Royal Bank of Canada Earnings Lift Dividend

Royal Bank of Canada reported fiscal 2025 earnings on Dec. 3, 2025, and the board approved a dividend increase after a record quarter, citing stronger net interest income and gains in Wealth Management and Capital Markets.

Earnings Growth and Drivers

RBC posted fiscal-year net income of $20.4 billion, a 25% increase from a year earlier, with adjusted net income rising 20% to $20.9 billion. Diluted earnings per share reached $14.07, up 25%, while adjusted diluted EPS rose 19% to $14.43. Total revenue climbed 11% year over year, driven by a 13% increase in net interest income. The net interest margin expanded 22 basis points to 2.63%, rising 2 basis points sequentially, the company said in a press release.

The fourth quarter produced record net income of C$5.4 billion, up 29% from the prior-year period, with adjusted net income of C$5.6 billion. Quarterly revenue rose 7%, and net interest income increased 8% year over year. Average volumes grew about 4%, with loans up 5% and deposits up 3%. Wealth Management and Capital Markets delivered notably strong performance throughout the period.

Capital Position, Dividend Increase, and Outlook

RBC maintained a strong capital position, with a common equity Tier 1 capital ratio of 13.5%. The bank set a return on equity (ROE) target above 17% for fiscal 2026, according to investor-relations materials.

The board declared a 6% dividend increase to $1.64 per share, payable on or after Feb. 24, 2026, with a record date of Jan. 26, 2026. President Dave McKay said, "Results that continues to define our success."

Analyst calculations show trailing and forward price-to-earnings multiples of 15.9× and 15.4×, about a 39% premium to the sector, with limited upside given an expected revenue growth rate near 5.4%. This valuation comparison frames investor questions about whether the stock’s current price fully reflects the bank’s growth and return targets.