Royal Bank of Canada (RY) Q4 2022 Earnings Call Transcript

For the period ending October 31, 2022

November 30, 2022 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen. Welcome to the RBC's Conference Call for the Fourth Quarter 2022 Financial Results. Please be advised that this call is being recorded.

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

Asim Imran - Head, IR

Thank you, and good morning, everyone. Speaking today will be Dave McKay, President and Chief Executive Officer; Nadine Ahn, Chief Financial Officer; and Graeme Hepworth, Chief Risk Officer. Also joining us today for your questions, Neil McLaughlin, Group Head, Personal & Commercial Banking; Doug Guzman, Group Head, Wealth Management, Insurance and I&TS; and Derek Neldner, 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. 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 requeue.

With that, I'll turn it over to Dave.

Dave McKay - President and CEO

Thanks, Asim, and good morning, everyone. Thank you for joining us. Today, we reported fourth quarter earnings of $3.9 billion. Net interest income increased over 20% from last year, underpinned by higher interest rates and client demand. Higher net interest income was partly offset by headwinds in our market-related Capital Markets and Wealth Management businesses as macro and geopolitical uncertainty pushed our clients towards a risk-off stance. Our results were also impacted by higher PCL on performing loans and an end-of-year true-up in Capital Markets variable compensation.

Looking back at the 2022 fiscal year, RBC delivered earnings of nearly $16 billion and revenue of nearly $49 billion. Both are the second highest on record as we supported our clients' financing needs. We met all of our medium-term objectives as we generated ROE of 16.4%, while ending the year with a strong CET1 ratio of 12.6%. As part of our commitment to delivering long-term value to our shareholders, we ended the year with an 80% total payout ratio, including paying out nearly $7 billion of common share dividends while buying back over $5 billion of stock. And this morning, we announced a $0.04 or 3% increase in our quarterly dividend.