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Royal Bank of Canada(RY) - 2024 Q4 - Annual Report
RYRoyal Bank of Canada(RY)2024-12-04 11:34
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Financial Performance - Total revenue for 2024 reached CAD 57,344 million, an increase of 11.4% from CAD 51,464 million in 2023 [114]. - Net income for 2024 was CAD 16,240 million, reflecting an 11.1% increase from CAD 14,612 million in 2023 [114]. - Adjusted net income for 2024 was CAD 17,430 million, up 10.1% from CAD 15,829 million in 2023 [114]. - Total revenue for the year ended October 31, 2024, was 57.344billion,anincreasefrom57.344 billion, an increase from 51.464 billion in 2023, representing a growth of approximately 11% [200]. - Net income available to common shareholders for 2024 was 15.908billion,comparedto15.908 billion, compared to 14.369 billion in 2023, reflecting a year-over-year increase of about 10.7% [200]. - The consolidated Return on Equity (ROE) for 2024 was 14.4%, slightly up from 14.3% in 2023 [200]. - The company reported a specified item related to the HSBC Canada transaction and integration costs amounting to 960millionin2024[200].−Theefficiencyratioimprovedto59.7960 million in 2024 [200]. - The efficiency ratio improved to 59.7%, a decrease of 20 bps from the previous year, while the adjusted efficiency ratio decreased to 57.1% [168]. Assets and Capital - Total assets increased by 8.2% to CAD 2,171,582 million from CAD 2,006,531 million in 2023 [114]. - The Common Equity Tier 1 (CET1) ratio decreased to 13.2% from 14.5% in 2023, a decline of 130 basis points [114]. - The liquidity coverage ratio (LCR) was reported at 128%, down from 131% in 2023 [114]. - The average total assets increased to 165.4 billion from 127.2billion[254].−Theaveragetotalearningassetsroseto127.2 billion [254]. - The average total earning assets rose to 149.4 billion from 108.8billion[254].−Thecompanyaimstomaintainastrongcapitalratio(CET1)of13.4108.8 billion [254]. - The company aims to maintain a strong capital ratio (CET1) of 13.4% [141]. Wealth Management - Wealth Management segment saw a significant increase in net income of 27.1%, reaching CAD 3,422 million compared to CAD 2,693 million in 2023 [114]. - Wealth Management reported total revenue of 18.161 billion for 2024, with adjusted revenue of 18.403billionafteraccountingforspecifieditems[205].−TheU.S.WealthManagementsegmentgeneratedCAD8,906millioninrevenue,anincreaseof11.818.403 billion after accounting for specified items [205]. - The U.S. Wealth Management segment generated CAD 8,906 million in revenue, an increase of 11.8% from CAD 7,969 million in 2023 [276]. - Canadian Wealth Management revenue increased by 717 million or 14%, largely due to higher fee-based client assets and transactional revenue [296]. - Assets Under Administration (AUA) increased to CAD 4,685,900 million in 2024, a rise of 13.9% from CAD 4,110,200 million in 2023 [283]. - The company reported a total AUA balance of 4,685,900millionattheendoftheyear,comparedto4,685,900 million at the end of the year, compared to 4,110,200 million in the previous year [288]. Risk Factors - The company emphasizes the importance of considering various risk factors that could cause actual results to differ materially from expectations [111]. - The risk factors include credit, market, liquidity, operational, and compliance risks, among others [111]. - The company provides additional information about risk factors in the risk sections of the 2024 Annual Report, which may be updated by subsequent quarterly reports [113]. Economic Outlook - Canadian GDP is expected to increase by 1.0% in calendar 2024, following a 1.5% increase in calendar 2023 [127]. - U.S. GDP growth is projected to be 2.8% in calendar 2024, after a 2.9% increase in calendar 2023 [128]. - Euro area GDP is expected to rise by 0.7% in calendar 2024, following a 0.5% increase in calendar 2023 [129]. - Economic growth in the Caribbean is expected to moderate, with risks from climate vulnerability and geopolitical conflicts impacting growth prospects [217]. - In the U.S., GDP growth resilience is anticipated to limit downward pressure on labor markets and inflation, leading to fewer interest rate reductions compared to Canada [218]. Transaction and Integration - The company completed the HSBC Canada transaction on March 28, 2024, consolidating its results into various segments [114]. - The acquisition of HSBC Bank Canada was completed for a total consideration of 15.5billion,enhancingthecompany′spositionincommercialbanking[133][134].−ThecompanysuccessfullytransitionedHSBCCanadaclientsontotheRBCDirectInvestingplatform,enhancingitsdigitalcapabilities[271].ShareholderReturns−Thecompany′stotalshareholderreturn(TSR)forthepastthreeyearswas1415.5 billion, enhancing the company's position in commercial banking [133][134]. - The company successfully transitioned HSBC Canada clients onto the RBC Direct Investing platform, enhancing its digital capabilities [271]. Shareholder Returns - The company's total shareholder return (TSR) for the past three years was 14%, outperforming the peer group average of 11% [143]. - The total shareholder return was 57.8%, a significant increase compared to the previous year [144]. - The common share price at the end of the period was 168.39, reflecting a 52.0% increase from the previous year [144].