Royal Bank of Canada Q4 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Just a follow-up for Derek on the Capital Markets outlook. I guess some of the indications there, but do you think earnings growth and PPPT growth in your segment can be positive in the coming year? And then a separate question, Dave, Nadine. Well, Dave, in your opening remarks, you talked about paying $6 billion of taxes in this past fiscal year makes me think about the liberal proposal to introduce the surtax on banks and on their Canadian earnings presumably. Have you done any work to quantify the impact of that proposal?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Are expenses a lever, though, but you can't pull because you would have -- I mean, a lot of investment banks would have expanded staffing levels in the past year or 2?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I hear you, but I tend to agree with everything you say, but there may actually be a tax that's imposed nonetheless. Is there a view evaluated the...

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Maybe just can I start there, Nadine, for a second. So call it around 4%, let's just say, expense growth, including inflation. You've talked about the positive operating leverage and a number of times, I think you made reference to higher rates. Can you tell us what is assumed in your budgeting process as far as rates increases next year?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So just -- so that would be the basis of the assumption when you're talking about positive operating leverage, for example, as far as the impact on your margins and spreads?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. And then if I can just clarify one thing with Neil. Neil, mortgage growth. Can you talk to us a little bit about what mortgage spreads were like during the quarter, maybe throughout the quarter compared to prior periods?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And can you quantify some of that for us? Like how were spreads this quarter versus prior quarters? Or any point of reference?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I appreciate that. And if I can just have one last question. If I look historically at the total bank level, your RWA growth has been, call it, mid-single digits, sometimes 6%, sometimes 3%. But let's call it in that 4% to 5%. This year was obviously on a full year basis lower, although you had some growth in the fourth quarter. If I think about next year, are you -- can you give us any guidance as to how you expect given the business plans that you have, how that RWA is going to trend? Is it going to revert back to that mid-single digit? Or could there be a year of catch-up where it could be more like 10% given that you hardly had any growth this year?