ROYAL BANK OF CANADA REPORTS FOURTH QUARTER AND RECORD 2013 RESULTS To view the PDF of this Earnings Release, please click on the following link: http://www.rns-pdf.londonstockexchange.com/rns/9784U_-2013-12-7.pdf All amounts are in Canadian dollars and are based on our audited Annual and unaudited Interim Consolidated Financial Statements for the year and quarter ended October 31, 2013 and related notes prepared in accordance with International Financial Reporting Standards (IFRS). Our 2013 Annual Report (which includes our audited annual Consolidated Financial Statements and accompanying Management's Discussion & Analysis), our 2013 Annual Information Form and our Supplementary Financial Information are available on our website at rbc.com/investorrelations (http://www.rbc.com/investorrelations). TORONTO, December 5, 2013 - Royal Bank of Canada (RY on TSX and NYSE) today reported record net income of $8.4 billion for the year ended October 31, 2013, up $890 million or 12% from the prior year. Our results were driven by record earnings in Personal & Commercial Banking, Wealth Management and Capital Markets, as well as higher earnings in Investor & Treasury Services. Net income for the fourth quarter ended October 31, 2013 was $2.1 billion, up 11% from the prior year reflecting strong growth in Capital Markets and Personal & Commercial Banking, and higher earnings in Investor & Treasury Services. "With solid fourth quarter earnings of more than $2 billion, RBC delivered record earnings of $8.4 billion in 2013. These results build on our financial strength, diversified business mix and ability to serve clients across many products, markets and geographies," said Gordon M. Nixon, RBC President and CEO. "We believe our domestic leadership and focus on global growth position us well to deliver sustainable earnings growth and build long-term value." 2013 compared to 2012 Q4 2013 compared to Q4 2012 - Net income of $8,429 million - Net income of $2,119 (up 12% from $7,539 million) million (up 11% from $1,911 - Diluted earnings per share million) (EPS) of $5.54 (up $0.61 from - Diluted EPS of $1.40 (up $4.93) $0.15 from $1.25) - Return on common equity (ROE) - ROE of 18.6% (down from of 19.4% (up from 19.3%) 18.7%) - Basel III Common Equity Tier 1 (CET1) ratio of 9.6% 2013 Performance Earnings of $8,429 million were up $890 million, or 12% from the prior year. This reflects record earnings in Personal & Commercial Banking, up 9%, driven by solid volume growth in Canadian Banking along with improved credit quality; record earnings in Wealth Management, up 18%, due to higher average fee-based client assets and higher transaction volumes; and record earnings in Capital Markets, up 8%, reflecting strong growth in our corporate and investment banking businesses, partially offset by lower trading revenue. This increase was also due to higher earnings in Investor & Treasury Services driven by improved business performance and a loss in the prior year related to the acquisition of the remaining 50% interest of RBC Dexia Investor Services. Our Insurance earnings were down 16% largely reflecting a charge of $160 million ($118 million after-tax) as a result of proposed legislation in Canada, which would affect the policyholders' tax treatment of certain individual life insurance policies(). Q4 2013 Performance Earnings of $2,119 million were up $208 million or 11% from the prior year, driven by strong growth in our corporate and investment banking businesses, higher earnings in Canadian Banking reflecting solid volume growth of 7%, higher average fee-based client assets in Wealth Management and improved business performance in Investor Services. A lower effective tax rate, largely reflecting a $124 million income tax adjustment related to prior years, and lower provisions for credit losses (PCL) also contributed to the increase. These factors were partially offset by a charge of $118 million after-tax in Insurance related to the proposed legislation in Canada as noted above. Earnings were down $185 million or 8% from the prior quarter, as strong growth in our investment banking businesses and volume growth across all our Canadian Banking businesses were more than offset by the charge in Insurance as noted above, higher PCL, and moderate spread compression. Q4 2013 Business Segment Performance Personal & Commercial Banking net income of $1,081 million increased $47 million or 5% from last year, largely due to earnings growth of 7% in Canadian Banking reflecting solid volume growth of 7% which includes the contribution of our Ally Canada acquisition, and lower PCL in our Canadian portfolios. Compared to last quarter, net income decreased $99 million or 8%, as higher volume growth across all our Canadian businesses was more than offset by higher PCL in our Canadian and Caribbean banking portfolios, a provision related to post-employment benefits and restructuring charges in the Caribbean, and moderate spread compression. Wealth Management net income of $205 million was relatively flat compared to the prior year, as higher average fee-based client _________________________ () As previously announced on November 14, 2013. For further information about the charge, refer to the Non-GAAP measures section on page 10 of this Earnings Release. assets, reflecting net sales and capital appreciation were more than offset by higher PCL on a few accounts, and lower transaction volumes. Compared to the prior quarter, net income decreased $31 million or 13% as higher average fee -based client assets were more than offset by higher PCL and a higher effective tax rate. Insurance net income of $107 million decreased $87 million or 45% from last year, and $53 million or 33% from the last quarter, primarily due to the charge of $118 million after-tax related to the proposed legislation in Canada as noted above. Excluding this charge, earnings were up $31 million or 16% from the prior year, and up $65 million or 41%1) from the prior quarter, mainly due to favourable actuarial adjustments and a gain on the sale of our Canadian travel agency insurance business. Investor & Treasury Services net income of $92 million increased $20 million or 28% compared to the prior year, largely due to improved business performance in Investor Services and continued benefits from our ongoing focus on efficiency management activities. Compared to the prior quarter, net income decreased $12 million or 12% due to lower securities lending as the prior quarter was favourably impacted by seasonally higher securities lending. Capital Markets net income of $472 million increased $62 million or 15% from last year, mainly due to strong growth in our corporate and investment banking businesses primarily from loan syndication in the U.S., the favourable impact of a stronger U.S. dollar, and lower PCL, partially offset by higher litigation provisions and related legal costs. Compared to the prior quarter, net income increased $84 million or 22%, mainly due to strong growth in loan syndication activities and higher debt origination. Higher trading revenue also contributed to the increase. These factors were partially offset by higher litigation provisions and related legal costs along with higher variable compensation reflecting improved results. Corporate Support net income was $162 million largely reflecting net favourable tax adjustments including a $124 million income tax adjustment related to prior years, and asset/liability management activities. Capital - As at October 31, 2013, Basel III CET1 ratio was 9.6%, up 40 basis points (bps) compared to last quarter, driven by solid internal capital generation. Credit Quality - Total PCL of $335 million decreased $27 million or 7% from a year ago, mainly due to lower PCL in Capital Markets and Canadian Banking business lending and credit card portfolios. Total PCL increased $68 million from the prior quarter, mainly due to higher PCL in both our Canadian Banking and Caribbean portfolios and PCL on a few accounts in Wealth Management. PCL ratio of 0.32% decreased 5 bps compared to the prior year and increased 6 bps compared to last quarter. ____________________________________ (1) Results excluding the charge related to proposed legislation in Canada affecting certain individual life insurance policies are non-GAAP measures. For further information, including a reconciliation, refer to the Non-GAAP measures section on page 10 of this Earnings Release.