Royal Bank of Canada (TSX: RY; NYSE: RY) reported net income of CAD 4.4 billion for the second quarter of 2025, an increase of 11% year-over-year. Diluted earnings per share (EPS) rose to CAD 3.02, up 10% from the same quarter last year. Adjusted net income was CAD 4.5 billion, reflecting an 8% increase year-over-year, while adjusted diluted EPS reached CAD 3.12, up 7%. The bank’s return on equity (ROE) stood at 14.2%, a decrease of 30 basis points compared to the previous year.

The results included an increase of CAD 504 million, or 55%, in total provisions for credit losses (PCL) year-over-year, elevating the PCL on loans ratio to 58 basis points, an increase of 17 basis points from the prior year. The PCL on performing loans notably increased by CAD 324 million, primarily due to unfavorable changes in macroeconomic forecasts and scenario weights influenced by trade disruptions.

Revenue for the quarter totaled CAD 15.7 billion, a year-over-year increase of 11%, supported by robust growth in personal, commercial, and wealth management banking segments. Pre-provision, pre-tax earnings (PPPT) grew to CAD 6.9 billion, marking a 19% increase from the prior year. This growth was driven by increased net interest income fueled by strong average volume growth in personal and commercial banking, and enhanced fixed income trading revenue in capital markets.

The bank’s common equity tier 1 (CET1) ratio remained robust at 13.2%, well above regulatory requirements. Additionally, the bank announced a quarterly dividend of CAD 1.54 per share, reflecting a CAD 0.06, or 4%, increase. The bank also intends to commence a normal course issuer bid to repurchase up to 35 million common shares, pending regulatory approvals.

In terms of segment performance, personal banking net income was CAD 1.6 billion, up 15% year-over-year. In commercial banking, net income increased 3% to CAD 597 million, including contributions from the HSBC Canada acquisition. Wealth management recorded net income of CAD 929 million, up 11%, while capital markets net income totaled CAD 1.2 billion, down 5% year-over-year, reflecting lower M&A activity.

The allowance for credit losses (ACL) stood at CAD 7.5 billion, whereas the ratio of ACL to total loans was 74 basis points, a slight increase from the previous quarter. Overall, while the earnings reflected notable growth in several segments, challenges in capital markets and higher provisions for credit losses impacted the quarter’s outcomes.