Royal Bank of Canada Barclays 24th Annual Global Financial Services Conference

gonna happen, so All right.

It's great to be here.

Yeah, for sure. It is hard to believe that it is almost been a year and a half since Investor Day, and the time has just flown by. We are really excited about the progress that we have made against our Investor Day strategy that we communicated as well as our target. I thought I could break it down into the three pieces for you, like what we have accomplished to date, where we see ourselves today, and then a bit of what does that mean as we look going forward. What we have accomplished so far, we are feeling really good on the progress that we have made against the strategy, the targets. You will see that some of the targets we are already hitting those targets. If I start with our Canadian business, definitely seeing growth in our Canadian business, and I will reference Q3 as kind of our recent results that have come out.

On mortgages, seeing really good growth. Mortgages were up 4% year-over-year in line with our guidance. It is very important to us to be focusing on client growth. From a market share perspective, that 4% equated to us taking about 50% of the market share just in that quarter-over-quarter growth. We are also seeing really good growth in our Avion acquisition. We hit a historical high in Q3 with our acquisitions. The other item I would just call out is on our commercial deposits. We had a 9% year-over-year growth in our commercial deposits, and again, that equated to about 50% of the market share growth in a year-over-year basis. It is not just Canada. I know Royal Bank of Canada, we get a focus on the Canadian front, but we are also seeing growth in our global businesses as well. Our investment banking, we are seeing increasing market share.

We have just recently announced our focus on building a Global Transaction Banking. If you look at our U.S. region results, also making really good progress on the strategy that we outlined on Investor Day of really focusing on like a one region, one RBC focus. We are moving through that quite well. Where does that take us? Where are we today? In Q3, we reported a ROE of just over 18% on a CET1 basis of 13.5%, which again, we were very pleased with.

That has been a focus of growing that ROE over multiple years. If you look back, in 2024, we had an ROE of 15.5%. In 2025, that was 16.7%. Now year-to-date for 2026, that is already at 17.6%. What has underpinned that has been a combined focus on improving our revenue productivity as well as driving cost efficiencies. On the revenue productivity front, it is a couple of items to call out there. If we look at our NIM, we have had our NIM expand over the last two years by 18 basis points. We have also seen a metric that we threw out there for Investor Day was a focus on increasing our revenue per RWA.

We've seen a 15 to 20 basis points increase there, really underpinned by the growth that we're seeing in wealth management as well as capital markets. On the cost efficiency front, in Q3, we had an efficiency ratio at the all bank level of just over 52%, so ahead of our Investor Day target of 53%. That's reflecting our ongoing focus on driving cost efficiencies. It also is reflective of our success on our HSBC cost synergies, where we achieved CAD 760 million ahead of schedule. So feeling really good about that. That's even before we see the AI benefits that we called out at our Investor Day coming on board. The next part, the third part, I would expect the question would be, what does that mean going forward?

You've an ROE of 18%, these efficiency ratios, you're hitting some of the targets that you've put out there for Investor Day. The way that we're thinking about that is we have a medium-term objective of 17% plus, and we add emphasis to that plus. The plus means that we're not holding ourselves back. We'll continue to see expansion on the ROE front. Now, why do we feel that we've got growth continuing to underpin that as we go forward? There's three things that we called out at our Investor Day that underpinned our targeted ROE, and they're still coming on board. One I just briefly mentioned was our AI benefits. So we had a target of CAD 700 million to CAD 1 billion, and that was net of investment. So we were very clear it was net of investment.

We've been at that for a couple of years now, and we're really starting to see hitting the milestones with the scale-up to come on board in 2027. We've also called out our HSBC revenue synergies. We've put out a target of CAD 300 million, so there's a good portion of that still to come online in 2027. The other item that I would mention would be in our U.S. region. So I commented on how we're pleased with the progress that we're seeing there, but there's still areas where we're looking for that to continue to improve on efficiency, on our funding optimization, as well as on our top-line revenue growth. So feeling kind of really good on kind of the journey so far, where we're currently positioned.

I think we're in a really good foundational place of strength, and we've got some tailwinds that are within our control as we think about the headway as we point going forward.

Yeah, great question, and definitely a very popular question has been around sustainability of capital markets, sustainability as wealth management as well. As we've seen constructive markets, and constructive markets has definitely been a driver in helping us set record levels in both wealth management as well as capital markets. So specific, excuse me, to capital markets, I would say it has been a driver, but it hasn't been the only driver. We've been investing in that business for years, and we're seeing the returns from that. We've been investing in our technology. We've been investing in our talent. As part of our growth strategy, we've also been very focused in growing in a stable manner.