Exhibit 99.2

Royal Bank of Canada second quarter 2025 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. Our Q2 2025 Report to Shareholders and Supplementary Financial Information are available at http://www.rbc.com/investorrelations and on https://www.sedarplus.com/.

Net income $4.4 Billion Up 11% YoY	Diluted EPS1 $3.02 Up 10% YoY	Total PCL1 $1.4 Billion PCL on loans ratio1 up 16 bps1 QoQ	ROE1, 2 14.2% Down 30 bps YoY	CET1 ratio1 13.2% Above regulatory requirements
Adjusted net income3 $4.5 Billion Up 8% YoY	Adjusted diluted EPS3 $3.12 Up 7% YoY	Total ACL1 $7.5 Billion ACL on loans ratio1 up 6 bps QoQ	Adjusted ROE3 14.7% Down 80 bps YoY	LCR1 131% Up from 128% last quarter

TORONTO, May 29, 2025 — Royal Bank of Canada4 (RY on TSX and NYSE) today reported net income of $4.4 billion for the quarter ended April 30, 2025, up $0.4 billion or 11% from the prior year. Diluted EPS was $3.02, up 10% over the same period. Strong earnings growth in Personal Banking, Wealth Management and Insurance, and higher results in Commercial Banking, were partly offset by lower results in Capital Markets. Net losses were lower in Corporate Support, primarily due to the after-tax impact of specified items related to the HSBC Bank Canada (HSBC Canada)5 transaction last year. The inclusion of HSBC Canada results5 increased net income by $258 million. Adjusted net income3 and adjusted diluted EPS3 of $4.5 billion and $3.12 were up 8% and 7%, respectively, from the prior year.

Our consolidated results reflect an increase in total PCL of $504 million from a year ago, including a $324 million increase in PCL on performing loans. Provisions were higher across Commercial Banking, Personal Banking and Wealth Management, and in Capital Markets to a lesser extent. The PCL on loans ratio of 58 bps increased 17 bps from the prior year, mainly driven by unfavourable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs).

Pre-provision, pre-tax earnings6 of $6.9 billion were up $1.1 billion or 19% from last year. The inclusion of HSBC Canada results increased pre-provision, pre-tax earnings6 by $264 million. Excluding HSBC Canada results, pre-provision, pre-tax earnings6 increased 15% from last year, mainly due to higher net interest income reflecting strong average volume growth in Personal Banking and Commercial Banking, higher spreads in Personal Banking and higher fixed income trading revenue in Capital Markets. Higher fee-based revenue in Wealth Management reflecting market appreciation and net sales, lower HSBC Canada transaction and integration costs, which is treated as a specified item, and the impact of foreign exchange translation also contributed to the increase. These factors were partially offset by higher expenses driven by higher staff-related costs, including severance, higher variable compensation on increased results and ongoing investments in technology.

Compared to last quarter, net income was down 14% reflecting lower results across each of our business segments. Adjusted net income3 was down 14% over the same period. Pre-provision, pre-tax earnings6 were down $0.5 billion or 7%, primarily due to seasonally lower trading revenue, partially offset by lower variable compensation on decreased results and higher net interest income. The PCL on loans ratio of 58 bps increased 16 bps from the prior quarter, mainly reflecting higher provisions in Commercial Banking and Personal Banking. The PCL on impaired loans ratio1 was 35 bps, down 4 bps from the prior quarter, mainly reflecting lower provisions in Capital Markets. The PCL on performing loans ratio1 was 23 bps, up 20 bps from the prior quarter, driven by unfavourable changes to our macroeconomic forecast and scenario weights.

Our capital position remains robust, with a CET1 ratio of 13.2%, supporting solid volume growth and $2.6 billion of capital returned to our shareholders through common share dividends and share buybacks.

Today, we declared a quarterly dividend of $1.54 per share reflecting an increase of $0.06 or 4%. We also announced our intention, subject to the approval of the Toronto Stock Exchange (TSX) and the Office of the Superintendent of Financial Institutions (OSFI), to commence a normal course issuer bid and to repurchase for cancellation up to 35 million of our common shares.

“We saw the strength of our diversified business model reflected across our largest segments in Q2, underpinned by our robust capital position, balance sheet strength and prudent, through-the-cycle approach to risk management. Importantly, in a quarter hallmarked by macroeconomic uncertainty and market volatility, Team RBC continued to step up for our clients with the advice, insights and experiences they expect from us. We also hosted an Investor Day, detailing how we are accelerating our ambitions to extend our leadership in Canada, grow in global fee pools, including in the United States – our second home market, leverage our data scale and artificial intelligence investments to create more value for clients and deliver on our medium-term objectives for our shareholders.”

– Dave McKay, President and Chief Executive Officer of Royal Bank of Canada

Q2 2025 Compared to Q2 2024	Reported: •   Net income of $4,390 million •   Diluted EPS of $3.02 •   ROE of 14.2% •   CET1 ratio of 13.2%	h  11% h  10% i  30 bps h  40 bps	Adjusted3: •   Net income of $4,528 million •   Diluted EPS of $3.12 •   ROE of 14.7%	h  8% h  7% i  80 bps
Q2 2025 Compared to Q1 2025	•   Net income of $4,390 million •   Diluted EPS of $3.02 •   ROE of 14.2% •   CET1 ratio of 13.2%	i  14% i  15% i  260 bps g unchanged	•   Net income of $4,528 million •   Diluted EPS of $3.12 •   ROE of 14.7%	i  14% i  14% i  250 bps
YTD 2025 Compared to YTD 2024	•   Net income of $9,521 million •   Diluted EPS of $6.56 •   ROE of 15.5%	h  26% h  25% h  170 bps	•   Net income of $9,782 million •   Diluted EPS of $6.75 •   ROE of 15.9%	h  18% h  17% h  70 bps

(1) See the Glossary section of this Q2 2025 Report to Shareholders for composition of these measures.

(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 non-GAAP measures section of this Q2 2025 Report to Shareholders.

(3) These are non-GAAP measures or ratios. For further information, including a reconciliation, refer to the Key performance and non-GAAP measures section of this Q2 2025 Report to Shareholders.

(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, 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. For further details, refer to the Key corporate events section of this Q2 2025 Report to Shareholders.

(6) Pre-provision, pre-tax (PPPT) earnings is calculated as income (April 30, 2025: $4,390 million; January 31, 2025: $5,131 million; April 30, 2024: $3,950 million) before income taxes (April 30, 2025: $1,128 million; January 31, 2025: $1,302 million; April 30, 2024: $976 million) and PCL (April 30, 2025: $1,424 million; January 31, 2025: $1,050 million; April 30, 2024: $920 million). For the three months ended April 30, 2024, pre-provision, pre-tax earnings excluding HSBC Canada results of $5,700 million is calculated as pre-provision, pre-tax earnings of $5,846 million less net income of $(51) million, income taxes of $(20) million and PCL of $217 million. For the three months ended April 30, 2025, pre-provision, pre-tax earnings excluding HSBC Canada results of $6,532 million is calculated as pre-provision, pre-tax earnings of $6,942 million less net income of $207 million, income taxes of $75 million, and PCL of $128 million. This is a non-GAAP 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 non-GAAP measures are more reflective of our ongoing operating results and provide readers with a better understanding of management’s perspective on our performance.

2   Royal Bank of Canada  Second Quarter 2025

Table of contents

1	Second 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

	12	Key performance and non-GAAP measures
	15	Personal Banking
	16	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
42	Capital management

46	Accounting and control matters
	46	Summary of accounting policies and estimates
	46	Controls and procedures
46	Related party transactions
47	Glossary
50	Enhanced Disclosure Task Force recommendations index
51	Interim Condensed Consolidated Financial Statements (unaudited)
57	Notes to the Interim Condensed Consolidated Financial Statements (unaudited)
78	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 six month periods ended or as at April 30, 2025, compared to the corresponding periods in the prior fiscal year and the three month period ended January 31, 2025. This MD&A should be read in conjunction with our unaudited Interim Condensed Consolidated Financial Statements for the quarter ended April 30, 2025 (Condensed Financial Statements) and related notes and our 2024 Annual Report. This MD&A is dated May 28, 2025. 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 2024 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 Q2 2025 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, priorities, vision and strategic goals, the economic, market, and regulatory review and outlook for Canadian, U.S., United Kingdom (U.K.), Euro area and global economies, the regulatory environment in which we operate and the risk environment including our credit risk, market risk, liquidity and funding risk, and include 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”, “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.

Royal Bank of Canada   Second Quarter 2025   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, 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 and systemic risks, risks associated with escalating trade tensions, including protectionist trade policies such as the imposition of tariffs, and other risks discussed in the risk sections of our 2024 Annual Report and the Risk management section of this Q2 2025 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, 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 2024 Annual Report and the Risk management section of this Q2 2025 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 headings in our 2024 Annual Report, as updated by the Economic, market and regulatory review and outlook section of this Q2 2025 Report to Shareholders. Such sections may be updated by subsequent quarterly reports. Any forward-looking statements contained in this document represent the views of management only as of the date hereof, and 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 2024 Annual Report and the Risk management section of this Q2 2025 Report to Shareholders, as may be updated by subsequent quarterly reports.

Overview and outlook

About Royal Bank of Canada

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 97,000+ 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 19 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.

Effective the fourth quarter of 2024, the Personal & Commercial Banking segment became two standalone business segments: Personal Banking and Commercial Banking. With this change, RBC Direct Investing® moved from the previous Personal & Commercial Banking segment to the Wealth Management segment. Comparative results in this MD&A have been revised to conform to our new basis of segment presentation.

4   Royal Bank of Canada  Second Quarter 2025

Selected financial and other highlights

	As at or for the three months ended									As at or for the six months ended
(Millions of Canadian dollars, except per share, number of and percentage amounts)	April 30 2025 (1)			January 31 2025 (1)			April 30 2024 (1)			April 30 2025 (1)			April 30 2024 (1)
Total revenue	$	15,672		$	16,739		$	14,154		$	32,411		$	27,639
Provision for credit losses (PCL)		1,424			1,050			920			2,474			1,733
Non-interest expense		8,730			9,256			8,308			17,986			16,632
Income before income taxes		5,518			6,433			4,926			11,951			9,274
Net income	$	4,390		$	5,131		$	3,950		$	9,521		$	7,532
Net income – adjusted (2), (3)	$	4,528		$	5,254		$	4,198		$	9,782		$	8,264
Segments – net income
Personal Banking (4)	$	1,602		$	1,678		$	1,403		$	3,280		$	2,756
Commercial Banking (4)		597			777			577			1,374			1,227
Wealth Management (4)		929			980			840			1,909			1,504
Insurance		211			272			177			483			397
Capital Markets		1,202			1,432			1,262			2,634			2,416
Corporate Support		(151	)		(8	)		(309	)		(159	)		(768	)
Net income	$	4,390		$	5,131		$	3,950		$	9,521		$	7,532
Selected information
Earnings per share (EPS) – basic	$	3.03		$	3.54		$	2.75		$	6.57		$	5.25
– diluted		3.02			3.54			2.74			6.56			5.25
– basic adjusted (2), (3)		3.13			3.63			2.92			6.76			5.77
– diluted adjusted (2), (3)		3.12			3.62			2.92			6.75			5.77
Return on common equity (ROE) (3)		14.2%			16.8%			14.5%			15.5%			13.8%
ROE – adjusted (2), (3)		14.7%			17.2%			15.5%			15.9%			15.2%
Average common equity (5)	$	123,300		$	118,550		$	108,650		$	120,900		$	107,850
Net interest margin (NIM) – on average earning assets, net (3)		1.64%			1.60%			1.50%			1.62%			1.45%
PCL on loans as a % of average net loans and acceptances		0.58%			0.42%			0.41%			0.50%			0.39%
PCL on performing loans as a % of average net loans and acceptances		0.23%			0.03%			0.11%			0.13%			0.08%
PCL on impaired loans as a % of average net loans and acceptances		0.35%			0.39%			0.30%			0.37%			0.31%
Gross impaired loans (GIL) as a % of loans and acceptances		0.88%			0.78%			0.55%			0.88%			0.55%
Liquidity coverage ratio (LCR) (3), (6)		131%			128%			128%			131%			128%
Net stable funding ratio (NSFR) (3), (6)		116%			115%			111%			116%			111%
Capital, Leverage and Total loss absorbing capacity (TLAC) ratios (3), (7)
Common Equity Tier 1 (CET1) ratio		13.2%			13.2%			12.8%			13.2%			12.8%
Tier 1 capital ratio		14.7%			14.6%			14.1%			14.7%			14.1%
Total capital ratio		16.5%			16.4%			16.1%			16.5%			16.1%
Leverage ratio		4.3%			4.4%			4.2%			4.3%			4.2%
TLAC ratio		31.0%			29.8%			27.5%			31.0%			27.5%
TLAC leverage ratio		9.2%			8.9%			8.1%			9.2%			8.1%
Selected balance sheet and other information (8)
Total assets	$	2,242,133		$	2,191,026		$	2,031,050		$	2,242,133		$	2,031,050
Securities, net of applicable allowance		492,497			488,025			412,553			492,497			412,553
Loans, net of allowance for loan losses		1,007,306			1,006,050			960,539			1,007,306			960,539
Derivative related assets		188,211			153,686			130,199			188,211			130,199
Deposits		1,446,786			1,441,940			1,327,603			1,446,786			1,327,603
Common equity		122,084			122,763			112,065			122,084			112,065
Total risk-weighted assets (RWA) (3), (7)		703,920			708,941			653,702			703,920			653,702
Assets under management (AUM) (3)		1,363,900			1,428,700			1,223,300			1,363,900			1,223,300
Assets under administration (AUA) (3), (9)		5,019,700			5,148,300			4,546,200			5,019,700			4,546,200
Common share information
Shares outstanding (000s) – average basic		1,411,362			1,413,937			1,412,651			1,412,671			1,409,452
– average diluted		1,413,517			1,416,502			1,414,166			1,415,037			1,410,842
– end of period		1,409,539			1,412,878			1,414,304			1,409,539			1,414,304
Dividends declared per common share	$	1.48		$	1.48		$	1.38		$	2.96		$	2.76
Dividend yield (3)		3.6%			3.4%			4.1%			3.6%			4.4%
Dividend payout ratio (3)		49%			42%			50%			45%			53%
Common share price (RY on TSX) (10)	$	165.47		$	177.18		$	133.19		$	165.47		$	133.19
Market capitalization (TSX) (10)		233,236			250,334			188,371			233,236			188,371
Business information (number of)
Employees (full-time equivalent) (FTE)		94,369			94,624			94,480			94,369			94,480
Bank branches		1,284			1,286			1,348			1,284			1,348
Automated teller machines (ATMs)		4,331			4,358			4,447			4,331			4,447
Period average US$ equivalent of C$1.00 (11)		0.704			0.699			0.734			0.701			0.740
Period-end US$ equivalent of C$1.00		0.725			0.687			0.727			0.725			0.727

(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 Banking, Commercial Banking, Wealth Management and Capital Markets segments. For further details, refer to the Key corporate events section.

(2) These are non-GAAP measures or ratios. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

(3) See Glossary for composition of these measures.

(4) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(5) Average amounts are calculated using methods intended to approximate the average of the daily balances for the period.

(6) 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.

(7) 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. Both the CAR guideline and LR guideline are based on the Basel III framework. For further details, refer to the Capital management section.

(8) Represents period-end spot balances.

(9) AUA includes $15 billion and $6 billion (January 31, 2025 – $15 billion and $6 billion; April 30, 2024 – $16 billion and $6 billion) of securitized residential mortgages and credit card loans, respectively.

(10) Based on TSX closing market price at period-end.

(11) Average amounts are calculated using month-end spot rates for the period.

Royal Bank of Canada   Second Quarter 2025   5

Economic, market and regulatory review and outlook – data as at May 28, 2025

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

U.S. international trade policy has weakened the economic growth outlook across most advanced economies, including Canada, the Euro area, the U.K. and the U.S. The U.S. administration has imposed a universal 10% baseline tariff on all its trade partners but left exemptions for trade that is compliant with the Canada-United States-Mexico Agreement (CUSMA). Product-specific tariffs have also been imposed on U.S. imports of steel, aluminum and motor vehicles. Canada has retaliated with tariffs on certain U.S. goods. The economic growth outlook remains highly dependent on the length of time that the new tariffs imposed this calendar year remain in place and whether additional trade measures are imposed. Our forecast assumes that tariffs remain in place broadly as-is until the fourth calendar quarter of 2025 before easing. We expect the U.S. economy will grow at a slower rate this year than last year but do not expect it to contract. Tariffs are expected to increase consumer prices, particularly in the U.S., while the removal of the consumer carbon tax from energy products is expected to lower price growth in Canada. We expect the U.S. Federal Reserve (Fed) to resume cutting interest rates later this calendar year as anticipated weaker economic growth and a rising unemployment rate offset concerns about the upward impact of tariffs on inflation. The Bank of Canada (BoC) reduced interest rates by more than other global central banks over the last calendar year and we expect further moderate reductions into this summer. We expect slow growth in the U.K. and Euro area economies with the Bank of England (BOE) and the European Central Bank (ECB) expected to reduce policy interest rates further.

Canada

Canadian GDP is expected to have risen 1.8%1 in the first calendar quarter of 2025 following an increase of 2.6%1 in the final calendar quarter of 2024 but growth is expected to slow in the second calendar quarter of 2025 as international trade disruptions weigh on economic growth. Strength in consumer spending is expected to have waned in the first calendar quarter of 2025. Residential investment likely remained weak given slow resale activities and non-residential capital investment is expected to decline in the second calendar quarter. The unemployment rate increased to 6.9% in April 2025, up 0.7% from a year earlier, and is expected to continue to rise to 7.1% in the third calendar quarter of 2025, as a weakened domestic economic backdrop due to the impact of tariffs slows hiring demand. Inflation surprised to the upside early in 2025 but is expected to ease back to the BoC’s 2% target rate with the end of the consumer carbon tax on energy products. The BoC is expected to reduce the overnight rate to 2.25% in the third calendar quarter of 2025. GDP growth is expected to remain low over the second half of calendar 2025, before gradually recovering in calendar 2026.

U.S.

U.S. GDP fell by 0.3%1 in the first calendar quarter of 2025 following a 2.4%1 increase in the final calendar quarter of 2024. The decline was mostly due to a rise in imports and drop in government spending while household spending and business investment continued to grow. We expect slow GDP growth over the remainder of the 2025 calendar year as tariffs imposed by the U.S. administration increase costs and slow domestic production. The unemployment rate remains low but increased to 4.2% in April, up 0.3% from a year earlier. Job openings have continued to decline and wage growth has slowed. Inflationary pressures showed signs of re-acceleration in early calendar 2025 and are expected to increase further as tariffs raise input costs and consumer prices. Weaker economic growth and a rising unemployment rate for the remainder of calendar 2025 is expected to result in Federal Reserve interest rate reductions despite higher inflation. We expect the Fed to reduce the target range for the federal funds rate by 75 basis points in calendar 2025 with the first reduction in the third calendar quarter.

Euro area and the U.K.

Euro area GDP rose 0.3% in the first calendar quarter of 2025 following a 0.2% increase in the final calendar quarter of 2024. GDP growth is expected to remain slow but positive in the remaining quarters of this calendar year, as softening in global demand for Euro area exports is expected to be partially offset by higher government spending. Unemployment rates remain low across countries in the Euro area but are expected to rise modestly through the rest of calendar 2025. The ECB cut the deposit rate to 2.25% in April and further reductions are expected to a 1.75% rate in the third calendar quarter of 2025. U.K. GDP grew by 0.7% in the first calendar quarter of 2025 following a 0.1% increase in the fourth calendar quarter of 2024. GDP growth in the U.K. is expected to remain slow and the unemployment rate is expected to remain low for the remainder of calendar 2025. We anticipate the BoE will continue to cut the Bank Rate until it reaches 3.75%, which is expected by the end of calendar 2025.

Financial markets

The U.S. dollar has depreciated by about 5% since mid-January based on the trade-weighted U.S. dollar index. Equity markets have been volatile. The S&P 500 has not changed significantly from levels at the end of calendar 2024 with sharp declines in April reversing in subsequent weeks, and has broadly underperformed equity markets in the rest of the world. Government yield curves have steepened over the last three months across Canada, the United States and Europe, with longer-term bond yields rising slightly over that period while shorter-term yields have declined. Credit spreads have narrowed after widening in April. Other global commodity prices, including oil, have dropped, given expectations of slow global economic growth due to protectionist U.S. trade policy.

1  Annualized rate

6   Royal Bank of Canada  Second Quarter 2025

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 2024 Annual Report and updates are listed below.

Global uncertainty

In April 2025, the International Monetary Fund (IMF) projected global growth of 2.8%2 for calendar 2025, down 0.5% from its January forecast. Significant uncertainty continues to pose risks to the global economic outlook, driven by:

• Escalation of trade tensions, including protectionist trade policies such as the imposition of tariffs, which could soften demand, increase inflationary pressures, lower investment, disrupt supply chains and further reduce near- and long-term growth;

• A shift away from global economic integration, which could negatively impact productivity, growth and financial stability;

• Potential financial market instability or faster-than-anticipated deceleration in growth resulting from the persistence of inflation and elevated interest rates, along with their associated impact on consumer and business confidence;

• Diverging monetary policies in response to inflationary pressures, which may drive asset repricing, impact foreign exchange rates and capital flows and heighten financial market volatility;

• Shifting global policy priorities, including prolonged uncertainty surrounding changes to U.S. trade, foreign relations, defense and immigration policies, which could disrupt global alliances and heighten economic, market and other risks;

• Labour supply gaps which could hinder potential growth;

• Ongoing conflicts such as those between Russia and Ukraine and those in the Middle East, as well as increasing tensions in other regions such as between China and Taiwan;

• Increased polarization and social unrest; and

• Extreme weather-related events.

Our diversified business model, as well as our product and geographic diversification, continue to help mitigate the risks posed by global uncertainty.

U.S. legislative proposals

On May 22, 2025, the U.S. House of Representatives passed the One Big Beautiful Bill Act (the Bill). The Bill extends many of the expiring provisions in the 2017 Tax Cuts and Jobs Act and proposes a number of new measures, including the introduction of a new tax regime to retaliate against countries that impose taxes on U.S. persons that are deemed unfair, discriminatory or extraterritorial. As the Bill is not yet final, it is possible that the Bill may not ultimately be enacted, or may change significantly prior to enactment, including through removal of or amendments to any currently proposed provisions, or the addition of new provisions. We continue to actively monitor for developments and assess implications to RBC as the Bill moves through the legislative process.

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 2024 Annual Report. For further details on our framework and activities to manage risks, refer to the Risk management and Capital management sections of this Q2 2025 Report to Shareholders.

2  Given the complexity and fluidity of the current economic environment, the IMF has used a reference forecast in lieu of the usual baseline to project global growth.

Royal Bank of Canada   Second Quarter 2025   7

Key corporate events

HSBC Bank Canada

On March 28, 2024, we completed the acquisition of HSBC Bank Canada (HSBC Canada). The following table provides details on the impact of the acquisition of HSBC Canada (the HSBC Canada transaction) on our Personal Banking segment, 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 April 30, 2025
	Segment results – Personal Banking							Segment results – Commercial Banking							Consolidated results
(Millions of Canadian dollars)	Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total
Net interest income	$	3,286	$	233		$	3,519	$	1,442	$	292		$	1,734	$	7,500	$	556		$	8,056
Non-interest income		1,279		7			1,286		287		41			328		7,523		93			7,616
Total revenue		4,565		240			4,805		1,729		333			2,062		15,023		649			15,672
PCL		651		3			654		416		123			539		1,296		128			1,424
Non-interest expense		1,830		122			1,952		611		87			698		8,491		239			8,730
Income before income taxes		2,084		115			2,199		702		123			825		5,236		282			5,518
Income taxes		566		31			597		194		34			228		1,053		75			1,128
Net income	$	1,518	$	84		$	1,602	$	508	$	89		$	597	$	4,183	$	207		$	4,390
	For the three months ended April 30, 2024 (1)
	Segment results – Personal Banking							Segment results – Commercial Banking							Consolidated results
(Millions of Canadian dollars)	Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total
Net interest income	$	2,907	$	78		$	2,985	$	1,239	$	90		$	1,329	$	6,444	$	179		$	6,623
Non-interest income		1,167		11			1,178		304		23			327		7,465		66			7,531
Total revenue		4,074		89			4,163		1,543		113			1,656		13,909		245			14,154
PCL (2)		419		45			464		134		156			290		703		217			920
Non-interest expense		1,731		56			1,787		535		31			566		8,209		99			8,308
Income before income taxes		1,924		(12	)		1,912		874		(74	)		800		4,997		(71	)		4,926
Income taxes		512		(3	)		509		244		(21	)		223		996		(20	)		976
Net income	$	1,412	$	(9	)	$	1,403	$	630	$	(53	)	$	577	$	4,001	$	(51	)	$	3,950

(1) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(2) Segment results – Personal Banking and Segment results – Commercial Banking include initial PCL on purchased performing financial assets of $44 million and $142 million, respectively. Consolidated results include initial PCL on purchased performing financial assets of $200 million, of which $193 million relates to purchased performing loans.

	For the six months ended April 30, 2025
	Segment results – Personal Banking							Segment results – Commercial Banking							Consolidated results
(Millions of Canadian dollars)	Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total
Net interest income	$	6,560	$	464		$	7,024	$	2,912	$	618		$	3,530	$	14,859	$	1,145		$	16,004
Non-interest income		2,555		37			2,592		586		73			659		16,187		220			16,407
Total revenue		9,115		501			9,616		3,498		691			4,189		31,046		1,365			32,411
PCL		1,134		8			1,142		604		274			878		2,191		283			2,474
Non-interest expense		3,715		252			3,967		1,215		193			1,408		17,482		504			17,986
Income before income taxes		4,266		241			4,507		1,679		224			1,903		11,373		578			11,951
Income taxes		1,161		66			1,227		467		62			529		2,273		157			2,430
Net income	$	3,105	$	175		$	3,280	$	1,212	$	162		$	1,374	$	9,100	$	421		$	9,521
	For the six months ended April 30, 2024 (1)
	Segment results – Personal Banking							Segment results – Commercial Banking							Consolidated results
(Millions of Canadian dollars)	Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total		Excluding HSBC Canada		HSBC Canada			Total
Net interest income	$	5,761	$	78		$	5,839	$	2,521	$	90		$	2,611	$	12,776	$	179		$	12,955
Non-interest income		2,344		11			2,355		635		23			658		14,618		66			14,684
Total revenue		8,105		89			8,194		3,156		113			3,269		27,394		245			27,639
PCL (2)		883		45			928		304		156			460		1,516		217			1,733
Non-interest expense		3,455		56			3,511		1,077		31			1,108		16,533		99			16,632
Income before income taxes		3,767		(12	)		3,755		1,775		(74	)		1,701		9,345		(71	)		9,274
Income taxes		1,002		(3	)		999		495		(21	)		474		1,762		(20	)		1,742
Net income	$	2,765	$	(9	)	$	2,756	$	1,280	$	(53	)	$	1,227	$	7,583	$	(51	)	$	7,532

(1) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(2) Segment results – Personal Banking and Segment results – Commercial Banking include initial PCL on purchased performing financial assets of $44 million and $142 million, respectively. Consolidated results include initial PCL on purchased performing financial assets of $200 million, of which $193 million relates to purchased performing loans.

8   Royal Bank of Canada  Second Quarter 2025

Financial performance

Overview

Q2 2025 vs. Q2 2024

Net income of $4,390 million was up $440 million or 11% from a year ago. Diluted EPS of $3.02 was up $0.28 or 10% and ROE of 14.2% was down from 14.5% a year ago. Our CET1 ratio of 13.2% was up 40 bps from a year ago.

Adjusted net income of $4,528 million was up $330 million or 8% from a year ago. Adjusted diluted EPS of $3.12 was up $0.20 or 7% and adjusted ROE of 14.7% was down from 15.5% from a year ago.

Our earnings reflect higher results in Personal Banking, Wealth Management, Insurance and Commercial Banking, partially offset by lower earnings in Capital Markets. Prior period results reflect higher HSBC Canada transaction and integration costs and the impact of management of closing capital volatility related to the HSBC Canada transaction, both of which were treated as specified items and reported in Corporate Support. Our earnings also reflect higher PCL, mainly on performing loans, and the impact of foreign exchange translation.

Q2 2025 vs. Q1 2025

Net income of $4,390 million was down $741 million or 14% from last quarter. Diluted EPS of $3.02 was down $0.52 or 15% and ROE of 14.2% was down from 16.8% in the prior quarter. Our CET1 ratio of 13.2% was unchanged from last quarter.

Adjusted net income of $4,528 million was down $726 million or 14% from last quarter. Adjusted diluted EPS of $3.12 was down $0.50 or 14% and adjusted ROE of 14.7% was down from 17.2% last quarter.

Our earnings reflect lower results across all of our business segments and in Corporate Support. Higher PCL on performing loans contributed to lower results.

Q2 2025 vs. Q2 2024 (Six months ended)

Net income of $9,521 million was up $1,989 million or 26% from the same period last year. Diluted EPS of $6.56 was up $1.31 or 25% and ROE of 15.5% was up from 13.8% in the prior year.

Adjusted net income of $9,782 million was up $1,518 million or 18% from the same period last year. Adjusted diluted EPS of $6.75 was up $0.98 or 17% and adjusted ROE of 15.9% was up from 15.2% 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. Results in the current period also reflect a lower impact from HSBC Canada transaction and integration costs which is treated as a specified item and reported in Corporate Support. Our earnings also reflect higher PCL and the impact of foreign exchange translation.

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 six months ended
(Millions of Canadian dollars, except per share amounts)	Q2 2025 vs. Q2 2024		Q2 2025 vs. Q1 2025			Q2 2025 vs. Q2 2024
Increase (decrease):
Total revenue	$	306	$	(20	)	$	783
PCL		10		–			24
Non-interest expense		177		(6	)		437
Income taxes		13		(1	)		36
Net income		106		(13	)		286
Impact on EPS
Basic	$	0.07	$	(0.01	)	$	0.20
Diluted		0.07		(0.01	)		0.20

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

	$		$		$		$	$		$
(Average foreign currency equivalent of C$1.00) (1)	For the three months ended							For the six months ended
	April 30 2025		January 31 2025		April 30 2024			April 30 2025		April 30 2024
U.S. dollar		0.704		0.699		0.734			0.701		0.740
British pound		0.544		0.556		0.583			0.550		0.586
Euro		0.650		0.669		0.682			0.659		0.683

(1) Average amounts are calculated using month-end spot rates for the period.

Royal Bank of Canada   Second Quarter 2025   9

Total revenue

(Millions of Canadian dollars, except percentage amounts)	For the three months ended						For the six months ended
	April 30 2025		January 31 2025		April 30 2024		April 30 2025		April 30 2024
Interest and dividend income	$	24,970	$	26,455	$	25,754	$	51,425	$	51,363
Interest expense		16,914		18,507		19,131		35,421		38,408
Net interest income	$	8,056	$	7,948	$	6,623	$	16,004	$	12,955
NIM		1.64%		1.60%		1.50%		1.62%		1.45%
Insurance service result	$	224	$	286	$	203	$	510	$	390
Insurance investment result		78		82		59		160		200
Trading revenue		641		1,195		633		1,836		1,437
Investment management and custodial fees		2,544		2,667		2,257		5,211		4,442
Mutual fund revenue		1,211		1,236		1,067		2,447		2,097
Securities brokerage commissions		486		471		431		957		819
Service charges		607		612		557		1,219		1,111
Underwriting and other advisory fees		615		674		734		1,289		1,340
Foreign exchange revenue, other than trading		338		318		287		656		549
Card service revenue		328		317		291		645		617
Credit fees		370		435		434		805		829
Net gains on investment securities		45		55		59		100		129
Income (loss) from joint ventures and associates		16		19		18		35		30
Other		113		424		501		537		694
Non-interest income		7,616		8,791		7,531		16,407		14,684
Total revenue	$	15,672	$	16,739	$	14,154	$	32,411	$	27,639
Additional trading information
Net interest income (1)	$	614	$	364	$	403	$	978	$	747
Non-interest income		641		1,195		633		1,836		1,437
Total trading revenue	$	1,255	$	1,559	$	1,036	$	2,814	$	2,184

(1) 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).

Q2 2025 vs. Q2 2024

Total revenue increased $1,518 million or 11% from a year ago, largely due to higher net interest income. Higher investment management and custodial fees and mutual fund revenue also contributed to the increase. These factors were partially offset by lower other revenue and underwriting and other advisory fees. The impact of foreign exchange translation increased revenue by $306 million. The inclusion of HSBC Canada revenue contributed $649 million to total revenue.

Net interest income increased $1,433 million or 22%, of which $377 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $1,056 million or 16% was mainly due to average volume growth in Personal Banking and Commercial Banking, as well as higher spreads in Personal Banking. Higher fixed income trading revenue primarily in North America in Capital Markets and the impact of foreign exchange translation also contributed to the increase.

NIM was up 14 bps compared to a year ago, mainly due to higher trading net interest margin in Capital Markets, the acquisition of HSBC Canada including the accretion of fair value adjustments, the sustained impact of a higher interest rate environment across most of our business segments, as well as favourable changes in product mix in Personal Banking. These factors were partially offset by competitive pricing pressures in Personal Banking and Commercial Banking.

Investment management and custodial fees increased $287 million or 13%, primarily due to higher fee-based client assets reflecting market appreciation and net sales.

Mutual fund revenue increased $144 million or 13%, primarily due to higher fee-based client assets reflecting market appreciation and net sales in Wealth Management, as well as higher average mutual fund balances driving higher distribution fees in Personal Banking.

Underwriting and other advisory fees decreased $119 million or 16%, mainly due to lower M&A activity across all regions.

Other revenue decreased $388 million or 77%, primarily attributable to 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, as well as the impact of management of closing capital volatility related to the HSBC Canada transaction in the same quarter last year, which is treated as a specified item.

Q2 2025 vs. Q1 2025

Total revenue decreased $1,067 million or 6% from prior quarter, primarily due to lower trading revenue, other revenue and investment management and custodial fees. These factors were partially offset by higher net interest income.

Net interest income increased $108 million or 1%, mainly due to higher equity trading revenue across most regions in Capital Markets, partially offset by the impact of three less days in the current quarter.

Trading revenue decreased $554 million or 46%, primarily due to lower fixed income and equity trading revenue across most regions.

Investment management and custodial fees decreased $123 million or 5%, mainly due to seasonally lower performance fees, as well as three less days in the quarter and lower fee-based client assets driven by unfavourable market conditions, partially offset by net sales.

Other revenue decreased $311 million or 73%, primarily attributable to 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.

10   Royal Bank of Canada  Second Quarter 2025

Q2 2025 vs. Q2 2024 (Six months ended)

Total revenue increased $4,772 million or 17% from the same period last year, mainly driven by higher net interest income. Higher investment management and custodial fees, trading revenue and mutual fund revenue also contributed to the increase. These factors were partially offset by lower other revenue. The impact of foreign exchange translation increased revenue by $783 million. The inclusion of HSBC Canada revenue contributed $1,365 million to total revenue.

Net interest income increased $3,049 million or 24%, of which $966 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $2,083 million or 16% was primarily due to average volume growth in Personal Banking and Commercial Banking, as well as higher spreads in Personal Banking. Higher fixed income trading revenue primarily in North America in Capital Markets and the impact of foreign exchange translation also contributed to the increase.

Trading revenue increased $399 million or 28%, primarily due to higher equity trading revenue across most regions, higher foreign exchange trading revenue across all regions and higher commodities trading revenue primarily in Europe. The impact of foreign exchange translation also contributed to the increase. These factors were partially offset by lower fixed income trading revenue primarily in North America.

Investment management and custodial fees increased $769 million or 17%, primarily due to higher fee-based client assets reflecting market appreciation and net sales.

Mutual fund revenue increased $350 million or 17%, largely due to higher fee-based client assets reflecting market appreciation and net sales in Wealth Management, as well as higher average mutual fund balances driving higher distribution fees in Personal Banking.

Other revenue decreased $157 million or 23%, primarily attributable to 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. This was partially offset by the impact of management of closing capital volatility related to the HSBC Canada transaction in the same period last year, which is treated as a specified item.

Provision for credit losses (1)

	For the three months ended									For the six months ended
(Millions of Canadian dollars, except percentage amounts)	April 30 2025			January 31 2025			April 30 2024 (2)			April 30 2025			April 30 2024 (2)
Personal Banking	$	246		$	63		$	103		$	309		$	236
Commercial Banking		253			30			140			283			156
Wealth Management		35			36			(19	)		71			(46	)
Capital Markets		35			(61	)		19			(26	)		29
Corporate Support and other (3)		(1	)		–			1			(1	)		2
PCL on performing loans		568			68			244			636			377
Personal Banking	$	410		$	427		$	362		$	837		$	694
Commercial Banking		286			308			149			594			303
Wealth Management		51			45			46			96			84
Capital Markets		105			205			115			310			276
PCL on impaired loans		852			985			672			1,837			1,357
PCL – Loans		1,420			1,053			916			2,473			1,734
PCL – Other (4)		4			(3	)		4			1			(1	)
Total PCL	$	1,424		$	1,050		$	920		$	2,474		$	1,733
PCL on loans is comprised of:
Retail	$	300		$	104		$	107		$	404		$	244
Wholesale		268			(36	)		137			232			133
PCL on performing loans		568			68			244			636			377
Retail		454			485			396			939			755
Wholesale		398			500			276			898			602
PCL on impaired loans		852			985			672			1,837			1,357
PCL – Loans	$	1,420		$	1,053		$	916		$	2,473		$	1,734
PCL on loans as a % of average net loans and acceptances		0.58%			0.42%			0.41%			0.50%			0.39%
PCL on impaired loans as a % of average net loans and acceptances		0.35%			0.39%			0.30%			0.37%			0.31%

(1) Information on loans represents loans, acceptances and commitments.

(2) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(3) Includes PCL recorded in Corporate Support and Insurance.

(4) 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.

Q2 2025 vs. Q2 2024

Total PCL increased $504 million or 55% from a year ago, primarily due to higher provisions in Commercial Banking and Personal Banking. The PCL on loans ratio increased 17 bps.

PCL on performing loans increased $324 million, mainly driven by unfavourable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs). This was partially offset by the impact of $193 million of initial PCL on performing loans purchased in the HSBC Canada transaction in the prior year.

PCL on impaired loans increased $180 million or 27%, mainly due to higher provisions in Commercial Banking.

Royal Bank of Canada   Second Quarter 2025   11

Q2 2025 vs. Q1 2025

Total PCL increased $374 million or 36% from last quarter, primarily reflecting higher provisions in Commercial Banking and Personal Banking. The PCL on loans ratio increased 16 bps.

PCL on performing loans increased $500 million, mainly driven by unfavourable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs). PCL in the prior quarter included the impact of the migration to impaired in Capital Markets.

PCL on impaired loans decreased $133 million or 14%, mainly due to lower provisions in Capital Markets.

Q2 2025 vs. Q2 2024 (Six months ended)

Total PCL increased $741 million or 43% from the same period last year, mainly reflecting higher provisions in Commercial Banking, Personal Banking and Wealth Management. The PCL on loans ratio increased 11 bps.

PCL on performing loans increased $259 million or 69%, mainly driven by unfavourable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs). This was partially offset by the impact of $193 million of initial PCL on performing loans purchased in the HSBC Canada transaction in the prior year.

PCL on impaired loans increased $480 million or 35%, primarily due to higher provisions in Commercial Banking and Personal Banking.

Non-interest expense

	For the three months ended						For the six months ended
(Millions of Canadian dollars, except percentage amounts)	April 30 2025		January 31 2025		April 30 2024		April 30 2025		April 30 2024
Salaries	$	2,366	$	2,354	$	2,145	$	4,720	$	4,223
Variable compensation		2,338		2,569		2,161		4,907		4,244
Benefits and retention compensation		720		686		606		1,406		1,211
Share-based compensation		54		378		179		432		576
Human resources		5,478		5,987		5,091		11,465		10,254
Equipment		704		681		615		1,385		1,234
Occupancy		428		429		441		857		848
Communications		378		327		358		705		679
Professional fees		538		502		697		1,040		1,321
Amortization of other intangibles		457		435		373		892		725
Other		747		895		733		1,642		1,571
Non-interest expense	$	8,730	$	9,256	$	8,308	$	17,986	$	16,632
Efficiency ratio (1)		55.7%		55.3%		58.7%		55.5%		60.2%
Efficiency ratio – adjusted (1), (2)		54.5%		54.3%		56.0%		54.4%		57.0%

(1) See Glossary for composition of these measures.

(2) This is a non-GAAP ratio. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

Q2 2025 vs. Q2 2024

Non-interest expense increased $422 million or 5% from a year ago, of which $140 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $282 million or 3% was primarily due to higher staff costs, including severance, the impact of foreign exchange translation, as well as higher variable compensation commensurate with increased results. Ongoing technology investments 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, and the change in the fair value of our U.S. share-based compensation plans, which was largely offset in Other revenue.

Our efficiency ratio of 55.7% decreased 300 bps. Our adjusted efficiency ratio of 54.5% decreased 150 bps.

Q2 2025 vs. Q1 2025

Non-interest expense decreased $526 million or 6% from last quarter, primarily due to the change in the fair value of our U.S. share-based compensation plans, which was largely offset in Other revenue, and lower variable compensation on decreased results.

Our efficiency ratio of 55.7% increased 40 bps. Our adjusted efficiency ratio of 54.5% increased 20 bps.

Q2 2025 vs. Q2 2024 (Six months ended)

Non-interest expense increased $1,354 million or 8% from the same period last year, of which $405 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $949 million or 6% was primarily due to higher staff costs, including severance, higher variable compensation commensurate with increased results, as well as the impact of foreign exchange translation. Ongoing technology investments 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, and the change in the fair value of our U.S. share-based compensation plans, which was largely offset in Other revenue.

Our efficiency ratio of 55.5% decreased 470 bps. Our adjusted efficiency ratio of 54.4% decreased 260 bps.

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

12   Royal Bank of Canada  Second Quarter 2025

Income taxes

	For the three months ended						For the six months ended
(Millions of Canadian dollars, except percentage amounts)	April 30 2025		January 31 2025		April 30 2024		April 30 2025		April 30 2024
Income taxes	$	1,128	$	1,302	$	976	$	2,430	$	1,742
Income before income taxes		5,518		6,433		4,926		11,951		9,274
Effective income tax rate		20.4%		20.2%		19.8%		20.3%		18.8%
Adjusted results (1), (2)
Income taxes – adjusted	$	1,174	$	1,344	$	1,037	$	2,518	$	1,950
Income before income taxes – adjusted		5,702		6,598		5,235		12,300		10,214
Effective income tax rate – adjusted		20.6%		20.4%		19.8%		20.5%		19.1%

(1) These are non-GAAP measures or ratios. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.

(2) See Glossary for composition of these measures.

Q2 2025 vs. Q2 2024

Income tax expense increased $152 million or 16% from a year ago, primarily due to higher income before income taxes. Adjusted income tax expense increased $137 million or 13%.

The effective income tax rate of 20.4% increased 60 bps, primarily due to the impact of changes in earnings mix and the impact of Pillar Two legislation, which became effective for us beginning November 1, 2024. These factors were partially offset by the net impact of tax adjustments. The adjusted effective income tax rate of 20.6% increased 80 bps. For further details on Pillar Two legislation, refer to Note 9 of our Condensed Financial Statements.

Q2 2025 vs. Q1 2025

Income tax expense decreased $174 million or 13% from last quarter, primarily due to lower income before income taxes and the net impact of tax adjustments. These factors were partially offset by the impact of changes in earnings mix. Adjusted income tax expense decreased $170 million or 13%.

The effective income tax rate of 20.4% increased 20 bps, primarily due to the impact of changes in earnings mix, partially offset by the net impact of tax adjustments. The adjusted effective income tax rate of 20.6% increased 20 bps.

Q2 2025 vs. Q2 2024 (Six months ended)

Income tax expense increased $688 million or 39% from the same period last year, primarily due to higher income before income taxes. Adjusted income tax expense increased $568 million or 29%.    

The effective income tax rate of 20.3% increased 150 bps, primarily due to the impact of the Pillar Two legislation noted above. The adjusted effective income tax rate of 20.5% increased 140 bps.

Adjusted income tax expense and adjusted effective income tax rate are non-GAAP measures or ratios. For further details, 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 the first quarter of 2025, we increased our capital attribution rates to our business segments to better align with our internal targets, which reduced the amount of unattributed capital retained in Corporate Support. 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 2024 Annual Report.

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.

Royal Bank of Canada   Second Quarter 2025   13

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. 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
	April 30 2025															January 31 2025		April 30 2024
(Millions of Canadian dollars, except percentage amounts)	Personal Banking (3)		Commercial Banking (3)		Wealth Management (3)		Insurance		Capital Markets (3)		Corporate Support			Total		Total (3)		Total
Net income available to common shareholders	$	1,573	$	578	$	906	$	209	$	1,169	$	(161	)	$	4,274	$	5,011	$	3,881
Total average common equity (1), (2)		27,950		19,700		25,500		2,050		38,450		9,650			123,300		118,550		108,650
ROE		23.1%		12.1%		14.6%		42.0%		12.5%		n.m.			14.2%		16.8%		14.5%
	For the six months ended
	April 30 2025															April 30 2024
(Millions of Canadian dollars, except percentage amounts)	Personal Banking (3)		Commercial Banking (3)		Wealth Management (3)		Insurance		Capital Markets (3)		Corporate Support			Total		Total
Net income available to common shareholders	$	3,221	$	1,336	$	1,861	$	479	$	2,566	$	(178	)	$	9,285	$	7,403
Total average common equity (1), (2)		27,800		19,500		25,250		2,100		37,850		8,400			120,900		107,850
ROE		23.4%		13.8%		14.9%		46.1%		13.7%		n.m.			15.5%		13.8%

(1) Total average common equity represents rounded figures.

(2) The amounts for the segments are referred to as attributed capital.

(3) Effective the first quarter of 2025, we increased our capital attribution rates. For further details, refer to the How we measure and report our business segments section.

n.m. not meaningful

Non-GAAP measures

Non-GAAP measures and ratios 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 and ratios we use in evaluating our operating results.

Adjusted results and ratios

We believe that adjusted results are more reflective of our ongoing operating results and provide readers with a better understanding of management’s perspective on performance. Specified items discussed below can lead to variability that could obscure trends in underlying business performance and the amortization of acquisition-related intangibles can differ widely between organizations. Excluding the impact of specified items and amortization of acquisition-related intangibles may enhance comparability of our financial performance and enable 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 three and six months ended April 30, 2024 were adjusted for the following specified item:

• Management of closing capital volatility related to the HSBC Canada transaction.

Adjusted ratios, including adjusted EPS (basic and diluted), adjusted ROE and adjusted efficiency ratio, which are derived from adjusted results, are useful to readers because they may enhance comparability in assessing profitability on a per-share basis, how efficiently profits are generated from average common equity and how efficiently costs are managed relative to revenues. Adjusted results and ratios can also help inform and support strategic choices and capital allocation decisions.

14   Royal Bank of Canada  Second Quarter 2025

Consolidated results, reported and adjusted

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 ratios presented below are non-GAAP measures or ratios.

	As at or for the three months ended							As at or for the six months ended
(Millions of Canadian dollars, except per share, number of and percentage amounts)	April 30 2025		January 31 2025		April 30 2024			April 30 2025		April 30 2024
Total revenue	$	15,672	$	16,739	$	14,154		$	32,411	$	27,639
PCL		1,424		1,050		920			2,474		1,733
Non-interest expense		8,730		9,256		8,308			17,986		16,632
Income before income taxes		5,518		6,433		4,926			11,951		9,274
Income taxes		1,128		1,302		976			2,430		1,742
Net income	$	4,390	$	5,131	$	3,950		$	9,521	$	7,532
Net income available to common shareholders	$	4,274	$	5,011	$	3,881		$	9,285	$	7,403
Average number of common shares (thousands)		1,411,362		1,413,937		1,412,651			1,412,671		1,409,452
Basic earnings per share (in dollars)	$	3.03	$	3.54	$	2.75		$	6.57	$	5.25
Average number of diluted common shares (thousands)		1,413,517		1,416,502		1,414,166			1,415,037		1,410,842
Diluted earnings per share (in dollars)	$	3.02	$	3.54	$	2.74		$	6.56	$	5.25
ROE		14.2%		16.8%		14.5%			15.5%		13.8%
Effective income tax rate		20.4%		20.2%		19.8%			20.3%		18.8%
Total adjusting items impacting net income (before-tax)	$	184	$	165	$	309		$	349	$	940
Specified item: HSBC Canada transaction and integration costs (1), (2)		31		12		358			43		623
Specified item: Management of closing capital volatility related to the HSBC Canada transaction (1)		–		–		(155	)		–		131
Amortization of acquisition-related intangibles (3)		153		153		106			306		186
Total income taxes for adjusting items impacting net income	$	46	$	42	$	61		$	88	$	208
Specified item: HSBC Canada transaction and integration costs (1)		7		6		76			13		123
Specified item: Management of closing capital volatility related to the HSBC Canada transaction (1)		–		–		(43	)		–		36
Amortization of acquisition-related intangibles (3)		39		36		28			75		49
Adjusted results
Income before income taxes – adjusted	$	5,702	$	6,598	$	5,235		$	12,300	$	10,214
Income taxes – adjusted		1,174		1,344		1,037			2,518		1,950
Net income – adjusted		4,528		5,254		4,198			9,782		8,264
Net income available to common shareholders – adjusted (4)		4,412		5,134		4,129			9,546		8,135
Average number of common shares (thousands)		1,411,362		1,413,937		1,412,651			1,412,671		1,409,452
Basic earnings per share (in dollars) – adjusted	$	3.13	$	3.63	$	2.92		$	6.76	$	5.77
Average number of diluted common shares (thousands)		1,413,517		1,416,502		1,414,166			1,415,037		1,410,842
Diluted earnings per share (in dollars) – adjusted	$	3.12	$	3.62	$	2.92		$	6.75	$	5.77
ROE – adjusted		14.7%		17.2%		15.5%			15.9%		15.2%
Effective income tax rate – adjusted		20.6%		20.4%		19.8%			20.5%		19.1%
Adjusted efficiency ratio
Total revenue	$	15,672	$	16,739	$	14,154		$	32,411	$	27,639
Add specified item: Management of closing capital volatility related to the HSBC Canada transaction (before-tax) (1)		–		–		(155	)		–		131
Total revenue – adjusted (4)	$	15,672	$	16,739	$	13,999		$	32,411	$	27,770
Non-interest expense	$	8,730	$	9,256	$	8,308		$	17,986	$	16,632
Less specified item: HSBC Canada transaction and integration costs (before-tax) (1)		31		12		358			43		623
Less: Amortization of acquisition-related intangibles (before-tax) (3)		153		153		106			306		186
Non-interest expense – adjusted (4)	$	8,546	$	9,091	$	7,844		$	17,637	$	15,823
Efficiency ratio		55.7%		55.3%		58.7%			55.5%		60.2%
Efficiency ratio – adjusted		54.5%		54.3%		56.0%			54.4%		57.0%

(1) These amounts have been recognized in Corporate Support.

(2) As at April 30, 2025, the cumulative HSBC Canada transaction and integration costs (before-tax) incurred were $1.4 billion.

(3) Represents the impact of amortization of acquisition-related intangibles (excluding amortization of software), and any goodwill impairment.

(4) See Glossary for composition of these measures.

Royal Bank of Canada   Second Quarter 2025   15

Personal Banking

	As at or for the three months ended						As at or for the six months ended
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	April 30 2025 (1)		January 31 2025 (1)		April 30 2024 (1),(2)		April 30 2025 (1)		April 30 2024 (1),(2)
Net interest income	$	3,519	$	3,505	$	2,985	$	7,024	$	5,839
Non-interest income		1,286		1,306		1,178		2,592		2,355
Total revenue		4,805		4,811		4,163		9,616		8,194
PCL on performing assets		246		63		104		309		238
PCL on impaired assets		408		425		360		833		690
PCL		654		488		464		1,142		928
Non-interest expense		1,952		2,015		1,787		3,967		3,511
Income before income taxes		2,199		2,308		1,912		4,507		3,755
Net income	$	1,602	$	1,678	$	1,403	$	3,280	$	2,756
Revenue by business
Personal Banking – Canada	$	4,483	$	4,499	$	3,877	$	8,982	$	7,630
Caribbean & U.S. Banking		322		312		286		634		564
Selected balance sheet and other information
ROE		23.1%		23.7%		25.5%		23.4%		26.0%
NIM		2.66%		2.58%		2.43%		2.62%		2.38%
Efficiency ratio		40.6%		41.9%		42.9%		41.3%		42.8%
Operating leverage (3)		6.2%		2.5%		4.6%		4.4%		2.2%
Average total earning assets, net	$	541,800	$	539,900	$	499,500	$	540,900	$	492,800
Average loans and acceptances, net		531,500		530,100		489,900		530,800		483,200
Average deposits		440,400		437,200		390,800		438,700		380,300
AUA (4)		257,500		266,400		238,600		257,500		238,600
Average AUA		260,700		261,600		229,600		261,200		222,300
PCL on impaired loans as a % of average net loans and acceptances		0.32%		0.32%		0.30%		0.32%		0.29%
Other selected information – Personal Banking – Canada
Net income	$	1,503	$	1,583	$	1,311	$	3,086	$	2,570
NIM		2.59%		2.50%		2.34%		2.55%		2.30%
Efficiency ratio		39.3%		40.5%		41.3%		39.9%		41.3%
Operating leverage		5.6%		2.3%		4.9%		3.9%		2.1%

(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 all reported periods. For further details, refer to the Key corporate events section.

(2) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(3) See Glossary for composition of this measure.

(4) AUA represents period-end spot balances and includes securitized residential mortgages and credit card loans as at April 30, 2025 of $15 billion and $6 billion, respectively (January 31, 2025 – $15 billion and $6 billion; April 30, 2024 – $16 billion and $6 billion).

Financial performance

Q2 2025 vs. Q2 2024

Net income increased $199 million or 14% from a year ago. The inclusion of HSBC Canada results increased net income by $93 million. Excluding HSBC Canada results, net income increased $106 million or 8%, largely driven by higher net interest income reflecting higher spreads and average volume growth of 6% in Personal Banking – Canada, partially offset by higher PCL on performing loans.

Total revenue increased $642 million or 15%.

Personal Banking – Canada revenue increased $606 million or 16%, of which $151 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $455 million or 12% was primarily due to higher net interest income reflecting higher spreads and average volume growth of 7% in deposits and 4% in loans. Higher average mutual fund balances driving higher distribution fees, higher card service revenue and higher service charges reflecting increased client activity also contributed to the increase.

Caribbean & U.S. Banking revenue increased $36 million or 13%, primarily due to the impact of foreign currency translation and higher net interest income reflecting average volume growth in loans and deposits.

NIM was up 23 bps, mainly due to favourable changes in product mix and the sustained impact of a higher interest rate environment. These factors were partially offset by competitive pricing pressures in deposits.

PCL increased $190 million or 41%, mainly due to higher provisions on performing loans in our Canadian portfolios driven by unfavourable changes to our macroeconomic forecast and scenario weights, partially offset by lower unfavourable changes in credit quality.

Non-interest expense increased $165 million or 9%, of which $66 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $99 million or 6% was primarily due to higher staff-related costs, including the impact of targeted amendments to our defined benefit pensions and severance.

Q2 2025 vs. Q1 2025

Net income decreased $76 million or 5% from last quarter, primarily due to higher PCL, reflecting higher provisions on performing loans in our Canadian portfolios driven by unfavourable changes to our macroeconomic forecast and scenario weights, partially offset by lower non-interest expenses, mainly reflecting lower staff-related costs. In net interest income, higher spreads and average volume growth in Personal Banking – Canada more than offset the impact of three less days in the current quarter.

NIM was up 8 bps, mainly due to a favourable shift in product mix and the sustained impact of a higher interest rate environment.

16   Royal Bank of Canada  Second Quarter 2025

Q2 2025 vs. Q2 2024 (Six months ended)

Net income increased $524 million or 19% from the same period last year. The inclusion of HSBC Canada results increased net income by $184 million. Excluding HSBC Canada results, net income increased $340 million or 12%, largely driven by higher net interest income reflecting higher spreads and average volume growth of 6% in Personal Banking – Canada. Higher non-interest income also contributed to the increase. These factors were partially offset by higher non-interest expenses and higher PCL.

Total revenue increased $1,422 million or 17%, of which $412 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $1,010 million or 12% was largely due to higher net interest income reflecting higher spreads and average volume growth of 8% in deposits and 4% in loans in Personal Banking – Canada. Higher average mutual fund balances driving higher distribution fees and higher service charges reflecting increased client activity also contributed to the increase.

PCL increased $214 million or 23%, mainly due to higher provisions on impaired loans in our Canadian personal and credit cards portfolios, resulting in an increase of 3 bps in the PCL on impaired loans ratio. Higher provisions on performing loans also contributed to the increase.

Non-interest expense increased $456 million or 13%, of which $196 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $260 million or 8% was primarily due to higher staff-related costs, including severance.

Commercial Banking

	As at or for the three months ended						As at or for the six months ended
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	April 30 2025 (1)		January 31 2025 (1)		April 30 2024 (1), (2)		April 30 2025 (1)		April 30 2024 (1), (2)
Net interest income	$	1,734	$	1,796	$	1,329	$	3,530	$	2,611
Non-interest income		328		331		327		659		658
Total revenue		2,062		2,127		1,656		4,189		3,269
PCL on performing assets		253		31		141		284		157
PCL on impaired assets		286		308		149		594		303
PCL		539		339		290		878		460
Non-interest expense		698		710		566		1,408		1,108
Income before income taxes		825		1,078		800		1,903		1,701
Net income	$	597	$	777	$	577	$	1,374	$	1,227
Selected balance sheet and other information
ROE		12.1%		15.5%		17.5%		13.8%		20.1%
NIM		3.82%		3.89%		4.04%		3.86%		4.18%
Efficiency ratio		33.9%		33.4%		34.2%		33.6%		33.9%
Operating leverage		1.2%		0.9%		8.8%		1.0%		4.9%
Average total earning assets, net	$	186,000	$	183,300	$	133,800	$	184,600	$	125,700
Average loans and acceptances, net		186,000		183,200		152,000		184,600		143,900
Average deposits		310,700		304,900		269,300		307,800		262,700
PCL on impaired loans as a % of average net loans and acceptances		0.63%		0.67%		0.40%		0.65%		0.42%

(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 all reported periods. For further details, refer to the Key corporate events section.

(2) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

Financial performance

Q2 2025 vs. Q2 2024

Net income increased $20 million or 3% from a year ago. The inclusion of HSBC Canada results increased net income by $142 million, which includes the impact of $100 million (after-tax) of initial PCL on performing loans purchased in the HSBC Canada transaction in the prior year. Excluding HSBC Canada results, net income decreased $122 million or 19%, as growth in total revenue was more than offset by higher PCL, largely on performing loans, and higher non-interest expenses.

Total revenue increased $406 million or 25%, of which $220 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $186 million or 12% was primarily due to higher net interest income reflecting average volume growth of 10% in deposits and 9% in loans and acceptances. The increase in net interest income also includes the impact of the cessation of Bankers’ Acceptance-based lending, which was largely offset in credit fees within non-interest income.

PCL increased $249 million or 86%. PCL on performing assets was $253 million in the current quarter, primarily driven by unfavourable changes to our macroeconomic forecast, credit quality and scenario weights, as compared to $141 million in the prior year, driven by $139 million of initial PCL on performing loans purchased in the HSBC Canada transaction. PCL on impaired assets increased $137 million, mainly in a few sectors, including the real estate and related and consumer discretionary sectors, resulting in an increase of 23 bps in the PCL on impaired loans ratio.

Non-interest expense increased $132 million or 23%, of which $56 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $76 million or 14% was mainly due to higher staff-related costs, including variable compensation, the impact of targeted amendments to our defined benefit pensions and severance.

Q2 2025 vs. Q1 2025

Net income decreased $180 million or 23% from last quarter, primarily attributable to higher PCL on performing loans, driven by unfavourable changes to our macroeconomic forecast, scenario weights and credit quality. Lower net interest income, largely reflecting three less days in the current quarter, also contributed to the decrease.

Royal Bank of Canada   Second Quarter 2025   17

Q2 2025 vs. Q2 2024 (Six months ended)

Net income increased $147 million or 12% from the same period last year. The inclusion of HSBC Canada results increased net income by $215 million, which includes the impact of $100 million (after-tax) of initial PCL on performing loans purchased in the HSBC Canada transaction in the prior year. Excluding HSBC Canada results, net income decreased $68 million or 5%, as growth in total revenue was more than offset by higher PCL, largely on performing loans, and higher non-interest expenses.

Total revenue increased $920 million or 28%, of which $578 million reflects the inclusion of HSBC Canada revenue. The remaining increase of $342 million or 11% was primarily due to higher net interest income reflecting average volume growth of 9% in loans and acceptances and 9% in deposits. The increase in net interest income also includes the impact of the cessation of Bankers’ Acceptance-based lending, which was largely offset in credit fees within non-interest income.

PCL increased $418 million or 91%. PCL on performing assets was $284 million in the current period, primarily driven by unfavourable changes to our credit quality, macroeconomic forecast and scenario weights, as compared to $157 million in the prior period, driven by $139 million of initial PCL on performing loans purchased in the HSBC Canada transaction. PCL on impaired assets increased $291 million, mainly in a few sectors, including the consumer discretionary and real estate and related sectors, resulting in an increase of 23 bps in the PCL on impaired loans ratio.

Non-interest expense increased $300 million or 27%, of which $162 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $138 million or 13% was mainly due to higher staff-related costs.

18   Royal Bank of Canada  Second Quarter 2025

Wealth Management

	As at or for the three months ended							As at or for the six months ended
(Millions of Canadian dollars, except number of, percentage amounts and as otherwise noted)	April 30 2025 (1)		January 31 2025 (1)		April 30 2024 (1), (2)			April 30 2025 (1)		April 30 2024 (1), (2)
Net interest income	$	1,301	$	1,394	$	1,222		$	2,695	$	2,452
Non-interest income		4,096		4,174		3,567			8,270		7,024
Total revenue		5,397		5,568		4,789			10,965		9,476
PCL on performing assets		35		36		(19	)		71		(46	)
PCL on impaired assets		51		45		46			96		84
PCL		86		81		27			167		38
Non-interest expense		4,098		4,204		3,728			8,302		7,569
Income before income taxes		1,213		1,283		1,034			2,496		1,869
Net income	$	929	$	980	$	840		$	1,909	$	1,504
Revenue by business
Canadian Wealth Management	$	1,685	$	1,693	$	1,393		$	3,378	$	2,720
U.S. Wealth Management (including City National Bank (City National))		2,450		2,466		2,211			4,916		4,369
U.S. Wealth Management (including City National) (US$ millions)		1,725		1,722		1,622			3,447		3,231
Global Asset Management		740		867		705			1,607		1,430
International Wealth Management		329		344		300			673		617
Investor Services		193		198		180			391		340
Selected balance sheet and other information
ROE		14.6%		15.2%		14.7%			14.9%		13.1%
NIM		3.28%		3.34%		3.25%			3.31%		3.25%
Pre-tax margin (3)		22.5%		23.0%		21.6%			22.8%		19.7%
Number of advisors (4)		6,191		6,180		6,128			6,191		6,128
Average total earning assets, net	$	162,800	$	165,700	$	152,700		$	164,200	$	151,600
Average loans and acceptances, net		123,400		122,100		114,000			122,700		113,700
Average deposits		170,200		183,700		161,400			177,100		160,700
AUA (5)		4,737,300		4,856,800		4,284,300			4,737,300		4,284,300
AUM (5)		1,354,800		1,419,200		1,214,100			1,354,800		1,214,100
Average AUA		4,862,100		4,778,100		4,312,400			4,819,400		4,257,700
Average AUM		1,391,700		1,361,700		1,200,000			1,376,400		1,160,600
PCL on impaired loans as a % of average net loans and acceptances		0.16%		0.15%		0.16%			0.16%		0.15%

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items (Millions of Canadian dollars, except percentage amounts)	For the three months ended					For the six months ended
	Q2 2025 vs. Q2 2024		Q2 2025 vs. Q1 2025			Q2 2025 vs. Q2 2024
Increase (decrease):
Total revenue	$	140	$	(9	)	$	340
PCL		3		(1	)		9
Non-interest expense		115		(4	)		273
Net income		17		(3	)		46
Percentage change in average U.S. dollar equivalent of C$1.00		(4)%		1%			(5)%
Percentage change in average British pound equivalent of C$1.00		(7)%		(2)%			(6)%
Percentage change in average Euro equivalent of C$1.00		(5)%		(3)%			(4)%

(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 all reported periods. For further details, refer to the Key corporate events section.

(2) Amounts have been revised from those previously presented to conform to our new basis of segment presentation. For further details, refer to the About Royal Bank of Canada section.

(3) Pre-tax margin is defined as Income before income taxes divided by Total revenue.

(4) Represents client-facing advisors across all of our Wealth Management businesses.

(5) Represents period-end spot balances.

Financial performance

Q2 2025 vs. Q2 2024

Net income increased $89 million or 11% from a year ago, mainly due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation.

Total revenue increased $608 million or 13%.

Canadian Wealth Management revenue increased $292 million or 21%, mainly due to higher fee-based client assets reflecting market appreciation and net sales. Higher net interest income reflecting average volume growth in deposits and higher spreads and higher transactional revenue driven by client activity also contributed to the increase.

U.S. Wealth Management (including City National) revenue increased $239 million or 11%. In U.S. dollars, revenue increased $103 million or 6%, primarily due to higher fee-based client assets reflecting market appreciation and net sales.

Global Asset Management revenue increased $35 million or 5%, primarily due to higher fee-based client assets reflecting market appreciation and net sales.

International Wealth Management revenue increased $29 million or 10%, mainly due to the impact of foreign exchange translation.

Royal Bank of Canada   Second Quarter 2025   19

Investor Services revenue increased $13 million or 7%, primarily due to higher net interest income reflecting higher spreads and average volume growth in deposits.

PCL increased $59 million, primarily due to provisions taken on performing loans in the current quarter in U.S. Wealth Management (including City National), mainly reflecting unfavourable changes to our scenario weights, as compared to releases of provisions in the same quarter last year.

Non-interest expense increased $370 million or 10%, primarily due to higher variable compensation commensurate with increased results, the impact of foreign exchange translation and higher staff costs.

Q2 2025 vs. Q1 2025

Net income decreased $51 million or 5% from last quarter, mainly due to lower fee-based revenue reflecting three less days in the quarter and lower fee-based client assets driven by unfavourable market conditions, partially offset by net sales. Seasonally lower performance fees and changes in the fair value of seed capital investments also contributed to the decrease. These factors were partially offset by lower variable compensation commensurate with decreased results.

Q2 2025 vs. Q2 2024 (Six months ended)

Net income increased $405 million or 27% from the same period last year, mainly due to higher fee-based client assets reflecting market appreciation and net sales, which also drove higher variable compensation. The prior year also included the cost of the Federal Deposit Insurance Corporation (FDIC) special assessment.

Total revenue increased $1,489 million or 16%, mainly due to higher fee-based client assets reflecting market appreciation and net sales. The impact of foreign exchange translation and higher transactional revenue driven by client activity also contributed to the increase.

PCL increased $129 million, primarily due to provisions taken on performing loans in the current period in U.S. Wealth Management (including City National), mainly driven by unfavourable changes to scenario weights and credit quality, as compared to releases of provisions in the same period last year.

Non-interest expense increased $733 million or 10%, primarily due to higher variable compensation commensurate with increased results, the impact of foreign exchange translation and higher staff costs. The prior year also included the cost of the FDIC special assessment.

20   Royal Bank of Canada  Second Quarter 2025

Insurance

	As at or for the three months ended						As at or for the six months ended
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	April 30 2025		January 31 2025		April 30 2024		April 30 2025		April 30 2024
Non-interest income
Insurance service result	$	224	$	286	$	203	$	510	$	390
Insurance investment result		78		82		59		160		200
Other income		36		38		36		74		71
Total revenue		338		406		298		744		661
PCL		–		–		–		–		1
Non-interest expense		80		87		69		167		140
Income before income taxes		258		319		229		577		520
Net income	$	211	$	272	$	177	$	483	$	397
Selected balances and other information
ROE		42.0%		49.9%		34.7%		46.1%		37.9%
Premiums and deposits (1)	$	1,276	$	2,317	$	1,610	$	3,593	$	2,956
Contractual service margin (CSM) (2)		1,950		2,008		1,980		1,950		1,980

(1) 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.

(2) 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.

Financial performance

Q2 2025 vs. Q2 2024

Net income increased $34 million or 19% from a year ago, mainly due to higher insurance service result reflecting improved claims experience, primarily in our short-term products. Higher insurance investment result, primarily due to lower capital funding costs and higher favourable investment-related experience, also contributed to the increase.

Total revenue increased $40 million or 13%, primarily due to higher insurance service result and higher insurance investment result, as noted above.

Non-interest expense increased $11 million or 16%, primarily due to higher staff-related costs, mainly reflecting the impact of severance.

Q2 2025 vs. Q1 2025

Net income decreased $61 million or 22% from last quarter, primarily due to lower insurance service result as the prior quarter included a favourable impact from reinsurance contract recaptures.

Q2 2025 vs. Q2 2024 (Six months ended)

Net income increased $86 million or 22% from the same period last year, primarily due to higher insurance service result driven by improved claims experience across the majority of our products and the impact of reinsurance contract recaptures. This was partially offset by lower insurance investment result, primarily reflecting higher favourable investment-related experience in the prior period on transition to IFRS 17.

Total revenue increased $83 million or 13%, primarily due to higher insurance service result, partially offset by lower insurance investment result, as noted above.

Non-interest expense increased $27 million or 19%, primarily due to higher staff-related costs, mainly reflecting the impact of severance.

Royal Bank of Canada   Second Quarter 2025   21

Capital Markets

	As at or for the three months ended								As at or for the six months ended
(Millions of Canadian dollars, except percentage amounts and as otherwise noted)	April 30 2025 (1)			January 31 2025 (1)			April 30 2024 (1)		April 30 2025 (1)			April 30 2024 (1)
Net interest income (2)	$	1,275		$	918		$	764	$	2,193		$	1,425
Non-interest income (2)		2,026			2,838			2,390		4,864			4,680
Total revenue (2)		3,301			3,756			3,154		7,057			6,105
PCL on performing assets		40			(63	)		22		(23	)		28
PCL on impaired assets		106			205			115		311			276
PCL		146			142			137		288			304
Non-interest expense		1,885			2,041			1,722		3,926			3,364
Income before income taxes		1,270			1,573			1,295		2,843			2,437
Net income	$	1,202		$	1,432		$	1,262	$	2,634		$	2,416
Revenue by business
Corporate & Investment Banking (3), (4)	$	1,589		$	1,715		$	1,708	$	3,304		$	3,088
Global Markets (3)		1,769			2,079			1,434		3,848			3,116
Other (4)		(57	)		(38	)		12		(95	)		(99	)
Selected balance sheet and other information
ROE		12.5%			14.9%			16.3%		13.7%			15.4%
Average total assets	$	1,295,000		$	1,326,700		$	1,154,300	$	1,311,100		$	1,174,800
Average trading securities		199,800			211,600			179,200		205,800			191,800
Average loans and acceptances, net		160,900			159,700			149,900		160,300			145,900
Average deposits		374,100			360,300			294,100		367,100			293,300
PCL on impaired loans as a % of average net loans and acceptances		0.27%			0.51%			0.31%		0.39%			0.38%

Estimated impact of U.S. dollar, British pound and Euro translation on key income statement items (Millions of Canadian dollars, except percentage amounts)	For the three months ended					For the six months ended
	Q2 2025 vs. Q2 2024		Q2 2025 vs. Q1 2025			Q2 2025 vs. Q2 2024
Increase (decrease):
Total revenue	$	146	$	(4	)	$	372
PCL		7		1			14
Non-interest expense		63		–			151
Net income		67		(5	)		180
Percentage change in average U.S. dollar equivalent of C$1.00		(4)%		1%			(5)%
Percentage change in average British pound equivalent of C$1.00		(7)%		(2)%			(6)%
Percentage change in average Euro equivalent of C$1.00		(5)%		(3)%			(4)%

(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 all reported periods. For further details, refer to the Key corporate events section.

(2) The taxable equivalent basis (teb) adjustment for the three months ended April 30, 2025 was $9 million (January 31, 2025 – $26 million; April 30, 2024 – $(4) million) and for the six months ended April 30, 2025 was $35 million (April 30, 2024 – $50 million). For further discussion, refer to the How we measure and report our business segments section of our 2024 Annual Report.

(3) Effective the third quarter of 2024, we moved the majority of our debt origination business from Global Markets to Corporate & Investment Banking. Comparative amounts for the three and six month periods ended April 30, 2024 have been revised from those previously presented.

(4) Comparative amounts have been revised from those previously presented.

Financial performance

Q2 2025 vs. Q2 2024

Net income decreased $60 million or 5% from a year ago, as higher revenue in Global Markets and the impact of foreign exchange translation were more than offset by lower revenue in Corporate & Investment Banking and Other, higher non-interest expenses, as well as higher taxes including the impact of Pillar Two legislation and changes in earnings mix.

Total revenue increased $147 million or 5%.

Corporate & Investment Banking revenue decreased $119 million or 7%, largely due to lower M&A activity across all regions, partially offset by the impact of foreign exchange translation and higher lending revenue primarily in Europe.

Global Markets revenue increased $335 million or 23%, largely due to higher equity and foreign exchange trading revenue across all regions, as well as the impact of foreign exchange translation.

Other revenue decreased $69 million, largely reflecting higher residual funding and capital costs, as well as the impact of fair value changes in our legacy U.S. portfolios.

PCL increased $9 million or 7%, mainly due to higher provisions on performing loans, including unfavourable changes to our scenario weights. This was partially offset by lower provisions on impaired loans, resulting in a 4 bps decrease in the PCL on impaired loans ratio.

Non-interest expense increased $163 million or 9%, largely driven by the impact of foreign exchange translation and ongoing technology investments.

22   Royal Bank of Canada  Second Quarter 2025

Q2 2025 vs. Q1 2025

Net income decreased $230 million or 16% from last quarter, mainly due to lower fixed income trading across all regions and lower M&A activity primarily in the U.S. These factors were partially offset by lower compensation on decreased results. PCL in the prior quarter reflected the impact of one account in the other services sector that migrated from performing to impaired and resulted in the release of provisions on performing loans and provisions taken on impaired loans.

Q2 2025 vs. Q2 2024 (Six months ended)

Net income increased $218 million or 9% from the same period last year, primarily driven by higher revenue in Global Markets and the impact of foreign exchange translation. These factors were partially offset by higher compensation on increased results and higher taxes including the impact of Pillar Two legislation and changes in earnings mix.

Total revenue increased $952 million or 16%, mainly due to the impact of foreign exchange translation, as well as higher equity and foreign exchange trading revenue across all regions. These factors were partially offset by lower M&A activity across most regions.

PCL decreased $16 million or 5%. The current period reflects releases of provisions on performing loans, as compared to provisions taken on performing loans in the same period last year, mainly due to one account in the other services sector that migrated from performing to impaired in the current period, partially offset by unfavourable changes to our scenario weights. Higher provisions on impaired loans were driven by increases in a few sectors, including the other services sector, partially offset by decreases in a few sectors, including the real estate and related sector, resulting in an increase of 1 bp in the PCL on impaired loans ratio.

Non-interest expense increased $562 million or 17%, largely driven by higher compensation on increased results, the impact of foreign exchange translation and ongoing technology investments.

Corporate Support

	For the three months ended									For the six months ended
(Millions of Canadian dollars)	April 30 2025			January 31 2025			April 30 2024			April 30 2025			April 30 2024
Net interest income (loss) (1)	$	227		$	335		$	323		$	562		$	628
Non-interest income (loss) (1), (2)		(458	)		(264	)		(229	)		(722	)		(694	)
Total revenue (1), (2)		(231	)		71			94			(160	)		(66	)
PCL		(1	)		–			2			(1	)		2
Non-interest expense (2)		17			199			436			216			940
Income (loss) before income taxes (1)		(247	)		(128	)		(344	)		(375	)		(1,008	)
Income taxes (recoveries) (1)		(96	)		(120	)		(35	)		(216	)		(240	)
Net income (loss)	$	(151	)	$	(8	)	$	(309	)	$	(159	)	$	(768	)

(1) Teb adjusted.

(2) Revenue for the three months ended April 30, 2025 included losses of $140 million (January 31, 2025 and April 30, 2024 – gains of $112 million and gains of $64 million, respectively) on economic hedges of our U.S. Wealth Management (including City National) share-based compensation plans, and non-interest expense included $(112) million (January 31, 2025 and April 30, 2024 – $108 million and $60 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 six months ended April 30, 2025 included losses of $28 million (April 30, 2024 – gains of $286 million) on economic hedges of our U.S. Wealth Management (including City National) share-based compensation plans, and non-interest expense included $(4) million (April 30, 2024 – $266 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.

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 Legal and regulatory environment risk section in our 2024 Annual Report.

The teb amount for the three months ended April 30, 2025 was $9 million, compared to $26 million in the prior quarter and $(4) million in the same quarter last year.

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

Q2 2025

Net loss was $151 million, primarily due to residual unallocated items, including severance.

Q1 2025

Net loss was $8 million.

Royal Bank of Canada   Second Quarter 2025   23

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.

Q2 2025 (Six months ended)

Net loss was $159 million, primarily due to residual unallocated items, including severance.

Q2 2024 (Six months ended)

Net loss was $768 million, primarily due to the after-tax impact of the HSBC Canada transaction and integration costs of $500 million and the after-tax impact of management of closing capital volatility related to the HSBC Canada transaction of $95 million, both of which are treated as specified items. Unallocated costs also contributed to the net loss.

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)

	2025					2024											2023
(Millions of Canadian dollars, except per share and percentage amounts)	Q2 (2)			Q1 (2)		Q4 (2)			Q3 (2)			Q2 (2)		Q1			Q4			Q3
Personal Banking	$	4,805		$	4,811	$	4,658		$	4,490		$	4,163	$	4,031		$	4,009		$	3,898
Commercial Banking		2,062			2,127		2,077			2,036			1,656		1,613			1,565			1,511
Wealth Management		5,397			5,568		5,186			4,964			4,789		4,687			4,332			4,556
Insurance		338			406		278			285			298		363			248			336
Capital Markets (3)		3,301			3,756		2,903			3,004			3,154		2,951			2,564			2,679
Corporate Support (3)		(231	)		71		(28	)		(148	)		94		(160	)		(33	)		(3	)
Total revenue		15,672			16,739		15,074			14,631			14,154		13,485			12,685			12,977
PCL		1,424			1,050		840			659			920		813			720			616
Non-interest expense		8,730			9,256		9,019			8,599			8,308		8,324			8,059			7,765
Income before income taxes		5,518			6,433		5,215			5,373			4,926		4,348			3,906			4,596
Income taxes		1,128			1,302		993			887			976		766			(33	)		736
Net income	$	4,390		$	5,131	$	4,222		$	4,486		$	3,950	$	3,582		$	3,939		$	3,860
EPS  – basic	$	3.03		$	3.54	$	2.92		$	3.09		$	2.75	$	2.50		$	2.77		$	2.73
– diluted		3.02			3.54		2.91			3.09			2.74		2.50			2.76			2.73
Effective income tax rate		20.4%			20.2%		19.0%			16.5%			19.8%		17.6%			(0.8)%			16.0%
Period average US$ equivalent of C$1.00	$	0.704		$	0.699	$	0.733		$	0.730		$	0.734	$	0.745		$	0.732		$	0.750

(1) Fluctuations in the Canadian dollar relative to other foreign currencies have affected our consolidated results over the period.

(2) 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 Banking, Commercial Banking, Wealth Management and Capital Markets segments. For further details, refer to the Key corporate events section.

(3) Teb adjusted. For further discussion, refer to the How we measure and report our business segments section of our 2024 Annual Report.

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 Banking revenue has benefitted from volume growth in loans and deposits over the period. NIM has been favourably impacted by the higher interest rate environment, and more recently by favourable changes in product mix. HSBC Canada revenue has been included since the transaction closed on March 28, 2024.

Commercial Banking revenue has benefitted from volume growth in loans and deposits over the period. HSBC Canada revenue has been included since the transaction closed on March 28, 2024.

Wealth Management revenue has generally benefitted from growth in fee-based client assets, which is influenced 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.

Insurance revenue reflects fluctuations in market conditions and insurance experience. New business gains are deferred through CSM and new business losses are reflected through insurance service result. In the first quarter of 2025, insurance revenue also reflected the impact of reinsurance contract recaptures.

24   Royal Bank of Canada  Second Quarter 2025

Capital Markets revenue is influenced, to a large extent, by market conditions that impact client activity. Investment banking fee pools were muted in 2023, but saw increasing activity through most of 2024. However, in 2025, fee pool growth started to slow amidst macroeconomic uncertainty and market volatility. Conversely, sales & trading activity improved in 2023 and carried increasingly strong momentum into 2024. In 2025, macroeconomic uncertainty has continued to keep client volumes robust across the sales & trading business.

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, which drive our forecasts and influence our scenario weights, and exposures. Provisions on performing assets over the period have generally been reflective of unfavourable changes in credit quality. Throughout the period, we have generally seen improvements to our macroeconomic forecast until the second quarter of 2025, where we have seen unfavourable changes, driven by the potential impacts of trade disruptions (including tariffs). The second quarter of 2024 included initial PCL on performing loans purchased in the HSBC Canada transaction. PCL on impaired assets has generally trended upwards over 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 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. Beginning in the first quarter of 2025, our effective income tax rate reflects the impact of Pillar Two legislation, which became effective for us beginning November 1, 2024.

Financial condition

Condensed balance sheets

	As at
(Millions of Canadian dollars)	April 30 2025			October 31 2024
Assets
Cash and due from banks	$	48,621		$	56,723
Interest-bearing deposits with banks		65,970			66,020
Securities, net of applicable allowance (1)		492,497			439,918
Assets purchased under reverse repurchase agreements and securities borrowed		301,927			350,803
Loans
Retail		635,280			626,978
Wholesale		379,151			360,439
Allowance for loan losses		(7,125	)		(6,037	)
Other – Derivatives		188,211			150,612
– Other		137,601			126,126
Total assets	$	2,242,133		$	2,171,582
Liabilities
Deposits	$	1,446,786		$	1,409,531
Other – Derivatives		194,344			163,763
– Other		454,728			457,550
Subordinated debentures		13,745			13,546
Total liabilities		2,109,603			2,044,390
Equity attributable to shareholders		132,447			127,089
Non-controlling interests		83			103
Total equity		132,530			127,192
Total liabilities and equity	$	2,242,133		$	2,171,582

(1) Securities are comprised of trading and investment securities.

Q2 2025 vs. Q4 2024

Total assets increased $71 billion or 3% from October 31, 2024. Foreign exchange translation decreased total assets by $66 billion.

Cash and due from banks decreased $8 billion or 14%, largely due to lower deposits with central banks reflecting short-term cash management activities.

Securities, net of applicable allowance, increased $53 billion or 12%, primarily due to higher government debt securities reflecting liquidity management activities and favourable market opportunities.

Assets purchased under reverse repurchase agreements (reverse repos) and securities borrowed decreased $49 billion or 14%, primarily due to decreased client financing activity.

Loans (net of Allowance for loan losses) increased $26 billion or 3%, primarily due to volume growth in wholesale loans and residential mortgages.

Royal Bank of Canada   Second Quarter 2025   25

Derivative assets increased $38 billion or 25%, mainly attributable to higher fair values on foreign exchange contracts, partially offset by the impact of foreign exchange translation.

Other assets increased $11 billion or 9%, largely due to higher cash collateral and commodity trading receivables reflecting market conditions and client activity.

Total liabilities increased $65 billion or 3%. Foreign exchange translation decreased total liabilities by $66 billion.

Deposits increased $37 billion or 3%, mainly due to higher demand deposits driven by client activity.

Derivative liabilities increased $31 billion or 19%, mainly attributable to higher fair values on foreign exchange contracts, partially offset by the impact of foreign exchange translation.

Other liabilities decreased $3 billion or 1%, mainly due to lower obligations related to repurchase agreements (repos) reflecting decreased client financing activity, partially offset by higher securities sold short and cash collateral.

Total equity increased $5 billion or 4%, reflecting earnings, net of dividends, and the issuance of a limited recourse capital note.

Off-balance 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 Q2 2025 Report to Shareholders.

Our significant off-balance sheet transactions include those described on pages 64 to 66 of our 2024 Annual Report.

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 2024 Annual Report.

26   Royal Bank of Canada  Second Quarter 2025

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 April 30, 2025
(Millions of Canadian dollars, except percentage amounts)	Residential mortgages										Home equity lines of credit (2)
	Insured (3)				Uninsured				Total		Total
Region (4)
Canada
Atlantic provinces	$	8,741	42	%	$	12,150	58	%	$	20,891	$	1,692
Quebec		11,416	25			34,419	75			45,835		3,398
Ontario		31,169	14			193,584	86			224,753		18,292
Alberta		18,302	42			25,312	58			43,614		4,473
Saskatchewan and Manitoba		8,302	40			12,423	60			20,725		1,707
B.C. and territories		12,190	14			76,890	86			89,080		8,271
Total Canada (5)		90,120	20			354,778	80			444,898		37,833
U.S.		–	–			33,658	100			33,658		2,203
Other International		–	–			3,278	100			3,278		1,451
Total International		–	–			36,936	100			36,936		3,654
Total	$	90,120	19	%	$	391,714	81	%	$	481,834	$	41,487

	As at January 31, 2025
(Millions of Canadian dollars, except percentage amounts)	Residential mortgages										Home equity lines of credit (2)
	Insured (3)				Uninsured				Total		Total
Region (4)
Canada
Atlantic provinces	$	8,713	42	%	$	11,921	58	%	$	20,634	$	1,683
Quebec		11,639	25			35,405	75			47,044		3,332
Ontario		31,709	14			191,308	86			223,017		17,998
Alberta		18,584	43			24,818	57			43,402		4,410
Saskatchewan and Manitoba		8,437	41			12,313	59			20,750		1,674
B.C. and territories		12,432	14			75,981	86			88,413		8,081
Total Canada (5)		91,514	21			351,746	79			443,260		37,178
U.S.		–	–			35,235	100			35,235		2,320
Other International		–	–			3,427	100			3,427		1,411
Total International		–	–			38,662	100			38,662		3,731
Total	$	91,514	19	%	$	390,408	81	%	$	481,922	$	40,909

(1) Disclosure is provided in accordance with the requirements of OSFI’s Guideline B-20 (Residential Mortgage Underwriting Practices and Procedures).

(2) Includes $41,470 million and $17 million of uninsured and insured home equity lines of credit, respectively (January 31, 2025 – $40,892 million and $17 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 $445 billion (January 31, 2025 – $443 billion) includes $12 billion (January 31, 2025 – $12 billion) of mortgages with commercial clients in Commercial Banking, of which $9 billion (January 31, 2025 – $9 billion) are insured, and $17 billion (January 31, 2025 – $18 billion) of residential mortgages in Capital Markets, of which $17 billion (January 31, 2025 – $18 billion) are held for securitization purposes. All of the residential mortgages held for securitization purposes are insured (January 31, 2025 – 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
	April 30   2025									January 31    2025
	Canada (2)			U.S. and other International			Total			Canada (2)			U.S. and other International			Total
Amortization period
≤ 25 years		76	%		34	%		73	%		68	%		33	%		66	%
> 25 years ≤ 30 years		24			66			27			32			67			34
Total		100	%		100	%		100	%		100	%		100	%		100	%

(1) Disclosure is provided in accordance with the requirements of OSFI’s Guideline B-20 (Residential Mortgage Underwriting Practices and Procedures).

(2) Our policy is to originate mortgages with amortization periods of 30 years or less. 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.

Royal Bank of Canada   Second Quarter 2025   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 six months ended
	April 30 2025						January 31 2025						April 30 2025
	Uninsured						Uninsured						Uninsured
	Residential mortgages (2)			RBC Homeline Plan products (3)			Residential mortgages (2)			RBC Homeline Plan products (3)			Residential mortgages (2)			RBC Homeline Plan products (3)
Average of newly originated and acquired for the period, by region (4)
Atlantic provinces		70	%		70	%		70	%		70	%		70	%		70	%
Quebec		70			70			70			70			70			70
Ontario		70			65			70			64			70			65
Alberta		72			71			71			69			72			70
Saskatchewan and Manitoba		72			73			72			72			72			72
B.C. and territories		67			62			67			63			67			63
U.S.		71			n.m.			71			n.m.			71			n.m.
Other International		69			n.m.			73			n.m.			71			n.m.
Average of newly originated and acquired for the period (5), (6)		70	%		66	%		70	%		66	%		70	%		66	%
Total Canadian Banking residential mortgages portfolio (7)		58	%		48	%		57	%		48	%		58	%		48	%

(1) Disclosure is provided in accordance with the requirements of OSFI’s Guideline B-20 (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) Weighted by mortgage balances and adjusted for property values based on the Teranet-National Bank House Price Index‡.

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
	April 30 2025																January 31 2025
	Asset type								Client type
(Millions of Canadian dollars)	Loans Outstanding		Securities (3)		Repo-style transactions		Derivatives		Financials		Sovereign		Corporate		Total		Total
Europe (excluding U.K.)	$	19,024	$	27,797	$	6,105	$	3,801	$	26,803	$	12,968	$	16,956	$	56,727	$	62,295
U.K.		14,625		29,126		5,596		1,612		18,834		20,659		11,466		50,959		43,455
Caribbean		6,434		10,622		2,762		1,313		9,089		4,650		7,392		21,131		23,095
Asia-Pacific		6,506		36,549		5,318		1,811		19,326		25,709		5,149		50,184		52,201
Other (4)		1,876		1,539		2,440		441		1,965		2,523		1,808		6,296		7,213
Net International exposure (5), (6)	$	48,465	$	105,633	$	22,221	$	8,978	$	76,017	$	66,509	$	42,771	$	185,297	$	188,259

(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 $439 billion against repo-style transactions (January 31, 2025 – $424 billion) and $21 billion against derivatives (January 31, 2025 – $15 billion).

(3) Securities include $23 billion of trading securities (January 31, 2025 – $20 billion), $35 billion of deposits (January 31, 2025 – $37 billion), and $48 billion of investment securities (January 31, 2025 – $53 billion).

(4) Includes exposures in the Middle East, Africa and Latin America.

(5) Excludes $6,566 million (January 31, 2025 – $7,387 million) of exposures to supranational agencies.

(6) Reflects $4,453 million of mitigation through credit default swaps, which are largely used to hedge single name exposures and market risk (January 31, 2025 – $5,912 million).

28   Royal Bank of Canada  Second Quarter 2025

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)	April 30 2025			January 31 2025			October 31 2024
Personal Banking	$	1,848		$	1,822		$	1,652
Commercial Banking		3,414			2,742			2,372
Wealth Management		552			482			508
Capital Markets		3,125			2,830			1,335
Total GIL	$	8,939		$	7,876		$	5,867
Impaired loans, beginning balance	$	7,876		$	5,867		$	5,685
Classified as impaired during the period (new impaired) (1)		2,745			3,044			1,343
Net repayments (1)		(339	)		(293	)		(354	)
Amounts written off		(786	)		(581	)		(721	)
Other (2)		(557	)		(161	)		(86	)
Impaired loans, balance at end of period	$	8,939		$	7,876		$	5,867
GIL as a % of related loans and acceptances
Total GIL as a % of related loans and acceptances		0.88%			0.78%			0.59%
Personal Banking		0.34%			0.34%			0.31%
Personal Banking – Canada		0.30%			0.29%			0.26%
Commercial Banking		1.80%			1.47%			1.29%
Wealth Management		0.45%			0.38%			0.42%
Capital Markets		1.93%			1.74%			0.88%

(1) Certain GIL movements for Personal Banking – Canada and Commercial Banking are generally allocated to 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 co-lending arrangements, foreign exchange translation and other movements.

Q2 2025 vs. Q1 2025

Total GIL increased $1,063 million or 13% from last quarter and the total GIL ratio of 88 bps increased 10 bps, primarily due to higher impaired loans in Commercial Banking and Capital Markets.

GIL in Personal Banking increased $26 million or 1%, mainly due to higher impaired loans in our Canadian residential mortgages portfolio, partially offset by lower impaired loans in Caribbean Banking.

GIL in Commercial Banking increased $672 million or 25%, mainly due to higher impaired loans in a few sectors, including the consumer discretionary and real estate and related sectors.

GIL in Wealth Management increased $70 million or 15%, mainly driven by higher impaired loans in a few sectors, including the telecommunications and media and automotive sectors, partially offset by lower impaired loans in the utilities sector.

GIL in Capital Markets increased $295 million or 10%, mainly due to higher impaired loans in the real estate and related sector.

Allowance for credit losses (ACL)

	$		$		$
	As at
(Millions of Canadian dollars)	April 30 2025		January 31 2025		October 31 2024
Personal Banking	$	3,628	$	3,385	$	3,273
Commercial Banking		2,228		1,882		1,626
Wealth Management		577		521		466
Capital Markets		1,047		1,144		986
Corporate Support and other		1		1		1
ACL on loans		7,481		6,933		6,352
ACL on other financial assets (1)		19		12		12
Total ACL	$	7,500	$	6,945	$	6,364
ACL on loans is comprised of:
Retail	$	3,414	$	3,121	$	3,011
Wholesale		2,050		1,827		1,825
ACL on performing loans	$	5,464	$	4,948	$	4,836
ACL on impaired loans		2,017		1,985		1,516

(1) ACL on other financial assets mainly represents allowances on debt securities measured at FVOCI and amortized cost, accounts receivable and financial guarantees.

Royal Bank of Canada   Second Quarter 2025   29

Q2 2025 vs. Q1 2025

Total ACL increased $555 million or 8% from last quarter, reflecting an increase in ACL on loans.

ACL on performing loans increased $516 million or 10%, primarily due to unfavourable changes to our macroeconomic forecast and scenario weights, reflecting the potential impacts of trade disruptions (including tariffs).

ACL on impaired loans increased $32 million or 2%, mainly due to higher ACL in Commercial Banking and Wealth Management, partially offset by lower ACL in Capital Markets.

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 2024 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 2024 Annual Report. For further details on our approach to the management of market risk, refer to the Market risk section of our 2024 Annual Report.

Market risk measures – FVTPL positions

VaR and Trading VaR

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

	April 30, 2025										January 31, 2025						April 30, 2024
				For the three months ended										For the three months ended						For the three months ended
(Millions of Canadian dollars)	As at			Average			High		Low		As at			Average			As at			Average
Equity	$	25		$	15		$	30	$	11	$	13		$	15		$	12		$	10
Foreign exchange		3			3			7		2		6			4			3			4
Commodities		5			7			8		5		7			7			7			5
Interest rate (1)		22			19			26		17		22			23			36			26
Credit specific (2)		8			7			8		7		8			8			7			7
Diversification (3)		(29	)		(27	)		n.m.		n.m.		(33	)		(32	)		(33	)		(24	)
Trading VaR	$	34		$	24		$	34	$	19	$	23		$	25		$	32		$	28
Total VaR	$	51		$	33		$	51	$	22	$	26		$	32		$	45		$	86
	April 30, 2025										April 30, 2024
				For the six months ended										For the six months ended
(Millions of Canadian dollars)	As at			Average			High		Low		As at			Average
Equity	$	25		$	15		$	30	$	11	$	12		$	9
Foreign exchange		3			4			7		2		3			4
Commodities		5			7			11		5		7			5
Interest rate (1)		22			21			28		17		36			30
Credit specific (2)		8			8			9		7		7			7
Diversification (3)		(29	)		(31	)		n.m.		n.m.		(33	)		(26	)
Trading VaR	$	34		$	24		$	35	$	19	$	32		$	29
Total VaR	$	51		$	32		$	51	$	22	$	45		$	104

(1) General credit spread risk and funding spread risk associated with uncollateralized derivatives are included under interest rate VaR.

(2) Credit specific risk captures issuer-specific credit spread volatility.

(3) Trading VaR is less than the sum of the individual risk factor VaR results due to risk factor diversification.

n.m. not meaningful

Q2 2025 vs. Q2 2024

Average Trading VaR of $24 million decreased $4 million from a year ago, primarily driven by exposure changes in our fixed income portfolio, partially offset by exposure changes in our equity portfolio due to the impact of heightened market volatility.

Average total VaR of $33 million decreased $53 million, primarily driven by the impact of management of closing capital volatility related to the HSBC Canada transaction in the same quarter last year.

Q2 2025 vs. Q1 2025

Average Trading VaR of $24 million and average total VaR of $33 million remained relatively stable from last quarter. Trading VaR increased towards the end of quarter, reflecting the heightened market volatility experienced in early April.

30   Royal Bank of Canada  Second Quarter 2025

Q2 2025 vs. Q2 2024 (Six months ended)

Average Trading VaR of $24 million decreased $5 million from the same period last year, primarily driven by exposure changes in our fixed income portfolio, partially offset by exposure changes in our equity portfolio due to the impact of heightened market volatility.

Average total VaR of $32 million decreased $72 million, primarily driven by the impact of management of closing capital volatility related to the HSBC Canada transaction in the same period last year.

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 April 30, 2025 and January 31, 2025.

(1) Trading revenue (teb) in the chart above excludes the impact of loan underwriting commitments.

Market risk measures for assets and liabilities of RBC Insurance®

We offer a range of insurance products to clients and hold investments to meet 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 April 30, 2025, we held assets in support of $21 billion of insurance contract liabilities net of insurance contract assets and reinsurance contracts held balances (January 31, 2025 – $21 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.

	April 30 2025																		January 31 2025						April 30 2024
	EVE risk									NII risk (1)
(Millions of Canadian dollars)	Canadian dollar impact			U.S. dollar impact			Total			Canadian dollar impact			U.S. dollar impact			Total			EVE risk			NII risk (1)			EVE risk			NII risk (1)
Before-tax impact of:
100 bps increase in rates	$	(2,157	)	$	(279	)	$	(2,436	)	$	292		$	95		$	387		$	(2,107	)	$	503		$	(2,149	)	$	325
100 bps decrease in rates		1,966			(75	)		1,891			(400	)		(121	)		(521	)		1,644			(589	)		1,803			(458	)

(1) Represents the 12-month NII exposure to an instantaneous and sustained shift in interest rates.

As at April 30, 2025, an immediate and sustained -100 bps shock would have had a negative impact to our NII of $521 million, down from $589 million last quarter. An immediate and sustained +100 bps shock as at April 30, 2025 would have had a negative impact to the bank’s EVE of $2,436 million, up from $2,107 million last quarter. The quarter-over-quarter changes in NII and EVE sensitivity reflect an increase in fixed rate asset positions. During the second quarter of 2025, NII and EVE risks remained within approved limits.

Royal Bank of Canada   Second Quarter 2025   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 April 30, 2025
				Market risk measure
(Millions of Canadian dollars)	Balance sheet amount			Traded risk (1)		Non-traded risk (2)			Non-traded risk primary risk sensitivity
Assets subject to market risk
Cash and due from banks	$	48,621		$	–	$	48,621		Interest rate
Interest-bearing deposits with banks		65,970			3		65,967		Interest rate
Securities
Trading		189,137			161,056		28,081		Interest rate, credit spread
Investment, net of applicable allowance		303,360			–		303,360		Interest rate, credit spread, equity
Assets purchased under reverse repurchase agreements and securities borrowed		301,927			245,257		56,670		Interest rate
Loans
Retail		635,280			–		635,280		Interest rate
Wholesale		379,151			4,986		374,165		Interest rate
Allowance for loan losses		(7,125	)		–		(7,125	)	Interest rate
Other
Derivatives		188,211			184,763		3,448		Interest rate, foreign exchange
Other assets		130,074			57,406		72,668		Interest rate
Assets not subject to market risk (3)		7,527
Total assets	$	2,242,133		$	653,471	$	1,581,135
Liabilities subject to market risk
Deposits	$	1,446,786		$	64,294	$	1,382,492		Interest rate
Other
Obligations related to securities sold short		46,823			46,569		254		Interest rate, equity
Obligations related to assets sold under repurchase agreements and securities loaned		281,326			250,836		30,490		Interest rate
Derivatives		194,344			191,041		3,303		Interest rate, foreign exchange
Other liabilities		103,030			48,746		54,284		Interest rate
Subordinated debentures		13,745			–		13,745		Interest rate
Liabilities not subject to market risk (4)		23,549
Total liabilities	$	2,109,603		$	601,486	$	1,484,568
Total equity		132,530
Total liabilities and equity	$	2,242,133

(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 risk includes positions used in the management of IRRBB and other non-trading portfolios. Other material non-trading 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.

32   Royal Bank of Canada  Second Quarter 2025

	As at January 31, 2025
				Market risk measure
(Millions of Canadian dollars)	Balance sheet amount			Traded risk (1)		Non-traded risk (2)			Non-traded risk primary risk sensitivity
Assets subject to market risk
Cash and due from banks	$	71,200		$	–	$	71,200		Interest rate
Interest-bearing deposits with banks		47,924			1		47,923		Interest rate
Securities
Trading		189,416			161,798		27,618		Interest rate, credit spread
Investment, net of applicable allowance		298,609			–		298,609		Interest rate, credit spread, equity
Assets purchased under reverse repurchase agreements and securities borrowed		280,451			235,353		45,098		Interest rate
Loans
Retail		633,400			–		633,400		Interest rate
Wholesale		379,250			2,825		376,425		Interest rate
Allowance for loan losses		(6,600	)		–		(6,600	)	Interest rate
Other
Derivatives		153,686			150,971		2,715		Interest rate, foreign exchange
Other assets		136,246			58,937		77,309		Interest rate
Assets not subject to market risk (3)		7,444
Total assets	$	2,191,026		$	609,885	$	1,573,697
Liabilities subject to market risk
Deposits	$	1,441,940		$	67,363	$	1,374,577		Interest rate
Other
Obligations related to securities sold short		45,460			45,238		222		Interest rate, equity
Obligations related to assets sold under repurchase agreements and securities loaned		274,592			243,755		30,837		Interest rate
Derivatives		161,590			156,653		4,937		Interest rate, foreign exchange
Other liabilities		96,886			41,346		55,540		Interest rate
Subordinated debentures		13,670			–		13,670		Interest rate
Liabilities not subject to market risk (4)		23,625
Total liabilities	$	2,057,763		$	554,355	$	1,479,783
Total equity		133,263
Total liabilities and equity	$	2,191,026

(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 risk includes positions used in the management of IRRBB and other non-trading portfolios. Other material non-trading 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.

Royal Bank of Canada   Second Quarter 2025   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 that are appropriate for the execution of our strategy and ensuring liquidity risk remains within our risk appetite. There have been no material changes to our internal frameworks and policies from those described in our 2024 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 April 30, 2025
(Millions of Canadian dollars)	Bank-owned liquid assets		Securities received as collateral from securities financing and derivative transactions		Total liquid assets		Encumbered liquid assets		Unencumbered liquid assets
Cash and deposits with banks	$	114,591	$	–	$	114,591	$	3,201	$	111,390
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks (1)		388,341		347,516		735,857		415,596		320,261
Other securities		155,750		131,500		287,250		176,402		110,848
Other liquid assets (2)		46,605		–		46,605		39,201		7,404
Total liquid assets	$	705,287	$	479,016	$	1,184,303	$	634,400	$	549,903
	As at January 31, 2025
(Millions of Canadian dollars)	Bank-owned liquid assets		Securities received as collateral from securities financing and derivative transactions		Total liquid assets		Encumbered liquid assets		Unencumbered liquid assets
Cash and deposits with banks	$	119,124	$	–	$	119,124	$	3,393	$	115,731
Securities issued or guaranteed by sovereigns, central banks or multilateral development banks (1)		368,204		325,992		694,196		402,563		291,633
Other securities		168,398		144,145		312,543		176,707		135,836
Other liquid assets (2)		45,184		–		45,184		37,317		7,867
Total liquid assets	$	700,910	$	470,137	$	1,171,047	$	619,980	$	551,067
	As at
(Millions of Canadian dollars)	April 30 2025		January 31 2025
Royal Bank of Canada	$	251,435	$	266,821
Foreign branches		91,270		57,146
Subsidiaries		207,198		227,100
Total unencumbered liquid assets	$	549,903	$	551,067

(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 over-the-counter 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.

Q2 2025 vs. Q1 2025

Total unencumbered liquid assets remained relatively stable from the prior quarter as a decrease in cash and deposits with banks was largely offset by a net increase in on-balance sheet securities reflecting growth in deposits and funding.

34   Royal Bank of Canada  Second Quarter 2025

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 April 30, 2025, our unencumbered assets available as collateral comprised 24% of total assets (January 31, 2025 – 25%).

	As at April 30, 2025
	Total Assets						Encumbered				Unencumbered
(Millions of Canadian dollars)	Bank-owned assets		Securities received as collateral from securities financing and derivative transactions		Total		Pledged as collateral		Other (1)		Available as collateral (2)		Other (3)
Cash and deposits with banks	$	114,591	$	–	$	114,591	$	–	$	3,201	$	111,390	$	–
Securities (4)		502,202		537,701		1,039,903		619,082		31,324		385,806		3,691
Loans, net of allowance for loan losses
Mortgage securities		55,735		–		55,735		26,769		–		28,966		–
Mortgage loans		425,368		–		425,368		68,993		–		38,928		317,447
Other loans		526,203		–		526,203		6,282		–		25,885		494,036
Derivatives		188,211		–		188,211		–		–		–		188,211
Others (5)		137,601		–		137,601		39,201		–		7,404		90,996
Total	$	1,949,911	$	537,701	$	2,487,612	$	760,327	$	34,525	$	598,379	$	1,094,381
	As at January 31, 2025
	Total Assets						Encumbered				Unencumbered
(Millions of Canadian dollars)	Bank-owned assets		Securities received as collateral from securities financing and derivative transactions		Total		Pledged as collateral		Other (1)		Available as collateral (2)		Other (3)
Cash and deposits with banks	$	119,124	$	–	$	119,124	$	–	$	3,393	$	115,731	$	–
Securities (4)		498,827		526,646		1,025,473		604,411		30,437		387,296		3,329
Loans, net of allowance for loan losses
Mortgage securities		56,017		–		56,017		27,222		–		28,795		–
Mortgage loans		425,269		–		425,269		68,925		–		42,693		313,651
Other loans		524,764		–		524,764		6,630		–		25,786		492,348
Derivatives		153,686		–		153,686		–		–		–		153,686
Others (5)		143,690		–		143,690		37,317		–		7,867		98,506
Total	$	1,921,377	$	526,646	$	2,448,023	$	744,505	$	33,830	$	608,168	$	1,061,520

(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 off-balance sheet securities financing, derivative transactions, and margin lending. Includes $31 billion (January 31, 2025 – $30 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.

Q2 2025 vs. Q1 2025

Total unencumbered assets available as collateral decreased $10 billion or 2% from last quarter, primarily due to a decrease in cash and deposits with banks, as well as a decrease in mortgage loans and securities.

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 April 30, 2025, relationship-based deposits, which are the primary source of funding for retail and commercial lending, were $982 billion or 55% of our total funding (January 31, 2025 – $999 billion or 56%). The remaining portion is comprised of short- and long-term wholesale funding.

Royal Bank of Canada   Second Quarter 2025   35

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.

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 April 30, 2025, the notional value of issued and outstanding long-term debt subject to conversion under the Bail-in regime was $119 billion (January 31, 2025 – $117 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. Each long-term debt program allows issuances in multiple currencies. The following table summarizes our registered programs and their authorized limits by geography:

Programs by geography

Canada	U.S.	Europe
•  Canadian Shelf Program – $25 billion	•  U.S. Shelf Program – US$75 billion	•  European Debt Issuance Program – US$75 billion
		•  Global Covered Bond Program – €75 billion

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 debentures with an original term to maturity greater than 1 year	(1)   Includes unsecured and secured long-term funding and subordinated 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 April 30, 2025
(Millions of Canadian dollars)	Less than 1 month		1 to 3 months		3 to 6 months		6 to 12 months		Less than 1 year sub-total		1 year to 2 years		2 years and greater		Total
Deposits from banks (2)	$	2,932	$	15	$	883	$	487	$	4,317	$	–	$	–	$	4,317
Certificates of deposit and commercial paper (3)		11,187		17,706		29,680		34,647		93,220		–		–		93,220
Asset-backed commercial paper (4)		5,199		6,119		6,029		893		18,240		–		–		18,240
Senior unsecured medium-term notes (5)		3,442		5,108		4,489		15,189		28,228		31,538		61,012		120,778
Senior unsecured structured notes (6)		1,057		1,497		1,721		4,097		8,372		5,631		11,135		25,138
Mortgage securitization		–		442		154		709		1,305		2,046		12,937		16,288
Covered bonds/asset-backed securities (7)		1,326		2,665		3,467		6,339		13,797		27,626		24,475		65,898
Subordinated liabilities		–		1,249		–		2,068		3,317		–		10,437		13,754
Other (8)		4,799		2,583		895		578		8,855		20,646		202		29,703
Total	$	29,942	$	37,384	$	47,318	$	65,007	$	179,651	$	87,487	$	120,198	$	387,336
Of which:
– Secured	$	11,224	$	10,621	$	10,339	$	7,941	$	40,125	$	29,672	$	37,412	$	107,209
– Unsecured		18,718		26,763		36,979		57,066		139,526		57,815		82,786		280,127

36   Royal Bank of Canada  Second Quarter 2025

	As at January 31, 2025
(Millions of Canadian dollars)	Less than 1 month		1 to 3 months		3 to 6 months		6 to 12 months		Less than 1 year sub-total		1 year to 2 years		2 years and greater		Total
Deposits from banks (2)	$	2,384	$	143	$	96	$	1,287	$	3,910	$	–	$	–	$	3,910
Certificates of deposit and commercial paper (3)		10,240		12,324		28,781		40,621		91,966		–		–		91,966
Asset-backed commercial paper (4)		3,868		7,610		6,108		893		18,479		–		–		18,479
Senior unsecured medium-term notes (5)		52		7,432		8,554		11,689		27,727		30,221		57,639		115,587
Senior unsecured structured notes (6)		1,751		2,559		2,211		3,633		10,154		6,173		9,791		26,118
Mortgage securitization		23		1,015		727		757		2,522		2,341		11,809		16,672
Covered bonds/asset-backed securities (7)		–		1,508		4,122		6,748		12,378		23,947		28,589		64,914
Subordinated liabilities		–		–		–		2,182		2,182		–		11,556		13,738
Other (8)		5,079		994		1,327		530		7,930		20,138		189		28,257
Total	$	23,397	$	33,585	$	51,926	$	68,340	$	177,248	$	82,820	$	119,573	$	379,641
Of which:
– Secured	$	8,848	$	10,133	$	10,957	$	8,398	$	38,336	$	26,288	$	40,398	$	105,022
– Unsecured		14,549		23,452		40,969		59,942		138,912		56,532		79,175		274,619

(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 $4,715 million (January 31, 2025 – $4,957 million), other long-term structured deposits (unsecured) of $22,718 million (January 31, 2025 – $23,104 million), FHLB advances (secured) of $2,068 million (January 31, 2025 - $nil) and wholesale guaranteed interest certificates of $202 million (January 31, 2025 – $196 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 May 28, 2025
	Short-term debt		Legacy senior long-term debt (2)		Senior long-term debt (3)		Outlook
Moody’s‡ (4)		P-1		Aa1		A1		stable
Standard & Poor’s‡ (5)		A-1+		AA-		A		stable
Fitch Ratings‡ (6)		F1+		AA		AA-		stable
DBRS‡ (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 Bail-in regime.

(3) Includes senior long-term debt issued on or after September 23, 2018 which is subject to conversion under the Bail-in regime.

(4) On October 8, 2024, 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 9, 2025, 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
	April 30 2025						January 31 2025
(Millions of Canadian dollars)	One-notch downgrade		Two-notch downgrade		Three-notch downgrade		One-notch downgrade		Two-notch downgrade		Three-notch downgrade
Contractual derivatives funding or margin requirements	$	264	$	98	$	195	$	336	$	135	$	289
Other contractual funding or margin requirements (1)		43		23		36		50		42		97

(1) Includes Guaranteed Investment Certificates (GICs) issued by our municipal markets business out of New York.

Royal Bank of Canada   Second Quarter 2025   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
	April 30 2025
(Millions of Canadian dollars, except percentage amounts)	Total unweighted value (average) (2)		Total weighted value (average)
High-quality liquid assets
Total high-quality liquid assets (HQLA)			$	446,512
Cash outflows
Retail deposits and deposits from small business customers, of which:	$	419,251	$	39,228
Stable deposits (3)		132,181		3,965
Less stable deposits		287,070		35,263
Unsecured wholesale funding, of which:		492,088		228,537
Operational deposits (all counterparties) and deposits in networks of cooperative banks (4)		175,308		41,327
Non-operational deposits		298,343		168,773
Unsecured debt		18,437		18,437
Secured wholesale funding				48,810
Additional requirements, of which:		430,049		90,378
Outflows related to derivative exposures and other collateral requirements		88,706		25,908
Outflows related to loss of funding on debt products		11,583		11,583
Credit and liquidity facilities		329,760		52,887
Other contractual funding obligations (5)		23,350		23,350
Other contingent funding obligations (6)		876,652		14,945
Total cash outflows			$	445,248
Cash inflows
Secured lending (e.g., reverse repos)	$	364,727	$	64,673
Inflows from fully performing exposures		23,569		13,822
Other cash inflows		26,745		26,745
Total cash inflows			$	105,240
			Total adjusted value
Total HQLA			$	446,512
Total net cash outflows				340,008
Liquidity coverage ratio				131%
	January 31 2025
(Millions of Canadian dollars, except percentage amounts)			Total adjusted value
Total HQLA			$	419,334
Total net cash outflows				328,139
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 April 30, 2025 is calculated as an average of 61 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 medium-sized 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 off-balance 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 86% 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.

38   Royal Bank of Canada  Second Quarter 2025

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.

Q2 2025 vs. Q1 2025

The average LCR for the quarter ended April 30, 2025 was 131%, which translates into a surplus of approximately $107 billion, compared to 128% and a surplus of approximately $91 billion in the prior quarter. Average LCR increased from the prior quarter, primarily due to growth in deposits and funding, partially offset by securities and securities financing transactions.

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.

Royal Bank of Canada   Second Quarter 2025   39

Net Stable Funding Ratio common disclosure template (1)

	As at April 30, 2025
	Unweighted value by residual maturity (2)								Weighted value
(Millions of Canadian dollars, except percentage amounts)	No maturity		< 6 months		6 months to < 1 year		≥ 1 year
Available Stable Funding (ASF) Item
Capital:	$	133,887	$	–	$	–	$	13,043	$	146,930
Regulatory Capital		133,887		–		–		13,043		146,930
Other Capital Instruments		–		–		–		–		–
Retail deposits and deposits from small business customers:		336,631		134,650		56,945		64,159		543,026
Stable deposits (3)		102,545		58,502		29,500		27,515		208,535
Less stable deposits		234,086		76,148		27,445		36,644		334,491
Wholesale funding:		375,818		456,449		69,621		175,670		420,540
Operational deposits (4)		195,967		–		–		–		97,983
Other wholesale funding		179,851		456,449		69,621		175,670		322,557
Liabilities with matching interdependent assets (5)		–		1,170		1,684		22,948		–
Other liabilities:		51,145		211,181						21,414
NSFR derivative liabilities				28,372
All other liabilities and equity not included in the above categories		51,145		161,139		511		21,159		21,414
Total ASF									$	1,131,910
Required Stable Funding (RSF) Item
Total NSFR high-quality liquid assets (HQLA)									$	41,605
Deposits held at other financial institutions for operational purposes		–		2,930		–		–		1,465
Performing loans and securities:		289,793		328,818		123,892		545,628		795,821
Performing loans to financial institutions secured by Level 1 HQLA		–		97,200		16,303		52		13,280
Performing loans to financial institutions secured by non-Level 1 HQLA and unsecured performing loans to financial institutions		8,198		122,174		21,571		20,964		53,356
Performing loans to non-financial corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and PSEs, of which:		197,260		58,816		35,160		185,777		372,226
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		–		780		603		5,585		4,321
Performing residential mortgages, of which:		40,417		47,398		50,244		317,121		299,556
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		40,417		47,367		50,212		315,986		298,560
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities		43,918		3,230		614		21,714		57,403
Assets with matching interdependent liabilities (5)		–		1,170		1,684		22,948		–
Other assets:		7,404		315,343						104,038
Physical traded commodities, including gold		7,404								6,293
Assets posted as initial margin for derivative contracts and contributions to default funds of CCPs				28,664						24,365
NSFR derivative assets				24,260						–
NSFR derivative liabilities before deduction of variation margin posted				75,832						3,792
All other assets not included in the above categories		–		124,139		58		62,390		69,588
Off-balance sheet items		–		898,235						34,602
Total RSF									$	977,531
Net Stable Funding Ratio (%)										116%
	As at January 31, 2025
(Millions of Canadian dollars, except percentage amounts)									Weighted value
Total ASF									$	1,126,088
Total RSF										982,998
Net Stable Funding Ratio (%)										115%

(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 Off-balance 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 medium-sized 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.

40   Royal Bank of Canada  Second Quarter 2025

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.

Q2 2025 vs. Q1 2025

The NSFR as at April 30, 2025 was 116%, which translates into a surplus of approximately $154 billion, compared to 115% and a surplus of approximately $143 billion in the prior quarter. NSFR increased compared to the previous quarter, primarily due to lower funding requirements on securities and securities financing transactions and an increase in deposits and stable 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 settlement of the amounts 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 2024 Annual Report.

	As at April 30, 2025
(Millions of Canadian dollars)	Less than 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 year to 2 years		2 years to 5 years		5 years and greater		With no specific maturity		Total
Assets
Cash and deposits with banks	$	112,201	$	12	$	–	$	–	$	5	$	–	$	–	$	–	$	2,373	$	114,591
Securities
Trading (1)		88,695		2,454		1,371		104		496		239		547		13,533		81,698		189,137
Investment, net of applicable allowance		7,828		7,930		15,708		17,701		14,894		58,797		70,507		108,649		1,346		303,360
Assets purchased under reverse repurchase agreements and securities borrowed (2)		133,553		52,321		59,562		14,113		21,286		179		–		–		20,913		301,927
Loans, net of applicable allowance		45,542		31,650		47,572		49,167		52,370		291,996		301,754		82,969		104,286		1,007,306
Other
Customers’ liability under acceptances		20		2		–		–		–		–		6		–		–		28
Derivatives		18,188		19,391		12,977		14,693		9,326		24,134		40,824		48,678		–		188,211
Other financial assets		51,448		3,918		2,432		605		828		163		704		1,726		3,585		65,409
Total financial assets		457,475		117,678		139,622		96,383		99,205		375,508		414,342		255,555		214,201		2,169,969
Other non-financial assets		14,192		2,228		1,530		328		258		2,640		3,336		9,486		38,166		72,164
Total assets	$	471,667	$	119,906	$	141,152	$	96,711	$	99,463	$	378,148	$	417,678	$	265,041	$	252,367	$	2,242,133
Liabilities and equity
Deposits (3)
Unsecured borrowing	$	101,249	$	76,791	$	95,030	$	87,050	$	66,447	$	54,824	$	86,394	$	54,846	$	710,263	$	1,332,894
Secured borrowing		5,461		8,084		8,606		2,505		843		7,326		13,002		9,727		–		55,554
Covered bonds		1,326		2,662		2,328		3,223		3,084		25,022		16,603		4,090		–		58,338
Other
Acceptances		20		2		–		–		–		–		6		–		–		28
Obligations related to securities sold short		38,529		3,317		2,404		1,209		712		652		–		–		–		46,823
Obligations related to assets sold under repurchase agreements and securities loaned (2)		189,556		49,147		19,483		1,497		–		938		–		–		20,705		281,326
Derivatives		20,333		24,626		14,766		14,073		9,946		24,856		40,030		45,714		–		194,344
Other financial liabilities		46,110		5,010		3,295		1,780		1,666		1,457		2,560		19,640		1,041		82,559
Subordinated debentures		–		–		–		2,032		–		–		–		11,713		–		13,745
Total financial liabilities		402,584		169,639		145,912		113,369		82,698		115,075		158,595		145,730		732,009		2,065,611
Other non-financial liabilities		1,359		1,125		229		3,833		405		1,604		1,703		22,565		11,169		43,992
Equity		–		–		–		–		–		–		–		–		132,530		132,530
Total liabilities and equity	$	403,943	$	170,764	$	146,141	$	117,202	$	83,103	$	116,679	$	160,298	$	168,295	$	875,708	$	2,242,133
Off-balance sheet items
Financial guarantees	$	981	$	3,006	$	3,956	$	4,608	$	4,778	$	2,368	$	5,738	$	2,097	$	24	$	27,556
Commitments to extend credit		6,015		10,823		13,744		14,860		22,156		63,567		221,716		24,777		4,240		381,898
Other credit-related commitments		69,646		2,055		2,620		2,759		2,186		417		1,205		122		74,438		155,448
Other commitments		6		11		17		18		17		64		163		231		948		1,475
Total off-balance sheet items	$	76,648	$	15,895	$	20,337	$	22,245	$	29,137	$	66,416	$	228,822	$	27,227	$	79,650	$	566,377

(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.

Royal Bank of Canada   Second Quarter 2025   41

	As at January 31, 2025
(Millions of Canadian dollars)	Less than 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 year to 2 years		2 years to 5 years		5 years and greater		With no specific maturity		Total
Assets
Cash and deposits with banks	$	116,898	$	6	$	–	$	–	$	–	$	–	$	–	$	–	$	2,220	$	119,124
Securities
Trading (1)		84,492		2,567		1,176		50		109		270		645		13,396		86,711		189,416
Investment, net of applicable allowance		5,369		9,243		11,221		15,442		19,007		56,633		71,751		108,667		1,276		298,609
Assets purchased under reverse repurchase agreements and securities borrowed (2)		126,591		69,178		33,461		12,144		19,051		162		–		–		19,864		280,451
Loans, net of applicable allowance		40,691		37,876		51,468		49,970		51,052		289,717		297,582		84,739		102,955		1,006,050
Other
Customers’ liability under acceptances		17		–		46		–		–		–		11		–		–		74
Derivatives		12,639		16,664		9,414		7,621		9,214		17,075		32,008		49,051		–		153,686
Other financial assets		54,094		4,086		2,597		382		834		208		761		1,739		4,434		69,135
Total financial assets		440,791		139,620		109,383		85,609		99,267		364,065		402,758		257,592		217,460		2,116,545
Other non-financial assets		15,771		2,295		942		342		341		3,128		3,331		9,384		38,947		74,481
Total assets	$	456,562	$	141,915	$	110,325	$	85,951	$	99,608	$	367,193	$	406,089	$	266,976	$	256,407	$	2,191,026
Liabilities and equity
Deposits (3)
Unsecured borrowing	$	103,083	$	66,475	$	96,968	$	77,019	$	87,804	$	58,760	$	83,739	$	52,959	$	699,794	$	1,326,601
Secured borrowing		4,183		10,270		8,235		2,922		1,675		8,234		13,899		9,288		–		58,706
Covered bonds		–		1,503		4,108		2,235		3,303		21,202		20,341		3,941		–		56,633
Other
Acceptances		17		2		44		–		–		–		11		–		–		74
Obligations related to securities sold short		36,356		1,509		3,996		2,303		1,157		139		–		–		–		45,460
Obligations related to assets sold under repurchase agreements and securities loaned (2)		153,900		83,432		10,315		1,539		4		905		–		–		24,497		274,592
Derivatives		13,251		18,207		11,320		8,261		10,163		19,180		33,807		47,401		–		161,590
Other financial liabilities		43,739		3,165		2,823		1,896		1,818		1,107		2,544		18,915		1,140		77,147
Subordinated debentures		–		–		–		–		2,128		–		–		11,542		–		13,670
Total financial liabilities		354,529		184,563		137,809		96,175		108,052		109,527		154,341		144,046		725,431		2,014,473
Other non-financial liabilities		1,567		1,333		300		199		2,417		1,640		1,576		22,728		11,530		43,290
Equity		–		–		–		–		–		–		–		–		133,263		133,263
Total liabilities and equity	$	356,096	$	185,896	$	138,109	$	96,374	$	110,469	$	111,167	$	155,917	$	166,774	$	870,224	$	2,191,026
Off-balance sheet items
Financial guarantees	$	1,254	$	3,146	$	3,825	$	4,456	$	4,892	$	1,856	$	6,705	$	2,133	$	23	$	28,290
Commitments to extend credit		4,891		12,314		16,347		15,419		19,427		69,184		224,882		23,762		4,585		390,811
Other credit-related commitments		50,872		1,659		3,050		2,637		2,986		430		1,226		119		82,568		145,547
Other commitments		6		11		18		17		18		62		156		241		1,018		1,547
Total off-balance sheet items	$	57,023	$	17,130	$	23,240	$	22,529	$	27,323	$	71,532	$	232,969	$	26,255	$	88,194	$	566,195

(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.

42   Royal Bank of Canada  Second Quarter 2025

Capital management

We continue to manage our capital in accordance with our Capital Management Framework as described in our 2024 Annual Report. In addition, we continue to monitor for new regulatory capital developments, including OSFI guidance, in order to comply with these requirements as disclosed in the Capital management section in our 2024 Annual Report, and as updated below.

OSFI expects Canadian banks to meet the Basel III targets for CET1, Tier 1 and Total capital ratios as per CAR guidelines. 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. Certain credit risk portfolios are subject to the 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 as noted in our 2024 Annual Report.

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 December 17, 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.

On July 5, 2024, OSFI announced a one-year delay to the increase in the capital floor factor prescribed in OSFI’s CAR guidelines, maintaining the current 67.5% of RWA (as calculated using only the 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. On February 12, 2025, OSFI announced an indefinite delay in any further increases to the capital floor factor, and committed to providing at least two years notice to affected banks prior to resuming increases in the capital floor.

Our methodology for allocating capital to our business segments is based on the Basel III regulatory capital requirements, with the exception of Insurance. Effective the first quarter of 2025, we increased our capital attribution rates to our business segments. For further details, refer to the How we measure and report our business segments section.

For further details, refer to the Capital management section of our 2024 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 capital, leverage and TLAC ratios	OSFI regulatory target requirements for large banks under Basel III										Domestic Stability Buffer (3)		Minimum including Capital Buffers, D-SIB/G-SIB surcharge and Domestic Stability Buffer as at April 30, 2025 (4)		RBC capital, leverage and TLAC ratios as at April 30, 2025
	Minimum		Capital Buffers		Minimum including Capital Buffers		D-SIB/G-SIB surcharge (1)		Minimum including Capital Buffers and D-SIB/G-SIB surcharge (1), (2)
Common Equity Tier 1		4.5%		2.6%		7.1%		1.0%		8.1%		3.5%		11.6%		13.2%
Tier 1 capital		6.0%		2.6%		8.6%		1.0%		9.6%		3.5%		13.1%		14.7%
Total capital		8.0%		2.6%		10.6%		1.0%		11.6%		3.5%		15.1%		16.5%
Leverage ratio		3.0%		n.a.		3.0%		0.5%		3.5%		n.a.		3.5%		4.3%
TLAC ratio		21.6%		n.a.		21.6%		n.a.		21.6%		3.5%		25.1%		31.0%
TLAC leverage ratio		7.25%		n.a.		7.25%		n.a.		7.25%		n.a.		7.25%		9.2%

(1) A capital surcharge, equal to the higher of our D-SIB surcharge and the BCBS’s G-SIB 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 0.09% as at April 30, 2025 (January 31, 2025 – 0.09%; October 31, 2024 – 0.08%).

(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 April 30, 2025 which are subject to change based on exposures held at the reporting date.

n.a. not applicable

Royal Bank of Canada   Second Quarter 2025   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)	April 30 2025		January 31 2025		October 31 2024
Capital (1)
CET1 capital	$	92,829	$	93,321	$	88,936
Tier 1 capital		103,194		103,718		97,952
Total capital		116,237		115,914		110,487
RWA used in calculation of capital ratios (1)
Credit risk	$	570,953	$	579,866	$	548,809
Market risk		39,287		36,530		33,930
Operational risk		93,680		92,545		89,543
Total RWA	$	703,920	$	708,941	$	672,282
Capital ratios and Leverage ratio (1)
CET1 ratio		13.2%		13.2%		13.2%
Tier 1 capital ratio		14.7%		14.6%		14.6%
Total capital ratio		16.5%		16.4%		16.4%
Leverage ratio		4.3%		4.4%		4.2%
Leverage ratio exposure	$	2,379,092	$	2,367,402	$	2,344,228
TLAC available and ratios (2)
TLAC available	$	217,931	$	211,585	$	196,659
TLAC ratio		31.0%		29.8%		29.3%
TLAC leverage ratio		9.2%		8.9%		8.4%

(1) 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.

(2) 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.

Q2 2025 vs. Q1 2025

(1) Represents rounded figures.

(2) Represents net internal capital generation of $2.2 billion or 31 bps consisting of Net income available to shareholders less common and preferred share dividends and distributions on other equity instruments.

Our CET1 ratio of 13.2% was unchanged from last quarter, reflecting net internal capital generation that was offset by RWA growth (excluding FX) and share repurchases.

Total RWA decreased by $5 billion, primarily due to the impact of foreign exchange translation, partially offset by business growth and net credit migration. Business growth primarily reflects higher trading related activities, wholesale lending and personal lending, partially offset by a reduction in loan underwriting commitments. In our CET1 ratio, the impact of foreign exchange translation on RWA is largely mitigated with economic hedges.

Our Tier 1 capital ratio of 14.7% was up 10 bps and our Total capital ratio of 16.5% was up 10 bps, mainly reflecting the factors noted above under the CET1 ratio.

Our Leverage ratio of 4.3% was down 10 bps from last quarter, primarily due to business-driven growth in leverage exposures and share repurchases, partially offset by net internal capital generation.

Total leverage exposures increased by $12 billion, primarily due to higher business-driven leverage exposures in repo-style transactions, securities and wholesale and retail loans. This was partially offset by the impact of foreign exchange translation.

44   Royal Bank of Canada  Second Quarter 2025

Our TLAC ratio of 31.0% was up 120 bps, reflecting a favourable impact from a net increase in eligible external TLAC instruments.

Our TLAC leverage ratio of 9.2% was up 30 bps, reflecting a favourable impact from a net increase in eligible external TLAC instruments, partially offset by 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.

Selected capital management activity

The following table provides our selected capital management activity:

	For the three months ended April 30, 2025								For the six months ended April 30, 2025
(Millions of Canadian dollars, except number of shares)	Issuance or redemption date		Number of shares (000s)			Amount			Number of shares (000s)			Amount
Tier 1 capital
Common shares activity
Issued in connection with share-based compensation plans (1)				158		$	14			374		$	36
Purchased for cancellation (2)				(3,013	)		(45	)		(4,955	)		(74	)
Issuance of limited recourse capital notes (LRCNs) Series 5 (2), (3), (4)		November 1, 2024		–			–			1,000			1,396
Tier 2 capital
Redemption of December 23, 2029 subordinated debentures (2), (3)		December 23, 2024				$	–						(1,500	)
Issuance of February 4, 2035 subordinated debentures (2), (3)		January 29, 2025				$	–						1,500

(1) Amounts include cash received for stock options exercised during the period and fair value adjustments to stock options.

(2) For further details, refer to Note 10 of our Condensed Financial Statements.

(3) Non-Viability Contingent Capital (NVCC) instruments.

(4) 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. For the three months ended April 30, 2025, the total number of common shares repurchased and cancelled under our NCIB program was approximately 3,013 thousand. The total cost of the shares repurchased was $488 million. Since the inception of this NCIB, the total number of common shares repurchased and cancelled was approximately 5,843 thousand, at a cost of approximately $966 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 1, 2024, we issued US$1,000 million of LRCN Series 5 at a price of US$1,000 per note. The LRCN Series 5 bear interest at a fixed rate of 6.350% per annum until November 24, 2034. Thereafter, the interest rate on the LRCN Series 5 will reset every five years at a rate per annum equal to the prevailing 5-Year U.S. Treasury Rate plus 2.257% until their maturity on November 24, 2084.

On December 23, 2024, we redeemed all $1,500 million of our outstanding NVCC 2.88% subordinated debentures due December 23, 2029 for 100% of their principal amount plus accrued interest to, but excluding, the redemption date.

On January 29, 2025, we issued $1,500 million of NVCC subordinated debentures. The notes bear interest at a fixed rate of 4.279% per annum until February 4, 2030, and at the Daily Compounded Canadian Overnight Repo Rate Average plus 1.45% thereafter until their maturity on February 4, 2035.

On April 15, 2025, we announced our intention to redeem all outstanding NVCC 2.088% subordinated debentures due on June 30, 2030 for 100% of their principal amount plus accrued interest to, but excluding, the redemption date, which will occur on June 30, 2025.

On May 24, 2025, we redeemed all 24 million of our issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series BD at a price of $25 per share.

Royal Bank of Canada   Second Quarter 2025   45

Selected share data (1)

	As at April 30, 2025
(Millions of Canadian dollars, except number of shares and as otherwise noted)	Number of shares (000s)			Amount			Dividends declared per share
Common shares issued		1,410,499		$	20,975		$	1.48
Treasury shares – common shares (2)		(960	)		(155	)
Common shares outstanding		1,409,539		$	20,820
Stock options and awards
Outstanding		7,917
Exercisable		3,948
First preferred shares issued
Non-cumulative Series BD (3), (4)		24,000		$	600		$	0.20
Non-cumulative Series BF (3), (4)		12,000			300			0.19
Non-cumulative Series BH (4)		6,000			150			0.31
Non-cumulative Series BI (4)		6,000			150			0.31
Non-cumulative Series BO (3), (4)		14,000			350			0.37
Non-cumulative Series BT (3), (4), (5)		750			750			4.20%
Non-cumulative Series BU (3), (4), (5)		750			750			7.408%
Non-cumulative Series BW (3), (4), (5)		600			600			6.698%
Other equity instruments issued
Limited recourse capital notes Series 1 (3), (4), (6), (7)		1,750			1,750			4.50%
Limited recourse capital notes Series 2 (3), (4), (6), (7)		1,250			1,250			4.00%
Limited recourse capital notes Series 3 (3), (4), (6), (7)		1,000			1,000			3.65%
Limited recourse capital notes Series 4 (3), (4), (6), (7)		1,000			1,370			7.50%
Limited recourse capital notes Series 5 (3), (4), (6), (7)		1,000			1,396			6.35%
Preferred shares and other equity instruments issued		70,100			10,416
Treasury instruments – preferred shares and other equity instruments (2)		(80	)		(53	)
Preferred shares and other equity instruments outstanding		70,020		$	10,363
Dividends on common shares				$	2,087
Dividends on preferred shares and distributions on other equity instruments (8)					112

(1) For further details about our capital management activity, refer to Note 10 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); 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); and in connection with the issuance of LRCN Series 5 on November 1, 2024, we issued US$1,000 million of First Preferred Shares Series BX (Series BX). The Series BQ, BR and BS preferred shares were issued at a price of $1,000 per share and the Series BV and BX preferred shares were issued at a price of US$1,000 per share. The Series BQ, BR, BS, BV and BX preferred shares were issued to a consolidated trust to be held as trust assets in connection with the LRCN series. For further details, refer to Note 19 of our audited 2024 Annual Consolidated Financial Statements.

(8) Excludes distributions to non-controlling interests.

As at May 23, 2025, the number of outstanding common shares was 1,410,276,755, net of treasury shares held of 276,136, and the number of stock options and awards was 7,863,250.

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 April 30, 2025, which were the preferred shares Series BD, BF, BH, BI, BO, BT, BU, BW, LRCN Series 1, LRCN Series 2, LRCN Series 3, LRCN Series 4, LRCN Series 5 and subordinated debentures due on January 27, 2026, June 30, 2030, January 28, 2033, November 3, 2031, May 3, 2032, February 1, 2033, April 3, 2034, August 8, 2034, and February 4, 2035 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 6.2 billion common shares, in aggregate, which would represent a dilution impact of 81.5% based on the number of common shares outstanding as at April 30, 2025.

46   Royal Bank of Canada  Second Quarter 2025

Accounting and control matters

Summary of accounting policies and estimates

Our Condensed Financial Statements are presented in compliance with International Accounting Standard 34 Interim Financial Reporting. Our material accounting policies are described in Note 2 of our audited 2024 Annual Consolidated Financial Statements.

Future changes in accounting policies and disclosures

Future changes in accounting policies and disclosures that are not yet effective for us are described in Note 2 of our audited 2024 Annual Consolidated Financial Statements.

Controls and procedures

Disclosure controls and procedures

As of April 30, 2025, management evaluated, under the supervision of and with the participation of the President and Chief Executive Officer and the 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 Chief Financial Officer concluded that our disclosure controls and procedures were effective as of April 30, 2025.

Internal control over financial reporting

No changes were made in our internal control over financial reporting during the quarter ended April 30, 2025 that have materially affected, or are reasonably likely to materially affect, 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 25 of our audited 2024 Annual Consolidated Financial Statements.

Royal Bank of Canada   Second Quarter 2025   47

Glossary

Adjusted results

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

• Adjusted effective income tax rate – calculated as effective income tax rate excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted income before income taxes – calculated as income before income taxes excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted income taxes – calculated as income taxes excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted net income – calculated as net income excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted net income available to common shareholders – calculated as net income available to common shareholders excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted non-interest expense – calculated as non-interest expense excluding the impact of specified items and amortization of acquisition-related intangibles.

• Adjusted total revenue – 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)

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.

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.

48   Royal Bank of Canada  Second Quarter 2025

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

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. Insurance contracts also include reinsurance contracts issued by us to compensate another company for claims arising from underlying insurance contracts issued by that other company.

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. Net investment income primarily comprises interest and dividend income and net gains (losses) on financial instruments and derivatives relating to the Insurance segment. Insurance and reinsurance finance income (expense) represents the net effect of and changes in the time value of money and financial risks on insurance contracts and reinsurance contracts held, respectively.

Insurance service result

Calculated as Insurance revenue less Insurance service expense from insurance contracts and Net income (expense) from reinsurance contracts held. Insurance revenue represents the revenue recognized in the period as we provide insurance services for the groups of insurance contracts. Insurance service expense represents the costs incurred in providing insurance services in the period, which includes incurred claims and other directly attributable expenses, allocation of acquisition costs, 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.

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.

PCL on impaired loans ratio

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

PCL on performing loans ratio

PCL on performing loans ratio is calculated as PCL on performing 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.

Royal Bank of Canada   Second Quarter 2025   49

Return on common equity (ROE)

Net income available to common shareholders, expressed as a percentage of average common equity. ROE is based on actual balances of average common equity before rounding. 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.

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.

50   Royal Bank of Canada  Second Quarter 2025

Enhanced Disclosure Task Force recommendations index

We aim to present transparent, high-quality risk disclosures by providing disclosures in our 2024 Annual Report, Q2 2025 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 Q2 2025 Report to Shareholders.

The following index summarizes our disclosure by EDTF recommendation:

			Location of disclosure
Type of Risk	Recommendation	Disclosure	RTS page	Annual Report page	SFI page
General	1	Table of contents for EDTF risk disclosure	50	140	1
	2	Define risk terminology and measures		69-75, 137-139	–
	3	Top and emerging risks		66-69	–
	4	New regulatory ratios	42-44	114-120	–
Risk governance, risk management and business model	5	Risk management organization		69-75	–
	6	Risk culture		69-75	–
	7	Risk in the context of our business activities		124	–
	8	Stress testing		73, 85	–
Capital adequacy and risk-weighted assets (RWA)	9	Minimum Basel III capital ratios and Domestic systemically important bank surcharge	42	114-120	–
	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		114-120	–
	13	RWA by business segments		–	20
	14	Analysis of capital requirement, and related measurement model information		75-79	*
	15	RWA credit risk and related risk measurements		–	*
	16	Movement of RWA by risk type		–	20
	17	Basel back-testing		72, 75-77	31
Liquidity	18	Quantitative and qualitative analysis of our liquidity reserve	33	92-93, 98-99	–
Funding	19	Encumbered and unencumbered assets by balance sheet category, and contractual obligations for rating downgrades	34, 36	94, 97	–
	20	Maturity analysis of consolidated total assets, liabilities and off-balance sheet commitments analyzed by remaining contractual maturity at the balance sheet date	40-41	101-102	–
	21	Sources of funding and funding strategy	34-36	94-96	–
Market risk	22	Relationship between the market risk measures for trading and non-trading portfolios and the balance sheet	31-32	89-90	–
	23	Decomposition of market risk factors	29-30	85-90	–
	24	Market risk validation and back-testing		85	–
	25	Primary risk management techniques beyond reported risk measures and parameters		85-88	–
Credit risk	26	Bank’s credit risk profile	25-29	75-85, 187-194	21-31,*
		Quantitative summary of aggregate credit risk exposures that reconciles to the balance sheet	65-71	131-136	*
	27	Policies for identifying impaired loans		77-79, 126, 157-160	–
	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 over-the-counter derivatives or exchange-traded derivatives		80	32
	30	Credit risk mitigation, including collateral held for all sources of credit risk		78-79	*
Other	31	Other risk types		104-113	–
	32	Publicly known risk events		108-109, 236-237	–

* These disclosure requirements are satisfied or partially satisfied by disclosures provided in our Pillar 3 Report for the quarter ended April 30, 2025 and for the year ended October 31, 2024.

Royal Bank of Canada   Second Quarter 2025   51

Interim Condensed Consolidated Financial Statements (unaudited)

Interim Condensed Consolidated Balance Sheets (unaudited)

	As at
(Millions of Canadian dollars)	April 30 2025			October 31 2024
Assets
Cash and due from banks	$	48,621		$	56,723
Interest-bearing deposits with banks		65,970			66,020
Securities
Trading		189,137			183,300
Investment, net of applicable allowance (Note 4)		303,360			256,618
		492,497			439,918
Assets purchased under reverse repurchase agreements and securities borrowed		301,927			350,803
Loans (Note 5)
Retail		635,280			626,978
Wholesale		379,151			360,439
		1,014,431			987,417
Allowance for loan losses (Note 5)		(7,125	)		(6,037	)
		1,007,306			981,380
Other
Customers’ liability under acceptances		28			35
Derivatives		188,211			150,612
Premises and equipment		6,734			6,852
Goodwill		19,287			19,286
Other intangibles		7,532			7,798
Other assets		104,020			92,155
		325,812			276,738
Total assets	$	2,242,133		$	2,171,582
Liabilities and equity
Deposits (Note 6)
Personal	$	519,172		$	522,139
Business and government		893,573			839,670
Bank		34,041			47,722
		1,446,786			1,409,531
Other
Acceptances		28			35
Obligations related to securities sold short		46,823			35,286
Obligations related to assets sold under repurchase agreements and securities loaned		281,326			305,321
Derivatives		194,344			163,763
Insurance contract liabilities		23,407			22,231
Other liabilities		103,144			94,677
		649,072			621,313
Subordinated debentures (Note 10)		13,745			13,546
Total liabilities		2,109,603			2,044,390
Equity attributable to shareholders
Preferred shares and other equity instruments (Note 10)		10,363			9,031
Common shares (Note 10)		20,820			20,952
Retained earnings		92,988			88,608
Other components of equity		8,276			8,498
		132,447			127,089
Non-controlling interests		83			103
Total equity		132,530			127,192
Total liabilities and equity	$	2,242,133		$	2,171,582

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

52   Royal Bank of Canada  Second Quarter 2025

Interim Condensed Consolidated Statements of Income (unaudited)

	For the three months ended				For the six months ended
(Millions of Canadian dollars, except per share amounts)	April 30 2025		April 30 2024		April 30 2025		April 30 2024
Interest and dividend income (Note 3)
Loans	$	13,484	$	12,933	$	27,814	$	25,202
Securities		4,845		4,194		9,677		8,748
Assets purchased under reverse repurchase agreements and securities borrowed		5,312		7,011		11,236		14,232
Deposits and other		1,329		1,616		2,698		3,181
		24,970		25,754		51,425		51,363
Interest expense (Note 3)
Deposits and other		10,716		11,488		22,532		22,793
Other liabilities		6,042		7,454		12,568		15,240
Subordinated debentures		156		189		321		375
		16,914		19,131		35,421		38,408
Net interest income		8,056		6,623		16,004		12,955
Non-interest income
Insurance service result (Note 7)		224		203		510		390
Insurance investment result (Note 7)		78		59		160		200
Trading revenue		641		633		1,836		1,437
Investment management and custodial fees		2,544		2,257		5,211		4,442
Mutual fund revenue		1,211		1,067		2,447		2,097
Securities brokerage commissions		486		431		957		819
Service charges		607		557		1,219		1,111
Underwriting and other advisory fees		615		734		1,289		1,340
Foreign exchange revenue, other than trading		338		287		656		549
Card service revenue		328		291		645		617
Credit fees		370		434		805		829
Net gains on investment securities		45		59		100		129
Income (loss) from joint ventures and associates		16		18		35		30
Other		113		501		537		694
		7,616		7,531		16,407		14,684
Total revenue		15,672		14,154		32,411		27,639
Provision for credit losses (Notes 4 and 5)		1,424		920		2,474		1,733
Non-interest expense
Human resources (Note 8)		5,478		5,091		11,465		10,254
Equipment		704		615		1,385		1,234
Occupancy		428		441		857		848
Communications		378		358		705		679
Professional fees		538		697		1,040		1,321
Amortization of other intangibles		457		373		892		725
Other		747		733		1,642		1,571
		8,730		8,308		17,986		16,632
Income before income taxes		5,518		4,926		11,951		9,274
Income taxes (Note 9)		1,128		976		2,430		1,742
Net income	$	4,390	$	3,950	$	9,521	$	7,532
Net income attributable to:
Shareholders	$	4,386	$	3,948	$	9,515	$	7,528
Non-controlling interests		4		2		6		4
	$	4,390	$	3,950	$	9,521	$	7,532
Basic earnings per share (in dollars) (Note 11)	$	3.03	$	2.75	$	6.57	$	5.25
Diluted earnings per share (in dollars) (Note 11)		3.02		2.74		6.56		5.25
Dividends per common share (in dollars)		1.48		1.38		2.96		2.76

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

Royal Bank of Canada   Second Quarter 2025   53

Interim Condensed Consolidated Statements of Comprehensive Income (unaudited)

	For the three months ended						For the six months ended
(Millions of Canadian dollars)	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Net income	$	4,390		$	3,950		$	9,521		$	7,532
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		(214	)		82			(30	)		870
Provision for credit losses recognized in income		–			–			(2	)		–
Reclassification of net losses (gains) on debt securities and loans at fair value through other comprehensive income to income		(30	)		(43	)		(91	)		(92	)
		(244	)		39			(123	)		778
Foreign currency translation adjustments
Unrealized foreign currency translation gains (losses)		(4,261	)		1,831			(627	)		(320	)
Net foreign currency translation gains (losses) from hedging activities		1,978			(827	)		307			95
Reclassification of losses (gains) on foreign currency translation to income		(13	)		–			(13	)		–
Reclassification of losses (gains) on net investment hedging activities to income		–			–			–			1
		(2,296	)		1,004			(333	)		(224	)
Net change in cash flow hedges
Net gains (losses) on derivatives designated as cash flow hedges		(98	)		293			570			(309	)
Reclassification of losses (gains) on derivatives designated as cash flow hedges to income		(177	)		(128	)		(336	)		(309	)
		(275	)		165			234			(618	)
Items that will not be reclassified subsequently to income:
Remeasurement gains (losses) on employee benefit plans (Note 8)		11			104			49			146
Net gains (losses) from fair value changes due to credit risk on financial liabilities designated at fair value through profit or loss		471			(313	)		(37	)		(1,014	)
Net gains (losses) on equity securities designated at fair value through other comprehensive income		24			19			38			74
		506			(190	)		50			(794	)
Total other comprehensive income (loss), net of taxes		(2,309	)		1,018			(172	)		(858	)
Total comprehensive income (loss)	$	2,081		$	4,968		$	9,349		$	6,674
Total comprehensive income attributable to:
Shareholders	$	2,082		$	4,963		$	9,343		$	6,670
Non-controlling interests		(1	)		5			6			4
	$	2,081		$	4,968		$	9,349		$	6,674

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 six months ended
(Millions of Canadian dollars)	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Income taxes on other comprehensive income
Net unrealized gains (losses) on debt securities and loans at fair value through other comprehensive income	$	(28	)	$	(7	)	$	93		$	296
Provision for credit losses recognized in income		–			–			–			–
Reclassification of net losses (gains) on debt securities and loans at fair value through other comprehensive income to income		(10	)		(12	)		(28	)		(28	)
Unrealized foreign currency translation gains (losses)		(26	)		7			(7	)		(10	)
Net foreign currency translation gains (losses) from hedging activities		733			(307	)		113			33
Reclassification of losses (gains) on foreign currency translation to income		–			–			–			–
Reclassification of losses (gains) on net investment hedging activities to income		–			–			–			–
Net gains (losses) on derivatives designated as cash flow hedges		(48	)		137			216			(125	)
Reclassification of losses (gains) on derivatives designated as cash flow hedges to income		(68	)		(47	)		(128	)		(115	)
Remeasurement gains (losses) on employee benefit plans		5			30			19			52
Net gains (losses) from fair value changes due to credit risk on financial liabilities designated at fair value through profit or loss		180			(119	)		(14	)		(390	)
Net gains (losses) on equity securities designated at fair value through other comprehensive income		10			7			14			27
Total income tax expenses (recoveries)	$	748		$	(311	)	$	278		$	(260	)

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

54   Royal Bank of Canada  Second Quarter 2025

Interim Condensed Consolidated Statements of Changes in Equity (unaudited)

	For the three months ended April 30, 2025
															Other components of equity
(Millions of Canadian dollars)	Preferred shares and other equity instruments		Common shares			Treasury – preferred shares and other equity instruments			Treasury – common shares			Retained earnings			FVOCI securities and loans			Foreign currency translation			Cash flow hedges			Total other components of equity			Equity attributable to shareholders			Non-controlling interests			Total equity
Balance at beginning of period	$	10,416	$	21,006		$	(12	)	$	(83	)	$	90,754		$	(776	)	$	9,086		$	2,776		$	11,086		$	133,167		$	96		$	133,263
Changes in equity
Issues of share capital and other equity instruments		–		14			–			–			–			–			–			–			–			14			–			14
Common shares purchased for cancellation		–		(45	)		–			–			(443	)		–			–			–			–			(488	)		–			(488	)
Redemption of preferred shares and other equity instruments		–		–			–			–			–			–			–			–			–			–			–			–
Sales of treasury shares and other equity instruments		–		–			721			1,313			–			–			–			–			–			2,034			–			2,034
Purchases of treasury shares and other equity instruments		–		–			(762	)		(1,385	)		–			–			–			–			–			(2,147	)		–			(2,147	)
Share-based compensation awards		–		–			–			–			6			–			–			–			–			6			–			6
Dividends on common shares		–		–			–			–			(2,087	)		–			–			–			–			(2,087	)		–			(2,087	)
Dividends on preferred shares and distributions on other equity instruments		–		–			–			–			(112	)		–			–			–			–			(112	)		(12	)		(124	)
Other		–		–			–			–			(22	)		–			–			–			–			(22	)		–			(22	)
Net income		–		–			–			–			4,386			–			–			–			–			4,386			4			4,390
Total other comprehensive income (loss), net of taxes		–		–			–			–			506			(244	)		(2,291	)		(275	)		(2,810	)		(2,304	)		(5	)		(2,309	)
Balance at end of period	$	10,416	$	20,975		$	(53	)	$	(155	)	$	92,988		$	(1,020	)	$	6,795		$	2,501		$	8,276		$	132,447		$	83		$	132,530
	For the three months ended April 30, 2024
															Other components of equity
(Millions of Canadian dollars)	Preferred shares and other equity instruments		Common shares			Treasury – preferred shares and other equity instruments			Treasury – common shares			Retained earnings			FVOCI securities and loans			Foreign currency translation			Cash flow hedges			Total other components of equity			Equity attributable to shareholders			Non-controlling interests			Total equity
Balance at beginning of period	$	8,050	$	20,156		$	(19	)	$	(84	)	$	82,049		$	(1,121	)	$	5,387		$	1,973		$	6,239		$	116,391		$	97		$	116,488
Changes in equity
Issues of share capital and other equity instruments		1,370		762			–			–			(8	)		–			–			–			–			2,124			–			2,124
Common shares purchased for cancellation		–		–			–			–			–			–			–			–			–			–			–			–
Redemption of preferred shares and other equity instruments		–		–			–			–			–			–			–			–			–			–			–			–
Sales of treasury shares and other equity instruments		–		–			404			1,112			–			–			–			–			–			1,516			–			1,516
Purchases of treasury shares and other equity instruments		–		–			(366	)		(1,099	)		–			–			–			–			–			(1,465	)		–			(1,465	)
Share-based compensation awards		–		–			–			–			–			–			–			–			–			–			–			–
Dividends on common shares		–		–			–			–			(1,953	)		–			–			–			–			(1,953	)		–			(1,953	)
Dividends on preferred shares and distributions on other equity instruments		–		–			–			–			(67	)		–			–			–			–			(67	)		(2	)		(69	)
Other		–		–			–			–			(5	)		–			–			–			–			(5	)		–			(5	)
Net income		–		–			–			–			3,948			–			–			–			–			3,948			2			3,950
Total other comprehensive income (loss), net of taxes		–		–			–			–			(190	)		39			1,001			165			1,205			1,015			3			1,018
Balance at end of period	$	9,420	$	20,918		$	19		$	(71	)	$	83,774		$	(1,082	)	$	6,388		$	2,138		$	7,444		$	121,504		$	100		$	121,604

Royal Bank of Canada   Second Quarter 2025   55

	For the six months ended April 30, 2025
																Other components of equity
(Millions of Canadian dollars)	Preferred shares and other equity instruments			Common shares			Treasury – preferred shares and other equity instruments			Treasury – common shares			Retained earnings			FVOCI securities and loans			Foreign currency translation			Cash flow hedges			Total other components of equity			Equity attributable to shareholders			Non-controlling interests			Total equity
Balance at beginning of period	$	9,020		$	21,013		$	11		$	(61	)	$	88,608		$	(897	)	$	7,128		$	2,267		$	8,498		$	127,089		$	103		$	127,192
Changes in equity
Issues of share capital and other equity instruments		1,396			36			–			–			(10	)		–			–			–			–			1,422			–			1,422
Common shares purchased for cancellation		–			(74	)		–			–			(752	)		–			–			–			–			(826	)		–			(826	)
Redemption of preferred shares and other equity instruments		–			–			–			–			–			–			–			–			–			–			–			–
Sales of treasury shares and other equity instruments		–			–			1,231			2,907			–			–			–			–			–			4,138			–			4,138
Purchases of treasury shares and other equity instruments		–			–			(1,295	)		(3,001	)		–			–			–			–			–			(4,296	)		–			(4,296	)
Share-based compensation awards		–			–			–			–			19			–			–			–			–			19			–			19
Dividends on common shares		–			–			–			–			(4,179	)		–			–			–			–			(4,179	)		–			(4,179	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(230	)		–			–			–			–			(230	)		(26	)		(256	)
Other		–			–			–			–			(33	)		–			–			–			–			(33	)		–			(33	)
Net income		–			–			–			–			9,515			–			–			–			–			9,515			6			9,521
Total other comprehensive income (loss), net of taxes		–			–			–			–			50			(123	)		(333	)		234			(222	)		(172	)		–			(172	)
Balance at end of period	$	10,416		$	20,975		$	(53	)	$	(155	)	$	92,988		$	(1,020	)	$	6,795		$	2,501		$	8,276		$	132,447		$	83		$	132,530
	For the six months ended April 30, 2024
																Other components of equity
(Millions of Canadian dollars)	Preferred shares and other equity instruments			Common shares			Treasury – preferred shares and other equity instruments			Treasury – common shares			Retained earnings			FVOCI securities and loans			Foreign currency translation			Cash flow hedges			Total other components of equity			Equity attributable to shareholders			Non-controlling interests			Total equity
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		2,120			1,520			–			–			(14	)		–			–			–			–			3,626			–			3,626
Common shares purchased for cancellation		–			–			–			–			–			–			–			–			–			–			–			–
Redemption of preferred shares and other equity instruments		(23	)		–			–			–			2			–			–			–			–			(21	)		–			(21	)
Sales of treasury shares and other equity instruments		–			–			517			2,339			–			–			–			–			–			2,856			–			2,856
Purchases of treasury shares and other equity instruments		–			–			(489	)		(2,179	)		–			–			–			–			–			(2,668	)		–			(2,668	)
Share-based compensation awards		–			–			–			–			8			–			–			–			–			8			–			8
Dividends on common shares		–			–			–			–			(3,897	)		–			–			–			–			(3,897	)		–			(3,897	)
Dividends on preferred shares and distributions on other equity instruments		–			–			–			–			(125	)		–			–			–			–			(125	)		(3	)		(128	)
Other		–			–			–			–			7			–			–			–			–			7			–			7
Net income		–			–			–			–			7,528			–			–			–			–			7,528			4			7,532
Total other comprehensive income (loss), net of taxes		–			–			–			–			(794	)		778			(224	)		(618	)		(64	)		(858	)		–			(858	)
Balance at end of period	$	9,420		$	20,918		$	19		$	(71	)	$	83,774		$	(1,082	)	$	6,388		$	2,138		$	7,444		$	121,504		$	100		$	121,604

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

56   Royal Bank of Canada  Second Quarter 2025

Interim Condensed Consolidated Statements of Cash Flows (unaudited)

	For the three months ended						For the six months ended
(Millions of Canadian dollars)	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Cash flows from operating activities
Net income	$	4,390		$	3,950		$	9,521		$	7,532
Adjustments for non-cash items and others
Provision for credit losses		1,424			920			2,474			1,733
Depreciation		321			338			644			658
Deferred income taxes		(260	)		(246	)		(232	)		(852	)
Amortization and impairment of other intangibles		459			385			910			739
Net changes in investments in joint ventures and associates		(16	)		(18	)		(35	)		(30	)
Losses (Gains) on investment securities		(45	)		(59	)		(100	)		(129	)
Losses (Gains) on disposition of businesses		–			(1	)		–			(5	)
Adjustments for net changes in operating assets and liabilities
Insurance contract liabilities		(70	)		(143	)		1,176			2,173
Net change in accrued interest receivable and payable		323			1,414			(656	)		1,589
Current income taxes		736			(430	)		146			(115	)
Derivative assets		(34,525	)		(21,796	)		(37,599	)		15,616
Derivative liabilities		32,754			26,053			30,581			(9,602	)
Trading securities		279			21,141			(5,837	)		18,620
Loans, net of securitizations		(2,452	)		(27,878	)		(28,235	)		(33,716	)
Assets purchased under reverse repurchase agreements and securities borrowed		(21,476	)		46,518			48,876			38,838
Obligations related to assets sold under repurchase agreements and securities loaned		6,734			(60,433	)		(23,995	)		(61,181	)
Obligations related to securities sold short		1,363			(4,433	)		11,537			(3,072	)
Deposits		4,846			209			37,255			9,690
Brokers and dealers receivable and payable		717			505			(89	)		8
Other		14,349			(1,599	)		(5,337	)		(5,740	)
Net cash from (used in) operating activities		9,851			(15,603	)		41,005			(17,246	)
Cash flows from investing activities
Change in interest-bearing deposits with banks		(18,046	)		22,621			50			32,627
Proceeds from sales and maturities of investment securities		53,100			43,051			110,118			108,531
Purchases of investment securities		(66,482	)		(46,833	)		(157,025	)		(107,720	)
Net acquisitions of premises and equipment and other intangibles		(483	)		(410	)		(1,164	)		(892	)
Net proceeds from (cash transferred for) dispositions		–			1			–			10
Cash used in acquisitions, net of cash acquired		–			(12,716	)		–			(12,716	)
Net cash from (used in) investing activities		(31,911	)		5,714			(48,021	)		19,840
Cash flows from financing activities
Issuance of subordinated debentures		–			2,000			1,500			2,000
Repayment of subordinated debentures		–			–			(1,500	)		–
Issue of common shares, net of issuance costs		13			20			34			56
Common shares purchased for cancellation		(488	)		–			(826	)		–
Issue of preferred shares and other equity instruments, net of issuance costs		–			1,362			1,386			2,106
Redemption of preferred shares and other equity instruments		–			–			–			(21	)
Sales of treasury shares and other equity instruments		2,034			1,516			4,138			2,856
Purchases of treasury shares and other equity instruments		(2,147	)		(1,465	)		(4,296	)		(2,668	)
Dividends paid on shares and distributions paid on other equity instruments		(2,210	)		(1,262	)		(4,311	)		(2,502	)
Dividends/distributions paid to non-controlling interests		(14	)		(2	)		(14	)		(3	)
Change in short-term borrowings of subsidiaries		2,068			(4,352	)		2,068			(3,819	)
Repayment of lease liabilities		(171	)		(157	)		(325	)		(310	)
Net cash from (used in) financing activities		(915	)		(2,340	)		(2,146	)		(2,305	)
Effect of exchange rate changes on cash and due from banks		396			(745	)		1,060			(905	)
Net change in cash and due from banks		(22,579	)		(12,974	)		(8,102	)		(616	)
Cash and due from banks at beginning of period (1)		71,200			74,347			56,723			61,989
Cash and due from banks at end of period (1)	$	48,621		$	61,373		$	48,621		$	61,373
Cash flows from operating activities include:
Amount of interest paid	$	16,367		$	16,788		$	35,844		$	35,708
Amount of interest received		24,269			24,930			50,316			49,880
Amount of dividends received		987			798			2,050			1,856
Amount of income taxes paid		1,468			1,221			2,710			2,076

(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 April 30, 2025 (January 31, 2025 – $2 billion; October 31, 2024 – $2 billion; April 30, 2024 – $2 billion; January 31, 2024 - $3 billion; October 31, 2023 – $3 billion).

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

Royal Bank of Canada   Second Quarter 2025   57

Note 1 General information

Our unaudited Interim Condensed Consolidated Financial Statements (Condensed Financial Statements) are presented in compliance with International Accounting Standard 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 2024 Annual Consolidated Financial Statements and the accompanying notes included on pages 148 to 247 in our 2024 Annual Report. Unless otherwise stated, monetary amounts are stated in Canadian dollars. Tabular information is stated in millions of dollars, except as noted. On May 28, 2025, the Board of Directors authorized the Condensed Financial Statements for issue.

Note 2 Summary of material accounting policies, estimates and judgments

The Condensed Financial Statements have been prepared using the same accounting policies and methods used in the preparation of our audited 2024 Annual Consolidated Financial Statements. Our material 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 2024 Annual Consolidated 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 in the Interim Condensed Consolidated Balance Sheets. Refer to Note 2 and Note 3 of our audited 2024 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 April 30, 2025
	Carrying value and fair value								Carrying value		Fair value
(Millions of Canadian dollars)	Financial instruments classified as FVTPL		Financial instruments designated as FVTPL		Financial instruments classified as FVOCI		Financial instruments designated as FVOCI		Financial instruments measured at amortized cost		Financial instruments measured at amortized cost		Total carrying amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–	$	56,275	$	–	$	–	$	9,695	$	9,695	$	65,970	$	65,970
Securities
Trading		183,776		5,361		–		–		–		–		189,137		189,137
Investment, net of applicable allowance		–		–		201,580		1,360		100,420		97,703		303,360		300,643
		183,776		5,361		201,580		1,360		100,420		97,703		492,497		489,780
Assets purchased under reverse repurchase agreements and securities borrowed		226,379		–		–		–		75,548		75,538		301,927		301,917
Loans, net of applicable allowance
Retail		910		–		461		–		630,071		630,062		631,442		631,433
Wholesale		7,006		2,807		709		–		365,342		362,888		375,864		373,410
		7,916		2,807		1,170		–		995,413		992,950		1,007,306		1,004,843
Other
Derivatives		188,211		–		–		–		–		–		188,211		188,211
Other assets (1)		12,686		–		–		–		56,636		56,636		69,322		69,322
Financial liabilities
Deposits
Personal	$	557	$	33,593					$	485,022	$	487,618	$	519,172	$	521,768
Business and government (2)		210		167,383						725,980		727,418		893,573		895,011
Bank (3)		–		2,920						31,121		31,137		34,041		34,057
		767		203,896						1,242,123		1,246,173		1,446,786		1,450,836
Other
Obligations related to securities sold short		46,823		–						–		–		46,823		46,823
Obligations related to assets sold under repurchase agreements and securities loaned		–		240,561						40,765		40,765		281,326		281,326
Derivatives		194,344		–						–		–		194,344		194,344
Other liabilities (4)		556		16,990						60,460		60,466		78,006		78,012
Subordinated debentures		–		–						13,745		13,788		13,745		13,788

58   Royal Bank of Canada  Second Quarter 2025

Note 3 Fair value of financial instruments (continued)

	As at October 31, 2024
	Carrying value and fair value									Carrying value		Fair value
(Millions of Canadian dollars)	Financial instruments classified as FVTPL			Financial instruments designated as FVTPL		Financial instruments classified as FVOCI		Financial instruments designated as FVOCI		Financial instruments measured at amortized cost		Financial instruments measured at amortized cost		Total carrying amount		Total fair value
Financial assets
Interest-bearing deposits with banks	$	–		$	53,996	$	–	$	–	$	12,024	$	12,024	$	66,020	$	66,020
Securities
Trading		182,346			954		–		–		–		–		183,300		183,300
Investment, net of applicable allowance		–			–		155,118		1,242		100,258		96,336		256,618		252,696
		182,346			954		155,118		1,242		100,258		96,336		439,918		435,996
Assets purchased under reverse repurchase agreements and securities borrowed		284,311			–		–		–		66,492		66,492		350,803		350,803
Loans, net of applicable allowance
Retail		915			–		580		–		622,098		619,320		623,593		620,815
Wholesale		6,177			2,030		1,003		–		348,577		345,561		357,787		354,771
		7,092			2,030		1,583		–		970,675		964,881		981,380		975,586
Other
Derivatives		150,612			–		–		–		–		–		150,612		150,612
Other assets (1)		11,770			–		–		–		50,093		50,093		61,863		61,863
Financial liabilities
Deposits
Personal	$	508		$	33,799					$	487,832	$	490,170	$	522,139	$	524,477
Business and government (2)		191			156,238						683,241		684,748		839,670		841,177
Bank (3)		–			10,530						37,192		37,183		47,722		47,713
		699			200,567						1,208,265		1,212,101		1,409,531		1,413,367
Other
Obligations related to securities sold short		35,286			–						–		–		35,286		35,286
Obligations related to assets sold under repurchase agreements and securities loaned		–			270,663						34,658		34,658		305,321		305,321
Derivatives		163,763			–						–		–		163,763		163,763
Other liabilities (4)		(1,407	)		–						69,597		69,850		68,190		68,443
Subordinated debentures		–			–						13,546		13,602		13,546		13,602

(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.

Royal Bank of Canada   Second Quarter 2025   59

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

	As at
	April 30, 2025												October 31, 2024
	Fair value measurements using							Netting adjustments					Fair value measurements using								Netting adjustments
(Millions of Canadian dollars)	Level 1		Level 2			Level 3				Fair value			Level 1		Level 2			Level 3					Fair value
Financial assets
Interest-bearing deposits with banks	$	–	$	56,275		$	–	$		$	56,275		$	–	$	53,996		$	–		$		$	53,996
Securities
Trading
Debt issued or guaranteed by:
Canadian government (1)
Federal		10,101		1,914			–				12,015			11,611		2,173			–					13,784
Provincial and municipal		–		17,472			–				17,472			–		16,588			–					16,588
U.S. federal, state, municipal and agencies (1), (2)		1,213		38,491			–				39,704			1,852		29,136			–					30,988
Other OECD government (3)		8,305		6,018			–				14,323			2,481		2,153			–					4,634
Mortgage-backed securities (1)		–		93			–				93			–		3			–					3
Asset-backed securities		–		890			–				890			–		1,434			–					1,434
Corporate debt and other debt		–		22,866			32				22,898			–		26,195			–					26,195
Equities		76,450		2,637			2,655				81,742			84,814		2,316			2,544					89,674
		96,069		90,381			2,687				189,137			100,758		79,998			2,544					183,300
Investment
Debt issued or guaranteed by:
Canadian government (1)
Federal		16,813		11,007			–				27,820			4,623		8,546			–					13,169
Provincial and municipal		–		9,953			–				9,953			–		7,554			–					7,554
U.S. federal, state, municipal and agencies (1)		139		103,808			–				103,947			42		80,224			–					80,266
Other OECD government		6,579		9,525			–				16,104			2,370		7,786			–					10,156
Mortgage-backed securities (1)		–		2,447			31				2,478			–		2,603			31					2,634
Asset-backed securities		–		9,887			–				9,887			–		9,357			–					9,357
Corporate debt and other debt		–		31,257			134				31,391			–		31,839			143					31,982
Equities		454		336			570				1,360			432		304			506					1,242
		23,985		178,220			735				202,940			7,467		148,213			680					156,360
Assets purchased under reverse repurchase agreements and securities borrowed		–		226,379			–				226,379			–		284,311			–					284,311
Loans		–		10,686			1,207				11,893			–		8,924			1,781					10,705
Other
Derivatives
Interest rate contracts		–		26,685			317				27,002			–		27,719			354					28,073
Foreign exchange contracts		–		134,792			–				134,792			–		98,480			3					98,483
Credit derivatives		–		429			–				429			–		273			–					273
Other contracts		1,322		28,178			53				29,553			2,553		23,830			21					26,404
Valuation adjustments		–		(1,215	)		25				(1,190	)		–		(1,067	)		14					(1,053	)
Total gross derivatives		1,322		188,869			395				190,586			2,553		149,235			392					152,180
Netting adjustments									(2,375)		(2,375	)										(1,568)		(1,568	)
Total derivatives											188,211													150,612
Other assets		5,510		7,171			5				12,686			5,291		6,472			7					11,770
	$	126,886	$	757,981		$	5,029	$	(2,375)	$	887,521		$	116,069	$	731,149		$	5,404		$	(1,568)	$	851,054
Financial liabilities
Deposits
Personal	$	–	$	33,608		$	542	$		$	34,150		$	–	$	33,829		$	478		$		$	34,307
Business and government		–		167,593			–				167,593			–		156,429			–					156,429
Bank		–		2,920			–				2,920			–		10,530			–					10,530
Other
Obligations related to securities sold short		14,539		32,284			–				46,823			15,172		20,114			–					35,286
Obligations related to assets sold under repurchase agreements and securities loaned		–		240,561			–				240,561			–		270,663			–					270,663
Derivatives
Interest rate contracts		–		22,032			839				22,871			–		24,852			847					25,699
Foreign exchange contracts		–		133,861			53				133,914			–		93,164			54					93,218
Credit derivatives		–		396			–				396			–		218			–					218
Other contracts		2,272		37,215			445				39,932			3,212		42,961			324					46,497
Valuation adjustments		–		(394	)		–				(394	)		–		(297	)		(4	)				(301	)
Total gross derivatives		2,272		193,110			1,337				196,719			3,212		160,898			1,221					165,331
Netting adjustments									(2,375)		(2,375	)										(1,568)		(1,568	)
Total derivatives											194,344													163,763
Other liabilities		315		17,231			–				17,546			287		(1,694	)		–					(1,407	)
	$	17,126	$	687,307		$	1,879	$	(2,375)	$	703,937		$	18,671	$	650,769		$	1,699		$	(1,568)	$	669,571

(1) As at April 30, 2025, residential and commercial mortgage-backed securities (MBS) included in all fair value levels of Trading securities were $ 19,515 million and $nil (October 31, 2024 – $17,154 million and $nil), respectively, and in all fair value levels of Investment securities were $28,298 million and $2,478 million (October 31, 2024 – $27,048 million and $2,568 million), respectively.

(2) United States (U.S.).

(3) Organisation for Economic Co-operation and Development (OECD).

60   Royal Bank of Canada  Second Quarter 2025

Note 3 Fair value of financial instruments (continued)

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 April 30, 2025, 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 April 30, 2025, 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 2024 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 April 30, 2025
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	–		$	–		$	–		$	–		$	–		$	32		$	–		$	32		$	–
Equities		2,643			(6	)		(73	)		127			(36	)		–			–			2,655			(6	)
		2,643			(6	)		(73	)		127			(36	)		32			–			2,687			(6	)
Investment
Mortgage-backed securities		32			–			(1	)		–			–			–			–			31			n.a.
Corporate debt and other debt		142			–			(4	)		–			(4	)		–			–			134			n.a.
Equities		523			–			15			32			–			–			–			570			n.a.
		697			–			10			32			(4	)		–			–			735			n.a.
Loans		1,876			98			(23	)		51			(795	)		–			–			1,207			20
Other
Net derivative balances (3)
Interest rate contracts		(535	)		(47	)		2			28			2			7			21			(522	)		(46	)
Foreign exchange contracts		(66	)		3			3			–			(1	)		–			8			(53	)		2
Other contracts		(455	)		101			16			–			3			(49	)		(8	)		(392	)		125
Valuation adjustments		8			–			–			16			1			–			–			25			–
Other assets		7			–			–			–			(2	)		–			–			5			–
	$	4,175		$	149		$	(65	)	$	254		$	(832	)	$	(10	)	$	21		$	3,692		$	95
Liabilities
Deposits	$	(634	)	$	8		$	7		$	(169	)	$	26		$	(44	)	$	264		$	(542	)	$	9
	$	(634	)	$	8		$	7		$	(169	)	$	26		$	(44	)	$	264		$	(542	)	$	9

Royal Bank of Canada   Second Quarter 2025   61

	For the three months ended April 30, 2024
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Equities		2,286			(36	)		28			131			(16	)		–			(1	)		2,392			(12	)
		2,286			(36	)		28			131			(16	)		–			(1	)		2,392			(12	)
Investment
Mortgage-backed securities		30			–			–			–			–			–			–			30			n.a.
Corporate debt and other debt		148			–			1			–			(5	)		–			–			144			n.a.
Equities		462			–			9			3			–			2			–			476			n.a.
		640			–			10			3			(5	)		2			–			650			n.a.
Loans		1,815			(8	)		12			202			(47	)		3			(140	)		1,837			(4	)
Other
Net derivative balances (3)
Interest rate contracts		(535	)		(77	)		–			(26	)		(3	)		(5	)		(1	)		(647	)		(62	)
Foreign exchange contracts		(49	)		10			4			10			(2	)		2			(2	)		(27	)		13
Other contracts		(349	)		8			(8	)		(33	)		3			(79	)		160			(298	)		–
Valuation adjustments		4			–			–			(2	)		(8	)		–			–			(6	)		–
Other assets		10			–			–			–			(1	)		–			–			9			–
	$	3,822		$	(103	)	$	46		$	285		$	(79	)	$	(77	)	$	16		$	3,910		$	(65	)
Liabilities
Deposits	$	(429	)	$	(4	)	$	(2	)	$	(235	)	$	25		$	(89	)	$	101		$	(633	)	$	6
	$	(429	)	$	(4	)	$	(2	)	$	(235	)	$	25		$	(89	)	$	101		$	(633	)	$	6
	For the six months ended April 30, 2025
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	–		$	–		$	–		$	–		$	–		$	32		$	–		$	32		$	–
Equities		2,544			(70	)		(14	)		334			(140	)		1			–			2,655			(48	)
		2,544			(70	)		(14	)		334			(140	)		33			–			2,687			(48	)
Investment
Mortgage-backed securities		31			–			–			–			–			–			–			31			n.a.
Corporate debt and other debt		143			–			2			–			(11	)		–			–			134			n.a.
Equities		506			–			35			32			(3	)		–			–			570			n.a.
		680			–			37			32			(14	)		–			–			735			n.a.
Loans		1,781			95			–			141			(814	)		7			(3	)		1,207			19
Other
Net derivative balances (3)
Interest rate contracts		(493	)		(35	)		2			(39	)		5			9			29			(522	)		(34	)
Foreign exchange contracts		(51	)		(11	)		3			1			(1	)		–			6			(53	)		(23	)
Other contracts		(303	)		80			3			(12	)		7			(274	)		107			(392	)		109
Valuation adjustments		18			–			–			6			1			–			–			25			–
Other assets		7			–			–			–			(2	)		–			–			5			–
	$	4,183		$	59		$	31		$	463		$	(958	)	$	(225	)	$	139		$	3,692		$	23
Liabilities
Deposits	$	(478	)	$	9		$	1		$	(401	)	$	88		$	(210	)	$	449		$	(542	)	$	46
	$	(478	)	$	9		$	1		$	(401	)	$	88		$	(210	)	$	449		$	(542	)	$	46

62   Royal Bank of Canada  Second Quarter 2025

Note 3 Fair value of financial instruments (continued)

	For the six months ended April 30, 2024
(Millions of Canadian dollars)	Fair value at beginning of period			Gains (losses) included in earnings			Gains (losses) included in OCI (1)			Purchases (issuances)			Settlement (sales) and other (2)			Transfers into Level 3			Transfers out of Level 3			Fair value at end of period			Gains (losses) included in earnings for positions still held
Assets
Securities
Trading
Corporate debt and other debt	$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–		$	–
Equities		2,266			(54	)		(8	)		229			(40	)		–			(1	)		2,392			(8	)
		2,266			(54	)		(8	)		229			(40	)		–			(1	)		2,392			(8	)
Investment
Mortgage-backed securities		29			–			1			–			–			–			–			30			n.a.
Corporate debt and other debt		149			–			4			–			(9	)		–			–			144			n.a.
Equities		466			–			5			3			–			2			–			476			n.a.
		644			–			10			3			(9	)		2			–			650			n.a.
Loans		1,859			(54	)		4			367			(240	)		41			(140	)		1,837			(50	)
Other
Net derivative balances (3)
Interest rate contracts		(662	)		3			–			(14	)		13			12			1			(647	)		17
Foreign exchange contracts		(49	)		(1	)		5			15			3			2			(2	)		(27	)		3
Other contracts		(438	)		(115	)		6			(48	)		1			(86	)		382			(298	)		(64	)
Valuation adjustments		3			–			–			(1	)		(8	)		–			–			(6	)		–
Other assets		11			–			–			–			(2	)		–			–			9			–
	$	3,634		$	(221	)	$	17		$	551		$	(282	)	$	(29	)	$	240		$	3,910		$	(102	)
Liabilities
Deposits	$	(383	)	$	(51	)	$	1		$	(357	)	$	38		$	(90	)	$	209		$	(633	)	$	(28	)
	$	(383	)	$	(51	)	$	1		$	(357	)	$	38		$	(90	)	$	209		$	(633	)	$	(28	)

(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 $16 million for the three months ended April 30, 2025 (April 30, 2024 – gains or losses of $nil) and gains of $31 million for the six months ended April 30, 2025 (April 30, 2024 – gains of $10 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 April 30, 2025 included derivative assets of $395 million (April 30, 2024 – $300 million) and derivative liabilities of $1,337 million (April 30, 2024 – $1,278 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 April 30, 2025, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $938 million. During the three months ended April 30, 2024, transfers out of Level 1 to Level 2 included Investment U.S. federal, state, municipal and agencies debt of $498 million and Trading U.S. federal, state, municipal and agencies debt of $258 million.

During the three months ended April 30, 2025 and April 30, 2024, there were no significant transfers out of Level 2 to Level 1.

During the six months ended April 30, 2025, transfers out of Level 1 to Level 2 included Trading U.S. federal, state, municipal and agencies debt of $938 million. During the six months ended April 30, 2024, transfers out of Level 1 to Level 2 included Investment U.S. federal, state, municipal and agencies debt of $621 million and Trading U.S. federal, state, municipal and agencies debt of $258 million.

During the six months ended April 30, 2025 and April 30, 2024, 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 April 30, 2025 and April 30, 2024, there were no significant transfers out of Level 2 to Level 3.

During the three months ended April 30, 2025, transfers out of Level 3 to Level 2 included Deposits due to changes in the significance of unobservable inputs. During the three months ended April 30, 2024, transfers out of Level 3 to Level 2 included Other contracts, Loans and Deposits due to changes in the significance of unobservable inputs and changes in the market observability of inputs.

Royal Bank of Canada   Second Quarter 2025   63

During the six months ended April 30, 2025, transfers out of Level 2 to Level 3 included Other contracts and Deposits due to changes in the significance of unobservable inputs. During the six months ended April 30, 2024, there were no significant transfers out of Level 2 to Level 3.

During the six months ended April 30, 2025, transfers out of Level 3 to Level 2 included Deposits and Other contracts due to changes in the significance of unobservable inputs and changes in the market observability of inputs. During the six months ended April 30, 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.

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 six months ended
(Millions of Canadian dollars)	April 30 2025		April 30 2024		April 30 2025		April 30 2024
Interest and dividend income (1), (2)
Financial instruments measured at fair value through profit or loss	$	7,332	$	9,431	$	15,254	$	18,905
Financial instruments measured at fair value through other comprehensive income		2,106		1,627		4,155		3,235
Financial instruments measured at amortized cost		15,532		14,696		32,016		29,223
		24,970		25,754		51,425		51,363
Interest expense (1)
Financial instruments measured at fair value through profit or loss		7,317		8,711		15,362		17,795
Financial instruments measured at amortized cost		9,597		10,420		20,059		20,613
		16,914		19,131		35,421		38,408
Net interest income	$	8,056	$	6,623	$	16,004	$	12,955

(1) Excludes interest and dividend income for the three months ended April 30, 2025 of $292 million (April 30, 2024 – $162 million) and for the six months ended April 30, 2025 of $657 million (April 30, 2024 – $434 million), and interest expense for the three months ended April 30, 2025 of $75 million (April 30, 2024 – $12 million) and for the six months ended April 30, 2025 of $118 million (April 30, 2024 – $23 million) presented in Insurance investment result in the Interim Condensed Consolidated Statements of Income.

(2) Includes dividend income for the three months ended April 30, 2025 of $1,003 million (April 30, 2024 – $776 million) and for the six months ended April 30, 2025 of $1,999 million (April 30, 2024 – $1,733 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
	April 30, 2025									October 31, 2024
(Millions of Canadian dollars)	Cost/ Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value		Cost/ Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
Debt issued or guaranteed by:
Canadian government
Federal	$	27,793	$	46	$	(19	)	$	27,820	$	13,165	$	31	$	(27	)	$	13,169
Provincial and municipal		9,983		31		(61	)		9,953		7,563		27		(36	)		7,554
U.S. federal, state, municipal and agencies		105,351		283		(1,687	)		103,947		81,632		333		(1,699	)		80,266
Other OECD government		16,145		11		(52	)		16,104		10,199		6		(49	)		10,156
Mortgage-backed securities		2,493		2		(17	)		2,478		2,646		3		(15	)		2,634
Asset-backed securities		9,905		11		(29	)		9,887		9,343		17		(3	)		9,357
Corporate debt and other debt		31,349		84		(42	)		31,391		31,932		101		(51	)		31,982
Equities		791		574		(5	)		1,360		728		519		(5	)		1,242
	$	203,810	$	1,042	$	(1,912	)	$	202,940	$	157,208	$	1,037	$	(1,885	)	$	156,360

(1) Excludes $100,420 million of held-to-collect securities as at April 30, 2025 that are carried at amortized cost, net of allowance for credit losses (October 31, 2024 – $100,258 million).

(2) Gross unrealized gains and losses includes $(35) million of allowance for credit losses on debt securities at FVOCI as at April 30, 2025 (October 31, 2024 – $(35) million) recognized in income and Other components of equity.

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.

64   Royal Bank of Canada  Second Quarter 2025

Note 4 Securities (continued)

Allowance for credit losses – securities at FVOCI (1)

	For the three months ended
	April 30, 2025											April 30, 2024
	Performing					Impaired						Performing					Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2		Stage 3 (2)			Total			Stage 1			Stage 2		Stage 3 (2)			Total
Balance at beginning of period	$	4		$	–	$	(42	)	$	(38	)	$	4		$	–	$	(37	)	$	(33	)
Provision for credit losses
Transfers to stage 1		–			–		–			–			–			–		–			–
Transfers to stage 2		–			–		–			–			–			–		–			–
Transfers to stage 3		–			–		–			–			–			–		–			–
Purchases		2			–		–			2			3			–		–			3
Sales and maturities		(1	)		–		–			(1	)		(1	)		–		–			(1	)
Changes in risk, parameters and exposures		(1	)		–		(2	)		(3	)		(1	)		–		(2	)		(3	)
Exchange rate and other		1			–		4			5			1			–		–			1
Balance at end of period	$	5		$	–	$	(40	)	$	(35	)	$	6		$	–	$	(39	)	$	(33	)

	For the six months ended
	April 30, 2025											April 30, 2024
	Performing					Impaired						Performing					Impaired
(Millions of Canadian dollars)	Stage 1			Stage 2		Stage 3 (2)			Total			Stage 1			Stage 2		Stage 3 (2)			Total
Balance at beginning of period	$	6		$	–	$	(41	)	$	(35	)	$	4		$	–	$	(37	)	$	(33	)
Provision for credit losses
Transfers to stage 1		–			–		–			–			–			–		–			–
Transfers to stage 2		–			–		–			–			–			–		–			–
Transfers to stage 3		–			–		–			–			–			–		–			–
Purchases		4			–		–			4			6			–		–			6
Sales and maturities		(2	)		–		–			(2	)		(2	)		–		–			(2	)
Changes in risk, parameters and exposures		(4	)		–		(4	)		(8	)		(3	)		–		(4	)		(7	)
Exchange rate and other		1			–		5			6			1			–		2			3
Balance at end of period	$	5		$	–	$	(40	)	$	(35	)	$	6		$	–	$	(39	)	$	(33	)

(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.

Allowance for credit losses – securities at amortized cost

For the three months ended

April 30, 2025

April 30, 2024

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

$

6

$

8

$

–

$

14

$

9

$

14

$

–

$

23

Provision for credit losses

Transfers to stage 1

–

–

–

–

–

–

–

–

Transfers to stage 2

–

–

–

–

–

–

–

–

Transfers to stage 3

–

–

–

–

–

–

–

–

Purchases

1

–

–

1

1

–

–

1

Sales and maturities

–

–

–

–

–

–

–

–

Changes in risk, parameters and exposures

–

(1

)

–

(1

)

(2

)

(1

)

–

(3

)

Exchange rate and other

(1

)

1

–

–

–

–

–

–

Balance at end of period

$

6

$

8

$

–

$

14

$

8

$

13

$

–

$

21

	For the six months ended
	April 30, 2025											April 30, 2024
	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	$	6		$	8		$	–	$	14		$	8		$	15		$	–	$	23
Provision for credit losses
Transfers to stage 1		–			–			–		–			–			–			–		–
Transfers to stage 2		–			–			–		–			–			–			–		–
Transfers to stage 3		–			–			–		–			–			–			–		–
Purchases		2			–			–		2			4			–			–		4
Sales and maturities		–			–			–		–			–			–			–		–
Changes in risk, parameters and exposures		(1	)		(1	)		–		(2	)		(4	)		(1	)		–		(5	)
Exchange rate and other		(1	)		1			–		–			–			(1	)		–		(1	)
Balance at end of period	$	6		$	8		$	–	$	14		$	8		$	13		$	–	$	21

Royal Bank of Canada   Second Quarter 2025   65

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 2024 Annual Report.

	As at
	April 30, 2025								October 31, 2024
	Performing				Impaired				Performing				Impaired
(Millions of Canadian dollars)	Stage 1		Stage 2		Stage 3 (1)		Total		Stage 1		Stage 2		Stage 3 (1)		Total
Investment securities
Securities at FVOCI
Investment grade	$	200,470	$	9	$	–	$	200,479	$	154,100	$	–	$	–	$	154,100
Non-investment grade		967		–		–		967		875		–		–		875
Impaired		–		–		134		134		–		–		143		143
		201,437		9		134		201,580		154,975		–		143		155,118
Items not subject to impairment (2)								1,360								1,242
							$	202,940							$	156,360
Securities at amortized cost
Investment grade	$	99,386	$	–	$	–	$	99,386	$	99,224	$	–	$	–	$	99,224
Non-investment grade		882		166		–		1,048		856		192		–		1,048
		100,268		166		–		100,434		100,080		192		–		100,272
Allowance for credit losses		6		8		–		14		6		8		–		14
	$	100,262	$	158	$	–	$	100,420	$	100,074	$	184	$	–	$	100,258

(1) Reflects $134 million of purchased credit-impaired securities (October 31, 2024 – $143 million).

(2) Investment securities at FVOCI not subject to impairment represent equity securities designated as FVOCI.

Note 5 Loans and allowance for credit losses

Allowance for credit losses

	For the three months ended
	April 30, 2025												April 30, 2024
(Millions of Canadian dollars)	Balance at beginning of period		Provision for credit losses		Net write-offs			Exchange rate and other			Balance at end of period		Balance at beginning of period		Provision for credit losses		Net write-offs			Exchange rate and other			Balance at end of period
Retail
Residential mortgages	$	636	$	121	$	(2	)	$	(25	)	$	730	$	542	$	28	$	(5	)	$	4		$	569
Personal		1,534		288		(178	)		(11	)		1,633		1,287		213		(134	)		5			1,371
Credit cards		1,264		257		(199	)		(2	)		1,320		1,101		223		(185	)		–			1,139
Small business		289		88		(28	)		(6	)		343		212		39		(19	)		(2	)		230
Wholesale		3,210		666		(270	)		(151	)		3,455		2,445		405		(133	)		(3	)		2,714
Customers’ liability under acceptances		–		–		–			–			–		43		8		–			–			51
	$	6,933	$	1,420	$	(677	)	$	(195	)	$	7,481	$	5,630	$	916	$	(476	)	$	4		$	6,074
Presented as:
Allowance for loan losses	$	6,600									$	7,125	$	5,299									$	5,715
Other liabilities – Provisions		328										353		282										302
Customers’ liability under acceptances		–										–		43										51
Other components of equity		5										3		6										6

66   Royal Bank of Canada  Second Quarter 2025

Note 5 Loans and allowance for credit losses (continued)

	For the six months ended
	April 30, 2025												April 30, 2024
(Millions of Canadian dollars)	Balance at beginning of period		Provision for credit losses		Net write-offs			Exchange rate and other			Balance at end of period		Balance at beginning of period		Provision for credit losses		Net write-offs			Exchange rate and other			Balance at end of period
Retail
Residential mortgages	$	572	$	194	$	(4	)	$	(32	)	$	730	$	481	$	102	$	(6	)	$	(8	)	$	569
Personal		1,482		535		(367	)		(17	)		1,633		1,228		415		(273	)		1			1,371
Credit cards		1,233		480		(392	)		(1	)		1,320		1,069		406		(335	)		(1	)		1,139
Small business		272		134		(52	)		(11	)		343		194		76		(34	)		(6	)		230
Wholesale		2,793		1,130		(349	)		(119	)		3,455		2,326		734		(282	)		(64	)		2,714
Customers’ liability under acceptances		–		–		–			–			–		50		1		–			–			51
	$	6,352	$	2,473	$	(1,164	)	$	(180	)	$	7,481	$	5,348	$	1,734	$	(930	)	$	(78	)	$	6,074
Presented as:
Allowance for loan losses	$	6,037									$	7,125	$	5,004									$	5,715
Other liabilities – Provisions		311										353		288										302
Customers’ liability under acceptances		–										–		50										51
Other components of equity		4										3		6										6

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.

Royal Bank of Canada   Second Quarter 2025   67

Allowance for credit losses – Retail and wholesale loans

	For the three months ended
	April 30, 2025												April 30, 2024
	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	$	218		$	158		$	260		$	636		$	245		$	110		$	187		$	542
Provision for credit losses
Transfers to stage 1		34			(34	)		–			–			16			(16	)		–			–
Transfers to stage 2		(14	)		18			(4	)		–			(4	)		8			(4	)		–
Transfers to stage 3		(1	)		(10	)		11			–			(1	)		(8	)		9			–
Originations		24			–			–			24			32			–			–			32
Maturities		(5	)		(8	)		–			(13	)		(4	)		(3	)		–			(7	)
Changes in risk, parameters and exposures		4			89			17			110			(43	)		27			19			3
Write-offs		–			–			(5	)		(5	)		–			–			(7	)		(7	)
Recoveries		–			–			3			3			–			–			2			2
Exchange rate and other		(1	)		(4	)		(20	)		(25	)		4			–			–			4
Balance at end of period	$	259		$	209		$	262		$	730		$	245		$	118		$	206		$	569
Personal
Balance at beginning of period	$	305		$	1,009		$	220		$	1,534		$	280		$	843		$	164		$	1,287
Provision for credit losses
Transfers to stage 1		141			(140	)		(1	)		–			134			(134	)		–			–
Transfers to stage 2		(32	)		32			–			–			(18	)		19			(1	)		–
Transfers to stage 3		(1	)		(40	)		41			–			–			(31	)		31			–
Originations		25			–			–			25			39			–			–			39
Maturities		(13	)		(53	)		–			(66	)		(9	)		(40	)		–			(49	)
Changes in risk, parameters and exposures		(122	)		304			147			329			(128	)		226			125			223
Write-offs		–			–			(215	)		(215	)		–			–			(166	)		(166	)
Recoveries		–			–			37			37			–			–			32			32
Exchange rate and other		1			(2	)		(10	)		(11	)		(2	)		4			3			5
Balance at end of period	$	304		$	1,110		$	219		$	1,633		$	296		$	887		$	188		$	1,371
Credit cards
Balance at beginning of period	$	206		$	1,058		$	–		$	1,264		$	188		$	913		$	–		$	1,101
Provision for credit losses
Transfers to stage 1		179			(179	)		–			–			138			(138	)		–			–
Transfers to stage 2		(28	)		28			–			–			(27	)		27			–			–
Transfers to stage 3		–			(146	)		146			–			–			(118	)		118			–
Originations		3			–			–			3			10			–			–			10
Maturities		(1	)		(15	)		–			(16	)		(1	)		(13	)		–			(14	)
Changes in risk, parameters and exposures		(155	)		373			52			270			(116	)		277			66			227
Write-offs		–			–			(246	)		(246	)		–			–			(201	)		(201	)
Recoveries		–			–			47			47			–			–			16			16
Exchange rate and other		(2	)		(1	)		1			(2	)		–			(1	)		1			–
Balance at end of period	$	202		$	1,118		$	–		$	1,320		$	192		$	947		$	–		$	1,139
Small business
Balance at beginning of period	$	80		$	87		$	122		$	289		$	72		$	74		$	66		$	212
Provision for credit losses
Transfers to stage 1		10			(10	)		–			–			7			(7	)		–			–
Transfers to stage 2		(7	)		7			–			–			(4	)		4			–			–
Transfers to stage 3		(1	)		(3	)		4			–			–			(3	)		3			–
Originations		11			–			–			11			11			–			–			11
Maturities		(4	)		(6	)		–			(10	)		(4	)		(5	)		–			(9	)
Changes in risk, parameters and exposures		7			39			41			87			(8	)		15			30			37
Write-offs		–			–			(31	)		(31	)		–			–			(22	)		(22	)
Recoveries		–			–			3			3			–			–			3			3
Exchange rate and other		2			–			(8	)		(6	)		–			–			(2	)		(2	)
Balance at end of period	$	98		$	114		$	131		$	343		$	74		$	78		$	78		$	230
Wholesale
Balance at beginning of period	$	835		$	992		$	1,383		$	3,210		$	709		$	853		$	883		$	2,445
Provision for credit losses
Transfers to stage 1		44			(43	)		(1	)		–			52			(51	)		(1	)		–
Transfers to stage 2		(43	)		43			–			–			(40	)		41			(1	)		–
Transfers to stage 3		(4	)		(71	)		75			–			(1	)		(38	)		39			–
Originations		188			–			–			188			245			–			–			245
Maturities		(117	)		(97	)		–			(214	)		(95	)		(95	)		–			(190	)
Changes in risk, parameters and exposures		59			309			324			692			(90	)		201			239			350
Write-offs		–			–			(289	)		(289	)		–			–			(150	)		(150	)
Recoveries		–			–			19			19			–			–			17			17
Exchange rate and other		(16	)		(29	)		(106	)		(151	)		(23	)		13			7			(3	)
Balance at end of period	$	946		$	1,104		$	1,405		$	3,455		$	757		$	924		$	1,033		$	2,714

68   Royal Bank of Canada  Second Quarter 2025

Note 5 Loans and allowance for credit losses (continued)

	For the six months ended
	April 30, 2025												April 30, 2024
	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	$	215		$	126		$	231		$	572		$	223		$	90		$	168		$	481
Provision for credit losses
Transfers to stage 1		59			(59	)		–			–			33			(33	)		–			–
Transfers to stage 2		(18	)		24			(6	)		–			(10	)		18			(8	)		–
Transfers to stage 3		(2	)		(24	)		26			–			(2	)		(16	)		18			–
Originations		47			–			–			47			51			–			–			51
Maturities		(10	)		(14	)		–			(24	)		(8	)		(7	)		–			(15	)
Changes in risk, parameters and exposures		(33	)		158			46			171			(44	)		67			43			66
Write-offs		–			–			(9	)		(9	)		–			–			(11	)		(11	)
Recoveries		–			–			5			5			–			–			5			5
Exchange rate and other		1			(2	)		(31	)		(32	)		2			(1	)		(9	)		(8	)
Balance at end of period	$	259		$	209		$	262		$	730		$	245		$	118		$	206		$	569
Personal
Balance at beginning of period	$	305		$	966		$	211		$	1,482		$	280		$	793		$	155		$	1,228
Provision for credit losses
Transfers to stage 1		285			(284	)		(1	)		–			259			(259	)		–			–
Transfers to stage 2		(53	)		56			(3	)		–			(37	)		39			(2	)		–
Transfers to stage 3		(2	)		(79	)		81			–			(1	)		(59	)		60			–
Originations		53			–			–			53			61			–			–			61
Maturities		(26	)		(106	)		–			(132	)		(21	)		(86	)		–			(107	)
Changes in risk, parameters and exposures		(258	)		558			314			614			(242	)		455			248			461
Write-offs		–			–			(438	)		(438	)		–			–			(335	)		(335	)
Recoveries		–			–			71			71			–			–			62			62
Exchange rate and other		–			(1	)		(16	)		(17	)		(3	)		4			–			1
Balance at end of period	$	304		$	1,110		$	219		$	1,633		$	296		$	887		$	188		$	1,371
Credit cards
Balance at beginning of period	$	207		$	1,026		$	–		$	1,233		$	203		$	866		$	–		$	1,069
Provision for credit losses
Transfers to stage 1		334			(334	)		–			–			275			(275	)		–			–
Transfers to stage 2		(56	)		56			–			–			(55	)		55			–			–
Transfers to stage 3		(1	)		(283	)		284			–			(1	)		(226	)		227			–
Originations		5			–			–			5			13			–			–			13
Maturities		(2	)		(27	)		–			(29	)		(2	)		(21	)		–			(23	)
Changes in risk, parameters and exposures		(283	)		680			107			504			(241	)		549			108			416
Write-offs		–			–			(480	)		(480	)		–			–			(460	)		(460	)
Recoveries		–			–			88			88			–			–			125			125
Exchange rate and other		(2	)		–			1			(1	)		–			(1	)		–			(1	)
Balance at end of period	$	202		$	1,118		$	–		$	1,320		$	192		$	947		$	–		$	1,139
Small business
Balance at beginning of period	$	80		$	86		$	106		$	272		$	70		$	66		$	58		$	194
Provision for credit losses
Transfers to stage 1		23			(23	)		–			–			12			(12	)		–			–
Transfers to stage 2		(11	)		11			–			–			(9	)		9			–			–
Transfers to stage 3		(1	)		(6	)		7			–			–			(5	)		5			–
Originations		20			–			–			20			20			–			–			20
Maturities		(10	)		(11	)		–			(21	)		(7	)		(10	)		–			(17	)
Changes in risk, parameters and exposures		(6	)		57			84			135			(13	)		30			56			73
Write-offs		–			–			(60	)		(60	)		–			–			(40	)		(40	)
Recoveries		–			–			8			8			–			–			6			6
Exchange rate and other		3			–			(14	)		(11	)		1			–			(7	)		(6	)
Balance at end of period	$	98		$	114		$	131		$	343		$	74		$	78		$	78		$	230
Wholesale
Balance at beginning of period	$	787		$	1,038		$	968		$	2,793		$	774		$	785		$	767		$	2,326
Provision for credit losses
Transfers to stage 1		99			(98	)		(1	)		–			102			(101	)		(1	)		–
Transfers to stage 2		(64	)		73			(9	)		–			(95	)		99			(4	)		–
Transfers to stage 3		(6	)		(206	)		212			–			(4	)		(47	)		51			–
Originations		424			–			–			424			369			–			–			369
Maturities		(303	)		(197	)		–			(500	)		(192	)		(182	)		–			(374	)
Changes in risk, parameters and exposures		11			499			696			1,206			(191	)		374			556			739
Write-offs		–			–			(380	)		(380	)		–			–			(310	)		(310	)
Recoveries		–			–			31			31			–			–			28			28
Exchange rate and other		(2	)		(5	)		(112	)		(119	)		(6	)		(4	)		(54	)		(64	)
Balance at end of period	$	946		$	1,104		$	1,405		$	3,455		$	757		$	924		$	1,033		$	2,714

Royal Bank of Canada   Second Quarter 2025   69

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 2024 Annual Consolidated Financial Statements.

Our base scenario reflects a rise in near-term unemployment rates in Canada and the U.S. as U.S. international trade policy has reduced economic growth outlooks across most advanced economies. The weak economic growth forecast for the remainder of calendar 2025 is expected to result in central bank policy rate reductions in Canada and the U.S. despite increasing inflation.

Our downside scenarios include two additional and more severe downside scenarios designed for trade disruptions and the real estate sector. During the quarter, in response to U.S. international trade policy, we designed a trade disruption scenario to replace our energy sector scenario. Our downside scenarios reflect the possibility of moderate and escalating macroeconomic shocks beginning in calendar Q3 2025 relative to our base scenario. In these scenarios, conditions are expected to deteriorate from calendar Q2 2025 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.

Our 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 increased weight to our downside scenarios relative to October 31, 2024 to reflect the heightened economic uncertainty related to U.S. international trade policy as compared to our base scenario.

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 6.9% in calendar Q2 2025, peaking at 7.1% in calendar Q3 2025, then returning to its long run equilibrium by calendar Q1 2028. The U.S. unemployment rate is expected to rise to 4.3% in calendar Q2 2025, peaking at 4.8% in calendar Q4 2025, then returning to its long run equilibrium level by calendar Q3 2027.

• Gross Domestic Product (GDP) – In our base forecast, we expect both Canadian and U.S. GDP to continuously grow in calendar Q2 2025 and thereafter. GDP in calendar Q4 2025 is expected to be 0.6% and 0.1% above Q4 2024 levels in Canada and the U.S., respectively.

70   Royal Bank of Canada  Second Quarter 2025

Note 5 Loans and allowance for credit losses (continued)

• Canadian housing price index – In our base forecast, we expect housing prices to increase by 0.1% over the next 12 months from calendar Q2 2025, with a compound annual growth rate of 3.4% 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 9.5% for the following 2 to 5 years. As at October 31, 2024, our base forecast included housing price growth of 0.7% from calendar Q4 2024 for the next 12 months and housing price growth of 3.0% for the following 2 to 5 years.

• Oil price (West Texas Intermediate in US$) – In our base forecast, we expect oil prices to average $60 per barrel over the next 12 months from calendar Q2 2025 and $64 per barrel in the following 2 to 5 years. The range of average prices in our alternative downside and upside scenarios is $32 to $77 per barrel for the next 12 months and $45 to $69 per barrel for the following 2 to 5 years. As at October 31, 2024, our base forecast included an average price of $69 per barrel for the next 12 months and $66 per barrel for the following 2 to 5 years.

Royal Bank of Canada   Second Quarter 2025   71

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 2024 Annual Report.

	As at
	April 30, 2025								October 31, 2024
(Millions of Canadian dollars)	Stage 1		Stage 2		Stage 3 (1)		Total		Stage 1		Stage 2		Stage 3 (1)		Total
Retail
Loans outstanding – Residential mortgages
Low risk	$	379,026	$	14,792	$	–	$	393,818	$	388,742	$	1,354	$	–	$	390,096
Medium risk		20,819		2,494		–		23,313		18,419		4,479		–		22,898
High risk		2,073		6,484		–		8,557		1,761		6,593		–		8,354
Not rated (2)		51,487		2,326		–		53,813		52,569		1,479		–		54,048
Impaired		–		–		1,423		1,423		–		–		1,233		1,233
		453,405		26,096		1,423		480,924		461,491		13,905		1,233		476,629
Items not subject to impairment (3)								910								915
Total							$	481,834							$	477,544
Loans outstanding – Personal
Low risk	$	84,858	$	2,710	$	–	$	87,568	$	82,904	$	1,680	$	–	$	84,584
Medium risk		4,217		3,721		–		7,938		5,525		3,063		–		8,588
High risk		672		2,468		–		3,140		592		2,365		–		2,957
Not rated (2)		11,368		760		–		12,128		11,303		498		–		11,801
Impaired		–		–		414		414		–		–		408		408
Total	$	101,115	$	9,659	$	414	$	111,188	$	100,324	$	7,606	$	408	$	108,338
Loans outstanding – Credit cards
Low risk	$	17,153	$	187	$	–	$	17,340	$	17,363	$	177	$	–	$	17,540
Medium risk		2,086		2,342		–		4,428		1,999		2,436		–		4,435
High risk		67		2,361		–		2,428		75		2,289		–		2,364
Not rated (2)		996		774		–		1,770		1,173		53		–		1,226
Total	$	20,302	$	5,664	$	–	$	25,966	$	20,610	$	4,955	$	–	$	25,565
Loans outstanding – Small business
Low risk	$	10,105	$	664	$	–	$	10,769	$	9,428	$	773	$	–	$	10,201
Medium risk		2,533		1,093		–		3,626		2,740		962		–		3,702
High risk		241		1,254		–		1,495		214		1,086		–		1,300
Not rated (2)		8		–		–		8		7		–		–		7
Impaired		–		–		394		394		–		–		321		321
Total	$	12,887	$	3,011	$	394	$	16,292	$	12,389	$	2,821	$	321	$	15,531
Undrawn loan commitments – Retail
Low risk	$	289,824	$	3,667	$	–	$	293,491	$	284,036	$	592	$	–	$	284,628
Medium risk		13,222		454		–		13,676		12,110		381		–		12,491
High risk		745		682		–		1,427		746		602		–		1,348
Not rated (2)		10,150		91		–		10,241		10,715		88		–		10,803
Total	$	313,941	$	4,894	$	–	$	318,835	$	307,607	$	1,663	$	–	$	309,270
Wholesale – Loans outstanding
Investment grade	$	123,066	$	1,921	$	–	$	124,987	$	116,549	$	1,471	$	–	$	118,020
Non-investment grade		196,334		28,852		–		225,186		189,889		26,826		–		216,715
Not rated (2)		11,780		677		–		12,457		12,871		721		–		13,592
Impaired		–		–		6,708		6,708		–		–		3,905		3,905
		331,180		31,450		6,708		369,338		319,309		29,018		3,905		352,232
Items not subject to impairment (3)								9,813								8,207
Total							$	379,151							$	360,439
Undrawn loan commitments – Wholesale
Investment grade	$	354,793	$	695	$	–	$	355,488	$	345,236	$	516	$	–	$	345,752
Non-investment grade		166,910		14,878		–		181,788		170,212		14,512		–		184,724
Not rated (2)		3,964		20		–		3,984		3,290		17		–		3,307
Total	$	525,667	$	15,593	$	–	$	541,260	$	518,738	$	15,045	$	–	$	533,783

(1) Includes $115 million of purchased or originated credit-impaired loans (October 31, 2024 – $109 million).

(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
	April 30, 2025						October 31, 2024
(Millions of Canadian dollars)	30 to 89 days		90 days and greater		Total		30 to 89 days		90 days and greater		Total
Retail	$	2,286	$	294	$	2,580	$	2,542	$	263	$	2,805
Wholesale		789		–		789		1,454		4		1,458
	$	3,075	$	294	$	3,369	$	3,996	$	267	$	4,263

(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. Past due loans arising from administrative processes are not representative of the borrowers’ ability to meet their payment obligations.

72   Royal Bank of Canada  Second Quarter 2025

Note 6 Deposits

	As at
	April 30, 2025								October 31, 2024
(Millions of Canadian dollars)	Demand (1)		Notice (2)		Term (3)		Total		Demand (1)		Notice (2)		Term (3)		Total
Personal	$	219,237	$	55,622	$	244,313	$	519,172	$	205,714	$	62,845	$	253,580	$	522,139
Business and government		405,325		20,220		468,028		893,573		369,943		20,157		449,570		839,670
Bank		9,859		–		24,182		34,041		9,675		641		37,406		47,722
	$	634,421	$	75,842	$	736,523	$	1,446,786	$	585,332	$	83,643	$	740,556	$	1,409,531
Non-interest-bearing (4)
Canada	$	153,998	$	8,914	$	226	$	163,138	$	144,712	$	7,164	$	203	$	152,079
United States		35,619		–		–		35,619		38,520		–		–		38,520
Europe (5)		164		–		–		164		11		–		–		11
Other International		8,010		–		–		8,010		7,758		–		–		7,758
Interest-bearing (4)
Canada		377,070		16,939		578,646		972,655		355,221		14,468		594,066		963,755
United States		47,675		49,106		68,428		165,209		28,389		61,087		75,933		165,409
Europe (5)		6,029		779		65,797		72,605		5,013		851		53,295		59,159
Other International		5,856		104		23,426		29,386		5,708		73		17,059		22,840
	$	634,421	$	75,842	$	736,523	$	1,446,786	$	585,332	$	83,643	$	740,556	$	1,409,531

(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 April 30, 2025, deposits denominated in U.S. dollars, British pounds, Euro and other foreign currencies were $514 billion, $39 billion, $69 billion and $34 billion, respectively (October 31, 2024 – $511 billion, $34 billion, $53 billion and $29 billion, respectively).

(5) Europe includes the United Kingdom and the Channel Islands.

Contractual maturities of term deposits (1)

	As at
(Millions of Canadian dollars)	April 30 2025		October 31 2024
Within 1 year:
less than 3 months	$	195,573	$	207,698
3 to 6 months		105,964		94,585
6 to 12 months		163,152		173,603
1 to 2 years		87,172		79,777
2 to 3 years		60,082		61,175
3 to 4 years		39,147		45,767
4 to 5 years		16,770		20,692
Over 5 years		68,663		57,259
	$	736,523	$	740,556

(1) The aggregate amount of term deposits in denominations of one hundred thousand dollars or more is $670 billion (October 31, 2024 – $670 billion).

Note 7 Insurance and reinsurance

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 six months ended
(Millions of Canadian dollars)	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Insurance service result
Insurance revenue	$	1,331		$	1,247		$	2,739		$	2,452
Insurance service expense		(1,092	)		(1,000	)		(2,216	)		(1,984	)
Net income (expense) from reinsurance contracts held		(15	)		(44	)		(13	)		(78	)
	$	224		$	203		$	510		$	390
Insurance investment result
Net investment income	$	255		$	86		$	625		$	2,104
Insurance finance income (expense)		(206	)		(20	)		(506	)		(1,996	)
Reinsurance finance income (expense)		29			(7	)		41			92
	$	78		$	59		$	160		$	200
Insurance service and insurance investment results	$	302		$	262		$	670		$	590

Royal Bank of Canada   Second Quarter 2025   73

Note 8 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)	April 30 2025			April 30 2024			April 30 2025		April 30 2024
Current service costs	$	52		$	47		$	8	$	8
Past service costs		49			–			–		–
Net interest expense (income)		(41	)		(37	)		20		20
Remeasurements of other long-term benefits		–			–			3		(1	)
Administrative expense		5			4			–		–
Defined benefit pension expense		65			14			31		27
Defined contribution pension expense		131			98			–		–
	$	196		$	112		$	31	$	27

	For the six months ended
	Pension plans						Other post-employment benefit plans
(Millions of Canadian dollars)	April 30 2025			April 30 2024			April 30 2025		April 30 2024
Current service costs	$	104		$	93		$	16	$	16
Past service costs		49			–			–		–
Net interest expense (income)		(81	)		(75	)		39		40
Remeasurements of other long-term benefits		–			–			5		9
Administrative expense		11			8			–		–
Defined benefit pension expense		83			26			60		65
Defined contribution pension expense		288			204			–		–
	$	371		$	230		$	60	$	65

Pension and other post-employment benefit remeasurements (1)

	For the three months ended
(Millions of Canadian dollars)	Defined benefit pension plans						Other post-employment benefit plans
	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Actuarial (gains) losses:
Changes in financial assumptions (2)	$	(526	)	$	(548	)	$	(48	)	$	(50	)
Experience adjustments		(1	)		–			(2	)		(1	)
Return on plan assets (excluding interest based on discount rate)		561			465			–			–
	$	34		$	(83	)	$	(50	)	$	(51	)
(Millions of Canadian dollars)	For the six months ended
	Defined benefit pension plans						Other post-employment benefit plans
	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Actuarial (gains) losses:
Changes in financial assumptions (2)	$	(183	)	$	723		$	(14	)	$	70
Experience adjustments		(1	)		–			(2	)		–
Return on plan assets (excluding interest based on discount rate)		132			(1,004	)		–			–
	$	(52	)	$	(281	)	$	(16	)	$	70

(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.

Note 9 Income taxes

Tax examinations and assessments

During the second quarter of 2025, we received proposal letters (the Proposals) from the Canada Revenue Agency (CRA) in respect of the 2020 taxation year, which suggested that Royal Bank of Canada owes additional taxes of approximately $411 million as the CRA denied the deductibility of certain dividends. This amount represents the maximum additional taxes owing for that year. The Proposals are consistent with the previously received reassessments as described in Note 21 of our audited 2024 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

The Organisation for Economic Co-operation and Development’s two-pillar plan includes a 15% global minimum corporate tax on certain multinational enterprises (Pillar Two). Pillar Two legislation in certain countries in which RBC operates became effective for us beginning November 1, 2024, including the Global Minimum Tax Act (GMTA) in Canada, which increased RBC’s effective tax rate by approximately 1.6% for the three and six months ended April 30, 2025.

74   Royal Bank of Canada  Second Quarter 2025

Note 10 Significant capital and funding transactions

Preferred shares and other equity instruments

On November 1, 2024, we issued US$1,000 million of Limited Recourse Capital Notes Series 5 (LRCN Series 5) 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 BX (Series BX Preferred Shares), issued concurrently with LRCN Series 5 at a price of US$1,000 per Series BX Preferred Share.

The price per LRCN Series 5 note is US$1,000 and will bear interest paid quarterly at a fixed rate of 6.35% per annum until November 24, 2034 and thereafter at a rate per annum, reset every fifth year, equal to the prevailing 5-year U.S. Treasury Rate plus 2.257% until maturity on November 24, 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 5, (iii) non-payment of principal at the maturity of LRCN Series 5, 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 5.

LRCN Series 5 are redeemable on or prior to maturity to the extent we redeem Series BX Preferred Shares on certain redemption dates as set out in the terms of Series BX Preferred Shares and subject to the consent and approval of OSFI.

The terms of Series BX Preferred Shares and LRCN Series 5 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 5 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 BX Preferred Shares. The terms of Series BX 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 BX Preferred Share will be determined by dividing the share value of Series BX 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.

LRCN Series 5 are compound instruments with both equity and liability features as payments of interest and principal in cash are made at our discretion. The non-payment of interest and principal in cash does not constitute an event of default and will trigger delivery of Series BX 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, 2025, we redeemed all 24 million of our issued and outstanding Non-Cumulative 5-Year Rate Reset First Preferred Shares Series BD at a redemption price of $25.00 per share.

Subordinated debentures

On December 23, 2024, we redeemed all $1,500 million of our outstanding NVCC 2.88% subordinated debentures due December 23, 2029 for 100% of their principal amount plus interest accrued to, but excluding, the redemption date.

On January 29, 2025, we issued $1,500 million of NVCC subordinated debentures. The notes bear interest at a fixed rate of 4.279% per annum until February 4, 2030, and at the Daily Compounded Canadian Overnight Repo Rate Average plus 1.45% thereafter until maturity on February 4, 2035.

Common shares issued

	For the three months ended
	April 30, 2025						April 30, 2024
(Millions of Canadian dollars, except number of shares)	Number of shares (thousands)			Amount			Number of shares (thousands)		Amount
Issued in connection with share-based compensation plans (1)		158		$	14			228	$	22
Issued in connection with dividend reinvestment plan (2)		–			–			5,715		740
Purchased for cancellation (3)		(3,013	)		(45	)		–		–
		(2,855	)	$	(31	)		5,943	$	762

         

	For the six months ended
	April 30, 2025						April 30, 2024
(Millions of Canadian dollars, except number of shares)	Number of shares (thousands)			Amount			Number of shares (thousands)		Amount
Issued in connection with share-based compensation plans (1)		374		$	36			628	$	60
Issued in connection with dividend reinvestment plan (2)		–			–			11,850		1,460
Purchased for cancellation (3)		(4,955	)		(74	)		–		–
		(4,581	)	$	(38	)		12,478	$	1,520

(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 and six months ended April 30, 2025 our DRIP requirements were satisfied through open market share purchases. During the three and six months ended April 30, 2024 our DRIP requirements were satisfied through shares issued from treasury.

(3) During the three months ended April 30, 2025, under the NCIB we purchased for cancellation common shares at a total fair value of $488 million (average cost of $162.10 per share), with a book value of $45 million (book value of $14.87 per share). During the six months ended April 30, 2025, under the NCIB we purchased for cancellation common shares at a total fair value of $826 million (average cost of $166.76 per share), with a book value of $74 million (book value of $14.86 per share). During the three and six months ended April 30, 2024, we did not have an active NCIB and therefore we did not purchase any common shares for cancellation.

Royal Bank of Canada   Second Quarter 2025   75

Note 11 Earnings per share

	For the three months ended						For the six months ended
(Millions of Canadian dollars, except share and per share amounts)	April 30 2025			April 30 2024			April 30 2025			April 30 2024
Basic earnings per share
Net income	$	4,390		$	3,950		$	9,521		$	7,532
Dividends on preferred shares and distributions on other equity instruments		(112	)		(67	)		(230	)		(125	)
Net income attributable to non-controlling interests		(4	)		(2	)		(6	)		(4	)
Net income available to common shareholders	$	4,274		$	3,881		$	9,285		$	7,403
Weighted average number of common shares (in thousands)		1,411,362			1,412,651			1,412,671			1,409,452
Basic earnings per share (in dollars)	$	3.03		$	2.75		$	6.57		$	5.25
Diluted earnings per share
Net income available to common shareholders	$	4,274		$	3,881		$	9,285		$	7,403
Weighted average number of common shares (in thousands)		1,411,362			1,412,651			1,412,671			1,409,452
Stock options (1)		2,155			1,489			2,366			1,364
Issuable under other share-based compensation plans		–			26			–			26
Average number of diluted common shares (in thousands)		1,413,517			1,414,166			1,415,037			1,410,842
Diluted earnings per share (in dollars)	$	3.02		$	2.74		$	6.56		$	5.25

(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 April 30, 2025, an average of 917,151 outstanding options with an average exercise price of $177.97 were excluded from the calculation of diluted earnings per share. For the three months ended April 30, 2024, no outstanding options were excluded from the calculation of diluted earnings per share. For the six months ended April 30, 2025, an average of 684,687 outstanding options with an average exercise price of $177.97 were excluded from the calculation of diluted earnings per share. For the six months ended April 30, 2024, an average of 1,060,719 outstanding options with an average exercise price of $131.64 were excluded from the calculation of diluted earnings per share.

Note 12 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 24 of our audited 2024 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.

Royal Bank of Canada Trust Company (Bahamas) Limited proceedings

On January 17, 2025, the U.S. Department of Labor (DOL) proposed exemptive relief to allow Royal Bank of Canada to continue to qualify for the Qualified Professional Asset Manager (QPAM) exemption under the Employee Retirement Income Security Act from March 5, 2025 through March 4, 2030. On February 21, 2025, the DOL proposed to extend the original relief granted to Royal Bank of Canada in 2016 until the earlier of September 4, 2025 or the effective date of a final agency action in connection with the proposed exemption published on January 17, 2025. The six month extension was granted on March 5, 2025. While there can be no assurances, we anticipate the DOL will grant the relief proposed on January 17, 2025 before the six month extension expires on September 4, 2025.

U.K. Competition and Markets Authority investigation

In February 2025, Royal Bank of Canada and RBC Europe Limited entered into a settlement with the U.K. Competition and Markets Authority and agreed to make payment of £34.2 million in full and final resolution of the matter.

In the U.S. class action, in March 2025, the court preliminarily approved the settlement agreement entered into by RBC Europe Limited, RBC Capital Markets, LLC and certain of the other defendants to dismiss the putative class action filed in the U.S., with prejudice, against those defendants. The settlement agreement remains subject to final court approval.

76   Royal Bank of Canada  Second Quarter 2025

Note 13 Results by business segment

Composition of business segments

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

	For the three months ended April 30, 2025
(Millions of Canadian dollars)	Personal Banking (1)		Commercial Banking (1)		Wealth Management (1)		Insurance			Capital Markets (1), (2)		Corporate Support (2)			Total
Net interest income (3)	$	3,519	$	1,734	$	1,301	$	–		$	1,275	$	227		$	8,056
Non-interest income		1,286		328		4,096		338			2,026		(458	)		7,616
Total revenue		4,805		2,062		5,397		338			3,301		(231	)		15,672
Provision for credit losses		654		539		86		–			146		(1	)		1,424
Non-interest expense		1,952		698		4,098		80			1,885		17			8,730
Income (loss) before income taxes		2,199		825		1,213		258			1,270		(247	)		5,518
Income taxes (recoveries)		597		228		284		47			68		(96	)		1,128
Net income	$	1,602	$	597	$	929	$	211		$	1,202	$	(151	)	$	4,390
Non-interest expense includes:
Depreciation and amortization	$	271	$	27	$	318	$	24		$	137	$	1		$	778
	For the three months ended April 30, 2024
(Millions of Canadian dollars)	Personal Banking (1), (4)		Commercial Banking (1), (4)		Wealth Management (1), (4)		Insurance			Capital Markets (1), (2)		Corporate Support (2)			Total
Net interest income (3)	$	2,985	$	1,329	$	1,222	$	–		$	764	$	323		$	6,623
Non-interest income		1,178		327		3,567		298			2,390		(229	)		7,531
Total revenue		4,163		1,656		4,789		298			3,154		94			14,154
Provision for credit losses		464		290		27		–			137		2			920
Non-interest expense		1,787		566		3,728		69			1,722		436			8,308
Income (loss) before income taxes		1,912		800		1,034		229			1,295		(344	)		4,926
Income taxes (recoveries)		509		223		194		52			33		(35	)		976
Net income	$	1,403	$	577	$	840	$	177		$	1,262	$	(309	)	$	3,950
Non-interest expense includes:
Depreciation and amortization	$	272	$	8	$	309	$	(1	)	$	130	$	(7	)	$	711

	For the six months ended April 30, 2025
(Millions of Canadian dollars)	Personal Banking (1)		Commercial Banking (1)		Wealth Management (1)		Insurance		Capital Markets (1), (2)		Corporate Support (2)			Total
Net interest income (3)	$	7,024	$	3,530	$	2,695	$	–	$	2,193	$	562		$	16,004
Non-interest income		2,592		659		8,270		744		4,864		(722	)		16,407
Total revenue		9,616		4,189		10,965		744		7,057		(160	)		32,411
Provision for credit losses		1,142		878		167		–		288		(1	)		2,474
Non-interest expense		3,967		1,408		8,302		167		3,926		216			17,986
Income (loss) before income taxes		4,507		1,903		2,496		577		2,843		(375	)		11,951
Income taxes (recoveries)		1,227		529		587		94		209		(216	)		2,430
Net income	$	3,280	$	1,374	$	1,909	$	483	$	2,634	$	(159	)	$	9,521
Non-interest expense includes:
Depreciation and amortization	$	545	$	53	$	635	$	22	$	281	$	–		$	1,536
	For the six months ended April 30, 2024
(Millions of Canadian dollars)	Personal Banking (1), (4)		Commercial Banking (1), (4)		Wealth Management (1), (4)		Insurance		Capital Markets (1), (2)		Corporate Support (2)			Total
Net interest income (3)	$	5,839	$	2,611	$	2,452	$	–	$	1,425	$	628		$	12,955
Non-interest income		2,355		658		7,024		661		4,680		(694	)		14,684
Total revenue		8,194		3,269		9,476		661		6,105		(66	)		27,639
Provision for credit losses		928		460		38		1		304		2			1,733
Non-interest expense		3,511		1,108		7,569		140		3,364		940			16,632
Income (loss) before income taxes		3,755		1,701		1,869		520		2,437		(1,008	)		9,274
Income taxes (recoveries)		999		474		365		123		21		(240	)		1,742
Net income	$	2,756	$	1,227	$	1,504	$	397	$	2,416	$	(768	)	$	7,532
Non-interest expense includes:
Depreciation and amortization	$	507	$	8	$	620	$	3	$	254	$	(9	)	$	1,383

(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 Banking, Commercial Banking, Wealth Management and Capital Markets segments.

(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) Effective the fourth quarter of 2024, the Personal & Commercial Banking segment became two standalone business segments: Personal Banking and Commercial Banking. With this change, RBC Direct Investing moved from the previous Personal & Commercial Banking segment to the Wealth Management segment. Amounts have been revised from those previously presented to conform to our new basis of segment presentation.

Royal Bank of Canada   Second Quarter 2025   77

Total assets and total liabilities by business segment

	As at April 30, 2025
(Millions of Canadian dollars)	Personal Banking		Commercial Banking		Wealth Management		Insurance		Capital Markets		Corporate Support			Total
Total assets	$	561,214	$	192,549	$	185,080	$	31,275	$	1,175,510	$	96,505		$	2,242,133
Total liabilities		561,182		192,547		183,623		31,131		1,175,427		(34,307	)		2,109,603
	As at October 31, 2024
(Millions of Canadian dollars)	Personal Banking		Commercial Banking		Wealth Management		Insurance		Capital Markets		Corporate Support			Total
Total assets	$	555,029	$	187,142	$	184,503	$	29,288	$	1,127,661	$	87,959		$	2,171,582
Total liabilities		554,970		187,135		183,055		29,158		1,127,564		(37,492	)		2,044,390

Note 14 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 second quarter of 2025, 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)	April 30 2025		October 31 2024
Capital (1)
CET1 capital	$	92,829	$	88,936
Tier 1 capital		103,194		97,952
Total capital		116,237		110,487
Risk-weighted assets (RWA) used in calculation of capital ratios (1)
Credit risk	$	570,953	$	548,809
Market risk		39,287		33,930
Operational risk		93,680		89,543
Total RWA	$	703,920	$	672,282
Capital ratios and Leverage ratio (1)
CET1 ratio		13.2%		13.2%
Tier 1 capital ratio		14.7%		14.6%
Total capital ratio		16.5%		16.4%
Leverage ratio		4.3%		4.2%
Leverage ratio exposure	$	2,379,092	$	2,344,228
TLAC available and ratios (2)
TLAC available	$	217,931	$	196,659
TLAC ratio		31.0%		29.3%
TLAC leverage ratio		9.2%		8.4%

(1) 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.

(2) 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.