Royal Bank of Canada at RBC Capital Markets Canadian Bank CEO Conference Transcript

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

Question: Darko Mihelic - RBC Capital - Analyst : So, Dave, with that out of the way, as I mentioned earlier, it was a pretty big year for bank stocks. Your stock did quite well. You closed the HSBC acquisition, attained synergies, really a strong year. And so I get a lot of questions in terms of what do you do for follow-up in 2025? And a lot of the questions inevitably lead towards what are your intentions with respect to capital in the US market? There's a lot of debate going on that there's going to be some M&A and there's some change possibly coming in the US. So maybe just to kick off, maybe you can provide a bit of an overview of what you have in the US and what you're really attempting to accomplish in '25 and '26. And what are the odds that we see some capital deployed there inorganically?

Question: Darko Mihelic - RBC Capital - Analyst : So sticking with that, so that was a great overview of macro and what you intend to do in the organic growth opportunities. So maybe we'll just switch gears and start talking about macro in Canada, whereas I mentioned in my opening remarks, last year, there was quite a big concern that rates weren't going to fall enough to help us on the mortgage side. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 1:40PM, RY.TO - Royal Bank of Canada at RBC Capital Markets Canadian Bank CEO Conference Here we are, as we sit here today, we've had some rate drops. The outlook looks different. So I wondered if you could maybe talk a little bit about the great renewal, as we're starting to call it, in Canada and how you see that developing over 2025 and into '26? And if there's anything you could share with us in terms of how your outlook has changed on the mortgage market and what the opportunities are outside of that?

Question: Darko Mihelic - RBC Capital - Analyst : Yes, there's a lot of detail there. I'm still processing. And you're going to be -- obviously, there's going to be -- as you mentioned, this is a bigger cohort than normal. There will be a lot of discussions going on and other opportunities, I suppose, to work with your clients?

Question: Darko Mihelic - RBC Capital - Analyst : And you touched on NII there, but you were a bit focused there on the mortgage book. What about just a general view on the NII because as rates come down, you would figure there'd be some pressure? And I realize there's a bit of the tractor, maybe you can just touch on --

Question: Darko Mihelic - RBC Capital - Analyst : So we've got good NII growth. And I think you just touched on it earlier. Maybe you can just really quickly walk us through your view on the cap markets pipeline and how you see that developing for 2025? Should we be expecting -- I mean, I've heard things are developing better across both jurisdictions. But maybe you can give us a sense of where you see the strength, specifically in cap markets and even wealth?

Question: Darko Mihelic - RBC Capital - Analyst : And so is that possibly -- one of the things that struck me is different for Royal at year end was you sort of stuck to a high ROE target despite the higher denominator. I know cap markets has a generally lower ROE. Is that part and parcel of sticking to that higher ROE target? Or what is it that gives us -- maybe you can walk us through your ROE aspirations, how you get there and some of the risks to it and maybe some of the opportunities to exceed?

Question: Darko Mihelic - RBC Capital - Analyst : And in your discussion there, you didn't really talk about the NCIB. So what are your intentions on the NCIB?

Question: Darko Mihelic - RBC Capital - Analyst : So I wanted to take this opportunity to talk about something else that's come up last year could be impactful as we go forward. And as I think of it, it was quite a year where anti-money laundering became quite topical. Could become very interesting this year as well as Canada goes through an audit. Your company is rather large, traverses a lot of different geographies. So I wondered if you could maybe just spend a few minutes here on your overarching views on AML, where you sit, but also more importantly, where you think this could go and what's necessary for the system? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 1:40PM, RY.TO - Royal Bank of Canada at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital - Analyst : I'm going to take a few questions from the audience here because we've got 13 questions, if you can believe it. Okay. So this one, top question uploaded. In light of recent departures of major US banks from global climate alliances like the Net Zero Banking Alliance, how do you see it evolving in Canada?

Question: Darko Mihelic - RBC Capital - Analyst : Yes. The question is: how do you see it evolving in Canada or for Canadian banks? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 1:40PM, RY.TO - Royal Bank of Canada at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital - Analyst : Another question that's been uploaded quite a bit is: what are your thoughts on US prime brokerage? Is this a space that you're excited about?

Question: Darko Mihelic - RBC Capital - Analyst : And is that opportunity going to be all organic? Could you just work your way into it? It's nothing that wouldn't necessarily --

Question: Darko Mihelic - RBC Capital - Analyst : And what about -- just there's a general question. I think it's kind of interesting. How are you thinking about the Trump tariffs or the threat of tariffs, I suppose, you're still not really in office, but -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 07, 2025 / 1:40PM, RY.TO - Royal Bank of Canada at RBC Capital Markets Canadian Bank CEO Conference

Question: Darko Mihelic - RBC Capital - Analyst : Okay. So we're coming up to the end of our time together. And as always, I'd like to throw it over to the CEO for the last word. So Dave, I'd love to hear what you think the key messages for investors for 2025?

Question: Darko Mihelic - RBC Capital - Analyst : All right. Thank you very much for the first session. Great.