Royal Bank of Canada at Scotiabank Financials Summit Transcript

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

Question: Meny Grauman - Scotia Capital Inc. - Analyst : <_ALACRA_META_ABSTRACT>That's right. We're back here. I wanted to start off by getting you to give me a pep talk about Canada. (laughter) Canadian banking results, your Canadian banking results beat expectations. We saw that as a, I think, a theme across the board. So it's something that's a bigger picture theme. I think, going around Toronto, I think if you speak to people across the country, there's a certain level of malaise out there. Within the market itself, there definitely seems to be as well. If you look at how Canadian bank stocks have underperformed US bank stocks, definitely this view. More negative view of Canada than, it seems, we see in the results themselves. So the question really is, did this surprise you? Did your Canadian banking results in Q3 surprise you? What is really the bull case here for Canada that investors seem to be missing?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : Yeah, I want to get into that. I mean, just going back to what you're saying, so I feel better about the downside risk in Canada, but in terms of seeing growth, especially credit growth, looking ahead, even if the Bank of Canada can engineer a soft landing, is there this bull case that sees expanding demand for credit in Canada?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : And you talked about -- nsort of touching the wholesale business, and that's where I wanted to ask you, given your position, your perspective. I mean, it feels like there's a lot of negativity, particularly on the wholesale side of the business in Canada, maybe particularly on the equity side, lack of IPOs, more companies are going private than they seem to be going public. And so the question that I get a lot is, is there something structural REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 1:35PM, RY.TO - Royal Bank of Canada at Scotiabank Financials Summit going on here? Is it related again to your comments about risk taking? Is there something more fundamental here? Or are you seeing signs that this is just cyclical and it's coming back and we shouldn't get too worried about it?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : I wanted to stick with Canada, talk about the mortgage market. I think you've been very open, outspoken, even you mentioned on the Q3 call, talking about the intense competition in the residential mortgage marketing in Canada, maybe even, I think you might have even used the term historic. So that's severely impacting profitability in this product. So I wanted to understand how you're responding to that and just to get your analysis of what's driving it, what does it mean for the industry. And then maybe an overarching question, given your position in the market, why not just take share and come out the winner on the other end? Why not approach it differently than -- it seems the way you're approaching it is very much focused on profitability. Why not flip it around?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : I want to get to -- hopefully get to a deeper ROE question a little bit later on, but just in terms of following up on what you're talking about in terms of market share versus ROE, is keeping your market share stable sort of the line in the sand for you? Or would you be willing to, if you had to choose between ROE and just keeping your market share from actually dipping --

Question: Meny Grauman - Scotia Capital Inc. - Analyst : So maybe another way to look at it, I was going to ask this in relation to capital, but maybe it fits better here in terms of -- broadly, your gaining share. At some point, does RBC outgrow Canada? Like is there a point here where that scale advantage becomes a disadvantage where you're not really able to grow because of your size?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : You look young, so that's one thing. (laughter)

Question: Meny Grauman - Scotia Capital Inc. - Analyst : I definitely do want to talk about US capital markets. I want to talk about your wealth strategy. But first, maybe in terms of leadership changes, you recently announced new group heads. You split up personal commercial banking, wealth and insurance. So the question is, why did you make these changes? What's the real message for investors here that they should take away from these changes?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : I wanted to talk about capital deployment. I think on the call, you were very clear in terms of accelerated buyback. Long discussion in terms of no interest in doing a big US deal. But I don't know if you have anything to add to that, but I wanted to push back just in terms of -- I guess the question to you is, are you being too negative on the US? And this is a broad question, are we being too negative on the US, especially if the US is on the cusp of another wave of consolidation? Obviously, the biggest banking market in the world, the most developed banking market in the world. You already have very important businesses in that market. Why not be a part of that? Why not get bigger in the US in an inorganic way? Even if it's maybe out of fashion now? Why is it the right decision to not want to go bigger in terms of significant capital deployment?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : We've touched on Canada, the US, I want to talk about the wide strategy in Europe two years since you bought Brewin Dolphin. Relatively small deal, but I'm interested in how that's going. But more broadly, what I'm really interested in is just your ongoing plans for the wealth business in the UK. Do you still see Royal Bank as a consolidator in that market? And I don't think we've heard from you about it in a little bit, so just if you can just update us on that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2024 / 1:35PM, RY.TO - Royal Bank of Canada at Scotiabank Financials Summit

Question: Meny Grauman - Scotia Capital Inc. - Analyst : And maybe just quickly with the short time that we have, just in terms of, again, trying to get back to this key theme of ROE. For a period, you were tracking below your 16%-plus, now we target Q3 inflection point back there. How sustainable is that? And I think maybe we'll leave it as the last question here. How sustainable is that right now?

Question: Meny Grauman - Scotia Capital Inc. - Analyst : With that, I want to thank you so much for being here. Always a great conversation. Thanks.