When it comes to banking, the Royal Bank of Canada is the largest bank in Canada. It is also one of the largest financial institutions in the world today. But how does Royal Bank of Canada make money?
RBC, as is popularly referred to as, is listed in the New York Stock Exchange (NYSE). This means that you can easily find information related to revenues and profit.
You can therefore get a breakdown of how Royal Bank of Canada makes money today.
Listed companies are required to provide and publish their financials to the public.
Access to this information is important to shareholders, investors, government and the public.
Over the last couple of years, the bank has focused on Canadian banking segment and wealth management segments.
These two market segments has allowed RBC to generate consistent profits.
If you would like to learn and understand how the Royal bank of Canada makes money, then you have come to the right resource.
This article will provide you with an in-depth analysis of how RBC makes money.
What do you fancy right now? Coffee, tea, a glass of wine or whiskey?
I suggest you get your drink and let us dive into how Royal Bank of Canada makes money.
How Does Royal Bank of Canada Make Money?
The Royal Bank of Canada, or RBC, makes money form providing the following services;
- Personal Banking
- Wealth Management
- Capital Markets
- Insurance Services
Almost 50% of RBC’s revenues come from personal banking segment.
Wealth management and capital markets segment generate 20% and 22% respectively to the bank’s bottom line
In terms of geography, Royal Bank of Canada generates around 60% of the revenues from the Canadian operation.
United States market contribute about 24 percent.
The remaining 16 percent comes from its international markets outside of U.S and Canada
It is worth noting that RBC has a good return on equity (RoE). This can be attributed to its focus on personal and commercial banking.
Personal and commercial banking are considered to be foundational, the nuts and bolts of banking.
Royal Bank of Canada’s balance seems to be in good shape. By looking into it further, you will learn that its mortgage lending business remains very conservative.
As you have learned, Royal Bank of Canada makes money from personal and commercial banking, wealth management, insurance and capital markets.
These revenue streams make the bank’s balance sheet very healthy.