1	Third quarter highlights
2	Management’s Discussion and Analysis
2	Caution regarding forward-looking statements
3	Overview and outlook
	3	About Royal Bank of Canada
	4	Selected financial and other highlights
	5	Economic, market and regulatory review and outlook
7	Key corporate events
8	Financial performance
	8	Overview
12	Business segment results
	12	How we measure and report our business segments
	13	Key performance and non-GAAP measures
---	---	---
	16	Personal & Commercial Banking
	18	Wealth Management
	20	Insurance
	21	Capital Markets
	22	Corporate Support
23	Quarterly results and trend analysis
24	Financial condition
	24	Condensed balance sheets
	25	Off-balance sheet arrangements
25	Risk management
	25	Credit risk
	29	Market risk
	33	Liquidity and funding risk
41	Capital management
47	Accounting and control matters
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	47	Summary of accounting policies and estimates
	47	Changes in accounting policies and disclosures
	48	Controls and procedures
48	Related party transactions
49	Glossary
52	Enhanced Disclosure Task Force recommendations index
53	Interim Condensed Consolidated Financial Statements<br>(unaudited)
59	Notes to the Interim Condensed Consolidated Financial Statements<br>(unaudited)
87	Shareholder Information
Management’s Discussion and Analysis
---

Management’s Discussion and Analysis (MD&A) is provided to enable a reader to assess our results of operations and financial condition for the three and nine month periods ended or as at July 31, 2024, compared to the corresponding periods in the prior fiscal year and the three month period ended April 30, 2024. This MD&A should be read in conjunction with our unaudited Interim Condensed Consolidated Financial Statements for the quarter ended July 31, 2024 (Condensed Financial Statements) and related notes and our 2023 Annual Report. This MD&A is dated August 27, 2024. All amounts are in Canadian dollars, unless otherwise specified, and are based on financial statements presented in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), unless otherwise noted.

Additional information about us, including our 2023 Annual Information Form, is available free of charge on our website at rbc.com/investorrelations, on the Canadian Securities Administrators’ website, SEDAR+, at sedarplus.com and on the EDGAR section of the United States (U.S.) Securities and Exchange Commission’s (SEC) website at sec.gov.

Information contained in or otherwise accessible through the websites mentioned herein does not form part of this report. All references in this report to websites are inactive textual references and are for your information only.

Caution regarding forward-looking statements

From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this Q3 2024 Report to Shareholders, in other filings with Canadian regulators or the SEC, in other reports to shareholders, and in other communications. In addition, our representatives may communicate forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements in this document include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals, the economic, market, and regulatory review and outlook for Canadian, U.S., United Kingdom (U.K.), European and global economies, the regulatory environment in which we operate, the expected impacts of the HSBC Bank Canada transaction, including transaction and integration costs, the risk environment including our credit risk, market risk, liquidity and funding risk, as well as the effectiveness of our risk monitoring, and includes statements made by our President and Chief Executive Officer and other members of management. The forward-looking statements contained in this document represent the views of management and are presented for the purpose of assisting the holders of our securities and financial analysts in understanding our financial position and results of operations as at and for the periods ended on the dates presented, as well as our financial performance objectives, vision, strategic goals and priorities and anticipated financial performance, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as “believe”, “expect”, “suggest”, “seek”, “foresee”, “forecast”, “schedule”, “anticipate”, “intend”, “estimate”, “goal”, “commit”, “target”, “objective”, “plan”, “outlook”, “timeline” and “project” and similar expressions of future or conditional verbs such as “will”, “may”, “might”, “should”, “could”, “can”, “would” or negative or grammatical variations thereof.

Table of Contents

Royal Bank of Canada Third Quarter 2024 3

We caution readers not to place undue reliance on our forward-looking statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors – many of which are beyond our control and the effects of which can be difficult to predict – include, but are not limited to: credit, market, liquidity and funding, insurance, operational, regulatory compliance (which could lead to us being subject to various legal and regulatory proceedings, the potential outcome of which could include regulatory restrictions, penalties and fines), strategic, reputation, legal and regulatory environment, competitive, model, systemic risks and other risks discussed in the risk sections of our 2023 Annual Report and the Risk management section of this Q3 2024 Report to Shareholders, including business and economic conditions in the geographic regions in which we operate, Canadian housing and household indebtedness, information technology, cyber and third-party risks, geopolitical uncertainty, environmental and social risk (including climate change), digital disruption and innovation, privacy and data related risks, regulatory changes, culture and conduct risks, the effects of changes in government fiscal, monetary and other policies, tax risk and transparency, and our ability to anticipate and successfully manage risks arising from all of the foregoing factors. Additional factors that could cause actual results to differ materially from the expectations in such forward-looking statements can be found in the risk sections of our 2023 Annual Report and the Risk management section of this Q3 2024 Report to Shareholders, as may be updated by subsequent quarterly reports.

We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events, as well as the inherent uncertainty of forward-looking statements. Material economic assumptions underlying the forward-looking statements contained in this Q3 2024 Report to Shareholders are set out in the Economic, market and regulatory review and outlook section and for each business segment under the Strategic priorities and Outlook sections in our 2023 Annual Report, as updated by the Economic, market and regulatory review and outlook section of this Q3 2024 Report to Shareholders. Such sections may be updated by subsequent quarterly reports. Assumptions about costs related to post-close consolidation and integration activities were considered in the estimation of transaction and integration costs. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.

Additional information about these and other factors can be found in the risk sections of our 2023 Annual Report and the Risk management section of this Q3 2024 Report to Shareholders, as may be updated by subsequent quarterly reports.

Overview and outlook
About Royal Bank of Canada
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Currently we are organized into four business segments: Personal & Commercial Banking, Wealth Management, Insurance and Capital Markets. Effective Q4 2024, the Personal & Commercial Banking segment will become two standalone business segments: Personal Banking and Commercial Banking. With this change, RBC Direct Investing will move from Personal & Commercial Banking to the Wealth Management segment. This realignment will be reflected in our 2024 Annual Report.

Table of Contents

4 Royal Bank of Canada Third Quarter 2024

Selected financial and other highlights
									As at or for the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except per share,number of and percentage amounts)			April 30<br><br>2024 <br>(1)			July 31<br><br>2023 <br>(2)			July 31<br><br>2024<br><br>(1)			July 31<br><br>2023 <br>(2)
Total revenue	14,631		$	14,154		$	12,977		$	42,270		$	38,779
Provision for credit losses (PCL)	659			920			616			2,392			1,748
Non-interest expense	8,599			8,308			7,765			25,231			22,754
Income before income taxes	5,373			4,926			4,596			14,647			14,277
Net income	4,486		$	3,950		$	3,860		$	12,018		$	10,673
Net income – adjusted (3), (4)	4,727		$	4,198		$	4,005		$	12,991		$	12,056
Segments – net income
Personal & Commercial Banking	2,490		$	2,051		$	2,134		$	6,602		$	6,175
Wealth Management (5)	862			769			663			2,237			2,212
Insurance	170			177			215			567			452
Capital Markets (5)	1,172			1,262			949			3,588			3,152
Corporate Support	(208	)		(309	)		(101	)		(976	)		(1,318	)
Net income	4,486		$	3,950		$	3,860		$	12,018		$	10,673
Selected information
Earnings per share (EPS) – basic	3.09		$	2.75		$	2.73		$	8.35		$	7.56
– diluted	3.09			2.74			2.73			8.34			7.55
Earnings per share (EPS) – basic adjusted (3), (4)	3.26			2.92			2.83			9.04			8.56
– diluted adjusted (3), (4)	3.26			2.92			2.83			9.03			8.55
Return on common equity (ROE) (4), (6)	15.5%			14.5%			14.9%			14.4%			14.1%
Return on common equity (ROE) – adjusted (3), (4)	16.4%			15.5%			15.4%			15.6%			16.0%
Average common equity (6)	112,100		$	108,650		$	101,450		$	109,300		$	99,400
Net interest margin (NIM) – on average earning assets, net (4)	1.58%			1.50%			1.50%			1.50%			1.50%
PCL on loans as a % of average net loans and acceptances	0.27%			0.41%			0.29%			0.35%			0.28%
PCL on performing loans as a % of average net loans and acceptances	0.01%			0.11%			0.06%			0.06%			0.08%
PCL on impaired loans as a % of average net loans and acceptances	0.26%			0.30%			0.23%			0.29%			0.20%
Gross impaired loans (GIL) as a % of loans and acceptances	0.58%			0.55%			0.38%			0.58%			0.38%
Liquidity coverage ratio (LCR) (4), (7)	126%			128%			134%			126%			134%
Net stable funding ratio (NSFR) (4), (7)	114%			111%			112%			114%			112%
Capital, Leverage and Total loss absorbing capacity (TLAC) ratios (4), (8), (9)
Common Equity Tier 1 (CET1) ratio	13.0%			12.8%			14.1%			13.0%			14.1%
Tier 1 capital ratio	14.5%			14.1%			15.4%			14.5%			15.4%
Total capital ratio	16.3%			16.1%			17.3%			16.3%			17.3%
Leverage ratio	4.2%			4.2%			4.2%			4.2%			4.2%
TLAC ratio	28.4%			27.5%			30.9%			28.4%			30.9%
TLAC leverage ratio	8.3%			8.1%			8.5%			8.3%			8.5%
Selected balance sheet and other information (10)
Total assets	2,076,107		$	2,031,050		$	1,959,063		$	2,076,107		$	1,959,063
Securities, net of applicable allowance	431,185			412,553			372,625			431,185			372,625
Loans, net of allowance for loan losses	971,797			960,539			835,714			971,797			835,714
Derivative related assets	115,659			130,199			115,914			115,659			115,914
Deposits	1,361,265			1,327,603			1,215,671			1,361,265			1,215,671
Common equity	114,899			112,065			102,583			114,899			102,583
Total risk-weighted assets (RWA) (4), (8), (9)	661,177			653,702			585,899			661,177			585,899
Assets under management (AUM) (4)	1,300,100			1,223,300			1,095,400			1,300,100			1,095,400
Assets under administration (AUA) (4), (11), (12)	4,716,100			4,546,200			4,420,000			4,716,100			4,420,000
Common share information
Shares outstanding (000s) – average basic	1,414,194			1,412,651			1,393,515			1,411,044			1,388,217
– average diluted	1,416,149			1,414,166			1,394,939			1,412,644			1,389,857
– end of period	1,413,666			1,414,304			1,394,997			1,413,666			1,394,997
Dividends declared per common share	1.42		$	1.38		$	1.35		$	4.18		$	3.99
Dividend yield (4)	3.9%			4.1%			4.2%			4.2%			4.1%
Dividend payout ratio (4)	46%			50%			50%			50%			53%
Common share price (RY on TSX) (13)	154.28		$	133.19		$	130.73		$	154.28		$	130.73
Market capitalization (TSX) (13)	218,100			188,371			182,368			218,100			182,368
Business information (number of)
Employees (full-time equivalent) (FTE)	96,165			94,480			93,753			96,165			93,753
Bank branches	1,344			1,348			1,257			1,344			1,257
Automated teller machines (ATMs)	4,426			4,447			4,353			4,426			4,353
Period average US equivalent of C1.00 (14)	0.730			0.734			0.750			0.736			0.744
Period-end US equivalent of C1.00	0.724			0.727			0.758			0.724			0.758

All values are in US Dollars.

(1)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, and are included in our Personal & Commercial Banking, Wealth Management and Capital Markets segments. For further details, refer to the Key corporate events section.
(2)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. For further details on the impacts of the adoption of IFRS 17 including the description of accounting policies selected, refer to Note 2 of our Condensed Financial Statements.
---	---
(3)	These are <br>non-GAAP<br> measures. For further details, including a reconciliation, refer to the Key performance and <br>non-GAAP<br> measures section.
---	---
(4)	See Glossary for composition of these measures.
---	---
(5)	Effective the fourth quarter of 2023, we moved the Investor Services lending business from our Wealth Management segment to our Capital Markets segment. Therefore, comparative results for the three and nine month periods ended July 31, 2023 have been revised from those previously presented.
---	---
(6)	Average amounts are calculated using methods intended to approximate the average of the daily balances for the period. This includes average common equity used in the calculation of ROE. For further details, refer to the Key performance and <br>non-GAAP<br> measures section.
---	---
(7)	The LCR and NSFR are calculated in accordance with the Office of the Superintendent of Financial Institutions’ (OSFI) Liquidity Adequacy Requirements (LAR) guideline. LCR is the average for the three months ended for each respective period. For further details, refer to the Liquidity and funding risk section.
---	---
(8)	Capital ratios and RWA are calculated using OSFI’s Capital Adequacy Requirements (CAR) guideline, the Leverage ratio is calculated using OSFI’s Leverage Requirements (LR) guideline, and both the TLAC and TLAC leverage ratios are calculated using OSFI’s TLAC guideline. The periods ended July 31, 2024 and April 30, 2024 reflect our adoption of the revised market risk and credit valuation adjustment (CVA) frameworks that came into effect on November 1, 2023. For further details, refer to the Capital management section.
---	---
(9)	As prior period restatements are not required by OSFI, there was no impact from the adoption of IFRS 17 on regulatory capital, RWA, capital ratios, leverage ratio, TLAC available and TLAC ratios for periods prior to November 1, 2023.
---	---
(10)	Represents <br>period-end<br> spot balances.
---	---
(11)	AUA includes $15 billion and $6 billion (April 30, 2024 – $16 billion and $6 billion; July 31, 2023 – $13 billion and $7 billion) of securitized residential mortgages and credit card loans, respectively.
---	---
(12)	Comparative amounts for July 31, 2023 have been revised from those previously presented.
---	---
(13)	Based on TSX closing market price at <br>period-end.
---	---
(14)	Average amounts are calculated using <br>month-end<br> spot rates for the period.
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Royal Bank of Canada Third Quarter 2024 5

Economic, market and regulatory review and outlook – data as at August 27, 2024

The predictions and forecasts in this section are based on information and assumptions from sources we consider reliable. If this information or these assumptions are not accurate, actual economic outcomes may differ materially from the outlook presented in this section.

Economic and market review and outlook

The economic backdrop has shown signs of improvement in the Euro area and the U.K. however has continued to soften in Canada. Inflation has also continued to slow among advanced economies, including the U.S. where inflationary pressures re-accelerated in the earlier part of calendar 2024. GDP growth in the U.S. remained broadly robust but labour market conditions have softened. Job openings continue to decline, and the unemployment rate has been gradually increasing. The Bank of Canada (BoC) and the European Central Bank (ECB) both reduced interest rates in June and the Bank of England (BOE) followed with a reduction in August. The U.S. Federal Reserve (Fed) is expected to announce an initial reduction before the end of the third calendar quarter of 2024. While interest rates are beginning to move lower, they remain at elevated levels that are slowing the pace of economic growth. Softer GDP growth is expected to persist across most advanced economies over the second half of calendar 2024.

Canada

Canadian GDP is expected to have increased 1.4% 1 in the second calendar quarter of 2024 after rising 1.7% 1 in the first calendar quarter of 2024. Amidst a rapidly increasing population, per-capita output continued to decline over the first half of calendar 2024. The unemployment rate increased to 6.4% in July, up 0.9% from last year and is expected to continue to edge higher over the second half of calendar 2024 as higher interest rates continue to increase household debt servicing costs. The weakening economic backdrop signals that inflation will continue to slow towards the BoC’s 2% target rate. The BoC cut the overnight interest rate for the first time in more than four years in June, followed with another reduction in July, amidst inflationary pressures easing. However, interest rates remain at levels high enough to slow GDP growth. Slower GDP growth and weakening labour market conditions are expected to persist, signaling further gradual interest rate reductions from the BoC over the second half of calendar 2024.

U.S.

U.S. GDP grew by 2.8% 1 in the second calendar quarter of 2024 after a 1.4% 1 increase in the first calendar quarter of 2024. These growth rates are still strong but slightly softer than the increases seen over the second half of calendar year 2023. Labour markets have shown further signs of softening. The unemployment rate remains low, but increased to 4.3% in July, up 0.8% from a year earlier. Overall demand for labour in the U.S. has continued to moderate, with the number of job openings falling and wage growth persistently slowing over the last calendar year. Inflationary pressures eased more significantly over May through July after showing signs of re-acceleration over the first calendar quarter of 2024. GDP growth is expected to slow but remain positive over the second half of calendar 2024. The combination of a weaker economic backdrop and a downward trend in inflation is expected to prompt a gradual reduction in interest rates by the Fed, with the first decrease in the fed funds target range expected in September.

Europe

Euro area GDP increased 0.3% in the second calendar quarter of 2024 after rising 0.3% in the first calendar quarter of 2024. Unemployment rates remain very low across countries in the Euro area. Inflation in the Euro area has continued to ease but remains elevated. The ECB is expected to continue to reduce interest rates after lowering the deposit rate in June. U.K. GDP increased by 0.6% in the second calendar quarter of 2024 after increasing by 0.7% in the first calendar quarter of 2024. Inflationary trends have continued to moderate but progress, especially with services inflation, is still lagging that of other advanced economies. Labour market conditions have also softened with job vacancies falling and the unemployment rate edging higher. The BoE is expected to continue to lower the Bank Rate at a gradual pace after an initial reduction in August.

Financial markets

Government bond yields have moved lower with some advanced economy central banks already beginning to move interest rates lower. A softening in U.S. inflation after a re-acceleration earlier in the calendar year signals that the Fed will follow with an initial interest rate reduction before the end of the third calendar quarter of 2024. Equity markets have been volatile in recent weeks but remain at or close to record highs with signs of softening in U.S. economic growth offset by the expectation that the Fed is close to reducing interest rates. Oil prices have, on average, risen in calendar year 2024. Other global commodity prices have moderated from peak pandemic levels in calendar 2022.

1	Annualized rate

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6 Royal Bank of Canada Third Quarter 2024

Regulatory environment

We continue to monitor and prepare for regulatory developments and changes in a manner that seeks to ensure compliance with new requirements while mitigating adverse business or financial impacts. Such impacts could result from new or amended laws or regulations and the expectations of those who enforce them. A high level summary of the key regulatory changes that have the potential to increase or decrease our costs and the complexity of our operations is included in the Legal and regulatory environment risk section of our 2023 Annual Report and updates are listed below.

Global uncertainty

In July 2024, the International Monetary Fund (IMF) projected global growth of 3.2% for calendar 2024, unchanged from its April forecast. Significant uncertainty continues to pose risks to the global economic outlook, driven by: challenges in monetary policy normalization, including persistent inflation in the services sector offsetting disinflation in other sectors, raising the prospect of higher-for-even-longer interest rates in some economies; growing geopolitical tensions, including those between Russia and Ukraine, the conflict in the Middle East, and those between China and Taiwan and the West; escalating trade tensions which could raise costs of imported goods and hinder disinflation; upcoming elections, including the U.S. election in November, which could result in changes in economic, trade and foreign policy; deepening economic concerns in China, particularly in the real estate sector, that could have an impact on global growth; extreme weather-related events; potential restrictive fiscal policies in response to high government debt; and the potential re-emergence of financial sector instability as banks face regulatory reform in the U.S. Our diversified business model, as well as our product and geographic diversification, continue to help mitigate the risks posed by global uncertainty.

Interest Rate Benchmark Reform

As part of the interest rate benchmark reform, the publication of all remaining Canadian Dollar Offered Rate (CDOR) settings ceased on June 28, 2024. Relatedly, we have ceased Bankers’ Acceptance-based lending. As at July 31, 2024, and consistent with our transition plan, our exposure to financial instruments referencing CDOR and interest rates substantially similar to CDOR are no longer material to our Condensed Financial Statements.

Government of Canada 2023 and 2024 budgets

The Fall Economic Statement Implementation Act, 2023 (the FESIA), introduced as Bill C-59 and tabled by the Government of Canada, received Royal Assent and was enacted on June 20, 2024. The FESIA implements a variety of tax measures including: subject to certain exceptions, eliminating availability of the dividend received deduction in respect of dividends received by financial institutions after December 31, 2023 on shares of corporations resident in Canada, where such shares are mark-to-market property or tracking property for tax purposes; and a new 2% tax applicable to certain publicly listed corporations on net share buybacks in excess of $1 million occurring on or after January 1, 2024. The Q3 2024 impact from the enactment of the legislation was not material.

The Budget Implementation Act, 2024, No. 1 (the BIA), introduced as Bill C-69 and tabled by the Government of Canada, received Royal Assent and was enacted on June 20, 2024. The BIA includes the Global Minimum Tax Act (the GMTA) which implements into Canadian law certain measures relating to the Organisation for Economic Co-operation and Development’s two-pillar plan to combat tax base erosion and profit shifting, including a 15% global minimum corporate tax on certain multinational enterprises (Pillar Two). A number of other countries in which RBC operates have also enacted Pillar Two legislation. The GMTA and corresponding foreign Pillar Two legislation will be effective for our fiscal year beginning November 1, 2024. For further details, refer to Note 10 of our Condensed Financial Statements.

Climate-related regulatory activity

On March 20, 2024, OSFI released updates to its Guideline B-15 – Climate Risk Management. The guideline sets out expectations for the management and disclosure of climate-related risks for federally regulated financial institutions (FRFIs) and aims to support FRFIs in developing greater resilience to, and management of, these risks. The updated guideline includes additional climate-related disclosure requirements aligned with IFRS S2 and will be effective for fiscal year-end 2024. We continue to work towards meeting the requirements by the effective date.

For a discussion on risk factors resulting from these and other developments which may affect our business and financial results, refer to the risk sections of our 2023 Annual Report. For further details on our framework and activities to manage risks, refer to the risk and Capital management sections of this Q3 2024 Report to Shareholders.

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Royal Bank of Canada Third Quarter 2024 7

Key corporate events

HSBC Bank Canada

On March 28, 2024, we completed the acquisition of HSBC Bank Canada (HSBC Canada). The acquisition of HSBC Canada (the HSBC Canada transaction) gives us the opportunity to enhance our existing businesses in line with our strategic goals and better positions us to be the bank of choice for commercial clients with international needs, newcomers to Canada and globally connected clients. HSBC Canada results have been consolidated from the closing date and are included in our Personal & Commercial Banking, Wealth Management and Capital Markets segments.

Total consideration of $15.5 billion in cash included $13.5 billion for 100% of the common shares of HSBC Canada, $2.1 billion for the preferred shares and subordinated debt held directly or indirectly by HSBC Holdings plc, $(0.5) billion for the settlement of pre-existing relationships with HSBC Canada and $0.4 billion for an additional amount that accrued from August 30, 2023 to the closing date. This additional amount was calculated based on the $13.5 billion all-cash purchase price for the common shares of HSBC Canada and the Canadian Overnight Repo Rate Average. Relatedly, under a locked box mechanism, HSBC Canada’s earnings from June 30, 2022 to the closing date accrued to RBC and were reflected in the acquired net assets on closing. For further details, refer to Note 6 of our Condensed Financial Statements.

As the fair values of HSBC Canada’s fixed rate financial assets and liabilities are sensitive to changes in market interest rates, increases in interest rates prior to closing would have reduced the net fair value of the financial assets and liabilities to be acquired, which would have increased the goodwill recognized on closing and reduced our capital ratios. To manage this, we had previously de-designated certain interest rate swaps in cash flow hedging relationships such that future mark-to-market gains (losses) were recorded in net income, instead of Other comprehensive income (OCI), to mitigate closing capital ratio volatility. For the nine months ended July 31, 2024, we recognized $222 million of mark-to-market losses in Non-interest income – Other on the swaps and $91 million in Net interest income related to the reclassification of amounts previously accumulated in OCI, both of which are treated as specified items and reflected in Corporate Support. Subsequent to closing, we re-designated these interest rate swaps into cash flow hedging relationships. Adjusted results excluding specified items are non-GAAP measures. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

The following table provides details on the impact of the HSBC Canada transaction on our Personal & Commercial Banking segment and consolidated results, and reflects revenue, PCL, non-interest expenses and income taxes associated with the acquired operations and clients, which include the acquired assets, assumed liabilities and employees with the exception of assets and liabilities relating to treasury and liquidity management activities (HSBC Canada results).

	For the three months ended July 31, 2024
	Segment results – Personal & Commercial Banking						Consolidated results
(Millions of Canadian dollars)	Excluding<br>HSBC Canada		HSBC<br><br>Canada		Total		Excluding<br>HSBC Canada		HSBC<br><br>Canada		Total
Net interest income	$	4,503	$	549	$	5,052	$	6,758	$	569	$	7,327
Non-interest<br> income		1,569		104		1,673		7,145		159		7,304
Total revenue		6,072		653		6,725		13,903		728		14,631
PCL		520		87		607		576		83		659
Non-interest<br> expense		2,423		292		2,715		8,283		316		8,599
Income before income taxes		3,129		274		3,403		5,044		329		5,373
Income taxes		837		76		913		797		90		887
Net income	$	2,292	$	198	$	2,490	$	4,247	$	239	$	4,486
	For the nine months ended July 31, 2024
---	---	---	---	---	---	---	---	---	---	---	---	---
	Segment results – Personal & Commercial Banking						Consolidated results
(Millions of Canadian dollars)	Excluding<br>HSBC Canada		HSBC<br><br>Canada		Total		Excluding<br>HSBC Canada		HSBC<br><br>Canada		Total
Net interest income	$	12,948	$	720	$	13,668	$	19,534	$	748	$	20,282
Non-interest income		4,702		139		4,841		21,763		225		21,988
Total revenue		17,650		859		18,509		41,297		973		42,270
PCL <br>(1)		1,706		289		1,995		2,092		300		2,392
Non-interest expense		7,101		381		7,482		24,816		415		25,231
Income before income taxes		8,843		189		9,032		14,389		258		14,647
Income taxes		2,378		52		2,430		2,559		70		2,629
Net income	$	6,465	$	137	$	6,602	$	11,830	$	188	$	12,018
(1)	Segment results – Personal & Commercial Banking include initial PCL on purchased performing financial assets of $186 million, of which $181 million relates to purchased performing loans. Consolidated results include initial PCL on purchased performing financial assets of $200 million, of which $193 million relates to purchased performing loans.
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8 Royal Bank of Canada Third Quarter 2024

Financial performance
Overview
---

Q3 2024 vs. Q3 2023

Net income of $4,486 million was up $626 million or 16% from a year ago. Diluted EPS of $3.09 was up $0.36 or 13% and ROE of 15.5% was up from 14.9% last year. Our CET1 ratio of 13.0% was down 110 bps from a year ago.

Adjusted net income of $4,727 million was up $722 million or 18% from a year ago. Adjusted diluted EPS of $3.26 was up $0.43 or 15% and adjusted ROE of 16.4% was up from 15.4% last year.

Our earnings reflect higher results in Personal & Commercial Banking, Capital Markets and Wealth Management, partially offset by lower results in Corporate Support and Insurance.

Q3 2024 vs. Q2 2024

Net income of $4,486 million was up $536 million or 14% from last quarter. Diluted EPS of $3.09 was up $0.35 or 13% and ROE of 15.5% was up from 14.5% in the prior quarter. Our CET1 ratio of 13.0% was up 20 bps from last quarter.

Adjusted net income of $4,727 million was up $529 million or 13% from last quarter. Adjusted diluted EPS of $3.26 was up $0.34 or 12% and adjusted ROE of 16.4% was up from 15.5% last quarter.

Our earnings reflect higher results in Personal & Commercial Banking and Wealth Management, partially offset by lower earnings in Capital Markets. Results in the current period also reflect a lower impact from specified items relating to the HSBC Canada transaction in Corporate Support.

Q3 2024 vs. Q3 2023 (Nine months ended)

Net income of $12,018 million was up $1,345 million or 13% from the same period last year. Diluted EPS of $8.34 was up $0.79 or 10% and ROE of 14.4% was up from 14.1% in the prior year.

Adjusted net income of $12,991 million was up $935 million or 8% from the same period last year. Adjusted diluted EPS of $9.03 was up $0.48 or 6% and adjusted ROE of 15.6% was down from 16.0% in the prior year.

Our earnings were up from the same period last year, primarily driven by higher results across all of our business segments. The prior year results also reflected the impact of the Canada Recovery Dividend (CRD) and other tax related adjustments, which was treated as a specified item and reported in Corporate Support. Results in the current period also reflect a higher impact from specified items relating to the HSBC Canada transaction in Corporate Support.

For further details on our business segment results and CET1 ratio, refer to the Business segment results and Capital management sections, respectively.

Adjusted results

Adjusted results exclude specified items and the after-tax impact of amortization of acquisition-related intangibles. Adjusted results are non-GAAP measures. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

Impact of foreign currency translation

The following table reflects the estimated impact of foreign currency translation on key income statement items:

	For the three months ended						For the nine months ended
(Millions of Canadian dollars, except per share amounts)	Q3 2024 vs.<br>Q3 2023			Q3 2024 vs.<br>Q2 2024			Q3 2024 vs.<br>Q3 2023
Increase (decrease):
Total revenue	$	182		$	49		$	263
PCL		(1	)		–			2
Non-interest<br> expense		114			33			171
Income taxes		(1	)		(2	)		(1	)
Net income		70			18			91
Impact on EPS
Basic	$	0.05		$	0.01		$	0.06
Diluted		0.05			0.01			0.06

The relevant average exchange rates that impact our business are shown in the following table:

	For the three months ended						For the nine months ended
(Average foreign currency equivalent of C$1.00) (1)	July 31<br><br>2024		April 30<br><br>2024		July 31<br><br>2023		July 31<br><br>2024		July 31<br><br>2023
U.S. dollar		0.730		0.734		0.750		0.736		0.744
British pound		0.572		0.583		0.592		0.581		0.601
Euro		0.676		0.682		0.690		0.681		0.690
(1)	Average amounts are calculated using <br>month-end<br> spot rates for the period.
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Royal Bank of Canada Third Quarter 2024 9

Total revenue

	For the three months ended								For the nine months ended
(Millions of Canadian dollars, except percentage amounts)	July 31<br><br>2024			April 30<br><br>2024		July 31<br><br>2023 <br>(1)			July 31<br><br>2024			July 31<br><br>2023 <br>(1)
Interest and dividend income	$	27,090		$	25,754	$	22,834		$	78,453		$	62,489
Interest expense		19,763			19,131		16,548			58,171			43,902
Net interest income	$	7,327		$	6,623	$	6,286		$	20,282		$	18,587
NIM		1.58%			1.50%		1.50%			1.50%			1.50%
Insurance service result	$	214		$	203	$	149		$	604		$	566
Insurance investment result <br>(2)		28			59		151			228			92
Trading revenue		507			633		485			1,944			1,984
Investment management and custodial fees		2,382			2,257		2,099			6,824			6,238
Mutual fund revenue		1,151			1,067		1,034			3,248			3,049
Securities brokerage commissions		413			431		362			1,232			1,100
Service charges		587			557		529			1,698			1,551
Underwriting and other advisory fees		676			734		472			2,016			1,442
Foreign exchange revenue, other than trading		292			287		289			841			1,044
Card service revenue		324			291		334			941			938
Credit fees		405			434		342			1,234			1,078
Net gains on investment securities		28			59		27			157			191
Income (loss) from joint ventures and associates		(57	)		18		(37	)		(27	)		4
Other		354			501		455			1,048			915
Non-interest<br> income		7,304			7,531		6,691			21,988			20,192
Total revenue	$	14,631		$	14,154	$	12,977		$	42,270		$	38,779
Additional trading information
Net interest income <br>(3)	$	475		$	403	$	510		$	1,222		$	1,165
Non-interest<br> income		507			633		485			1,944			1,984
Total trading revenue	$	982		$	1,036	$	995		$	3,166		$	3,149
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(2)	The 2023 restated results may not be fully comparable to the current period as we were not managing our asset and liability portfolios under IFRS 17.
---	---
(3)	Reflects net interest income arising from trading-related positions, including assets and liabilities that are classified or designated at fair value through profit or loss (FVTPL).
---	---

Q3 2024 vs. Q3 2023

Total revenue increased $1,654 million or 13% from a year ago, mainly due to higher net interest income. Higher investment management and custodial fees, underwriting and other advisory fees and mutual fund revenue also contributed to the increase. These factors were partially offset by lower insurance investment result and other revenue. The impact of foreign exchange translation increased revenue by $182 million. The inclusion of HSBC Canada revenue contributed $728 million to total revenue.

Net interest income increased $1,041 million or 17%, of which $569 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $472 million or 8% was largely due to higher spreads and average volume growth in Canadian Banking.

NIM was up 8 bps compared to last year, mainly driven by the acquisition of HSBC Canada including the accretion of fair value adjustments, as well as higher interest rates and changes in product mix in Canadian Banking. This was partially offset by competitive pricing pressures in Canadian Banking and higher funding costs in Capital Markets.

Insurance investment result decreased $123 million or 81%, mainly due to lower favourable investment-related experience. The results in the prior period are not fully comparable as we were not managing our asset and liability portfolios under IFRS 17.

Investment management and custodial fees increased $283 million or 13%, mainly due to higher fee-based client assets reflecting market appreciation and net sales.

Mutual fund revenue increased $117 million or 11%, primarily due to higher fee-based client assets reflecting market appreciation and net sales in Wealth Management, and higher average mutual fund balances driving higher distribution fees in Canadian Banking.

Underwriting and other advisory fees increased $204 million or 43%, largely due to higher debt origination in North America.

Other revenue decreased $101 million or 22%, primarily attributable to changes in the fair value of certain instruments in our non-trading portfolios.

Q3 2024 vs. Q2 2024

Total revenue increased $477 million or 3% from last quarter, largely due to higher net interest income and investment management and custodial fees. These factors were partially offset by lower other revenue and trading revenue. The inclusion of HSBC Canada revenue contributed $728 million in Q3 2024 and $245 million in Q2 2024 to total revenue, as the current quarter includes a full quarter of revenue.

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10 Royal Bank of Canada Third Quarter 2024

Net interest income increased $704 million or 11%, of which $390 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $314 million or 5% was primarily due to average volume growth, the impact of two more days in the current quarter and higher spreads in Canadian Banking.

Trading revenue decreased $126 million or 20%, primarily due to lower fixed income trading revenue in the U.S., partially offset by higher equity trading revenue primarily in Europe.

Investment management and custodial fees increased $125 million or 6%, mainly due to higher fee-based client assets reflecting market appreciation.

Other revenue decreased $147 million or 29%, mainly attributable to changes in the fair value of certain instruments in our non-trading portfolios and the prior quarter impact of management of closing capital volatility related to the HSBC Canada transaction, which was treated as a specified item. These factors were partially offset by changes in the fair value of the hedges related to our U.S. share-based compensation plans, which was largely offset in Non-interest expense.

Q3 2024 vs. Q3 2023 (Nine months ended)

Total revenue increased $3,491 million or 9% from the same period last year, primarily driven by higher net interest income. Higher investment management and custodial fees, underwriting and other advisory fees and mutual fund revenue also contributed to the increase. This was partially offset by lower foreign exchange revenue, other than trading. The impact of foreign exchange translation increased revenue by $263 million. The inclusion of HSBC Canada revenue contributed $973 million to total revenue.

Net interest income increased $1,695 million or 9%, of which $748 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $947 million or 5% was largely due to higher spreads and average volume growth in Canadian Banking.

Investment management and custodial fees increased $586 million or 9%, mainly due to higher fee-based client assets reflecting market appreciation and net sales.

Mutual fund revenue increased $199 million or 7%, primarily due to higher average fee-based client assets reflecting market appreciation and net sales in Wealth Management, and higher average mutual fund balances driving higher distribution fees in Canadian Banking.

Underwriting and other advisory fees increased $574 million or 40%, mainly due to higher debt origination across all regions and higher M&A activity across most regions.

Foreign exchange revenue, other than trading decreased $203 million or 19%, largely driven by reduced revenue following the sale of RBC Investor Services ® operations.

Provision for credit losses

(1)

	For the three months ended									For the nine months ended
(Millions of Canadian dollars, except percentage amounts)	July 31<br><br>2024			April 30<br><br>2024			July 31<br><br>2023			July 31<br><br>2024			July 31<br><br>2023
Personal & Commercial Banking	$	70		$	243		$	2		$	462		$	266
Wealth Management		(16	)		(19	)		64			(62	)		90
Capital Markets		(11	)		19			54			18			110
Corporate Support and other <br>(2)		(1	)		1			–			1			–
PCL on performing loans		42			244			120			419			466
Personal & Commercial Banking	$	541		$	511		$	303		$	1,538		$	867
Wealth Management		32			46			38			116			106
Capital Markets		50			115			158			326			324
PCL on impaired loans		623			672			499			1,980			1,297
PCL – Loans		665			916			619			2,399			1,763
PCL – Other<br><br>(3)		(6	)		4			(3	)		(7	)		(15	)
Total PCL	$	659		$	920		$	616		$	2,392		$	1,748
PCL on loans is comprised of:
Retail	$	32		$	107		$	(1	)	$	276		$	230
Wholesale		10			137			121			143			236
PCL on performing loans		42			244			120			419			466
Retail		407			396			270			1,162			758
Wholesale		216			276			229			818			539
PCL on impaired loans		623			672			499			1,980			1,297
PCL – Loans	$	665		$	916		$	619		$	2,399		$	1,763
PCL on loans as a % of average net loans and acceptances		0.27%			0.41%			0.29%			0.35%			0.28%
PCL on impaired loans as a % of average net loans and acceptances		0.26%			0.30%			0.23%			0.29%			0.20%
(1)	Information on loans represents loans, acceptances and commitments.
---	---
(2)	Includes PCL recorded in Corporate Support and Insurance.
---	---
(3)	PCL – Other includes amounts related to debt securities measured at fair value through other comprehensive income (FVOCI) and amortized cost, accounts receivable, and financial and purchased guarantees.
---	---

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Royal Bank of Canada Third Quarter 2024 11

Q3 2024 vs. Q3 2023

Total PCL increased $43 million or 7% from a year ago, mainly reflecting higher provisions in Personal & Commercial Banking, partially offset by lower provisions in Capital Markets and Wealth Management. The PCL on loans ratio decreased 2 bps.

PCL on performing loans decreased $78 million or 65%, mainly due to favourable changes to our scenario weights, partially offset by unfavourable changes to our macroeconomic forecast and credit quality.

PCL on impaired loans increased $124 million or 25%, mainly due to higher provisions in our Canadian Banking portfolios, partially offset by lower provisions in Capital Markets.

Q3 2024 vs. Q2 2024

Total PCL decreased $261 million or 28% from last quarter, primarily reflecting lower provisions in Personal & Commercial Banking and Capital Markets. The PCL on loans ratio decreased 14 bps.

PCL on performing loans decreased $202 million or 83%, mainly reflecting higher provisions in the prior quarter driven by the initial PCL on performing loans purchased in the HSBC Canada transaction.

Q3 2024 vs. Q3 2023 (Nine months ended)

Total PCL increased $644 million or 37% from the same period last year, mainly reflecting higher provisions in Personal & Commercial Banking, partially offset by lower provisions in Wealth Management and Capital Markets. The PCL on loans ratio increased 7 bps.

PCL on performing loans decreased $47 million or 10%, largely due to favourable changes to our macroeconomic forecast and scenario weights, partially offset by the initial PCL on performing loans purchased in the HSBC Canada transaction and unfavourable changes in credit quality mainly in Personal & Commercial Banking.

PCL on impaired loans increased $683 million or 53%, primarily due to higher provisions in our Canadian Banking portfolios.

Non-interest expense

	For the three months ended						For the nine months ended
(Millions of Canadian dollars, except percentage amounts)	July 31<br><br>2024		April 30<br><br>2024		July 31<br><br>2023 <br>(1)		July 31<br><br>2024		July 31<br><br>2023 <br>(1)
Salaries	$	2,310	$	2,145	$	2,160	$	6,533	$	6,239
Variable compensation		2,246		2,161		1,816		6,490		5,653
Benefits and retention compensation		615		606		545		1,826		1,650
Share-based compensation		235		179		243		811		645
Human resources		5,406		5,091		4,764		15,660		14,187
Equipment		629		615		611		1,863		1,769
Occupancy		443		441		409		1,291		1,218
Communications		342		358		321		1,021		917
Professional fees		547		697		591		1,868		1,479
Amortization of other intangibles		426		373		369		1,151		1,114
Other		806		733		700		2,377		2,070
Non-interest<br> expense	$	8,599	$	8,308	$	7,765	$	25,231	$	22,754
Efficiency ratio<br><br>(2)		58.8%		58.7%		59.8%		59.7%		58.7%
Efficiency ratio – adjusted<br><br>(3)		56.6%		56.0%		58.4%		56.9%		57.6%
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(2)	Efficiency ratio is calculated as <br>Non-interest<br> expense divided by Total revenue.
---	---
(3)	This is a <br>non-GAAP<br> ratio. For further details, including a reconciliation, refer to the Key performance and <br>non-GAAP<br> measures section.
---	---

Q3 2024 vs. Q3 2023

Non-interest expense increased $834 million or 11% from a year ago, of which $316 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $518 million or 7% was largely due to higher variable compensation commensurate with increased revenue and the impact of foreign exchange translation.

Our efficiency ratio of 58.8% decreased 100 bps from 59.8% last year. Our adjusted efficiency ratio of 56.6% decreased 180 bps from 58.4% last year.

Q3 2024 vs. Q2 2024

Non-interest expense increased $291 million or 4% from last quarter. The inclusion of HSBC Canada non-interest expense increased non-interest expense by $217 million, as the current quarter includes a full quarter of non-interest expense. The fair value of our U.S. share-based compensation plans, which was largely offset in Other revenue, also contributed to the increase. These factors were partially offset by lower HSBC Canada transaction and integration costs, which is treated as a specified item.

Our efficiency ratio of 58.8% increased 10 bps from 58.7% last quarter. Our adjusted efficiency ratio of 56.6% increased 60 bps from 56.0% last quarter.

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12 Royal Bank of Canada Third Quarter 2024

Q3 2024 vs. Q3 2023 (Nine months ended)

Non-interest expense increased $2,477 million or 11% from the same period last year, of which $415 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $2,062 million or 9% was mainly due to higher HSBC Canada transaction and integration costs, which is treated as a specified item, as well as higher variable compensation costs commensurate with increased revenue.

Our efficiency ratio of 59.7% increased 100 bps from 58.7% last year. Our adjusted efficiency ratio of 56.9% decreased 70 bps from 57.6% last year.

Adjusted efficiency ratio is a non-GAAP ratio. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

Income taxes

	For the three months ended						For the nine months ended
(Millions of Canadian dollars, except percentage amounts)	July 31<br><br>2024		April 30<br><br>2024		July 31<br><br>2023 <br>(1)		July 31<br><br>2024		July 31<br><br>2023 <br>(1)
Income taxes	$	887	$	976	$	736	$	2,629	$	3,604
Income before income taxes		5,373		4,926		4,596		14,647		14,277
Effective income tax rate		16.5%		19.8%		16.0%		17.9%		25.2%
Adjusted results<br><br>(2), (3)
Income taxes – adjusted	$	960	$	1,037	$	782	$	2,910	$	2,647
Income before income taxes – adjusted		5,687		5,235		4,787		15,901		14,703
Effective income tax rate – adjusted		16.9%		19.8%		16.3%		18.3%		18.0%
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(2)	These are <br>non-GAAP<br> measures. For further details, including a reconciliation, refer to the Key performance and <br>non-GAAP<br> measures section.
---	---
(3)	See Glossary for composition of these measures.
---	---

Q3 2024 vs. Q3 2023

Income tax expense increased $151 million or 21% from a year ago, primarily due to higher income before income taxes, partially offset by the impact of changes in earnings mix. Adjusted income tax expense increased $178 million or 23%.

The effective income tax rate of 16.5% increased 50 bps, primarily due to the net impact of tax adjustments in the same quarter last year, partially offset by the impact of changes in earnings mix. The adjusted effective income tax rate of 16.9% increased 60 bps.

Q3 2024 vs. Q2 2024

Income tax expense decreased $89 million or 9% from last quarter, primarily due to the impact of changes in earnings mix. Adjusted income tax expense decreased $77 million or 7%.

The effective income tax rate of 16.5% decreased 330 bps, primarily due to the impact of changes in earnings mix. The adjusted effective income tax rate of 16.9% decreased 290 bps.

Q3 2024 vs. Q3 2023 (Nine months ended)

Income tax expense decreased $975 million or 27% from the same period last year, primarily due to the impact of the CRD and other tax related adjustments, which was treated as a specified item in the prior year. Adjusted income tax expense increased $263 million or 10%.

The effective income tax rate of 17.9% decreased 730 bps, primarily due to the impact of the CRD and other tax related adjustments noted above. The adjusted effective income tax rate of 18.3% increased 30 bps.

For further details on specified items, including a reconciliation, refer to the Key performance and non-GAAP measures section.

Business segment results
How we measure and report our business segments
---

The key methodologies and assumptions used in our management reporting framework are periodically reviewed by management to ensure they remain valid. Effective November 1, 2023, we prospectively revised our attributed capital methodology to include the allocation of leverage to our business segments to further align our allocation processes with evolving regulatory capital requirements. Our methodology for allocating capital to our business segments is intended to consistently measure and align economic costs with the underlying benefits and risks associated with the activities of each business segment, allowing for a uniform base for performance measurement among our business segments to facilitate management decisions in resource allocation in conjunction with other factors. For Insurance, the allocation of capital remains unchanged and continues to be based on fully diversified economic capital.

For further details on the key methodologies and assumptions used in our management reporting framework, refer to the How we measure and report our business segments section of our 2023 Annual Report.

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Royal Bank of Canada Third Quarter 2024 13

Key performance and <br>non-GAAP<br> measures

Performance measures

Return on common equity

We use ROE, at both the consolidated and business segment levels, as a measure of return on total capital invested in our business. Management views the business segment ROE measure as a useful measure for supporting investment and resource allocation decisions because it adjusts for certain items that may affect comparability between business segments and certain competitors.

Our consolidated ROE calculation is based on net income available to common shareholders divided by total average common equity for the period. Business segment ROE calculations are based on net income available to common shareholders divided by average attributed capital for the period. For each segment, with the exception of Insurance, average attributed capital includes the capital and leverage required to underpin various risks and amounts invested in goodwill and intangibles and other regulatory deductions. For Insurance, the allocation of capital is based on fully diversified economic capital.

The attribution of capital involves the use of assumptions, judgments and methodologies that are regularly reviewed and revised by management as deemed necessary. For further details on changes to our attributed capital methodology, refer to the How we measure and report our business segments section. Changes to such assumptions, judgments and methodologies can have a material effect on the business segment ROE information that we report. Other companies that disclose information on similar attributions and related return measures may use different assumptions, judgments and methodologies.

The following table provides a summary of our ROE calculations:

	For the three months ended
	July 31<br><br>2024													April 30<br><br>2024		July 31<br><br>2023
(Millions of Canadian dollars,<br>except percentage amounts)	Personal &<br>Commercial<br>Banking<br>(1)		Wealth<br>Management<br>(1)		Insurance		Capital<br>Markets<br>(1)		Corporate<br>Support			Total		Total		Total (2)
Net income available to common shareholders	$	2,446	$	840	$	168	$	1,141	$	(218)		$	4,377	$	3,881	$	3,800
Total average common equity <br>(3), (4)		44,150		23,350		2,000		32,150		10,450			112,100		108,650		101,450
ROE <br>(5)		22.0%		14.3%		33.6%		14.1%		n.m.			15.5%		14.5%		14.9%
	For the nine months ended
	July 31<br><br>2024													July 31<br><br>2023
(Millions of Canadian dollars,<br>except percentage amounts)	Personal &<br>Commercial<br>Banking<br>(1)		Wealth<br>Management<br>(1)		Insurance		Capital<br>Markets<br>(1)		Corporate<br>Support			Total		Total (2)
Net income available to common shareholders	$	6,517	$	2,190	$	564	$	3,522	$	(1,013	)	$	11,780	$	10,499
Total average common equity <br>(3), (4)		37,000		22,850		2,050		31,400		16,000			109,300		99,400
ROE <br>(5)		23.5%		12.8%		36.5%		15.0%		n.m.			14.4%		14.1%
(1)	Effective November 1, 2023, our attributed capital methodology incorporates leverage requirements to allocate capital to our business segments. For further details on changes to our attributed capital methodology, refer to the How we measure and report our business segments section.
---	---
(2)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(3)	Total average common equity represents rounded figures.
---	---
(4)	The amounts for the segments are referred to as attributed capital.
---	---
(5)	ROE is based on actual balances of average common equity before rounding.
---	---
n.m.	not meaningful
---	---

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14 Royal Bank of Canada Third Quarter 2024

Non-GAAP measures

The following discussion describes the non-GAAP measures we use in evaluating our operating results.

Adjusted results

Our results for all reported periods were adjusted for the following specified item:

•	HSBC Canada transaction and integration costs.

Our results for the nine months ended July 31, 2024 and the three months ended April 30, 2024 were adjusted for the following specified item:

•	Management of closing capital volatility related to the HSBC Canada transaction. For further details, refer to the Key corporate events section.

Our results for the nine months ended July 31, 2023 were adjusted for the following specified item:

•	CRD and other tax related adjustments: reflects the impact of the CRD and the 1.5% increase in the Canadian corporate tax rate applicable to fiscal 2022, net of deferred tax adjustments, which were announced in the Government of Canada’s 2022 budget and enacted in the first quarter of 2023.

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Royal Bank of Canada Third Quarter 2024 15

Consolidated results, reported and adjusted

	As at or for the three months ended							As at or for the nine months ended
(Millions of Canadian dollars,<br>except per share, number of and percentage amounts)	July 31<br><br>2024		April 30<br><br>2024			July 31<br><br>2023 <br>(1)		July 31<br><br>2024		July 31<br><br>2023 <br>(1)
Total revenue	$	14,631	$	14,154		$	12,977	$	42,270	$	38,779
PCL		659		920			616		2,392		1,748
Non-interest<br> expense		8,599		8,308			7,765		25,231		22,754
Income before income taxes		5,373		4,926			4,596		14,647		14,277
Income taxes		887		976			736		2,629		3,604
Net income	$	4,486	$	3,950		$	3,860	$	12,018	$	10,673
Net income available to common shareholders	$	4,377	$	3,881		$	3,800	$	11,780	$	10,499
Average number of common shares (thousands)		1,414,194		1,412,651			1,393,515		1,411,044		1,388,217
Basic earnings per share (in dollars)	$	3.09	$	2.75		$	2.73	$	8.35	$	7.56
Average number of diluted common shares (thousands)		1,416,149		1,414,166			1,394,939		1,412,644		1,389,857
Diluted earnings per share (in dollars)	$	3.09	$	2.74		$	2.73	$	8.34	$	7.55
ROE <br>(2)		15.5%		14.5%			14.9%		14.4%		14.1%
Effective income tax rate		16.5%		19.8%			16.0%		17.9%		25.2%
Total adjusting items impacting net income <br>(before-tax)	$	314	$	309		$	191	$	1,254	$	426
Specified item: HSBC Canada transaction and integration costs <br>(3), (4)		160		358			110		783		177
Specified item: Management of closing capital volatility related to the HSBC Canada transaction <br>(3), (5)		–		(155	)		–		131		–
Amortization of acquisition-related intangibles <br>(6)		154		106			81		340		249
Total income taxes for adjusting items impacting net income	$	73	$	61		$	46	$	281	$	(957	)
Specified item: HSBC Canada transaction and integration costs <br>(3)		35		76			26		158		42
Specified item: Management of closing capital volatility related to the HSBC Canada transaction <br>(3), (5)		–		(43	)		–		36		–
Specified item: CRD and other tax related adjustments <br>(3), (7)		–		–			–		–		(1,050	)
Amortization of acquisition-related intangibles <br>(6)		38		28			20		87		51
Adjusted results<br><br>(8)
Income before income taxes – adjusted	$	5,687	$	5,235		$	4,787	$	15,901	$	14,703
Income taxes – adjusted		960		1,037			782		2,910		2,647
Net income – adjusted		4,727		4,198			4,005		12,991		12,056
Net income available to common shareholders – adjusted		4,618		4,129			3,945		12,753		11,882
Average number of common shares (thousands)		1,414,194		1,412,651			1,393,515		1,411,044		1,388,217
Basic earnings per share (in dollars) – adjusted <br>(8)	$	3.26	$	2.92		$	2.83	$	9.04	$	8.56
Average number of diluted common shares (thousands)		1,416,149		1,414,166			1,394,939		1,412,644		1,389,857
Diluted earnings per share (in dollars) – adjusted <br>(8)	$	3.26	$	2.92		$	2.83	$	9.03	$	8.55
ROE – adjusted <br>(8)		16.4%		15.5%			15.4%		15.6%		16.0%
Effective income tax rate – adjusted <br>(8)		16.9%		19.8%			16.3%		18.3%		18.0%
Adjusted efficiency ratio<br><br>(8)
Total revenue	$	14,631	$	14,154		$	12,977	$	42,270	$	38,779
Add specified item: Management of closing capital volatility related to the HSBC Canada transaction <br>(before-tax)<br> <br>(3), (5)		–		(155	)		–		131		–
Total revenue – adjusted	$	14,631	$	13,999		$	12,977	$	42,401	$	38,779
Non-interest<br> expense	$	8,599	$	8,308		$	7,765	$	25,231	$	22,754
Less specified item: HSBC Canada transaction and integration costs <br>(before-tax)<br> <br>(3)		160		358			110		783		177
Less: Amortization of acquisition-related intangibles <br>(before-tax)<br> <br>(6)		154		106			81		340		249
Non-interest<br> expense – adjusted	$	8,285	$	7,844		$	7,574	$	24,108	$	22,328
Efficiency ratio		58.8%		58.7%			59.8%		59.7%		58.7%
Efficiency ratio – adjusted		56.6%		56.0%			58.4%		56.9%		57.6%
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(2)	ROE is based on actual balances of average common equity before rounding.
---	---
(3)	These amounts have been recognized in Corporate Support.
---	---
(4)	As at July 31, 2024, the cumulative HSBC Canada transaction and integration costs <br>(before-tax)<br> incurred were $1.2 billion and it is currently estimated that an additional $0.3 billion will be incurred, for a total of approximately $1.5 billion.
---	---
(5)	For the nine months ended July 31, 2024 and the three months ended April 30, 2024, we included management of closing capital volatility related to the HSBC Canada transaction as a specified item for <br>non-GAAP<br> measures and <br>non-GAAP<br> ratios. Refer to the Key corporate events section for further details.
---	---
(6)	Represents the impact of amortization of acquisition-related intangibles (excluding amortization of software), and any goodwill impairment.
---	---
(7)	The impact of the CRD and other tax related adjustments does not include $0.2 billion recognized in other comprehensive income.
---	---
(8)	See Glossary for composition of these measures.
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16 Royal Bank of Canada Third Quarter 2024

Personal & Commercial Banking
	As at or for the three months ended						As at or for the nine months ended
---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars,<br>except percentage amounts and as otherwise noted)	July 31<br><br>2024<br><br>(1)		April 30<br><br>2024 <br>(1)		July 31<br><br>2023		July 31<br><br>2024<br><br>(1)		July 31<br><br>2023
Net interest income	$	5,052	$	4,400	$	4,062	$	13,668	$	11,886
Non-interest<br> income		1,673		1,590		1,501		4,841		4,516
Total revenue		6,725		5,990		5,563		18,509		16,402
PCL on performing assets		68		245		5		463		268
PCL on impaired assets		539		509		300		1,532		860
PCL		607		754		305		1,995		1,128
Non-interest<br> expense		2,715		2,428		2,319		7,482		6,805
Income before income taxes		3,403		2,808		2,939		9,032		8,469
Net income	$	2,490	$	2,051	$	2,134	$	6,602	$	6,175
Revenue by business
Canadian Banking	$	6,445	$	5,704	$	5,292	$	17,665	$	15,616
Caribbean & U.S. Banking		280		286		271		844		786
Selected balance sheet and other information
ROE <br>(2)		22.0%		23.2%		28.1%		23.5%		28.1%
NIM		2.89%		2.82%		2.74%		2.83%		2.73%
Efficiency ratio <br>(3)		40.4%		40.5%		41.7%		40.4%		41.5%
Operating leverage <br>(3)		3.8%		5.5%		(1.5)%		2.9%		1.1%
Average total earning assets, net	$	696,100	$	634,900	$	588,400	$	645,600	$	581,400
Average loans and acceptances, net		698,800		643,500		596,000		652,200		588,200
Average deposits		731,200		664,800		601,100		675,600		589,600
AUA <br>(4), (5)		429,200		405,400		357,500		429,200		357,500
Average AUA		419,700		385,700		349,100		387,600		346,800
PCL on impaired loans as a % of average net loans and acceptances		0.31%		0.32%		0.20%		0.31%		0.20%
Other selected information – Canadian Banking
Net income	$	2,399	$	1,959	$	2,043	$	6,325	$	5,924
NIM		2.84%		2.76%		2.68%		2.78%		2.69%
Efficiency ratio		39.3%		39.3%		40.5%		39.3%		40.3%
Operating leverage		3.6%		5.8%		(2.0)%		2.8%		0.8%
(1)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, which impacted results, balances and ratios for the periods ended July 31, 2024 and April 30, 2024. For further details, refer to the Key corporate events section.
---	---
(2)	Effective November 1, 2023, our attributed capital methodology incorporates leverage requirements to allocate capital to our business segments. For further details on changes to our attributed capital methodology, refer to the How we measure and report our business segments section.
---	---
(3)	See Glossary for composition of this measure.
---	---
(4)	AUA represents <br>period-end<br> spot balances and includes securitized residential mortgages and credit card loans as at July 31, 2024 of $15 billion and $6 billion, respectively (April 30, 2024 – $16 billion and $6 billion; July 31, 2023 – $13 billion and $7 billion).
---	---
(5)	Comparative amounts for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
---	---

Financial performance

Q3 2024 vs. Q3 2023

Net income increased $356 million or 17% from a year ago. The inclusion of HSBC Canada results increased net income by $198 million. Excluding HSBC Canada results, net income increased $158 million or 7%, primarily driven by higher net interest income reflecting higher spreads and average volume growth of 8% in Canadian Banking, partially offset by higher PCL.

Total revenue increased $1,162 million or 21%.

Canadian Banking revenue increased $1,153 million or 22%, of which $653 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $500 million or 9% was primarily due to higher net interest income reflecting higher spreads and average volume growth of 10% in deposits and 6% in loans. The prior year impact of harmonized sales tax (HST) on payment card clearing services also contributed to the increase.

Caribbean & U.S. Banking revenue increased $9 million or 3%.

NIM was up 15 bps, mainly due to the impact of the higher interest rate environment and changes in product mix. The inclusion of HSBC Canada also contributed to the increase reflecting the accretion of fair value adjustments. These factors were partially offset by competitive pricing pressures.

PCL increased $302 million, primarily due to higher provisions on impaired loans in our Canadian Banking retail and commercial portfolios in a few sectors, including the real estate and related and forest products sectors, resulting in an increase of 11 bps in the PCL on impaired loans ratio.

Non-interest expense increased $396 million or 17%, of which $292 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $104 million or 4% was primarily due to higher staff-related costs, marketing costs largely associated with new client acquisition campaigns, and professional fees.

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Royal Bank of Canada Third Quarter 2024 17

Q3 2024 vs. Q2 2024

Net income increased $439 million or 21% from last quarter. The inclusion of HSBC Canada results increased net income by $259 million, as the current quarter includes a full quarter of net income and the prior quarter reflected the initial PCL on the performing loans purchased in the HSBC Canada transaction. Excluding HSBC Canada results, net income increased $180 million or 9%, primarily driven by higher net interest income reflecting average volume growth of 2% in Canadian Banking, the impact of two more days in the current quarter and higher spreads in Canadian Banking. These factors were partially offset by higher staff-related costs.

NIM was up 7 bps, mainly due to changes in product mix, the inclusion of HSBC Canada reflecting the accretion of fair value adjustments and the favourable impact of the higher interest rate environment. These factors were partially offset by competitive pricing pressures.

Q3 2024 vs. Q3 2023 (Nine months ended)

Net income increased $427 million or 7% from the same period last year. The inclusion of HSBC Canada results increased net income by $137 million. Excluding HSBC Canada results, net income increased $290 million or 5%, primarily driven by higher net interest income reflecting higher spreads and average volume growth of 7% in Canadian Banking. Higher non-interest income also contributed to the increase. These factors were partially offset by higher PCL and higher non-interest expenses.

Total revenue increased $2,107 million or 13%, of which $859 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $1,248 million or 8% was primarily due to higher net interest income reflecting spreads and average volume growth of 9% in deposits and 6% in loans. Higher service charges, mainly reflecting higher client activity, and the prior year impact of HST on payment card clearing services also contributed to the increase.

PCL increased $867 million or 77%, largely due to higher provisions on impaired loans in our Canadian Banking retail and commercial portfolios across many sectors, including the automotive and real estate and related sectors, resulting in an increase of 11 bps in the PCL on impaired loans ratio. Higher provisions on performing loans also contributed to the increase, mainly reflecting the initial PCL on the performing loans purchased in the HSBC Canada transaction and unfavourable changes in credit quality, partially offset by favourable changes to our macroeconomic forecast.

Non-interest expense increased $677 million or 10%, of which $381 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $296 million or 4% was primarily due to higher marketing costs largely associated with new client acquisition campaigns, as well as higher staff-related costs, ongoing technology investments and higher professional fees.

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18 Royal Bank of Canada Third Quarter 2024

Wealth Management
								As at or for the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except number of,percentage amounts and as otherwise noted)			April 30<br><br>2024 <br>(1)			July 31<br><br>2023 <br>(2)		July 31<br><br>2024<br><br>(1)			July 31<br><br>2023 <br>(2)
Net interest income (3)	1,133		$	1,136		$	1,047	$	3,419		$	3,352
Non-interest income (3)	3,632			3,482			3,355		10,501			10,004
Total revenue	4,765			4,618			4,402		13,920			13,356
PCL on performing assets	(16	)		(19	)		64		(62	)		90
PCL on impaired assets	32			46			38		116			106
PCL	16			27			102		54			196
Non-interest expense	3,679			3,653			3,498		11,100			10,379
Income before income taxes	1,070			938			802		2,766			2,781
Net income	862		$	769		$	663	$	2,237		$	2,212
Revenue by business
Canadian Wealth Management	1,304		$	1,222		$	1,111	$	3,703		$	3,316
U.S. Wealth Management (including City National)	2,206			2,211			1,969		6,575			6,102
U.S. Wealth Management (including City National) (US millions)	1,610			1,622			1,477		4,841			4,539
Global Asset Management	750			705			635		2,180			1,952
International Wealth Management	328			300			324		945			935
Investor Services (4)	177			180			363		517			1,051
Selected balance sheet and other information
ROE (5)	14.3%			13.5%			10.8%		12.8%			12.0%
NIM	2.98%			3.06%			2.48%		3.04%			2.58%
Pre-tax margin (6)	22.5%			20.3%			18.2%		19.9%			20.8%
Number of advisors (7)	6,092			6,128			6,239		6,092			6,239
Average total earning assets, net	151,200		$	151,100		$	167,400	$	150,400		$	173,800
Average loans and acceptances, net	114,000			112,400			112,400		112,800			113,600
Average deposits (4)	159,100			156,700			154,300		157,100			166,300
AUA (4), (8)	4,266,800			4,120,600			4,043,600		4,266,800			4,043,600
U.S. Wealth Management (including City National) (8)	894,200			840,700			756,300		894,200			756,300
U.S. Wealth Management (including City National) (US millions) (8)	647,800			610,800			573,500		647,800			573,500
Investor Services (8)	2,499,600			2,456,300			2,544,500		2,499,600			2,544,500
AUM (8)	1,290,600			1,214,100			1,086,800		1,290,600			1,086,800
Average AUA (4)	4,225,300			4,159,400			4,987,300		4,149,800			5,301,000
Average AUM	1,263,500			1,200,000			1,074,600		1,195,200			1,054,000
PCL on impaired loans as a % of average net loans and acceptances	0.11%			0.17%			0.13%		0.14%			0.12%

All values are in US Dollars.

Estimated impact of U.S. dollar, British poundand Euro translation on key income statement items(Millions of Canadian dollars, except percentage amounts)				For the nine<br><br>months ended
		Q3 2024 vs.<br>Q2 2024		Q3 2024 vs.<br>Q3 2023
Increase (decrease):
Total revenue	80	$	23	$	119
PCL	–		–		–
Non-interest expense	65		18		98
Net income	13		4		18
Percentage change in average U.S. dollar equivalent of C1.00	(3)%		(1)%		(1)%
Percentage change in average British pound equivalent of C1.00	(3)%		(2)%		(3)%
Percentage change in average Euro equivalent of C1.00	(2)%		(1)%		(1)%

All values are in US Dollars.

(1)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, which impacted results, balances and ratios for the periods ended July 31, 2024 and April 30, 2024. For further details, refer to the Key corporate events section.
(2)	Effective the fourth quarter of 2023, we moved the Investor Services lending business from our Wealth Management segment to our Capital Markets segment. Therefore, comparative results for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
---	---
(3)	Amounts for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
---	---
(4)	We completed the sale of RBC Investor Services operations in Europe, Jersey and the U.K to CACEIS on July 3, 2023, December 1, 2023 and March 25, 2024, respectively (the sale of RBC Investor Services operations). For further details, refer to Note 6 of our Condensed Financial Statements.
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(5)	Effective November 1, 2023, our attributed capital methodology incorporates leverage requirements to allocate capital to our business segments. For further details on changes to our attributed capital methodology, refer to How we measure and report our business segments section.
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(6)	Pre-tax<br> margin is defined as Income before income taxes divided by Total revenue.
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(7)	Represents client-facing advisors across all of our Wealth Management businesses.
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(8)	Represents <br>period-end<br> spot balances.
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Royal Bank of Canada Third Quarter 2024 19

Financial performance

Q3 2024 vs. Q3 2023

Net income increased $199 million or 30% from a year ago, mainly due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation. Higher transactional revenue and lower PCL also contributed to the increase. The prior year also included the gain on the sale of RBC Investor Services operations.

Total revenue increased $363 million or 8%.

Canadian Wealth Management revenue increased $193 million or 17%, primarily due to higher fee-based client assets reflecting market appreciation and net sales. Higher transactional revenue, mainly driven by client activity, also contributed to the increase.

U.S. Wealth Management (including City National) revenue increased $237 million or 12%. In U.S. dollars, revenue increased $133 million or 9%, mainly due to higher fee-based client assets reflecting market appreciation and net sales. Higher net interest income primarily driven by higher spreads also contributed to the increase.

Global Asset Management revenue increased $115 million or 18%, mainly due to higher fee-based client assets reflecting market appreciation and net sales. Changes in the fair value of seed capital investments also contributed to the increase.

International Wealth Management revenue increased $4 million or 1%.

Investor Services revenue decreased $186 million or 51%, largely reflecting reduced revenue following the sale of RBC Investor Services operations. The prior year also included the gain on the sale of RBC Investor Services operations.

PCL decreased $86 million or 84%, primarily due to releases of provisions on performing loans in the current quarter in U.S. Wealth Management (including City National), mainly driven by favourable changes in scenario weights, as compared to provisions taken in the prior year.

Non-interest expense increased $181 million or 5%, primarily driven by higher variable compensation commensurate with increased commissionable revenue. This was partially offset by reduced expenses following the sale of RBC Investor Services operations.

Q3 2024 vs. Q2 2024

Net income increased $93 million or 12% from last quarter, primarily due to higher fee-based client assets reflecting market appreciation, which also drove higher variable compensation.

Q3 2024 vs. Q3 2023 (Nine months ended)

Net income increased $25 million or 1% from the same period last year, largely due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation. Higher transactional revenue also contributed to the increase. These factors were partially offset by the cost of the FDIC special assessment.

Total revenue increased $564 million or 4%, primarily due to higher fee-based client assets reflecting market appreciation and net sales. Higher transactional revenue, mainly driven by client activity and the impact of foreign exchange translation also contributed to the increase. These factors were partially offset by reduced revenue following the sale of RBC Investor Services operations.

PCL decreased $142 million or 72%, mainly due to releases of provisions on performing loans in the current period in U.S. Wealth Management (including City National), primarily driven by favourable changes to our macroeconomic forecast and scenario weights, as compared to provisions taken in the same period last year.

Non-interest expense increased $721 million or 7%, largely due to higher variable compensation commensurate with increased commissionable revenue. The cost of the FDIC special assessment, higher staff costs mainly reflecting continued investments in the operational infrastructure of City National and the impact of foreign exchange translation also contributed to the increase. These factors were partially offset by reduced expenses following the sale of RBC Investor Services operations.

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20 Royal Bank of Canada Third Quarter 2024

Insurance
	As at or for the three months ended						As at or for the nine months ended
---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	July 31<br><br>2024		April 30<br><br>2024		July 31<br><br>2023 <br>(1), (2)		July 31<br><br>2024		July 31<br><br>2023 <br>(1), (2)
Non-interest<br> income
Insurance service result	$	214	$	203	$	149	$	604	$	566
Insurance investment result		28		59		151		228		92
Other income		43		36		36		114		104
Total revenue		285		298		336		946		762
PCL		1		–		–		2		–
Non-interest<br> expense		70		69		69		210		204
Income before income taxes		214		229		267		734		558
Net income	$	170	$	177	$	215	$	567	$	452
Selected balances and other information
ROE		33.6%		34.7%		38.5%		36.5%		28.2%
Premiums and deposits <br>(3)	$	1,546	$	1,610	$	1,974	$	4,502	$	4,632
Contractual service margin (CSM) <br>(4)		2,155		1,980		1,894		2,155		1,894
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
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(2)	The 2023 restated results may not be fully comparable to the current period as we were not managing our asset and liability portfolios under IFRS 17.
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(3)	Premiums and deposits include premiums on risk-based individual and group insurance and annuity products as well as segregated fund deposits, consistent with insurance industry practices.
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(4)	Represents the CSM of insurance contract assets and liabilities net of reinsurance contract held assets and liabilities. For insurance contracts, the CSM represents the unearned profit (net inflows) for providing insurance coverage. For reinsurance contracts held, the CSM represents the net cost or net gain of purchasing reinsurance. The CSM is not applicable to contracts measured using the premium allocation approach.
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Financial performance

Q3 2024 vs. Q3 2023

Net income decreased $45 million or 21% from a year ago, largely due to lower insurance investment result from lower favourable investment-related experience, partially offset by lower capital funding costs. This was partially offset by higher insurance service result, largely attributable to improved claims experience in life retrocession and business growth across the majority of our products. The results in the prior period are not fully comparable as we were not managing our asset and liability portfolios under IFRS 17.

Total revenue decreased $51 million or 15%, primarily due to lower insurance investment result, partially offset by higher insurance service result, as noted above.

Non-interest expense increased $1 million or 1%.

Q3 2024 vs. Q2 2024

Net income decreased $7 million or 4% from last quarter, largely due to lower insurance investment result from lower favourable investment-related experience. This factor was largely offset by higher insurance service result, mainly due to business growth across the majority of our products.

Q3 2024 vs. Q3 2023 (Nine months ended)

Net income increased $115 million or 25% from the same period last year, primarily due to higher insurance investment result largely attributable to lower capital funding costs and favourable investment-related experience as we repositioned our portfolio for the transition to IFRS 17. Higher insurance service result, mainly due to business growth across the majority of our products, also contributed to the increase. The results in the prior period are not fully comparable as we were not managing our asset and liability portfolios under IFRS 17.

Total revenue increased $184 million or 24%, primarily due to higher insurance investment result and higher insurance service result, as noted above.

Non-interest expense increased $6 million or 3%.

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Royal Bank of Canada Third Quarter 2024 21

Capital Markets
	As at or for the three months ended									As at or for the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except<br><br>percentage amounts and as otherwise noted)	July 31<br><br>2024<br><br>(1)			April 30<br><br>2024 <br>(1)			July 31<br><br>2023 <br>(2)			July 31<br><br>2024<br><br>(1)			July 31<br><br>2023 <br>(2)
Net interest income <br>(3)	$	817		$	764		$	907		$	2,242		$	2,650
Non-interest<br> income <br>(3)		2,187			2,390			1,772			6,867			5,837
Total revenue<br><br>(3)		3,004			3,154			2,679			9,109			8,487
PCL on performing assets		(12	)		22			51			16			100
PCL on impaired assets		50			115			158			326			324
PCL		38			137			209			342			424
Non-interest<br> expense		1,755			1,722			1,620			5,119			4,831
Income before income taxes		1,211			1,295			850			3,648			3,232
Net income	$	1,172		$	1,262		$	949		$	3,588		$	3,152
Revenue by business
Corporate & Investment Banking <br>(4)	$	1,645		$	1,736		$	1,333		$	4,810		$	4,132
Global Markets <br>(4)		1,414			1,434			1,426			4,530			4,591
Other		(55	)		(16	)		(80	)		(231	)		(236	)
Selected balance sheet and other information
ROE <br>(5)		14.1%			16.3%			13.4%			15.0%			14.7%
Average total assets	$	1,089,600		$	1,154,300		$	1,089,500		$	1,146,200		$	1,095,900
Average trading securities		176,400			179,200			157,400			186,600			151,900
Average loans and acceptances, net		152,200			149,900			143,600			148,000			145,600
Average deposits		298,000			294,100			285,500			294,900			296,400
PCL on impaired loans as a % of average net loans and acceptances		0.13%			0.31%			0.44%			0.29%			0.31%
Estimated impact of U.S. dollar, British poundand Euro translation on key income statement items(Millions of Canadian dollars, except percentage amounts)					For the nine<br><br>months ended
---	---	---	---	---	---	---
			Q3 2024 vs.<br><br>Q2 2024		Q3 2024 vs.<br>Q3 2023
Increase (decrease):
Total revenue	88		$	25	$	130
PCL	(1	)		–		1
Non-interest expense	37			12		60
Net income	45			11		62
Percentage change in average U.S. dollar equivalent of C1.00	(3)%			(1)%		(1)%
Percentage change in average British pound equivalent of C1.00	(3)%			(2)%		(3)%
Percentage change in average Euro equivalent of C1.00	(2)%			(1)%		(1)%

All values are in US Dollars.

(1)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, which impacted results, balances and ratios for the periods ended July 31, 2024 and April 30, 2024. For further details, refer to the Key corporate events section.
(2)	Effective the fourth quarter of 2023, we moved the Investor Services lending business from our Wealth Management segment to our Capital Markets segment. Therefore, comparative results for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
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(3)	The taxable equivalent basis (teb) adjustment for the three months ended July 31, 2024 was $231 million (April 30, 2024 – $(4) million; July 31, 2023 – $113 million) and for the nine months ended July 31, 2024 was $281 million (July 31, 2023 – $442 million). For further discussion, refer to the How we measure and report our business segments section of our 2023 Annual Report.
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(4)	Effective the third quarter of 2024, we moved the majority of our debt origination business from Global Markets to Corporate & Investment Banking. Comparative amounts have been revised from those previously presented.
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(5)	Effective November 1, 2023, our attributed capital methodology incorporates leverage requirements to allocate capital to our business segments. For further details on changes to our attributed capital methodology, refer to the How we measure and report our business segments section.
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Financial performance

Q3 2024 vs. Q3 2023

Net income increased $223 million or 23% from a year ago, primarily driven by higher revenue in Corporate & Investment Banking and lower PCL. These factors were partially offset by higher taxes reflecting changes in earnings mix and higher compensation on increased results.

Total revenue increased $325 million or 12%.

Corporate & Investment Banking revenue increased $312 million or 23%, primarily due to higher municipal banking activity. Higher loan syndication activity in the U.S., higher debt origination in North America and the impact of foreign exchange translation also contributed to the increase.

Global Markets revenue decreased $12 million or 1%, largely due to lower fixed income trading revenue in the U.S. and lower equity trading revenue in North America. These factors were partially offset by higher debt origination in North America and the impact of foreign exchange translation.

Other revenue improved $25 million or 31%, reflecting lower unallocated funding and capital costs.

PCL decreased $171 million or 82%, mainly due to lower provisions on impaired loans in a few sectors, including the real estate and related and industrial products sectors, resulting in a decrease of 31 bps in the PCL on impaired loans ratio. Releases of provisions on performing loans in the current quarter as compared to the provisions taken in the prior year also contributed to the decrease.

Non-interest expense increased $135 million or 8%, mainly driven by higher compensation on increased results and the impact of foreign exchange translation.

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22 Royal Bank of Canada Third Quarter 2024

Q3 2024 vs. Q2 2024

Net income decreased $90 million or 7% from last quarter, mainly due to lower M&A activity in the U.S., partially offset by lower PCL on impaired loans in a few sectors.

Q3 2024 vs. Q3 2023 (Nine months ended)

Net income increased $436 million or 14% from the same period last year, mainly driven by higher revenue in Corporate & Investment Banking, partially offset by higher compensation on increased results and lower revenue in Global Markets.

Total revenue increased $622 million or 7%, mainly due to higher debt origination across all regions and higher M&A activity across most regions. These factors were partially offset by lower equity trading revenue in Canada.

PCL decreased $82 million or 19%, mainly reflecting lower provisions on performing loans, largely due to favourable changes to our macroeconomic forecast and scenario weights.

Non-interest expense increased $288 million or 6%, mainly driven by higher compensation on increased results. The impact of foreign exchange translation and ongoing technology investments also contributed to the increase.

Corporate Support
	For the three months ended									For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars)	July 31<br><br>2024			April 30<br><br>2024			July 31<br><br>2023			July 31<br><br>2024			July 31<br><br>2023
Net interest income (loss) <br>(1), (2)	$	325		$	323		$	270		$	953		$	699
Non-interest<br> income (loss) <br>(1), (2), (3)		(473	)		(229	)		(273	)		(1,167	)		(927	)
Total revenue<br><br>(1), (3)		(148	)		94			(3	)		(214	)		(228	)
PCL		(3	)		2			–			(1	)		–
Non-interest<br> expense<br><br>(3)		380			436			259			1,320			535
Income (loss) before income taxes<br><br>(1)		(525	)		(344	)		(262	)		(1,533	)		(763	)
Income taxes (recoveries) <br>(1)		(317	)		(35	)		(161	)		(557	)		555
Net income (loss)	$	(208	)	$	(309	)	$	(101	)	$	(976	)	$	(1,318	)
(1)	Teb adjusted.
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(2)	Amounts for the three and nine months ended July 31, 2023 have been revised from those previously presented.
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(3)	Revenue for the three months ended July 31, 2024 included gains of $166 million (April 30, 2024 and July 31, 2023 – gains of $64 million and gains of $129 million, respectively) on economic hedges of our U.S. Wealth Management (including City National) share-based compensation plans, and <br>non-interest<br> expense included $157 million (April 30, 2024 and July 31, 2023 – $60 million and $118 million, respectively) of share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. Wealth Management (including City National) share-based compensation plans. Revenue for the nine months ended July 31, 2024 included gains of $452 million (July 31, 2023 – gains of $261 million) on economic hedges of our U.S. Wealth Management (including City National) share-based compensation plans, and <br>non-interest<br> expense included $423 million (July 31, 2023 – $237 million) of share-based compensation expense driven by changes in the fair value of liabilities relating to our U.S. Wealth Management (including City National) share-based compensation plans.
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Due to the nature of activities and consolidation adjustments reported in this segment, we believe that a comparative period analysis is not relevant.

Total revenue and Income taxes (recoveries) in Corporate Support include the deduction of the teb adjustment related to gross-up of income from the U.S. tax credit investment business and income from Canadian taxable corporate dividends received on or before December 31, 2023 that are recorded in Capital Markets. For further details on the elimination of the availability of the dividend received deduction for Canadian taxable corporate dividends after December 31, 2023, refer to the Economic, market and regulatory review and outlook section.

The teb amount for the three months ended July 31, 2024 was $231 million, compared to $(4) million in the prior quarter and $113 million in the same quarter last year. The teb amount for the nine months ended July 31, 2024 was $281 million, compared to $442 million in the same period last year.

The following identifies the material items, other than the teb impacts noted previously, affecting the reported results in each period.

Q3 2024

Net loss was $208 million, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $125 million, which is treated as a specified item. Unallocated costs also contributed to the net loss.

Q2 2024

Net loss was $309 million, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $282 million, partially offset by the after-tax impact of management of closing capital volatility related to the HSBC Canada transaction of $112 million, both of which are treated as specified items. Unallocated costs also contributed to the net loss.

Q3 2023

Net loss was $101 million, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $84 million, which is treated as a specified item.

Q3 2024 (Nine months ended)

Net loss was $976 million, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $625 million, which is treated as a specified item. Unallocated costs also contributed to the net loss.

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Royal Bank of Canada Third Quarter 2024 23

Q3 2023 (Nine months ended)

Net loss was $1,318 million, primarily due to the impact of the CRD and other tax related adjustments of $1,050 million, as well as the after-tax impact of the HSBC Canada transaction and integration costs of $135 million, both of which are treated as specified items.

For further details on specified items, refer to the Key performance and non-GAAP measures section.

Quarterly results and trend analysis

Our quarterly results are impacted by a number of trends and recurring factors, which include seasonality of certain businesses, general economic and market conditions, and fluctuations in the Canadian dollar relative to other currencies. The following table summarizes our results for the last eight quarters (the period):

Quarterly results

(1), (2)

	2024								2023 <br>(3)												2022
(Millions of Canadian dollars,<br><br>except per share and percentage amounts)	Q3<br><br>(4)			Q2 <br>(4)		Q1			Q4			Q3			Q2			Q1			Q4
Personal & Commercial Banking	$	6,725		$	5,990	$	5,794		$	5,718		$	5,563		$	5,298		$	5,541		$	5,419
Wealth Management <br>(5)		4,765			4,618		4,537			4,188			4,402			4,394			4,560			4,287
Insurance <br>(2)		285			298		363			248			336			272			154			644
Capital Markets <br>(5), (6)		3,004			3,154		2,951			2,564			2,679			2,662			3,146			2,505
Corporate Support <br>(6)		(148	)		94		(160	)		(33	)		(3	)		(181	)		(44	)		(288	)
Total revenue		14,631			14,154		13,485			12,685			12,977			12,445			13,357			12,567
PCL		659			920		813			720			616			600			532			381
PBCAE<br><br>(7)		n.a.			n.a.		n.a.			n.a.			n.a.			n.a.			n.a.			116
Non-interest<br> expense		8,599			8,308		8,324			8,059			7,765			7,400			7,589			7,209
Income before income taxes		5,373			4,926		4,348			3,906			4,596			4,445			5,236			4,861
Income taxes		887			976		766			(33	)		736			765			2,103			979
Net income	$	4,486		$	3,950	$	3,582		$	3,939		$	3,860		$	3,680		$	3,133		$	3,882
EPS – basic	$	3.09		$	2.75	$	2.50		$	2.77		$	2.73		$	2.60		$	2.23		$	2.75
– diluted		3.09			2.74		2.50			2.76			2.73			2.60			2.23			2.74
Effective income tax rate		16.5%			19.8%		17.6%			(0.8)%			16.0%			17.2%			40.2%			20.1%
Period average US$ equivalent of C$1.00	$	0.730		$	0.734	$	0.745		$	0.732		$	0.750		$	0.737		$	0.745		$	0.739
(1)	Fluctuations in the Canadian dollar relative to other foreign currencies have affected our consolidated results over the period.
---	---
(2)	Effective November 1, 2023, we adopted IFRS 17. The quarterly trend for the Insurance segment will not be fully comparable across the periods presented as they have been prepared under a different basis of accounting. The 2023 results have been restated as part of our adoption of IFRS 17 while results for fiscal 2022 are reported in accordance with IFRS 4 <br>Insurance Contracts<br>.
---	---
(3)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(4)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, and are included in our Personal & Commercial Banking, Wealth Management and Capital Markets segments. For further details, refer to the Key corporate events section.
---	---
(5)	Effective the fourth quarter of 2023, we moved the Investor Services lending business from our Wealth Management segment to our Capital Markets segment. Therefore, comparative results have been revised from those previously presented.
---	---
(6)	Teb adjusted. For further discussion, refer to the How we measure and report our business segments section of our 2023 Annual Report.
---	---
(7)	As part of our adoption of IFRS 17, Insurance policyholder benefits, claims and acquisition expense (PBCAE) is no longer applicable. 2023 amounts have been restated from those previously presented.
---	---
n.a.	not applicable
---	---

Seasonality

Seasonal factors may impact our results in certain quarters. The first quarter has historically been stronger for our Capital Markets businesses. The second quarter has fewer days than the other quarters, which generally results in a decrease in net interest income and certain expense items. The third and fourth quarters include the summer months, which generally results in lower client activity and may negatively impact the results of our Capital Markets trading business.

Trend analysis

Earnings over the period have been impacted by the factors noted below.

Personal & Commercial Banking revenue has benefitted from solid volume growth in loans and deposits over the period. NIM has been favourably impacted over the majority of the period by the higher interest rate environment. NIM was adversely impacted by a shift in deposit mix over fiscal 2023 and the first half of 2024. HSBC Canada revenue has been included since the transaction closed on March 28, 2024.

Wealth Management revenue has generally benefitted from growth in average fee-based client assets, which was impacted by market conditions. On July 3, 2023, we completed the sale of the European asset servicing activities of RBC Investor Services and its associated Malaysian centre of excellence. The fourth quarter of 2023 reflected impairment losses on our interest in an associated company.

As part of our adoption of IFRS 17, effective November 1, 2023, fluctuations in Insurance revenue are reflective of market conditions and insurance experience, while new business gains are deferred through CSM.

Capital Markets revenue is influenced, to a large extent, by market conditions that impact client activity. In 2023, we saw strong client activity, driving higher sales & trading revenues, which continued into 2024. Beginning in the second quarter of 2024, we also saw an increase in investment banking activity as fee pools were muted in previous quarters.

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24 Royal Bank of Canada Third Quarter 2024

PCL is comprised of provisions taken on performing assets and provisions taken on impaired assets. PCL on performing assets fluctuated over the period as it is impacted by changes in credit quality, macroeconomic conditions, and exposures. Provisions on performing assets over the period have generally been reflective of unfavourable changes in credit quality. During the early part of the period, there were unfavourable changes in our macroeconomic forecast. Starting 2024, we have seen improvements in our macroeconomic forecast. The second quarter of 2024 includes initial PCL on the performing loans purchased in the HSBC Canada transaction. PCL on impaired assets was low during the early part of the period, but has generally trended upwards over the remainder of the period.

Non-interest expense has been impacted by fluctuations in variable compensation over the period, commensurate with fluctuations in revenue and earnings. Changes in the fair value of our U.S. share-based compensation plans, which are largely offset in revenue, have also contributed to fluctuations over the period and are impacted by market conditions. While we continue to focus on efficiency management activities, expenses over the period also reflect investments in staff and technology. Beginning in fiscal 2023, expenses have also included HSBC Canada transaction and integration costs. HSBC Canada non-interest expenses have been included since the transaction closed on March 28, 2024.

Our effective income tax rate has fluctuated over the period, mostly due to varying levels of tax adjustments and changes in earnings mix. The first quarter of 2023 reflects the impact of the CRD and other tax related adjustments. The fourth quarter of 2023 reflects the recognition of deferred tax assets relating to realized losses in City National associated with the intercompany sale of certain debt securities.

Financial condition
Condensed balance sheets
---
	As at
---	---	---	---	---	---	---
(Millions of Canadian dollars)	July 31<br><br>2024			October 31<br><br>2023 <br>(1)
Assets
Cash and due from banks	$	55,230		$	61,989
Interest-bearing deposits with banks		57,409			71,086
Securities, net of applicable allowance <br>(2)		431,185			409,730
Assets purchased under reverse repurchase agreements and securities borrowed		325,401			340,191
Loans
Retail		619,452			569,951
Wholesale		358,143			287,826
Allowance for loan losses		(5,798	)		(5,004	)
Other – Derivatives		115,659			142,450
– Other		119,426			128,312
Total assets	$	2,076,107		$	2,006,531
Liabilities
Deposits	$	1,361,265		$	1,231,687
Other – Derivatives		126,884			142,629
– Other		450,029			505,682
Subordinated debentures		13,437			11,386
Total liabilities		1,951,615			1,891,384
Equity attributable to shareholders		124,391			115,048
Non-controlling<br> interests		101			99
Total equity		124,492			115,147
Total liabilities and equity	$	2,076,107		$	2,006,531
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective November 1, 2023. Refer to Note 2 of our Condensed Financial Statements for further details on these changes.
---	---
(2)	Securities are comprised of trading and investment securities.
---	---

Q3 2024 vs. Q4 2023

Total assets increased $70 billion or 3% from October 31, 2023. Foreign exchange translation decreased total assets by $38 billion.

Cash and due from banks decreased $7 billion or 11%, largely due to lower deposits with central banks reflecting short-term cash management activities.

Interest-bearing deposits with banks decreased $14 billion or 19%, primarily due to lower deposits with central banks reflecting short-term cash management activities.

Securities, net of applicable allowance, increased $21 billion or 5%, mainly due to the impact of the HSBC Canada transaction and higher equity trading securities reflecting favourable market conditions. These factors were partially offset by lower Canadian government debt trading securities reflecting liquidity management activities and market conditions.

Assets purchased under reverse repurchase agreements (reverse repos) and securities borrowed decreased $15 billion or 4%, primarily reflecting decreased client demand.

Loans (net of Allowance for loan losses) increased $119 billion or 14%, primarily due to the impact of the HSBC Canada transaction and volume growth in wholesale loans.

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Royal Bank of Canada Third Quarter 2024 25

Derivative assets decreased $27 billion or 19%, mainly attributable to the impact of foreign exchange translation and lower fair values on interest rate contracts, partially offset by higher fair values on foreign exchange contracts and equity contracts.

Other assets decreased $9 billion or 7%, largely due to lower customers’ liability under acceptances, partially offset by higher goodwill and intangible assets from the impact of the HSBC Canada transaction.

Total liabilities increased $60 billion or 3%. Foreign exchange translation decreased total liabilities by $38 billion.

Deposits increased $130 billion or 11%, primarily due to the impact of the HSBC Canada transaction, higher retail term deposits attributable to clients’ investment preferences and higher demand deposits.

Derivative liabilities decreased $16 billion or 11%, mainly attributable to the impact of foreign exchange translation and lower fair values on interest rate contracts, partially offset by higher fair values on foreign exchange contracts and equity contracts.

Other liabilities decreased $56 billion or 11%, mainly due to lower obligations related to repurchase agreements (repos) reflecting decreased client demand and lower acceptances.

Subordinated debentures increased by $2 billion or 18%, reflecting new issuances, partially offset by redemptions.

Total equity increased $9 billion or 8%, reflecting earnings, net of dividends, and the issuance of limited recourse capital notes and common shares.

Off-balance<br> sheet arrangements

In the normal course of business, we engage in a variety of financial transactions that, for accounting purposes, are not recorded on our consolidated balance sheets. Off-balance sheet transactions are generally undertaken for risk, capital and funding management purposes which benefit us and our clients. These include transactions with structured entities and may also include the purchase or issuance of guarantees. These transactions give rise to, among other risks, varying degrees of market, credit, liquidity and funding risks, which are discussed in the Risk management section of this Q3 2024 Report to Shareholders.

The following provides an update to our significant off-balance sheet transactions, which are described on pages 60 to 63 of our 2023 Annual Report.

Involvement with unconsolidated structured entities

Multi-seller conduits

We administer multi-seller conduits which are used primarily for the securitization of our clients’ financial assets. Our maximum exposure to loss under these transactions primarily relates to backstop liquidity and partial credit enhancement facilities extended to the conduits. As at July 31, 2024, the total assets of the multi-seller conduits were $58 billion (October 31, 2023 – $54 billion) and our maximum exposure to loss was $59 billion (October 31, 2023 – $55 billion). The increase reflects higher securitization activities since October 31, 2023, mainly in the Auto and truck loans and leases and Consumer loans asset classes.

As at July 31, 2024, the total asset-backed commercial paper (ABCP) issued by the conduits amounted to $40 billion (October 31, 2023 – $37 billion). The rating agencies that rate the ABCP rated 100% (October 31, 2023 – 100%) of the total amount issued within the top ratings category.

Third-party securitization vehicles

We hold interests in certain unconsolidated third-party securitization vehicles, which are structured entities. We, as well as other financial institutions, are obligated to provide funding to these entities up to our maximum commitment level and are exposed to credit losses on the underlying assets after various credit enhancements. As at July 31, 2024, our maximum exposure to loss in these entities was $18 billion (October 31, 2023 – $15 billion). The increase in our maximum exposure to loss compared to last year reflects an increase in client activity with third-party securitization vehicles.

Risk management
Credit risk
---

Credit risk is the risk of loss associated with an obligor’s potential inability or unwillingness to fulfill its contractual obligations on a timely basis and may arise directly from the risk of default of a primary obligor (e.g., issuer, debtor, counterparty, borrower or policyholder), indirectly from a secondary obligor (e.g., guarantor or reinsurer), through off-balance sheet exposures, contingent credit risk, associated credit risk and/or transactional risk. Credit risk includes counterparty credit risk arising from both trading and non-trading activities.

Our Enterprise Credit Risk Management Framework (ECRMF) and supporting credit policies are designed to clearly define roles and responsibilities, acceptable practices, limits and key controls. There have been no material changes to our ECRMF as described in our 2023 Annual Report.

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26 Royal Bank of Canada Third Quarter 2024

Residential mortgages and home equity lines of credit (insured vs. uninsured)

(1)

Residential mortgages and home equity lines of credit are secured by residential properties. The following table presents a breakdown by geographic region.

	As at July 31, 2024
(Millions of Canadian dollars,<br><br>except percentage amounts)	Residential mortgages										Home equity<br>lines of credit<br>(2)
	Insured<br>(3)				Uninsured				Total		Total
Region<br><br>(4)
Canada
Atlantic provinces	$	8,488	43	%	$	11,412	57	%	$	19,900	$	1,683
Quebec		11,958	26			34,878	74			46,836		3,236
Ontario		32,043	15			187,129	85			219,172		17,986
Alberta		18,933	44			24,125	56			43,058		4,418
Saskatchewan and Manitoba		8,491	41			12,178	59			20,669		1,740
B.C. and territories		12,799	15			75,240	85			88,039		7,960
Total Canada <br>(5)		92,712	21			344,962	79			437,674		37,023
U.S.		–	–			32,775	100			32,775		2,113
Other International		–	–			3,191	100			3,191		1,521
Total International		–	–			35,966	100			35,966		3,634
Total	$	92,712	20	%	$	380,928	80	%	$	473,640	$	40,657
	As at April 30, 2024
(Millions of Canadian dollars,<br><br>except percentage amounts)	Residential mortgages										Home equity<br>lines of credit (2)
	Insured (3)				Uninsured				Total		Total
Region<br><br>(4)
Canada
Atlantic provinces	$	8,484	43	%	$	11,094	57	%	$	19,578	$	1,659
Quebec		12,107	26			34,488	74			46,595		3,251
Ontario		32,467	15			183,690	85			216,157		17,773
Alberta		19,246	45			23,656	55			42,902		4,465
Saskatchewan and Manitoba		8,542	41			12,050	59			20,592		1,752
B.C. and territories		13,040	15			74,466	85			87,506		7,861
Total Canada <br>(5)		93,886	22			339,444	78			433,330		36,761
U.S.		–	–			32,893	100			32,893		2,119
Other International		–	–			3,152	100			3,152		1,521
Total International		–	–			36,045	100			36,045		3,640
Total	$	93,886	20	%	$	375,489	80	%	$	469,375	$	40,401
(1)	Disclosure is provided in accordance with the requirements of OSFI’s Guideline <br>B-20<br> (Residential Mortgage Underwriting Practices and Procedures).
---	---
(2)	Includes $40,640 million and $17 million of uninsured and insured home equity lines of credit, respectively (April 30, 2024 – $40,383 million and $18 million, respectively), reported within the personal loan category. The amounts in U.S. and Other International include term loans collateralized by residential properties.
---	---
(3)	Insured residential mortgages are mortgages whereby our exposure to default is mitigated by insurance through the Canadian Mortgage and Housing Corporation or other private mortgage default insurers.
---	---
(4)	Region is based upon the address of the property mortgaged. The Atlantic provinces are comprised of Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick; B.C. and territories are comprised of British Columbia, Nunavut, Northwest Territories and Yukon.
---	---
(5)	Total consolidated residential mortgages in Canada of $438 billion (April 30, 2024 – $433 billion) includes $12 billion (April 30, 2024 – $12 billion) of mortgages with commercial clients in Canadian Banking, of which $9 billion (April 30, 2024 – $9 billion) are insured, and $18 billion (April 30, 2024 – $18 billion) of residential mortgages in Capital Markets, of which $18 billion (April 30, 2024 – $18 billion) are held for securitization purposes. All of the residential mortgages held for securitization purposes are insured (April 30, 2024 – all insured).
---	---

Residential mortgages portfolio by amortization period

(1)

The following table provides a summary of the percentage of residential mortgages that fall within the remaining amortization periods based upon current customer payment amounts, which incorporate payments larger than the minimum contractual amount and/or higher frequency of payments.

	As at
	July 31<br><br>2024									April 30<br><br>2024
	Canada<br>(2)			U.S. and other<br>International			Total			Canada (2)			U.S. and other<br>International			Total
Amortization period
≤<br> 25 years		59	%		30	%		57	%		58	%		28	%		56	%
> 25 years <br>≤<br> 30 years		23			70			26			21			72			25
> 30 years <br>≤<br> 35 years		2			–			2			2			–			1
> 35 years		16			–			15			19			–			18
Total		100	%		100	%		100	%		100	%		100	%		100	%
(1)	Disclosure is provided in accordance with the requirements of OSFI’s Guideline <br>B-20<br> (Residential Mortgage Underwriting Practices and Procedures).
---	---
(2)	Our policy is to originate mortgages with amortization periods of 30 years or less. Amortization periods greater than 30 years reflect the impact of increases in interest rates on our variable rate mortgage portfolios. For these loans, the amortization period resets to the original amortization schedule upon renewal. We do not originate mortgage products with a structure that would result in negative amortization, as payments on variable rate mortgages automatically increase to ensure accrued interest is covered.
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Royal Bank of Canada Third Quarter 2024 27

Average loan-to-value (LTV) ratios

(1)

The following table provides a summary of our average LTV ratios for newly originated and acquired uninsured residential mortgages and RBC Homeline Plan ® products by geographic region, as well as the respective LTV ratios for our total Canadian Banking residential mortgage portfolio outstanding.

	For the three months ended												For the nine months ended
	July 31<br><br>2024						April 30<br><br>2024						July 31<br><br>2024
	Uninsured						Uninsured						Uninsured
	Residential<br>mortgages<br>(2)			RBC Homeline<br>Plan products<br>(3)			Residential<br>mortgages (2)			RBC Homeline<br>Plan products (3)			Residential<br>mortgages<br>(2)			RBC Homeline<br>Plan products<br>(3)
Average of newly originated and acquired for the period, by region<br><br>(4)
Atlantic provinces		71	%		69	%		61	%		66	%		67	%		68	%
Quebec		71			69			55			60			62			66
Ontario		70			63			56			56			61			59
Alberta		72			70			59			61			64			66
Saskatchewan and Manitoba		72			71			62			66			68			69
B.C. and territories		67			61			45			46			49			51
U.S.		73			n.m.			71			n.m.			72			n.m.
Other International		72			n.m.			69			n.m.			72			n.m.
Average of newly originated and acquired for the period<br><br>(5), (6), (7)		70	%		65	%		52	%		53	%		58	%		58	%
Total Canadian Banking residential mortgages portfolio<br><br>(8)		55	%		47	%		57	%		49	%		55	%		47	%
(1)	Disclosure is provided in accordance with the requirements of OSFI’s Guideline <br>B-20<br> (Residential Mortgage Underwriting Practices and Procedures).
---	---
(2)	Residential mortgages exclude residential mortgages within the RBC Homeline Plan products.
---	---
(3)	RBC Homeline Plan products are comprised of both residential mortgages and home equity lines of credit.
---	---
(4)	Region is based upon the address of the property mortgaged. The Atlantic provinces are comprised of Newfoundland and Labrador, Prince Edward Island, Nova Scotia and New Brunswick; B.C. and territories are comprised of British Columbia, Nunavut, Northwest Territories and Yukon.
---	---
(5)	The average LTV ratios for newly originated and acquired uninsured residential mortgages and RBC Homeline Plan products are calculated on a weighted basis by mortgage amounts at origination.
---	---
(6)	For newly originated mortgages and RBC Homeline Plan products, LTV is calculated based on the total facility amount for the residential mortgage and RBC Homeline Plan product divided by the value of the related residential property.
---	---
(7)	Includes the HSBC Canada portfolio acquired in Q2 2024, impacting the three months ended April 30, 2024 and the nine months ended July 31, 2024 periods. Excluding the acquired HSBC Canada portfolio, the average of newly originated and acquired residential mortgages and RBC Homeline Plan products for the three months ended April 30, 2024 was 70% and 65%, respectively, and for the nine months ended July 31, 2024 was 70% and 65%, respectively.
---	---
(8)	Weighted by mortgage balances and adjusted for property values based on the Teranet-National Bank <br>House Price Index<br><br>‡<br>.
---	---
n.m.	not meaningful
---	---

Net International wholesale exposure by region, asset type and client type

(1), (2)

The following table provides a breakdown of our credit risk exposure by region, asset type and client type.

	As at
	July 31<br><br>2024																April 30<br><br>2024
	Asset type								Client type
(Millions of Canadian dollars)	Loans<br><br>Outstanding		Securities<br>(3)		Repo-style<br>transactions		Derivatives		Financials		Sovereign		Corporate		Total		Total
Europe (excluding U.K.)	$	15,280	$	22,008	$	6,365	$	3,231	$	24,283	$	6,133	$	16,468	$	46,884	$	52,570
U.K.		12,902		26,098		3,489		2,016		15,152		18,641		10,712		44,505		31,141
Caribbean		6,401		11,613		2,193		1,002		8,986		4,436		7,787		21,209		22,649
Asia-Pacific		5,656		31,290		4,449		1,657		18,724		20,679		3,649		43,052		40,707
Other <br>(4)		1,683		1,545		2,707		324		2,731		1,760		1,768		6,259		5,588
Net International exposure<br><br>(5), (6)	$	41,922	$	92,554	$	19,203	$	8,230	$	69,876	$	51,649	$	40,384	$	161,909	$	152,655
(1)	Geographic profile is based on country of risk, which reflects our assessment of the geographic risk associated with a given exposure. Typically, this is the residence of the borrower.
---	---
(2)	Exposures are calculated on a fair value basis and net of collateral, which includes $415 billion against repo-style transactions (April 30, 2024 – $362 billion) and $14 billion against derivatives (April 30, 2024 – $16 billion).
---	---
(3)	Securities include $15 billion of trading securities (April 30, 2024 – $14 billion), $36 billion of deposits (April 30, 2024 – $31 billion), and $42 billion of investment securities (April 30, 2024 – $40 billion).
---	---
(4)	Includes exposures in the Middle East, Africa and Latin America.
---	---
(5)	Excludes $5,640 million (April 30, 2024 – $6,846 million) of exposures to supranational agencies.
---	---
(6)	Reflects $3,988 million of mitigation through credit default swaps, which are largely used to hedge single name exposures and market risk (April 30, 2024 – $3,788 million).
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28 Royal Bank of Canada Third Quarter 2024

Credit quality performance

The following credit quality performance tables and analysis provide information on loans, which represents loans, acceptances and commitments, and other financial assets:

Gross impaired loans

	As at and for the three months ended
(Millions of Canadian dollars, except percentage amounts)	July 31<br><br>2024			April 30<br><br>2024			October 31<br><br>2023
Personal & Commercial Banking	$	3,668		$	2,908		$	1,905
Wealth Management		533			586			514
Capital Markets		1,484			1,838			1,285
Total GIL	$	5,685		$	5,332		$	3,704
Impaired loans, beginning balance	$	5,332		$	4,198		$	3,284
Classified as impaired during the period (new impaired) <br>(1)		1,723			1,712			1,063
Net repayments <br>(1)		(183	)		(146	)		(166	)
Amounts written off		(644	)		(546	)		(466	)
Other <br>(2)		(543	)		114			(11	)
Impaired loans, balance at end of period	$	5,685		$	5,332		$	3,704
GIL as a % of related loans and acceptances
Total GIL as a % of related loans and acceptances		0.58%			0.55%			0.42%
Personal & Commercial Banking		0.52%			0.42%			0.31%
Canadian Banking		0.48%			0.38%			0.26%
Caribbean Banking		3.20%			3.27%			3.45%
Wealth Management		0.46%			0.51%			0.44%
Capital Markets		0.98%			1.17%			0.89%
(1)	Certain GIL movements for Canadian Banking retail and wholesale portfolios are generally allocated to new impaired, as Net repayments and certain Other movements are not reasonably determinable. Certain GIL movements for Caribbean Banking retail and wholesale portfolios are generally allocated to Net repayments and new impaired, as Net repayments and certain Other movements are not reasonably determinable.
---	---
(2)	Includes return to performing status during the period, recoveries of loans and advances previously written off, sold, amounts related to foreclosed properties held as investment properties and interests in joint ventures for certain <br>co-lending<br> arrangements, foreign exchange translation and other movements.
---	---

Q3 2024 vs. Q2 2024

Total GIL increased $353 million or 7% from last quarter, and the total GIL ratio increased 3 bps, mainly due to higher impaired loans in Personal & Commercial Banking, partially offset by lower impaired loans in Capital Markets.

GIL in Personal & Commercial Banking increased $760 million or 26%, mainly due to higher impaired loans in our Canadian Banking commercial portfolio in a few sectors, including the real estate and related and forest products sectors.

GIL in Wealth Management decreased $53 million or 9%, mainly due to lower impaired loans in few sectors, including the consumer staples and mining and metals sectors.

GIL in Capital Markets decreased $354 million or 19%, mainly due to lower impaired loans in the real estate and related sector, partially offset by higher impaired loans in the banking sector. The reduction in GIL includes $442 million in foreclosed properties related to real estate and related loans which are accounted for as investment properties and interests in joint ventures for certain co-lending arrangements.

Allowance for credit losses (ACL)

	As at
(Millions of Canadian dollars)	July 31<br><br>2024		April 30<br><br>2024		October 31<br><br>2023
Personal & Commercial Banking	$	4,590	$	4,390	$	3,718
Wealth Management		517		563		618
Capital Markets		1,030		1,119		1,012
Corporate Support and other		1		2		–
ACL on loans		6,138		6,074		5,348
ACL on other financial assets<br><br>(1)		17		23		18
Total ACL	$	6,155	$	6,097	$	5,366
ACL on loans is comprised of:
Retail	$	2,873	$	2,837	$	2,591
Wholesale		1,745		1,732		1,609
ACL on performing loans	$	4,618	$	4,569	$	4,200
ACL on impaired loans		1,520		1,505		1,148
(1)	ACL on other financial assets mainly represents allowances on debt securities measured at FVOCI and amortized cost, accounts receivable and financial guarantees.
---	---

Q3 2024 vs. Q2 2024

Total ACL increased $58 million or 1% from last quarter, mainly reflecting an increase in ACL on loans.

ACL on performing loans increased $49 million or 1%, mainly due to higher ACL in Personal & Commercial Banking, largely driven by unfavourable changes in credit quality and portfolio growth, partially offset by favourable changes in scenario weights. This was partially offset by lower ACL in Wealth Management, mainly reflecting favourable changes in scenario weights.

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Royal Bank of Canada Third Quarter 2024 29

ACL on impaired loans increased $15 million or 1%, mainly due to higher ACL in Personal & Commercial Banking, partially offset by lower ACL in Capital Markets and Wealth Management.

For further details, refer to Note 5 of our Condensed Financial Statements.

Market risk

Market risk is defined to be the impact of market factors and prices upon our financial condition. This includes potential financial gains or losses due to changes in market-determined variables such as interest rates, credit spreads, equity prices, commodity prices, foreign exchange rates and implied volatilities. There have been no material changes to our Market Risk Management Framework from the framework described in our 2023 Annual Report. Using that framework, we continuously seek to ensure that our market risk exposure is consistent with risk appetite constraints set by the Board of Directors.

Market risk controls include limits on probabilistic measures of potential loss in trading positions, such as Value-at-Risk (VaR) and stress testing. Market risk controls are also in place to manage Interest Rate Risk in the Banking Book (IRRBB). To monitor and control IRRBB, we assess two primary metrics, Net Interest Income (NII) risk and Economic Value of Equity (EVE) risk, under a range of market shocks, scenarios, and time horizons. There has been no material change to the VaR or IRRBB measurement methodology, controls, or limits from those described in our 2023 Annual Report. For further details on our approach to the management of market risk, refer to the Market risk section of our 2023 Annual Report.

Market risk measures – FVTPL positions

VaR and Trading VaR

The following table presents our Market risk VaR and Trading VaR figures:

	July 31, 2024										April 30, 2024						July 31, 2023 (1)
				For the three<br>months ended										For the three<br>months ended						For the three<br>months ended
(Millions of Canadian dollars)	As at			Average			High		Low		As at			Average			As at			Average
Equity	$	17		$	15		$	19	$	12	$	12		$	10		$	7		$	10
Foreign exchange		8			6			10		3		3			4			5			4
Commodities		6			7			8		6		7			5			5			5
Interest rate <br>(2)		35			29			37		23		36			26			27			28
Credit specific <br>(3)		8			8			9		7		7			7			6			5
Diversification <br>(4)		(45	)		(35	)		n.m.		n.m.		(33	)		(24	)		(30	)		(28	)
Trading VaR	$	29		$	30		$	36	$	23	$	32		$	28		$	20		$	24
Total VaR	$	33		$	38		$	49	$	31	$	45		$	86		$	27		$	36
	July 31, 2024										July 31, 2023 (1)
				For the nine<br>months ended										For the nine<br>months ended
(Millions of Canadian dollars)	As at			Average			High		Low		As at			Average
Equity	$	17		$	11		$	19	$	6	$	7		$	12
Foreign exchange		8			5			10		2		5			3
Commodities		6			6			8		4		5			5
Interest rate <br>(2)		35			30			44		22		27			30
Credit specific <br>(3)		8			7			9		7		6			5
Diversification <br>(4)		(45	)		(30	)		n.m.		n.m.		(30	)		(31	)
Trading VaR	$	29		$	29		$	41	$	20	$	20		$	24
Total VaR	$	33		$	82		$	138	$	31	$	27		$	46
(1)	Amounts have been revised from those previously presented to align with a trading VaR view.
---	---
(2)	General credit spread risk and funding spread risk associated with uncollateralized derivatives are included under interest rate VaR.
---	---
(3)	Credit specific risk captures issuer-specific credit spread volatility.
---	---
(4)	Trading VaR is less than the sum of the individual risk factor VaR results due to risk factor diversification.
---	---
n.m.	not meaningful
---	---

Q3 2024 vs. Q3 2023

Average Trading VaR of $30 million increased $6 million from a year ago, primarily driven by exposure changes in our securities financing portfolio.

Average total VaR of $38 million remained relatively stable from a year ago.

Q3 2024 vs. Q2 2024

Average Trading VaR of $30 million remained relatively stable from last quarter.

Average total VaR of $38 million decreased $48 million, primarily due to the prior quarter impact of management of closing capital volatility related to the HSBC Canada transaction.

Q3 2024 vs. Q3 2023 (Nine months ended)

Average Trading VaR of $29 million increased $5 million from the same period last year, largely driven by exposure changes in our securities financing portfolio.

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30 Royal Bank of Canada Third Quarter 2024

Average total VaR of $82 million increased $36 million, primarily due to the impact of management of closing capital volatility related to the HSBC Canada transaction.

The following chart displays a bar graph of our daily trading profit and loss and a line graph of our daily market risk VaR. We incurred no net trading losses in the three months ended July 31, 2024 and April 30, 2024.

(1)	Trading revenue (teb) in the chart above excludes the impact of loan underwriting commitments.
(2)	In Q4 2023, VaR amounts in the chart above were revised from those previously presented to reflect Trading VaR corresponding to our trading portfolios.
---	---

Market risk measures for assets and liabilities of RBC Insurance ®

We offer a range of insurance products to clients and hold investments to meet the future obligations to policyholders. The investments which support actuarial liabilities are predominantly fixed income assets measured at FVTPL. Consequently, changes in the fair values of these assets are largely offset by changes in the discount rates used in the measurement of insurance and reinsurance contract assets and liabilities, and the impacts of both are reflected in Insurance investment result in the Consolidated Statements of Income. As at July 31, 2024, we held assets in support of $19 billion of insurance contract liabilities net of insurance contract assets and reinsurance contracts held balances (April 30, 2024 – $19 billion).

Market risk measures – IRRBB sensitivities

The following table shows the potential before-tax impact of an immediate and sustained 100 bps increase or decrease in interest rates on projected EVE and 12-month NII, assuming no subsequent hedging. Interest rate risk measures are based on current on- and off-balance sheet positions which can change over time in response to business activity and management actions.

	July 31<br><br>2024																		April 30<br><br>2024						July 31<br><br>2023
	EVE risk									NII risk<br>(1)
(Millions of Canadian dollars)	Canadian<br><br>dollar<br><br>impact			U.S.<br><br>dollar<br>impact			Total			Canadian<br><br>dollar<br><br>impact			U.S.<br><br>dollar<br><br>impact			Total			EVE risk			NII risk (1)			EVE risk			NII risk (1)
Before-tax<br> impact of:
100 bps increase in rates	$	(1,669	)	$	(153	)	$	(1,822	)	$	206		$	119		$	325		$	(2,149	)	$	325		$	(1,999	)	$	580
100 bps decrease in rates		1,613			(214	)		1,399			(248	)		(177	)		(425	)		1,803			(458	)		1,789			(648	)
(1)	Represents the <br>12-month<br> NII exposure to an instantaneous and sustained shift in interest rates.
---	---

As at July 31, 2024, an immediate and sustained -100 bps shock would have had a negative impact to our NII of $425 million, down from $458 million last quarter. An immediate and sustained +100 bps shock as at July 31, 2024 would have had a negative impact to the bank’s EVE of $1,822 million, down from $2,149 million last quarter. Quarter-over-quarter NII sensitivity remained relatively stable, while quarter-over-quarter EVE sensitivity decreased primarily in response to a marginal reduction in net fixed rate assets. During the third quarter of 2024, NII and EVE risks remained within approved limits.

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Royal Bank of Canada Third Quarter 2024 31

Linkage of market risk to selected balance sheet items

The following tables provide the linkages between selected balance sheet items with positions included in our trading market risk and non-trading market risk disclosures, which illustrates how we manage market risk for our assets and liabilities through different risk measures:

	As at July 31, 2024
				Market risk measure
(Millions of Canadian dollars)	Balance<br>sheet amount			Traded risk<br>(1)		Non-traded<br><br>risk<br>(2)			Non-traded<br> risk<br>primary risk sensitivity
Assets subject to market risk
Cash and due from banks	$	55,230		$	–	$	55,230		Interest rate
Interest-bearing deposits with banks		57,409			1		57,408		Interest rate
Securities
Trading		180,441			158,142		22,299		Interest rate, credit spread
Investment, net of applicable allowance		250,744			–		250,744		Interest rate, credit spread, equity
Assets purchased under reverse repurchase<br>agreements and securities borrowed		325,401			275,143		50,258		Interest rate
Loans
Retail		619,452			2		619,450		Interest rate
Wholesale		358,143			3,687		354,456		Interest rate
Allowance for loan losses		(5,798	)		–		(5,798	)	Interest rate
Other
Derivatives		115,659			113,023		2,636		Interest rate, foreign exchange
Other assets		103,083			10,902		92,181		Interest rate
Assets not subject to market risk<br><br>(3)		16,343
Total assets	$	2,076,107		$	560,900	$	1,498,864
Liabilities subject to market risk
Deposits	$	1,361,265		$	62,608	$	1,298,657		Interest rate
Other
Obligations related to securities sold short		33,972			33,839		133		Interest rate, equity
Obligations related to assets sold under repurchase agreements and securities loaned		304,373			278,162		26,211		Interest rate
Derivatives		126,884			118,814		8,070		Interest rate, foreign exchange
Other liabilities		89,153			14,629		74,524		Interest rate
Subordinated debentures		13,437			–		13,437		Interest rate
Liabilities not subject to market risk<br><br>(4)		22,531
Total liabilities	$	1,951,615		$	508,052	$	1,421,032
Total equity		124,492
Total liabilities and equity	$	2,076,107
(1)	Traded risk includes positions that are classified or designated as FVTPL and positions whose revaluation gains and losses are reported in revenue within our trading portfolios. Market risk measures of VaR and stress tests are used as risk controls for traded risk.
---	---
(2)	Non-traded<br> risk includes positions used in the management of IRRBB and other <br>non-trading<br> portfolios. Other material <br>non-trading<br> portfolios include positions from RBC Insurance and investment securities, net of applicable allowance, not included in IRRBB.
---	---
(3)	Assets not subject to market risk include physical and other assets.
---	---
(4)	Liabilities not subject to market risk include payroll related and other liabilities.
---	---

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32 Royal Bank of Canada Third Quarter 2024

	As at April 30, 2024
				Market risk measure
(Millions of Canadian dollars)	Balance<br>sheet amount			Traded risk (1)		Non-traded<br><br>risk (2)			Non-traded<br> risk<br>primary risk sensitivity
Assets subject to market risk
Cash and due from banks	$	61,373		$	–	$	61,373		Interest rate
Interest-bearing deposits with banks		38,459			1		38,458		Interest rate
Securities
Trading		173,566			151,456		22,110		Interest rate, credit spread
Investment, net of applicable allowance		238,987			–		238,987		Interest rate, credit spread, equity
Assets purchased under reverse repurchase agreements and securities borrowed		301,797			266,802		34,995		Interest rate
Loans
Retail		612,687			–		612,687		Interest rate
Wholesale		353,567			16,297		337,270		Interest rate
Allowance for loan losses		(5,715	)		–		(5,715	)	Interest rate
Other
Derivatives		130,199			127,529		2,670		Interest rate, foreign exchange
Other assets		110,346			11,197		99,149		Interest rate
Assets not subject to market risk<br><br>(3)		15,784
Total assets	$	2,031,050		$	573,282	$	1,441,984
Liabilities subject to market risk
Deposits	$	1,327,603		$	57,145	$	1,270,458		Interest rate
Other
Obligations related to securities sold short		31,487			31,219		268		Interest rate, equity
Obligations related to assets sold under repurchase agreements and securities loaned		279,721			258,589		21,132		Interest rate
Derivatives		136,568			126,473		10,095		Interest rate, foreign exchange
Other liabilities		95,744			14,203		81,541		Interest rate
Subordinated debentures		13,464			–		13,464		Interest rate
Liabilities not subject to market risk<br><br>(4)		24,859
Total liabilities	$	1,909,446		$	487,629	$	1,396,958
Total equity		121,604
Total liabilities and equity	$	2,031,050
(1)	Traded risk includes positions that are classified or designated as FVTPL and positions whose revaluation gains and losses are reported in revenue within our trading portfolios. Market risk measures of VaR and stress tests are used as risk controls for traded risk.
---	---
(2)	Non-traded<br> risk includes positions used in the management of IRRBB and other <br>non-trading<br> portfolios. Other material <br>non-trading<br> portfolios include positions from RBC Insurance and investment securities, net of applicable allowance, not included in IRRBB.
---	---
(3)	Assets not subject to market risk include physical and other assets.
---	---
(4)	Liabilities not subject to market risk include payroll related and other liabilities.
---	---

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Royal Bank of Canada Third Quarter 2024 33

Liquidity and funding risk

Liquidity and funding risk (liquidity risk) is the risk that we may be unable to generate sufficient cash or its equivalents in a timely and cost-effective manner to meet our commitments. Liquidity risk arises from mismatches in the timing and value of on-balance sheet and off-balance sheet cash flows.

Our liquidity risk management activities are conducted in accordance with internal frameworks and policies, including the Enterprise Risk Management Framework (ERMF), the Enterprise Risk Appetite Framework (ERAF), the Enterprise Liquidity Risk Management Framework (LRMF), the Enterprise Liquidity Risk Policy, and the Enterprise Pledging Policy. Collectively, our frameworks and policies establish liquidity and funding management requirements appropriate for the execution of our strategy and ensuring liquidity risk remains within our risk appetite. There have been no material changes as described in our 2023 Annual Report.

Liquidity reserve

Our liquidity reserve consists only of available unencumbered liquid assets. Although unused wholesale funding capacity could be another potential source of liquidity, it is excluded in the determination of the liquidity reserve.

	As at July 31, 2024
(Millions of Canadian dollars)	Bank-owned<br><br>liquid assets		Securities<br>received<br>as collateral<br>from securities<br>financing<br>and derivative<br>transactions		Total liquid<br>assets		Encumbered<br>liquid assets		Unencumbered<br>liquid assets
Cash and deposits with banks	$	112,639	$	–	$	112,639	$	3,273	$	109,366
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks <br>(1)		329,287		360,461		689,748		418,218		271,530
Other securities		151,689		130,550		282,239		167,567		114,672
Other liquid assets <br>(2)		33,235		–		33,235		29,132		4,103
Total liquid assets	$	626,850	$	491,011	$	1,117,861	$	618,190	$	499,671
	As at April 30, 2024
(Millions of Canadian dollars)	Bank-owned<br>liquid assets		Securities<br>received<br>as collateral<br>from securities<br>financing<br>and derivative<br>transactions		Total liquid<br>assets		Encumbered<br>liquid assets		Unencumbered<br>liquid assets
Cash and deposits with banks	$	99,832	$	–	$	99,832	$	3,395	$	96,437
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks <br>(1)		313,620		327,290		640,910		384,177		256,733
Other securities		146,643		124,589		271,232		158,033		113,199
Other liquid assets <br>(2)		33,214		–		33,214		28,047		5,167
Total liquid assets	$	593,309	$	451,879	$	1,045,188	$	573,652	$	471,536
	As at
(Millions of Canadian dollars)	July 31<br><br>2024		April 30<br><br>2024
Royal Bank of Canada	$	218,166	$	228,869
Foreign branches		67,028		50,871
Subsidiaries		214,477		191,796
Total unencumbered liquid assets	$	499,671	$	471,536
(1)	Includes liquid securities issued by provincial governments and U.S. government-sponsored entities working under U.S. Federal government’s conservatorship (e.g., Federal National Mortgage Association and Federal Home Loan Mortgage Corporation).
---	---
(2)	Encumbered liquid assets amount represents cash collateral and margin deposit amounts pledged related to <br>over-the-counter<br> and exchange-traded derivative transactions.
---	---

The liquidity reserve is typically most affected by routine flows of retail and commercial client banking activities, where liquid asset portfolios reflect changes in deposit and loan balances, as well as business strategies and client flows related to the activities in Capital Markets. Corporate Treasury also affects liquidity reserves through the management of funding issuances, which could result in timing differences between when debt is issued and funds are deployed into business activities.

Q3 2024 vs. Q2 2024

Total unencumbered liquid assets increased $28 billion or 6% from last quarter, mainly due to an increase in on-balance sheet securities and cash reflecting growth in deposits.

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34 Royal Bank of Canada Third Quarter 2024

Asset encumbrance

The table below provides a summary of our on- and off-balance sheet amounts for cash, securities and other assets, distinguishing between those that are encumbered, and those available for sale or use as collateral in secured funding transactions. Other assets, such as mortgages and credit card receivables, can also be monetized, albeit over longer timeframes than those required for marketable securities. As at July 31, 2024, our unencumbered assets available as collateral comprised 24% of total assets (April 30, 2024 – 24%).

	As at
	July 31<br><br>2024												April 30<br><br>2024
	Encumbered				Unencumbered								Encumbered				Unencumbered
(Millions of Canadian dollars)	Pledged as<br>collateral		Other<br>(1)		Available as<br>collateral<br>(2)		Other<br>(3)			Total			Pledged as<br>collateral		Other (1)		Available as<br>collateral (2)		Other (3)			Total
Cash and deposits with banks	$	–	$	3,273	$	109,366	$	–		$	112,639		$	–	$	3,395	$	96,437	$	–		$	99,832
Securities
Trading		81,577		–		106,812		2,392			190,781			80,608		–		100,152		2,400			183,160
Investment, net of applicable allowance		18,575		–		232,169		–			250,744			15,584		–		223,403		–			238,987
Assets purchased under reverse repurchase agreements and securities borrowed <br>(4)		509,863		30,009		9,796		1,057			550,725			470,479		29,326		9,980		1,541			511,326
Loans
Retail
Mortgage securities		28,346		–		29,878		–			58,224			28,729		–		29,559		–			58,288
Mortgage loans		79,134		–		40,791		295,491			415,416			74,336		–		39,948		296,803			411,087
Non-mortgage<br> loans		6,290		–		–		139,522			145,812			6,272		–		–		137,040			143,312
Wholesale		–		–		24,566		333,577			358,143			–		–		27,476		326,091			353,567
Allowance for loan losses		–		–		–		(5,798	)		(5,798	)		–		–		–		(5,715	)		(5,715	)
Segregated fund net assets		–		–		–		–			–			–		–		–		–			–
Other
Derivatives		–		–		–		115,659			115,659			–		–		–		130,199			130,199
Others <br>(5)		29,132		–		4,103		86,191			119,426			28,047		–		5,167		92,916			126,130
Total assets	$	752,917	$	33,282	$	557,481	$	968,091		$	2,311,771		$	704,055	$	32,721	$	532,122	$	981,275		$	2,250,173
(1)	Includes assets restricted from use to generate secured funding due to legal or other constraints.
---	---
(2)	Represents assets that are immediately available for use as collateral, including National Housing Act Mortgage-Backed Securities (NHA MBS), our unencumbered mortgage loans that qualify as eligible collateral at Federal Home Loan Banks (FHLB), as well as loans that qualify as eligible collateral for discount window facility available to us and lodged at the Federal Reserve Bank of New York (FRBNY).
---	---
(3)	Other unencumbered assets are not subject to any restrictions on their use to secure funding or as collateral but would not be considered immediately available.
---	---
(4)	Includes bank-owned liquid assets and securities received as collateral from <br>off-balance<br> sheet securities financing, derivative transactions, and margin lending. Includes $30 billion (April 30, 2024 – $29 billion) of collateral received through reverse repurchase transactions that cannot be rehypothecated in its current legal form.
---	---
(5)	The Pledged as collateral amount represents cash collateral and margin deposit amounts pledged related to OTC and exchange-traded derivative transactions.
---	---

Q3 2024 vs. Q2 2024

Total unencumbered assets available as collateral increased $25 billion or 5% from last quarter, mainly due to an increase in securities and in cash and deposits with banks.

Funding

Funding strategy

Maintaining a diversified funding base is a key strategy for managing our liquidity risk profile.

Core funding, comprising capital, longer-term wholesale liabilities and a diversified pool of personal as well as the stable portion of our commercial and institutional deposits, is the foundation of our structural liquidity position.

Wholesale funding activities are well-diversified by geography, investor segment, instrument, currency, structure and maturity. We maintain an ongoing presence in different funding markets, which allows us to continuously monitor market developments and trends, identify opportunities and risks and take appropriate and timely actions.

We continuously evaluate opportunities to expand into new markets and untapped investor segments since diversification expands our wholesale funding flexibility, minimizes funding concentration and dependency and generally reduces financing costs.

We regularly assess our funding concentration and have implemented limits on certain funding sources to support diversification of our funding base.

Deposit and funding profile

As at July 31, 2024, relationship-based deposits, which are the primary source of funding for retail and commercial lending, were $957 billion or 56% of our total funding (April 30, 2024 – $943 billion or 57%). The remaining portion is comprised of short- and long-term wholesale funding.

Funding for highly liquid assets consists primarily of short-term wholesale funding that reflects the monetization period of those assets. Long-term wholesale funding is used mostly to fund less liquid wholesale assets and to support liquid asset buffers.

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Royal Bank of Canada Third Quarter 2024 35

Senior long-term debt issued by the bank on or after September 23, 2018, that has an original term greater than 400 days and is marketable, subject to certain exceptions, is subject to the Canadian Bank Recapitalization (Bail-in) regime. Under the Bail-in regime, in circumstances when the Superintendent of Financial Institutions has determined that a bank may no longer be viable, the Governor in Council may, upon a recommendation of the Minister of Finance that he or she is of the opinion that it is in the public interest to do so, grant an order directing the Canada Deposit Insurance Corporation (CDIC) to convert all or a portion of certain shares and liabilities of that bank into common shares. As at July 31, 2024, the notional value of issued and outstanding long-term debt subject to conversion under the Bail-in regime was $105 billion (April 30, 2024 – $109 billion).

For further details on our wholesale funding, refer to the Composition of wholesale funding tables below.

Long-term debt issuance

We operate long-term debt issuance registered programs. The following table summarizes our registered programs and their authorized limits by geography:

Programs by geography
Canada	U.S.	Europe/Asia
---	---	---
• Canadian Shelf Program – $25 billion	• U.S. Shelf Program – US$75 billion	• European Debt Issuance Program – US$75 billion
		• Global Covered Bond Program – <br>€<br>75 billion
		• Japanese Issuance Programs – ¥1 trillion

We also raise long-term funding using Canadian Senior Notes, Kangaroo Bonds (issued in the Australian domestic market by foreign firms) and Yankee Certificates of Deposit (issued in the U.S. domestic market by foreign firms).

As presented in the following charts, our current long-term debt profile is well-diversified by both currency and product.

(1) Includes unsecured and secured long-term funding and subordinated<br>debentures with an original term to maturity greater than 1 year	(1) Includes unsecured and secured long-term funding and subordinated<br>debentures with an original term to maturity greater than 1 year
	(2) Mortgage-backed securities and Canada Mortgage Bonds

The following table shows the composition of wholesale funding based on remaining term to maturity:

Composition of wholesale funding

(1)

	As at July 31, 2024
(Millions of Canadian dollars)	Less than<br>1 month		1 to 3<br>months		3 to 6<br>months		6 to 12<br>months		Less than 1<br><br>year sub-total		1 year to<br>2 years		2 years and<br>greater		Total
Deposits from banks <br>(2)	$	2,997	$	70	$	65	$	100	$	3,232	$	–	$	–	$	3,232
Certificates of deposit and commercial paper <br>(3)		7,285		14,529		16,342		24,474		62,630		–		–		62,630
Asset-backed commercial paper <br>(4)		3,862		7,094		5,222		1,114		17,292		–		–		17,292
Senior unsecured medium-term notes <br>(5)		44		5,011		13,118		15,460		33,633		20,864		50,185		104,682
Senior unsecured structured notes <br>(6)		1,077		2,030		2,279		6,019		11,405		3,573		19,398		34,376
Mortgage securitization		37		487		553		2,256		3,333		1,630		11,880		16,843
Covered bonds/asset-backed securities <br>(7)		–		1,775		2,218		5,490		9,483		14,412		43,609		67,504
Subordinated liabilities		–		–		1,500		1,250		2,750		2,070		8,883		13,703
Other <br>(8)		4,919		264		368		2,803		8,354		16,399		163		24,916
Total	$	20,221	$	31,260	$	41,665	$	58,966	$	152,112	$	58,948	$	134,118	$	345,178
Of which:
– Secured	$	8,716	$	9,434	$	8,115	$	8,860	$	35,125	$	16,042	$	55,489	$	106,656
– Unsecured		11,505		21,826		33,550		50,106		116,987		42,906		78,629		238,522

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36 Royal Bank of Canada Third Quarter 2024

	As at April 30, 2024
(Millions of Canadian dollars)	Less than<br>1 month		1 to 3<br>months		3 to 6<br>months		6 to 12<br>months		Less than 1<br><br>year sub-total		1 year to<br>2 years		2 years and<br>greater		Total
Deposits from banks <br>(2)	$	3,947	$	312	$	–	$	116	$	4,375	$	–	$	–	$	4,375
Certificates of deposit and commercial paper <br>(3)		12,883		19,008		18,663		15,599		66,153		–		–		66,153
Asset-backed commercial paper <br>(4)		4,329		3,873		8,101		1,069		17,372		–		–		17,372
Senior unsecured medium-term notes <br>(5)		2,589		11,435		5,007		20,148		39,179		15,666		53,963		108,808
Senior unsecured structured notes <br>(6)		858		1,822		2,347		5,812		10,839		3,980		17,470		32,289
Mortgage securitization		–		1,066		405		1,815		3,286		1,307		12,720		17,313
Covered bonds/asset-backed securities <br>(7)		–		–		1,720		3,620		5,340		13,401		47,647		66,388
Subordinated liabilities		–		1,500		–		1,500		3,000		3,273		7,698		13,971
Other <br>(8)		4,794		268		1,706		1,890		8,658		16,945		145		25,748
Total	$	29,400	$	39,284	$	37,949	$	51,569	$	158,202	$	54,572	$	139,643	$	352,417
Of which:
– Secured	$	9,019	$	5,023	$	10,975	$	6,504	$	31,521	$	14,708	$	60,367	$	106,596
– Unsecured		20,381		34,261		26,974		45,065		126,681		39,864		79,276		245,821
(1)	Excludes bankers’ acceptances and repos.
---	---
(2)	Excludes deposits associated with services we provide to banks (e.g., custody, cash management).
---	---
(3)	Includes bearer deposit notes (unsecured).
---	---
(4)	Only includes consolidated liabilities, including our collateralized commercial paper program.
---	---
(5)	Includes deposit notes and floating rate notes (unsecured).
---	---
(6)	Includes notes where the payout is tied to movements in foreign exchange, commodities and equities.
---	---
(7)	Includes covered bonds collateralized with residential mortgages and securities backed by credit card receivables.
---	---
(8)	Includes tender option bonds (secured) of $5,017 million (April 30, 2024 – $4,835 million), other long-term structured deposits (unsecured) of $19,678 million (April 30, 2024 – $20,022 million), FHLB advances (secured) of $nil (April 30, 2024 – $688 million) and wholesale guaranteed interest certificates of $221 million (April 30, 2024 – $203 million).
---	---

Credit ratings

Our ability to access unsecured funding markets and to engage in certain collateralized business activities on a cost-effective basis are largely dependent on maintaining competitive credit ratings. Credit ratings and outlooks provided by rating agencies reflect their views and methodologies. Ratings are subject to change, based on a number of factors including, but not limited to, our financial strength, competitive position, liquidity and other factors not completely within our control.

The following table presents our major credit ratings:

Credit ratings

(1)

	As at August 27, 2024
	Short-term<br><br>debt		Legacy senior<br><br>long-term debt<br>(2)		Senior long-<br>term debt<br>(3)		Outlook
Moody’s<br>‡<br> <br>(4)		P-1		Aa1		A1		stable
Standard & Poor’s<br>‡<br> <br>(5)		A-1+		AA-		A		stable
Fitch Ratings<br>‡<br> <br>(6)		F1+		AA		AA-		stable
DBRS<br>‡<br> <br>(7)		R-1 (high)		AA (high)		AA		stable
(1)	Credit ratings are not recommendations to purchase, sell or hold a financial obligation in as much as they do not comment on market price or suitability for a particular investor. Ratings are determined by the rating agencies based on criteria established from time to time by them and are subject to revision or withdrawal at any time by the rating organization.
---	---
(2)	Includes senior long-term debt issued prior to September 23, 2018 and senior long-term debt issued on or after September 23, 2018 which is excluded from the <br>Bail-in<br> regime.
---	---
(3)	Includes senior long-term debt issued on or after September 23, 2018 which is subject to conversion under the <br>Bail-in<br> regime.
---	---
(4)	On November 6, 2023, Moody’s affirmed our ratings with stable outlook.
---	---
(5)	On June 25, 2024, Standard & Poor’s affirmed our ratings with a stable outlook.
---	---
(6)	On June 11, 2024, Fitch Ratings affirmed our ratings with a stable outlook.
---	---
(7)	On May 10, 2024, DBRS affirmed our ratings with a stable outlook.
---	---

Additional contractual obligations for rating downgrades

We are required to deliver collateral to certain counterparties in the event of a downgrade from our current credit rating. The following table shows the additional collateral obligations required at the reporting date in the event of a one-,

two- or three-notch downgrade. These additional collateral obligations are incremental requirements for each successive downgrade and do not represent the cumulative impact of multiple downgrades. The amounts reported change periodically due to several factors, including the transfer of trading activity to centrally cleared financial market infrastructures and exchanges, the expiration of transactions with downgrade triggers, the imposition of internal limitations on new agreements to exclude downgrade triggers, as well as normal course mark-to-market. There is no outstanding senior debt issued in the market that contains rating triggers that would lead to early prepayment of principal.

	As at
	July 31<br><br>2024						April 30<br><br>2024
(Millions of Canadian dollars)	One-notch<br><br>downgrade		Two-notch<br><br>downgrade		Three-notch<br><br>downgrade		One-notch<br><br>downgrade		Two-notch<br><br>downgrade		Three-notch<br><br>downgrade
Contractual derivatives funding or margin requirements	$	195	$	96	$	194	$	228	$	137	$	218
Other contractual funding or margin requirements <br>(1)		36		64		11		44		46		87
(1)	Includes Guaranteed Investment Certificates (GICs) issued by our municipal markets business out of New York.
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Royal Bank of Canada Third Quarter 2024 37

Liquidity Coverage Ratio (LCR)

The LCR is a Basel III metric that measures the sufficiency of high-quality liquid assets (HQLA) available to meet liquidity needs over a 30-day period in an acute stress scenario. The Basel Committee on Banking Supervision (BCBS) and OSFI regulatory minimum coverage level for LCR is 100%.

OSFI requires Canadian banks to disclose the LCR using the standard Basel disclosure template and calculated using the average of daily LCR positions during the quarter.

Liquidity coverage ratio common disclosure template

(1)

	For the three months ended
	July 31<br><br>2024
(Millions of Canadian dollars, except percentage amounts)	Total unweighted<br>value (average)<br>(2)		Total weighted<br>value (average)
High-quality liquid assets
Total high-quality liquid assets (HQLA)			$	389,190
Cash outflows
Retail deposits and deposits from small business customers, of which:	$	401,452	$	39,590
Stable deposits<br><br>(3)		130,360		3,911
Less stable deposits		271,092		35,679
Unsecured wholesale funding, of which:		451,980		214,045
Operational deposits (all counterparties) and deposits in networks of cooperative banks<br><br>(4)		170,428		40,017
Non-operational<br> deposits		247,916		140,392
Unsecured debt		33,636		33,636
Secured wholesale funding				40,555
Additional requirements, of which:		389,439		81,464
Outflows related to derivative exposures and other collateral requirements		66,926		17,656
Outflows related to loss of funding on debt products		10,488		10,488
Credit and liquidity facilities		312,025		53,320
Other contractual funding obligations<br><br>(5)		29,613		29,613
Other contingent funding obligations<br><br>(6)		806,230		14,062
Total cash outflows			$	419,329
Cash inflows
Secured lending (e.g., reverse repos)	$	324,405	$	55,613
Inflows from fully performing exposures		18,952		11,236
Other cash inflows		44,155		44,155
Total cash inflows			$	111,004
			Total<br>adjusted value
Total HQLA			$	389,190
Total net cash outflows				308,325
Liquidity coverage ratio				126%
	April 30<br><br>2024
(Millions of Canadian dollars, except percentage amounts)			Total<br>adjusted value
Total HQLA			$	382,663
Total net cash outflows				299,253
Liquidity coverage ratio				128%
(1)	The LCR is calculated in accordance with OSFI’s LAR guideline, which, in turn, reflects liquidity-related requirements issued by the BCBS. The LCR for the quarter ended July 31, 2024 is calculated as an average of 64 daily positions.
---	---
(2)	With the exception of other contingent funding obligations, unweighted inflow and outflow amounts are items maturing or callable in 30 days or less. Other contingent funding obligations also include debt securities with remaining maturity greater than 30 days.
---	---
(3)	As defined by the BCBS, stable deposits from retail and small business customers are deposits that are insured and are either held in transactional accounts or the bank has an established relationship with the client making the withdrawal unlikely.
---	---
(4)	Operational deposits from customers other than retail and small and <br>medium-sized<br> enterprises, are deposits which clients need to keep with the bank in order to facilitate their access and ability to use payment and settlement systems primarily for clearing, custody and cash management activities.
---	---
(5)	Other contractual funding obligations primarily include outflows from unsettled securities trades and outflows from obligations related to securities sold short.
---	---
(6)	Other contingent funding obligations include outflows related to other <br>off-balance<br> sheet facilities that carry low LCR runoff factors (0% – 5%).
---	---

We manage our LCR position within a target range that reflects our liquidity risk tolerance, business mix, asset composition and funding capabilities. The range is subject to periodic review, considering changes to internal requirements and external developments.

We maintain HQLA in major currencies with dependable market depth and breadth. Our treasury management practices are designed to ensure that the levels of HQLA are actively managed to meet target LCR objectives. Our Level 1 assets, as calculated according to OSFI LAR and the BCBS LCR requirements, represent 87% of total HQLA. These assets consist of cash, placements with central banks and highly rated securities issued or guaranteed by governments, central banks and supranational entities.

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38 Royal Bank of Canada Third Quarter 2024

LCR captures cash flows from on- and off-balance sheet activities that are either expected or could potentially occur within 30 days in an acute stress scenario. Cash outflows result from the application of withdrawal and non-renewal factors to demand and term deposits, differentiated by client type (wholesale, retail and small- and medium-sized enterprises). Cash outflows also arise from business activities that create contingent funding and collateral requirements, such as repo funding, derivatives, short sales of securities and the extension of credit and liquidity commitments to clients. Cash inflows arise primarily from maturing secured loans, interbank loans and non-HQLA securities.

LCR does not reflect any market funding capacity that we believe would be available in a stress situation. All maturing wholesale debt is assigned 100% outflow in the LCR calculation.

Q3 2024 vs. Q2 2024

The average LCR for the quarter ended July 31, 2024 was 126%, which translates into a surplus of approximately $81 billion, compared to 128% and a surplus of approximately $83 billion in the prior quarter. Average LCR remained relatively stable from the prior quarter reflecting loan growth and an increase in on-balance sheet securities, largely offset by growth in retail deposits.

Net Stable Funding Ratio (NSFR)

NSFR is a Basel III metric that measures the sufficiency of available stable funding relative to the amount of required stable funding. The BCBS and OSFI regulatory minimum coverage level for NSFR is 100%.

Available stable funding is defined as the portion of capital and liabilities expected to be reliable over the one-year time horizon considered by the NSFR. Required stable funding is a function of the liquidity characteristics and residual maturities of various bank assets and off-balance sheet exposures.

OSFI requires Canadian Domestic Systemically Important Banks (D-SIBs) to disclose the NSFR using the standard Basel disclosure template. Amounts presented in this disclosure template are determined in accordance with the requirements of OSFI’s LAR guideline and are not necessarily aligned with the classification requirements prescribed under IFRS.

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Royal Bank of Canada Third Quarter 2024 39

Net Stable Funding Ratio common disclosure template

(1)

	As at July 31, 2024
	Unweighted value by residual maturity<br>(2)
(Millions of Canadian dollars, except percentage amounts)	No maturity		< 6 months		6 months to<br>< 1 year		≥<br><br><br><br>1 year		Weighted value
Available Stable Funding (ASF) Item
Capital:	$	125,974	$	–	$	–	$	12,355	$	138,329
Regulatory Capital		125,974		–		–		12,355		138,329
Other Capital Instruments		–		–		–		–		–
Retail deposits and deposits from small business customers:		329,056		132,719		55,830		69,334		535,412
Stable deposits<br><br>(3)		97,570		55,431		28,748		31,633		204,294
Less stable deposits		231,486		77,288		27,082		37,701		331,118
Wholesale funding:		318,514		444,936		72,775		160,001		386,619
Operational deposits<br><br>(4)		178,861		–		–		–		89,431
Other wholesale funding		139,653		444,936		72,775		160,001		297,188
Liabilities with matching interdependent assets<br><br>(5)		–		1,921		2,914		21,976		–
Other liabilities:		50,222		224,416						16,642
NSFR derivative liabilities				27,848
All other liabilities and equity not included in the above categories		50,222		178,794		2,265		15,509		16,642
Total ASF									$	1,077,002
Required Stable Funding (RSF) Item
Total NSFR high-quality liquid assets (HQLA)									$	42,525
Deposits held at other financial institutions for operational purposes		–		1,507		–		–		753
Performing loans and securities:		275,076		324,259		122,186		532,035		771,234
Performing loans to financial institutions secured by Level 1 HQLA		–		100,277		8,794		31		10,206
Performing loans to financial institutions secured by <br>non-Level<br> 1 HQLA and unsecured performing loans to financial institutions		6,053		123,246		30,686		21,824		60,641
Performing loans to <br>non-financial<br> corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and PSEs, of which:		184,289		54,314		32,987		173,767		347,865
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		–		615		438		4,966		3,754
Performing residential mortgages, of which:		39,502		43,807		48,026		314,878		293,947
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		39,502		43,775		47,994		313,716		292,928
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities		45,232		2,615		1,693		21,535		58,575
Assets with matching interdependent liabilities<br><br>(5)		–		1,921		2,914		21,976		–
Other assets:		4,103		319,198						93,037
Physical traded commodities, including gold		4,103								3,488
Assets posted as initial margin for derivative contracts and contributions to default funds of CCPs				22,899						19,464
NSFR derivative assets				26,811						–
NSFR derivative liabilities before deduction of variation margin posted				58,430						2,921
All other assets not included in the above categories		–		146,290		109		64,659		67,164
Off-balance<br> sheet items				873,142						33,888
Total RSF									$	941,437
Net Stable Funding Ratio (%)										114%
	As at April 30, 2024
(Millions of Canadian dollars, except percentage amounts)									Weighted<br>value
Total ASF									$	1,045,019
Total RSF										940,401
Net Stable Funding Ratio (%)										111%
(1)	The NSFR is calculated in accordance with OSFI’s LAR guideline, which, in turn, reflects liquidity-related requirements issued by the BCBS.
---	---
(2)	Totals for the following rows encompass the residual maturity categories of less than 6 months, 6 months to less than 1 year, and greater than or equal to 1 year in accordance with the requirements of the common disclosure template prescribed by OSFI: Other liabilities, NSFR derivative liabilities, Other assets, Assets posted as initial margin for derivative contracts and contributions to default funds of central counterparties (CCPs), NSFR derivative assets, NSFR derivative liabilities before deduction of variation margin posted and <br>Off-balance<br> sheet items.
---	---
(3)	As defined by the BCBS, stable deposits from retail and small business customers are deposits that are insured and are either held in transactional accounts or the bank has an established relationship with the client making the withdrawal unlikely.
---	---
(4)	Operational deposits from customers other than retail and small- and <br>medium-sized<br> enterprises, are deposits which clients need to keep with the bank in order to facilitate their access and ability to use payment and settlement systems primarily for clearing, custody and cash management activities.
---	---
(5)	Interdependent assets and liabilities represent NHA MBS liabilities, including liabilities arising from transactions involving the Canada Mortgage Bond program and their corresponding encumbered mortgages.
---	---

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40 Royal Bank of Canada Third Quarter 2024

Available stable funding is comprised primarily of a diversified pool of personal and commercial deposits, capital and long-term wholesale liabilities. Required stable funding is driven mainly by the bank’s mortgage and loan portfolio, secured loans to financial institutions and to a lesser extent by other less liquid assets. NSFR does not reflect any unused market funding capacity that we believe would be available.

Volume and composition of available stable funding is actively managed to optimize our structural funding position and meet NSFR objectives. Our NSFR is managed in accordance with our comprehensive LRMF.

Q3 2024 vs. Q2 2024

The NSFR as at July 31, 2024 was 114%, which translates into a surplus of approximately $136 billion, compared to 111% and a surplus of approximately $105 billion in the prior quarter. NSFR increased compared to the previous quarter, mainly due to higher available stable funding driven by an increase in the weighted value of retail deposits and wholesale funding.

Contractual maturities of financial assets, financial liabilities and off-balance sheet items

The following tables provide remaining contractual maturity profiles of all our assets, liabilities, and off-balance sheet items at their carrying value (e.g., amortized cost or fair value) and maturity profiles of assets and liabilities of insurance contracts and reinsurance contracts held at their carrying value based on the estimated timing of when the cash flows are expected to occur at the balance sheet date. Off-balance sheet items are allocated based on the expiry date of the contract.

Details of contractual maturities and commitments to extend funds are a source of information for the management of liquidity risk. Among other purposes, these details form a basis for modelling a behavioural balance sheet with effective maturities to calculate liquidity risk measures. For further details, refer to the Risk measurement and internal liquidity section within the Liquidity and funding risk section of our 2023 Annual Report.

	As at July 31, 2024
(Millions of Canadian dollars)	Less than<br>1 month		1 to 3<br>months		3 to 6<br>months		6 to 9<br>months		9 to 12<br>months		1 year<br>to 2 years		2 years<br>to 5 years		5 years<br>and greater		With no<br>specific<br>maturity			Total
Assets
Cash and deposits with banks	$	110,247	$	11	$	–	$	–	$	–	$	–	$	–	$	–	$	2,381		$	112,639
Securities
Trading (1)		89,574		299		201		188		12		72		673		10,860		78,562			180,441
Investment, net of applicable allowance		4,346		5,256		6,205		8,080		14,007		46,465		74,886		90,340		1,159			250,744
Assets purchased under reverse repurchase agreements and securities borrowed (2)		148,751		67,372		56,401		15,439		17,619		31		–		–		19,788			325,401
Loans, net of applicable allowance		34,463		36,495		47,089		46,698		54,269		274,292		296,722		77,946		103,823			971,797
Other
Customers’ liability under acceptances		130		572		2		–		–		–		5		–		(32	)		677
Derivatives		8,459		12,728		9,009		6,074		4,354		13,057		23,544		38,434		–			115,659
Other financial assets		40,608		2,639		2,226		697		803		155		687		1,821		3,793			53,429
Total financial assets		436,578		125,372		121,133		77,176		91,064		334,072		396,517		219,401		209,474			2,010,787
Other <br>non-financial<br> assets		7,768		2,309		1,788		199		119		2,146		2,788		10,111		38,092			65,320
Total assets	$	444,346	$	127,681	$	122,921	$	77,375	$	91,183	$	336,218	$	399,305	$	229,512	$	247,566		$	2,076,107
Liabilities and equity
Deposits (3)
Unsecured borrowing	$	110,259	$	73,064	$	90,917	$	70,514	$	75,563	$	62,513	$	79,481	$	37,400	$	645,017		$	1,244,728
Secured borrowing		4,136		8,846		6,810		3,352		1,692		6,719		17,128		8,915		–			57,598
Covered bonds		–		1,776		2,221		1,465		3,945		13,019		32,692		3,821		–			58,939
Other
Acceptances		130		571		2		–		–		–		5		–		–			708
Obligations related to securities sold short		33,972		–		–		–		–		–		–		–		–			33,972
Obligations related to assets sold under repurchase agreements and securities loaned (2)		203,464		54,845		7,512		9,935		6,402		3		–		–		22,212			304,373
Derivatives		9,486		16,546		11,451		7,497		8,502		14,148		23,250		36,004		–			126,884
Other financial liabilities		38,054		3,218		2,800		1,888		1,916		957		2,367		16,808		1,310			69,318
Subordinated debentures		–		–		–		–		–		1,987		–		11,450		–			13,437
Total financial liabilities		399,501		158,866		121,713		94,651		98,020		99,346		154,923		114,398		668,539			1,909,957
Other <br>non-financial<br> liabilities		1,103		1,124		5,655		341		157		1,397		1,379		19,625		10,877			41,658
Equity		–		–		–		–		–		–		–		–		124,492			124,492
Total liabilities and equity	$	400,604	$	159,990	$	127,368	$	94,992	$	98,177	$	100,743	$	156,302	$	134,023	$	803,908		$	2,076,107
Off-balance<br> sheet items
Financial guarantees	$	776	$	2,737	$	3,887	$	4,751	$	3,689	$	980	$	7,104	$	1,122	$	40		$	25,086
Commitments to extend credit		3,996		9,925		17,470		17,863		22,595		65,158		212,426		25,219		3,857			378,509
Other credit-related commitments		29,444		1,544		2,358		2,458		3,009		377		1,234		110		85,922			126,456
Other commitments		6		10		18		18		18		62		152		188		936			1,408
Total <br>off-balance<br> sheet items	$	34,222	$	14,216	$	23,733	$	25,090	$	29,311	$	66,577	$	220,916	$	26,639	$	90,755		$	531,459
(1)	With the exception of debt securities within the Insurance segment, trading debt securities classified as FVTPL have been included in the less than 1 month category as there is no expectation to hold these assets to their contractual maturity.
---	---
(2)	Open reverse repo and repo contracts, which have no set maturity date and are typically short-term, have been included in the with no specific maturity category.
---	---
(3)	A major portion of relationship-based deposits are repayable on demand or at short notice on a contractual basis while, in practice, these customer balances form a core base for our operations and liquidity needs, as explained in the preceding Deposit and funding profile section.
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Royal Bank of Canada Third Quarter 2024 41

	As at April 30, 2024
(Millions of Canadian dollars)	Less than<br>1 month		1 to 3<br>months		3 to 6<br>months		6 to 9<br>months		9 to 12<br>months		1 year<br>to 2 years		2 years<br>to 5 years		5 years<br>and greater		With no<br>specific<br>maturity			Total
Assets
Cash and deposits with banks	$	97,580	$	11	$	–	$	–	$	–	$	–	$	–	$	–	$	2,241		$	99,832
Securities
Trading (1)		87,638		225		300		191		29		57		686		10,782		73,658			173,566
Investment, net of applicable allowance		5,158		8,386		4,412		5,188		7,599		45,901		76,182		85,011		1,150			238,987
Assets purchased under reverse repurchase agreements and securities borrowed (2)		124,533		71,600		39,967		28,174		17,906		1		–		–		19,616			301,797
Loans, net of applicable allowance		48,164		32,869		41,487		51,113		50,861		243,493		313,973		77,250		101,329			960,539
Other
Customers’ liability under acceptances		6,560		2,543		–		2		–		–		5		–		(51	)		9,059
Derivatives		10,115		12,843		7,860		8,177		6,419		15,184		27,909		41,692		–			130,199
Other financial assets		38,392		3,200		1,820		709		966		164		671		1,987		3,881			51,790
Total financial assets		418,140		131,677		95,846		93,554		83,780		304,800		419,426		216,722		201,824			1,965,769
Other <br>non-financial<br> assets		8,062		2,333		1,791		159		131		2,745		2,612		9,598		37,850			65,281
Total assets	$	426,202	$	134,010	$	97,637	$	93,713	$	83,911	$	307,545	$	422,038	$	226,320	$	239,674		$	2,031,050
Liabilities and equity
Deposits (3)
Unsecured borrowing	$	91,143	$	80,798	$	83,610	$	80,978	$	64,877	$	59,440	$	79,604	$	33,161	$	638,515		$	1,212,126
Secured borrowing		4,802		6,893		9,644		2,105		2,245		6,683		16,086		9,966		–			58,424
Covered bonds		–		–		1,722		2,154		1,427		11,876		34,979		4,895		–			57,053
Other
Acceptances		6,560		2,543		–		2		–		–		5		–		–			9,110
Obligations related to securities sold short		31,487		–		–		–		–		–		–		–		–			31,487
Obligations related to assets sold under repurchase agreements and securities loaned (2)		192,996		43,991		12,306		40		8,596		5		–		–		21,787			279,721
Derivatives		9,432		15,297		8,632		10,408		7,561		15,926		28,281		41,031		–			136,568
Other financial liabilities		39,024		2,925		3,320		1,852		2,073		1,067		2,378		16,393		1,507			70,539
Subordinated debentures		–		–		–		–		–		1,947		–		11,517		–			13,464
Total financial liabilities		375,444		152,447		119,234		97,539		86,779		96,944		161,333		116,963		661,809			1,868,492
Other <br>non-financial<br> liabilities		2,347		982		98		4,597		199		1,264		1,260		19,574		10,633			40,954
Equity		–		–		–		–		–		–		–		–		121,604			121,604
Total liabilities and equity	$	377,791	$	153,429	$	119,332	$	102,136	$	86,978	$	98,208	$	162,593	$	136,537	$	794,046		$	2,031,050
Off-balance<br> sheet items
Financial guarantees	$	1,075	$	2,340	$	3,858	$	4,073	$	4,657	$	987	$	7,699	$	843	$	19		$	25,551
Commitments to extend credit		4,261		12,228		14,509		17,925		22,640		62,144		208,876		25,822		4,685			373,090
Other credit-related commitments		29,105		1,992		2,383		2,353		2,437		572		1,026		109		83,484			123,461
Other commitments		6		11		16		17		18		62		152		193		965			1,440
Total <br>off-balance<br> sheet items	$	34,447	$	16,571	$	20,766	$	24,368	$	29,752	$	63,765	$	217,753	$	26,967	$	89,153		$	523,542
(1)	With the exception of debt securities within the Insurance segment, trading debt securities classified as FVTPL have been included in the less than 1 month category as there is no expectation to hold these assets to their contractual maturity.
---	---
(2)	Open reverse repo and repo contracts, which have no set maturity date and are typically short-term, have been included in the with no specific maturity category.
---	---
(3)	A major portion of relationship-based deposits are repayable on demand or at short notice on a contractual basis while, in practice, these customer balances form a core base for our operations and liquidity needs, as explained in the preceding Deposit and funding profile section.
---	---
Capital management
---

We continue to manage our capital in accordance with our Capital Management Framework as described in our 2023 Annual Report. In addition, we continue to monitor for new regulatory capital developments, including OSFI guidance, in order to ensure compliance with these requirements as disclosed in the Capital management section in our 2023 Annual Report, as updated below.

OSFI expects Canadian banks to meet the Basel III targets for CET1, Tier 1 and Total capital ratios. Under Basel III, banks select from two main approaches, the Standardized Approach (SA) or the Internal Ratings Based (IRB) Approach, to calculate their minimum regulatory capital required to support credit, market and operational risks. We apply the IRB approach to credit risk to determine minimum regulatory capital requirements for the majority of our portfolios, including most of the exposures acquired from the HSBC Canada transaction. Certain credit risk portfolios are subject to SA, primarily in Wealth Management including our City National wholesale portfolio, our Caribbean Banking operations and certain non-mortgage retail portfolios acquired through the HSBC Canada transaction. For consolidated regulatory reporting of market risk capital and operational risk capital, we use the revised SA based on OSFI rules as further noted below.

The Financial Stability Board (FSB) has re-designated us as a Global Systemically Important Bank (G-SIB). This designation requires us to maintain a higher loss absorbency requirement (common equity as a percentage of RWA) of 1% consistent with the D-SIB requirement. In addition to the Basel III targets, OSFI established a Domestic Stability Buffer (DSB) applicable to all Canadian D-SIBs to further ensure the financial stability of the Canadian financial system. The current OSFI requirement for the DSB is set at 3.5% of total RWA as reaffirmed by OSFI on June 18, 2024.

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42 Royal Bank of Canada Third Quarter 2024

Under OSFI’s Total Loss Absorbing Capacity (TLAC) guideline, D-SIBs are required to maintain a risk-based TLAC ratio which builds on the risk-based capital ratios described in the CAR guideline, and a TLAC leverage ratio which builds on the leverage ratio described in OSFI’s LR guideline. The TLAC requirement is intended to address the sufficiency of a D-SIB’s loss absorbing capacity in supporting its recapitalization in the event of its failure. TLAC is defined as the aggregate of Tier 1 capital, Tier 2 capital and external TLAC instruments, which allow conversion in whole or in part into common shares under the CDIC Act and meet all of the eligibility criteria under the TLAC guideline.

Effective Q2 2023 we implemented OSFI’s first phase of the adoption of the final BCBS Basel III reforms consisting of revised capital, leverage and disclosure guidelines. The second phase of OSFI’s implementation of the final BCBS Basel III reforms relating to the revised credit valuation adjustment (CVA) and market risk chapters of the CAR guideline came into effect in Q1 2024. The adoption of the revised CVA and market risk rules reflects adoption of a revised SA framework for CVA and a revised SA for market risk, as well as the discontinuation of our existing internal models-based approach used for market risk RWA determination. The revised Pillar 3 disclosure requirements effective upon adoption of these revised rules were reflected in our Q1 2024 standalone Pillar 3 Report. In addition, as prescribed by the CAR guidelines, effective Q1 2024 our regulatory capital floor transitioned to a new regulatory capital floor of 67.5% of RWA for fiscal 2024 from 65% of RWA in fiscal 2023. On July 5, 2024, OSFI announced a one-year delay to the increase in the capital floor factor, maintaining the current 67.5% of RWA (as calculated using only SA for credit, market and operational risk) factor throughout 2024 and 2025, and delaying the 70% factor implementation from 2025 to 2026, and the 72.5% factor implementation from 2026 to 2027.

Our methodology for allocating capital to our business segments is based on the Basel III regulatory capital requirements, with the exception of Insurance. Effective November 1, 2023, our attributed capital methodology incorporates leverage requirements to allocate capital to our business segments. Our insurance platform continues to be allocated capital based on fully diversified economic capital, similar to past quarters. For further details on changes to our attributed capital methodology, refer to the How we measure and report our business segments section.

For further details, refer to the Capital management section of our 2023 Annual Report.

The following table provides a summary of OSFI’s current regulatory target ratios under Basel III and Pillar 2 requirements. We are in compliance with all current capital, leverage and TLAC requirements imposed by OSFI:

Basel III<br><br>capital,<br><br>leverage and TLAC<br>ratios	OSFI regulatory target requirements for large banks under Basel III
	Minimum		Capital<br><br>Buffers		Minimum<br><br>including<br><br>Capital<br><br>Buffers		D-SIB/G-SIB<br><br>surcharge<br><br>(1)		Minimum including<br>Capital Buffers<br><br>and <br>D-SIB/G-SIB<br><br>surcharge<br><br>(1), (2)
Common Equity Tier 1		4.5%		2.6%		7.1%		1.0%		8.1%	3.5%	11.6%	13.0%
Tier 1 capital		6.0%		2.6%		8.6%		1.0%		9.6%	3.5%	13.1%	14.5%
Total capital		8.0%		2.6%		10.6%		1.0%		11.6%	3.5%	15.1%	16.3%
Leverage ratio		3.0%		n.a.		3.0%		0.5%		3.5%	n.a.	3.5%	4.2%
TLAC ratio		21.6%		n.a.		21.6%		n.a.		21.6%	3.5%	25.1%	28.4%
TLAC leverage ratio		7.25%		n.a.		7.25%		n.a.		7.25%	n.a.	7.25%	8.3%
(1)	A capital surcharge, equal to the higher of our <br>D-SIB<br> surcharge and the BCBS’s <br>G-SIB<br> surcharge, is applicable to risk-weighted capital. For leverage ratio, only 50% of our D-SIB surcharge for capital is the required surcharge.
---	---
(2)	The capital buffers include the capital conservation buffer of 2.5% and the countercyclical capital buffer (CCyB) as prescribed by OSFI. The CCyB, calculated in accordance with OSFI’s CAR guidelines, was 0.07% as at July 31, 2024 (April 30, 2024 – 0.05%; October 31, 2023 – 0.06%).
---	---
(3)	The DSB can range from 0% to 4% of total RWA and is currently set at 3.5%.
---	---
(4)	Minimum target requirements reflect CCyB requirements as at July 31, 2024 which are subject to change based on exposures held at the reporting date.
---	---
n.a.	not applicable
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Royal Bank of Canada Third Quarter 2024 43

The following table provides details on our regulatory capital, TLAC available, RWA, and on ratios for capital, leverage and TLAC. Our capital position remains strong and our capital, leverage and TLAC ratios remain well above OSFI regulatory targets.

	As at
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	July 31<br><br>2024		April 30<br><br>2024		October 31<br><br>2023
Capital<br><br>(1), (2)
CET1 capital	$	86,230	$	83,497	$	86,611
Tier 1 capital		95,724		92,444		93,904
Total capital		108,079		105,353		104,952
RWA used in calculation of capital ratios<br><br>(1), (2)
Credit risk	$	540,482	$	531,381	$	475,842
Market risk		32,920		35,156		40,498
Operational risk		87,775		87,165		79,883
Total RWA	$	661,177	$	653,702	$	596,223
Capital ratios and Leverage ratio<br><br>(1), (2)
CET1 ratio		13.0%		12.8%		14.5%
Tier 1 capital ratio		14.5%		14.1%		15.7%
Total capital ratio		16.3%		16.1%		17.6%
Leverage ratio		4.2%		4.2%		4.3%
Leverage ratio exposure	$	2,271,007	$	2,219,019	$	2,179,590
TLAC available and ratios<br><br>(1), (3)
TLAC available	$	187,656	$	179,902	$	184,916
TLAC ratio		28.4%		27.5%		31.0%
TLAC leverage ratio		8.3%		8.1%		8.5%
(1)	As prior period restatements are not required by OSFI, there was no impact from the adoption of IFRS 17 on regulatory capital, RWA, capital ratios, leverage ratio, TLAC available and TLAC ratios for periods prior to November 1, 2023.
---	---
(2)	Capital, RWA and capital ratios are calculated using OSFI’s CAR guideline and the Leverage ratio is calculated using OSFI’s LR guideline. Both the CAR guideline and LR guideline are based on the Basel III framework. The period ended October 31, 2023 reflects our adoption of the revised CAR and LR guidelines that came into effect in Q2 2023, as further updated on October 20, 2023 as part of OSFI’s implementation of the Basel III reforms. The periods ended July 31, 2024 and April 30, 2024 also reflect our adoption of the revised market risk and CVA frameworks that came into effect on November 1, 2023.
---	---
(3)	TLAC available and TLAC ratios are calculated using OSFI’s TLAC guideline. The TLAC standard is applied at the resolution entity level which for us is deemed to be Royal Bank of Canada and its subsidiaries. A resolution entity and its subsidiaries are collectively called a resolution group. The TLAC ratio and TLAC leverage ratio are calculated using the TLAC available as a percentage of total RWA and leverage exposure, respectively.
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44 Royal Bank of Canada Third Quarter 2024

Q3 2024 vs. Q2 2024

(1)	Represents rounded figures.
(2)	Represents net internal capital generation of $2.5 billion or 38 bps consisting of Net income available to shareholders excluding the impact of the specified item, less common and preferred share dividends and distributions on other equity instruments.
---	---
(3)	Excludes the specified item for transaction and integration costs relating to the HSBC Canada transaction.
---	---
(4)	Includes the impact of the specified item noted above.
---	---

Our CET1 ratio was 13.0%, up 20 bps from last quarter, mainly reflecting net internal capital generation, partially offset by RWA growth (excluding FX).

Total RWA increased by $7 billion, mainly due to the impact of net credit migration and foreign exchange translation. The net impact of business growth, mainly driven by wholesale and personal lending, partly offset by lower market risk, also contributed to the increase. In our CET1 ratio, the impact of foreign exchange translation on RWA is largely mitigated with economic hedges.

Our Tier 1 capital ratio of 14.5% was up 40 bps, mainly reflecting the factors noted above under the CET1 ratio and the net impact of Tier 1 issuances and redemptions.

Our Total capital ratio of 16.3% was up 20 bps, mainly reflecting the factors noted above under the Tier 1 capital ratio.

Our Leverage ratio of 4.2% was unchanged from last quarter, as net internal capital generation was offset by business-driven growth in leverage exposures.

Leverage exposures increased by $52 billion, primarily due to volume growth in repo-style transactions, interest-bearing deposits with banks and securities. The impact of foreign exchange translation also contributed to the increase.

Our TLAC ratio of 28.4% was up 90 bps, reflecting a favourable impact from a net increase in eligible external TLAC instruments, as well as the factors noted above under the Total capital ratio.

Our TLAC leverage ratio of 8.3% was up 20 bps, reflecting a favourable impact from a net increase in eligible external TLAC instruments, as well as the factors noted above under the Leverage ratio.

External TLAC instruments include long-term debt subject to conversion under the Bail-in regime. For further details, refer to Deposit and funding profile in the Liquidity and funding risk section.

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Royal Bank of Canada Third Quarter 2024 45

Selected capital management activity

The following table provides our selected capital management activity:

	For the three months ended<br>July 31, 2024								For the nine months ended<br>July 31, 2024
(Millions of Canadian dollars, except number of shares)	Issuance or<br>redemption date		Number of<br>shares<br>(000s)			Amount			Number of<br>shares<br>(000s)			Amount
Tier 1 capital
Common shares activity
Issued in connection with share-based compensation plans <br>(1)				683		$	66			1,311		$	126
Issued under the DRIP <br>(2)				–			–			11,850			1,460
Purchased for cancellation <br>(3)				(480	)		(7	)		(480	)		(7	)
Redemption of preferred shares, <br>Series C-2<br><br>(3)		November 7, 2023		–			–			(15	)		(23	)
Issuance of preferred shares, Series BU <br>(3), (4)		January 25, 2024		–			–			750			750
Issuance of limited recourse capital notes (LRCNs) Series 4 <br>(3), (4), (5)		April 24, 2024		–			–			1,000			1,370
Redemption of preferred shares, Series AZ <br>(3), (4)		May 24, 2024		(20,000	)		(500	)		(20,000	)		(500	)
Issuance of preferred shares, Series BW <br>(3), (4)		July 24, 2024		600			600			600			600
Tier 2 capital
Issuance of April 3, 2034 subordinated debentures <br>(3), (4)		April 2, 2024				$	–					$	2,000
Redemption of July 25, 2029 subordinated debentures <br>(3), (4)		July 25, 2024					(1,500	)					(1,500	)
Issuance of August 8, 2034 subordinated debentures <br>(3), (4)		July 29, 2024					1,250						1,250
(1)	Amounts include cash received for stock options exercised during the period and fair value adjustments to stock options.
---	---
(2)	On February 28, 2024, we announced our intention to satisfy requirements of the DRIP through open market share purchases with no discount from the Average Market Price (as defined in the DRIP) for our May 24, 2024 dividend and for future dividends declared until further notice. The requirements of the DRIP were satisfied through shares issued from treasury for the first two quarters of 2024 and through open market share purchases for the third quarter of 2024.
---	---
(3)	For further details, refer to Note 11 of our Condensed Financial Statements.
---	---
(4)	Non-Viability<br> Contingent Capital (NVCC) instruments.
---	---
(5)	For the LRCNs, the number of shares represents the number of notes issued.
---	---

On June 10, 2024, we announced a normal course issuer bid (NCIB) to purchase up to 30 million of our common shares, commencing on June 12, 2024 and continuing until June 11, 2025, or such earlier date as we complete the repurchase of all shares permitted under the bid. Since the inception of this NCIB, the total number of common shares repurchased and cancelled was approximately 480 thousand, at a cost of approximately $73 million.

We determine the amount and timing of purchases under the NCIB, subject to prior consultation with OSFI. Purchases may be made through the TSX, the NYSE and other designated exchanges and alternative Canadian trading systems. The price paid for repurchased shares is the prevailing market price at the time of acquisition.

On November 7, 2023, we redeemed all 15 thousand of our issued and outstanding Non-Cumulative First Preferred Shares Series C-2 at a redemption price of US$1,000 per share. Concurrently, we redeemed all 615 thousand Series C-2 depositary shares, each of which represents a one-fortieth interest in a Series C-2 share.

On January 25, 2024, we issued 750 thousand Non-Cumulative

5-Year Fixed Rate Reset First Preferred Shares Series BU (NVCC) to certain institutional investors at a price of $1,000 per share.

On April 2, 2024, we issued $2,000 million of NVCC subordinated debentures. The notes bear interest at a fixed rate of 5.096% per annum until April 3, 2029, and at the Daily Compounded Canadian Overnight Repo Rate Average plus 1.56% thereafter until their maturity on April 3, 2034.

On April 24, 2024, we issued US$1,000 million of LRCN Series 4 at a price of US$1,000 per note. The LRCN Series 4 bear interest at a fixed rate of 7.5% per annum until May 2, 2029. Thereafter, the interest rate on the LRCN Series 4 will reset every five years at a rate per annum equal to the prevailing 5-Year U.S. Treasury Rate plus 2.887% until their maturity on May 2, 2084.

On May 24, 2024, we redeemed all 20 million of our issued and outstanding Non-Cumulative

5-Year Rate Reset First Preferred Shares Series AZ at a redemption price of $25 per share.

On July 24, 2024, we issued 600 thousand Non-Cumulative

5-Year Fixed Rate Reset First Preferred Shares Series BW (NVCC) to certain institutional investors at a price of $1,000 per share.

On July 25, 2024, we redeemed all $1,500 million of our outstanding NVCC 2.74% subordinated debentures due July 25, 2029 for 100% of their principal amount plus accrued interest to, but excluding, the redemption date.

On July 29, 2024, we issued $1,250 million of NVCC subordinated debentures. The notes bear interest at a fixed rate of 4.829% per annum until August 8, 2029, and at the Daily Compounded Canadian Overnight Repo Rate Average plus 1.55% thereafter until their maturity on August 8, 2034.

On August 24, 2024, we redeemed all 20 million of our issued and outstanding Non-Cumulative

5-Year Rate Reset First Preferred Shares Series BB at a redemption price of $25 per share.

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46 Royal Bank of Canada Third Quarter 2024

Selected share data

(1)

	As at July 31, 2024
(Millions of Canadian dollars,<br>except number of shares and as otherwise noted)	Number of<br>shares<br>(000s)			Amount			Dividends<br>declared per<br>share
Common shares issued		1,415,053		$	20,977		$	1.42
Treasury shares – common shares <br>(2)		(1,387	)		(191	)
Common shares outstanding		1,413,666		$	20,786
Stock options and awards
Outstanding		8,049
Exercisable		3,626
First preferred shares issued
Non-cumulative<br> Series BB <br>(3), (4)		20,000		$	500		$	0.23
Non-cumulative<br> Series BD <br>(3), (4)		24,000			600			0.20
Non-cumulative<br> Series BF <br>(3), (4)		12,000			300			0.19
Non-cumulative<br> Series BH <br>(4)		6,000			150			0.31
Non-cumulative<br> Series BI <br>(4)		6,000			150			0.31
Non-cumulative<br> Series BO <br>(3), (4)		14,000			350			0.37
Non-cumulative<br> Series BT <br>(3), (4), (5)		750			750			4.20%
Non-cumulative<br> Series BU <br>(3), (4), (5)		750			750			7.41%
Non-cumulative<br> Series BW <br>(3), (4), (5)		600			600			6.70%
Other equity instruments issued
Limited recourse capital notes Series 1 <br>(3), (4), (6), (7)		1,750			1,750			4.50%
Limited recourse capital notes Series 2 <br>(3), (4), (6), (7)		1,250			1,250			4.00%
Limited recourse capital notes Series 3 <br>(3), (4), (6), (7)		1,000			1,000			3.65%
Limited recourse capital notes Series 4<br>(3), (4), (6), (7)		1,000			1,370			7.50%
Preferred shares and other equity instruments issued		89,100			9,520
Treasury instruments – preferred shares and other equity instruments <br>(2)		(39	)		(28	)
Preferred shares and other equity instruments outstanding		89,061		$	9,492
Dividends on common shares				$	2,009
Dividends on preferred shares and distributions on other equity instruments <br>(8)					106
(1)	For further details about our capital management activity, refer to Note 11 of our Condensed Financial Statements.
---	---
(2)	Positive amounts represent a short position and negative amounts represent a long position.
---	---
(3)	Dividend rate will reset every five years.
---	---
(4)	NVCC instruments.
---	---
(5)	The dividends declared per share represent the per annum dividend rate applicable to the shares issued as at the reporting date.
---	---
(6)	For LRCN Series, the number of shares represent the number of notes issued and the dividends declared per share represent the annual interest rate percentage applicable to the notes issued as at the reporting date.
---	---
(7)	In connection with the issuance of LRCN Series 1, on July 28, 2020, we issued $1,750 million of First Preferred Shares Series BQ (Series BQ); in connection with the issuance of LRCN Series 2, on November 2, 2020, we issued $1,250 million of First Preferred Shares Series BR (Series BR); in connection with the issuance of LRCN Series 3, on June 8, 2021, we issued $1,000 million of First Preferred Shares Series BS (Series BS); and in connection with the issuance of LRCN Series 4 on April 24, 2024, we issued US$1,000 million of First Preferred Shares Series BV (Series BV). The Series BQ, BR and BS preferred shares were issued at a price of $1,000 per share and the Series BV preferred shares were issued at a price of US$1,000 per share. The Series BQ, BR, BS and BV preferred shares were issued to a consolidated trust to be held as trust assets in connection with the LRCN structure. For further details, refer to Note 20 of our 2023 Annual Consolidated Financial Statements.
---	---
(8)	Excludes distributions to <br>non-controlling<br> interests.
---	---

As at August 23, 2024, the number of outstanding common shares was 1,414,455,806, net of treasury shares held of 596,325, and the number of stock options and awards was 7,959,865.

NVCC provisions require the conversion of the capital instrument into a variable number of common shares in the event that OSFI deems a bank to be non-viable or a federal or provincial government in Canada publicly announces that a bank has accepted or agreed to accept a capital injection. If a NVCC trigger event were to occur, our NVCC capital instruments as at July 31, 2024, which were the preferred shares Series BB, BD, BF, BH, BI, BO, BT, BU, BW, LRCN Series 1, LRCN Series 2, LRCN Series 3, LRCN Series 4 and subordinated debentures due on January 27, 2026, December 23, 2029, June 30, 2030, January 28, 2033, November 3, 2031, May 3, 2032, February 1, 2033, April 3, 2034, and August 8, 2034 would be converted into common shares pursuant to an automatic conversion formula with a conversion price based on the greater of: (i) a contractual floor price of $5.00 (subject to adjustment in certain circumstances), and (ii) the current market price of our common shares at the time of the trigger event (10-day weighted average). Based on a floor price of $5.00 and including an estimate for accrued dividends and interest, these NVCC capital instruments would convert into a maximum of approximately 6.0 billion common shares, in aggregate, which would represent a dilution impact of 81.0% based on the number of common shares outstanding as at July 31, 2024.

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Royal Bank of Canada Third Quarter 2024 47

Accounting and control matters
Summary of accounting policies and estimates
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Our Condensed Financial Statements are presented in compliance with International Accounting Standard 34 Interim Financial Reporting . Our significant accounting policies are described in Note 2 of our audited 2023 Annual Consolidated Financial Statements and Note 2 of our Condensed Financial Statements.

Changes in accounting policies and disclosures

Changes in accounting policies

During the first quarter of 2024, we adopted IFRS 17 Insurance Contracts (IFRS 17), replacing IFRS 4 Insurance Contracts (IFRS 4). Our updated critical accounting policies and estimates for insurance and reinsurance contracts are described below. We have applied IFRS 17 retrospectively and restated comparative period results beginning November 1, 2022. Adjustments to the carrying amounts of insurance and reinsurance contracts at the transition date of November 1, 2022 were recognized in Retained earnings. The comparative period information for insurance and reinsurance contracts prior to November 1, 2022 is presented in accordance with our previous accounting policies.

As permitted by the transition provisions of IFRS 17, we reclassified certain financial assets between fair value classification categories at the date of initial application of IFRS 17. The reclassifications resulted in no adjustments to the carrying amounts of financial assets as at November 1, 2023. Retained earnings and Other components of equity as at November 1, 2023 were adjusted as a result with no net impact to total equity. As permitted, we elected not to restate comparative period results for these changes and accordingly, comparative period information for the impacted financial assets prior to November 1, 2023 is presented in accordance with our previous classifications.

Refer to Note 2 of our Condensed Financial Statements for details of these changes.

Insurance and reinsurance contracts

For insurance and reinsurance contracts measured using the general measurement method or variable fee approach, the carrying amount of a group of contracts is measured as the sum of the fulfilment cash flows and CSM. The fulfilment cash flows consist of the present value of future cash flows and a risk adjustment for non-financial risk, discounted using the current rates as at the reporting date determined using the discount rate methodologies below. The estimates of future cash flows consider probability-weighted scenarios and include all future cash flows that are within the contract boundary. The risk adjustment for non-financial risk is estimated using the margin approach and represents the compensation that we require for bearing the uncertainty about the amount and timing of cash flows that arise from non-financial risk as the insurance contract is fulfilled. The measurement of the group of contracts requires the use of judgment in setting methodologies and assumptions for mortality, morbidity, policy lapses and other policyholder behaviour, discount rates, policy dividends, and directly attributable expenses including acquisition expenses allocated using a systematic and rational method. Changes to the underlying assumptions and estimates may have a significant effect on Non-interest income – Insurance service result and Insurance investment result.

Discount rates used reflect the time value of money and are based on the characteristics of the insurance and reinsurance contracts. Cash flows that vary based on the returns on underlying items are discounted at rates reflecting that variability. For cash flows that do not vary based on the returns on underlying items, we predominantly apply the top-down approach in determining discount rates. Under this approach, the discount rates for the observable periods are determined using yield curves implied from a reference portfolio of assets adjusted to eliminate factors (market and credit risk of the financial assets) that are not relevant to the insurance contracts. For unobservable periods, the discount rates are interpolated using the last observable point and the ultimate discount rate that is composed of a risk-free rate and illiquidity premium. For a selected portfolio, the bottom-up approach is applied in determining the discount rate, which uses a risk-free rate plus an illiquidity premium to reflect the characteristics of the contracts. Management judgment is required in estimating the market and credit risk factors and illiquidity premiums in determining the discount rates.

For insurance contracts, the CSM represents the unearned profit (net inflows) for providing insurance coverage. For reinsurance contracts held, the CSM represents the net cost or net gain of purchasing reinsurance. The CSM for insurance and reinsurance contacts are released into income based on coverage units, which represent the quantity of service (insurance coverage as well as investment-return and investment-related services) provided by a group of contracts and are determined by considering the quantity of benefits provided under each contract and the expected coverage duration.

Refer to Note 2 of our Condensed Financial Statements for further information.

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48 Royal Bank of Canada Third Quarter 2024

Future changes in accounting policies and disclosures

IFRS 18

Presentation and Disclosure in Financial Statements

(IFRS 18)

In April 2024, the IASB issued IFRS 18 which sets out requirements for the presentation and disclosure of information in the financial statements. IFRS 18 will replace IAS 1 Presentation of Financial Statements and accompanies limited amendments to other standards which will be effective upon the adoption of the new standard. The standard introduces new defined subtotals to be presented in the Consolidated Statements of Income, disclosure of management-defined performance measures and requirements for grouping of information. This standard will be effective for us on November 1, 2027. We are currently assessing the impact of adopting this standard on our Consolidated Financial Statements.

Amendments to the Classification and Measurement of Financial Instruments

In May 2024, the IASB issued Amendments to the Classification and Measurement of Financial Instruments which amends IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures (the Amendments). The Amendments clarify classification guidance for financial assets with environmental, social and governance-linked features and introduce additional related disclosure requirements. The Amendments will be effective for us on November 1, 2026. We are currently assessing the impact of adopting the Amendments on our Consolidated Financial Statements.

Controls and procedures

Disclosure controls and procedures

As of July 31, 2024, management evaluated, under the supervision of and with the participation of the President and Chief Executive Officer and the Interim Chief Financial Officer, the effectiveness of our disclosure controls and procedures as defined under rules adopted by the Canadian securities regulatory authorities and the U.S. SEC. Based on that evaluation, the President and Chief Executive Officer and the Interim Chief Financial Officer concluded that our disclosure controls and procedures were effective as of July 31, 2024.

Internal control over financial reporting

No changes were made in our internal control over financial reporting during the quarter ended July 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. While we implemented and modified certain internal controls over financial reporting as a result of the HSBC Canada transaction and the November 1, 2023 adoption of the IFRS 17 standard, these changes did not have a material impact on our internal control over financial reporting.

Related party transactions

In the ordinary course of business, we provide normal banking services and operational services, and enter into other transactions with associated and other related corporations, including our joint venture entities, on terms similar to those offered to non-related parties. We grant loans to directors, officers and other employees at rates normally accorded to preferred clients. In addition, we offer deferred share and other plans to non-employee directors, executives and certain other key employees. For further information, refer to Notes 12 and 26 of our audited 2023 Annual Consolidated Financial Statements.

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Royal Bank of Canada Third Quarter 2024 49

Glossary

Adjusted Results and Measures

We believe that providing adjusted results as well as certain measures and ratios enhances comparability with prior periods and enables readers to better assess trends in the underlying businesses. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

•	Adjusted effective income tax rate<br> – calculated as effective income tax rate excluding the impact of specified items and amortization of acquisition-related intangibles.
•	Adjusted income before income taxes<br> – calculated as income before income taxes excluding the impact of specified items and amortization of acquisition-related intangibles.
---	---
•	Adjusted income taxes<br> – calculated as income taxes excluding the impact of specified items and amortization of acquisition-related intangibles.
---	---
•	Adjusted net income<br> – calculated as net income excluding the impact of specified items and amortization of acquisition-related intangibles.
---	---
•	Adjusted net income available to common shareholders<br> – calculated as net income available to common shareholders excluding the impact of specified items and amortization of acquisition-related intangibles.
---	---
•	Adjusted <br>non-interest<br> expense<br> – calculated as <br>non-interest<br> expense excluding the impact of specified items and amortization of acquisition-related intangibles.
---	---
•	Adjusted total revenue<br> – calculated as total revenue excluding the impact of specified items.
---	---

Acceptances

A bill of exchange or negotiable instrument drawn by the borrower for payment at maturity and accepted by a bank. The acceptance constitutes a guarantee of payment by the bank and can be traded in the money market. The bank earns a “stamping fee” for providing this guarantee.

Allowance for credit losses (ACL)

The amount deemed adequate by management to absorb expected credit losses as at the balance sheet date. The allowance is established for all financial assets subject to impairment assessment, including certain loans, debt securities, customers’ liability under acceptances, financial guarantees, and undrawn loan commitments. The allowance is changed by the amount of provision for credit losses recorded, which is charged to income, and decreased by the amount of write-offs net of recoveries in the period.

ACL on loans ratio

ACL on loans ratio is calculated as ACL on loans as a percentage of total loans and acceptances.

Asset-backed securities (ABS)

Securities created through the securitization of a pool of assets, for example auto loans or credit card loans.

Assets under administration (AUA)

Assets administered by us, which are beneficially owned by clients, unless otherwise noted. Services provided in respect of assets under administration are of an administrative nature, including safekeeping, collecting investment income, settling purchase and sale transactions, and record keeping.

Assets under management (AUM)

Assets managed by us, which are beneficially owned by clients, unless otherwise noted. Services provided in respect of assets under management include the selection of investments and the provision of investment advice. We have assets under management that are also administered by us and included in assets under administration.

Attributed capital

Attributed capital to our business segments is based on the Basel III regulatory capital and leverage requirements other than for our insurance segment for which we attribute capital based only on economic capital.

Auction rate securities (ARS)

Debt securities whose interest rates are regularly reset through an auction process.

Average earning assets, net

Average earning assets include interest-bearing deposits with other banks, securities, net of applicable allowance, assets purchased under reverse repurchase agreements and securities borrowed, loans, net of allowance, cash collateral and margin deposits. Insurance assets, and all other assets not specified are excluded. The averages are based on the daily balances for the period.

Basis point (bp)

One one-hundredth of a percentage point (.01%).

Collateral

Assets pledged as security for a loan or other obligation. Collateral can take many forms, such as cash, highly rated securities, property, inventory, equipment and receivables.

Collateralized debt obligation (CDO)

Securities with multiple tranches that are issued by structured entities and collateralized by debt obligations including bonds and loans. Each tranche offers a varying degree of risk and return so as to meet investor demand.

Commercial mortgage-backed securities (CMBS)

Securities created through the securitization of commercial mortgages.

Commitments to extend credit

Unutilized amount of credit facilities available to clients either in the form of loans, bankers’ acceptances and other on-balance sheet financing, or through off-balance sheet products such as guarantees and letters of credit.

Common Equity Tier 1 (CET1) capital

A regulatory Basel III capital measure comprised mainly of common shareholders’ equity less regulatory deductions and adjustments for goodwill and intangibles, defined benefit pension fund assets, shortfall in allowances and other specified items. The CET1 capital is calculated in accordance with OSFI’s CAR guideline. For more details, refer to the Capital management section.

Common Equity Tier 1 capital ratio

A risk-based capital measure calculated as CET1 capital divided by risk-weighted assets. The CET1 ratio is calculated in accordance with OSFI’s CAR guideline.

Contractual service margin (CSM)

Covered bonds

Full recourse on-balance sheet obligations issued by banks and credit institutions that are fully collateralized by assets over which investors enjoy a priority claim in the event of an issuer’s insolvency.

Credit default swaps (CDS)

A derivative contract that provides the purchaser with a one-time payment should the referenced entity/entities default (or a similar triggering event occur).

Derivative

A contract between two parties, which requires little or no initial investment and where payments between the parties are dependent upon the movements in price of an underlying instrument, index or financial rate. Examples of derivatives include swaps, options, forward rate agreements and futures. The notional amount of the derivative is the contract amount used as a reference point to calculate the payments to be exchanged between the two parties, and the notional amount itself is generally not exchanged by the parties.

Dividend payout ratio

Common dividends as a percentage of net income available to common shareholders.

Dividend yield

Dividends per common share divided by the average of the high and low share price in the relevant period.

Earnings per share (EPS), basic

Calculated as net income available to common shareholders divided by the average number of shares outstanding. Adjusted EPS, basic is calculated in the same manner, using adjusted net income available to common shareholders.

Earnings per share (EPS), diluted

Calculated as net income available to common shareholders divided by the average number of shares outstanding adjusted for the dilutive effects of stock options and other convertible securities. Adjusted EPS, diluted is calculated in the same manner, using adjusted net income available to common shareholders.

Efficiency ratio

Non-interest expense as a percentage of total revenue. Adjusted efficiency ratio is calculated in the same manner, using adjusted non-interest expense and adjusted total revenue.

Expected credit losses

The difference between the contractual cash flows due to us in accordance with the relevant contractual terms and the cash flows that we expect to receive, discounted to the balance sheet date.

Fair value

Fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

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50 Royal Bank of Canada Third Quarter 2024

Funding valuation adjustment

Funding valuation adjustments are calculated to incorporate cost and benefit of funding in the valuation of uncollateralized and under-collateralized OTC derivatives. Future expected cash flows of these derivatives are discounted to reflect the cost and benefit of funding the derivatives by using a funding curve, implied volatilities and correlations as inputs.

Guarantees and standby letters of credit

These primarily represent irrevocable assurances that a bank will make payments in the event that its client cannot meet its financial obligations to third parties. Certain other guarantees, such as bid and performance bonds, represent non-financial undertakings.

Hedge

A risk management technique used to mitigate exposure from market, interest rate or foreign currency exchange risk arising from normal banking operations. The elimination or reduction of such exposure is accomplished by establishing offsetting positions. For example, assets denominated in foreign currencies can be offset with liabilities in the same currencies or through the use of foreign exchange hedging instruments such as futures, options or foreign exchange contracts.

Hedge funds

A type of investment fund, marketed to accredited high net worth investors, that is subject to limited regulation and restrictions on its investments compared to retail mutual funds, and that often utilize aggressive strategies such as selling short, leverage, program trading, swaps, arbitrage and derivatives.

High-quality liquid assets (HQLA)

HQLA are cash or assets that can be converted into cash quickly through sales (or by being pledged as collateral) with no significant loss of value.

Impaired loans

Loans are classified as impaired when there has been a deterioration of credit quality to the extent that management no longer has reasonable assurance of timely collection of the full amount of principal and interest in accordance with the contractual terms of the loan agreement. Credit card balances are not classified as impaired as they are directly written off after payments are 180 days past due.

Insurance contracts

Insurance investment result

Calculated as Net investment income from the Insurance segment, Insurance finance income (expense) from insurance contracts and Reinsurance finance income (expense) from reinsurance contracts held.

Insurance service result

Calculated as Insurance revenue less Insurance service expense from insurance contracts and Net income (expense) from reinsurance contracts held.

International Financial Reporting Standards (IFRS)

IFRS are principles-based standards, interpretations and the framework adopted by the International Accounting Standards Board.

Leverage ratio

A Basel III regulatory measure, the ratio divides Tier 1 capital by the leverage exposure measure. The leverage ratio is a non-risk based measure and is calculated in accordance with OSFI’s LR guideline.

Leverage ratio exposure

The leverage ratio exposure is calculated in accordance with OSFI’s LR guideline and is defined as the sum of total assets plus off-balance sheet items after certain adjustments.

Liquidity Coverage Ratio (LCR)

The LCR is a Basel III standard that aims to ensure that an institution has an adequate stock of unencumbered HQLA that consists of cash or assets that can be converted into cash at little or no loss of value in private markets, to meet its liquidity needs for a 30 calendar day liquidity stress scenario. The LCR is calculated in accordance with OSFI’s LAR guideline.

Loan-to-value (LTV) ratio

Calculated based on the total facility amount for the residential mortgage and RBC Homeline Plan product divided by the value of the related residential property.

Master netting agreement

An agreement between us and a counterparty designed to reduce the credit risk of multiple derivative transactions through the creation of a legal right of offset of exposure in the event of a default.

Net interest income

The difference between what is earned on assets such as loans and securities and what is paid on liabilities such as deposits and subordinated debentures.

Net interest margin (NIM) on average earning assets, net

Calculated as net interest income divided by average earning assets, net.

Net Stable Funding Ratio (NSFR)

The NSFR is a Basel III standard that requires institutions to maintain a stable funding profile defined as available amount of stable funding (ASF) in relation to the composition of their assets and off-balance sheet activities defined as required amount of stable funding (RSF). The ratio should be at least equal to 100% on an ongoing basis. The NSFR is calculated in accordance with OSFI’s LAR guideline.

Normal course issuer bid (NCIB)

A program for the repurchase of our own shares for cancellation through a stock exchange that is subject to the various rules of the relevant stock exchange and securities commission.

Notional amount

The contract amount used as a reference point to calculate payments for derivatives.

Off-balance sheet financial instruments

A variety of arrangements offered to clients, which include credit derivatives, written put options, backstop liquidity facilities, stable value products, financial standby letters of credit, performance guarantees, credit enhancements, mortgage loans sold with recourse, commitments to extend credit, securities lending, documentary and commercial letters of credit, sponsor member guarantees, securities lending indemnifications and indemnifications.

Office of the Superintendent of Financial Institutions Canada (OSFI)

The primary regulator of federally chartered financial institutions and federally administered pension plans in Canada. OSFI’s mission is to safeguard policyholders, depositors and pension plan members from undue loss.

Operating leverage

The difference between our revenue growth rate and non-interest expense growth rate.

Options

A contract or a provision of a contract that gives one party (the option holder) the right, but not the obligation, to perform a specified transaction with another party (the option issuer or option writer) according to specified terms.

Provision for credit losses (PCL)

The amount charged to income necessary to bring the allowance for credit losses to a level determined appropriate by management. This includes provisions on performing and impaired financial assets.

PCL on loans ratio

PCL on loans ratio is calculated using PCL on loans as a percentage of average net loans and acceptances.

RBC Homeline Plan products

This is comprised of residential mortgages and secured personal loans whereby the borrower pledges real estate as collateral.

Reinsurance contracts held

Contracts under which we transfer significant insurance risk to a reinsurer that compensates us for claims relating to underlying insurance contracts issued by us and are accounted for separately from the underlying insurance contracts to which they relate.

Repurchase agreements

These involve the sale of securities for cash and the simultaneous repurchase of the securities for value at a later date. These transactions normally do not constitute economic sales and therefore are treated as collateralized financing transactions.

Return on common equity (ROE)

Net income available to common shareholders, expressed as a percentage of average common equity. Adjusted ROE is calculated in the same manner, using adjusted net income available to common shareholders.

Reverse repurchase agreements

These involve the purchase of securities for cash and the simultaneous sale of the securities for value at a later date. These transactions normally do not constitute economic sales and therefore are treated as collateralized financing transactions.

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Royal Bank of Canada Third Quarter 2024 51

Risk-weighted assets (RWA)

Assets adjusted by a regulatory risk-weight factor to reflect the riskiness of on- and off-balance sheet exposures. Certain assets are not risk-weighted, but deducted from capital. The calculation is defined by OSFI’s CAR guideline. For more details, refer to the Capital management section.

Securities lending

Transactions in which the owner of securities agrees to lend it under the terms of a prearranged contract to a borrower for a fee. Collateral for the loan consists of either high quality securities or cash and collateral value must be at least equal to the market value of the loaned securities. Borrowers pay a negotiated fee for loans collateralized by securities, whereas for cash collateral lenders pay borrowers interest at a negotiated rate and reinvest the cash collateral to earn a return. An intermediary such as a bank often acts as agent lender for the owner of the security in return for a share of the revenue earned by the owner from lending securities. Most often, agent lenders indemnify the owner against the risk of the borrower’s failure to redeliver the loaned securities – counterparty credit risk if a borrower defaults and market risk if the value of the non-cash collateral declines. The agent lender does not indemnify against the investment risk of re-investing cash collateral which is borne by the owner.

Securities sold short

A transaction in which the seller sells securities and then borrows the securities in order to deliver them to the purchaser upon settlement. At a later date, the seller buys identical securities in the market to replace the borrowed securities.

Securitization

The process by which various financial assets are packaged into newly issued securities backed by these assets.

Standardized Approach (SA) for credit risk

Risk weights prescribed by OSFI are used to calculate RWA for the credit risk exposures. Credit assessments by OSFI-recognized external credit rating agencies of Standard & Poor’s Financial Services LLP; Moody’s Investor Service, Inc.; Fitch Ratings, Inc.; and DBRS Limited are used to risk-weight our Sovereign and Bank exposures based on the standards and guidelines issued by OSFI.

Structured entities

A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding who controls the entity, such as when the activities that significantly affect the entity’s returns are directed by means of contractual arrangements. Structured entities often have restricted activities, narrow and well defined objectives, insufficient equity to finance their activities, and financing in the form of multiple contractually-linked instruments.

Taxable equivalent basis (teb)

Income from certain specified tax advantaged sources (U.S. tax credit investment business as well as eligible Canadian taxable corporate dividends received on or before December 31, 2023) is increased to a level that would make it comparable to income from taxable sources. There is an offsetting adjustment in the tax provision, thereby generating the same after-tax net income.

Tier 1 capital and Tier 1 capital ratio

Tier 1 capital comprises predominantly of CET1 capital, with additional Tier 1 items such as preferred shares, limited recourse capital notes and non-controlling interests in subsidiaries Tier 1 instruments. The Tier 1 capital ratio is calculated in accordance with OSFI’s CAR guideline by dividing Tier 1 capital by risk-weighted assets.

Tier 2 capital

Tier 2 capital consists mainly of subordinated debentures that meet certain criteria, certain loan loss allowances and non-controlling interests in subsidiaries’ Tier 2 instruments.

Total loss absorbing capacity (TLAC)

The aggregate of Tier 1 capital, Tier 2 capital, and external TLAC instruments which allow conversion in whole or in part into common shares under the Canada Deposit Insurance Corporation Act and meet all of the eligibility criteria under the guideline.

TLAC ratio

The risk-based TLAC ratio is defined as TLAC divided by total risk-weighted assets. The TLAC ratio is calculated in accordance with OSFI’s TLAC guideline.

TLAC leverage ratio

The TLAC leverage ratio is defined as TLAC divided by the leverage ratio exposure. The TLAC leverage ratio is calculated in accordance with OSFI’s TLAC guideline.

Total capital and total capital ratio

Total capital is defined as the total of Tier 1 and Tier 2 capital. The total capital ratio is calculated in accordance with OSFI’s CAR guideline by dividing total capital by risk-weighted assets.

Tranche

A security class created whereby the risks and returns associated with a pool of assets are packaged into several classes of securities offering different risk and return profiles from those of the underlying asset pool. Tranches are typically rated by ratings agencies, and reflect both the credit quality of underlying collateral as well as the level of protection based on the tranches’ relative subordination.

Unattributed capital

Unattributed capital represents common equity in excess of common equity attributed to our business segments and is reported in the Corporate Support segment.

Value-at-Risk (VaR)

A generally accepted risk-measurement concept that uses statistical models based on historical information to estimate within a given level of confidence the maximum loss in market value we would experience in our financial portfolio from an adverse one-day movement in market rates and prices.

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52 Royal Bank of Canada Third Quarter 2024

Enhanced Disclosure Task Force recommendations index

We aim to present transparent, high-quality risk disclosures by providing disclosures in our 2023 Annual Report, Q3 2024 Report to Shareholders (RTS), Supplementary Financial Information package (SFI), and Pillar 3 Report, in accordance with recommendations from the FSB’s Enhanced Disclosure Task Force (EDTF). Information within the SFI and Pillar 3 Report is not and should not be considered incorporated by reference into our Q3 2024 Report to Shareholders.

The following index summarizes our disclosure by EDTF recommendation:

			Location of disclosure
Type of Risk	Recommendation	Disclosure	RTS<br><br>page	Annual<br>Report page	SFI<br><br>page
General	1	Table of contents for EDTF risk disclosure	52	132	1
	2	Define risk terminology and measures		65-70,<br><br><br>130-131	–
	3	Top and emerging risks		63-65	–
	4	New regulatory ratios	41-44	109-114	–
Risk governance, risk management and business model	5	Risk management organization		65-70	–
	6	Risk culture		65-70	–
	7	Risk in the context of our business activities		117	–
	8	Stress testing		68-69,<br> 81	–
Capital adequacy and risk-weighted assets (RWA)	9	Minimum Basel III capital ratios and Domestic systemically important bank surcharge	42	109-114	–
	10	Composition of capital and reconciliation of the accounting balance sheet to the regulatory balance sheet		–	*
	11	Flow statement of the movements in regulatory capital		–	19
	12	Capital strategic planning		109-114	–
	13	RWA by business segments		–	20
	14	Analysis of capital requirement, and related measurement model information		71-74	*
	15	RWA credit risk and related risk measurements		–	*
	16	Movement of RWA by risk type		–	20
	17	Basel back-testing		68, <br>71-73	31
Liquidity	18	Quantitative and qualitative analysis of our liquidity reserve	33	88-89, 94-95	–
Funding	19	Encumbered and unencumbered assets by balance sheet category, and contractual obligations for rating downgrades	34, 36	90, 93	–
	20	Maturity analysis of consolidated total assets, liabilities and <br>off-balance<br> sheet commitments analyzed by remaining contractual maturity at the balance sheet date	40-41	97-98	–
	21	Sources of funding and funding strategy	34-36	90-92	–
Market risk	22	Relationship between the market risk measures for trading and <br>non-trading<br> portfolios and the balance sheet	31-32	85-86	–
	23	Decomposition of market risk factors	29-30	81-86	–
	24	Market risk validation and back-testing		81	–
	25	Primary risk management techniques beyond reported risk measures and parameters		81-84	–
Credit risk	26	Bank’s credit risk profile	25-29	71-81, 178-185	21-31,*
		Quantitative summary of aggregate credit risk exposures that reconciles to the balance sheet	71-76	124-129	*
	27	Policies for identifying impaired loans		73-75, 119, 149-151	–
	28	Reconciliation of the opening and closing balances of impaired loans and impairment allowances during the year		–	23, 28
	29	Quantification of gross notional exposure for <br>over-the-counter<br> derivatives or exchange-traded derivatives		76	32
	30	Credit risk mitigation, including collateral held for all sources of credit risk		74-75	*
Other	31	Other risk types		100-109	–
	32	Publicly known risk events		104-105, 223-224	–
*	These disclosure requirements are satisfied or partially satisfied by disclosures provided in our Pillar 3 Report for the quarter ended July 31, 2024 and for the year ended October 31, 2023.
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Royal Bank of Canada Third Quarter 2024 53

Interim Condensed Consolidated Financial Statements<br>(unaudited)
Interim Condensed Consolidated Balance Sheets<br>(unaudited)
---
	As at
---	---	---	---	---	---	---
(Millions of Canadian dollars)	July 31<br><br>2024			October 31<br><br>2023<br><br>(Restated – Note 2)
Assets
Cash and due from banks	$	55,230		$	61,989
Interest-bearing deposits with banks		57,409			71,086
Securities
Trading		180,441			190,151
Investment, net of applicable allowance <br>(Note 4)		250,744			219,579
		431,185			409,730
Assets purchased under reverse repurchase agreements and securities borrowed		325,401			340,191
Loans<br> <br>(Note 5)
Retail		619,452			569,951
Wholesale		358,143			287,826
		977,595			857,777
Allowance for loan losses <br>(Note 5)		(5,798	)		(5,004	)
		971,797			852,773
Other
Customers’ liability under acceptances		677			21,695
Derivatives		115,659			142,450
Premises and equipment		6,943			6,749
Goodwill		19,125			12,594
Other intangibles		8,032			5,903
Other assets		84,649			81,371
		235,085			270,762
Total assets	$	2,076,107		$	2,006,531
Liabilities and equity
Deposits<br> <br>(Note 7)
Personal	$	510,542		$	441,946
Business and government		809,380			745,075
Bank		41,343			44,666
		1,361,265			1,231,687
Other
Acceptances		708			21,745
Obligations related to securities sold short		33,972			33,651
Obligations related to assets sold under repurchase agreements and securities loaned		304,373			335,238
Derivatives		126,884			142,629
Insurance contract liabilities <br>(Note 8)		21,153			19,026
Other liabilities		89,823			96,022
		576,913			648,311
Subordinated debentures<br><br>(Note 11)		13,437			11,386
Total liabilities		1,951,615			1,891,384
Equity attributable to shareholders
Preferred shares and other equity instruments <br>(Note 11)		9,492			7,314
Common shares <br>(Note 11)		20,786			19,167
Retained earnings		86,065			81,715
Other components of equity		8,048			6,852
		124,391			115,048
Non-controlling interests		101			99
Total equity		124,492			115,147
Total liabilities and equity	$	2,076,107		$	2,006,531

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

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54 Royal Bank of Canada Third Quarter 2024

Interim Condensed Consolidated Statements of Income<br>(unaudited)
	For the three months ended						For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except per share amounts)	July 31<br> <br>2024			July 31<br> <br>2023<br> <br>(Restated – Note 2)			July 31<br> <br>2024			July 31<br> <br>2023<br> <br>(Restated – Note 2)
Interest and dividend income<br> <br>(Note 3)
Loans	$	14,433		$	11,219		$	39,635		$	31,600
Securities		4,482			3,751			13,230			9,932
Assets purchased under reverse repurchase agreements and securities borrowed		6,632			6,063			20,864			15,736
Deposits and other		1,543			1,801			4,724			5,221
		27,090			22,834			78,453			62,489
Interest expense<br> <br>(Note 3)
Deposits and other		12,432			9,775			35,225			26,203
Other liabilities		7,124			6,599			22,364			17,218
Subordinated debentures		207			174			582			481
		19,763			16,548			58,171			43,902
Net interest income		7,327			6,286			20,282			18,587
Non-interest income
Insurance service result <br>(Note 8)		214			149			604			566
Insurance investment result <br>(Note 8)		28			151			228			92
Trading revenue		507			485			1,944			1,984
Investment management and custodial fees		2,382			2,099			6,824			6,238
Mutual fund revenue		1,151			1,034			3,248			3,049
Securities brokerage commissions		413			362			1,232			1,100
Service charges		587			529			1,698			1,551
Underwriting and other advisory fees		676			472			2,016			1,442
Foreign exchange revenue, other than trading		292			289			841			1,044
Card service revenue		324			334			941			938
Credit fees		405			342			1,234			1,078
Net gains on investment securities		28			27			157			191
Income (loss) from joint ventures and associates		(57	)		(37	)		(27	)		4
Other		354			455			1,048			915
		7,304			6,691			21,988			20,192
Total revenue		14,631			12,977			42,270			38,779
Provision for credit losses<br> <br>(Notes 4 and 5)		659			616			2,392			1,748
Non-interest expense
Human resources <br>(Note 9)		5,406			4,764			15,660			14,187
Equipment		629			611			1,863			1,769
Occupancy		443			409			1,291			1,218
Communications		342			321			1,021			917
Professional fees		547			591			1,868			1,479
Amortization of other intangibles		426			369			1,151			1,114
Other		806			700			2,377			2,070
		8,599			7,765			25,231			22,754
Income before income taxes		5,373			4,596			14,647			14,277
Income taxes		887			736			2,629			3,604
Net income	$	4,486		$	3,860		$	12,018		$	10,673
Net income attributable to:
Shareholders	$	4,483		$	3,858		$	12,011		$	10,668
Non-controlling interests		3			2			7			5
	$	4,486		$	3,860		$	12,018		$	10,673
Basic earnings per share<br> <br>(in dollars) (Note 12)	$	3.09		$	2.73		$	8.35		$	7.56
Diluted earnings per share<br> <br>(in dollars) (Note 12)		3.09			2.73			8.34			7.55
Dividends per common share<br><br>(in dollars)		1.42			1.35			4.18			3.99

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

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Royal Bank of Canada Third Quarter 2024 55

Interim Condensed Consolidated Statements of Comprehensive Income<br>(unaudited)
	For the three months ended						For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)			July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)
Net income	$	4,486		$	3,860		$	12,018		$	10,673
Other comprehensive income (loss), net of taxes
Items that will be reclassified subsequently to income:
Net change in unrealized gains (losses) on debt securities and loans at fair value through other comprehensive income
Net unrealized gains (losses) on debt securities and loans at fair value through other comprehensive income		243			(85	)		1,113			527
Provision for credit losses recognized in income		–			(3	)		–			(3	)
Reclassification of net losses (gains) on debt securities and loans at fair value through other comprehensive income to income		(22	)		(21	)		(114	)		(134	)
		221			(109	)		999			390
Foreign currency translation adjustments
Unrealized foreign currency translation gains (losses)		548			(1,878	)		228			(1,296	)
Net foreign currency translation gains (losses) from hedging activities		(253	)		722			(158	)		175
Reclassification of losses (gains) on foreign currency translation to income		–			(160	)		–			(160	)
Reclassification of losses (gains) on net investment hedging activities to income		–			146			1			146
		295			(1,170	)		71			(1,135	)
Net change in cash flow hedges
Net gains (losses) on derivatives designated as cash flow hedges		359			10			50			(581	)
Reclassification of losses (gains) on derivatives designated as cash flow hedges to income		(271	)		(7	)		(580	)		79
		88			3			(530	)		(502	)
Items that will not be reclassified subsequently to income:
Remeasurement gains (losses) on employee benefit plans (Note 9)		37			147			183			(212	)
Net gains (losses) from fair value changes due to credit risk on financial liabilities designated at fair value through profit or loss		(47	)		(388	)		(1,061	)		(875	)
Net gains (losses) on equity securities designated at fair value through other comprehensive income		2			–			76			18
		(8	)		(241	)		(802	)		(1,069	)
Total other comprehensive income (loss), net of taxes		596			(1,517	)		(262	)		(2,316	)
Total comprehensive income (loss)	$	5,082		$	2,343		$	11,756		$	8,357
Total comprehensive income attributable to:
Shareholders	$	5,079		$	2,344		$	11,749		$	8,355
Non-controlling interests		3			(1	)		7			2
	$	5,082		$	2,343		$	11,756		$	8,357

The income tax effect on the Interim Condensed Consolidated Statements of Comprehensive Income is shown in the table below.

	For the three months ended						For the nine months ended
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023			July 31<br><br>2024			July 31<br><br>2023
Income taxes on other comprehensive income
Net unrealized gains (losses) on debt securities and loans at fair value through other comprehensive income	$	6		$	(71	)	$	302		$	120
Provision for credit losses recognized in income		(3	)		(1	)		(3	)		–
Reclassification of net losses (gains) on debt securities and loans at fair value through other comprehensive income to income		(3	)		(8	)		(31	)		(38	)
Unrealized foreign currency translation gains (losses)		(1	)		(1	)		(11	)		–
Net foreign currency translation gains (losses) from hedging activities		(96	)		267			(63	)		203
Reclassification of losses (gains) on net investment hedging activities to income		–			45			–			45
Net gains (losses) on derivatives designated as cash flow hedges		117			10			(8	)		(130	)
Reclassification of losses (gains) on derivatives designated as cash flow hedges to income		(102	)		(2	)		(217	)		32
Remeasurement gains (losses) on employee benefit plans		19			55			71			(17	)
Net gains (losses) from fair value changes due to credit risk on financial liabilities designated at fair value through profit or loss		(18	)		(150	)		(408	)		(337	)
Net gains (losses) on equity securities designated at fair value through other comprehensive income		1			(1	)		28			14
Total income tax expenses (recoveries)	$	(80	)	$	143		$	(340	)	$	(108	)

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

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56 Royal Bank of Canada Third Quarter 2024

Interim Condensed Consolidated Statements of Changes in Equity<br>(unaudited)
	For the three months ended July 31, 2024
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
																Other components of equity
(Millions of Canadian dollars)	Preferred<br>shares and<br>other equity<br>instruments			Common<br>shares			Treasury –<br>preferred<br><br>shares and<br><br>other equity<br>instruments			Treasury –<br><br>common<br><br>shares			Retained<br>earnings			FVOCI<br>securities<br>and loans			Foreign<br>currency<br>translation			Cash flow<br>hedges		Total other<br>components<br>of equity			Equity<br>attributable to<br>shareholders			Non-controlling<br><br>interests			Total<br><br>equity
Balance at beginning of period	$	9,420		$	20,918		$	19		$	(71	)	$	83,774		$	(1,082	)	$	6,388		$	2,138	$	7,444		$	121,504		$	100		$	121,604
Changes in equity
Issues of share capital and other equity instruments		600			66			–			–			(4	)		–			–			–		–			662			–			662
Common shares purchased for cancellation		–			(7	)		–			–			(66	)		–			–			–		–			(73	)		–			(73	)
Redemption of preferred shares and other equity instruments		(500	)		–			–			–			–			–			–			–		–			(500	)		–			(500	)
Sales of treasury shares and other equity instruments		–			–			550			1,609			–			–			–			–		–			2,159			–			2,159
Purchases of treasury shares and other equity instruments		–			–			(597	)		(1,729	)		–			–			–			–		–			(2,326	)		–			(2,326	)
Share-based compensation awards		–			–			–			–			(2	)		–			–			–		–			(2	)		–			(2	)
Dividends on common shares		–			–			–			–			(2,009	)		–			–			–		–			(2,009	)		–			(2,009	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(106	)		–			–			–		–			(106	)		(2	)		(108	)
Other		–			–			–			–			3			–			–			–		–			3			–			3
Net income		–			–			–			–			4,483			–			–			–		–			4,483			3			4,486
Total other comprehensive income (loss), net of taxes		–			–			–			–			(8	)		221			295			88		604			596			–			596
Balance at end of period	$	9,520		$	20,977		$	(28	)	$	(191	)	$	86,065		$	(861	)	$	6,683		$	2,226	$	8,048		$	124,391		$	101		$	124,492
	For the three months ended July 31, 2023 (Restated – Note 2)
																Other components of equity
(Millions of Canadian dollars)	Preferred<br>shares and<br>other equity<br>instruments			Common<br>shares			Treasury –<br>preferred<br>shares and<br>other equity<br>instruments			Treasury –<br>common<br>shares			Retained<br>earnings			FVOCI<br>securities<br><br>and loans			Foreign<br>currency<br>translation			Cash flow<br>hedges		Total other<br>components<br>of equity			Equity<br>attributable to<br>shareholders			Non-controlling<br><br>interests			Total<br><br>equity
Balance at beginning of period	$	7,323		$	17,984		$	(4	)	$	(127	)	$	77,917		$	(1,858	)	$	5,723		$	1,889	$	5,754		$	108,847		$	98		$	108,945
Changes in equity
Issues of share capital and other equity instruments		–			686			–			–			–			–			–			–		–			686			–			686
Common shares purchased for cancellation		–			–			–			–			–			–			–			–		–			–			–			–
Redemption of preferred shares and other equity instruments		–			–			–			–			–			–			–			–		–			–			–			–
Sales of treasury shares and other equity instruments		–			–			72			883			–			–			–			–		–			955			–			955
Purchases of treasury shares and other equity instruments		–			–			(61	)		(914	)		–			–			–			–		–			(975	)		–			(975	)
Share-based compensation awards		–			–			–			–			–			–			–			–		–			–			–			–
Dividends on common shares		–			–			–			–			(1,885	)		–			–			–		–			(1,885	)		–			(1,885	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(58	)		–			–			–		–			(58	)		(2	)		(60	)
Other		–			–			–			–			(1	)		–			–			–		–			(1	)		–			(1	)
Net income		–			–			–			–			3,858			–			–			–		–			3,858			2			3,860
Total other comprehensive income (loss), net of taxes		–			–			–			–			(241	)		(109	)		(1,167	)		3		(1,273	)		(1,514	)		(3	)		(1,517	)
Restated balance at end of period	$	7,323		$	18,670		$	7		$	(158	)	$	79,590		$	(1,967	)	$	4,556		$	1,892	$	4,481		$	109,913		$	95		$	110,008

Table of Contents

Royal Bank of Canada Third Quarter 2024 57

	For the nine months ended July 31, 2024
																Other components of equity
(Millions of Canadian dollars)	Preferred<br>shares and<br>other equity<br>instruments			Common<br>shares			Treasury –<br>preferred<br>shares and<br>other equity<br>instruments			Treasury –<br> <br>common<br> <br>shares			Retained<br>earnings			FVOCI<br>securities<br>and loans			Foreign<br>currency<br>translation			Cash flow<br>hedges			Total other<br>components<br>of equity			Equity<br>attributable to<br>shareholders			Non-controlling<br> <br>interests			Total<br> <br>equity
Balance at beginning of period	$	7,323		$	19,398		$	(9	)	$	(231	)	$	81,715		$	(2,516	)	$	6,612		$	2,756		$	6,852		$	115,048		$	99		$	115,147
Transition adjustment <br>(Note 2)		–			–			–			–			(656	)		656			–			–			656			–			–			–
Restated balance at beginning of period	$	7,323		$	19,398		$	(9	)	$	(231	)	$	81,059		$	(1,860	)	$	6,612		$	2,756		$	7,508		$	115,048		$	99		$	115,147
Changes in equity
Issues of share capital and other equity instruments		2,720			1,586			–			–			(18	)		–			–			–			–			4,288			–			4,288
Common shares purchased for cancellation		–			(7	)		–			–			(66	)		–			–			–			–			(73	)		–			(73	)
Redemption of preferred shares and other equity instruments		(523	)		–			–			–			2			–			–			–			–			(521	)		–			(521	)
Sales of treasury shares and other equity instruments		–			–			1,067			3,948			–			–			–			–			–			5,015			–			5,015
Purchases of treasury shares and other equity instruments		–			–			(1,086	)		(3,908	)		–			–			–			–			–			(4,994	)		–			(4,994	)
Share-based compensation awards		–			–			–			–			6			–			–			–			–			6			–			6
Dividends on common shares		–			–			–			–			(5,906	)		–			–			–			–			(5,906	)		–			(5,906	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(231	)		–			–			–			–			(231	)		(5	)		(236	)
Other		–			–			–			–			10			–			–			–			–			10			–			10
Net income		–			–			–			–			12,011			–			–			–			–			12,011			7			12,018
Total other comprehensive income (loss), net of taxes		–			–			–			–			(802	)		999			71			(530	)		540			(262	)		–			(262	)
Balance at end of period	$	9,520		$	20,977		$	(28)		$	(191	)	$	86,065		$	(861	)	$	6,683		$	2,226		$	8,048		$	124,391		$	101		$	124,492
	For the nine months ended July 31, 2023 (Restated – Note 2)
																Other components of equity
(Millions of Canadian dollars)	Preferred<br>shares and<br>other equity<br>instruments			Common<br>shares			Treasury –<br>preferred<br>shares and<br>other equity<br>instruments			Treasury –<br>common<br> <br>shares			Retained<br>earnings			FVOCI<br>securities<br>and loans			Foreign<br>currency<br>translation			Cash flow<br>hedges			Total other<br>components<br>of equity			Equity<br>attributable to<br>shareholders			Non-controlling<br>interests			Total<br> <br>equity
Balance at beginning of period	$	7,323		$	17,318		$	(5	)	$	(334	)	$	78,037		$	(2,357	)	$	5,688		$	2,394		$	5,725		$	108,064		$	111		$	108,175
Transition adjustment <br>(Note 2)		–			–			–			–			(2,359	)		–			–			–			–			(2,359	)		–			(2,359	)
Restated balance at beginning of period	$	7,323		$	17,318		$	(5	)	$	(334	)	$	75,678		$	(2,357	)	$	5,688		$	2,394		$	5,725		$	105,705		$	111		$	105,816
Changes in equity
Issues of share capital and other equity instruments		–			1,352			–			–			1			–			–			–			–			1,353			–			1,353
Common shares purchased for cancellation		–			–			–			–			–			–			–			–			–			–			–			–
Redemption of preferred shares and other equity instruments		–			–			–			–			–			–			–			–			–			–			–			–
Sales of treasury shares and other equity instruments		–			–			461			2,960			–			–			–			–			–			3,421			–			3,421
Purchases of treasury shares and other equity instruments		–			–			(449	)		(2,784	)		–			–			–			–			–			(3,233	)		–			(3,233	)
Share-based compensation awards		–			–			–			–			4			–			–			–			–			4			–			4
Dividends on common shares		–			–			–			–			(5,550	)		–			–			–			–			(5,550	)		–			(5,550	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(169	)		–			–			–			–			(169	)		(18	)		(187	)
Other		–			–			–			–			27			–			–			–			–			27			–			27
Net income		–			–			–			–			10,668			–			–			–			–			10,668			5			10,673
Total other comprehensive income (loss), net of taxes		–			–			–			–			(1,069	)		390			(1,132	)		(502	)		(1,244	)		(2,313	)		(3	)		(2,316	)
Restated balance at end of period	$	7,323		$	18,670		$	7		$	(158	)	$	79,590		$	(1,967	)	$	4,556		$	1,892		$	4,481		$	109,913		$	95		$	110,008

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

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58 Royal Bank of Canada Third Quarter 2024

Interim Condensed Consolidated Statements of Cash Flows<br>(unaudited)
	For the three months ended						For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)			July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)
Cash flows from operating activities
Net income	$	4,486		$	3,860		$	12,018		$	10,673
Adjustments for non-cash items and others
Provision for credit losses		659			616			2,392			1,748
Depreciation		333			324			991			952
Deferred income taxes		(776	)		166			(1,628	)		(191	)
Amortization and impairment of other intangibles		430			383			1,169			1,151
Net changes in investments in joint ventures and associates		57			37			27			(3	)
Losses (Gains) on investment securities		(28	)		(27	)		(157	)		(191	)
Losses (Gains) on disposition of businesses		34			(92	)		29			(92	)
Adjustments for net changes in operating assets and liabilities
Insurance contract liabilities		(46	)		532			2,127			1,958
Net change in accrued interest receivable and payable		(832	)		(167	)		757			1,786
Current income taxes		780			(749	)		665			(180	)
Derivative assets		14,540			8,235			30,156			38,362
Derivative liabilities		(9,684	)		(6,654	)		(19,286	)		(35,837	)
Trading securities		(6,875	)		(40,396	)		11,745			(28,398	)
Loans, net of securitizations		(11,341	)		(4,690	)		(45,057	)		(17,120	)
Assets purchased under reverse repurchase agreements and securities borrowed		(23,604	)		(11,912	)		15,234			(29,306	)
Obligations related to assets sold under repurchase agreements and securities loaned		24,652			42,907			(36,529	)		60,518
Obligations related to securities sold short		2,485			605			(587	)		1,142
Deposits, net of securitizations		33,662			5,618			43,352			27,974
Brokers and dealers receivable and payable		(865	)		1,127			(857	)		(1,877	)
Other		(4,848	)		9,313			(10,588	)		4,132
Net cash from (used in) operating activities		23,219			9,036			5,973			37,201
Cash flows from investing activities
Change in interest-bearing deposits with banks		(18,950	)		(5,770	)		13,677			2,179
Proceeds from sales and maturities of investment securities		38,794			39,464			147,325			116,661
Purchases of investment securities		(46,838	)		(56,943	)		(154,558	)		(145,776	)
Net acquisitions of premises and equipment and other intangibles		(717	)		(557	)		(1,609	)		(1,961	)
Net proceeds from (cash transferred for) dispositions		5			1,712			15			1,712
Cash used in acquisitions, net of cash acquired		–			–			(12,716	)		–
Net cash from (used in) investing activities		(27,706	)		(22,094	)		(7,866	)		(27,185	)
Cash flows from financing activities
Issuance of subordinated debentures		1,250			–			3,250			1,500
Repayment of subordinated debentures		(1,500	)		(110	)		(1,500	)		(170	)
Issue of common shares, net of issuance costs		63			16			119			58
Common shares purchased for cancellation		(73	)		–			(73	)		–
Issue of preferred shares and other equity instruments, net of issuance costs		596			–			2,702			–
Redemption of preferred shares and other equity instruments		(500	)		–			(521	)		–
Sales of treasury shares and other equity instruments		2,159			955			5,015			3,421
Purchases of treasury shares and other equity instruments		(2,326	)		(975	)		(4,994	)		(3,233	)
Dividends paid on shares and distributions paid on other equity instruments		(2,020	)		(1,234	)		(4,522	)		(4,327	)
Dividends/distributions paid to non-controlling interests		(2	)		(2	)		(5	)		(18	)
Change in short-term borrowings of subsidiaries		(688	)		(2,758	)		(4,507	)		(376	)
Repayment of lease liabilities		135			(167	)		(175	)		(496	)
Net cash from (used in) financing activities		(2,906	)		(4,275	)		(5,211	)		(3,641	)
Effect of exchange rate changes on cash and due from banks		1,250			(1,508	)		345			1,586
Net change in cash and due from banks		(6,143	)		(18,841	)		(6,759	)		7,961
Cash and due from banks at beginning of period <br>(1)		61,373			99,199			61,989			72,397
Cash and due from banks at end of period<br><br>(1)	$	55,230		$	80,358		$	55,230		$	80,358
Cash flows from operating activities include:
Amount of interest paid	$	20,372		$	16,014		$	56,080		$	39,041
Amount of interest received		26,499			21,557			76,379			58,239
Amount of dividends received		815			921			2,671			2,542
Amount of income taxes paid		767			1,470			2,843			3,878
(1)	We are required to maintain balances due to regulatory requirements or contractual restrictions from central banks, other regulatory authorities, and other counterparties. The total balances were $2 billion as at July 31, 2024 (April 30, 2024 – $2 billion; October 31, 2023 – $3 billion; July 31, 2023 – $2 billion; October 31, 2022 – $2 billion).
---	---

The accompanying notes are an integral part of these Interim Condensed Consolidated Financial Statements.

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Royal Bank of Canada Third Quarter 2024 59

Note 1 General information

Our unaudited Interim Condensed Consolidated Financial Statements (Condensed Financial Statements) are presented in compliance with International Accounting Standard (IAS) 34 Interim Financial Reporting . The Condensed Financial Statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with our audited 2023 Annual Consolidated Financial Statements and the accompanying notes included on pages 140 to 234 in our 2023 Annual Report. Unless otherwise stated, monetary amounts are stated in Canadian dollars. Tabular information is stated in millions of dollars, except as noted. On August 27, 2024, the Board of Directors authorized the Condensed Financial Statements for issue.

Note 2 Summary of significant accounting policies, estimates and judgments

Except as indicated below, the Condensed Financial Statements have been prepared using the same accounting policies and methods used in the preparation of our audited 2023 Annual Consolidated Financial Statements. Our significant accounting policies and future changes in accounting policies and disclosures that are not yet effective for us are described in Note 2 of our audited 2023 Annual Consolidated Financial Statements and updates are provided below.

Changes in accounting policies

During the first quarter of 2024, we adopted IFRS 17 Insurance Contracts (IFRS 17), replacing IFRS 4 Insurance Contracts (IFRS 4). Our updated accounting policies for insurance and reinsurance contracts are described below. We have applied IFRS 17 retrospectively and restated comparative period results beginning November 1, 2022, where applicable. Adjustments to the carrying amounts of insurance and reinsurance contracts at the transition date of November 1, 2022 were recognized in Retained earnings.

As permitted by the transition provisions of IFRS 17, we reclassified certain financial assets between fair value classification categories at the date of initial application of IFRS 17 as described below. The reclassifications resulted in no adjustments to carrying amounts of financial assets as at November 1, 2023. Retained earnings and Other components of equity as at November 1, 2023 were adjusted as a result with no net impact to total equity. We elected not to restate comparative period results for these changes and accordingly, comparative period information for the impacted financial assets prior to November 1, 2023 is presented in accordance with our previous classifications.

Insurance and reinsurance contracts

Contracts under which we accept significant insurance risk from a policyholder by agreeing to compensate the policyholder if a specified uncertain future event adversely affects the policyholder are insurance contracts, which includes reinsurance contracts issued. Contracts under which we transfer significant insurance risk to a reinsurer that compensates us for claims relating to underlying insurance contracts issued by us are reinsurance contracts held, and are accounted for separately from the underlying insurance contracts to which they relate. Embedded derivatives, investment components and promises to provide non-insurance services are separated from the insurance or reinsurance contract provided specific criteria are met. Insurance and reinsurance contracts are aggregated into portfolios that are subject to similar risks and are managed together, and then divided into groups based on the period of issuance and expected profitability. Groups are separately recognized and measured using one of three measurement models depending on the characteristics of the contracts:

•	For insurance contracts with direct participating features (applicable primarily to our segregated fund insurance contracts), the variable fee approach (VFA) is applied.
•	For insurance contracts and reinsurance contracts held with a short duration of one year or less (applicable primarily to our creditor reinsurance contracts issued, group life and health insurance contracts and travel insurance contracts), the premium allocation approach (PAA) is applied.
---	---
•	The general measurement method (GMM) is applied to all remaining contracts.
---	---

Under the GMM and VFA, the carrying amount of a group of insurance or reinsurance contracts is measured as the sum of the fulfilment cash flows and the contractual service margin (CSM). The carrying amount is also the sum of the balance for remaining coverage and the balance for incurred claims. The balance for remaining coverage comprises the fulfilment cash flows that relate to services that will be provided under the contracts in future periods and any remaining CSM at that date. The balance for incurred claims includes the fulfilment cash flows for incurred claims and expenses that have not yet been paid, including claims that have been incurred but not yet reported. The fulfilment cash flows consist of the present value of future cash flows and a risk adjustment for non-financial risk, discounted using the current rates as at the reporting date determined using the discount rate methodology below. The estimates of future cash flows consider probability-weighted scenarios and include all future cash flows that are within the contract boundary. The risk adjustment for non-financial risk is estimated using the margin approach and represents the compensation that we require for bearing the uncertainty about the amount and timing of cash flows that arise from non-financial risk as the insurance contract is fulfilled. The measurement of the groups of contracts requires the use of judgment in setting methodologies and assumptions for mortality, morbidity, policy lapses and other policyholder behaviour, policy dividends and directly attributable expenses, including acquisition costs allocated using a systematic and rational method. Changes to the underlying assumptions and estimates may have a significant effect on Non-interest income – Insurance service result and Insurance investment result. Subsequent changes in fulfilment cash flows related to future services adjust the CSM, unless the group is onerous in which case such changes are recognized in Non-interest income – Insurance service result along with changes related to past or current services.

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60 Royal Bank of Canada Third Quarter 2024

Note 2 Summary of significant accounting policies, estimates and judgments<br><br>(continued)

Discount rates used reflect the time value of money and are based on the characteristics of the insurance and reinsurance contracts. Cash flows that vary based on the returns on underlying items are discounted at rates reflecting that variability. For cash flows that do not vary based on the returns on underlying items, we predominantly apply the top-down approach in determining discount rates. Under this approach, the discount rates for the observable periods are determined using yield curves implied from a reference portfolio of assets adjusted to eliminate factors (credit and market risk of the financial assets) that are not relevant to the insurance contracts. For unobservable periods, the discount rates are interpolated using the last observable point and the ultimate discount rate, composed of a risk-free rate and illiquidity premium. For a selected portfolio, the bottom-up approach is applied in determining the discount rate, which uses a risk-free rate plus an illiquidity premium to reflect the characteristics of the contracts. Management judgment is required in estimating the market and credit risk factors and illiquidity premiums in determining the discount rates.

For insurance contracts, the CSM represents the unearned profit (net inflows) for providing insurance coverage. If there is a net outflow at the initial recognition of the group, the group is onerous and the net outflow is recognized in

Non-interest

income – Insurance service result immediately. For reinsurance contracts held, the CSM represents the net cost or net gain of purchasing reinsurance. The CSM for insurance and reinsurance contacts are released into income based on coverage units, which represent the quantity of service (insurance coverage as well as investment-return and investment-related services) provided by a group of contracts and are determined by considering the quantity of benefits provided under each contract and the expected coverage duration. Under the GMM, the CSM is adjusted for interest accretion using the discount rates that were

locked-in

at initial recognition of the groups or the discount rates that were

locked-in

at the transition date for groups where the fair value approach was applied. Under the VFA, the CSM is adjusted for changes in the amount of our share of the fair value of the underlying items, while the changes to the fair value of the underlying items, reflecting changes in the obligation to pay the policyholder, are recognized in

Non-interest

income – Insurance investment result.

Under the PAA, the liability for remaining coverage for each group is measured as the premiums received less insurance revenue recognized for services provided, while the liability for incurred claims is measured as the fulfillment cash flows for incurred claims.

Losses from the recognition of onerous groups of insurance contracts, regardless of the measurement model applied, are recognized in Non-interest income – Insurance service result immediately. Any losses recognized relating to future service can be reversed in subsequent periods if the group of contracts is no longer onerous.

The insurance and reinsurance contract balances are remeasured at the end of each reporting period. We have elected to update the accounting estimates made in the previous interim period when remeasuring the insurance and reinsurance contracts in subsequent interim and annual reporting periods.

An insurance or reinsurance contract is derecognized when it is extinguished or modified such that the modification results in a change in the measurement model, a substantially different contract boundary or a change in the scope of the applicable standard for measuring a component of the contract.

Insurance service result comprises Insurance revenue less Insurance service expense and Net income (expense) from reinsurance contracts held.

•	Insurance revenue is recognized as we provide insurance contract services under the groups of insurance contracts. For contracts measured using the PAA, the insurance revenue is generally recognized based on allocating expected premium receipts over the passage of time. For contracts measured using the GMM and VFA, insurance revenue represents the amount of consideration we expect to be entitled to in exchange for services in the period, which includes expected claims and expenses directly attributable to fulfilling insurance contracts (excluding any investment components), release of the risk adjustment for the period, CSM amortization to reflect services provided in the period, an allocation of premiums that relates to recovering insurance acquisition expenses and experience adjustments for premium receipts relating to current or past services.
•	Insurance service expense arising from insurance contracts include<br>s<br> incurred claims and other directly attributable expenses in the current period (excluding investment components), amortization and impairment losses relating to insurance acquisition cash flows where applicable, changes relating to past or current services and changes in loss components of onerous groups of contracts.
---	---
•	Net income (expense) from reinsurance contracts held represents the amounts recovered from the reinsurers less the allocation of premiums paid on reinsurance contracts held.
---	---

Insurance investment result comprises Net investment income, Net insurance finance income (expense) and Net reinsurance finance income (expense) from reinsurance contracts held.

•	Net investment income primarily comprises interest and dividend income and net gains (losses) on financial assets, including segregated fund assets, and derivatives relating to the Insurance segment. Financial assets supporting the Insurance segment are primarily measured at FVTPL and FVOCI.
•	Insurance and reinsurance finance income (expense) represents the net effect of and changes in the time value of money (including the time value of money relating to risk adjustment on <br>non-financial<br> risks) and financial risks on insurance contracts and reinsurance contracts held respectively.
---	---

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Royal Bank of Canada Third Quarter 2024 61

Impact of IFRS 17 transition excluding the impact of reclassifications of financial assets

Upon the adoption of IFRS 17, we applied IFRS 17 retrospectively by adjusting our Consolidated Balance Sheets as at November 1, 2022 and restating the comparative information for the year ended October 31, 2023. The full retrospective approach was applied for all insurance and reinsurance contracts unless it was impracticable to do so. The full retrospective approach was applied to all contracts measured using the PAA and all new contracts issued on and after November 1, 2022 measured using the GMM and VFA as if IFRS 17 had always been applied. Due to data availability and the inability to use hindsight, the fair value approach was applied to contracts issued before November 1, 2022 that were measured under the GMM and VFA. Under the fair value approach, each portfolio comprises only one group, and the CSM was calculated as the difference between the fair value of a group of contracts and the fulfilment cash flows using reasonable and supportable information available at the transition date. To determine the fair value of a group of contracts, the requirements of IFRS 13 Fair Value Measurement were applied based on the present value of expected future cash flows within the contract boundary using assumptions adjusted for market participants’ views, and includes a profit margin beyond the risk adjustment for non-financial risk to reflect what a market participant would require for accepting such contract obligations. The fulfilment cash flows and discount rates were determined as at the transition using the policies applicable to new business described above.

The adoption of IFRS 17 resulted in a reduction in Retained earnings of $2.4 billion, net of taxes, as at November 1, 2022. This is attributable to the establishment of the CSM and other remeasurement changes to insurance and reinsurance contracts and related tax effects. The CSM of all insurance contracts net of reinsurance contracts held as at November 1, 2022 was $1.8 billion. The following details the selected balances and totals impacted on our Consolidated Balance Sheets as at November 1, 2022:

(Millions of Canadian dollars)	As at November 1, 2022<br> before transition		Transition<br> adjustments			As at November 1, 2022<br> after transition
Assets
Segregated fund net assets <br>(1)	$	2,638	$	(2,638	)	$	–
Other
Other assets <br>(2)		80,300		4,261			84,561
Total assets	$	1,917,219	$	1,623		$	1,918,842
Liabilities
Segregated fund net liabilities <br>(3)	$	2,638	$	(2,638	)	$	–
Other
Insurance claims and policy benefit liabilities <br>(4)		11,511		(11,511	)		–
Insurance contract liabilities <br>(4)		–		18,226			18,226
Other liabilities <br>(5)		95,235		(95	)		95,140
Total liabilities	$	1,809,044	$	3,982		$	1,813,026
Total equity		108,175		(2,359	)		105,816
Total liabilities and equity	$	1,917,219	$	1,623		$	1,918,842
(1)	Segregated fund net assets are now presented within Other assets.
---	---
(2)	The increase is primarily attributable to the inclusion of segregated fund net assets, the increase in insurance contract assets, reinsurance contract held assets and the tax effects of the IFRS 17 transition adjustment.
---	---
(3)	Segregated fund insurance contracts are now presented within Insurance contract liabilities.
---	---
(4)	Insurance claims and policy benefit liabilities measured under IFRS 4 is replaced with Insurance contract liabilities measured under IFRS 17. The increase in these balances is attributable to presentation changes and remeasurement impacts including the establishment of the CSM for <br>in-force<br> contracts at transition.
---	---
(5)	Certain liabilities that were previously presented in Other liabilities are now included in the measurement of insurance contracts or reinsurance contracts held.
---	---

Impact of reclassifications of financial assets from IFRS 17 transition

As permitted by IFRS 17, we reclassified certain eligible financial assets held in respect of activities that relate to insurance contracts upon the adoption of IFRS 17. The changes were primarily a result of changes to the business models based on facts and circumstances that existed as at November 1, 2023, the date of the initial application of IFRS 17. We have applied these changes retrospectively by adjusting our Consolidated Balance Sheet as at November 1, 2023 with no restatement of comparative information. The following were reclassified as at November 1, 2023:

•	$8.3 billion of securities and $2.0 billion of loans from designated as FVTPL to classified as FVTPL;
•	$0.5 billion of securities and $0.3 billion of loans from designated as FVTPL to classified as FVOCI;
---	---
•	$1.7 billion of securities from classified as FVOCI to classified as FVTPL; and
---	---
•	$0.3 billion of securities from classified as FVTPL to designated as FVOCI.
---	---

The impacts of the reclassifications resulted in an increase in Other components of equity by $656 million, net of taxes, and a decrease in Retained earnings by the same amount, with no net impact to our total equity nor the carrying amounts of those assets.

Future changes in accounting policies and disclosures

IFRS 18

Presentation and Disclosure in Financial Statements

(IFRS 18)

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62 Royal Bank of Canada Third Quarter 2024

Note 2 Summary of significant accounting policies, estimates and judgments<br><br>(continued)

Amendments to the Classification and Measurement of Financial Instruments

Updates related to interest rate benchmark reform

As part of the interest rate benchmark reform, the publication of all remaining Canadian Dollar Offered Rate (CDOR) settings ceased on June 28, 2024 and relatedly, we have ceased Bankers’ Acceptance-based lending. As at July 31, 2024, and consistent with our transition plan, our exposure to financial instruments referencing CDOR and interest rates substantially similar to CDOR are no longer material to our Condensed Financial Statements.

Note 3 Fair value of financial instruments

Carrying value and fair value of financial instruments

The following tables provide a comparison of the carrying values and fair values for financial instruments classified or designated as fair value through profit or loss (FVTPL) and fair value through other comprehensive income (FVOCI), and financial instruments measured at amortized cost. Embedded derivatives are presented on a combined basis with the host contracts. Refer to Note 2 and Note 3 of our audited 2023 Annual Consolidated Financial Statements for a description of the valuation techniques and inputs used in the fair value measurement of our financial instruments. There have been no significant changes to our determination of fair value during the quarter.

	As at July 31, 2024
	Carrying value and fair value									Carrying value		Fair value
(Millions of Canadian dollars)	Financial<br> instruments<br> classified as<br> FVTPL			Financial<br> instruments<br> designated as<br> FVTPL		Financial<br> instruments<br> classified as<br> FVOCI		Financial<br> instruments<br> designated as<br> FVOCI		Financial<br> instruments<br> measured at<br> amortized cost		Financial<br> instruments<br> measured at<br> amortized cost		Total carrying<br> amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–		$	48,443	$	–	$	–	$	8,966	$	8,966	$	57,409	$	57,409
Securities
Trading		179,354			1,087		–		–		–		–		180,441		180,441
Investment, net of applicable allowance		–			–		150,499		1,178		99,067		95,027		250,744		246,704
		179,354			1,087		150,499		1,178		99,067		95,027		431,185		427,145
Assets purchased under reverse repurchase agreements and securities borrowed		264,532			–		–		–		60,869		60,869		325,401		325,401
Loans, net of applicable allowance
Retail		638			–		540		–		615,043		608,916		616,221		610,094
Wholesale		8,908			2,312		991		–		343,365		338,324		355,576		350,535
		9,546			2,312		1,531		–		958,408		947,240		971,797		960,629
Other
Derivatives		115,659			–		–		–		–		–		115,659		115,659
Other assets <br>(1)		9,627			9		–		–		47,889		47,889		57,525		57,525
Financial liabilities
Deposits
Personal	$	356		$	31,607					$	478,579	$	478,843	$	510,542	$	510,806
Business and government <br>(2)		174			148,652						660,554		661,586		809,380		810,412
Bank <br>(3)		–			9,320						32,023		32,028		41,343		41,348
		530			189,579						1,171,156		1,172,457		1,361,265		1,362,566
Other
Obligations related to securities sold short		33,972			–						–		–		33,972		33,972
Obligations related to assets sold under repurchase agreements and securities loaned		–			266,457						37,916		37,916		304,373		304,373
Derivatives		126,884			–						–		–		126,884		126,884
Other liabilities <br>(4)		(1,275	)		2						66,515		66,781		65,242		65,508
Subordinated debentures		–			–						13,437		13,469		13,437		13,469

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Royal Bank of Canada Third Quarter 2024 63

	As at October 31, 2023 (Restated – Note 2)
	Carrying value and fair value									Carrying value		Fair value
(Millions of Canadian dollars)	Financial<br> instruments<br> classified as<br> FVTPL			Financial<br> instruments<br> designated as<br> FVTPL		Financial<br> instruments<br> classified as<br> FVOCI		Financial<br> instruments<br> designated as<br> FVOCI		Financial<br> instruments<br> measured at<br> amortized cost		Financial<br> instruments<br> measured at<br> amortized cost		Total carrying<br> amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–		$	60,856	$	–	$	–	$	10,230	$	10,230	$	71,086	$	71,086
Securities
Trading		180,651			9,500		–		–		–		–		190,151		190,151
Investment, net of applicable<br> allowance		–			–		127,624		842		91,113		83,667		219,579		212,133
		180,651			9,500		127,624		842		91,113		83,667		409,730		402,284
Assets purchased under reverse repurchase agreements and securities borrowed		285,869			–		–		–		54,322		54,322		340,191		340,191
Loans, net of applicable allowance
Retail		114			362		280		–		566,376		542,480		567,132		543,236
Wholesale		5,629			3,619		597		–		275,796		268,843		285,641		278,688
		5,743			3,981		877		–		842,172		811,323		852,773		821,924
Other
Derivatives		142,450			–		–		–		–		–		142,450		142,450
Other assets <br>(1)		7,579			5		–		–		68,450		68,450		76,034		76,034
Financial liabilities
Deposits
Personal	$	109		$	26,702					$	415,135	$	412,886	$	441,946	$	439,697
Business and government <br>(2)		174			137,454						607,447		605,260		745,075		742,888
Bank <br>(3)		–			11,462						33,204		33,160		44,666		44,622
		283			175,618						1,055,786		1,051,306		1,231,687		1,227,207
Other
Obligations related to securities sold short		33,651			–						–		–		33,651		33,651
Obligations related to assets sold under repurchase agreements and securities loaned		–			298,679						36,559		36,559		335,238		335,238
Derivatives		142,629			–						–		–		142,629		142,629
Other liabilities <br>(4)		(937	)		11						92,539		92,441		91,613		91,515
Subordinated debentures		–			–						11,386		11,213		11,386		11,213
(1)	Includes Customers’ liability under acceptances and financial instruments recognized in Other assets.
---	---
(2)	Business and government deposits include deposits from regulated deposit-taking institutions other than banks.
---	---
(3)	Bank deposits refer to deposits from regulated banks and central banks.
---	---
(4)	Includes Acceptances and financial instruments recognized in Other liabilities.
---	---

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64 Royal Bank of Canada Third Quarter 2024

Note 3 Fair value of financial instruments<br><br>(continued)

Fair value of assets and liabilities measured at fair value on a recurring basis and classified using the fair value

hiera rch y

	As at
	July 31, 2024															October 31, 2023 (Restated – Note 2)
	Fair value measurements using								Nettingadjustments							Fair value measurements using									Nettingadjustments
(Millions of Canadian dollars)	Level 1		Level 2			Level 3					Fair value				Level 1			Level 2				Level 3
Financial assets
Interest-bearing deposits with banks	$	–	$	48,443		$	–					$	48,443			$	–		$	60,856			$	–			$	60,856
Securities
Trading
Debt issued or guaranteed by:
Canadian government <br>(1)
Federal		22,324		1,816			–						24,140				26,675			2,581				–				29,256
Provincial and municipal		–		14,395			–						14,395				–			16,389				–				16,389
U.S. federal, state, municipal and agencies <br>(1), (2)		255		32,359			–						32,614				2,249			50,439				–				52,688
Other OECD government <br>(3)		2,502		2,532			–						5,034				2,055			2,577				–				4,632
Mortgage-backed securities <br>(1)		–		2			–						2				–			2				–				2
Asset-backed securities		–		1,399			–						1,399				–			1,245				–				1,245
Corporate debt and other debt		–		24,295			–						24,295				–			22,615				–				22,615
Equities		73,848		2,278			2,436						78,562				58,826			2,232				2,266				63,324
		98,929		79,076			2,436						180,441				89,805			98,080				2,266				190,151
Investment
Debt issued or guaranteed by:
Canadian government <br>(1)
Federal		6,664		8,064			–						14,728				2,731			3,528				–				6,259
Provincial and municipal		–		5,207			–						5,207				–			2,748				–				2,748
U.S. federal, state, municipal and agencies <br>(1)		–		79,096			–						79,096				275			73,020				–				73,295
Other OECD government		3,351		6,884			–						10,235				–			6,192				–				6,192
Mortgage-backed securities <br>(1)		–		2,460			29						2,489				–			2,672				29				2,701
Asset-backed securities		–		9,440			–						9,440				–			8,706				–				8,706
Corporate debt and other debt		–		29,158			146						29,304				–			27,574				149				27,723
Equities		389		305			484						1,178				38			338				466				842
		10,404		140,614			659						151,677				3,044			124,778				644				128,466
Assets purchased under reverse repurchase agreements and securities borrowed		–		264,532			–						264,532				–			285,869				–				285,869
Loans		–		11,575			1,814						13,389				–			8,742				1,859				10,601
Other
Derivatives
Interest rate contracts		–		29,458			370						29,828				–			39,243				290				39,533
Foreign exchange contracts		–		64,242			1						64,243				–			89,644				4				89,648
Credit derivatives		–		217			–						217				–			224				–				224
Other contracts		3,344		20,123			28						23,495				2,352			13,927				111				16,390
Valuation adjustments		–		(934	)		2						(932	)			–			(1,805	)			4				(1,801	)
Total gross derivatives		3,344		113,106			401						116,851				2,352			141,233				409				143,994
Netting adjustments										)			(1,192	)												)		(1,544	)
Total derivatives													115,659															142,450
Other assets		5,010		4,618			8						9,636				4,152			3,421				11				7,584
	$	117,687	$	661,964		$	5,318			)		$	783,777			$	99,353		$	722,979			$	5,189		)	$	825,977
Financial liabilities
Deposits
Personal	$	–	$	31,355		$	608					$	31,963			$	–		$	26,428			$	383			$	26,811
Business and government		–		148,826			–						148,826				–			137,628				–				137,628
Bank		–		9,320			–						9,320				–			11,462				–				11,462
Other
Obligations related to securities sold short		14,892		19,080			–						33,972				14,391			19,260				–				33,651
Obligations related to assets sold under repurchase agreements and securities loaned		–		266,457			–						266,457				–			298,679				–				298,679
Derivatives
Interest rate contracts		–		26,245			918						27,163				–			41,249				952				42,201
Foreign exchange contracts		–		60,103			47						60,150				–			81,750				53				81,803
Credit derivatives		–		239			–						239				–			176				–				176
Other contracts		4,357		35,907			424						40,688				3,119			17,306				549				20,974
Valuation adjustments		–		(156	)		(8	)					(164	)			–			(982	)			1				(981	)
Total gross derivatives		4,357		122,338			1,381						128,076				3,119			139,499				1,555				144,173
Netting adjustments										)			(1,192	)												)		(1,544	)
Total derivatives													126,884															142,629
Other liabilities		261		(1,534	)		–						(1,273	)			370			(1,296	)			–				(926	)
	$	19,510	$	595,842		$	1,989			)		$	616,149			$	17,880		$	631,660			$	1,938		)	$	649,934

All values are in US Dollars.

(1)	As at July 31, 2024, residential and commercial mortgage-backed securities (MBS) included in all fair value levels of trading securities were $16,394 million and $nil (October 31, 2023 – $14,345 million and $nil), respectively, and in all fair value levels of Investment securities were $26,766 million and $2,421 million (October 31, 2023 – $24,365 million and $2,618 million), respectively.
(2)	United States (U.S.).
---	---
(3)	Organisation for Economic <br>Co-operation<br> and Development (OECD).
---	---

Table of Contents

Royal Bank of Canada Third Quarter 2024 65

Fair value measurements using significant unobservable inputs (Level 3 Instruments)

A financial instrument is classified as Level 3 in the fair value hierarchy if one or more of its unobservable inputs may significantly affect the measurement of its fair value. In preparing the financial statements, appropriate levels for these unobservable input parameters are chosen so that they are consistent with prevailing market evidence or management judgment. Due to the unobservable nature of the prices or rates, there may be uncertainty about the valuation of these Level 3 financial instruments.

During the three months ended July 31, 2024, there were no significant changes made to the valuation techniques and ranges and weighted averages of unobservable inputs used in the determination of fair value of Level 3 financial instruments. As at July 31, 2024, the impacts of adjusting one or more of the unobservable inputs by reasonably possible alternative assumptions did not change significantly from the impacts disclosed in our audited 2023 Annual Consolidated Financial Statements.

Changes in fair value measurement for instruments measured on a recurring basis and categorized in Level 3

	For the three months ended July 31, 2024
(Millions of Canadian dollars)	Fair value<br> at beginning<br> of period			Gains (losses)<br> included<br> in earnings			Gains (losses)<br> included in<br> OCI<br>(1)			Purchases<br> (issuances)			Settlement<br> (sales) and<br> other<br>(2)			Transfers<br> into<br> Level 3			Transfers<br> out of<br> Level 3			Fair value<br> at end of<br> period			Gains<br> (losses) included<br> in earnings for<br> positions still held
Assets
Securities
Trading
Debt issued or guaranteed by:
U.S. state, municipal and agencies	$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Asset-backed securities		–			–			–			–			–			–			–			–			–
Corporate debt and other debt		–			–			–			–			–			–			–			–			–
Equities		2,392			(136	)		2			216			(38	)		1			(1	)		2,436			(117	)
		2,392			(136	)		2			216			(38	)		1			(1	)		2,436			(117	)
Investment
Mortgage-backed securities		30			–			(1	)		–			–			–			–			29			n.a.
Corporate debt and other debt		144			–			6			–			(4	)		–			–			146			n.a.
Equities		476			–			11			–			(3	)		–			–			484			n.a.
		650			–			16			–			(7	)		–			–			659			n.a.
Loans		1,837			(33	)		21			78			(84	)		9			(14	)		1,814			(30	)
Other
Net derivative balances <br>(3)
Interest rate contracts		(647	)		43			–			(66	)		122			18			(18	)		(548	)		43
Foreign exchange contracts		(27	)		(9	)		1			(1	)		–			–			(10	)		(46	)		(9	)
Other contracts		(298	)		(24	)		(1	)		(11	)		4			(198	)		132			(396	)		(13	)
Valuation adjustments		(6	)		–			–			–			16			–			–			10			–
Other assets		9			–			–			–			(1	)		–			–			8			–
	$	3,910		$	(159	)	$	39		$	216		$	12		$	(170	)	$	89		$	3,937		$	(126	)
Liabilities
Deposits	$	(633	)	$	(39	)	$	–		$	(60	)	$	38		$	(3	)	$	89		$	(608	)	$	(23	)
	$	(633	)	$	(39	)	$	–		$	(60	)	$	38		$	(3	)	$	89		$	(608	)	$	(23	)

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66 Royal Bank of Canada Third Quarter 2024

Note 3 Fair value of financial instruments<br><br>(continued)
	For the three months ended July 31, 2023
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars)	Fair value<br> at beginning<br> of period			Gains (losses)<br> included<br> in earnings			Gains (losses)<br> included in<br> OCI (1)			Purchases<br> (issuances)			Settlement<br> (sales) and<br> other (2)			Transfers<br> into<br> Level 3			Transfers<br> out of<br> Level 3			Fair value<br> at end of<br> period			Gains<br> (losses) included<br> in earnings for<br> positions still held
Assets
Securities
Trading
Debt issued or guaranteed by:
U.S. state, municipal and agencies	$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Asset-backed securities		–			–			–			–			–			–			–			–			–
Corporate debt and other debt		19			–			–			–			(16	)		–			(3	)		–			–
Equities		2,177			(37	)		(28	)		70			(9	)		6			–			2,179			(13	)
		2,196			(37	)		(28	)		70			(25	)		6			(3	)		2,179			(13	)
Investment
Mortgage-backed securities		27			–			3			–			–			–			–			30			n.a.
Corporate debt and other debt		150			–			(9	)		–			–			–			–			141			n.a.
Equities		436			–			(6	)		1			–			–			–			431			n.a.
		613			–			(12	)		1			–			–			–			602			n.a.
Loans		2,410			(28	)		(58	)		61			(71	)		2			(5	)		2,311			(13	)
Other
Net derivative balances <br>(3)
Interest rate contracts		(638	)		(14	)		1			1			19			7			(8	)		(632	)		(8	)
Foreign exchange contracts		(56	)		3			(1	)		(9	)		11			–			6			(46	)		2
Other contracts		(413	)		(43	)		11			(23	)		17			(37	)		47			(441	)		(45	)
Valuation adjustments		16			–			–			–			(5	)		–			–			11			–
Other assets		13			–			–			–			(2	)		–			–			11			–
	$	4,141		$	(119	)	$	(87	)	$	101		$	(56	)	$	(22	)	$	37		$	3,995		$	(77	)
Liabilities
Deposits	$	(250	)	$	1		$	1		$	(80	)	$	13		$	(16	)	$	50		$	(281	)	$	5
	$	(250	)	$	1		$	1		$	(80	)	$	13		$	(16	)	$	50		$	(281	)	$	5
	For the nine months ended July 31, 2024
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars)	Fair value<br>at beginning<br>of period			Gains (losses)<br>included<br>in earnings			Gains (losses)<br>included in<br>OCI<br>(1)			Purchases<br>(issuances)			Settlement<br>(sales) and<br>other<br>(2)			Transfers<br>into<br>Level 3			Transfers<br>out of<br>Level 3			Fair value<br>at end of<br>period			Gains<br>(losses) included<br>in earnings for<br>positions still held
Assets
Securities
Trading
Debt issued or guaranteed by:
U.S. state, municipal and agencies	$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Asset-backed securities		–			–			–			–			–			–			–			–			–
Corporate debt and other debt		–			–			–			–			–			–			–			–			–
Equities		2,266			(190	)		(6	)		445			(78	)		1			(2	)		2,436			(149	)
		2,266			(190	)		(6	)		445			(78	)		1			(2	)		2,436			(149	)
Investment
Mortgage-backed securities		29			–			–			–			–			–			–			29			n.a.
Corporate debt and other debt		149			–			10			–			(13	)		–			–			146			n.a.
Equities		466			–			16			3			(3	)		2			–			484			n.a.
		644			–			26			3			(16	)		2			–			659			n.a.
Loans		1,859			(87	)		25			445			(324	)		50			(154	)		1,814			(81	)
Other
Net derivative balances <br>(3)
Interest rate contracts		(662	)		46			–			(80	)		135			30			(17	)		(548	)		55
Foreign exchange contracts		(49	)		(10	)		6			14			3			2			(12	)		(46	)		(3	)
Other contracts		(438	)		(139	)		5			(59	)		5			(284	)		514			(396	)		1
Valuation adjustments		3			–			–			(1	)		8			–			–			10			–
Other assets		11			–			–			–			(3	)		–			–			8			–
	$	3,634		$	(380	)	$	56		$	767		$	(270	)	$	(199	)	$	329		$	3,937		$	(177	)
Liabilities
Deposits	$	(383	)	$	(90	)	$	1		$	(417	)	$	76		$	(93	)	$	298		$	(608	)	$	(44	)
	$	(383	)	$	(90	)	$	1		$	(417	)	$	76		$	(93	)	$	298		$	(608	)	$	(44	)

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Royal Bank of Canada Third Quarter 2024 67

	For the nine months ended July 31, 2023
(Millions of Canadian dollars)	Fair value<br> at beginning<br> of period			Gains (losses)<br> included<br> in earnings			Gains (losses)<br> included in<br> OCI (1)			Purchases<br> (issuances)			Settlement<br> (sales) and<br> other (2)			Transfers<br> into<br> Level 3			Transfers<br> out of<br> Level 3			Fair value<br> at end of<br> period			Gains<br> (losses) included<br> in earnings for<br> positions still held
Assets
Securities
Trading
Debt issued or guaranteed by:
U.S. state, municipal and agencies	$	4		$	–		$	–		$	–		$	(4	)	$	–		$	–		$	–		$	–
Asset-backed securities		2			–			–			–			(2	)		–			–			–			–
Corporate debt and other debt		7			–			–			2			(16	)		17			(10	)		–			–
Equities		1,874			(159	)		(34	)		491			(41	)		48			–			2,179			(130	)
		1,887			(159	)		(34	)		493			(63	)		65			(10	)		2,179			(130	)
Investment
Mortgage-backed securities		28			–			1			1			–			–			–			30			n.a.
Corporate debt and other debt		151			–			(2	)		–			(8	)		–			–			141			n.a.
Equities		397			–			34			1			(1	)		–			–			431			n.a.
		576			–			33			2			(9	)		–			–			602			n.a.
Loans		1,692			(54	)		(35	)		1,300			(452	)		30			(170	)		2,311			–
Other
Net derivative balances <br>(3)
Interest rate contracts		(859	)		(10	)		6			(7	)		194			30			14			(632	)		(9	)
Foreign exchange contracts		(132	)		4			10			(8	)		48			–			32			(46	)		(2	)
Other contracts		(785	)		(6	)		21			(61	)		83			(96	)		403			(441	)		(35	)
Valuation adjustments		53			–			–			–			(42	)		–			–			11			–
Other assets		15			–			–			–			(4	)		–			–			11			–
	$	2,447		$	(225	)	$	1		$	1,719		$	(245	)	$	29		$	269		$	3,995		$	(176	)
Liabilities
Deposits	$	(241	)	$	(26	)	$	1		$	(157	)	$	19		$	(67	)	$	190		$	(281	)	$	(8	)
	$	(241	)	$	(26	)	$	1		$	(157	)	$	19		$	(67	)	$	190		$	(281	)	$	(8	)
(1)	These amounts include the foreign currency translation gains or losses arising on consolidation of foreign subsidiaries relating to the Level 3 instruments, where applicable. The unrealized gains on Investment securities recognized in OCI were $<br>10 million for the three months ended July 31, 2024 (July 31, 2023 – gains of $3 million) and gains of $20 million for the nine months ended July 31, 2024 (July 31, 2023 – gains of $33 million), excluding the translation gains or losses arising on consolidation.
---	---
(2)	Other includes amortization of premiums or discounts recognized in net income.
---	---
(3)	Net derivatives as at July 31, 2024 included derivative assets of $401 million (July 31, 2023 – $345 million) and derivative liabilities of $1,381 million (July 31, 2023 – $1,453 million).
---	---
n.a.	not applicable
---	---

Transfers between fair value hierarchy levels for instruments carried at fair value on a recurring basis

Transfers between Level 1 and Level 2, and transfers into and out of Level 3 are assumed to occur at the end of the period. For an asset or a liability that transfers into Level 3 during the period, the entire change in fair value for the period is excluded from the Gains (losses) included in earnings for positions still held column of the above reconciliation, whereas for transfers out of Level 3 during the period, the entire change in fair value for the period is included in the same column of the above reconciliation.

Transfers between Level 1 and 2 are dependent on whether fair value is obtained on the basis of quoted market prices in active markets (Level 1).

During the three months ended July 31, 2024, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $564 million and Investment U.S. federal, state, municipal and agencies debt of $417 million. During the three months ended July 31, 2023, transfers out of Level 1 to Level 2 included Obligations related to securities sold short of $151 million.

During the three months ended July 31, 2024 and July 31, 2023, there were no significant transfers out of Level 2 to Level 1.

During the nine months ended July 31, 2024, transfers out of Level 1 to Level 2 included Investment U.S. federal, state, municipal and agencies debt of $1,038 million and Trading U.S. federal, state, municipal and agencies debt of $822 million. During the nine months ended July 31, 2023, transfers out of Level 1 to Level 2 included Investment U.S. federal, state, municipal and agencies debt of $435 million, Obligations related to securities sold short of $151 million, and Trading U.S. federal, state, municipal and agencies debt of $112 million.

During the nine months ended July 31, 2024 and July 31, 2023, there were no significant transfers out of Level 2 to Level 1.

Transfers between Level 2 and Level 3 are primarily due to either a change in the market observability for an input, or a change in an unobservable input’s significance to a financial instrument’s fair value.

During the three months ended July 31, 2024 , transfers out of Level 2 to Level 3 included Other contracts due to changes in the significance of unobservable inputs. During the three months ended July 31, 2023, there were no significant transfers out of Level 2 to Level 3.

Table of Contents

68 Royal Bank of Canada Third Quarter 2024

Note 3 Fair value of financial instruments<br><br>(continued)

During the three months ended July 31, 2024, transfers out of Level 3 to Level 2 included Other contracts due to changes in the significance of unobservable inputs and changes in the market observability of inputs . During the three months ended July 31, 2023, there were no significant transfers out of Level 3 to Level 2.

During the nine months ended July 31, 2024, transfers out of Level 2 to Level 3 included Other contracts due to changes in the significance of unobservable inputs and changes in the market observability of inputs. During the nine months ended July 31, 2023, there were no significant transfers out of Level 2 to Level 3.

During the nine months ended July 31, 2024, transfers out of Level 3 to Level 2 included Other contracts, Deposits and Loans due to changes in the significance of unobservable inputs and changes in the market observability of inputs. During the nine months ended July 31, 2023, transfers out of Level 3 to Level 2 included Other contracts and Loans due to changes in the market observability of inputs and changes in the significance of unobservable inputs.

Net interest income from financial instruments

Interest and dividend income arising from financial assets and financial liabilities and the associated costs of funding are reported in Net interest

income.

	For the three months ended				For the nine months ended
(Millions of Canadian dollars)	July 31<br><br>2024		July 31<br><br>2023		July 31<br><br>2024		July 31<br><br>2023
Interest and dividend income<br><br>(1), (2)
Financial instruments measured at fair value through profit or loss	$	8,678	$	8,546	$	27,583	$	22,203
Financial instruments measured at fair value through other comprehensive income		1,927		1,383		5,162		3,439
Financial instruments measured at amortized cost		16,485		12,905		45,708		36,847
		27,090		22,834		78,453		62,489
Interest expense<br><br>(1)
Financial instruments measured at fair value through profit or loss		8,432		7,531		26,227		20,046
Financial instruments measured at amortized cost		11,331		9,017		31,944		23,856
		19,763		16,548		58,171		43,902
Net interest income	$	7,327	$	6,286	$	20,282	$	18,587
(1)	Excludes interest and dividend income for the three months ended July 31, 2024 of $222 million (July 31, 2023 – $186 million<br>)<br> and for the nine months ended July 31, 2024 of $656 million (July 31, 2023 – $554 million<br>),<br> and interest expense for the three months ended July 31, 2024 of $54 <br>million<br>(July 31, 2023 – $83<br>million<br>) and for the nine months ended July 31, 2024 of $77 million (July 31, 2023 – $100<br>million<br>) presented in Insurance investment result in the Interim Condensed Consolidated Statements of Income.
---	---
(2)	Includes dividend income for the three months ended July 31, 2024 of $778 million<br><br>(July 31, 2023 – $803 million) and for the nine months ended July 31, 2024 of $2,511 million (July 31, 2023 – $2,396 million) presented in Interest and dividend income in the Interim Condensed Consolidated Statements of Income.
---	---
Note 4 Securities
---

Unrealized gains and losses on securities at FVOCI

(1), (2)

	As at
	July 31, 2024<br>(3)									October 31, 2023
(Millions of Canadian dollars)	Cost/<br> Amortized<br> cost		Gross<br> unrealized<br> gains		Gross<br> unrealized<br> losses			Fair value		Cost/<br> Amortized<br> cost		Gross<br> unrealized<br> gains		Gross<br> unrealized<br> losses			Fair value
Debt issued or guaranteed by:
Canadian government
Federal	$	14,725	$	29	$	(26	)	$	14,728	$	6,609	$	1	$	(351	)	$	6,259
Provincial and municipal		5,216		31		(40	)		5,207		3,396		2		(650	)		2,748
U.S. federal, state, municipal and agencies		80,327		423		(1,654	)		79,096		75,326		343		(2,374	)		73,295
Other OECD government		10,271		11		(47	)		10,235		6,200		1		(9	)		6,192
Mortgage-backed securities		2,514		1		(26	)		2,489		2,762		–		(61	)		2,701
Asset-backed securities		9,422		24		(6	)		9,440		8,752		5		(51	)		8,706
Corporate debt and other debt		29,248		116		(60	)		29,304		27,774		44		(95	)		27,723
Equities		720		463		(5	)		1,178		493		357		(8	)		842
	$	152,443	$	1,098	$	(1,864	)	$	151,677	$	131,312	$	753	$	(3,599	)	$	128,466
(1)	Excludes $99,067 million of held-to-collect securities as at July 31, 2024 that are carried at amortized cost, net of allowance for credit losses (October 31, 2023 – $91,113 million).
---	---
(2)	Gross unrealized gains and losses includes $(35) million of allowance for credit losses on debt securities at FVOCI as at July 31, 2024 (October 31, 2023 – $(33) million) recognized in income and Other components of equity.
---	---
(3)	These amounts reflect certain reclassifications made upon the adoption of IFRS 17 as at November 1, 2023 with no restatement of comparative information. Refer to Note 2 for further details.
---	---

Table of Contents

Royal Bank of Canada Third Quarter 2024 69

Allowance for credit losses on investment securities

The following tables reconcile the opening and closing allowance for debt securities at FVOCI and amortized cost by stage. Reconciling items include the following:

•	Transfers between stages, which are presumed to occur before any corresponding remeasurement of the allowance.
•	Purchases, which reflect the allowance related to assets newly recognized during the period, including those assets that were derecognized following a modification of terms.
---	---
•	Sales and maturities, which reflect the allowance related to assets derecognized during the period without a credit loss being incurred, including those assets that were derecognized following a modification of terms.
---	---
•	Changes in risk, parameters and exposures, which comprise the impact of changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions; partial repayments; changes in the measurement following a transfer between stages; and unwinding of the time value discount due to the passage of time.
---	---

Allowance for credit losses – securities at FVOCI

(1)

	For the three months ended
	July 31, 2024											July 31, 2023
	Performing					Impaired						Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2		Stage 3<br>(2)			Total			Stage 1			Stage 2			Stage 3 (2)			Total
Balance at beginning of period	$	6		$	–	$	(39	)	$	(33	)	$	3		$	2		$	(25	)	$	(20	)
Provision for credit losses
Transfers to stage 1		–			–		–			–			1			(1	)		–			–
Transfers to stage 2		–			–		–			–			–			–			–			–
Transfers to stage 3		–			–		–			–			–			–			–			–
Purchases		2			–		–			2			1			–			–			1
Sales and maturities		(1	)		–		–			(1	)		–			(1	)		–			(1	)
Changes in risk, parameters and exposures		(2	)		–		(2	)		(4	)		(2	)		(1	)		(2	)		(5	)
Exchange rate and other		–			–		1			1			–			1			1			2
Balance at end of period	$	5		$	–	$	(40	)	$	(35	)	$	3		$	–		$	(26	)	$	(23	)
	For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	July 31, 2024											July 31, 2023
	Performing					Impaired						Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2		Stage 3<br>(2)			Total			Stage 1			Stage 2			Stage 3 (2)			Total
Balance at beginning of period	$	4		$	–	$	(37	)	$	(33	)	$	3		$	1		$	(23	)	$	(19	)
Provision for credit losses
Transfers to stage 1		–			–		–			–			1			(1	)		–			–
Transfers to stage 2		–			–		–			–			–			–			–			–
Transfers to stage 3		–			–		–			–			–			–			–			–
Purchases		8			–		–			8			4			–			–			4
Sales and maturities		(3	)		–		–			(3	)		(1	)		(1	)		–			(2	)
Changes in risk, parameters and exposures		(5	)		–		(6	)		(11	)		(3	)		1			(7	)		(9	)
Exchange rate and other		1			–		3			4			(1	)		–			4			3
Balance at end of period	$	5		$	–	$	(40	)	$	(35	)	$	3		$	–		$	(26	)	$	(23	)
(1)	Expected credit losses on debt securities at FVOCI are not separately recognized on the balance sheet as the related securities are recorded at fair value. The cumulative amount of credit losses recognized in income is presented in Other components of equity.
---	---
(2)	Reflects changes in the allowance for purchased credit impaired securities.
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Table of Contents

70 Royal Bank of Canada Third Quarter 2024

Note 4 Securities<br><br>(continued)

Allowance for credit losses – securities at amortized cost

	For the three months ended
	July 31, 2024											July 31, 2023
	Performing						Impaired					Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2			Stage 3		Total			Stage 1			Stage 2			Stage 3		Total
Balance at beginning of period	$	8		$	13		$	–	$	21		$	9		$	13		$	–	$	22
Provision for credit losses
Transfers to stage 1		–			–			–		–			–			–			–		–
Transfers to stage 2		–			–			–		–			–			–			–		–
Transfers to stage 3		–			–			–		–			–			–			–		–
Purchases		2			–			–		2			3			–			–		3
Sales and maturities		(2	)		–			–		(2	)		–			–			–		–
Changes in risk, parameters and exposures		–			(2	)		–		(2	)		(1	)		2			–		1
Exchange rate and other		(1	)		1			–		–			(1	)		(1	)		–		(2	)
Balance at end of period	$	7		$	12		$	–	$	19		$	10		$	14		$	–	$	24
	For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	July 31, 2024											July 31, 2023
	Performing						Impaired					Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2			Stage 3		Total			Stage 1			Stage 2			Stage 3		Total
Balance at beginning of period	$	8		$	15		$	–	$	23		$	8		$	14		$	–	$	22
Provision for credit losses
Transfers to stage 1		–			–			–		–			–			–			–		–
Transfers to stage 2		–			–			–		–			–			–			–		–
Transfers to stage 3		–			–			–		–			–			–			–		–
Purchases		6			–			–		6			8			–			–		8
Sales and maturities		(2	)		–			–		(2	)		–			–			–		–
Changes in risk, parameters and exposures		(4	)		(3	)		–		(7	)		(6	)		1			–		(5	)
Exchange rate and other		(<br>1	)		–			–		(1	)		–			(1	)		–		(1	)
Balance at end of period	$	7		$	12		$	–	$	19		$	10		$	14		$	–	$	24

Credit risk exposure by internal risk rating

The following table presents the fair value of debt securities at FVOCI and gross carrying amount of securities at amortized cost. Risk ratings are based on internal ratings used in the measurement of expected credit losses as at the reporting date, as outlined in the internal ratings maps in the Credit risk section of our 2023 Annual Report.

	As at
	July 31, 2024								October 31, 2023
	Performing				Impaired				Performing				Impaired
(Millions of Canadian dollars)	Stage 1		Stage 2		Stage 3<br>(1)		Total		Stage 1		Stage 2		Stage 3 (1)		Total
Investment securities
Securities at FVOCI
Investment grade	$	149,556	$	8	$	–	$	149,564	$	126,732	$	1	$	–	$	126,733
Non-investment grade		789		–		–		789		742		–		–		742
Impaired		–		–		146		146		–		–		149		149
		150,345		8		146		150,499		127,474		1		149		127,624
Items not subject to impairment <br>(2)								1,178								842
							$	151,677							$	128,466
Securities at amortized cost
Investment grade	$	98,182	$	–	$	–	$	98,182	$	89,947	$	–	$	–	$	89,947
Non-investment grade		728		176		–		904		990		199		–		1,189
Impaired		–		–		–		–		–		–		–		–
		98,910		176		–		99,086		90,937		199		–		91,136
Allowance for credit losses		7		12		–		19		8		15		–		23
	$	98,903	$	164	$	–	$	99,067	$	90,929	$	184	$	–	$	91,113
(1)	Reflects $146 million of purchased credit impaired securities (October 31, 2023 – $149 million).
---	---
(2)	Investment securities at FVOCI not subject to impairment represent equity securities designated as FVOCI.
---	---

Table of Contents

Royal Bank of Canada Third Quarter 2024 71

Note 5 Loans and allowance for credit losses

Allowance for credit losses

	For the three months ended
	July 31, 2024													July 31, 2023
(Millions of Canadian dollars)	Balance at<br> beginning<br> of period		Provision<br> for credit<br> losses			Net<br> <br>write-offs			Exchange<br> rate and<br> other			Balance at<br> end of<br> period		Balance at<br> beginning<br> of period		Provision<br> for credit<br> losses			Net<br> <br>write-offs			Exchange<br> rate and<br> other			Balance at<br> end of<br> period
Retail
Residential mortgages	$	569	$	36		$	(2	)	$	(4	)	$	599	$	480	$	(5	)	$	(4	)	$	(8	)	$	463
Personal		1,371		188			(154	)		(8	)		1,397		1,165		97			(106	)		(4	)		1,152
Credit cards		1,139		169			(155	)		3			1,156		980		154			(117	)		–			1,017
Small business		230		46			(24	)		(6	)		246		225		23			(11	)		(2	)		235
Wholesale		2,714		246			(202	)		(50	)		2,708		1,886		349			(117	)		(67	)		2,051
Customers’ liability under acceptances		51		(20	)		–			1			32		41		1			–			(1	)		41
	$	6,074	$	665		$	(537	)	$	(64	)	$	6,138	$	4,777	$	619		$	(355	)	$	(82	)	$	4,959
Presented as:
Allowance for loan losses	$	5,715										$	5,798	$	4,332										$	4,495
Other liabilities – Provisions		302											303		397											416
Customers’ liability under acceptances		51											32		41											41
Other components of equity		6											5		7											7
	For the nine months ended
	July 31, 2024													July 31, 2023
(Millions of Canadian dollars)	Balance at<br> beginning<br> of period		Provision<br> for credit<br> losses			Net<br><br>write-offs			Exchange<br> rate and<br> other			Balance at<br> end of<br> period		Balance at<br> beginning<br> of period		Provision<br> for credit<br> losses			Net<br><br>write-offs			Exchange<br> rate and<br> other			Balance at<br> end of<br> period
Retail
Residential mortgages	$	481	$	138		$	(8	)	$	(12	)	$	599	$	432	$	57		$	(13	)	$	(13	)	$	463
Personal		1,228		603			(427	)		(7	)		1,397		1,043		402			(287	)		(6	)		1,152
Credit cards		1,069		575			(490	)		2			1,156		893		459			(334	)		(1	)		1,017
Small business		194		122			(58	)		(12	)		246		194		70			(27	)		(2	)		235
Wholesale		2,326		980			(484	)		(114	)		2,708		1,574		779			(188	)		(114	)		2,051
Customers’ liability under acceptances		50		(19	)		–			1			32		45		(4	)		–			–			41
	$	5,348	$	2,399		$	(1,467	)	$	(142	)	$	6,138	$	4,181	$	1,763		$	(849	)	$	(136	)	$	4,959
Presented as:
Allowance for loan losses	$	5,004										$	5,798	$	3,753										$	4,495
Other liabilities – Provisions		288											303		378											416
Customers’ liability under acceptances		50											32		45											41
Other components of equity		6											5		5											7

The following table reconciles the opening and closing allowance for each major product of loans and commitments as determined by our modelled, scenario-weighted allowance and the application of expert credit judgment as applicable. Reconciling items include the following:

•	Transfers between stages, which are presumed to occur before any corresponding remeasurements of the allowance.
•	Originations, which reflect the allowance related to assets newly recognized during the period, including those assets that were derecognized following a modification of terms.
---	---
•	Maturities, which reflect the allowance related to assets derecognized during the period without a credit loss being incurred, including those assets that were derecognized following a modification of terms.
---	---
•	Changes in risk, parameters and exposures, which comprise the impact of changes in model inputs or assumptions, including changes in forward-looking macroeconomic conditions; partial repayments and additional draws on existing facilities; changes in the measurement following a transfer between stages; and unwinding of the time value discount due to the passage of time in stage 1 and stage 2.
---	---

Table of Contents

72 Royal Bank of Canada Third Quarter 2024

Note 5 Loans and allowance for credit losses<br><br>(continued)

Allowance for credit losses – Retail and wholesale loans

	For the three months ended
	July 31, 2024												July 31, 2023
	Performing						Impaired						Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2			Stage 3			Total			Stage 1			Stage 2			Stage 3			Total
Residential mortgages
Balance at beginning of period	$	245		$	118		$	206		$	569		$	238		$	103		$	139		$	480
Provision for credit losses
Transfers to stage 1		39			(37	)		(2	)		–			38			(38	)		–			–
Transfers to stage 2		(8	)		8			–			–			(4	)		6			(2	)		–
Transfers to stage 3		(2	)		(13	)		15			–			–			(4	)		4			–
Originations		21			–			–			21			22			–			–			22
Maturities		(5	)		(6	)		–			(11	)		(4	)		(4	)		–			(8	)
Changes in risk, parameters and exposures		(66	)		68			24			26			(63	)		29			15			(19	)
Write-offs		–			–			(6	)		(6	)		–			–			(7	)		(7	)
Recoveries		–			–			4			4			–			–			3			3
Exchange rate and other		(1	)		1			(4	)		(4	)		–			(2	)		(6	)		(8	)
Balance at end of period	$	223		$	139		$	237		$	599		$	227		$	90		$	146		$	463
Personal
Balance at beginning of period	$	296		$	887		$	188		$	1,371		$	298		$	747		$	120		$	1,165
Provision for credit losses
Transfers to stage 1		149			(148	)		(1	)		–			177			(177	)		–			–
Transfers to stage 2		(17	)		18			(1	)		–			(20	)		21			(1	)		–
Transfers to stage 3		(2	)		(36	)		38			–			–			(13	)		13			–
Originations		27			–			–			27			31			–			–			31
Maturities		(12	)		(48	)		–			(60	)		(10	)		(32	)		–			(42	)
Changes in risk, parameters and exposures		(141	)		226			136			221			(182	)		189			101			108
Write-offs		–			–			(190	)		(190	)		–			–			(135	)		(135	)
Recoveries		–			–			36			36			–			–			29			29
Exchange rate and other		3			(4	)		(7	)		(8	)		(2	)		1			(3	)		(4	)
Balance at end of period	$	303		$	895		$	199		$	1,397		$	292		$	736		$	124		$	1,152
Credit cards
Balance at beginning of period	$	192		$	947		$	–		$	1,139		$	199		$	781		$	–		$	980
Provision for credit losses
Transfers to stage 1		151			(151	)		–			–			120			(120	)		–			–
Transfers to stage 2		(26	)		26			–			–			(31	)		31			–			–
Transfers to stage 3		(1	)		(127	)		128			–			–			(103	)		103			–
Originations		10			–			–			10			3			–			–			3
Maturities		(1	)		(15	)		–			(16	)		(3	)		(9	)		–			(12	)
Changes in risk, parameters and exposures		(123	)		270			28			175			(92	)		241			14			163
Write-offs		–			–			(210	)		(210	)		–			–			(164	)		(164	)
Recoveries		–			–			55			55			–			–			47			47
Exchange rate and other		2			2			(1	)		3			–			–			–			–
Balance at end of period	$	204		$	952		$	–		$	1,156		$	196		$	821		$	–		$	1,017
Small business
Balance at beginning of period	$	74		$	78		$	78		$	230		$	76		$	79		$	70		$	225
Provision for credit losses
Transfers to stage 1		15			(15	)		–			–			9			(9	)		–			–
Transfers to stage 2		(5	)		5			–			–			(4	)		4			–			–
Transfers to stage 3		–			(1	)		1			–			1			(3	)		2			–
Originations		11			–			–			11			12			–			–			12
Maturities		(5	)		(5	)		–			(10	)		(4	)		(4	)		–			(8	)
Changes in risk, parameters and exposures		(10	)		14			41			45			(13	)		11			21			19
Write-offs		–			–			(27	)		(27	)		–			–			(14	)		(14	)
Recoveries		–			–			3			3			–			–			3			3
Exchange rate and other		–			1			(7	)		(6	)		1			–			(3	)		(2	)
Balance at end of period	$	80		$	77		$	89		$	246		$	78		$	78		$	79		$	235
Wholesale
Balance at beginning of period	$	757		$	924		$	1,033		$	2,714		$	668		$	632		$	586		$	1,886
Provision for credit losses
Transfers to stage 1		101			(101	)		–			–			45			(44	)		(1	)		–
Transfers to stage 2		(26	)		29			(3	)		–			(28	)		29			(1	)		–
Transfers to stage 3		(1	)		(7	)		8			–			(3	)		(17	)		20			–
Originations		150			–			–			150			169			–			–			169
Maturities		(96	)		(109	)		–			(205	)		(129	)		(76	)		–			(205	)
Changes in risk, parameters and exposures		(108	)		198			211			301			(34	)		208			211			385
Write-offs		–			–			(211	)		(211	)		–			–			(126	)		(126	)
Recoveries		–			–			9			9			–			–			9			9
Exchange rate and other		1			1			(52	)		(50	)		(10	)		(10	)		(47	)		(67	)
Balance at end of period	$	778		$	935		$	995		$	2,708		$	678		$	722		$	651		$	2,051

Table of Contents

Royal Bank of Canada Third Quarter 2024 73

	For the nine months ended
	July 31, 2024												July 31, 2023
	Performing						Impaired						Performing						Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2			Stage 3			Total			Stage 1			Stage 2			Stage 3			Total
Residential mortgages
Balance at beginning of period	$	223		$	90		$	168		$	481		$	235		$	65		$	132		$	432
Provision for credit losses
Transfers to stage 1		72			(70	)		(2	)		–			70			(70	)		–			–
Transfers to stage 2		(18	)		26			(8	)		–			(23	)		31			(8	)		–
Transfers to stage 3		(4	)		(29	)		33			–			(1	)		(9	)		10			–
Originations <br>(1)		72			–			–			72			65			–			–			65
Maturities		(13	)		(13	)		–			(26	)		(12	)		(6	)		–			(18	)
Changes in risk, parameters and exposures		(110	)		135			67			92			(107	)		80			37			10
Write-offs		–			–			(17	)		(17	)		–			–			(23	)		(23	)
Recoveries		–			–			9			9			–			–			10			10
Exchange rate and other		1			–			(13	)		(12	)		–			(1	)		(12	)		(13	)
Balance at end of period	$	223		$	139		$	237		$	599		$	227		$	90		$	146		$	463
Personal
Balance at beginning of period	$	280		$	793		$	155		$	1,228		$	285		$	661		$	97		$	1,043
Provision for credit losses
Transfers to stage 1		408			(407	)		(1	)		–			474			(473	)		(1	)		–
Transfers to stage 2		(54	)		57			(3	)		–			(63	)		65			(2	)		–
Transfers to stage 3		(3	)		(95	)		98			–			(1	)		(38	)		39			–
Originations <br>(1)		88			–			–			88			79			–			–			79
Maturities		(33	)		(134	)		–			(167	)		(32	)		(82	)		–			(114	)
Changes in risk, parameters and exposures		(383	)		681			384			682			(450	)		604			283			437
Write-offs		–			–			(525	)		(525	)		–			–			(371	)		(371	)
Recoveries		–			–			98			98			–			–			84			84
Exchange rate and other		–			–			(7	)		(7	)		–			(1	)		(5	)		(6	)
Balance at end of period	$	303		$	895		$	199		$	1,397		$	292		$	736		$	124		$	1,152
Credit cards
Balance at beginning of period	$	203		$	866		$	–		$	1,069		$	177		$	716		$	–		$	893
Provision for credit losses
Transfers to stage 1		426			(426	)		–			–			409			(409	)		–			–
Transfers to stage 2		(81	)		81			–			–			(73	)		73			–			–
Transfers to stage 3		(2	)		(353	)		355			–			(1	)		(295	)		296			–
Originations <br>(1)		23			–			–			23			10			–			–			10
Maturities		(3	)		(36	)		–			(39	)		(5	)		(24	)		–			(29	)
Changes in risk, parameters and exposures		(364	)		819			136			591			(320	)		760			38			478
Write-offs		–			–			(670	)		(670	)		–			–			(465	)		(465	)
Recoveries		–			–			180			180			–			–			131			131
Exchange rate and other		2			1			(1	)		2			(1	)		–			–			(1	)
Balance at end of period	$	204		$	952		$	–		$	1,156		$	196		$	821		$	–		$	1,017
Small business
Balance at beginning of period	$	70		$	66		$	58		$	194		$	73		$	73		$	48		$	194
Provision for credit losses
Transfers to stage 1		27			(27	)		–			–			27			(27	)		–			–
Transfers to stage 2		(14	)		14			–			–			(11	)		11			–			–
Transfers to stage 3		–			(6	)		6			–			–			(7	)		7			–
Originations <br>(1)		31			–			–			31			28			–			–			28
Maturities		(12	)		(15	)		–			(27	)		(11	)		(14	)		–			(25	)
Changes in risk, parameters and exposures		(23	)		44			97			118			(31	)		39			59			67
Write-offs		–			–			(67	)		(67	)		–			–			(35	)		(35	)
Recoveries		–			–			9			9			–			–			8			8
Exchange rate and other		1			1			(14	)		(12	)		3			3			(8	)		(2	)
Balance at end of period	$	80		$	77		$	89		$	246		$	78		$	78		$	79		$	235
Wholesale
Balance at beginning of period	$	774		$	785		$	767		$	2,326		$	597		$	585		$	392		$	1,574
Provision for credit losses
Transfers to stage 1		203			(202	)		(1	)		–			145			(144	)		(1	)		–
Transfers to stage 2		(121	)		128			(7	)		–			(63	)		65			(2	)		–
Transfers to stage 3		(5	)		(54	)		59			–			(7	)		(44	)		51			–
Originations <br>(1)		519			–			–			519			481			–			–			481
Maturities		(288	)		(291	)		–			(579	)		(345	)		(205	)		–			(550	)
Changes in risk, parameters and exposures		(299	)		572			767			1,040			(120	)		477			491			848
Write-offs		–			–			(521	)		(521	)		–			–			(212	)		(212	)
Recoveries		–			–			37			37			–			–			24			24
Exchange rate and other		(5	)		(3	)		(106	)		(114	)		(10	)		(12	)		(92	)		(114	)
Balance at end of period	$	778		$	935		$	995		$	2,708		$	678		$	722		$	651		$	2,051
(1)	Includes the impact of the HSBC Canada transaction. Refer to Note 6 for further details.
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74 Royal Bank of Canada Third Quarter 2024

Note 5 Loans and allowance for credit losses<br><br>(continued)

Key inputs and assumptions

The following provides an update on the key inputs and assumptions used in the measurement of expected credit losses. For further details, refer to Note 2 and Note 5 of our audited 2023 Annual Consolidated Financial Statements.

Our base scenario reflects rising unemployment rates in the near-term in Canada and over the medium-term in the U.S. Central bank policy interest rate cuts are expected to continue in Canada as inflation continues to decline towards target levels and to begin at the end of calendar Q3 2024 in the U.S. due to weaker growth and declining inflation.

Downside scenarios, including two additional and more severe downside scenarios designed for the energy and real estate sectors, reflect the possibility of a more severe macroeconomic shock beginning in calendar Q4 2024 relative to our base scenario. In these scenarios, conditions are expected to deteriorate from calendar Q3 2024 levels for up to 18 months, followed by a recovery for the remainder of the period. These scenarios assume monetary policy responses that return the economy to a long-run, sustainable growth rate within the forecast period.

The upside scenario reflects slightly stronger economic growth than the base scenario, without prompting a further offsetting monetary policy response as compared to our base scenario, followed by a return to a long-run sustainable growth rate within the forecast period.

We reduced weight to our downside scenarios relative to October 31, 2023 in order to reflect reduced uncertainty surrounding timing of interest rate reductions as reflected in our base scenario relative to prolonged elevated interest rate levels reflected in our downside scenarios.

The following provides additional detail about our calendar quarter forecasts for certain key macroeconomic variables used in the models to estimate the allowance for credit losses:

•

Unemployment rates – In our base forecast, we expect the Canadian unemployment rate to rise to 6.6% by calendar Q 3 2024, peaking at 6.7% in calendar Q 4 2024 and returning to its long run equilibrium level by calend a r Q1 202 7 . The U.S. unemployment rate is expected to remain at 4.1% in calendar Q 3 2024, then increase to its long run equilibrium level by calendar Q3 2026.

•

Gross Domestic Product (GDP ) – In our base forecast, we expect both Canadian and U.S. GDP to continuously grow in calendar Q 3 2024 and thereafter. GDP in calendar Q4 2024 is expected to be 1.5% and 1.3% above Q4 2023 levels in Canada and the U.S., respectively.

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Royal Bank of Canada Third Quarter 2024 75

•

Oil price (West Texas Intermediate in US$) – In our base forecast, we expect oil prices to average $77 per barrel over the next 12 months from calendar Q 3 2024 and $66 per barrel in the following 2 to 5 years. The range of average prices in our alternative downside and upside scenarios is $28 to $99 per barrel for the next 12 months and $42 to $72 per barrel for the following 2 to 5 years. As at October 31, 2023, our base forecast included an average price of $81 per barrel for the next 12 months and $67 per barrel for the following 2 to 5 years.

•

Canadian housing price index – In our base forecast, we expect housing prices to increase by 1.7% over the next 12 months from calendar Q 3 2024, with a compound annual growth rate of 3.2% for the following 2 to 5 years. The range of annual housing price growth (contraction) in our alternative real estate downside and upside scenarios is (30.0)% to 10.9% over the next 12 months and 4.2% to 9.6% for the following 2 to 5 years. As at October 31, 2023, our base forecast included housing price growth of 1.6% for the next 12 months and 5.0% for the following 2 to 5 years.

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76 Royal Bank of Canada Third Quarter 2024

Note 5 Loans and allowance for credit losses<br><br>(continued)

Credit risk exposure by internal risk rating

The following table presents the gross carrying amount of loans measured at amortized cost, and the full contractual amount of undrawn loan commitments subject to the impairment requirements of IFRS 9 Financial Instruments . Risk ratings are based on internal ratings used in the measurement of expected credit losses as at the reporting date, as outlined in the internal ratings maps for Wholesale and Retail facilities in the Credit risk section of our 2023 Annual Report.

	As at
	July 31, 2024								October 31, 2023
(Millions of Canadian dollars)	Stage 1		Stage 2		Stage 3<br>(1)		Total		Stage 1		Stage 2		Stage 3 (1)		Total
Retail
Loans outstanding – Residential mortgages
Low risk	$	385,811	$	1,901	$	–	$	387,712	$	349,001	$	1,630	$	–	$	350,631
Medium risk		17,571		4,694		–		22,265		19,126		1,610		–		20,736
High risk		1,606		6,280		–		7,886		1,582		4,927		–		6,509
Not rated <br>(2)		52,620		1,417		–		54,037		54,247		1,220		–		55,467
Impaired		–		–		1,102		1,102		–		–		682		682
		457,608		14,292		1,102		473,002		423,956		9,387		682		434,025
Items not subject to impairment <br>(3)								638								476
Total							$	473,640							$	434,501
Loans outstanding – Personal
Low risk	$	80,735	$	1,682	$	–	$	82,417	$	75,572	$	1,676	$	–	$	77,248
Medium risk		6,079		2,913		–		8,992		5,587		2,915		–		8,502
High risk		585		2,190		–		2,775		477		2,088		–		2,565
Not rated <br>(2)		10,580		418		–		10,998		9,982		157		–		10,139
Impaired		–		–		406		406		–		–		280		280
Total	$	97,979	$	7,203	$	406	$	105,588	$	91,618	$	6,836	$	280	$	98,734
Loans outstanding – Credit cards
Low risk	$	17,217	$	159	$	–	$	17,376	$	16,331	$	135	$	–	$	16,466
Medium risk		2,009		2,257		–		4,266		1,771		2,132		–		3,903
High risk		74		2,077		–		2,151		41		1,734		–		1,775
Not rated <br>(2)		1,153		51		–		1,204		856		35		–		891
Total	$	20,453	$	4,544	$	–	$	24,997	$	18,999	$	4,036	$	–	$	23,035
Loans outstanding – Small business
Low risk	$	9,542	$	800	$	–	$	10,342	$	8,641	$	920	$	–	$	9,561
Medium risk		2,609		903		–		3,512		2,238		936		–		3,174
High risk		178		898		–		1,076		99		592		–		691
Not rated <br>(2)		5		–		–		5		11		–		–		11
Impaired		–		–		292		292		–		–		244		244
Total	$	12,334	$	2,601	$	292	$	15,227	$	10,989	$	2,448	$	244	$	13,681
Undrawn loan commitments – Retail
Low risk	$	285,812	$	721	$	–	$	286,533	$	266,209	$	610	$	–	$	266,819
Medium risk		12,011		359		–		12,370		10,759		298		–		11,057
High risk		922		535		–		1,457		956		434		–		1,390
Not rated <br>(2)		7,284		34		–		7,318		6,686		138		–		6,824
Total	$	306,029	$	1,649	$	–	$	307,678	$	284,610	$	1,480	$	–	$	286,090
Wholesale – Loans outstanding
Investment grade	$	114,675	$	1,494	$	–	$	116,169	$	89,037	$	416	$	–	$	89,453
Non-investment grade		189,433		24,773		–		214,206		156,211		19,210		–		175,421
Not rated <br>(2)		11,822		841		–		12,663		10,968		238		–		11,206
Impaired		–		–		3,885		3,885		–		–		2,498		2,498
		315,930		27,108		3,885		346,923		256,216		19,864		2,498		278,578
Items not subject to impairment <br>(3)								11,220								9,248
Total							$	358,143							$	287,826
Undrawn loan commitments – Wholesale
Investment grade	$	337,002	$	436	$	–	$	337,438	$	312,178	$	186	$	–	$	312,364
Non-investment grade		150,933		13,505		–		164,438		130,994		13,947		–		144,941
Not rated <br>(2)		3,600		12		–		3,612		4,176		–		–		4,176
Total	$	491,535	$	13,953	$	–	$	505,488	$	447,348	$	14,133	$	–	$	461,481
(1)	Includes $124 million of purchased credit-impaired loans acquired in the HSBC Canada transaction.
---	---
(2)	In certain cases where an internal risk rating is not assigned, we use other approved credit risk assessment or rating methodologies, policies and tools to manage our credit risk.
---	---
(3)	Items not subject to impairment are loans held at FVTPL.
---	---

Loans past due but not impaired

(1), (2)

	As at
	July 31, 2024						October 31, 2023
(Millions of Canadian dollars)	30 to 89 days		90 days<br> and greater		Total		30 to 89 days		90 days<br> and greater		Total
Retail	$	2,335	$	250	$	2,585	$	1,840	$	208	$	2,048
Wholesale		1,278		57		1,335		1,823		49		1,872
	$	3,613	$	307	$	3,920	$	3,663	$	257	$	3,920
(1)	Excludes loans less than 30 days past due as they are not generally representative of the borrowers’ ability to meet their payment obligations.
---	---
(2)	Amounts presented may include loans past due as a result of administrative processes, such as mortgage loans on which payments are restrained pending payout due to sale or refinancing, which can fluctuate based on business volumes. Past due loans arising from administrative processes are not representative of the borrowers’ ability to meet their payment obligations.
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Royal Bank of Canada Third Quarter 2024 77

Note 6 Significant acquisition and disposition

Acquisition

HSBC Bank Canada

Based on the estimated fair values, our preliminary purchase price allocation assign ed $108.1 billion to assets and $99.1 billion to liabilities on the acquisition date. Goodwill of $6.4 billion reflects the expected expense synergies from our Personal & Commercial Banking, Wealth Management and Capital Markets operations, expected growth of the platforms, and the ability to cross-sell products between segments. Goodwill is not expected to be deductible for tax purposes.

The following table presents the estimated fair value of the assets acquired and liabilities assumed as at the acquisition date. The estimates for the fair values of the assets acquired and liabilities assumed may be retroactively adjusted to reflect new information obtained about facts and circumstances that existed as at the acquisition date during the measurement period.

(Millions of Canadian dollars, except percentage amounts)
Percentage of shares acquired		100%
Purchase consideration	$	15,488
Fair value of identifiable assets acquired
Cash and due from banks	$	2,772
Securities
Trading		1,110
Investment		21,305
Loans <br>(1)
Retail <br>(2)		35,353
Wholesale		39,408
Derivatives		3,365
Intangible assets <br>(3)		2,402
Other <br>(4)		2,405
Total fair value of identifiable assets acquired	$	108,120
Fair value of identifiable liabilities assumed
Deposits
Personal		42,037
Business and government <br>(2)		44,065
Bank		124
Obligations related to assets sold under repurchase agreements and securities loaned		5,664
Derivatives		3,541
Other <br>(5)		3,639
Total fair value of identifiable liabilities assumed	$	99,070
Fair value of identifiable net assets acquired	$	9,050
Goodwill		6,438
Total purchase consideration	$	15,488
(1)	The fair value of loans reflects estimates of incurred and expected future credit losses as at the acquisition date and interest rate premiums or discounts relative to prevailing market rates. As at March 28, 2024, the gross contractual value of the loans is $75,920 million. The estimate of contractual cash flows not expected to be collected is $587 million, of which $147 million relates to purchased credit-impaired loans.
---	---
(2)	Loans – Retail includes $1.7 billion of Canadian residential mortgages sold with recourse to a mutual fund that do not qualify for derecognition, and Deposits – Business and government includes $1.7 billion of the related secured borrowing liability.
---	---
(3)	Intangible assets include $1,973 million of core deposit intangibles and $110 million of customer relationships, which are amortized on a straight-line basis over estimated useful lives of 7 years, and $319 million of mutual fund management contracts with indefinite useful lives.
---	---
(4)	Includes Assets purchased under reverse repurchase agreements and securities borrowed, Customers’ liability under acceptances, and Other assets.
---	---
(5)	Includes Acceptances, Obligations related to securities sold short, and Other liabilities.
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78 Royal Bank of Canada Third Quarter 2024

Note 6 Significant acquisition and disposition<br><br>(continued)

Since the acquisition date, the HSBC Canada transaction contributed revenue of $973 million and net income of $188 million to RBC’s consolidated results. The net income of $188 million includes initial PCL on purchased performing financial assets of $200 million ($145 million after-tax).

Assuming we acquired HSBC Canada on November 1, 2023, using the same fair value estimates and not reflecting any potential synergies, we estimate that RBC’s consolidated revenue and net income for the nine months ended July 3 1 , 2024 would be $43.5 billion and $12.4 billion, respectively.

RBC’s consolidated results include transaction and integration costs of $160 million for the three months ended July 3 1 , 2024 and $783 million for the nine months ended July 3 1 , 2024, recognized in Non-interest expense.

Disposition

Wealth Management

On December 1, 2023, we completed the previously announced sale of the RBC Investor Services ® business in Jersey to CACEIS, the asset servicing banking group of Crédit Agricole S.A. and Banco Santander, S.A. On March 25, 2024, we completed the previously announced sale of the business of the U.K. branch of RBC Investor Services Trust to CACEIS. The transaction did not have a significant impact on our Interim Condensed Consolidated Statements of Income.

Note 7 Deposits
	As at
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	July 31, 2024								October 31, 2023
(Millions of Canadian dollars)	Demand<br>(1)		Notice<br>(2)		Term<br>(3)		Total		Demand (1)		Notice (2)		Term (3)		Total
Personal	$	200,990	$	60,901	$	248,651	$	510,542	$	186,530	$	57,614	$	197,802	$	441,946
Business and government		354,231		19,154		435,995		809,380		316,200		19,056		409,819		745,075
Bank		9,064		677		31,602		41,343		7,996		769		35,901		44,666
	$	564,285	$	80,732	$	716,248	$	1,361,265	$	510,726	$	77,439	$	643,522	$	1,231,687
Non-interest-bearing<br><br>(4)
Canada	$	141,988	$	6,604	$	190	$	148,782	$	132,994	$	6,107	$	168	$	139,269
United States		36,139		–		–		36,139		40,646		–		–		40,646
Europe <br>(5)		15		–		–		15		17		–		–		17
Other International		7,673		–		–		7,673		7,265		–		–		7,265
Interest-bearing<br><br>(4)
Canada		347,652		14,320		575,076		937,048		302,746		14,641		493,347		810,734
United States		20,974		58,829		71,272		151,075		16,210		55,895		78,837		150,942
Europe <br>(5)		4,193		905		50,036		55,134		5,353		726		51,812		57,891
Other International		5,651		74		19,674		25,399		5,495		70		19,358		24,923
	$	564,285	$	80,732	$	716,248	$	1,361,265	$	510,726	$	77,439	$	643,522	$	1,231,687
(1)	Demand deposits are deposits for which we do not have the right to require notice of withdrawal, which include both savings and chequing accounts.
---	---
(2)	Notice deposits are deposits for which we can legally require notice of withdrawal. These deposits are primarily savings accounts.
---	---
(3)	Term deposits are deposits payable on a fixed date, and include term deposits, guaranteed investment certificates and similar instruments.
---	---
(4)	The geographical splits of the deposits are based on the point of origin of the deposits and where the revenue is recognized. As at July 31, 2024, deposits denominated in U.S. dollars, British pounds, Euro and other foreign currencies were $476<br>billion<br>, $36<br>billion<br>, $51 <br>billion<br>and $28<br>billion<br>, respectively (October 31, 2023 – $445 billion, $34 billion, $49 billion and $32 billion, respectively).
---	---
(5)	Europe includes the United Kingdom and the Channel Islands.
---	---

Contractual maturities of term deposits

(1)

	As at
(Millions of Canadian dollars)	July 31<br><br>2024		October 31<br><br>2023
Within 1 year:
less than 3 months	$	198,081	$	182,373
3 to 6 months		99,948		69,868
6 to 12 months		156,531		151,079
1 to 2 years		82,251		76,232
2 to 3 years		58,623		49,965
3 to 4 years		45,802		36,774
4 to 5 years		24,876		36,506
Over 5 years		50,136		40,725
	$	716,248	$	643,522
(1)	The aggregate amount of term deposits in denominations of one hundred thousand dollars or more is $644 <br>billion<br>(October 31, 2023: $586<br>billion<br>).
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Royal Bank of Canada Third Quarter 2024 79

Note 8 Insurance and reinsurance

Insurance and reinsurance contracts by measurement components

(1)

The following table presents the measurement components of assets and liabilities for insurance contracts issued and reinsurance contracts held by estimates of present value of future cash flows, risk adjustment for non-financial risk and CSM. These contracts are presented on a portfolio basis such that portfolios of contracts that are in an asset position are presented separately from those that are in a liability position. Financial assets held in support of the insurance and reinsurance contracts are not reflected in this table.

	As at
	July 31, 2024												October 31, 2023
(Millions of Canadian dollars)	Estimates of<br> present value<br> of future<br> cash flows			Risk<br> adjustment for<br> <br>non-financial<br><br> risk			CSM			Total			Estimates of<br> present value<br> of future<br> cash flows			Risk<br> adjustment for<br> <br>non-financial<br><br> risk			CSM			Total
Insurance contract assets<br><br>(2)	$	1,923		$	(574	)	$	(592	)	$	757		$	1,790		$	(544	)	$	(565	)	$	681
Insurance contract liabilities<br><br>(3)
Insurance contract liabilities for segregated funds	$	(3,065	)	$	(19	)	$	(144	)	$	(3,228	)	$	(2,553	)	$	(15	)	$	(64	)	$	(2,632	)
Insurance contract liabilities excluding segregated funds		(13,789	)		(1,974	)		(2,162	)		(17,925	)		(11,955	)		(2,308	)		(2,131	)		(16,394	)
	$	(16,854	)	$	(1,993	)	$	(2,306)		$	(21,153)		$	(14,508	)	$	(2,323	)	$	(2,195	)	$	(19,026	)
Reinsurance contract held assets<br><br>(2), (3)	$	402		$	533		$	702		$	1,637		$	327		$	469		$	786		$	1,582
Reinsurance contract held liabilities<br><br>(4)	$	(85	)	$	11		$	41		$	(33	)	$	(42	)	$	6		$	18		$	(18	)
CSM for insurance contracts,<br> net of reinsurance contracts held							$	(2,155	)										$	(1,956	)
(1)	Includes contracts measured using the GMM and VFA that have CSM and contracts measured using the PAA in which CSM is not applicable.
---	---
(2)	Presented in Other assets.
---	---
(3)	Insurance contract liabilities and reinsurance contract held assets primarily relate to balances for remaining coverage for future services on contracts measured using the GMM or VFA.
---	---
(4)	Presented in Other liabilities.
---	---

Insurance service and insurance investment results

The following table provides the composition of Insurance service result and Insurance investment result for insurance contracts issued and reinsurance contracts held.

	For the three months ended						For the nine months ended
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023 <br>(1)			July 31<br><br>2024			July 31<br><br>2023 <br>(1)
Insurance service result
Insurance revenue	$	1,303		$	1,165		$	3,755		$	3,474
Insurance service expense		(1,059	)		(954	)		(3,043	)		(2,737	)
Net income (expense) from reinsurance contracts held		(30	)		(62	)		(108	)		(171	)
	$	214		$	149		$	604		$	566
Insurance investment result
Net investment income	$	185		$	168		$	2,289		$	1,331
Insurance finance income (expense)		(159	)		55			(2,155	)		(1,246	)
Reinsurance finance income (expense)		2			(72	)		94			7
	$	28		$	151		$	228		$	92
Insurance service and insurance investment results	$	242		$	300		$	832		$	658
(1)	The 2023 amounts may not be fully comparable to the current period as we were not managing our asset and liability portfolios under IFRS 17 and Net investment income was not restated for the reclassifications of certain eligible financial assets. Refer to Note 2 for further details.
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80 Royal Bank of Canada Third Quarter 2024

Note 9 Employee benefits – Pension and other post-employment benefits

We offer a number of defined benefit and defined contribution plans which provide pension and post-employment benefits to eligible employees. The following tables present the composition of our pension and other post-employment benefit expense and the effects of remeasurements recorded in OCI:

Pension and other post-employment benefit expense

	For the three months ended
	Pension plans						Other post-employment benefit plans
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023			July 31<br><br>2024			July 31<br><br>2023
Current service costs	$	47		$	48		$	9		$	8
Past service costs		–			–			(6	)		–
Net interest expense (income)		(37	)		(40	)		20			19
Remeasurements of other long-term benefits		–			–			(5	)		(1	)
Administrative expense		5			3			–			–
Defined benefit pension expense		15			11			18			26
Defined contribution pension expense		115			84			–			–
	$	130		$	95		$	18		$	26
	For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---
	Pension plans						Other post-employment benefit plans
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023			July 31<br><br>2024			July 31<br><br>2023
Current service costs	$	140		$	146		$	25		$	24
Past service costs		–			–			(6	)		–
Net interest expense (income)		(112	)		(121	)		60			58
Remeasurements of other long-term benefits		–			–			4			2
Administrative expense		13			9			–			–
Defined benefit pension expense		41			34			83			84
Defined contribution pension expense		319			245			–			–
	$	360		$	279		$	83		$	84

Pension and other post-employment benefit remeasurements

(1)

	For the three months ended
	Defined benefit pension plans						Other post-employment benefit plans
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023			July 31<br><br>2024		July 31<br><br>2023
Actuarial (gains) losses:
Changes in financial assumptions <br>(2)	$	658		$	(483	)	$	68	$	(45	)
Experience adjustments		–			1			3		–
Return on plan assets (excluding interest based on discount rate)		(785	)		313			–		–
	$	(127	)	$	(169	)	$	71	$	(45	)
	For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---
	Defined benefit pension plans						Other post-employment benefit plans
(Millions of Canadian dollars)	July 31<br><br>2024			July 31<br><br>2023			July 31<br><br>2024		July 31<br><br>2023
Actuarial (gains) losses:
Changes in financial assumptions <br>(2)	$	1,381		$	421		$	138	$	45
Experience adjustments		–			1			3		(2	)
Return on plan assets (excluding interest based on discount rate)		(1,789	)		(248	)		–		–
	$	(408	)	$	174		$	141	$	43
(1)	Market based assumptions, including Changes in financial assumptions and Return on plan assets, are reviewed on a quarterly basis. All other assumptions are updated during our annual review of plan assumptions.
---	---
(2)	Changes in financial assumptions in our defined benefit pension plans primarily relate to changes in discount rates.
---	---

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Royal Bank of Canada Third Quarter 2024 81

Note 10 Income taxes

Tax examinations and assessments

During the third quarter of 2024, we received a reassessment from the Canada Revenue Agency (CRA), in respect of the 2019 taxation year, which suggested that Royal Bank of Canada owes additional taxes of approximately

$ 277 million

as the CRA denied the deductibility of certain dividends. This amount represents the maximum additional taxes owing for that year. The reassessment is consistent with the previously received reassessments as described in Note 22 of our 2023 Annual Consolidated Financial Statements. It is possible that the CRA will reassess us for significant additional income taxes for subsequent years on the same basis. In all cases, we are confident that our tax filing position was appropriate and intend to defend ourselves vigorously.

Pillar Two legislation

global minimum corporate tax on certain multinational enterprises (Pillar Two). A number of other countries in which RBC operates have also enacted Pillar Two legislation. The GMTA and corresponding foreign Pillar Two legislation will be effective for our fiscal year beginning November 1, 2024.

Pillar Two income taxes may arise in or in relation to jurisdictions where the operations of RBC have an effective tax rate below 15%. This is anticipated to occur mainly in certain Caribbean and European jurisdictions. Due to the complexities in applying the legislation and continued uncertainty regarding the Pillar Two response of certain jurisdictions in which RBC operates, the full impact of the Pillar Two legislation is not yet reasonably estimable. We continue to actively monitor the legislative developments in this area for each jurisdiction in which RBC operates.

Note 11 Significant capital and funding transactions

Preferred shares and other equity instruments

On January 25, 2024, we issued 750 thousand Non-Cumulative

5-Year Fixed Rate Reset First Preferred Shares Series BU to certain institutional investors, at a price of $1,000 per share, for total gross proceeds of $750 million. For the initial period to, but excluding, February 24, 2029, the shares pay semi-annual cash dividends, if declared, at a rate of 7.408% per annum. The dividend rate will reset every fifth year at a rate equal to the 5-year Government of Canada bond yield plus a premium of 3.90%. Subject to the consent of the Office of the Superintendent of Financial Institutions (OSFI) and the requirements of the Bank Act (Canada), we may redeem the Series BU Preferred Shares in whole or in part at par during the period from January 25, 2029, to and including February 24, 2029, and during the period from January 24 to and including February 24 every fifth year thereafter. The shares include non-viability contingency capital (NVCC) provisions necessary for them to qualify as Tier 1 regulatory capital under Basel III.

On April 24, 2024, we issued US$1,000 million of Limited Recourse Capital Notes Series 4 (LRCN Series 4) with recourse limited to assets (Trust Assets) held by a third-party trustee in a consolidated trust (Limited Recourse Trust). The Trust Assets consist of US$1,000 million of our First Preferred Shares, Series BV (Series BV Preferred Shares), issued concurrently with LRCN Series 4 at a price of US$1,000 per Series BV Preferred Share.

The price per LRCN Series 4 note is US$1,000 and will bear interest paid quarterly at a fixed rate of 7.5% per annum until May 2, 2029 and thereafter at a rate per annum, reset every fifth year, equal to the U.S. Treasury Rate plus 2.887% until maturity on May 2, 2084. In the event of (i) non-payment of interest on any interest payment date, (ii) non-payment of the redemption price in case of a redemption of LRCN Series 4, (iii) non-payment of principal at the maturity of LRCN Series 4, or (iv) an event of default on the notes, noteholders will have recourse only to the Trust Assets and each noteholder will be entitled to receive its pro rata share of the Trust Assets. In such an event, the delivery of the Trust Assets will represent the full and complete extinguishment of our obligations under LRCN Series 4.

LRCN Series 4 are redeemable on or prior to maturity to the extent we redeem Series BV Preferred Shares on certain redemption dates as set out in the terms of Series BV Preferred Shares and subject to the consent and approval of OSFI.

The terms of Series BV Preferred Shares and LRCN Series 4 include NVCC provisions necessary for them to qualify as Tier 1 regulatory capital under Basel III. NVCC provisions require the conversion of the instrument into a variable number of common shares in the event that OSFI deems the Bank non-viable or a federal or provincial government in Canada publicly announces that the Bank has accepted or agreed to accept a capital injection. In such an event, LRCN Series 4 will be automatically redeemed and the redemption price will be satisfied by the delivery of the Trust Assets, which will consist of common shares pursuant to an automatic conversion of Series BV Preferred Shares. The terms of Series BV Preferred Shares include an automatic conversion formula with a conversion price based on the greater of: (i) a floor price of $5.00 (subject to adjustment in certain circumstances), and (ii) the current market price of our common shares based on the volume weighted average trading price of our common shares on the Toronto Stock Exchange. The number of common shares issued in respect of each Series BV Preferred Share will be determined by dividing the share value of Series BV Preferred Shares (including declared and unpaid dividends) by the conversion price. The number of common shares delivered to each noteholder will be based on such noteholder’s pro rata interest in the Trust Assets.

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82 Royal Bank of Canada Third Quarter 2024

Note 11 Significant capital and funding transactions<br><br>(continued)

LRCN Series 4 are compound instruments with both equity and liability features as payments of interest and principal in cash are made at our discretion. Non-payment of interest and principal in cash does not constitute an event of default and will trigger a delivery of Series BV Preferred Shares. The liability component of the notes has a nominal value and, as a result, the full proceeds received have been presented as equity.

On May 24, 2024, we redeemed all 20 million of our issued and outstanding Non-Cumulative

5-Year Rate Reset First Preferred Shares Series AZ at a redemption price of $25.00 per share.

On July 24, 2024, we issued 600 thousand Non-Cumulative 5-Year Fixed Rate Reset First Preferred Shares Series BW to certain institutional investors, at a price of $1,000 per share, for total gross proceeds of $600 million. For the initial period to, but excluding, November 24, 2029, the shares pay semi-annual cash dividends, if declared, at a rate of 6.698% per annum. The dividend rate will reset every fifth year at a rate equal to the 5-year Government of Canada bond yield plus a premium of 3.40%. Subject to the consent of OSFI and the requirements of the Bank Act (Canada), we may redeem the Series BW Preferred Shares in whole or in part at par during the period from October 24, 2029 to and including November 24, 2029, and during the period from October 24 to and including November 24 every fifth year thereafter. The shares include NVCC provisions necessary for them to qualify as Tier 1 regulatory capital under Basel III.

On August 24, 2024, we redeemed all 20 million of our issued and outstanding Non-Cumulative

5-Year Rate Reset First Preferred Shares Series BB at a redemption price of $25.00 per share.

Subordinated debentures

On July 25, 2024, we redeemed all $1,500 million of our outstanding NVCC 2.740% subordinated

debentures due July 25, 2029 for 100% of their principal amount plus interest accrued to, but excluding, the redemption date.

Common shares issued

	For the three months ended
	July 31, 2024						July 31, 2023
(Millions of Canadian dollars, except number of shares)	Number of<br>shares<br>(thousands)			Amount			Number of<br>shares<br>(thousands)		Amount
Issued in connection with share-based compensation plans <br>(1)		683		$	66			174	$	16
Issued in connection with dividend reinvestment plan <br>(2)		–			–			5,355		670
Purchased for cancellation <br>(3)		(480	)		(7	)		–		–
		203		$	59			5,529	$	686
	For the nine months ended
---	---	---	---	---	---	---	---	---	---	---
	July 31, 2024						July 31, 2023
(Millions of Canadian dollars, except number of shares)	Number of<br> shares<br> (thousands)			Amount			Number of<br> shares<br> (thousands)		Amount
Issued in connection with share-based compensation plans <br>(1)		1,311		$	126			678	$	61
Issued in connection with dividend reinvestment plan <br>(2)		11,850			1,460			9,959		1,291
Purchased for cancellation <br>(3)		(480	)		(7	)		–		–
		12,681		$	1,579			10,637	$	1,352
(1)	Amounts include cash received for stock options exercised during the period and the fair value adjustment to stock options.
---	---
(2)	The requirements of our dividend reinvestment plan (DRIP) are satisfied through either open market share purchases or shares issued from treasury. During the three months ended July 31, 2024 our DRIP requirements were satisfied through open market share purchases. During the nine months ended July 31, 2024 our DRIP requirements were satisfied through shares issued from treasury in the first six months and open market share purchases in the last three months. During the three months ended July 31, 2023 our DRIP requirements were satisfied through shares issued from treasury. During the nine months ended July 31, 2023 our DRIP requirements were satisfied through open market share purchases in the first three months and shares issued from treasury in the last six months.
---	---
(3)	During the three and nine months ended July 31, 2024, we purchased for cancellation common shares at a total fair value of $73 million (average cost of $152.66 per share), with a book value of $7 million (book value of $14.82 per share). During the three and nine months ended July 31, 2023, we did not purchase for cancellation any common shares.
---	---

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Royal Bank of Canada Third Quarter 2024 83

Note 12 Earnings per share
	For the three months ended						For the nine months ended
---	---	---	---	---	---	---	---	---	---	---	---	---
(Millions of Canadian dollars, except share and per share amounts)	July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)			July 31<br><br>2024			July 31<br><br>2023<br><br>(Restated – Note 2)
Basic earnings per share
Net income	$	4,486		$	3,860		$	12,018		$	10,673
Dividends on preferred shares and distributions on other equity instruments		(106	)		(58	)		(231	)		(169	)
Net income attributable to <br>non-controlling<br> interests		(3	)		(2	)		(7	)		(5	)
Net income available to common shareholders	$	4,377		$	3,800		$	11,780		$	10,499
Weighted average number of common shares (in thousands)		1,414,194			1,393,515			1,411,044			1,388,217
Basic earnings per share (in dollars)	$	3.09		$	2.73		$	8.35		$	7.56
Diluted earnings per share
Net income available to common shareholders	$	4,377		$	3,800		$	11,780		$	10,499
Weighted average number of common shares (in thousands)		1,414,194			1,393,515			1,411,044			1,388,217
Stock options <br>(1)		1,929			1,398			1,574			1,614
Issuable under other share-based compensation plans		26			26			26			26
Average number of diluted common shares (in thousands)		1,416,149			1,394,939			1,412,644			1,389,857
Diluted earnings per share (in dollars)	$	3.09		$	2.73		$	8.34		$	7.55
(1)	The dilutive effect of stock options was calculated using the treasury stock method. When the exercise price of options outstanding is greater than the average market price of our common shares, the options are excluded from the calculation of diluted earnings per share. For the three months ended July 31, 2024, no outstanding options were excluded from the calculation of diluted earnings per share. For the three months ended July 31, 2023, an average of 2,244,505 outstanding options with an average exercise price of $130.78 were excluded from the calculation of diluted earnings per share. For the nine months ended July 31, 2024, no outstanding options were excluded from the calculation of diluted earnings per share. For the nine months ended July 31, 2023, an average of 917,036 outstanding options with an average exercise price of $131.64 were excluded from the calculation of diluted earnings per share.
---	---

Note 13 Legal and regulatory matters

We are a large global institution that is subject to many different complex legal and regulatory requirements that continue to evolve. We are and have been subject to a variety of legal proceedings, including civil claims and lawsuits, regulatory examinations, investigations, audits and requests for information by various governmental regulatory agencies and law enforcement authorities in various jurisdictions. Some of these matters may involve novel legal theories and interpretations and may be advanced under criminal as well as civil statutes, and some proceedings could result in the imposition of civil, regulatory enforcement or criminal penalties. We review the status of all proceedings on an ongoing basis and will exercise judgment in resolving them in such manner as we believe to be in our best interest. In many proceedings, it is inherently difficult to determine whether any loss is probable or to reliably estimate the amount of any loss. This is an area of significant judgment and uncertainty and the extent of our financial and other exposure to these proceedings after taking into account current provisions could be material to our results of operations in any particular period though we do not believe that the ultimate resolution of any such matter will have a material effect on our consolidated financial condition.

Our significant legal proceedings and regulatory matters are described in Note 25 of our audited 2023 Annual Consolidated Financial Statements and as updated below. Based on the facts currently known, except as may otherwise be noted, it is not possible at this time for us to predict the ultimate outcome of these proceedings or the timing of their resolution.

London interbank offered rate (LIBOR) litigation

On December 12, 2023, the settlement agreement resolving one of the LIBOR class actions brought on behalf of certain plaintiffs that purchased U.S. dollar LIBOR-based instruments was granted final court approval. Royal Bank of Canada remains a defendant in other LIBOR class actions.

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84 Royal Bank of Canada Third Quarter 2024

Note 13 Legal and regulatory matters<br><br>(continued)

Royal Bank of Canada Trust Company (Bahamas) Limited proceedings

On December 11, 2023, the U.S. Department of Labor published a technical correction to the prior one-year exemption reflecting the fact that the pending French Court of Appeal’s decision would be rendered by an appellate court, and not the district court.

On March 5, 2024, the Court of Appeal rendered a judgment of conviction (the Conviction) against Royal Bank of Canada Trust Company (Bahamas) Limited (RBC Bahamas) and the other parties. RBC Bahamas was ordered by the Court of Appeal to pay a fine of € 5,000 in connection with the Conviction. In addition, the Court of Appeal ordered that certain of those convicted of complicity in the matter, including RBC Bahamas, are jointly liable for the allegedly unpaid inheritance taxes owing, plus penalties and interest (such aggregate amount will be determined in separate proceedings before the tax courts, to which RBC Bahamas is not a party). RBC Bahamas believes that its actions did not violate French law, and has appealed the Conviction to the French Supreme Court. Under French law, upon the filing of an appeal by RBC Bahamas, the Conviction, as well as its effects (fine and joint liability) were stayed pending the outcome of the appeal.

As previously disclosed, in 2016 Royal Bank of Canada was granted an exemption by the U.S. Department of Labor that allows Royal Bank of Canada and its current and future affiliates to continue to qualify for the Qualified Professional Asset Manager (QPAM) exemption under the Employee Retirement Income Security Act despite any potential conviction of RBC Bahamas in the French proceeding for a temporary one-year period from the date of conviction. As a result of the Conviction, the temporary one-year period commenced on March 5, 2024. Royal Bank of Canada is seeking longer term relief from the Department of Labor.

U.S. communications recordkeeping inquiry

On August 14, 2024, the Securities and Exchange Commission announced its settlement with RBC Capital Markets, LLC, pursuant to which RBC Capital Markets, LLC will pay a US$45 million civil penalty.

Note 14 Results by business segment

Composition of business segments

For management purposes, based on the products and services offered, we are organized into four business segments: Personal & Commercial Banking, Wealth Management, Insurance and Capital Markets.

	For the three months ended July 31, 2024
(Millions of Canadian dollars)	Personal &<br>Commercial<br>Banking<br>(1)		Wealth<br><br>Management<br>(1)		Insurance		Capital<br><br>Markets<br>(1), (2)			Corporate<br><br>Support<br>(2)			Total
Net interest income <br>(3)	$	5,052	$	1,133	$	–	$	817		$	325		$	7,327
Non-interest<br> income		1,673		3,632		285		2,187			(473	)		7,304
Total revenue		6,725		4,765		285		3,004			(148	)		14,631
Provision for credit losses		607		16		1		38			(3	)		659
Non-interest<br> expense		2,715		3,679		70		1,755			380			8,599
Income (loss) before income taxes		3,403		1,070		214		1,211			(525	)		5,373
Income taxes (recoveries)		913		208		44		39			(317	)		887
Net income	$	2,490	$	862	$	170	$	1,172		$	(208	)	$	4,486
Non-interest<br> expense includes:
Depreciation and amortization	$	325	$	299	$	3	$	133		$	(1	)	$	759
	For the three months ended July 31, 2023 (Restated – Note 2)
(Millions of Canadian dollars)	Personal &<br> Commercial<br> Banking		Wealth<br><br>Management (4), (5)		Insurance		Capital<br><br>Markets (2), (5)			Corporate<br><br>Support (2), (4)			Total
Net interest income <br>(3)	$	4,062	$	1,047	$	–	$	907		$	270		$	6,286
Non-interest<br> income		1,501		3,355		336		1,772			(273	)		6,691
Total revenue		5,563		4,402		336		2,679			(3	)		12,977
Provision for credit losses		305		102		–		209			–			616
Non-interest<br> expense		2,319		3,498		69		1,620			259			7,765
Income (loss) before income taxes		2,939		802		267		850			(262	)		4,596
Income taxes (recoveries)		805		139		52		(99	)		(161	)		736
Net income	$	2,134	$	663	$	215	$	949		$	(101	)	$	3,860
Non-interest<br> expense includes:
Depreciation and amortization	$	240	$	312	$	15	$	126		$	–		$	693

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Royal Bank of Canada Third Quarter 2024 85

	For the nine months ended July 31, 2024
(Millions of Canadian dollars)	Personal &<br> Commercial<br> Banking<br>(1)		Wealth<br> Management<br>(1)		Insurance		Capital<br> Markets<br>(1), (2)		Corporate<br> Support<br>(2)			Total
Net interest income <br>(3)	$	13,668	$	3,419	$	–	$	2,242	$	953		$	20,282
Non-interest<br> income		4,841		10,501		946		6,867		(1,167	)		21,988
Total revenue		18,509		13,920		946		9,109		(214	)		42,270
Provision for credit losses		1,995		54		2		342		(1	)		2,392
Non-interest<br> expense		7,482		11,100		210		5,119		1,320			25,231
Income (loss) before income taxes		9,032		2,766		734		3,648		(1,533	)		14,647
Income taxes (recoveries)		2,430		529		167		60		(557	)		2,629
Net income	$	6,602	$	2,237	$	567	$	3,588	$	(976	)	$	12,018
Non-interest<br> expense includes:
Depreciation and amortization	$	840	$	919	$	6	$	387	$	(10	)	$	2,142
	For the nine months ended July 31, 2023 (Restated – Note 2)
(Millions of Canadian dollars)	Personal &<br> Commercial<br> Banking		Wealth<br> Management (4), (5)		Insurance		Capital<br> Markets (2), (5)		Corporate<br> Support (2), (4)			Total
Net interest income <br>(3)	$	11,886	$	3,352	$	–	$	2,650	$	699		$	18,587
Non-interest<br> income		4,516		10,004		762		5,837		(927	)		20,192
Total revenue		16,402		13,356		762		8,487		(228	)		38,779
Provision for credit losses		1,128		196		–		424		–			1,748
Non-interest<br> expense		6,805		10,379		204		4,831		535			22,754
Income (loss) before income taxes		8,469		2,781		558		3,232		(763	)		14,277
Income taxes (recoveries)		2,294		569		106		80		555			3,604
Net income	$	6,175	$	2,212	$	452	$	3,152	$	(1,318	)	$	10,673
Non-interest<br> expense includes:
Depreciation and amortization	$	721	$	925	$	39	$	381	$	–		$	2,066
(1)	On March 28, 2024, we completed the HSBC Canada transaction. HSBC Canada results have been consolidated from the closing date, and are included in our Personal & Commercial Banking, Wealth Management and Capital Markets segments. For further details, refer to Note 6.
---	---
(2)	Taxable equivalent basis.
---	---
(3)	Interest revenue is reported net of interest expense as we rely primarily on net interest income as a performance measure.
---	---
(4)	Amounts for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
---	---
(5)	Effective the fourth quarter of 2023, we moved the Investor Services lending business from our Wealth Management segment to our Capital Markets segment. Therefore, comparative results for the three months and nine months ended July 31, 2023 have been revised from those previously presented.
---	---

Total assets and total liabilities by business segment

	As at July 31, 2024
(Millions of Canadian dollars)	Personal &<br> Commercial<br> Banking<br>(1)		Wealth<br> Management<br>(1)		Insurance		Capital<br> Markets<br>(1)		Corporate<br> Support			Total
Total assets	$	736,538	$	177,293	$	27,501	$	1,045,826	$	88,949		$	2,076,107
Total liabilities		736,467		175,910		27,463		1,045,630		(33,855	)		1,951,615
	As at October 31, 2023 (Restated – Note 2)
(Millions of Canadian dollars)	Personal &<br> Commercial<br> Banking		Wealth<br> <br>Management		Insurance		Capital<br> <br>Markets		Corporate<br> Support			Total
Total assets	$	636,046	$	179,227	$	24,130	$	1,100,172	$	66,956		$	2,006,531
Total liabilities		635,952		177,389		24,895		1,099,893		(46,745	)		1,891,384
(1)	Includes the impact of the HSBC Canada transaction. Refer to Note 6 for further details.
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86 Royal Bank of Canada Third Quarter 2024

Note 15 Capital management

Regulatory capital and capital ratios

OSFI formally establishes risk-based capital and leverage minimums and Total Loss Absorbing Capacity (TLAC) ratios for deposit-taking institutions in Canada. During the third

quarter of 2024, we complied with all applicable capital, leverage and TLAC requirements, including the Domestic Stability Buffer, imposed by OSFI.

	As at
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	July 31<br> <br>2024		October 31<br> <br>2023
Capital<br><br>(1), (2)
CET1 capital	$	86,230	$	86,611
Tier 1 capital		95,724		93,904
Total capital		108,079		104,952
Risk-weighted assets (RWA) used in calculation of capital ratios<br><br>(1), (2)
Credit risk	$	540,482	$	475,842
Market risk		32,920		40,498
Operational risk		87,775		79,883
Total RWA	$	661,177	$	596,223
Capital ratios and Leverage ratio<br><br>(1), (2)
CET1 ratio		13.0%		14.5%
Tier 1 capital ratio		14.5%		15.7%
Total capital ratio		16.3%		17.6%
Leverage ratio		4.2%		4.3%
Leverage ratio exposure	$	2,271,007	$	2,179,590
TLAC available and ratios<br><br>(1), (3)
TLAC available	$	187,656	$	184,916
TLAC ratio		28.4%		31.0%
TLAC leverage ratio		8.3%		8.5%
(1)	As prior period restatements are not required by OSFI, there was no impact from the adoption of IFRS 17 on regulatory capital, RWA, capital ratios, leverage ratio, TLAC available and TLAC ratios for periods prior to November 1, 2023.
---	---
(2)	Capital, RWA and capital ratios are calculated using OSFI’s Capital Adequacy Requirements (CAR) guideline and the Leverage ratio is calculated using OSFI’s Leverage Requirements (LR) guideline. Both the CAR guideline and LR guideline are based on the Basel III framework. The period ended October 31, 2023 reflects our adoption of the revised CAR and LR guidelines that came into effect in Q2 2023, as further updated on October 20, 2023 as part of OSFI’s implementation of the Basel III reforms. The period ended July 31, 2024 also reflects our adoption of the revised market risk and CVA frameworks that came into effect on November 1, 2023.
---	---
(3)	TLAC available and TLAC ratios are calculated using OSFI’s TLAC guideline. The TLAC standard is applied at the resolution entity level which for us is deemed to be Royal Bank of Canada and its subsidiaries. A resolution entity and its subsidiaries are collectively called a resolution group. The TLAC ratio and TLAC leverage ratio are calculated using the TLAC available as percentage of total RWA and leverage exposure, respectively.
---	---

EX-99.3

Exhibit 99.3

Return on Equity and Assets Ratios

	Q3 2024
Return on Assets		0.85	%	0.77	%	0.68	%	0.76	%	0.73	%
Return on Equity		15.5	%	14.5	%	13.1	%	14.4	%	14.3	%
Dividend Payout Ratio		46	%	50	%	55	%	50	%	52	%
(1)	Amounts have been restated from those previously presented as part of the adoption of IFRS 17, effective<br>November 1, 2023.
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EX-31.1

Exhibit 31.1

SOX 302 Certification

I, David McKay, certify that:

1.	I have reviewed this quarterly report for the period ended July 31, 2024 (the “report”) of Royal<br>Bank of Canada (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a<br>material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other financial information included in this report,<br>fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining<br>disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act<br>Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be<br>designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is<br>being prepared;
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b.	Designed such internal control over financial reporting, or caused such internal control over financial<br>reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting<br>principles;
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c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this<br>report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that<br>occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.	All significant deficiencies and material weaknesses in the design or operation of internal control over<br>financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in<br>the registrant’s internal control over financial reporting.
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Date: August 28, 2024

/s/ David McKay
Name:	David McKay
Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

SOX 302 Certification

I, Katherine Gibson, certify that:

1.	I have reviewed this quarterly report for the period ended July 31, 2024 (the “report”) of Royal<br>Bank of Canada (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a<br>material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other financial information included in this report,<br>fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
---	---
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining<br>disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act<br>Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
---	---
a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be<br>designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is<br>being prepared;
---	---
b.	Designed such internal control over financial reporting, or caused such internal control over financial<br>reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting<br>principles;
---	---
c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this<br>report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
---	---
d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that<br>occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
---	---
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of<br>internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
---	---
a.	All significant deficiencies and material weaknesses in the design or operation of internal control over<br>financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
---	---
b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in<br>the registrant’s internal control over financial reporting.
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Date: August 28, 2024

/s/ Katherine Gibson
Name:	Katherine Gibson
Title:	Interim Chief Financial Officer