TLDR
- Royal Bank of Canada reported record Q3 2025 net income of $5.41B, up 21% YoY.
- Adjusted EPS came in at $3.84, beating analyst expectations of $3.32.
- Total revenue rose 16% to $16.99B, led by strength across all major segments.
- Provisions for credit losses climbed 34% YoY to $881M, though down 38% sequentially.
- Quarterly dividend of $1.54 per share declared, payable November 24, 2025.
Royal Bank of Canada (NYSE: RY, TSX: RY) traded at $146.01, up 6.05%, after announcing record results for the third quarter of fiscal 2025, ended July 31.
Net income reached $5.41 billion, a 21% increase from the $4.49 billion recorded a year earlier. Earnings per diluted share came in at $3.75, while on an adjusted basis, net income totaled $5.53 billion with EPS at $3.84, up 17% and 18% year-over-year, respectively.
Revenue Growth and Expense Pressures
Revenue climbed to $16.99 billion, representing a 16% increase over last year’s $14.63 billion. Growth was driven by robust contributions across Personal and Commercial Banking, Wealth Management, Insurance, and Capital Markets. Non-interest expenses rose 7% to $9.23 billion as the bank continued investments in technology and talent. Provisions for credit losses (PCL) surged 34% year-over-year to $881 million, though they were down 38% compared to the previous quarter.
Income before income taxes rose 28% to $6.87 billion, and pre-provision, pre-tax earnings advanced 29% to $7.75 billion. The effective tax rate increased to 21.2% from 16.5% a year ago, reflecting changes in tax-related items and segment mix.
Segment Performance
Personal Banking delivered $1.94 billion in net income, up 22% due to higher spreads and volume growth in Canada, bolstered by HSBC Canada synergies. Commercial Banking added $836 million, up 2%, while Wealth Management net income rose 15% to $1.10 billion, supported by higher fee-based assets and gains in U.S. operations including City National Bank.
Insurance operations contributed $247 million, a 45% increase from improved life claims experience. Capital Markets earned $1.33 billion, up 13% on stronger U.S. fixed-income trading and origination activity.
Capital Position and Dividend
RBC reported a CET1 ratio of 13.2%, up 20 basis points from last year, reflecting its solid balance sheet. The bank declared a quarterly dividend of $1.54 per share, payable on or after November 24, 2025.
Performance Overview
As of August 27, 2025, Royal Bank of Canada delivered a year-to-date return of 24.15%, with a one-year return of 29.59%. Over three years, the stock has surged 70.91%, and in five years, it has advanced 127.60%, outperforming the S&P 500 over both periods.
Outlook
CEO Dave McKay highlighted the strength of RBC’s diversified model, investments in innovation, and disciplined risk management. With continued synergies from the HSBC Canada integration and balanced growth across segments, RBC enters the next quarter with solid momentum despite elevated credit provisions and global uncertainties.
