TECHNOLOGY @ RBC

ACL reflects prudent reserve build through 2020 Movement in Allowance for Credit Losses on Loans (1) ($ billion) 0.53% ACL to L&A 2.5 3.4 1.3 -1.2 0.89% ACL to L&A 0.89% ACL to L&A 0.1- 0.3 -0.3 6.1 60% Wholesale, mainly P&CB and WM, partially offset by CM ACL (Q4/19) PCL on Performing Loans PCL on Impaired Loans Net write-offs, FX & Other ACL (Q3/20) PCL on Performing Loans PCL on Impaired Loans Net write-offs, FX & Other 6.1 ACL (Q4/20) Maintaining our prudent approach to provisioning ■ 2020: ACL as a percentage of loans and acceptances nearly doubled, primarily due to PCL on performing loans - COVID-19 resulted in unfavorable changes in macroeconomic factors and our credit quality outlook - Loss estimations using top-down model driven analysis coupled with bottom-up analysis by clients and sectors, and the application of expert credit judgement were used in the measurement of ACL on performing loans ■ Q4/2020: ACL remained relatively unchanged compared to Q3/2020 Macroeconomic forecasts were generally in line with those in Q3/2020, with favorable changes to housing price forecasts, Canadian and U.S. GDP growth, equities, and U.S. bond yields Scenario weights were updated to put greater emphasis on the downside scenario given ongoing uncertainty at the end of Q4/2020 - COVID-19 related government support and RBC Client Relief programs continue to result in lower impairments and delinquencies (1) Totals may not add due to rounding. 26 | RISK REVIEW RBC

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