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Royal Bank of Canada
Ian MacKayExecutive Vice President, Corporate TreasuryRoyal Bank of Canada
JPMorgan Financial Services Conference for Fixed-Income InvestorsNew York, Tuesday, March 2, 2004
Thank you for this opportunity to speak today about Royal Bank of Canada. I’d like to note to the audience that our recently released Q1/04 press release is available outside this room and that the focus of this presentation is on our full-year fiscal 2003 results
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Caution regarding forward-looking statements
From time to time, we make written and oral forward-looking statements, included in this presentation, in other filings with Canadian regulators or the U.S. Securities and Exchange Commission, in reports to shareholders and in other communications, which are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements with respect to our objectives for 2004, and the medium and long terms, and strategies to achieve those objectives, as well as statements with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. The words “may,” “could,” “should,” “would,” “suspect,”“outlook,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” and words and expressions of similar import are intended to identify forward-looking statements.By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause actual results to differ materiallyfrom the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the strength of the Canadian economy in general and the strength of the local economies within Canada in which we conduct operations; the strength of the United States economy and the economies of other nations in which we conduct significant operations; the effects of changes in monetary and fiscal policy, including changes in interest rate policies of the Bank of Canada and the Board of Governors of the Federal Reserve System in the United States; changes in trade policy; the effects of competition in the markets in which we operate; inflation; capital marketand currency market fluctuations; the timely development and introduction of new products and services in receptive markets; the impact of changes in the laws and regulations regulating financial services (including banking, insurance and securities); changes in tax laws; technological changes; our ability to complete strategic acquisitions and to integrate acquisitions; unexpected judicial or regulatory proceedings; unexpected changes in consumer spending and saving habits; the possible impact on our businesses of international conflicts and other developments including those relating to the war on terrorism; and our anticipation of and success in managing the risks implicated by the foregoing.We caution that the foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. We do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on our behalf.
At the advice of our legal counsel, our first slide is a safe harbor statement
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Company background
Founded in 1864 as the Merchant’s BankToday a major diversified financial services groupLeading positions in key marketsStrong credit ratings (Aa2/AA-/AA)Largest Canadian financial institution. As at Oct. 31, 2003:� Total assets of US$313 billion� Tier 1 ratio of 9.7%� Total capital ratio of 12.8%
Cdn GAAP
For those of you that may not be aware of RBC’s background:
• Founded in 1864 as the Merchant’s Bank• Today a major diversified financial services group• Leading positions in key markets• Strong credit ratings (Aa2/AA-/AA)• Largest Canadian financial institution. As at Oct. 31, 2003:
� Total assets of US$313 billion� Tier 1 ratio of 9.7%� Total capital ratio of 12.8%
• Tier 1 ratio as of Q1’04 was 9.3%
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Canada’s financial services industry
Mature, highly competitive industryIntegrated financial services since 1980s� banking� investment banking� brokerage (full service and discount)� money management� trust � insurance
Long history of nationwide bankingHighly efficient clearing system
Canada’s financial services industry is a mature and highly competitive industry:
• Integrated financial services since 1980s� banking� investment banking� brokerage (full service and discount)� money management� trust � insurance
• Long history of nationwide banking• Highly efficient clearing system
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1. Royal Bank of Canada $32.1
2. Bank of Nova Scotia $25.6
3. Toronto-Dominion Bank $21.9
4. Bank of Montreal $20.2
5. Canadian Imperial Bank of Commerce $18.6
Largest Canadian bank in market capitalization
As at February 26, 2004 (US$ billions)
Source: Bloomberg.
We are the largest bank in Canada in market capitalization and this reflects our leadership in most Canadian businesses. We have #1 or #2 market positions in virtually all of our businesses and are committed to retaining our strong positions, particularly in retail businesses, which account for a sizeable share of our total earnings
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Credit rating of the 10 largest North American banks in market capitalization(Rank order by Moody’s rating)
Moody’s S&PCitigroup Aa1 AA-Wells Fargo Aa1 AA-Royal Bank of Canada Aa2 AA-Fifth Third (P) Aa2 AA-Bank of America Aa2 A+Bank One Aa3 AUS Bancorp Aa3 A+Wachovia Aa3 AJP Morgan Chase A1 A+FleetBoston A1 A
Strong debt ratings compared to large North American peers
(P) = Provisional rating.
Strong debt ratings compared to large North American peers:
• It is in recognition of our strong franchise and performance that rating agencies have accorded us high debt ratings when compared to the 10 largest banks in North America in market value. Our credit ratings are a competitive advantage, which we do not want to compromise
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A financial services company diversified by business line and…
U.S. GAAP
Personal & Commercial
Banking51%
Corporate &Investment
Banking16%
WealthManagement
14% Insurance8%
TransactionProcessing
6%
Other5%
2003 net income contribution
A financial services company diversified by business line and…
• Over the past five years, we’ve significantly restructured our businesses –taking full-service brokerage out of the capital markets business and creating our wealth management division and integrating the corporate banking business with investment banking to form RBC Capital Markets. Insurance was separated from personal and commercial financial services and built into a core business. Transaction processing, which consists of institutional & investor services, financial institutions and treasury management & trade, was formed as the custody operations were taken out of wealth management and merged with other processing businesses. And while personal and commercial banking was not restructured from a divisional perspective, our distribution channels were significantly changed and our service delivery and processing activities consolidated
• This restructuring has allowed us to better manage and grow our various businesses, ensure further diversification and more transparent disclosure of performance. You’ll note that approximately one-quarter of our earnings are from asset quality-immune businesses – wealth management, insurance and transaction processing. And in personal and commercial banking and corporate and investment banking, an increased focus has been placed on fee-based businesses. Due to planned reductions of risk-weighted assets, corporate and investment banking’s contribution has declined over the past five years
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…by geography
Net income as % of total (2003)
U.S. GAAP
Canada
U.S.
Otherinternational
69% 13%
18%
Revenue as % of total (2003)
Canada
U.S.
Otherinternational
61% 27%
12%
… by geography:
• Our geographical diversification has also helped support our earnings stream
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Strategic priorities
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Strategic priorities:
• We have four key strategic priorities. They are: � Strong fundamentals� Superior client experience� Cross-enterprise leverage, meaning leveraging the capabilities of our
various platforms & functions to realize cost and revenue synergies, and
� North American expansion
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91 Based on Canadian GAAP financial information.
Financial performance vs. objectives
U.S. GAAP
2003 objectives 2003 performance 2004 objectives
EPS growth 10 - 15% 8% 10 – 15%
ROE 17 - 19% 17% 17 – 19%
Revenue growth 5 - 8% (1)% 5 – 8%
Expense growth Expense growth Expense growth nil Expense growth< revenue growth vs. revenue growth of (1)% < revenue growth
Specific provision ratio1 0.45 - 0.55% 0.33% 0.35 - 0.45%
Capital management1 Maintain strong 9.7% Tier 1 capital ratio Maintain strongcapital ratios 12.8% Total capital ratio capital ratios
vs. medium-term goals of 8-8.5%and 11-12%, respectively
Dividend payout ratio 35 - 45% 38% 40 – 50%
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Financial performance versus objectives:• We had a solid year in 2003, reporting net income of $3.04 billion, up 5 per cent from 2002, and
diluted earnings per share of $4.43, up 8 per cent. We achieved these results despite ongoing weakness in the North American economies and a very tough capital markets environment during the first six months of the year. Our goal is to maintain financial performance in the top quartile of North American financial companies and to meet or exceed our own objectives. As shown on slide 9, our performance this past year was strong in the areas of ROE, portfolio quality and capital ratios, with ROE in line with the 17 to 19 per cent target, the provision for credit losses ratio below the target range, and capital ratios above our medium-term goals
• However, expenses were unchanged while revenue growth was dampened by capital markets softness during the first six months of last fiscal year and the significant strengthening of the Canadian dollar, which lowered the translated value of U.S. dollar-denominated revenues by approximately $500 million
• Our common shares closed the year at $63.48, up 17 per cent from a year ago. This growth was achieved over a strong base, as we were fairly unique among the large Canadian banks in sustaining solid loan quality and financial and share price performance over the 2001 to 2002 period. Accordingly, as the industry’s loan quality improved in 2003, the S&P/TSX Composite Banks Index rose more than our shares did. We also increased dividends paid per common share by 13 per cent this past year
• Our objectives for 2004 are similar to those in place in 2003, with the exception of the specific provision for credit losses goal, which we are lowering to .35 to .45 per cent to reflect the improved credit markets environment, bringing it in line with our medium-term goal. We have not made any changes to our medium-term goals
• Revenue growth for Q1’04 was (3)% from a year ago vs. (1)% in fiscal 2003 and expenses declined by 9% in Q1’04 from a year ago vs. unchanged in fiscal 2003. We increased our dividend payout ratio goal in Q1’04 to a range of 40 to 50 per cent from the earlier goal of 35 to 45 per cent.
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Key initiatives of 2003
Maintaining financial performance� Improved capital ratios� Lowered specific provisions ratio reflects improved loan quality
Delivering superior client experience� Launched a new problem resolution process in RBC Royal Bank� Introduced digital imaging technology for tracing checks
Working across our businesses and functions to foster growth� Introduced RBC Snowbird Package for Canadians who vacation and
live in the Southern U.S.� Ongoing efficiency and effectiveness efforts focusing on duplication
and role clarity between businesses and functions
Enhancing U.S operations� Disciplined approach to acquisitions in 2003� 2003 net income from U.S. operations was US$265 million, up from
US$133 million in 2002U.S. GAAP
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Beyond financial performance, we managed to make considerable progress on our key initiatives in 2003:
• Maintaining financial performance� Improved capital ratios� Lowered specific provisions ratio reflects improved loan quality
• Delivering superior client experience� Launched a new problem resolution process in RBC Royal Bank� Introduced digital imaging technology for tracing checks
• Working across our businesses and functions to foster growth� Introduced RBC Snowbird Package for Canadians who vacation and
live in the Southern U.S.� Ongoing efficiency and effectiveness efforts focusing on duplication
and role clarity between businesses and functions• Enhancing U.S operations
� Disciplined approach to acquisitions in 2003� 2003 net income from U.S. operations was US$265 million, up from
US$133 million in 2002
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Strong credit culture
Cdn GAAP
Lowest gross impaired loan ratio1
1 Gross impaired loans as a percentage of total gross loans and bankers’ acceptances.
-17
-15
27
37
55
0.98
1.01
1.53
0.58
0.75
0.81
0.86
1.80
0.95
1.30
RBC
CIBC
BNS
TD
BMO
Change (bp)Q4/99 (%)Q4/03 (%)
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
At RBC we have had a strong credit culture over the past decade as we learnt a lot from our experiences in the early 90s:
• We have stood out from our Canadian peers since the end of 1999, during which time there was a deteriorating and then improving credit environment. In fact, we’ve recorded the lowest gross impaired loans ratio and the greatest improvement among the large Canadian banks
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Disciplined approach to risk management
Credit quality in Canadian consumer loan portfolio remains stableLeast volatile loan loss experience of the Canadian banksRecent examples of risk management initiatives:� US$16 mm invested to improve Scoring capabilities by developing a
Customer Risk Indicator (a measurement that determines the cash flow stability of our clients)
� US$125 mm in PCL savings and/or revenue growth expected over 5 years
� US$1 mm invested in systems for early detection of potential bankrupts
� targeting net PCL reduction of US$4 mm per year
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Our disciplined approach to risk management is also reflected inother aspects:
• Credit quality in Canadian consumer loan portfolio remains stable
• Least volatile loan loss experience of the Canadian banks• Recent examples of risk management initiatives:
� US$16 mm invested to improve Scoring capabilities by developing a Customer Risk Indicator (a measurement that determines the cash flow stability of our clients)
� US$125 mm in PCL savings and/or revenue growth expected over 5 years
� US$1 mm invested in systems for early detection of potential bankrupts
� targeting net PCL reduction of US$4 mm per year
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Well-diversified loan portfolio1 across asset classes and industry sectors reduces credit risk
Commercial mortgages1%
Consumer goods1%
Industrial products1%
Agriculture2%
Government1%
Forest products1%
Transportation and environmental
1%
Information technology and media
1%Commercial real estate
4%
Energy1%
Small business5%
Financial services4%
Other4%
Reverse repurchase agreements
17%Other consumer loans
18%
Residential mortgages37%
Automotive1%
Bus & Gov't28%
U.S. GAAP1 Diversification of loan portfolio based on percentage of total loan outstandings as at October 31, 2003.
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Loan outstandings mix(%)
Well-diversified loan portfolio across asset classes and industry sectors, which reduces credit risk:
• 55% of our loans are to our 12 million retail customers, which are well diversified geographically. The high proportion of mortgages may be surprising to those of you that are not familiar with the Canadian financial services industry. In Canada, it is more common for financial institutions to hold their mortgages on balance sheet and they have historically exhibited a low level of loan losses. We are the lead bank in Canada in residential mortgage market share and have leveraged this position to cross-sell other financial services products, such as creditor life insurance
• Business and government loans are only 28% of our total loans, and the largest individual categories are small business at 5%, commercial real estate and financial services each at 4% of total loans. As you can see we are well diversified across a variety of categories.
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Since 1999, reduced total outstandings of our corporate loan portfolio by 56%
17.4 14.9 12.3
8.07.3
7.3
18.821.7
7.88.8
1999 2000 2001 2002 2003
Down 56%
DomesticDomesticDown 20%
International
Down 77%
U.S. GAAP
30.526.6 25.4
22.2
Corporate loan portfolio (Including L/Cs and guarantees, US$ billions)
19.6
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Since 1999, we’ve reduced total outstandings of our corporate loan portfolio by 56%, reflecting a deliberate effort to prune corporate loan exposures, particularly outside Canada. This trimming of the portfolio has had positive implications for the risk profile of the corporate loan portfolio and has additionally enhanced its returns
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Strengthened capital ratios
11.812.7 12.8
8.18.6 8.7
12.011.2
9.79.3
1999 2000 2001 2002 2003
Total Capital
Tier 1 Capital
3-5 yr target: 11-12% 2
3-5 yr target: 8- 8.5% 2
Cdn GAAP1 Capital as a percentage of total risk adjusted assets as defined by OSFI (Canadian regulator).2 RBC medium term targets.
Capital ratios (%, as at each fiscal year-end)
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
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We managed to strengthen our capital ratios quite considerably, despite the downturn in the credit and capital markets over the past few years
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16 U.S. GAAP
Track record of consistent revenue growth
Gross revenues(US$ billions)
$7.4
$8.6
$10.3$10.8
$11.8
$7.2
1998 1999 2000 2001 2002 2003
5-Year CAGR 10.4%
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
As you can see on this slide, we have a track record of consistent revenue growth…
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17 U.S. GAAP
Track record of growing the bottom line
Net income after tax (US$ billions)
$1.2 $1.2
$1.5 $1.6
$1.8
$2.1
1998 1999 2000 2001 2002 2003
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
5-Year CAGR 11.7%
…growing the bottom line…
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Track record of creating value
$14.2 $13.3
$19.1 $19.9
$23.2
$31.6
1998 1999 2000 2001 2002 2003
Market capitalization (US$ billions)
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
5-Year CAGR 17.3%
… creating value, and …
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19 U.S. GAAP
Track record of growing our business
Total assets (US$ billions)
$182.2 $185.9 $193.1
$228.3$245.1
$312.6
1998 1999 2000 2001 2002 2003
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
5-Year CAGR 11.4%
… growing our business
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Lower earnings volatility than the vast majority of North American peers
4%15% 15%
23% 24% 25% 26% 27% 30% 31% 32% 33% 34%
53%
74% 75% 76%82%
103%
128%133%
STI
RY
NT
RS
NA
BA
C
FITB
NC
C
BN
S
BK
BB&
T
USB
BM
O
WFC
CIB
C
PNC
KE
Y
JPM
FBF
ON
E
TD
WB
U.S GAAP
1 Percent standard deviation from mean Net Income over 16 quarters ended October 31, 2003 for Canadian banks and ended December 31, 2003 for U.S. banks. U.S. GAAP, except Canadian GAAP for Canadian peers. Source of Net Income figures: Bloomberg.
Net income volatility1
(%)
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
We have experienced lower earnings volatility than the vast majority of our North American peers, which reflects the relative stability of our earnings stream and the effective diversification we have achieved through our business and geographical mix
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Earning the right to be our clients’ first choice
In process of transforming our processes to be more simple, more flexible and efficient� Specialized client care team created to resolve more complex client
problems
Working hard to earn more of our clients’ business by tailoring solutions that include the products of more than one business segment� RBC Referrals program brings access to services and products from
all RBC companies to clients� Created RBC Investments Financial Planning in Nov. 01
� Differentiated by addressing clients’ investments, credit and banking needs
� Has resulted in RBC Mutual Funds gaining number 1 market share position in Canada
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Earning the right to be our clients’ first choice:
• This new priority is consistent with our new vision statement – “Always earning the right to be our clients’ first choice” and it reinforces our commitment to client satisfaction, retention and growing our share of our clients’ business. This priority and our vision statement are extremely important within RBC FG – particularly in motivating our front-line employees to deliver an excellent client experience that builds profitable relationships and lasting loyalty.
• In process of transforming our processes to be more simple, more flexible and efficient
� Specialized client care team created to resolve more complex client problems
• Working hard to earn more of our clients’ business by tailoring solutions that include the products of more than one business segment
� RBC Referrals program brings access to services and products from all RBC companies to clients
� Created RBC Investments Financial Planning in Nov. 01� Differentiated by addressing clients’ investments, credit and
banking needs� Has resulted in RBC Mutual Funds gaining number 1 market
share position in Canada
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Increasing our focus on revenue and client-oriented initiatives
RBC Financial Group ideally positioned:� diversified business mix� strong market positions� sizeable customer base (12+ million personal, business & public sector
clients across North America and some 30 other countries)� strengths in Customer Relationship Management
Spending substantial time and effort to develop ways to encourage clients to use the products and services of more than one platform� RBC Insurance and RBC Royal Bank created the Investment Credit
Facility program for Canadian clients – allows high net worth policyholders to borrow against the collateral in their policies
� RBC Investments and RBC Capital Markets formed the Emerging Markets Fixed Income Group – providing clients a wider range of global fixed income products and advisory services
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
Increasing our focus on revenue and client-oriented initiatives:
• RBC Financial Group ideally positioned:� diversified business mix� strong market positions� sizeable customer base (12+ million personal, business & public
sector clients across North America and some 30 other countries)� strengths in Customer Relationship Management
• Spending substantial time and effort to develop ways to encourage clients to use the products and services of more than one platform
� RBC Insurance and RBC Royal Bank created the Investment Credit Facility program for Canadian clients – allows high net worth policyholders to borrow against the collateral in their policies
� RBC Investments and RBC Capital Markets formed the Emerging Markets Fixed Income Group – providing clients a wider range of global fixed income products and advisory services
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U.S. expansion strategyExpanded in businesses where we have competitive advantage Laid the foundation in businesses we want to grow in� RBC Centura forms the foundation for personal & commercial
banking in the Southeastern U.S. – focus on de novo branch extension� RBC Dain Rauscher is the eighth largest full-service brokerage in the
U.S., with approximately 1,750 financial consultants� RBC Insurance has acquired businesses in life insurance, wealth
management and has developed a travel insurance offering
Small acquisition, organic growth, not “bet-the-bank” strategyNear-term priority is on:� Meeting operating targets � Adopting best practices to enhance revenues, efficiency and
profitability
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
U.S. expansion strategy:
• Expanded in businesses where we have competitive advantage • Laid the foundation in businesses we want to grow in
� RBC Centura forms the foundation for personal & commercial banking in the Southeastern U.S. – focus on de novo branch extension
� RBC Dain Rauscher is the eighth largest full-service brokerage in the U.S., with approximately 1,750 financial consultants
� RBC Insurance has acquired businesses in life insurance, wealth management and has developed a travel insurance offering
• Small acquisition, organic growth, not “bet-the-bank” strategy• Near-term priority is on:
� Meeting operating targets � Adopting best practices to enhance revenues, efficiency and
profitability
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2000 revenues
Canadian83%
Other Int’l10%
Canadian61%
U.S. proportion of revenues growing
2003 revenues
U.S. 7%
U.S. GAAP
OtherInt’l12%
U.S. 27%
1. Strong fundamentals
2. Superior client experience
3. Cross-enterprise leverage
4. North American expansion
A reflection of our expansion strategy is the fact that the U.S. proportion of revenues is growing and has more than tripled over the last 4 years
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Our global funding strategy
Active borrower in a variety of markets� Established presence in the institutional and retail markets of Canada,
Europe and Asia� Benchmark transactions in several currencies� Frequent MTN borrower in private placements & structured products� Annual global issuance volume in term markets has ranged from
US$3.5 billion to US$6.1 billion� Total outstanding subdebt and term funding is US$13.7 billion
Established issuance programs� U.S. Registered Shelf - US$4 billion � EMTN program - US$14 billion � Canadian MTN program - C$4 billion
Our global funding strategy is:
• Active borrower in a variety of markets� Established presence in the institutional and retail markets of Canada,
Europe and Asia� Benchmark transactions in several currencies� Frequent MTN borrower in private placements & structured products� Annual global issuance volume in term markets has ranged from
US$3.5 billion to US$6.1 billion� Total outstanding subdebt and term funding is US$13.7 billion
• Established issuance programs� U.S. Registered Shelf - US$4 billion � EMTN program - US$14 billion � Canadian MTN program - C$4 billion
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Our U.S. funding strategy
Existing funding infrastructure� Well established borrower in the short dated CD market through our
NY Branch with US$10 billion currently outstanding� Active issuer of CP with US$2.5 billion currently outstanding� RBC Centura is an established borrower in CD market
New commitment to U.S. market � Established a U.S. Registered Shelf and 10b-5 due diligence in 2003� Issued US$1 billion into the 2a-7 extendible market in 2003� Will be opportunistic in accessing the term markets
Our U.S. funding strategy is:
• Existing funding infrastructure� Well established borrower in the short dated CD market through our NY
Branch with US$10 billion currently outstanding� Active issuer of CP with US$2.5 billion currently outstanding� RBC Centura is an established borrower in CD market
• New commitment to U.S. market � Established a U.S. Registered Shelf and 10b-5 due diligence in 2003� Issued US$1 billion into the 2a-7 extendible market in 2003� Will be opportunistic in accessing the term markets
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Conclusion
Will maintain clear focus on investors through unwavering commitment to:� ratings stability� disciplined growth� diversification� business leadership� superior returns
In conclusion, our management team is united in its efforts to grow the company in a disciplined manner. We are committed to achieving superior returns for debt investors by maintaining ratings stability, a diversified business base, and a leadership position in all lines of business:
• Thank you for your attention, and I’ll now take your questions.
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Questions & Answers