#1Royal Bank of Canada Investor Presentation Q1/2016 RB All amounts are in Canadian dollars and are based on financial statements prepared in compliance with International Accounting Standards 34 Interim Financial Reporting, unless otherwise noted. Our Q1/2016 Report to Shareholders and Supplementary Financial Information are available on our website at rbc.com/investorrelations. RBC#2Caution regarding forward-looking statements RBC 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 RBC Investor Presentation, in filings with Canadian regulators or the United States (U.S.) Securities and Exchange Commission (SEC), in reports to shareholders and in other communications. Forward-looking statements in this presentation include, but are not limited to, statements relating to our financial performance objectives, vision and strategic goals. The forward-looking information contained in this RBC Investor Presentation is presented for the purpose of assisting the holders of our securities and financial analysts 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, operational, regulatory compliance, strategic, reputation, legal and regulatory environment, competitive and systemic risks and other risks discussed in the Risk management and Overview of other risks sections of our 2015 Annual Report and the Risk management section of our Q1 2016 Report to shareholders; weak oil and gas prices; the high levels of Canadian household debt; exposure to more volatile sectors such as lending related to commercial real estate and leveraged financing; cybersecurity; anti-money laundering; 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; tax risk and transparency; and environmental risk. 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 RBC Investor Presentation are set out in the Overview and outlook section and for each business segment under the heading Outlook and priorities in our 2015 Annual Report, as updated by the Overview and outlook section in our Q1 2016 Report to Shareholders. 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 the Overview of other risks sections in our 2015 Annual Report and the Risk management section of our Q1 2016 Report to Shareholders. Information contained in or otherwise accessible through the websites mentioned does not form part of this RBC Investor Presentation. All references in this RBC Investor Presentation to websites are inactive textual references and are for your information only. About RBC#3About RBC RBC#4The RBC story RBC Market leader with a focused growth strategy Diversified business mix supports deep client relationships Financial strength underpinned by prudent risk and cost management Innovation is in our DNA Leading corporate citizen ■ Market leader in Canada and one of the largest financial institutions globally (1) ■ Clear strategy for continued long-term growth in Canada, the U.S. and select global markets ■ Well-diversified across businesses, geographies and client segments Ability to capitalize on opportunities created by changing market dynamics and economic conditions ■ Wide breadth of products and capabilities allows us to meet all of our clients' financial needs and build deep, long-term relationships ■ Track record of earnings and dividend growth while maintaining a disciplined approach to risk and cost management ■ Credit ratings amongst the highest globally. Strong capital position and a high quality liquid balance sheet ■Long history of innovation and proven ability to adapt to industry trends. Investments in technology allow us to drive efficiencies and deliver an exceptional client experience ■ Focused on simplifying, digitizing and personalizing our products to make it easier for clients and employees to do business and lower costs ■ Provide over $100MM in donations, sponsorships and community investments, including the RBC Kids Pledge and RBC Blue Water Project ■ Globally recognized as a financial services thought leader About RBC (1) Based on market cap as at January 31, 2016. 3#5Market leader with a focused strategy for growth Largest in Canada A market leader across all key businesses Top 20 globally One of the 20 largest global banks by market capitalization with operations in 39 countries RBC 16 million+ clients. Served by over 80,000 employees worldwide Purpose Help clients thrive and communities prosper Vision To be one of the world's most trusted and successful financial institutions Strategic Goals In Canada, to be the undisputed leader in financial services In the U.S., to be the preferred partner to corporate, institutional and high net worth clients and their businesses In select global financial centres, to be a leading financial services partner valued for our expertise About RBC 4#6Diversified business model with client leading franchises Earnings by business segment (1) Revenue by geography (1) About RBC Investor & Treasury Services 6% Insurance 7% Wealth Management 11% Capital Markets 24% Personal & Commercial Banking 52% International 18% U.S. 20% Canada 62% RBC 5 (1) Earnings for the latest twelve months ended January 31st, 2016. Amounts exclude Corporate Support. These are non-GAAP measures. For additional information refer to our Q1 2016 Report to Shareholders.#7Strong financial profile - Q1 reflects the closing of City National Consistent earnings growth and strong ROE while maintaining a strong capital position with a disciplined approach to risk Consistent earnings growth Net income ($BN) 10.0 9.0 8.3 2013 2014 2015 Strong capital position (2) Strong Return on Equity (2) 19.7% 19.0% 18.6% 2.5 2.4 Q1/2015 Q1/2016 (1) 2013 2014 2015 19.3% RBC 15.3% Q1/2015 Q1/2016 (1) Strong leverage and liquidity ratios (3) Leverage Ratio 14.0% 13.5% 13.4% 13.4% 13.0% Liquidity Coverage Ratio 10.6% 10.0% 10.1% 9.9% 9.6% Q4/15 ■Common Equity Tier 1 (CET1) Q1/15 Q2/15 ■Total capital Q3/15 About RBC 4.0% 122% Credit ratings (4) amongst the highest globally Moody's S&P Fitch DBRS Aa3 AA- AA AA Negative Stable Negative Negative Q1/16 (1) (1) Includes first quarter of City National results. (2) ROE may not have a standardized meaning under GAAP and may not be comparable to similar measures disclosed by other financial institutions. For additional information, see slide 40. (3) Capital calculated to include all regulatory adjustments that will be required by 2019 but retaining the phase-out rules for non-qualifying capital. Refer to the Capital Management section of our Q1 2016 Report to Shareholders for details on all ratios excluding Liquidity Coverage ratio calculated on a "All-in" Basel III basis and Basel III requirements. (4) Based on long-term senior debt ratings as of February 22, 2016. 6#8Robust risk management A disciplined approach and diversification has driven stable credit trends Loan book diversified by portfolio (1) Residential Mortgages & Personal Loans (2) Credit Cards Small 3% Business 1% Relatively stable PCL ratio (3) over the cycle (bps) 72 bps RBC Continued low loss rates and 53 bps good LTV coverage 45 bps ~ 75% of the portfolio is secured Wholesale Residential 33 bps 34 bps 35 bps 31 bps 31 bps 32% Mortgages & Wholesale " Consistent lending standards Personal Loans 64% 21 bps 23 bps 27 bps 24 bps throughout the cycle 60% of the portfolio is investment grade 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1/16 Global financial crisis Breakdown by region of total loans and acceptances (1) Breakdown of Canadian total loans and acceptances (1) Atlantic 6% Other International 18% U.S. 20% Canada 62% About RBC (1) Does not include letters of credit or guarantees, as at January 31, 2016. (2) Includes home equity lines of credit, auto loans, and other personal lending products. (3) PCL ratio is PCL on impaired loans as a percentage of average net loans & acceptances (annualized). Man/Sask 7% Quebec 12% Ontario 42% Alberta 16% B.C. and territories 17% 7#9History of delivering value to our shareholders Financial performance objectives measure our progress against our goal of maximizing total shareholder returns Medium-term financial performance objectives Diluted EPS Growth 7% + Return on Equity Capital Ratios (CET1) Dividend Payout Ratio 18% + Strong 40% -50% RBC Achieved solid TSR (1) performance Strong dividend growth (2) RBC Peer Average CAGR 10% $3.08 3 Year 10% 10% 5 Year 11% 9% 10 Year 9% 6% $1.18 About RBC 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) Annualized TSR is calculated based on the TSX common share price appreciation plus reinvested dividend income. Source: Bloomberg, as at January 31, 2016. RBC is compared to our global peer group. The peer group average excludes RBC; for the list of peers, please refer to our 2015 Annual Report. (2) Dividends declared per common share. Our current quarterly dividend is $0.81. 8#10Empty#11Business Segments RBC#12Personal & Commercial Banking ■ The undisputed financial services leader in Canada ◉ ◉ - #1 or #2 market share in all key product categories Most branches and largest sales force in Canada - Superior cross-sell ability In 17 countries and territories in the Caribbean 2nd largest bank by assets (1) in English Caribbean Provide innovative direct banking to U.S. cross-border clients Ongoing investment in digitizing our banking channels ATMs Q1/2016 Highlights Clients (MM) 13.6 Branches 1,355 4,824 Active digital and mobile users (2) (MM) 5.0 Employees (FTE) 34,924 Loans & acceptances (1) ($BN) 380.3 314.6 222 Deposits (1) ($BN) AUA ($BN) Net income ($BN) 5.0 4.5 4.4 2013 2014 2015 Revenue by business line (3) Personal Financial Services 52% 1.3 1.3 Q1/2015 Q1/2016 Business segments (1) Based on average balances. (2) Statistic is based on Canadian Banking only. (3) For the quarter ended January 31, 2016. Business Financial Services 22% Cards and Payment Solutions 19% RBC Caribbean & U.S. Banking 7% 11#13Personal & Commercial Banking - Canada Strategic Priorities Offer a differentiated experience Make it easier to do business with us Converge into an integrated multi-channel network ■ Be the undisputed leader in Canada ■ Demonstrate the value for money that sets RBC apart through quality of advice and service, and industry-leading convenience and access ■ Maintain focus on digitizing the bank and simplifying our end-to-end processes ■ Make it simpler and easier for clients to do business with us through self, assisted and full- serve options RBC Invest in skills, accreditation and engagement of our employees to enable us to compete more effectively Leveraging our unparalleled distribution breadth (e.g. most branches and ATMs in Canada), internal capabilities and strategic external partnerships to maintain our market leadership and extend our sales power Adapting our distribution network to ongoing changes in client preferences, including designing applications, processes and products for online and mobile channels Recent Awards Winner 2015 RETAIL BANKER INTERNATIONAL Global Retail Bank of the Year 2 years in a row (1) The Banker Awards 2015 BEST TRADE FINANC BANK AWARD⚫ 2015 GLOBAL FINANCE Brand Finance® #1 bank in the Caribbean and in Trinidad and Tobago (2) Best Trade Finance Bank in Canada 4 years in a row (3) Most valuable brand in Canada (4) Business segments 12 (1) Retail Banker International, 2015. (2) Based on Tier 1 capital. Tier 1 refers to the core measure of a bank's financial strength based on the sum of its equity capital and disclosed reserves (or retained earnings). The Banker, 2015. (3) Global Finance, 2016. (4) Brand Finance, 2015.#14Personal & Commercial Banking - Canada Banking Solid volume growth (1) 248 264 281 296 230 307 329 343 359 371 2012 2013 2014 2015 Q1/2016 ■Loans and acceptances ■ Deposits # 1 or #2 market share in all categories (3) Superior cross-sell ability Percent of households with transaction accounts, investments and borrowing products (2) 24% RBC 16% Peer Average Continue to improve our efficiency ratio RBC Market Product Rank share 49.7% 49.9% Peer Consumer lending (4) 23.6% 1 49.2% Average (8) 48.4% 48.3% Personal core deposits + GICs 20.1% 2 Long-Term Mutual Funds (5) 14.4% J Business loans ($0-$25MM) (6) 24.7% 1 44.5% 44.7% 44.2% 44.0% RBC 43.7% Business deposits (7) 26.3% 1 2012 2013 2014 2015 Q1/2016 Business segments 13 (1) Based on average balances. (2) Canadian Financial Monitor by Ipsos - 12,000 Canadian households annually - data based on Financial Group results for 2015 (January to December); TFSA is considered an Investment. Peers include BMO, BNS, CIBC and TD (3) Market share is calculated using most current data available from OSFI (M4), Investment Funds Institute of Canada (IFIC) and Canadian Bankers Association (CBA). OSFI, IFIC and CBA data is at September 2015. Market share is of total Chartered Banks except for Business Loans which is of total 7 banks (RBC, BMO, BNS, CIBC, TD, NA and CWB). (4) Consumer Lending market share is of 6 banks (RBC, BMO, BNS, CIBC, TD and NA). Consumer Lending comprises residential mortgages (excluding acquired portfolios), personal loans and credit cards. (5) Long-term mutual fund market share compared to total industry. (6) Business Loans market share is of the 7 Chartered Banks (RBC, BMO, BNS, CIBC, TD, NA and HSBC) that submit to CBA on a quarterly basis. (7) Business Deposits market share excludes Fixed Term, Government and Deposit Taking Institution balances. (8) Peers include BMO, BNS, CIBC and TD; 2012 through 2015 reflects annual results while the peer average efficiency ratio for Q1 2016 represents Q4 2015 according to the data that is available for the peers.#15Wealth Management ☐ Strategic Priorities Leverage and grow our high performing asset management business globally Deepen client relationships by bringing the best of RBC to our clients, leveraging the RBC enterprise brand, capabilities and competitive strengths ■ Focus on developing a differentiated client experience tailored to key HNW and UHNW (1) client segments in our priority markets ☐ Simplify and streamline our business to achieve a more scalable and streamlined operating model Net income ($MM) Recent Awards Top 5 Global Wealth Manager by Assets (Scorpio) Institutional Trust Company of the Year (Citywealth Magic Circle Awards) RBC Outstanding Wealth Manager - Customer Relationship Service and Engagement (Private Banker International) Leading Canadian Private Bank; Best Wealth Structuring Offering (Family Wealth Report Awards) Cash earnings ($MM) 886 1,083 1,041 2013 2014 2015 Business segments 230 303(2) 53 250 City National 1,161 1,116 953 248 352(2) 84 268 City National Q1/2015 Q1/2016 2013 2014 2015 Q1/2015 Q1/2016 14 (1) High Net Worth (HNW) and Ultra High Net Worth (UHNW). (2) Non-GAAP measure. For additional information refer to slide 40.#16Wealth Management - Global Asset Management Building a high-performing global asset management business ■ Driving top-tier profitability in our largest Wealth Management business " - $383BN in client assets, generating over 52% of RBC Wealth Management earnings in Q1/2016. Investor asset mix of 44% Individual / 56% Institutional client assets - Top 50 global asset manager by AUM (1) Extending our lead in Canada - Largest fund company in Canada with 14.5% market share (2) Third largest institutional pension asset manager in Canada (3) Delivering strong investment capabilities to support growth - Top performing investment firm with 68% of AUM outperforming the benchmark on a 3-year basis (4) Broadened suite of investment strategies enhancing Canadian offering Continued growth of U.S. and international institutional clients in select U.S. and global investment capabilities Above industry average AUM growth (5) RBC GAM Industry Diversifying our asset mix AUM by Client Segment ($BN) (6) 29% 12% 9% 8% 28% 27% 23% 13% Hi (1%)1% 11% RBC $383 20% ■International Institutional 14% ■U.S. Institutional 22% ■Canadian Institutional 8% $86 44% ■Canadian Retail 100% 2007 Q1/2016 2009 Business segments 2010 2011 2012 2013 2014 (1) Pensions and Investments, as of December 31, 2014. (2) Investment Funds Institute of Canada (IFIC) as at December 2015. (3) Benefits Canada as at November 12, 2015. (4) As at December 2015. Performance gross of fees. (5) Boston Consulting Group, McKinsey. AUM of RBC GAM acquisitions deducted in year of acquisition, and thereafter. (6) RBC GAM. 15#17Wealth Management ■ ☐ Extending our #1 position Canada - Extending our industry leadership Grew HNW market share by ~500 bps to 20% in the last five years (1) and anticipate reaching 22% market share by 2020 Maintaining profitable growth in a challenging market Generating -31% of RBC Wealth Management earnings with strong pre- tax margin, highest among North American peers (3) Driving strong advisor productivity Canadian leader in fee-based assets per advisor (1) Consistently driving revenue per advisor of over $1.2MM per year, 41% above Canadian industry average(1) Competitive hires delivering strong new asset growth Fee-based assets per advisor(2) ($MM) Over 2.0x the peer average $71 $35 RBC Cdn Peer Average Leveraging Enterprise linkages to continue to extend market share gains U.S. Wealth Management Focus on the successful integration of City National and begin to deliver on planned synergies Steadily increasing advisor productivity and continue growing complementary distribution through successfully recruiting revenue producers and establishing new clearing relationships Improving operational efficiencies and leveraging RBC's global capabilities to broaden our product offering International Wealth Management Focusing on UHNW and HNW client acquisition from select markets where we have scale Leveraging RBC's global capabilities (Global Asset Management and Capital Markets) RBC Business segments (1) Investor Economics report on RBC's full wealth and investment offering in Canada, October 2015. (2) Investor Economics report, October 2015. (3) As per BCG Global Wealth Manager Benchmarking 2014. 16#18City National enhances RBC's U.S. presence & accelerates growth Branch-light footprint in key markets (1) City National Q1/16 Highlights (US$) RBC San Francisco Los Angeles Orange County/ San Diego Revenue ($MM) 341 Expenses ($MM) 296 PCL ($MM) 4 New York Net income ($MM) 38 AUA ($BN) 13.6 AUM ($BN) 40.3 Loans ($BN)(2)(3) 23.4 Deposits ($BN) (2) 32.2 Aligns with RBC's strategic goals Premier U.S. private and commercial bank with wealth capabilities City National Corporation ("City National") enhances and complements RBC's presence in the U.S., our second home market Deep client relationships and sharp strategic focus on two highly attractive client segments: - High net worth: Combination of City National's private banking franchise and RBC's U.S. Wealth Management business creates a comprehensive platform to provide complete financial solutions to high net worth clients Commercial: City National is a premier U.S. commercial bank with deep industry expertise and a natural strategic fit with RBC Capital Markets' top 11 investment bank(4) High-touch and branch-light client service model in key high growth markets Strong track record of growth with well diversified and high quality loan portfolio Highly attractive deposit franchise, well positioned for rising rates ■ Fast growing wealth and asset management business Outstanding management and strong cultural fit Business segments (1) Only core markets depicted; City National also has offices in Boston, Atlanta, Nashville, Las Vegas and Reno. (2) Average balances. (3) Loans and leases. (4) Thomson Reuters Global Banking Review 2015. 17#19City National - A powerful & scalable engine for U.S. growth Expanding into U.S. private & commercial banking Enhancing U.S. wealth & asset management platform Extending full commercial & corporate capabilities Expense synergies Deposit synergies Growth initiatives ☐ ☐ ☐ Introducing City National's full suite of U.S. private and commercial banking products and services to RBC clients ~330,000 RBC U.S. Wealth Management households ~230,000 RBC Canadian cross-border clients ~82,000 RBC Canadian commercial clients Adding scale in wealth and asset management - Combined U.S.-based client assets of ~C$411BN Brings RBC's Wealth Management segment to over C$1.3 trillion in client assets globally Expanding the distribution channels for RBC and City National wealth management products ~2,100 combined advisors Accessing RBC Capital Markets' advisory, capital raising and risk management capabilities Extending full commercial and corporate capabilities to City National's key industry verticals (entertainment, real estate, technology and healthcare) Vertical alignment allowing for greater depth Leveraging RBC Capital Markets' market-leading platform into additional industry verticals for City National Replicate RBC's successful Canadian referral model between Commercial Banking and Capital Markets with City National and RBC Capital Markets RBC Consolidation of non-client facing infrastructure across City National, RBC Wealth Management and other RBC businesses Achieving scale benefits in procurement, technology and other functional areas Improving productivity via cross-sell and referrals Ability to attract additional deposits from RBC Wealth Management and Capital Markets clients Utilize low cost sweep balances from RBC U.S. Wealth Management as an additional competitive funding advantage to support future loan growth Introducing City National's private and commercial banking solutions through RBC's U.S. Wealth Management advisor and client base Leveraging RBC's platform and financial strength to increase City National's market penetration Accelerating expansion into other new high-growth markets through an expanded network Business segments The data on this slide, including client assets, number of clients, and number of advisors represents the most currently available data as of January 31, 2016. 18#20Insurance Strategic Priorities Improve distribution efficiency Deepen client relationships ◉ ■ RBC Delivering multi-line "insurance advice for your life" through an integrated product portfolio Strengthening profitability in all channels by increasing sales and managing expenses Providing a comprehensive suite of RBC Insurance products and services through cross-sell strategies to continue to meet our clients' unique insurance needs Providing a wide range of life, health, home, auto, travel and wealth accumulation solutions to individual and group clients across Canada, and offer reinsurance solutions for clients globally ■ Announced the sale of home and auto manufacturing business to Aviva Canada in January Enhancing and streamlining all processes to ensure that clients find it easy to do business with ■ Simplify the way we do business Pursue select international opportunities to grow our reinsurance business Net income ($MM) (1) ■ us Pursuing niche opportunities, diversifying risks and growing our reinsurance business to generate stable and diversified earnings Acquisition expense ratio (2) 713(3) 781 118 706 595 2013 2014 2015 185 131 Q1/2015 Q1/2016 12.5% 10.1% 2013 2014 7.0% 6.3% 2015 Q1/2016 19 Business segments (1) 2015 and 2016 results reflect a recent change in Canadian tax legislation impacting certain foreign affiliates, which became effective November 1, 2014. (2) Acquisition Expense Ratio calculated as Total Acquisition Expense/Net Premiums. (3) Adjusted net income excludes a Q4/2013 charge of $160MM ($118MM after-tax) as a result of new tax legislation in Canada. This is a non-GAAP measure. For additional information see slide 40.#21Investor & Treasury Services " Specialist provider of asset services, custody, payments and treasury services for financial and other institutional investors worldwide - Rated by our clients as the #1 global custodian for five consecutive years (1) - Awarded UCITS and Private Equity/Real Estate Fund Administrator of the Year (2) and European Transfer Agent of the Year (3) ■ Leader in Canadian dollar cash management, correspondent banking and trade finance for financial institutions globally; named Best Trade Finance Bank in Canada (4) Funding and liquidity management for RBC Net income ($MM) 556 Strategic Priorities RBC In Canada, to be the #1 provider of domestic custody, asset services and cash management products Compete as a leading provider of asset services in the largest offshore fund domicile markets of Luxembourg and Ireland Continue to deliver a high-level of investment in client- focused technology solutions Enhance our client centric service and improve efficiency Efficiency ratio 528(6) 370(5) 441 339 2013 2014 2015 142 143 Q1/2015 Q1/2016 75% 2013 68% 66% 64% 2014 2015 Q1/2016 20 Business segments (1) Global Investor/ISF magazine's Global Custody Survey 2015. (2) Custody Risk European Awards 2015. (3) Funds Europe Awards 2015. (4) Global Finance Magazine 2015. (5) Excludes a loss of $44MM ($31MM after-tax) related to the integration of Investor Services. This is a non-GAAP measure. For additional information see slide 40. (6) Excludes the net impact of additional month of earnings of $42MM ($28MM after-tax) related to aligning of Investor Services reporting period to that of RBC.#22Capital Markets ■ A premier North American investment bank with select global reach ☐ 11th largest global investment bank by fees (1) Full suite of integrated Corporate and Investment Banking and Global Markets services Strategically positioned in the largest financial centers, focused on the world's largest and most mature capital markets encompassing -75% of the global investment banking fee pool (1) Top talent with expertise and track record of excellence Net income ($MM) 1,700 2,055 2,319 594 570 2013 2014 2015 Q1/2015 Q1/2016 Business segments (1) Thomson Reuters Global Banking Review 2015. (2) Update as of January 31, 2016. RBC Revenue by geography (2) Canada Full suite of products and services across all sectors 30% 14% U.K./Europe M&A advisory and origination in key sectors with fixed income, equity and FX sales & trading U.S. Full service investment bank with equity and fixed income sales & trading 50% 6% Asia Pacific Primarily distribution with select M&A advisory and origination 21 24#23Capital Markets Strategic Priorities Maintain our leadership position in Canada Expand and strengthen client relationships in the U.S. Build on core strengths and capabilities in U.K./Europe and optimize performance in Asia Pacific Optimize capital use to earn high risk-adjusted returns on assets and equity Recent Awards ■ Focus on long-term client relationships and leverage our global capabilities ■ Increase focus on product and service cross-sell, and continue to improve collaborative efforts RBC ■ Build on our momentum and leverage broader relationships and client investments to expand origination, advisory, and distribution ■ Continue to strengthen client relationships to drive cross-sell ■ Continue to grow prudently, deepen client relationships, and selectively expand geographic and sector coverage ■ Maintain mix between investment banking and lending revenue and trading revenue Maintain disciplined diligence on the risks and costs of our business EUROMONEY 2015 AWARDS FOR EXCELLENCE the technical analyst GREENWICH ASSOCIATES Greenwich Excellence GREENWICH ASSOCIATES Greenwich Excellence BRENDAN WOOD INTERNATIONAL Best Investment Bank in Canada 8 years in a row (1) Best Bank Fixed Income Research & Strategy (2) #1 for Canadian Equity Research, Sales, and Trading (3) #1 for Canadian Fixed Income Research, Sales, and Trading (3) #1 for Canadian Equity Research (6th consecutive win) (4) (1) Euromoney, 2015. (2) The Technical Analyst Awards, 2015. (3) Greenwich Associates, 2015. (4) Brendan Wood International, 2015. 22#24Capital Markets RBC Diversified Global Markets revenue ($MM) Continued strength in Corporate & Investment Banking revenue ($MM) 4,477 3,896 3,314 1,260 1,018 778 3,697 3,437 3,014 1,864 1,701 1,440 1,336 1,118 856 1,149 1,110 886 870 1,680 1,760 1,881 312 329 1,574 1,736 1,833 349 293 446 480 488 488 440 390 2013 2014 2015 ■ FICC Q1/2015 Q1/2016 2013 2014 2015 Q1/2015 Q1/2016 ■Global Equities Repo and secured financing Steady trading securities ($BN, average) ■Investment Banking ■Lending and Other Growing contribution of U.S. loan book Average loans outstanding by region ($BN) (1) 86 81 76 73 13 118 119 68 13 116 112 13 109 13 46 12 43 40 37 34 27 25 22 23 23 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Business segments Q1/2015 Q2/2015 Q3/2015 ■ Canada ■ U.S. Q4/2015 Other International Q1/2016 (1) Average loans & acceptances, and letters of credit and guarantees for our Capital Markets portfolio, on single name basis. It excludes mortgage investments, securitized mortgages and other non-core items. 23#25Economic Backdrop RBC#26Canada Canada's fiscal position Strong rating as a result of fiscal prudence, conservative bank lending practices and solid economy ■Lowest net debt to GDP ratio among G7 peers (1) ■ #1 for soundness of banks for the 8th consecutive year (2) ■ Canadian economy adjusting to shifting drivers of growth Net Debt as % of GDP (3) 2015 Canadian GDP by Industry (4) (November 2015) 37.8 Germany 48.4 U.S. 89.4 79.9 80.3 82.9 U.K. G7 average France 113.5 126.0 7% 8% 12% 20% 4% 7% 9% 11% ■Finance, Insurance & Real Estate ■ Manufacturing Wholesale and Retail Trade Scientific, Technical & Educational Serv. ■Public Administration and Utilities 11% Mining, Oil & Gas Extractions ■Construction 11% Health Care ■Transportation, Warehousing ■ Other Economic Backdrop (1) International Monetary Fund. (2) World Economic Forum, 2015. (3) International Monetary Fund, RBC Economics Research. (4) Statistics Canada, RBC Economics Research. 25 RBC#27Economic fundamentals remain solid despite energy headwinds RBC ■ A modest recovery in crude oil prices is expected to contribute to headline inflation gradually drifting higher through 2016 and reaching the mid-point of the Bank of Canada's 1-3% target range by year-end ■ Labour market resilience is expected to persist as a strengthening in economic activity supports ongoing hiring gains with the unemployment rate expected to resume a modest downward trend through 2016 - We have seen a rise in the unemployment rate of oil affected regions, with Alberta at 7.4% in January 2016 from 4.6% a year ago ■ Headwinds emanating from the pullback of oil prices point to further weakness in the oil & gas sector; however, a strengthening U.S. economy and a weak Canadian currency are expected to be factors supporting a modest pick-up in economic growth in Canada in 2016 14 Canadian Labour Markets (2) 5.0 7 Canadian Inflation (YoY%) (1) 13 6 12 5 4 3 2 Ари 11 10 9 1 8 0 7 -1 -2 6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 5 Headline Core BoC Target Employment growth (YOY% - RHS) 1982 1984 1986 Economic Backdrop (1) Statistics Canada, RBC Economics Research. (2) Statistics Canada, Bureau of Labor Statistics, RBC Economics Research. 1988 1990 Unemployment rate (% - LHS) 1992 3.0 1.0 -1.0 -3.0 -5.0 26#282016 Economic Outlook Projected Economic Indicators for 2016 (1) RBC Unemployment Interest Rate Current Account GDP Growth Inflation Rate (2) (3 mth T-bills) Balance/GDP (2) Budget Surplus/GDP (3) Canada 1.8% 1.7% 6.8% 0.6% -3.9% -0.2% U.S. 2.3% 1.3% 4.9% 0.7% -2.9% -2.0% Euro Area 1.6% 0.6% 10.5% NA 3.6% -1.9% Canada U.S. ■ The Canadian economy is poised to modestly grow in 2016 alongside a slight rise in crude oil prices. Firm export performance from a strengthening U.S. economy is expected to be accompanied by persistent growth in household spending and a smaller, although still significant, decline in energy sector investment ■ The Bank of Canada is expected to maintain its current policy stance as it awaits evidence that the economy is transitioning towards the non-resource sectors being the key drivers of growth ■ Consumer spending is expected to remain a key source of economic growth while housing market activity, nationally, will likely continue to be supported by accommodative borrowing conditions ■ Economic growth in the U.S. is expected to remain solid in 2016 led by sustained growth in the domestic side of the economy; namely, consumer spending and business investment. Less drag on economic growth from net trade in 2016 is expected as the U.S. currency is poised to stabilize ■The U.S. Federal Reserve is expected continue to withdraw monetary policy stimulus in 2016 as unfolding domestic developments confirm sustained progress towards achieving the Fed's objectives of full employment and price stability Π A broadening out of the drivers of economic growth is expected to support the ongoing Euro zone recovery in 2016, although growth is expected to remain subdued · Significant monetary stimulus by the European Central Bank has curbed deflationary risks ■ A sluggish pace of structural reforms is expected to keep growth subdued in parts of the Euro zone ■ Financial stress is likely to weigh on economic activity in 2016 ■ Euro area Economic Backdrop (1) RBC Economics Research as of February 12, 2016 and reflect forecasts for calendar 2016. (2) European Commission, RBC Economics Research. (3) Department of Finance, Congressional Budget Office, European Commission, RBC Economics Research. 27#29Canadian Housing Market RBC#30Structural backdrop to the Canadian housing market Regulation Consumer Behaviour Lender Behaviour Lenders Recourse Canadian Housing Market Canada (1) Government influences mortgage underwriting policies through control of insurance eligibility rules Fully insured if loan-to-value (LTV) is over 80% ― - - - Must meet 5-year fixed rate mortgage standards Government-backed, on homes under $1MM Down-payment over 20% on non-owner occupied properties CMHC announced mortgage loan insurance premiums will rise by ~15% for new mortgages with LTV over 90% Minimum down payment for new government-back insured mortgages increased to 10% for portion of the value of a home being purchased that is between $500,000 - $999,000 Re-financing cap of 80% on non-insured Mortgage interest not tax deductible Greater incentive to pay off mortgage Strong underwriting discipline; extensive documentation ■ Most mortgages are held on balance sheet Conservative lending policies have historically led to low delinquency rates Ability to foreclose on non-performing mortgages, with no stay periods Full recourse against borrowers (2) • U.S.(1) RBC Agency insured only if conforming and LTV under 80% No regulatory LTV limit - can be over 100% Not government-backed if private insurer defaults ☐ Mortgage interest is tax deductible Less incentive to pay down mortgage Wide range of underwriting and documentation requirements Most mortgages securitized Stay period from 90 days to one year to foreclose on non-performing mortgages Limited recourse against borrowers in key states (1) Current regulation and lenders recourse. (2) Alberta and Saskatchewan have some limited restrictions on full recourse. 29#31Legislation and policies - promoting a healthy housing market December 2015 RBC ■ Minimum down payment for new government-backed insured mortgages increased from 5% to 10% for portion of the value of a home being purchased that is between $500,000 and $999,999 April 2014 ■ CMHC discontinued offering mortgage insurance on second homes and to self-employed individuals without 3rd party income validation July 2012 ■ Maximum amortization on government-backed insured mortgages reduced to 25 years from 30 years ▪ Maximum amount that can be borrowed on a mortgage refinancing lowered to 80% from 85% ■ CMHC insurance availability is limited to homes with a purchase price of <$1 million lowered from $3.5 million Set the borrower's maximum gross debt service ratio at 39% and maximum total debt service ratio at 44% March 2011 ■ Maximum amortization on government-backed insured mortgages reduced to 30 years from 35 years ■ Maximum amount that can be borrowed on a mortgage refinancing lowered to 85% from 90% February 2010 Borrowers must meet the standards for a five-year fixed rate mortgage ◉ Max. amount that can be borrowed on a mortgage refinancing lowered to 90% from 95% ■ Min. 20% down payment is required in order to qualify for government-backed mortgage insurance on non-owner-occupied properties July 2008 ■ Maximum amortization on government-backed insured mortgages reduced to 35 years from 40 years ■ A minimum 5% down payment is required in order to qualify for government-backed insured mortgages Canadian Housing Market 30#32The Toronto and Vancouver downtown condo markets RBC Undeveloped land around Toronto / Vancouver is limited, causing shift to centralized condo housing 'Green belt' surrounding Toronto has limited urban sprawl and increased demand for condos in the core - Vancouver is restricted in its ability for urban sprawl due to land constraints away from the city centre ■ Canada has one of the highest per capita rates of permanent immigration in the world (1) 20.6% of Canada's population is foreign born (6.8 million), highest proportion among the G8 nations (1) - 63% of all new immigrants to Canada move to Toronto, Vancouver or Montreal (1) RBC's exposure to condo development is limited - about 2.2% of our total commercial loan book (2) Condo exposure is 9.9% of our Canadian residential mortgage portfolio (2) (3) "Green belt" surrounding Greater Toronto area WELLINGTON Lake D Simcoe Lake Ontario CANADA USA Vancouver limited by mountains, sea, U.S. border Mt Seymour Provincial Park cal Reserve 1A North Vancouver District Belcara Regional Park Pinecone Lake-Burke Mountain Park Coquitlam VANCOUVER Pacific Spirit Regional Park 99 91A Richmond Ο [17] Maple Ridge New Westminster Langley Twp Surrey 10 Delta Point Roberts Canadian Housing Market (1) Citizenship and Immigration Canada 2013, Statistics Canada. (2) As at January 31, 2016. (3) Based on spot balances and includes HELOC White Rock Campbell Valley Regional Park 15 13 530 31#33Canadian housing market fundamentals remain sound RBC ■ Balanced demand-supply conditions continue to prevail in close to half of the markets in Canada with the exceptions being some markets in British Columbia and those in and around the Greater Toronto region Housing affordability is at reasonable levels across Canada with pressure concentrated in a few local markets Steady population growth, household income gains and low interest rates are supporting balanced conditions ■ A slowdown in housing market activity in oil-exposed provinces (Alberta, Saskatchewan) is being offset by strength in other regions of the country (net oil consumers) with support from highly accommodative borrowing conditions ■ ▪ Over the forecast horizon, we expect that an erosion of housing affordability on account of rising interest rates will weigh on overall housing activity, which is expected to gradually ease to lower, more sustainable levels Relatively stable household debt service cost ratios, with little movement towards higher risk ■ Lenders maintaining strong underwriting discipline and require extensive documentation – Most mortgages being held on balance sheet and conservative lending policies have led to low delinquency rates Sales-to-New Listings Ratio (1) (Residential unit sales to new residential listings) Household Debt Service Costs (2) (Mortgage & non-mortgage principal & interest payments as a % of PDI) 1.00 0.90 16 0.80 Seller's market 0.70 14 0.60 12 12 0.50 Balanced market 10 0.40 0.30 8 Buyer's market 0.20 6 0.10 0.00 4 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Canadian Housing Market (1) Canadian Real Estate Association, RBC Economics Research. (2) Statistics Canada, RBC Economics Research. PDI: Personal Disposable Income. 32#34Canadians have significant equity ownership in their homes ■ Canadians carry a significant and stable amount of equity in their homes ■ The pace of mortgage accumulation continues to trend within a range well below the double-digit rates of growth recorded in the mid-2000s ■ Mortgage delinquency rates remain low in Canada. and have been stable throughout recent credit cycles RBC monitors its residential mortgage and broader retail portfolios closely and performs stress tests for dramatic movements in house prices, GDP, interest rates and unemployment rates 20 Residential Mortgage Growth (2) (Year-over-year % change) Equity Ownership (1) RBC (Owners' equity as a % of total value of residential real estate assets) 80 75 R 70 65 60 55 50 45 40 Canada U.S. 35 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Mortgage Delinquencies (3) (Mortgages 90+ days in arrears as a % of total mortgages) Canada 6 U.S. 18 16 5 14 4 12 10 3 8 6 2 4 1 2 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Canadian Housing Market 33 (1) Statistics Canada, Federal Reserve Board, RBC Economics Research. (2) Bank of Canada, RBC Economics Research. (3) Canadian Bankers' Association, Mortgage Bankers' Association, RBC Economics Research.#35Appendix RBC#36Strength of a high quality liquid balance sheet $1,200BN (as at January 31, 2016) Assets Cash and Reverse Repos 39% Liquid Assets Trading & Investment Securities Liabilities & Capital Unsecured Funding 129% coverage Secured Funding RBC 31% Wholesale funding Loan portfolio represents 43% Personal Deposits 53% of total balance sheet excluding allowances and including sold MBS as per IFRS Derivatives are Residential Mortgages (1) Capital + Retail- 124% coverage Business & Government Deposits related Other Retail Loans Wholesale Loans funding Securitization (1) and Covered Bonds Capital on balance Other Assets (2) sheet as per IFRS Other Liabilities (2) Appendix (1) Securitized agency MBS are on balance sheet as per IFRS. (2) Other assets include $133BN of derivatives related assets, largely offset by derivatives related liabilities in Other liabilities. Under IFRS derivative amounts with master netting agreements cannot be offset and the gross derivative assets and liabilities are reported on balance sheet. 35#37Strong deposit growth RBC Leveraging the strength of our distribution channels and successful deposit initiatives to drive growth Gaining Canadian market share ■ Initiated successful strategies to grow relationship deposit base ☐ Leveraging our Wealth Management network with targeted strategies and product development ■ Canadian relationship deposits continue to grow at a faster pace than the market ■ Between October 2010 and September 2015, our share of the Canadian personal deposit market has grown from 18.7% to 20.1% (1) Average Balances ($B CAD) 170 RBC Canadian Deposits ($BN) 150 130 110 90 00 Cdn Personal Deposits 70 Cdn Business Deposits 50 5.94% CAGR 8.96% CAGR Leveraging our international reach ■ Strong deposit growth in our International Wealth Management and Canadian Banking platforms Appendix 30 Jan-07 Sep-08 Jun-10 Mar-12 Dec-13 Sep-15 HISA (2) RBC Relationship Deposits Advisory Channel Deposits (3) Other Personal Deposits Business Deposits Total Deposits ($BN) Jan 2014 Jan 2016 $27 $30 $23 $34 $150 $172 $172 $242 $371 $478 (1) Canadian deposit market share is based on Canadian Banking personal deposits and Wealth Management advisory channel deposits. Source: OSFI (M4 report). (2) High Interest Savings Account; Includes CAD and USD deposits. (3) Sourced largely from RBC Wealth Management network. 36#38RBC Wholesale funding strategy Large retail deposit base complemented by well diversified wholesale funding mix ■ Well diversified across products, currencies, investor segments and geographic regions ■Raise majority of funding in international markets to preserve significant domestic capacity which can be tapped in stressed market conditions ■ Regular issuance in all major markets to promote investor engagement and secondary market liquidity ■ Well balanced maturity profile that is reflective of the maturity profile of our asset base Diversified by Geography (1) Europe 25% Canada 24% Well Balanced Maturity Profile (1) ($BN) 60 50 40 U.S. 51% 30 20 10 0 2016 2017 2018 2019 2020 2021 >2021 Appendix (1) RBC term unsecured and covered bonds, as of January 31, 2016. 37 32#39Well diversified wholesale funding platform " Variety of programs allows for greater diversification and cost effectiveness Canada Canadian Shelf (C$25BN) Securitizations (Canadian mortgage bonds, NHA MBS (1) and credit cards) Well Diversified by Product (2) European Medium Term Note 6% Golden Credit Cards 8% Covered Bond 23% CMB 13% U.S. ■ SEC Registered Shelf (US$40BN) ■ SEC Registered Covered Bonds Canadian Deposit Note 17% U.S. Medium Term Note 24% (US$15BN) Recent deals ◉ Europe and Asia European Debt Issuance Program (US$40BN) ■ Covered Bond Program (EUR 32BN) Japanese Issuance Programs (JPY 1 trillion) ▪ A$800BN 5-year unsecured at Libor+104bps ■ EUR 500MM 5-year unsecured at Libor+ 105bps ■ US$1.25BN 5-year unsecured at Libor+ 100bps ■ US$1.5BN 3-year unsecured at Libor+ 70bps ■ USD 1.75BN 5-year covered bond at Libor+72bps ■ EUR 1.25BN 5-year covered bond at Libor+55bps Yankee CD & 3a2 9% Appendix (1) National Housing Act Mortgage Backed Securities. (2) As at January 31, 2016. RBC 38#40RBC Covered Bond Program Globally Active ■ Active program in six different currencies: EUR, CAD, USD, CHF, AUD and GBP Strong Issuer Largest Canadian bank by market capitalization - C$32.8BN currently outstanding ☐ Strong credit ratings ■ Seven benchmark transactions since January 2015 EUR 1.0BN 7-year C$2.2BN 5-year USD 1.75BN 5-year EUR 1.25BN 5-year GBP 400MM 3-year US$2.0BN 5-year US$500MM 3-year ■ Well capitalized and consistent historical profitability ■ Well diversified business mix RBC Canadian Legislative Changes ☐ ■ Canadian legislation protects claims of covered bond investors and overrides any other conflicting law related to bankruptcy and insolvency - Extensive regulatory oversight and pool audit requirements Mandatory property value indexation U.S. Registration ■ U.S. covered bond program is SEC registered - Issued US$13.75BN across seven deals since September 2012 - Index eligible and Trace eligible Appendix 39#41Note to users RBC We use a variety of financial measures to evaluate our performance. In addition to generally accepted accounting principles (GAAP) prescribed measures, we use certain key performance and non-GAAP measures we believe provide useful information to investors regarding our financial condition and result of operations. Readers are cautioned that key performance measures, such as ROE and non-GAAP measures such as earnings and revenue excluding Corporate Support, earnings excluding City National, earning excluding Q4 2013 charge as a result of new tax legislation in Canada and earnings excluding the loss. related to the integration of Investor Services and the net impact of an additional month of earnings related to the aligning of Investor Services reporting to RBC do not have any standardized meanings prescribed by GAAP, and therefore are unlikely to be comparable to similar measures disclosed by other financial institutions. Additional information about our ROE and non-GAAP measures can be found under the “Key performance and non-GAAP measures" section of our Q1/2016 Report to Shareholders and 2015 Annual Report. Definitions can be found under the "Glossary" sections in our Q1/2016 Supplementary Financial Information and our 2015 Annual Report. Investor Relations Contacts Amy Cairncross, VP & Head (416) 955-7803 (416) 955-7808 (416) 955-7809 (416) 955-7807 Lynda Gauthier, Managing Director Stephanie Phillips, Director Brendon Buckler, Associate Director www.rbc.com/investorrelations 40 40