Royal Bank of Canada (RY) Q1 2026 earnings summary

Executive summary

• Record net income of $5.8 billion for Q1 2026, up 13% year-over-year, with diluted EPS rising 14% to $4.03 and ROE at 17.6%; adjusted net income was $5.9 billion, up 12% year-over-year, and adjusted diluted EPS was $4.08, up 13% year-over-year.

• Strong performance across Wealth Management, Personal Banking, Commercial Banking, and Capital Markets, partially offset by lower Insurance results.

• Pre-provision, pre-tax earnings rose 14% year-over-year to $8.5 billion, reflecting higher net interest income and fee-based revenue.

• Robust capital position with CET1 ratio at 13.7%, above regulatory requirements, supporting continued investment and shareholder returns.

• $3.3 billion returned to shareholders, including $1.0 billion in share buybacks and $2.3 billion in dividends.

Financial highlights

• Total revenue rose 7% year-over-year to $17.96 billion, driven by higher net interest income and fee-based revenue; net interest income increased 8% year-over-year.

• Non-interest expense increased 2% year-over-year (3% adjusted), mainly due to higher compensation and staff-related costs.

• Provision for credit losses (PCL) was $1.09 billion, up 4% year-over-year, with higher provisions in Capital Markets and Personal Banking; PCL on loans ratio at 41 bps.

• ROE improved to 17.6%, up 80 bps year-over-year; adjusted ROE was 17.8%.

• Efficiency ratio improved to 52.7%, down 260 bps year-over-year.

Outlook and guidance

• Management highlights a strong start to the fiscal year, emphasizing robust balance sheet, capital position, and premium ROE.

• Economic growth expected to remain positive in Canada, U.S., and Europe, with moderate GDP growth and stable unemployment rates.

• No further interest rate reductions expected from the U.S. Federal Reserve or Bank of Canada in 2026.

• Key risks include trade policy uncertainty, inflation pressures, and global geopolitical tensions.

• Pro-forma retail credit risk model changes expected to impact CET1 ratio by -10 bps in Q2 2026.