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Royal Bank stock: why I'd buy it now for the next 5 years. Royal Bank just posted record profit and an 18% ROE. Here's why RBC stock looks like a smart buy for the next five years. Published October 8, 8:00 pm EDT The title above must have an exact match in a WordPress "Braze Ad". Key Points * Royal Bank of Canada earned about $18 for every $100 of shareholder money last quarter, and management says that number can keep rising. * Up to $1 billion in annual savings from artificial intelligence is just beginning to materialize, with the bigger payoff expected in 2027. * The dividend is set to grow in line with earnings, backed by a capital cushion well above what regulators require. Picture a retiree in Calgary. Her five-year GIC (Guaranteed Income Certificate) recently matured, and the rate she is offered isn't very attractive. So, she sits down with an advisor at the Royal Bank of Canada (TSX: RY) and moves the money into a balanced portfolio instead. The retiree is still a bank customer while RBC continues to earn income by upselling its product portfolio. These episodes play out thousands of times every day all across RBC branches. And it helps explain why I'd happily buy Royal Bank of Canada today and hold it for the next five years. What makes Royal Bank of Canada different from other Canadian banks? The business model of banks is simple to understand. They take deposits and provide loans. The difference between the interest they earn on loans and what is paid on deposits translates into profits. CEO David McKay said at Scotiabank's Financials Summit on September 9 that RBC runs its Canadian consumer and commercial bank at a 35% efficiency ratio, below the peer average of 45%. In other words, RBC spends $0.35 to earn each dollar of revenue, while competitors spend $0.45. Further, around 40% of RBC customers hold three or more products with the bank, CFO Katherine Gibson said at a Barclays conference on September 16. Notably, capital flows into RBC's wealth business rose 20% from a year earlier. In fiscal Q3 2026 (ended in July), RBC posted a net income of $6 billion, up from $5.4 billion last year. Its earnings per share rose 13% to $4.23, while revenue rose more than 10% to $18.5 billion. RBC added more than $80 billion in new loans in the quarter, larger than its next two peers combined. Return on equity measures the profit earned on shareholder money. The ratio has improved from 15.5% in 2024 to 16.7% in 2025 and to more than 18% in Q3. RBC's AI plan could push profits even higher by 2027. RBC is targeting $700 million to $1 billion in annual benefits from AI, after paying for the investment. Gibson said the real scale-up arrives in 2027, as it used AI to accelerate commercial loan approvals and cut mortgage sales costs. McKay said: RBC has already captured $760 million in cost savings from its HSBC Canada deal, ahead of schedule. A good part of its $300 million revenue target from that deal is still to come. Meanwhile, its U.S. bank, City National, earned roughly $184 million in Q3 as its turnaround gains speed. RBC aims to pay out 40% to 50% of earnings as dividends. That means the dividend should rise roughly in line with profits. The bank declared a quarterly dividend of $1.76 per share, or $7.04 a year. The annual dividend has risen from $2 per share in 2009. RBC also holds a capital cushion of 13.5%, well above the 11% minimum regulators require. It's also buying back about 2% of its shares a year because management believes the stock is undervalued. However, investing in RBC stock carries certain risks. For instance, the trade war could slow loan demand in sectors such as automobiles, steel, and forestry, especially in Ontario. Record profits from wealth management and capital markets could move lower if stock market sentiment turns bearish. Mortgage growth is stuck in the low single digits as immigration slows. Still, Gibson said reserves for retail loan losses now match a 20-year high. The foolish takeaway. Canada's biggest bank just had a record quarter. I'm excited about the blue-chip TSX dividend stock because it can maintain payouts across market cycles while consistently expanding earnings per share.

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Less friction, no fees, more freedom: RBC offers convenient ways to send money around the world with International Money Transfers. Oct 01, 2026, 06:11 ET * Conversion-free transfers for USD, EUR, GBP and HKD currencies held in RBC U.S. and RBC Foreign Currency Accounts * Digital self-serve available any time through RBC Online Banking and the RBC Mobile app* - no branch visit required * Zero RBC transfer fees** * No monthly fee, no minimum balance for RBC Foreign Currency Accounts TORONTO, Oct. 1, 2026 /CNW/ - RBC is making it simpler to send money around the world. Following the launch of International Money Transfers from USD accounts earlier this year, clients can now send same-currency International Money Transfers from their Euro, British pound, and Hong Kong dollar accounts - without paying any RBC transfer fees. "As a globally connected bank, we want international payments to feel seamless and reliable for Canadians," said Amit Sahasrabudhe, Senior Vice President, Personal Banking & Investments, RBC. "Until now, sending money abroad digitally meant starting with Canadian dollars first. We've removed that requirement and dropped the RBC transfer fee so clients can move money around the world with less hassle and more speed." Key features of RBC's International Money Transfer service include: * Send money directly in the currency held in RBC U.S. and RBC Foreign Currency Accounts. USD, EUR, GBP or HKD can now be sent abroad in that currency. * No exchange rate surprises. By sending International Money Transfers in the foreign currency they already hold, clients avoid foreign exchange surprises at the time of the transaction and gain greater clarity on what will arrive for recipients.** * Digital self-serve. Send International Money Transfers any time through RBC Online Banking and the RBC Mobile app. No branch visit required. * No minimum balance required, no monthly account fee. There is no need to carry a minimum balance in an RBC Foreign Currency Account and it's a no-monthly-fee account. * Transfers can arrive at the destination within minutes. Clients can send up to C$50,000 equivalent per day ($C100 equivalent minimum per transfer), with funds typically arriving within 2 days.*** * Pay $0 in RBC transfer fees. Send International Money Transfers from RBC U.S. and RBC Foreign Currency Accounts with no RBC transfer fee.** * RBC Online Banking and the RBC Mobile app are provided by Royal Bank of Canada. ** Additional service fees by any intermediary and receiving bank may apply. *** In some cases, payments may take additional time for processing by RBC, intermediaries and/or beneficiary banks. "Many Canadians rely on international payment solutions to support family abroad, pay for tuition or manage property overseas, among other needs. What they've told us is clear: they want these transfers to be as fast and easy as everything else they do in RBC Online Banking and the Mobile app," said Jay Acharya, Senior Vice President, Everyday Banking, RBC. "That's exactly what we're making possible." Disclaimer This is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. The information presented is believed to be factual and up to date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates. About RBC Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 105,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 19 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com. We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/peopleandplanet. Media contact: Kathy Bevan, RBC Corporate Communications, 647-618-2287 SOURCE RBC Royal Bank