Royal Bank of Canada Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 30, 2024

There are 14 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to RBC 20 24 Second Quarter Financial Results Conference Call. Please be advised that this call is being recorded.

Operator

I would now like to turn the meeting over to Assim Imran, Head of Investor Relations. Please go ahead, Mr. Imran.

Speaker 1

Thank you, and good morning, everyone. Speaking today will be Dave MacKay, President and Chief Executive Officer Catherine Gibson, Interim Chief Financial Officer and Graeme Hepworth, Chief Risk Officer. Also joining us today for your questions, Neil McLaughlin, Group Head, Personal and Commercial Banking Doug Guzman, Group Head, Wealth Management and Insurance and Derek Nellner, Group Head, Capital Markets. As noted on Slide 1, our comments may contain forward looking statements, which involve assumptions and have inherent risks and uncertainties. Actual results could differ materially.

Speaker 1

I would also remind listeners that the bank assesses its performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance. To give everyone a chance to ask questions, we ask that you limit your questions and then re queue. With that, I'll turn it over to Dave.

Speaker 2

Thank you, Asim, and good morning, everyone. Thank you for joining us today. Today, we reported 2nd quarter earnings of $4,000,000,000 or adjusted earnings of $4,200,000,000 Return on equity, which is the key pillar of our shareholder value creation framework, increased to 14.5% this quarter. Adjusted ROE increased to 15.5% as we successfully executed our strategic priorities, including client driven organic growth, expense discipline, maintaining a strong balance sheet and accretive capital allocation, including the acquisition of HSBC Bank Canada. This quarter, we saw strong growth across diversified revenue streams.

Speaker 2

Capital Markets reported record revenue of $3,200,000,000 as we gained market share in key areas of focus such as advisory and origination. Canadian Banking revenue growth was driven by strong volume growth and higher interest rates, reflecting benefits of our structurally advantaged balance sheet. Asset Management and North American Wealth Management Advisory revenue benefited from double digit fee based asset growth. Our increasing scale advantages and disciplined cost management help drive all bank operating leverage of 1.4 percent or strong 4.5% adjusting for specified items. Canadian Banking reported a 39% efficiency ratio.

Speaker 2

While we focused on creating efficiencies, we continue to invest in improving the client experience. RBC was the 1st Canadian bank to be awarded the Digital CX Award Excellence in Omnichannel Customer Experiences by the Digital Banker, along with being awarded the CELEN Model Bank Award for digital onboarding. We're also actively investing in artificial intelligence beyond retail banking and risk management. In U. S.

Speaker 2

Wealth management, we're using the power of AI to help financial advisors identify and act on new opportunities to provide even more value to clients. And in Capital Markets, we are seeing continued success with Aiden, our well established AI powered trading platform. Our balance sheet remains strong even after successfully closing the largest acquisition or 155 year history. We reported common equity Tier 1 ratio of 12.8%. Our Canadian Banking loan to deposit ratio improved to 98% as we continue to attract new clients through our client value propositions.

Speaker 2

Furthermore, we diversified our funding profile with the launch of our U. S. Cash management business, which I will speak to shortly. And we continue to prudently add to our reserves with PCL on performing loans of $244,000,000 Our results continue to demonstrate our ability to generate long term value. Our premium return on equity drove gross internal capital generation of over 70 basis points and book value growth of 8%.

Speaker 2

This morning, we announced a $0.04 or 3 percent increase in our quarterly dividend. We also announced our intention to repurchase up to 30,000,000 common shares under a normal course issuer bid as we look to offset the dilution from the shares issued under the dividend reinvestment plan. I will now speak to the acquisition of HSBC Canada, which we completed on March 28. This was a pivotal milestone as we continue to focus on driving premium long term ROE and growth. We're excited to welcome 780,000 clients from HSBC Canada, which added approximately $75,000,000,000 of both loans and relation based deposits to our balance sheet.

Speaker 2

I would like to thank our employees who made an extremely complex close and convert integration possible, all within a single weekend. The smooth integration also demonstrates the power of the technology investments we've made in recent years. The level of employee engagement is high and we're excited about the journey ahead. As a combined organization, we are well positioned as the bank choice for commercial clients with international needs, newcomers to Canada and retail clients who need global capabilities. A significant percentage of the acquired retail accounts are affluent clients.

Speaker 2

And through HSBC Canada, we also acquired a well established premier commercial bank with a leading trade finance value proposition and one which skews to a larger client segment than we have historically competed. We are pleased with that the client base and acquired loan portfolio, which can be seen on Slide 28, is largely within levels forecasted when we announced the transaction 18 months ago. These loans continue to be supported by a high quality, low cost deposit franchise, which is largely within forecasted levels. This included the expected repayment of non interest bearing CEBA deposits. Similar to our own experience, net interest margins were impacted by a shift in deposit mix towards term products and more intense competition for mortgages and deposits than we'd initially assumed.

Speaker 2

Since the acquisition date, HSBC Canada reported a loss of $51,000,000 or a loss of $33,000,000 adjusting for amortization of intangibles. As you see on the bottom of Slide 6, underlying HSBC Canada net income of $63,000,000 represented approximately 1 month of earnings. This quarter's results further benefited from the accretion of purchase price accounting marks, which Catherine will speak to shortly. In addition, we realized $30,000,000 of before tax expense synergies this quarter equating to an annualized run rate savings of $360,000,000 or approximately 50% of our stated target. In contrast, results were negatively impacted this quarter by the recognition of day 1 PCL, which Graeme will speak to shortly, as well as the cost of a short term special welcome offer for qualifying HSBC Canada high interest saving account clients.

Speaker 2

We continue to expect approximately $740,000,000 of expense synergies within the 2 year timeline we provided last quarter. Following the uncertainty of a long approval, which led to a slowdown in net new sales, the reenergized sales force is rebuilding pipelines with clients with whom they have long standing relationships. They're also leveraging the added benefits that come with RBC's technology ecosystem and a AA balance sheet. Furthermore, we believe our combined product and service offerings should drive compelling cross sell revenue synergies across retail and business banking. And while it's early, we are seeing positive signs.

Speaker 2

We continue to estimate the transaction will generate $1,400,000,000 of fully synergized adjusted earnings excluding the accretion of purchase price accounting marks. However, the initial lower than expected margins may push out the realization of our previously stated 2 year target by a couple of quarters. Should we see mortgage and deposit spreads recover, we expect that realization timeline will accelerate. Before discussing expanding client value proposition and our businesses, I will provide my perspective on the macro environment. The relative strength of the U.

Speaker 2

S. Economy, including a tighter labor market and healthy consumer spending has kept U. S. Inflation persistently above the targeted range. In contrast, Canada continues to lag its peers in GDP growth per capita, the higher impact of the impact of higher interest rates and rising unemployment begins to weigh on households, which Graeme will speak to in his remarks.

Speaker 2

Canadian inflation metrics are now within the 1% to 3% target range. The bifurcation in trends suggest the Bank of Canada should move earlier than the Fed and start lowering interest rates over the coming months. The expectation of central bank rate cuts has led to strong equity market returns this year and should also have positive implications for loan growth and M and A deal flow, while also providing relief for Canadians. With this context, we are executing on our growth strategy across our largest franchises, starting with Canadian Banking. Deposits were up double digits from last year or strong 9% excluding the benefit of the HSBC Canada acquisition.

Speaker 2

We welcomed a record number of newcomer clients this quarter, reflecting a 30% increase year over year. More broadly, new to RBC account acquisition was approximately 40% higher than last year due to our innovative client value proposition, which now include expansion of our partnership with Metro and its Moab rewards program in Ontario. This partnership will continue to build on the successful launch of our co brand credit card in Quebec. Additionally, RBC announced the launch of a new loyalty partnership with Pattison Food Group and its More Rewards loyalty program, which has more than 3,500,000 household members in Western Canada. Furthermore, since launching our Avion Select tier for non clients, we've registered nearly 500,000 new members.

Speaker 2

We remain focused on attracting new primary client deposits, which provide a foundation for profitable loan growth, credit insights, deepening relationships and earnings stability through the cycle. Commercial loans were up 25% or up 14% excluding HSBC Canada loans. Our growth strategy remains focused amongst a diversified set of existing clients we know well. Turning to our record results in Capital Markets. Investment Banking revenue grew 45% from last year.

Speaker 2

Our market share is up 40 basis points over the last 12 months, reflecting gains across all major products. We continue to focus on multi product mandates and improved sector diversification. While geopolitical risks and an evolving regulatory environment creates uncertainty, the market backdrop is creating opportunities for increased dialogue with clients and a healthy M and A pipeline that continues to build. Global Markets reported $1,500,000,000 in revenue, largely due to higher debt and equity origination and higher fixed income trading revenue. We also recently launched RBC Clear, our cloud native next generation U.

Speaker 2

S. Cash management business with a digital end to end onboarding platform and ability to offer enriched insights to corporate treasurers. Our initial focus is to increasingly diversify our U. S. Funding sources to reduce reliance on costlier wholesale funding and in turn improve ROE.

Speaker 2

Now moving to our Wealth Management segment. RBC Global Asset Management's AUM increased 11% from last year, particularly in Canadian strategies, benefiting both from higher markets and inflows from institutional mandates. An easing of monetary policy may also start to shift away from term deposits and cash ETFs towards fixed income opportunities, which is one of the core strengths of RBC Global Asset Management. In Europe, RBC BlueBay has been recognized by Morningstar's Excellence Awards and the Lipper Awards for its fixed income strategies. RBC GAM was also named the Top Gun Investment Team of the Year in Canada for the 9th time in 11 years.

Speaker 2

Assets under administration and our leading Canadian Wealth Management business were up 15% or nearly $80,000,000,000 from last year, increasing to a record level of nearly $620,000,000,000 benefiting from higher equity markets and net sales of $16,000,000,000 over the last 12 months. Assets under administration in our U. S. Wealth management platform, including the 6th largest wealth advisor in the U. S.

Speaker 2

Also increased 12% year over year to US610 $1,000,000,000 another record. One of our ongoing key strategic objectives for our wealth management businesses is to attract and retain top performing financial advisors. To close, our premium ROE reflects efficient capital deployment, diversified funding, prudent risk management, disciplined expense control and the execution of our client focused strategies, including the acquisition of HSBC Canada. In turn, our strong internal capital generation through economic cycles allows us to invest in organic growth, while also returning capital to shareholders. Now I'd like to turn it over to Catherine Gibson, our Interim CFO, and welcome her to our first quarterly call.

Speaker 2

Catherine brings deep financial sector experience and knowledge of RBC. Catherine, over to you.

Speaker 3

Thanks, Dave, and good morning, everyone. Overall, our results benefited from strong revenue momentum across all our segments, underscoring the bank's diversified business model. Disciplined cost management also drove robust operating leverage. Starting on slide 8, we reported earnings per share of 2 point $7.4 this quarter. Adjusted diluted earnings per share was $2.92 up 9% from last year.

Speaker 3

These adjusted results included a net loss from HSBC Canada of $33,000,000 reflecting the day 1 PCL impact of $145,000,000 after tax. We are excited by the earnings power from this transaction as it will provide yet another source of internal capital generation. Turning to capital on slide 9. We reported a CET1 ratio of 12.8%, down 2 10 basis points from last quarter, reflecting the impact of the HSBC Canada transaction and strong client driven volume growth. This was partly offset by the ongoing strength in internal capital generation.

Speaker 3

We do not expect the Basel III floors to be binding in fiscal 2024 and anticipate a minimal impact in the second half of twenty twenty five, absent optimization actions. Moving to slide 10, all bank net interest income was up 9% year over year or up 10% excluding trading revenue. These results were largely driven by higher spreads and average volume growth in Canadian Banking as well as the addition of HSBC Canada. We also recognized purchase accounting fair value adjustments on HSBC Canada loans, which will accrete to net interest income over time. This quarter, the benefit was $45,000,000 Allbank NIM, excluding trading revenue, was up 3 basis points from last quarter, driven by tailwinds in Canadian Banking.

Speaker 3

This was partly offset by the dilutive impact of HSBC Canada's lower yielding $21,000,000,000 securities portfolio that has been consolidated into our existing portfolios in corporate support. Canadian Banking NIM was up 4 basis points from last quarter. HSBC Canada added 2 basis points to NIM this quarter as a benefit from the accretion of purchase accounting fair value adjustment was partly offset by modest dilution from the HSBC Canada portfolio. Core Banking NIM was up 2 basis points sequentially. The structural advantage of our tractored core personal banking deposit portfolio continue to come through this quarter, reflecting the lengthened benefit of interest rate hikes.

Speaker 3

Additionally, we saw benefits from changes in asset mix associated with seasonally higher credit card revolve rates, which we anticipate will come off next quarter. These benefits were partly offset by ongoing intense competition for deposits. Going forward, with 5 year swap rates up approximately 200 basis points from 5 years ago, our core deposit portfolio is well positioned for continued benefits from tractor maturities rolling on at higher yields. We expect this benefit to be partly offset by ongoing market competition and a moderating client driven shift into higher yielding deposits. While the migration of bankers acceptances to core based loans may be marginally dilutive to NIM, we expect the impact will be net neutral to total revenue.

Speaker 3

In addition, the benefit of HSBC Canada purchase price marks will continue to accrete into net interest income, adding approximately $135,000,000 per quarter in 2024 followed by $110,000,000 benefit per quarter in 2025. This will partially offset modest dilution from a relatively lower spread HSBC Canada portfolio. Taken altogether, we anticipate Canadian Banking net interest margins to be slightly higher in the back half of the year. Moving to Slide 11. Non interest expenses were up 12% from last year.

Speaker 3

Adjusted expense growth was 8%, excluding HSBC Canada transaction and integration costs as well as the impact of amortization of intangibles. Further, excluding the macro driven factors such as FX and share based compensation and the addition of HSBC Canada run rate expenses, core expense growth was 6% year over year. Higher variable compensation driven by strong results in Capital Markets and Wealth Management made up 4% of the core expense growth. Looking forward, all bank core expense growth, inclusive of HSBC Canada business costs, is expected to come in at the top of the mid single digit range for fiscal 2024. Turning now to our Q2 segment results, beginning on Slide 12.

Speaker 3

Personal and Commercial Banking reported earnings of 2,100,000,000 dollars Canadian Banking net income was up 7% year over year, including the day 1 PCL of 181,000,000 dollars My following comments will now exclude any impact to Canadian Banking from HSBC Canada. Canadian Banking's earnings were up a strong 11% year over year. Net interest income was up 11% from last year. Non interest income was up 5% year over year as increased client activity underpinned higher service revenue and FX revenue, while market appreciation drove higher mutual fund distribution fees. Expenses were up 3% from last year, helping to drive 6% operating leverage.

Speaker 3

For the full year, including the benefit from the HSBC Canada transaction, we now expect Canadian Banking operating leverage to come in above our historical 1% to 2% target range. Turning to slide 13. Wealth Management's earnings were up 7% from last year. The underlying performance of our Wealth Management Advisory and Asset Management business benefited from the higher fee based client assets across each of our businesses, largely reflecting market appreciation and net sales. These factors were partly offset by higher variable compensation and lower net interest income in our Canadian and International Wealth Management businesses.

Speaker 3

City National generated US73 $1,000,000 in adjusted earnings this quarter or US86 $1,000,000 excluding the impact of the FDIC special assessment. Looking forward, our efforts to enhance expense and capital efficiency and deepen client relationships should allow City National to achieve more normalized profitability as we exit 2025. However, the path to normalized profitability may not be linear from quarter to quarter. Turning to Capital Markets results on Slide 14. Pre provision pretax earnings of $1,400,000,000 increased 24% from last year.

Speaker 3

Corporate and Investment Banking revenue was up 23% from last year, reflecting record investment banking fees, underpinned by market share gains across all major products and a recovery in fee pool. Global Markets revenue was up 8% from last year, including higher fixed income trading revenue led by mortgages and secured financing. This was partially offset by normalization in rates trading from a very robust quarter last year. Strong results year to date benefited from very robust Investment Banking activity and higher volumes in global markets. While we continue to see good client activity levels and momentum in our business performance, we expect results in the second half to be seasonally lower.

Speaker 3

Turning to insurance on Slide 15. Net income of $177,000,000 was up 4% from last year, driven by a higher insurance investment result from favorable investment related experience. It is important to note that the results in the prior year period are not fully comparable as we were not managing our asset and liability portfolios under IFRS 17. Turning to Slide 33. This quarter, we included additional details on our Corporate Support segment.

Speaker 3

Results for Corporate Support mainly reflect enterprise level activities, which are not allocated to business segments and therefore represent a modest 3% of all bank average assets. Results in the first half of the year included slightly elevated earnings on excess capital we were holding ahead of the HSBC Canada transaction close. As we look to the rest of the year, we expect corporate support to generate a net loss of approximately $100,000,000 to $150,000,000 per quarter. To conclude, our focus on thoughtful capital allocation and ongoing discipline around cost containment contributed to this quarter's strong results and remains a key priority going forward. With that, I'll now turn it over to Graham.

Speaker 4

Thank you, Catherine, and good morning, everyone. Starting on Slide 17, I'll discuss our allowances in the context of both the macroeconomic environment and HSBC Canada acquisition. As Dave noted earlier, the economies of Canada and U. S. Continue to diverge.

Speaker 4

In Canada, relatively weaker consumer demand, higher unemployment rates and the impact of almost 2 years of elevated interest rates are continuing to weigh on consumers and businesses. In the U. S, more persistent inflation means borrowers may have to cope with a more prolonged period of higher interest rates. With the backdrop, we saw credit quality continue to weaken quarter with net credit downgrades, additions to our watch list and elevated delinquency rates. These outcomes are in line with our expectations for where we are in the credit cycle.

Speaker 4

Consistent with last quarter, we added reserves on performing loans reflecting weaker credit quality, partially offset by a release of reserves reflecting an improving macroeconomic outlook. During the quarter, we also added reserves for the performing loans we acquired from HSBC Canada. As a reminder, the acquired impaired loan came onto our balance sheet at their fair value, net of any credit impairments. Additionally, under IFRS 9 accounting rules, we are required to take provisions on the acquired performing portfolio. These initial provisions are over and above the credit mark embedded in the fair value adjustment established for the purchase.

Speaker 4

This resulted in an initial provision on performing loans of $193,000,000 this quarter. As this portfolio is all deemed to be stage 1 at acquisition, provisions in the coming quarters will reflect credit migration moving more of the portfolio into stage 2. Since transaction closed, our analysis confirmed the credit quality of the acquired portfolio is strong and in line with our expectations from due diligence. Relative to our Canadian Banking Commercial portfolio, the acquired commercial loans have a similar ratings profile are skewed towards larger exposures that are more diversified by sector. Compared to our Canadian Banking retail portfolio, acquired retail loans are more concentrated in residential mortgages.

Speaker 4

However, the acquired mortgages have a lower average loan to value ratio and are supported by clients with relatively higher incomes and better FICO scores. Across acquired loans and our existing portfolio, we took a total of $44,000,000 of provisions on performing loans this quarter. Our total ACL on loans and acceptances increased by $444,000,000 to 6,100,000,000 dollars and represents over 2.8x our PCL on impaired loans over the last 12 months. Moving to Slide 18. Gross impaired loans were up $1,100,000,000 or 7 basis points this quarter, primarily due to increases in Capital Markets and Canadian Banking.

Speaker 4

In Capital Markets, new formations of $809,000,000 were largely a function of 2 loans. One loan was in the commercial real estate sector, which I'll speak to shortly, and the other loan was a securitization transaction related to a corporate board that defaulted last quarter in the automotive sector. This is a relatively large impaired loans, securitization facilities are structured to minimize loss in the event of default. In Canadian Banking, new formations were lower compared to last quarter. We remain elevated reflecting both the macroeconomic environment that I noted earlier and the impaired loans we acquired from HSBC Canada.

Speaker 4

Despite higher formations of gross impaired loans this quarter, you can see on Slide 19, the provisions on impaired loans were down $13,000,000 or 1 basis point relative to last quarter. Modestly higher provisions in Canadian Banking and Wealth Management were more than offset by lower provisions in Capital Markets. In our Canadian Banking Retail portfolio, provisions were up $24,000,000 driven by higher provisions on credit cards. In our Canadian Banking Commercial portfolio, provisions were down $9,000,000 compared to last quarter, remained above pre pandemic levels. Print outcomes in the commercial portfolio are in line with our expectations, with stress in the portfolio skewed to smaller borrowers, borrowers in sectors that are closely tied to consumer spending and borrowers still recovering from the impacts of the pandemic.

Speaker 4

In Capital Markets, provisions were down $46,000,000 compared to last last quarter, primarily due to a reversal on a previously impaired loan in the oil and gas sector. This quarter, nearly 3 quarters of our capital markets provisions were taken on a multifamily commercial real estate loan backed by a portfolio of rent controlled properties in San Francisco. We have now had 2 large impairments in provisions in our U. S. Multifamily commercial real estate portfolio.

Speaker 4

So we have provided some additional details on our exposure on Slide 20. The sector has generally been performing well, supported by strong demand for housing. However, pockets of geographic weakness have serviced on rent controlled properties in places like New York and San Francisco. Our exposure to U. S.

Speaker 4

Multifamily commercial real estate loans of $8,300,000,000 represents less than 1% of total loan acceptances. Almost 2 thirds of our exposure is in wealth management, where loans typically benefit from amortization, additional recourse outside of the properties held as collateral. To date, impairments and losses have been in our capital markets portfolio on rent controlled properties in San Francisco. Following a deep dive into our remaining $1,900,000,000 performing capital markets exposure to the sector, we remain comfortable with the risk and we are not expecting any additional impairments at this time. Shifting back to the multifamily sector and looking at commercial real estate more broadly.

Speaker 4

As I noted last quarter, impairments and losses have been consistent with our expectations and are well within our risk appetite. We remain prudently provisioned with full exposure to the sector with our downside provisioning scenarios accounting for reduction in commercial real estate prices of 25% to 40%. To conclude, credit performance this quarter remained in line with our expectations and we continue to expect provisions on impaired loans between 30 35 basis points for the year. We are pleased with the quality of the loans we acquired from HSBC Canada. And as Dave noted earlier, we are thrilled with how well the integration has gone.

Speaker 4

Alongside provisions we took on the acquired loans, we continue to prudently build reserves on performing loans, reflecting the credit outcomes of the softer macroeconomic environment we are currently experiencing. Moving forward, credit outcomes will continue to be dependent on the magnitude and change in unemployment rates, direction and magnitude of changes in interest rates and residential and commercial real estate prices. And as always, we continue to proactively manage risk through the cycle. We remain well capitalized to withstand plausible yet more severe macroeconomic outcomes. So with that, operator, let's open the lines for Q and A.

Operator

Thank you. We will now take questions from the telephone The first question is from John Aiken from Jefferies. Please go ahead.

Speaker 5

Good morning. Well, I'd like to kick this off with a question not related to HSBC Canada. Derek, very strong performance in Capital Markets this quarter. I know Kathleen mentioned in her prepared remarks that we should expect some level of moderation. But in terms of having us try to triangulate what that means, can you give us a sense in terms of what the pipeline is for your advisory work and how comfortable you are with the current quarter's run rate on trading?

Speaker 6

Sure. Thanks, John. Appreciate the question. Obviously, we're very pleased we had a very strong second quarter results in Capital Markets and that really reflected, as Dave touched on, both an improvement in the overall client activity, but also continued fairly significant market share gains that we saw across all of our products. As we look forward, we continue to think the environment will remain quite constructive.

Speaker 6

If we look at the fundamentals for Investment Banking, for example, as we're starting to see a little further clarity on the economic environment and outlook over the next 2 years, stabilization in the rate environment, obviously improving capital markets and availability of financing. That is all coming together to drive further both strategic M and A activity, but also associated financing with that. We think those fundamentals will continue and create a healthy environment. That being said, and to Catherine's comments, obviously, we've had a very strong first half. We do tend to see some slower seasonality as we go into the second half.

Speaker 6

And as well, when you just look at some of the ongoing uncertainty around the exact trajectory of rates, if we're in a higher for longer scenario and financing costs remain a little elevated, combined with probably some uncertainty as we look at a range of global elections underway, We think that will likely moderate activity a little bit as we go into H2. But as we look at our previously stated guidance $1,100,000,000 a quarter of pre provision, pre tax, we remain very comfortable. The strategic steps we're taking will continue to allow us to outperform that kind of benchmark.

Speaker 5

Great. Thanks for the color, Derek. I'll re queue.

Operator

Thank you. The next question is from Ebrahim Poonawala, Bank of America. Please go ahead.

Speaker 7

Hey, good morning. I guess maybe question Dave for you with HSBC now done like I was just thinking about strategically for Royal 15.5% ROE capital levels where they are today. Just give us a sense of how you're thinking about capital allocation from your just in terms of the mind frame, where you think you can play offense to drive growth? Is it in Canada? Is it in the U.

Speaker 7

S? And also just maybe if you can double click on the opportunity created by RBC Clear in kind of cross selling to your sort of capital markets plans? Thank you.

Speaker 2

Great. Thanks, Ebrahim. And I'll answer the first part and ask Derek to start off with RBC Clear, which we're really excited about and off to a great start. As far as our ROEs and capital generation, we are in a very good place. As you saw on an adjusted basis, 15.5 percent ROE.

Speaker 2

We have a strong path to our target range of 16% plus when you start looking at executing on the remaining HSBC synergies, fee based income opportunities we have, margin expansion, roll on roll offs in our book, cross sell, all of that give us a strong path to the 16 plus percent. And so as you think about the capital generation that's coming off that strong ROE, gives us enormous strategic flexibility, as you point out, to return capital to our shareholders, but also to continue to build out our core wealth franchises and commercial franchises in U. S. And in Europe. So as we think about those opportunities and we prepare, we'll have that capital generation that will allow us to in a timely way do that.

Speaker 2

Having said that, our current focus is on the enormous organic opportunities in front of us, whether it's the work that we're doing in simplifying and working on the U. S. Through Derek and the team there, the opportunities with City National, as we talked about the opportunities on executing the synergies with Bruin Dolphin internationally, bringing HSBC into the fold and going on the offense after being on defense for 18 months. And I'd like to thank the HSBC Canada team for really holding this bank together through a very prolonged uncertain approval period and execution period. And they've been on the defense for 18 months and now we're on the offense and you can see the excitement in their eyes to get back.

Speaker 2

You can imagine it's hard to replace people who retire or leave when you're going through an acquisition conversion. It's even harder to bring a new client in when they're going to change banks and go through conversion. So the team has done a great job and now we're back on to the offense there. So all of that drives opportunity and capital generation to grow organically, but also this enormous capital that we are generating gives us significant strategic flexibility inorganically.

Speaker 6

Abraham, it's Derek. I'll address the question just on RBC Clear. Really four key reasons we're really excited about the business and we saw it as an attractive opportunity. First, it's a very large addressable market amongst our corporate clients in particular. 2nd, it's another opportunity for us to further support our clients and deepen our relationships with them.

Speaker 6

3rd, as Dave touched on, it provides a very important source of incremental funding and diversification of funding for our businesses in the U. S. And then finally, at its core, it's a very attractive ROE business, attractive efficiency ratio and one that we think we can drive good earnings growth with over time at a compelling ROE. We've obviously had a multiyear initiative to launch the business. We're very excited to formally launch it in April.

Speaker 6

We very much partnered with a number of our clients along the journey to get their feedback on what was working in the market today, but as well where they were seeing pain points and opportunities for a new entrant to provide a differentiated offering. In this case, we had the benefit in the U. S. Of coming at this with a bit of a blank sheet of paper. And so we're able to build a very digitally enabled system based on the feedback from our clients.

Speaker 6

And it's early days given we just launched in April, but a very positive, very favorable result to date. It will be a multiyear journey to continue to build this out, but I think a very attractive standalone opportunity. Obviously, the U. S. Dollar funding it provides will be an important enabler for how we can continue to support clients through the loan book and other products we offer.

Speaker 6

And then you get a number of areas where it will connect into things like our foreign exchange offering and otherwise where it ties into existing products we offer to clients and allows us to serve them in an even more integrated and holistic way. So very excited about it. And

Speaker 7

does this business need to be global in scale to kind of clearly get the full benefit of what your clients might need? Or can you be a U. S. Only business in cash management and still pick up a decent amount of market share?

Speaker 6

I think there's a very strong opportunity in the U. S. We obviously do have a very strong and leading Canadian cash management platform today that over time we can connect between the geographies. We think there's a huge opportunity in the U. S.

Speaker 6

As we execute on that, we can obviously look at further places we can expand the offering.

Speaker 2

Thank you, Ebrahim. The plan is more to move it down market into mid corporate, mid commercial as well as there's a significant opportunity in the United States to look at different target segments. So this platform is extendable horizontally and vertically, which is great.

Speaker 7

That's helpful. Thank you.

Operator

Thank you. Next question is from Monique Romand from Scotiabank. Please go ahead.

Speaker 8

Hi, good morning. Graham, you're guiding to 30 to 35 basis points on the impaired PCL loan ratio. You've been trending at the low end of that. I'm wondering the expectations for the second half of the year. Do you see reasonable chance that we could get to the higher end of that given your rate outlook?

Speaker 8

And in terms of where you see that peaking, whether it's this year, next year on a quarterly basis in terms of that impaired PCL ratio?

Speaker 4

Yes, Manish, thanks for the question. I would say overall, I wouldn't say our outlook on the path of credit here has changed tremendously from Q1. I think we're very much kind of progressing on that path that we kind of had seen previously. I think when we break that down by businesses and just reiterate some of those kind of similar themes, I think certainly when we think about retail credit and retail credit in Canada, I think we're still on kind of the upswing there, particularly led by unsecured retail products, your cards and your unsecured RCL products. That's where we kind of see the most impact kind of rolling forward here.

Speaker 4

And so then if you kind of go on the other end, kind of large corporate wholesale side of it, that's been running at kind of, I would say, at the higher end and more elevated levels for the last kind of year and change. And I don't really expect that necessarily to accelerate, in fact, might be opportunity the other way there.

Speaker 7

And so

Speaker 4

I think when you put all that together, we still see an aggregate that that Stage 3 piece sale probably continues to increase some degree through 2024 and kind of peaks out at the end of this year and maybe in the first half of next year. And then Stage 1 and 2 obviously is on top of that. And we've been building that for quite some time. We've been in conjunction with this kind of rate hiking cycle and kind of the economic consequences that creating have been building reserves for 2 years on that. That how that moves forward really depend on kind of every quarter we reassess that forward outlook and reassess where our kind of credit quality sits.

Speaker 4

But at some point, we would expect that to start to toggle as that kind of peak period really comes into play and we move from a building stage into a releasing stage. So I think that 30% to 35%, we still feel good about this year and I think 2025 will kind of reassess as we get closer to the end of the year.

Speaker 8

And just a follow-up to that. If we see rate cuts, how long do you expect it to take for that to have a meaningful impact in terms of the behavior of the impaired PTCL ratio? Yes.

Speaker 4

I mean, rates the rate environment, whether higher for longer or whether we're facing cuts is always a hard one to assess because it really that's that by itself. It really is what's going on in the rest of the economy there, right? And so it's going to be much more driven by what's happening with unemployment, what's happening with house prices in conjunction with that. Certainly, in our base case forecast in Canada, we do expect rate cuts to start to begin here shortly and that we do expect kind of 100 basis points of rate cuts by the end of this year and then another 100 basis points into next year. On the U.

Speaker 4

S. Side, we're obviously much more cautious about the rate environment there. I think we only have a 25 basis point cut in our forecast this year and that's at the tail end of the year and only another 50 next year. And on the long end, we're not really anticipating much change there. So more impact on the U.

Speaker 4

S. Side. Those are in our baseline PCL forecast, our IFRS nine modeling. We do have a pessimistic scenario that kind of looks at more severe outcomes, but it really kind of takes the interest rate environment and looks at things going wrong in that and unemployment really ticking up and GDP really pulling back on that. So that's already kind of reflected in our ACL in that sense.

Speaker 4

But again, it's hard to comment on the rates by itself. It really is dependent on what's happening with the other key macroeconomic variables out there.

Speaker 8

Got it. Thank you very much.

Operator

Thank you. The next question is from Matthew Lee, Canaccord. Please go ahead.

Speaker 9

Hey, good morning guys and welcome to the call, Catherine. I will ask one on HSBC. Can you maybe just talk about the early results of your customer retention strategy, maybe relative to your initial expectations? But then provide some specifics as to where you're seeing the early cross sell opportunities post acquisition?

Speaker 10

Yes, Matt, it's Neil. I'll take that one. Thanks for the question. Maybe I'll just start with retention. I think the headline really across all the businesses is that early retention is above our expectations.

Speaker 10

So we're quite pleased across all the businesses and that's despite what Dave touched on, which was the extended approval time line. So that did give us some concern, I'd say, leading up to

Speaker 4

it, but really pleased where we are.

Speaker 10

On the consumer business, overall client count is very strong. The team actually grew the consumer client count in the quarter before migration, which we thought was a great outcome. We're seeing some minor requests for consolidation among some of the larger borrowers, just to balance the sort of some of those syndications. Beyond that, I think we're really pleased. And that's entirely reasonable, I think, on the client's part.

Speaker 10

Dave spoke to business deposits and there was a couple of things there that we saw which were really non revenue generating, roll off of business deposits as HSBC held the, EDC deposits for the CEBA account, which were really not providing any revenue, but there was about $5,000,000,000 of deposits that rolled off to pay off those CEBA loans. Then we did see as well in the deposit business, some clients actually choose to come to RBC a bit early. And again, net net a positive and just had both relationships and came to us, and just wanted to sidestep the migration. So top line, I think each of the businesses feel good about retention. Pivot to your question about cross sell, I think very similar story there.

Speaker 10

Each of the businesses identified

Speaker 2

opportunities

Speaker 10

where we think we've got a lot of revenue and relationship that we can provide. In the consumer business, we've identified things like just the credit card portfolio. We have a very strong lineup. We see an opportunity to really deepen it there. HSBC has not had a strong penetration of the HELOC product, which we really view as a much stickier lending product.

Speaker 10

So we would put that in the mix as well. Dave touched on the commercial business, just access to capital and growing the loan book. We would see that as an opportunity on the go forward. And working with Derek's team, FX is something that, this obviously brings us,

Speaker 1

I think, a real new vector of growth around FX. And maybe just

Speaker 10

the last one into Doug's business, we're already seeing some great referrals as we look at what Graham touched on, which is a high income affluent customer base that hasn't had the leading wealth management platform

Speaker 4

that Doug's team leads. So those

Speaker 10

would be just a few of them.

Operator

The The next question is from Gabriel Dechaine, National Bank Financial. Please go ahead.

Speaker 11

Hi, good morning. We're talking about client retention on the HSBC portfolio. I want to talk about the mortgage book there where they were known as a price leader. Is retention really an objective there or kind of like a more of a recycling phenomenon and using a funding to grow your the overall mortgage book and could see some margin expansion on the back of that. Maybe you could talk about that.

Speaker 11

And then on the commercial side, the buzz around that ahead of that deal and during the before the closing anyway was that a lot of the HSBC customers were needing cross border cash management capabilities. I know you've invested in that over the past year. If you could talk a bit about those investments and what the experience has been from the client side?

Speaker 10

Thanks Gabe, it's Neil. So maybe just on the mortgage book, we've actually touched on this before. HSBC just didn't have the strong proprietary sales force we did. So they did have a tactic that was to lead with an aggressive price, but they really did not discount once they started the conversation with the client. So we're happy with the spreads in the mortgage book, and we've been, I can say, going at it quite aggressively to retain that business.

Speaker 10

And in the 1st month, we actually see renewal rates actually a little bit above our own, and we feel quite good about that. So I'd say definitely put that in the opportunity category. As you talked about on the commercial business and cross border cash management, yes, this is what we would say is an opportunity. We've added a couple of products to our shelf to make sure we have all those value propositions they're used to. I'd say the headlines have been more sophisticated trade finance capabilities.

Speaker 10

And then at the upper end liquidity management. So for corporates that just work in a lot of different jurisdictions and want to be able to move that liquidity around. So not only will it be there for those HSBC clients, but obviously we can cross sell that in to our commercial clients here in Canada. Just where we are on that is there is a very small TSA that we've got about 2,600 clients, and that'll roll off in the 1st year and so far, just been exceptionally smooth.

Speaker 11

All right. Great. And if I could throw another one in there, if I may. There's a lot of attention paid on AML these days. Can you talk about the you're clearly investing in CMB's capabilities there.

Speaker 11

Any additional investment required across the rest of the bank and HSBC itself, the Canada part anyway?

Speaker 2

Maybe I'll start and it's Dave here and Graham. We continue to invest in our AML systems and in the overall ecosystem. Obviously, it takes all banks to protect the overall payment system and we do collaborate around that. We do invest in technology. AI helps us protect the system.

Speaker 2

So we're constantly on guard and investing in new systems and using technology and training to make sure that we play our role in the overall financial system and we protect

Speaker 4

the system

Speaker 2

against this type of crime. It's a complex world and it's a difficult world, but we constantly invest to do that. And we work with our regulators and we work with our governments and all our agencies to protect the financial system. So it's a journey and the world changes and we adjust to that. And I would say we make it the highest priority in our organization and we're all focused on it in every jurisdiction.

Speaker 2

Graeme, do you want to add?

Speaker 4

Yes. No, I mean, I think Dave hit the key headlines there. It's a clear area. We treat it like no other no different than the other risk areas. It's a key part of our risk management program and we make huge investments in that area to make sure not only that we're meeting the obligations and expectations that our partners in the public sector have on us, but we use that to make sure that we're managing this institution in a safe and sound way.

Speaker 4

You asked about HSBC within that. Certainly, they have an international client base that presents other unique risks there and that was a key part of our diligence. And so we spent a lot of time looking at their AML program that HSBC had invested a lot of time in. And so with the benefits of the close and convert as we bring that into our AML kind of infrastructure and are now in that process of reviewing all of those clients and making sure it's kind of our standard and specs. And the other thing I would just say, we talked about the HSBC client base and Dave referenced earlier, we're also bringing in a lot of really seasoned professionals from HSBC on the AML side and we're really leading to their knowledge and experience as well in this.

Speaker 4

And so that's a real benefit for us on that side as well.

Speaker 11

Okay. Well, thanks for the HSBC disclosures and commentary, very transparent and much appreciated. Thanks, Gabriel.

Operator

Thank you. Next question is from Mario Mendonca, TD Securities. Please go ahead.

Speaker 4

Dave, let me start a quick question for you. Hopefully, this is

Speaker 6

straightforward. You've announced the NCIB and in your comments, you said it was the NCIB is there to offset the shares issued under the DRIP. So the obvious question for me is, why do the DRIP if you're just now going to offset it unless something has improved in your outlook? So maybe that's the question. What's improved in your outlook that would cause you to want to offset what you just completed doing in the DRIP?

Speaker 2

Yes. So thanks for that question. So obviously, when we undertook this transaction and announced it 18 months ago, that was a long approval journey and we had to plan a buffer for our capital and make sure that we could close this transaction as we articulated on a cash basis without having to do an equity raise. And in all conservatism, we had to put on a DRIP to make sure that we could grow the organization, execute in all the work that we had in front of us and delivered this transaction. So there was a lot of moving pieces, Mario, as we took this on in 20, a year and a half ago.

Speaker 2

As we came through that, our earnings have been so strong and our ROEs have been really strong and we did produce more capital than we actually planned through the process and therefore exited this very strongly as you just saw is 12 0.8%. So it does give us the opportunity as we look at the organic momentum that we have, we look at strong ROEs, we're able to generate capital And therefore, we are going to use buybacks as a strategic tool, including this year to buy back 30,000,000 shares to start. So I think it's a start. It's our plan and we're going to see what organic growth. We're going see what the inorganic opportunities are.

Speaker 2

I'm going to see what the state of the economy is and where we should run our actual capital levels. So I think all those things are in play and it gave us an opportunity to return capital to you to offset the dilution. And therefore, it's part of a normal planning process. So when you have uncertainty, we ended up in a better place and we're going to drive very strong TSRs for you through it.

Speaker 6

I think I understand that. One quick question before I leave this topic. I've come to think of 13% as the bogey for our banks in Canada for CET1 ratio. Do you have a different impression? Is the appropriate level more like 12.5?

Speaker 4

Yes.

Speaker 6

Okay. That's different. Okay. One quick thing then and maybe not so quick, but I want to focus on, Catherine, the comments you made around the spread between the 5 year today and where it was years ago. That's something that's near and dear to me, something I'm focusing a lot on.

Speaker 6

Is it conceivable then if, let's say, the deposit pricing environment slows like this shift to the high cost deposit slows a little bit, But the high end of the curve remains relatively high as we see today, even in the context of a shorter a lower short end of the curve, so a steeper curve. Does that environment could that environment drive Royal's all bank margin up somewhat like 1 to 2 basis points a quarter, let's say over the next year or so. Is that reasonable expectation that the tractors drive that kind of improvement assuming the deposit environment plays well?

Speaker 3

Thank you for the question. It's Catherine. Yes, I would agree with your assessment as you've laid that out. As mentioned in my notes, we are definitely seeing that positive benefit come through off our deposit portfolio. And as you've laid it out, I would expect to see continued margin expansion flow through to the Canadian Banking NIM.

Speaker 6

And the All Bank NIM.

Speaker 3

And it would the expectation is that it would flow through to your Allbank NIM as well.

Speaker 6

All right. Thank you.

Operator

Thank you. Next question is from Paul Holden, CIBC. Please go ahead.

Speaker 12

Hi, thanks. Good morning. Maybe just a quick question from me. Just to better understand the additional PCLs performing PCLs you would have for HSBC. Is that a matter of just putting on some additional conservatism as you close the transaction?

Speaker 12

Is that a matter of Royal applying its own credit models to the HSBC portfolio? Really what I'm getting at is just trying to better understand what is the probability that those PCLs ultimately get released back into earnings?

Speaker 4

Yes. Thanks, Paul. I wouldn't say this isn't our conservatism. This is the IFRS 9 rules we're applying. And so you should think about it wouldn't the way the purchase accounting works, it's like we originated these as new loans in effect.

Speaker 4

So they're kind of mark to market as they come across that mark to market goes through the profits and the goodwill, if you will. And so as we do originate loans, we treat them as no different than the other loan we originate. And so they're stage 1 and we have to establish an allowance for that. And so that's really what that is. And again, the benefits of the close and convert, we brought them over.

Speaker 4

We put our RBC ratings on all of those. We've run those for all of our IFRS 9 models and all of our governance and review on that and done our own analysis on that. And so that we've established those day 1 PCL very much in line and consistent with how we would do all of our other products and portfolios at RBC. The only note I had made on that, as I noted in my speech, is that it's all stage 1 on day 1 because they are newly originated and we would expect in coming quarters to see the kind of natural migrations and delinquencies in that portfolio and so some additional Stage 1 and 2 there just as it kind of migrates to a more natural state in that regard.

Speaker 12

Got it. Okay. So you just applied your own IFRS 9 models to the HSBC book. Okay. That makes sense.

Speaker 12

And maybe one quick follow-up one, Graham, while I have you. You can kind of talk through some of the cash flow experience in and out you're seeing for your Canadian consumers and how they are grappling with higher cost of living and higher cost of borrow? Thanks.

Speaker 5

Yes, it's a good question there, Paul.

Speaker 4

I mean, so we have a number of tools we kind of look at to kind of better understand the health of our client base and the consumers. Certainly, we put our own ratings on each of our clients and those ratings are inherently tied to what we see happening in their kind of cash flow and their savings and their deposits. We kind of have some we obviously have really rich information to understand kind of clients' overall savings and deposit profiles that kind of give us an overall health there. One of the reasons the Canadian consumer has been quite resilient is they built up a lot of savings and a lot of, if you will, buffer starting the pandemic. We have seen that in aggregate drawdown over the last few years, but I would still say it's kind of in aggregate elevated, somewhat elevated beyond kind of what would be more of a normal growth in that.

Speaker 4

But what that does also tell us, it does point to those clients that are facing more stress, right? And those goes back to the mortgage clients that have faced those payment triggers and don't have quite the same resilience. We really do see those cash buffers and reserves start to draw down on that. And so that's again, overall, I would say, we still see a pretty healthy Canadian consumer out there, but those pockets of stress are exactly those ones we've identified and that really is tied to kind of where we're increasing our allowance and reserves accordingly.

Speaker 12

Got it. Okay. That's it for me. Thank you.

Operator

Thank you. The next question is from Sohrab Movahedi, BMO Capital Markets. Please go ahead.

Speaker 13

Okay. Thank you. I know we're tight on time. Hopefully, three quick questions. Dave, are you price sensitive on the NCIB?

Speaker 13

Or is it just intended to offset the dilution period?

Speaker 2

It's a good question. You always think about the overall value and you look at where your intrinsic value per share is and you make that call. So we'd obviously like to accelerate on any dips. We don't want dips obviously, but you'd accelerate on a dip. And price does come into it, but we do have an overall strategy of how to return capital to shareholders to create the overall premium total shareholder return that we are going to deliver.

Speaker 2

So can't give you more guidance, it's obviously a variable you think about.

Speaker 13

Okay. I appreciate that. That's helpful. Catherine, you had mentioned that you hope by the end of 2025 City National will be back to more normalized earnings levels. What would that be compared to where you are today?

Speaker 13

Obviously, you've had to make some extra spendings and what have you to rectify some stuff down there. I'm just curious as to what does that normalized look like?

Speaker 2

Yes. Saurabh, maybe I'll take that, Steve. Sure. I spent a lot of time on it. So as I talked about, you can see that the our expense trajectory is has the full run rate of our remediation efforts and our overall building of heightened standards and our replatforming of C and B.

Speaker 2

So you've seen as we talked about, the significant amount of work we're doing is embedded in the current run rates, which gives you kind of a line of sight on the cost line. Our revenue line is stable and higher interest rates will help us. We are putting on some tractors to protect that revenue line in the event of a declining rate environment. So I think that's a positive as well. The line items that will have a little bit of volatility going forward that could accelerate or decelerate, will be there are a number of opportunities for us to simplify this business, whether it's selling non core parts of CMB or taking out real estate that all have positive run rate benefits and positive shareholder value creation.

Speaker 2

So you may see, to Catherine's point, the odd one time, not material, but the odd one time that will impact the quarter where we're able to create long term shareholder value by simplifying, selling something or taking out leases, what it happens to be. So I think Catherine's kind of point was on there'll be a little bit of bumpiness towards that. Getting to kind of where are we going to come out of this, I think you can look at to where kind of peer ROAs are and look at our balance sheet. There's no reason why we can't achieve that. And therefore, for us to get to that pure ROA, we have to complete our remediation and start to bring a very significant cost structure down, which we plan to do.

Speaker 2

And that will happen, we hope, over the next roughly 18 months. So I think that is all the things that have to kind of go well, but you should take comfort that our run rates reflect the full cost run rate of remediating and building a stronger platform.

Speaker 13

Thank you for squeezing my questions.

Operator

Thank you. We will take one more question from Lamar Persaud, Cormark Securities. Please limit yourself to one question. Please go ahead.

Speaker 10

Yes, thanks. Just using my one question here on it seems like you guys are highlighting these cross selling opportunities at HSBC. So it really does beg the question, can you guys put some numbers around that? And would that be potential upside to the $1,400,000,000 in earnings? I think the answer is yes.

Speaker 10

So any numbers you could put around that and timelines to achieve? It just sounds like you guys are very excited about this. Thanks. Thanks, Lamar. It's Neil.

Speaker 10

Yes, I mean, you can probably sense that we do think there's a real opportunity here. Recently we stepped into it, we felt that the cross sell opportunities would be as much or more than any of the attrition risk. I think we feel quite confident that that is going to be the case, but it's not something we're going to put numbers around at this point.

Speaker 2

Yes. It's Dave. I think as we you got to give us a quarter or so to get a deeper knowledge of the client base we brought in. We know it's an affluent client base. Neil, I think, outlined really well the opportunities across all the businesses and services from investments to credit cards to core operating accounts to treasury management to cross border, all that exists.

Speaker 2

So we're just going to go through a process over the next quarter or so of testing that and then we're going to size that for you and we will talk about that in the coming quarters. But just give us a quarter to make sure we're solid on our expectations of the valuation of that cross sell. We want to get it right for you, but we're very excited about it.

Speaker 6

Appreciate the time.

Operator

Thank you. I would now like to turn the meeting over to Mr. Dave Mackay. Please go ahead.

Speaker 2

Yes. So just to wrap up, thanks for all your questions. Now the theme I wanted the team to get across, which I think we did is really along the lines that not only did we close one of the most complex transactions and we did a close and convert seamlessly, we didn't lose any momentum in the business. In fact, we accelerated the momentum in the core business across capital markets, across wealth and particularly across commercial and consumer banking. You see it in the volume growth, you see it in the profitability growth, you see it in a very strong operating leverage.

Speaker 2

The business, the core business accelerated over the past year. We did not lose momentum. And we've got now HSBC opportunities. We've got RBC Clear. We're building on very strong core momentum with these additional inorganic investments.

Speaker 2

And therefore, when you think about the ROE potential of the bank, when you think about the capital generation of bank, when you think about the EPS trajectory, we feel very strongly that we've got momentum, we've got great investments and we're going to continue to build from one strength to the next. So I think that was the message that we really wanted to deliver today. Thank you for your questions and we look forward to seeing you at the end of the summer in August.

Operator

Thank you. The conference has now ended. Please disconnect your lines at this time and we thank you for your participation.

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Earnings Conference Call
Royal Bank of Canada Q2 2024
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