Royal Bank of Canada reports $10.5B earnings for 2016

In his annual message to shareholders and staff he said, “As our clients increasingly move online, we are quickly transforming our business to build a truly digitally-enabled relationship bank. This focus on digitalisation will ultimately help will ultimately help us realise our vision to be among the world’s most trusted and successful financial institution.”

The CEO said we were living “in an uncertain and changing world”. He pointed out that 2016 was a challenging year for the banking industry, from a subdued macroeconomic outlook to political and technological disruption.

But he said, “Amid this uncertainty, RBC moves with a clear purpose, helping clients thrive and communities prosper. This is our north star that guides everything that we do. Our performance-focused and principles-led strategy enables us to navigate with conviction, to spot and create opportunities for our clients and ultimately to create sustainable value for shareholders.”

McKay added, “Our 2016 results demonstrate that this strategy continues to deliver success. Our record earnings of $10.5 billion were up four percent from last year.” He said the results which were delivered against the backdrop of “a challenging economic environment,” manifested how RBC continues to bring its strengths and capabilities to bear on things like “strong client relationships and an internationally respected brand together with a client-focused culture and highly-engaged employees”.

He also said the bank was well positioned given the strength of its diversification by business and by geography and its ability to effectively manage costs. He added that the bank’s strategic goals remain unchanged and it wants to be “the undisputed financial services leader,” the preferred partner to corporate, institutional and high net worth clients, as well as a leading financial services partner valued for its expertise in select global financial centres internationally.

Speaking specifically about sustainable growth, Mc Kay said in 2016 RBC maintained its number one or two market positions in all key retail categories and the institution remained the leader in business banking. He said its scale in Canada affords the bank the opportunities to leverage unrivalled digital and data insights and provide clients with an improved experience, leading to increased loyalty and improved profitability, despite the challenging macroeconomic environment.

Although the market is much smaller than that of Canada and the United States, the Caribbean played some small role and has not been left out McKay said, “We’ve continued to strengthen our retail business following our decision to exit non-core regions last year. Wherever we operate, our brand strength, breadth and scale enable us to bring the best we have to offer for the benefit of our clients.”

Praising RBC employees the world over, he said, “Our success this year (2016) would not have been possible without the dedication and professionalism of our colleagues, whose high engagement and client focus continues to drive our results. We will ensure that we evolve for uncertain times and a digital age.

“We are creating a culture that nurtures innovation and collaboration,” he added, “and is increasing fast-paced, adaptive and execution-focused, in order to meet clients’ needs. We are building a better workplace for our colleagues that harnesses diversity and inclusion and where everyone has the opportunity to realise their full potential.”

McKay said he was sure that potential was more likely to be achieved as employees take pride in working for a company that was confident in its role at building a future for clients, their families, their businesses and their communities.

“As a purpose-driven company – and as Canada’s largest corporation by market capitalisation – we understand the important role that we play in addressing societal challenges that could impact our business over time.”

He said with the focus on efficiency RBC is able to invest in reinvestment and technology in a way the others (Financial institutions) can’t. “This innovation will itself drive further efficiency, enabling us to simplify how we work and digitise our operation.” He noted that personal and commercial banking comprised 60 percent of all financial transactions that come through digital and mobile channels, excluding cash withdrawals. The insight derived from these channels helps the bank provide “an exceptional and secure experience” which is available to clients.

McKay said, “In a changing world, I’d like to thank all our clients for putting their trust in RBC. I also want to thank our colleagues whose commitment enable our ongoing success.”