Royal Bank of Canada (RY) Barclays 22nd Annual Global Financial Services Conference 2024 summary

Strategic priorities and capital management

• Focused on efficient capital allocation, maintaining a strong CET1 ratio of 12.8% after the HSBC acquisition, and initiating a share buyback program.

• Emphasized balance sheet strength, reducing costly funding at City National and implementing hedges to manage interest rate volatility.

• Pursuing cost synergies from the HSBC acquisition, with CAD 120 million already booked and on track for 50% of the annualized run rate.

• Capital allocation prioritizes organic growth, dividends, and selective bolt-on acquisitions, with a preferred CET1 operating level around 12.5%.

• Leverage ratio remains healthy at 4.2%, well above the regulatory minimum, with no current concerns about it becoming a constraint.

HSBC Canada acquisition and integration

• HSBC acquisition exceeded expectations, with lower-than-forecast client attrition and strong credit quality.

• Integration was rapid, with a 'close and convert' approach enabling immediate technology and cost synergies.

• Revenue synergies are emerging through cross-selling, new product offerings, and expanded commercial client appeal.

• New products like multicurrency and enhanced trade finance now benefit both legacy and new clients.

City National strategy and performance

• City National focuses on private and commercial banking, with efficiency and profitability improvements as top priorities.

• Applying a proven playbook to enhance efficiency, reduce headcount, and optimize the business footprint.

• Revenue growth targeted by deepening client relationships and leveraging connections with capital markets and wealth management.

• Ongoing review of the loan book to ensure all assets meet hurdle rates, with non-core assets being divested.