Royal Bank of Canada (NYSE:RY) Q1 2015 Earnings Conference Call - Preliminary Transcript

Feb 24, 2015 • 04:00 pm ET


Royal Bank of Canada (NYSE:RY) Q1 2015 Earnings Conference Call - Preliminary Transcript


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Good morning, ladies and gentlemen. Welcome to RBC's Conference Call for the First Quarter of 2015. [Operator Instructions] I would now like to turn the meeting over to Ms. Amy Cairncross, VP and Head of Investor Relations. Please go ahead.

Amy Cairncross

Good morning and thank you for joining us. Presenting to you this morning are Dave McKay, President and Chief Executive Officer; Janice Fukakusa, Chief Administrative Officer and CFO; and Mark Hughes, Chief Risk Officer. Following their comments, we will open the call for questions from analysts. The call is 1 hour long and will end at 9:00 a.m. To give everyone a chance to participate, please keep it to one question and then re-queue. We will be posting management's remarks on our website shortly after the call. Joining us for your questions are George Lewis, Group Head, Wealth Management and Insurance; Doug McGregor, Group Head, Capital Markets and Investor & Treasury Services; Jennifer Tory, Group Head, Personal And Commercial Banking; Zabeen Hiirji, Chief Human Resources Officer; and Bruce Ross, Group Head, Technology and Operations.

As noted on Slide 2, our comments may contain forward-looking statements, which involve applying assumptions and have inherent risks and uncertainties. Actual results could differ materially from these statements.

I will now turn the call over to Dave McKay.

Dave McKay

Thank you, Amy, and good morning everyone. And thank you for joining us today. RBC had a record first quarter with earnings of over $2.4 billion, up 17% from last year up 12% excluding items in the prior year related to our Caribbean operations. Our results were driven by record earnings in Personal & Commercial Banking and a very strong quarter in Capital Markets. Our performance also reflects record earnings in Investor & Treasury Services, continued strength in Insurance and solid underlying earnings in Wealth Management. Our capital position remains strong and I'm pleased to report that this morning we announced a $0.02 or 3% increase toward dividend, bringing our quarterly dividend to $0.77 a share. Overall RBC had a great start to the year and I would like to highlight the key strengths of our quarter.

First, it's our record earnings in Canadian Banking. We have the number one or number two market position in all retailing business product categories and we continue to gain market share across all of our core businesses, while maintaining strong margins. We continue to innovate and enrich our customer value proposition and we've executed strategic marketing programs which helped drive solid volume growth of 5% over last year. This growth includes continued momentum in deposits, reflecting our focus on growing core checking accounts, a key anchor product for us. As I've explained before, clients typically start their relationship with us through checking account and we can typically sell an additional two or three products within the following three months. We also had strong fee-based revenue, which was up 13% from last year, largely reflecting the power of our branch network to distribute mutual funds to our clients. And we achieved double-digit