2025 Q1 Report to Shareholders

Royal Bank of Canada

First Quarter 2025

Royal Bank of Canada first 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 Q1 2025 Report to Shareholders and Supplementary Financial Information are available at http://www.rbc.com/investorrelations and on https://www.sedarplus.com/.

Net income	Diluted EPS1	Total PCL1	ROE1, 2	CET1 ratio1
$1,050 Million	13.2%
$5.1 Billion	$3.54	16.8%
PCL on loans ratio1	Above regulatory
Up 43% YoY	Up 42% YoY	up 7 bps1 QoQ	Up 370 bps YoY	requirements
Adjusted	Adjusted	Total ACL1	Adjusted ROE3	LCR1
net income3	diluted EPS3	$6.9 Billion	128%
17.2%
$5.3 Billion	$3.62	ACL on loans ratio1	Unchanged from 128%
Up 29% YoY	Up 27% YoY	up 4 bps QoQ	Up 230 bps YoY	last quarter

TORONTO, February 27, 2025 - Royal Bank of Canada4 (RY on TSX and NYSE) today reported record net income of $5.1 billion for the quarter ended January 31, 2025, up $1.5 billion or 43% from the prior year. Diluted EPS was $3.54, up 42% over the same period, reflecting growth across each of our business segments. The inclusion of HSBC Bank Canada (HSBC Canada) results5 increased net income by $214 million. Adjusted net income3 and adjusted diluted EPS3 of $5.3 billion and $3.62 were up 29% and 27%, respectively, from the prior year.

Our consolidated results reflect an increase in total PCL of $237 million from a year ago, mainly reflecting higher provisions in Commercial Banking, Wealth Management and Personal Banking, partially offset by lower provisions in Capital Markets. The PCL on loans ratio of 42 bps increased 5 bps from the prior year.

Pre-provision, pre-tax earnings6 of $7.5 billion were up $2.3 billion or 45% from last year. The inclusion of HSBC Canada results increased pre-provision, pre-tax earnings6 by $451 million. Excluding HSBC Canada results, pre-provision, pre-tax earnings6 increased 36% from last year, mainly due to higher fee-based revenue in Wealth Management reflecting market appreciation and net sales, and higher revenue in Capital Markets driven by strength across Corporate & Investment Banking and Global Markets. Both segments also benefitted from the impact of foreign exchange translation. Higher net interest income reflecting strong average volume growth in Personal Banking and Commercial Banking and higher spreads in Personal Banking, also contributed to the increase. These factors were partially offset by higher expenses driven by higher variable compensation on improved results and continued investments in technology and talent across our businesses.

Compared to last quarter, net income was up 22% reflecting growth across each of our business segments. Adjusted net income3 was up 18% over the same period. Pre-provision, pre-tax earnings6 were up 24% as higher revenues more than offset expense growth. The PCL on loans ratio of 42 bps increased 7 bps from the prior quarter, mainly reflecting higher provisions in Wealth Management and Capital Markets. The PCL on impaired loans ratio was 39 bps, up 13 bps from the prior quarter, including one account in the other services sector that migrated from performing to impaired during the quarter. The PCL on performing loans ratio was 3 bps, down 6 bps from the prior quarter.

Our capital position remains robust, with a CET1 ratio of 13.2%, supporting solid volume growth, and $2.4 billion of capital returned to our shareholders through common share dividends and share buybacks.

"RBC's first quarter exemplifies our commitment to staying ahead of our clients' expectations in an increasingly complex world. In Q1, we delivered strong results and client-driven growth across our businesses, while prudently managing risk and making investments in technology and talent to position the bank for the future. At our upcoming Investor Day, we look forward to sharing more about how we will capitalize on our financial and strategic strength to elevate the value we create for our clients and shareholders."

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

1. See the Glossary section of this Q1 2025 Report to Shareholders for composition of these measures.
2. Retuon 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 Q1 2025 Report to Shareholders.
3. These are non-GAAP measures. For further information, including a reconciliation, refer to the Key performance and non-GAAP measures section of this Q1 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 Q1 2025 Report to Shareholders.
6. Pre-provision,pre-tax (PPPT) earnings is calculated as income (January 31, 2025: $5,131 million; October 31, 2024: $4,222 million; January 31, 2024: $3,582 million) before income
   taxes (January 31, 2025: $1,302 million; October 31, 2024: $993 million; January 31, 2024: $766 million) and PCL (January 31, 2025: $1,050 million; October 31, 2024: $840 million;
   January 31, 2024: $813 million). For the three months ended January 31, 2025, pre-provision, pre-tax earnings excluding HSBC Canada results of $7,032 million is calculated as pre-provision, pre-tax earnings of $7,483 million less net income of $214 million, income taxes of $82 million, and PCL of $155 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 First Quarter 2025

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 month period ended or as at January 31, 2025, compared to the corresponding period in the prior fiscal year and the three month period ended October 31, 2024. This MD&A should be read in conjunction with our unaudited Interim Condensed Consolidated Financial Statements for the quarter ended January 31, 2025 (Condensed Financial Statements) and related notes and our 2024 Annual Report. This MD&A is dated February 26, 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 Q1 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.), European 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.

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 Q1 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 Q1 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 Q1 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 Q1 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 98,000+ 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. Leamore 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 First Quarter 2025

Selected financial and other highlights

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. 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 (October 31, 2024 - $15 billion and $6 billion; January 31, 2024 - $14 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.

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 January 2025, the International Monetary Fund (IMF) projected global growth of 3.3% for calendar 2025, up 0.1% from its October forecast, with higher growth projections for the U.S. largely offset by downward revisions in other major economies. Though the IMF expects global inflation to decline, significant uncertainty continues to pose risks to the global economic outlook, driven by: challenges in monetary policy normalization, including policy changes interrupting the ongoing disinflation process; 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; escalating trade tensions, including protectionist trade policies such as the imposition of tariffs, which could lower investment and disrupt supply chains; shifts in U.S. trade, foreign relations, defense and immigration policies, which could disrupt global alliances and heighten economic, market and other risks; deepening economic concerns, particularly in China's real estate sector and Europe's energy sector, that could have an impact on global growth; potential inflationary pressures and restrictive monetary policy in response to accelerated growth in U.S. debt levels; continuing geopolitical tensions, such as those between Russia and Ukraine, those in the Middle East, and those between China and Taiwan and the West; increased polarization and social unrest; extreme weather-related events; and cyclical imbalances in the global economy. Our diversified business model, as well as our product and geographic diversification, continue to help mitigate the risks posed by global uncertainty.

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 and Capital management sections of this Q1 2025 Report to Shareholders.

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).

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Total revenue

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).

Q1 2025 vs. Q1 2024

Total revenue increased $3,254 million or 24% from a year ago, mainly due to higher net interest income. Higher investment management and custodial fees, trading revenue, other revenue and mutual fund revenue also contributed to the increase. The impact of foreign exchange translation increased revenue by $477 million. The inclusion of HSBC Canada revenue contributed $716 million to total revenue.

Net interest income increased $1,616 million or 26%, of which $589 million reflects the inclusion of HSBC Canada net interest income. The remaining increase of $1,027 million or 16% was mainly due to average volume growth in Personal Banking and Commercial Banking, as well as higher spreads in Personal Banking. The impact of foreign exchange translation also contributed to the increase.

NIM was up 19 bps compared to last year, mainly due to the acquisition of HSBC Canada including the accretion of fair value adjustments, favourable product mix in Personal Banking, higher trading net interest margin in Capital Markets as well as the sustained impact of a higher rate environment across most of our business segments. These factors were partially offset by competitive pricing pressures in deposits in Personal Banking and Commercial Banking.

Trading revenue increased $391 million or 49%, primarily due to higher equity trading revenue across most regions. Investment management and custodial fees increased $482 million or 22%, primarily due to higher fee-based client assets

reflecting market appreciation and net sales.

Mutual fund revenue increased $206 million or 20%, 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.

Other revenue increased $231 million, largely attributable to 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. This was partially offset by 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.

Q1 2025 vs. Q4 2024

Total revenue increased $1,665 million or 11% from prior quarter, primarily due to higher trading revenue. Higher net interest income, investment management and custodial fees, as well as insurance service result also contributed to the increase. The impact of foreign exchange translation increased revenue by $315 million.

Net interest income increased $277 million or 4%, largely due to average volume growth in Personal Banking and Wealth Management, as well as higher spreads in Personal Banking. The impact of foreign exchange translation also contributed to the increase.

Insurance service result increased $113 million or 65%, primarily due to the impact of reinsurance contract recaptures, adjustments relating to deferred acquisition expenses in the prior period and improved claims experience.

Trading revenue increased $812 million, mainly due to higher equity and fixed income trading revenue across most regions. Investment management and custodial fees increased $166 million or 7%, largely due to higher fee-based client assets

reflecting market appreciation and net sales.

Royal Bank of Canada First Quarter 2025 9

Provision for credit losses (1)

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.

Q1 2025 vs. Q1 2024

Total PCL increased $237 million or 29% from a year ago, due to higher provisions in Commercial Banking, Wealth Management and Personal Banking, partially offset by lower provisions in Capital Markets. The PCL on loans ratio increased 5 bps.

PCL on performing loans decreased $65 million or 49%, mainly due to migration to impaired in Capital Markets, partially offset by unfavourable changes to credit quality and portfolio growth.

PCL on impaired loans increased $300 million or 44%, primarily due to higher provisions in Commercial Banking, Personal Banking and Capital Markets.

Q1 2025 vs. Q4 2024

Total PCL increased $210 million or 25% from last quarter, mainly reflecting provisions taken in the current quarter in Wealth Management, as compared to releases of provisions last quarter and higher provisions in Capital Markets. The PCL on loans ratio increased 7 bps.

PCL on performing loans decreased $140 million or 67%, mainly due to lower unfavourable changes in credit quality and migration to impaired in Capital Markets, partially offset by lower favourable changes to our macroeconomic forecast and portfolio growth.

PCL on impaired loans increased $345 million or 54%, primarily due to higher provisions in Capital Markets, Commercial Banking and Personal Banking.

10 Royal Bank of Canada First Quarter 2025

Non-interest expense

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.

Q1 2025 vs. Q1 2024

Non-interest expense increased $932 million or 11% from a year ago, of which $265 million reflects the inclusion of HSBC Canada non-interest expense. The remaining increase of $667 million or 8% was primarily due to higher variable compensation commensurate with increased results and higher staff costs, including severance. The impact of foreign exchange translation of $261 million and 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, the cost of the Federal Deposit Insurance Corporation (FDIC) special assessment in the prior year, 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 55.3% decreased 640 bps from 61.7% last year. Our adjusted efficiency ratio of 54.3% decreased

360 bps from 57.9% last year.

Q1 2025 vs. Q4 2024

Non-interest expense increased $237 million or 3% from last quarter, primarily due to higher variable compensation commensurate with increased results, higher staff costs, largely reflecting seasonally higher compensation and severance, as well as the impact of foreign exchange translation of $167 million. These factors were partially offset by lower HSBC Canada transaction and integration costs, which is treated as a specified item. The prior period also reflected higher professional fees and the impact of higher legal provisions in Capital Markets.

Our efficiency ratio of 55.3% decreased 450 bps from 59.8% last quarter. Our adjusted efficiency ratio of 54.3% decreased

360 bps from 57.9% last quarter.

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

Income taxes

1. These are non-GAAP measures. For further details, including a reconciliation, refer to the Key performance and non-GAAP measures section.
2. See Glossary for composition of these measures.

Q1 2025 vs. Q1 2024

Income tax expense increased $536 million or 70% from a year ago, primarily due to higher income before income taxes. Adjusted income tax expense increased $431 million or 47%.

The effective income tax rate of 20.2% increased 260 bps, primarily due to the impact of Pillar Two legislation, which became effective for us beginning November 1, 2024, and the impact of changes in earnings mix. The adjusted effective income tax rate of 20.4% increased 210 bps. For further details on Pillar Two legislation, refer to Note 9 of our Condensed Financial Statements.