Royal Bank of Canada provides personal and commercial banking, wealth management, insurance, and capital-markets services.
Loading research record…
RY · Financials · Diversified Banks
Royal Bank of Canada
Royal Bank of Canada provides personal and commercial banking, wealth management, insurance, and capital-markets services.
ReportedCalculatedEstimatedForecastScenario Assumption
Executive summary
The questions under review.
The bank is being studied for franchise durability, fee diversification, capital discipline, and through-cycle credit performance.
Can diversified fee businesses and scale support attractive returns while credit and capital remain well controlled?
Monitor loan and deposit growth, net interest margin, provisions, capital ratios, and segment returns.
Under Review. Primary-source evidence is documented below, while the five-year model and valuation output remain incomplete.
What price-to-book and residual-income valuation is justified by sustainable ROE and capital generation?
Investment thesis
Scenarios before conviction.
Bull case
Scenario Assumption — operating drivers exceed the verified base evidence without requiring materially weaker economics.
Base case
Scenario Assumption — reported operating drivers develop within management's disclosed framework; no point valuation is published.
Bear case
Scenario Assumption — operating conversion, margins, or cash generation weaken relative to the cited evidence.
What the market may be missing
Research in progress. No differentiated conclusion has been published.
Conditions required
Required evidence will be defined after current filings and investor materials are reviewed.
What would invalidate the thesis
Invalidation criteria are pending completion of the initial research record.
Business overview
Understand the operating system.
Business model
Research in progress. Evidence and source citations have not yet been entered.
Revenue sources
Research in progress. Evidence and source citations have not yet been entered.
Customer base
Research in progress. Evidence and source citations have not yet been entered.
Geographic exposure
Research in progress. Evidence and source citations have not yet been entered.
Recurring versus transactional revenue
Research in progress. Evidence and source citations have not yet been entered.
Competitive advantages
Research in progress. Evidence and source citations have not yet been entered.
Capital intensity and cyclicality
Research in progress. Evidence and source citations have not yet been entered.
Industry structure
Research in progress. Evidence and source citations have not yet been entered.
Latest verified evidence
RBC's Q2 2026 release and shareholder-report archive provide the current reported evidence. Amounts are in Canadian dollars unless identified otherwise.
Segment analysis
Review disclosed business segments.
| Segment | Revenue | Growth | Operating income | Operating margin | Share of total | Key driver | Source |
|---|---|---|---|---|---|---|---|
| Personal Banking | 19,854 | 14.5% | 7,105Net income | Not applicable | 35.8% | Deposits, lending volumes, spreads, mutual-fund balances, and credit costs. | Annual report |
| Commercial Banking | 8,562 | 16.0% | 3,020Net income | Not applicable | 15.2% | Commercial loans, deposits, cash management, advisory activity, and credit costs. | Annual report |
| Wealth Management | 22,378 | 14.0% | 4,289Net income | Not applicable | 40.3% | Fee-based client assets, market levels, net flows, and transactional revenue. | Annual report |
| Insurance | 1,321 | 7.9% | 828Net income | Not applicable | 2.4% | Insurance-service results, claims experience, actuarial assumptions, and premiums. | Annual report |
| Capital Markets | 14,426 | 20.1% | 5,393Net income | Not applicable | 26.0% | Trading activity, underwriting, advisory fees, lending, and financing demand. | Annual report |
Operating components
Build From Operating Components
| Component | Historical evidence | Unit | Revenue relationship | Margin relationship | Cash-flow relationship | Key uncertainty | Analyst interpretation |
|---|---|---|---|---|---|---|---|
| Net interest income and fee revenueReported | Q2 2026 revenue was C$17.453 billion, including C$8.506 billion net interest income and C$8.947 billion non-interest income. | CAD | Balances, spreads, markets activity, and fee assets drive revenue. | Funding costs, compensation, and operating leverage affect returns. | Bank cash flow is not interpreted like industrial free cash flow. | Credit, market activity, and rate sensitivity. | Evaluate revenue with provisions, capital, and return on equity. |
| Credit and capitalReported | Q2 2026 total PCL was C$0.9 billion and CET1 ratio was 13.5%. | CAD and regulatory ratio | Credit does not create revenue but affects sustainable earning power. | Provision expense directly affects pre-tax income. | Capital ratios govern distributions and balance-sheet growth. | Future credit migration and regulatory requirements. | ROE must be assessed with credit normalization and capital sufficiency. |
Historical financials
Five Years of Evidence — Not Invented Precision
| Period | Revenue | Growth | Gross profit | Gross margin | Operating income | Operating margin | EBITDA | EBITDA margin | Net income | EPS | Operating cash flow | Capital expenditures | FCF | Cash | Debt | Diluted shares | Source |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| FY2021 | 49,693 | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | 16,050 | 11.06 | 61,044 | Not applicable | Not applicable | 113,846 | Not applicable | 1,426.7 | SEC filed annual reports / XBRL company factsCAD |
| FY2022 | 48,985 | -1.4% | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | 15,807 | 11.06 | 21,942 | Not applicable | Not applicable | 72,397 | Not applicable | 1,406 | SEC filed annual reports / XBRL company factsCAD |
| FY2023 | 56,129 | 14.6% | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | 14,866 | 10.5 | 26,079 | Not applicable | Not applicable | 61,989 | Not applicable | 1,392.5 | SEC filed annual reports / XBRL company factsCAD |
| FY2024 | 57,344 | 2.2% | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | 16,240 | 11.25 | 23,139 | Not applicable | Not applicable | 56,723 | Not applicable | 1,413.8 | SEC filed annual reports / XBRL company factsCAD |
| FY2025 | 66,605 | 16.1% | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | 20,369 | 14.07 | 55,220 | Not applicable | Not applicable | 37,024 | Not applicable | 1,411.6 | SEC filed annual reports / XBRL company factsCAD |
Revenue build
Model the actual economic drivers.
Personal Banking
Deposits, lending volumes, spreads, mutual-fund balances, and credit costs.
Review primary sourceCommercial Banking
Commercial loans, deposits, cash management, advisory activity, and credit costs.
Review primary sourceWealth Management
Fee-based client assets, market levels, net flows, and transactional revenue.
Review primary sourceInsurance
Insurance-service results, claims experience, actuarial assumptions, and premiums.
Review primary sourceCapital Markets
Trading activity, underwriting, advisory fees, lending, and financing demand.
Review primary sourceEstimates
Current-period calculations are not reported results.
No analyst estimate is published. Reported results and management guidance remain labeled separately in the source record.
Forecasts
Forward expectations begin with operating drivers.
| Period | Metric | Base case | Bull case | Bear case | Operating-driver build | Difference from guidance | Main sensitivity | Principal risk |
|---|---|---|---|---|---|---|---|---|
| Next fiscal year | Revenue and cash-flow directionForecast | Scenario Assumption — positive operating conversion continues, but growth moderates from the strongest recent period. | Scenario Assumption — demand, mix, and execution remain above the recent reported trend, supporting stronger cash conversion. | Scenario Assumption — demand timing, pricing, mix, or execution weakens enough to pressure revenue and cash conversion. | Build from average balances, net interest margin, fee assets, provisions, expenses, tax, and regulatory capital. | This is a Luna1 directional scenario, not management guidance and not an external consensus estimate. | Conversion of the cited operating drivers into reported revenue and cash flow | The operating evidence may not persist through the next fiscal year |
| Assumption | Historical basis | Management evidence | Luna1 interpretation | Base | Bull | Bear | Last updated |
|---|---|---|---|---|---|---|---|
| Credit normalization and operating leverage | Current reported period and prior-year comparison | RBC reported Q2 provisions, revenue growth, ROE, and CET1; no independent Luna1 point forecast is published. | Directionally relevant, but insufficient by itself for a point forecast. | Recent reported momentum moderates toward a normalized pace. | Demand and operating conversion remain above the recent trend. | Demand, pricing, mix, or execution falls below the recent trend. | July 28, 2026 |
Valuation
Make every assumption visible.
Methods
- Dividend discount model
- Residual income model
- Price-to-book
- Price-to-tangible-book
- Price-to-earnings
Primary model inputs
- Return on equity
- Common Equity Tier 1 ratio
- Loan and deposit growth
- Net interest margin
- Credit-loss provisions
- Capital-markets earnings
- Wealth-management earnings
| Selected method | Price-to-book and residual-income framework |
|---|---|
| Why it fits | A bank's valuation should connect sustainable ROE, cost of equity, credit losses, and required regulatory capital. |
| Valuation date | July 28, 2026 |
| Share-price date | No market-price source connected |
| Share count | Requires verification from the cited primary-source record. |
| Net debt or cash | Requires verification from the cited primary-source record. |
| Forecast period | Not published; operating forecast remains incomplete |
| Discount rate | Not published |
| Terminal assumption | Not published |
| Scenario range | Not published |
| Major sensitivities | Growth duration, margins, capital intensity, and valuation multiple |
| Calculation source | No valuation output is published until reported inputs and market data are verified. |
| Limitations | The site has no licensed real-time market-data feed. This framework is not a price target. |
Comparable companies
Comparable evidence remains separate from valuation output.
| Company | Ticker | Market capitalization | Enterprise value | Revenue growth | EBITDA margin | EV/Revenue | EV/EBITDA | P/E | FCF yield | Price-to-book |
|---|
Comparable-company data has not been entered. The model supports market capitalization, enterprise value, growth, margins, valuation multiples, free-cash-flow yield, and price-to-book where appropriate.
Catalysts
What could change the evidence.
Earnings
Research in progress. Evidence and source citations have not yet been entered.
Product cycle
Research in progress. Evidence and source citations have not yet been entered.
Industry demand
Research in progress. Evidence and source citations have not yet been entered.
Margin expansion
Research in progress. Evidence and source citations have not yet been entered.
Capital allocation
Research in progress. Evidence and source citations have not yet been entered.
Regulatory or macro catalyst
Research in progress. Evidence and source citations have not yet been entered.
Strategic partnerships
Research in progress. Evidence and source citations have not yet been entered.
M&A
Research in progress. Evidence and source citations have not yet been entered.
Customer adoption
Research in progress. Evidence and source citations have not yet been entered.
Risks
What could break the thesis.
Valuation risk
Research in progress. Evidence and source citations have not yet been entered.
Execution risk
Research in progress. Evidence and source citations have not yet been entered.
Cyclical risk
Research in progress. Evidence and source citations have not yet been entered.
Customer concentration
Research in progress. Evidence and source citations have not yet been entered.
Competitive risk
Research in progress. Evidence and source citations have not yet been entered.
Regulatory risk
Research in progress. Evidence and source citations have not yet been entered.
Balance-sheet risk
Research in progress. Evidence and source citations have not yet been entered.
Technology risk
Research in progress. Evidence and source citations have not yet been entered.
Macro risk
Research in progress. Evidence and source citations have not yet been entered.
Thesis-specific risk
Research in progress. Evidence and source citations have not yet been entered.
Thesis monitoring
Evidence that strengthens or challenges the case.
RBC's diversified franchise may support premium through-cycle returns with controlled credit and capital.
Q2 2026 reported net income grew 25% year over year and CET1 remained above regulatory requirements.
Credit normalization, housing exposure, funding costs, and capital-markets volatility remain risks.
PCL ratio, ROE, and CET1
Return on equity through the credit cycle
Sustainable ROE relative to cost of equity
Credit losses exceed normalization assumptions
Fiscal Q3 2026 results
August 27, 2026
Under Review
July 28, 2026
Earnings history
Verified quarterly evidence.
| Quarter | Revenue | Revenue growth | EPS | EPS growth | Gross margin | Operating margin | Guidance | Earnings reaction | Analyst note |
|---|
No earnings records or dated quarterly updates have been published. This section will remain empty until revenue, EPS, margins, guidance, market reaction, analyst notes, and source links are verified.
Research notes
Research changes and open questions.
No dated notes have been published. Earnings, investor-day, product, industry, valuation, thesis, and portfolio-lesson notes require a verified date and source.
Downloads
Branded documents—published only when complete.
RYRoyal Bank of Canada
Equity Research and Valuation Report
Prepared by Shy Lee- Last updated
- Updated July 28, 2026
- Format
- File size
- Available after publication
- Status
- In progress
RYRoyal Bank of Canada
Integrated Valuation Model
Prepared by Shy Lee- Last updated
- Updated July 28, 2026
- Format
- XLSX
- File size
- Available after publication
- Status
- In progress
Sources and disclosures
Evidence before publication.
| Document | Publisher | Publication date | Reporting period | Type | Relevant section | Date accessed |
|---|---|---|---|---|---|---|
| Q2 2026 earnings release | Royal Bank of Canada | May 28, 2026 | Quarter ended April 30, 2026 | Earnings release | Reported results, credit, capital, and segment commentary | July 28, 2026 |
| Financial information archive | Royal Bank of Canada | Ongoing archive | Multiple periods | Investor relations | Quarterly and annual reports | July 28, 2026 |
Source: Company filings, investor-relations materials, and Luna1 Research estimates. Estimates are labeled Luna1 Research Estimate; scenarios are labeled Illustrative Scenario.
Educational disclosure: This research is for educational and informational purposes only and is not investment advice. Luna1 Research may hold or monitor securities discussed on the platform.
Research completeness
What is supported, partial, or still missing.
| Section | Status | Audit note |
|---|---|---|
| Executive summary | Complete | Company purpose and research question are stated. |
| Business overview | Partial | Current primary-source evidence is present; multi-period model work remains incomplete. |
| Segment data | Complete | Latest disclosed segment or single-reportable-segment values are sourced to the annual filing. |
| Five-year financial history | Complete | Five fiscal-year rows cite filed annual reports; non-applicable or undisclosed measures are labeled explicitly. |
| Operating-component build | Partial | Company-relevant drivers and source links are present; undisclosed metrics are labeled. |
| Estimate section | Partial | Only management-guidance-derived or calculated estimates are shown. |
| Forecast section | Partial | No unsupported analyst point forecast is published. |
| Valuation | Partial | Method and required inputs are documented; market-dependent output is withheld. |
| Bull case | Partial | Scenario requires verified forecast inputs. |
| Base case | Partial | Scenario requires verified forecast inputs. |
| Bear case | Partial | Scenario requires verified forecast inputs. |
| Catalysts | Partial | Catalyst categories are present; dated event verification remains ongoing. |
| Risks | Partial | Risk categories are present; filing-specific citations remain ongoing. |
| Earnings update | Partial | Latest cited release is linked; full quarterly history is incomplete. |
| Source list | Partial | Primary sources are listed; a five-year source archive remains incomplete. |
| Performance tracking | Missing | No verified publication price and benchmark series are connected. |
| Thesis-monitoring indicators | Complete | Quarterly and annual monitoring fields are defined. |
Analyst