American Banker·2025-12-03 18:45Core Viewpoint - Royal Bank of Canada (RBC) has increased its return on equity target to 17% or more by 2027, reflecting strong quarterly earnings and improved U.S. performance [1][10] Financial Performance - RBC reported record net income of CAD $5.4 billion for the fourth quarter, a 29% increase year over year, with earnings per share of CAD $3.76, exceeding analysts' expectations by CAD $0.28 [11] - The bank's return on equity for the fourth quarter was 17.2%, and it has been achieving over 17% on an adjusted basis [3] Growth Strategy - RBC's growth plans include a revamped U.S. strategy focusing on cross-selling products, expanding the mortgage business, and concentrating on longstanding niches [4] - The bank's U.S. operations generated $884 million in net income during the quarter, a 54% increase year over year, with average loans up 14% and average deposits up 18% [7] Artificial Intelligence Integration - CEO Dave McKay indicated that the deployment of artificial intelligence tools among 30,000 employees could lead to lower costs and potentially further upward revisions of financial targets [2][10] Shareholder Returns - RBC returned CAD $11.3 billion to shareholders through dividends and share buybacks for the full year 2025, and raised its dividend by CAD $0.10 to CAD $1.64 per share [11]