Royal Bank of Canada (RBC) is the largest bank in Canada operating in 49 countries. In fiscal year 2012, RBC saw earnings increase by 9% with an ROE of 31.5%. RBC has a history dating back to 1869 and has transformed from a traditional commercial bank to a broad-based financial institution offering personal banking, commercial banking, wealth management, asset management, and capital markets services. RBC's strategic recommendations include making acquisitions in emerging markets to focus on higher growth businesses, introducing new technology-driven services, and advertising online banking through social media.

1. Royal Bank of Canada
Raja Abdar Rahman
Syed Qasim Ali
Saad Sarosh
Sachal Tahseen
Haider Zia

2. Introduction
• Headquartered in Toronto
• RBC is the largest bank in Canada
• RBC operates in more than 49 countries
• RBC Dominion securities and RBC wealth management
• Asset Management operations are among the worlds largest

3. Highlights for Fiscal Year 2012
• Earnings increased by 9% with ROE of 31.5%
• NIM 2.86%
• Loans and deposits increased by 8.4%
• Efficiency ratio improved by 2.6%
• Named best retail bank of North America

4. History
• The Merchants bank of Halifax was incorporated in 1869
• 134 Halifax businessman became shareholders of a new progressive
bank
• The history of RBC closely parallels with the history of Canada
• In 1941 it became Canada’s largest bank

5. Contd
• Under the leadership of John E. Cleghorn it transformed from a
traditional commercial bank to a broad based financial institution

6. Vision Statement
“Always earning the right to be our clients first choice”

7. Mission Statement
Royal Bank of Canada endeavors to be the first choice for consumers,
businesses, institutions and governments for the greater part of their
financial needs. We aim to be the best at providing financial services all
over the globe and we believe that we surpass everyone at what we
do. We strive daily to improve ourselves to provide optimal returns,
and therefore full sense of security, to our stakeholders. To provide the
best financial services, we hire the most experienced financial advisors
and workers. We are the Pioneers in Mobile Banking in Canada and our
clients extensively use this service all over the world. We believe in
good morals, and know that the environment in which we operate is
our responsibility.

8. External Audit - Opportunities
1. Expected growth of 2.4% in the Canadian economy in 2013, mainly driven by increases in 1) consumer spending, 2) business
investments, and 3) increases in net exports
2. Growth rates in the U.S are also expected to rise
3. Prediction of improvement in the U.S housing market implies greater demand for housing loans
4. Growing customer base for asset management and investment bank services in Asia, Latin America, Africa and the Middle East
5. U.S and Canada’s small businesses are continuing to grow and recover
6. Unemployment rate is improving, as a result qualifying more people for home loans
7. Increasing preference for online and smartphone banking
8. The long-established dominance of the banking sector by the developed economies is in decline and emerging economy
banking sectors are slowly taking their place
9. 2.8 billion Adults with discretionary income, in developing economies, are not part of the formal financial system.
10. Chinese market is the most promising emerging market and foreign banks account for only 3% of Chinese banking sector assets
11. Indian banking sector shows much growth and has only 6% of foreign ownerships of assets

9. External Audit - Threats
• U.S growth to be restrained by fiscal tightening, and expected decrease in interest rates
• Consumer and Government spending to fall in Eurozone in 2013
• Increased capital requirement due to Basel Committee and D-SIB’
• Reforms in over the counter derivatives will change the way that RBC operates, as it will
have an impact on their client and trading related revenues.
• Mobile payments over smartphones and Near Field Communications (NFC) are expected
to greatly erode into credit card usage.
• Percent of Americans owning checking accounts dropped from 92 to 88% between 2010
and 2011 and the number owning a credit card dropped from 74 to 67%.
• Consumer Financial Protection Bureau, established by the Federal Board, has placed
restrictions for lenders on credit cards, mortgage loans, student loans, and auto loans.

10. EFE Matrix

11. Competitive Profile Matrix

12. Internal Audit - Strengths
1. Largest bank in Canada with $825.1 billion assets in 50 countries, Highest overall market share among
competitors (35.46%)
2. Net Income increased 3% from prior year
3. Personal & Commercial Banking’s net income increased 7%
4. Acquisition of Ally Canada increased Wealth Management’s net income by 51%
5. Acquisition of Coutts, the wealth division of the Royal Bank of Scotland Group PLC, gave RBC numerous
clients in Latin America, the Caribbean (1 million), and Africa
6. More key private banking staff in Geneva, Switzerland, and Cayman Islands
7. Leading all firms in Canada in 2012, RBC facilitated 38.7% more valuable M&A deals than previous year
8. Globally, RBC aims to be a leading provider of capital markets and wealth
9. Pioneers of online banking in Canada
10. Volume growth (loans and deposits) in Canadian Banking of 8.4%
11. Improved efficiency of employees
12. Better profitability ratios

13. Internal Audit - Weaknesses
1. Lesser branches and geographical coverage than rivals
2. Least profit margin compared to competitors
3. Low EPS
4. Problems in the organization’s structure at top level management
5. Increase in Noninterest expense (7.17%)
6. Very high leverage – Decrease in the ratio is not much
7. Growth rates of sales, net income, and EPS declined
8. Investor and Treasury Services provide the least net income and
ROE (4.3%)

14. Internal Audit – Financial Ratio Analysis

15. Internal Audit – Income Statement Items
Growth

16. Internal Audit – IFE Matrix

17. SWOT Matrix
• SO Strategies
1. Establish units in emerging markets. Focus more on Personal &
Commercial Banking and Wealth Management services. (S3, S4, S5,
S6, O8, O9, O10, O11)
2. Exploit the rising global demand for Asset management and
Investment banking services through achieving the objective of
becoming global leader in provision of capital markets and wealth
management solutions. (S9, S7, O4)
3. Advertise the online banking services through social media and
other channels. (S8, O7)

18. SWOT Matrix
• WO Strategies
1. Make acquisitions and establish branches in Latin America,
Carribean, Africa, China, India, and other promising economies to
spread the geographical network and increase the customer base.
(W1, O8, O9, O10, O11)
2. Increase spread in Canada, U.S, and other economies where growth
is expected. (W2, W3, W7, O1, O2, O3, O8)
3. Provide more services in economies where wages and
administration expenses are lower. (W5, O8)

19. SWOT Matrix
• ST Strategies
1. Increase the volume of longer term fixed rate loans in U.S. (S3, S4,
T1)
2. Issue more capital to meet the capital requirements (S1, T3)
3. Further improve the online banking services to fill the gap being left
by the declining usage of credit cards and checking accounts. (S8,
T5, T6)

20. SWOT Matrix
• WT Strategies
1. Amend the organization's structure by hiring CFO and CAO, and
segment heads for the two other segments. (W4, T1, T4)
2. Decrease the leverage ratio. (W6, T3)

21. SPACE Matrix

22. SPACE Matrix
• Aggressive
• High Financial
Performance
• Financial Strength is
the dominating factor
in the industry

23. BCG Matrix

24. BCG Matrix
• STARS:
1. Personal and Commercial
Banking
2. Capital Markets
3. Insurance
• COWS:
1. Wealth Management
2. Investor and Treasury
Services

25. IE/FE Matrix

26. IE/FE Matrix

27. Grand Strategy Matrix

28. The Quantitative Strategic Planning Matrix (QSPM)

29. QSPM

30. QSPM

31. QSPM

32. Recommendations
• Make acquisitions and establish units in emerging markets (Latin America,
Caribbean, Africa, China, India). Focus more on Personal & Commercial
Banking and Wealth Management services for higher returns and net
income
• Introduce new, technologically advanced services in Wealth Management,
Insurance Investor and Treasury Services, and Capital Markets
• Advertise the online banking services through social media and other
channels.
• Increase the volume of longer term fixed rate loans in U.S.
• Amend the organization's structure by hiring CFO and CAO, and segment
heads for the two other segments.

33. Recommendations
• Form alliances with mobile phone companies and software
developers to provide the best online banking experience to the
customers
• Facilitate the increasing need of Asset Management and Investment
Banking
• Appoint a head for the Investor and Treasury Services and improve
the segment

34. Referrences
• http://www.marketwatch.com/investing/stock/td/financials/balance-sheet
• https://www.cibc.com/content/dam/about_cibc/investor_relations/pdfs/annual_reports
/2013/ar-13-en.pdf
• http://www.scotiabank.com/ca/common/pdf/ir_and_shareholders/Scotiabank_2012Ann
ualReport_ENG.pdf
• http://www.annualreports.com/Company/the-toronto-dominion-bank
• https://ycharts.com/companies/BNS/assets
• http://www.rbc.com/investorrelations/common-dividend-history.html
• http://www.trade.gov/td/finance/publications/2013%20Banking%20Industry%20Assess
ment.pdf
• http://www.rbc.com/history/milestones-at-a-glance/online-banking-services.html
• http://www.rbcroyalbank.com/personal-loans/personal-loans.html
• http://www.rbc.com/investorrelations/pdf/arfront_11_e.pdf