Royal Bank of Canada (RY) RBC Capital Markets Canadian Bank CEO Conference 2025 summary

Conference overview

• The 2025 RBC Canadian Bank CEO Conference opened with a focus on audience engagement and a fireside chat format, highlighting a shift in industry outlook compared to the previous year.

• Uncertainty remains in the sector, but the outlook for loan growth and valuations is more optimistic, with expectations for improvement by late 2025.

• Median P/E ratios for major banks have risen, and audience Q&A is encouraged to address key industry questions.

U.S. and international strategy

• Positive macroeconomic expectations for the U.S. with anticipated outperformance and a soft landing in Canada.

• Significant organic growth opportunities in U.S. lending, investment banking, and wealth management, with a new transaction banking business gaining momentum.

• Focus remains on organic growth, but inorganic expansion is possible if it accelerates scale and meets high shareholder return standards.

• Majority of international focus is on building scale in the U.S., with some attention to Europe and U.K. wealth opportunities.

Canadian macro and mortgage market

• Mortgage renewal risks have eased, with 60% of customers expected to renew at lower rates in 2025.

• Payment shock is now more manageable, with most customers able to absorb increases, though some consumer pain persists.

• Rate cuts in Canada are expected to stimulate growth, with modest GDP growth forecasted and a resurgence in mortgage demand anticipated.

• Mortgage book profitability has declined but may improve as rates fall and competition stabilizes.