2013 Management's Discussion and Analysis

| Source: Royal Bank of Canada
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Management's Discussion and Analysis (MD&A) is provided to enable a reader to
assess our results of operations and financial condition for the fiscal year
ended October 31, 2013, compared to the preceding two years. This MD&A should
be read in conjunction with our 2013 Annual Consolidated Financial Statements
and related notes and is dated December 4, 2013. All amounts are in Canadian
dollars, unless otherwise specified, and are based on financial statements
prepared in accordance with International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board (IASB), unless
otherwise noted.Additional information about us, including our 2013 Annual
Information Form, is available free of charge on our website at
rbc.com/investorrelations, on the Canadian Securities Administrators' website
at sedar.com and on the EDGAR section of the United States (U.S.) Securities
and Exchange Commission's (SEC) website at sec.gov.

Table of contents

Overview and outlook                             11
Selected financial and other highlights          11
About Royal Bank of Canada                       12
Vision and strategic goals                       12
Economic and market review and outlook           12
Key corporate events of 2013                     14
Financial performance                            14
Overview                                         14
Business segment results                         18
Results by business segments                     18
How we measure and report our business segments  18
Key performance and non-GAAP measures            19
Personal & Commercial Banking                    21
Wealth Management                                26
Insurance                                        29
Investor & Treasury Services                     32
Capital Markets                                  33
Corporate Support                                36
Quarterly financial information                  37
Fourth quarter 2013 performance                  37
Quarterly results and trend analysis             38
Results by geographic segment                    39
Financial condition                              40
Condensed balance sheets                         40
Off-balance sheet arrangements                   41
Risk management                                  44
Overview                                         44
Enhanced Disclosure Task Force                   44
Top and emerging risks                           44
Enterprise risk management                       46
Credit risk                                      50
Credit quality performance                       58
Market risk                                      60
Liquidity and funding management                 64
Insurance risk                                   73
Regulatory compliance risk                       73
Operational risk                                 74
Strategic risk                                   74
Reputation risk                                  74
Competitive risk                                 74
Overview of other risks                          74
Capital management                               76
Additional financial information                 84
Exposures to selected financial instruments      84
Accounting and control matters                   85
Related party transactions                       90
Supplementary information                        91

  See our Glossary for definitions of terms used throughout this document

Caution regarding forward-looking statements

From time to time, we make written or oral forward-looking statements within the
meaning of certain securities laws, including the "safe harbour" provisions of
the United States Private Securities Litigation Reform Act of 1995 and any
applicable Canadian securities legislation. We may make forward-looking
statements in this 2013 Annual Report, in other filings with Canadian regulators
or the SEC, in other reports to shareholders and in other communications.
Forward-looking statements in this document include, but are not limited to,
statements relating to our financial performance objectives, vision and
strategic goals, the economic and market review and outlook for Canadian, U.S.,
European and global economies, the regulatory environment in which we operate,
the outlook and priorities for each of our business segments, and the risk
environment including our liquidity and funding management. The forward-looking
information contained in this document is presented for the purpose of assisting
the holders of our securities and financial analysts in understanding our
financial position and results of operations as at and for the periods ended on
the dates presented and our financial performance objectives, vision and
strategic goals, and may not be appropriate for other purposes. Forward-looking
statements are typically identified by words such as "believe", "expect",
"foresee", "forecast", "anticipate", "intend", "estimate", "goal", "plan" and
"project" and similar expressions of future or conditional verbs such as "will",
"may", "should", "could" or "would".

By their very nature, forward-looking statements require us to make assumptions
and are subject to inherent risks and uncertainties, which give rise to the
possibility that our predictions, forecasts, projections, expectations or
conclusions will not prove to be accurate, that our assumptions may not be
correct and that our financial performance objectives, vision and strategic
goals will not be achieved. We caution readers not to place undue reliance on
these statements as a number of risk factors could cause our actual results to
differ materially from the expectations expressed in such forward-looking
statements. These factors - many of which are beyond our control and the effects
of which can be difficult to predict - include: credit, market, liquidity and
funding, insurance, regulatory compliance, operational, strategic, reputation
and competitive risks and other risks discussed in the Risk management and
Overview of other risks sections; the impact of regulatory reforms, including
relating to the Basel Committee on Banking Supervision's (BCBS) global standards
for capital and liquidity reform, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and the regulations issued and to be issued thereunder, over-the
-counter derivatives reform, the payments system in Canada, the U.S. Foreign
Account Tax Compliance Act (FATCA), and regulatory reforms in the United Kingdom
(U.K.) and Europe; the high levels of Canadian household debt; cybersecurity;
the business and economic conditions in Canada, the U.S. and certain other
countries in which we operate; the effects of changes in government fiscal,
monetary and other policies; our ability to attract and retain employees; the
accuracy and completeness of information concerning our clients and
counterparties; the development and integration of our distribution networks;
model, information technology and social media risk; and the impact of
environmental issues.

We caution that the foregoing list of risk factors is not exhaustive and other
factors could also adversely affect our results. When relying on our forward
-looking statements to make decisions with respect to us, investors and others
should carefully consider the foregoing factors and other uncertainties and
potential events. Material economic assumptions underlying the forward looking
statements contained in this 2013 Annual Report are set out in the Overview and
outlook section and for each business segment under the heading Outlook and
priorities. Except as required by law, we do not undertake to update any forward
-looking statement, whether written or oral, that may be made from time to time
by us or on our behalf.

Additional information about these and other factors can be found in the Risk
management and Overview of other risks sections.

Information contained in or otherwise accessible through the websites mentioned
does not form part of this report. All references in this report to websites are
inactive textual references and are for your information only.