Amy Cairncross - IR Gordon Nixon - CEO Dave McKay - President Mark Hughes - CRO Janice Fukakusa - CAO and CFO Douglas McGregor - Group Head, Capital Markets and Investor & Treasury Services

Steve Theriault - Bank of America Merrill Lynch Gabriel Dechaine - Canaccord Genuity Doug Young - Desjardins Capital Markets Mario Mendonca - TD Securities Meny Grauman - Cormark Securities Robert Sedran - CIBC World Markets Sumit Malhotra - Scotia Capital

Good morning, ladies and gentlemen. Welcome to the RBC 2014 Second Quarter Results Conference Call. I would now like to turn the meeting over to Ms. Amy Cairncross, VP and Head of Investor Relations. Please go ahead Ms. Cairncross.

Good morning and thank you for joining us. Presenting to you this morning are Gord Nixon, Chief Executive Officer; Dave McKay, President; Mark Hughes, Chief Risk Officer; and Janice Fukakusa, Chief Administrative Officer and CFO. Following their comments, we will open the call for questions from analysts. This call will be approximately 1 hour long and will end at 9:00 a.m. To give everyone a chance to participate, please keep it to one question and then re-queue. We will be posting management’s remarks on our website shortly after the call. Joining us on the call are George Lewis, Group Head, Wealth Management and Insurance; Doug McGregor, Group Head, Capital Markets and Investor & Treasury Services; Jennifer Tory, Group Head Personal And Commercial Banking; Zabeen Hirji, Chief Human Resources Officer; and Bruce Ross, Group Head, Technology and Operations. As noted on Slide 2, our comments may contain forward-looking statements which involve applying assumptions and have inherent risks and uncertainties. Actual results could differ materially from these statements. I will now turn the call over to Gord Nixon.

Thank you, Amy, and good morning, everyone. I am pleased to announce that RBC reported strong earnings up CAD2.2 billion this quarter, up 15% from last year. It was a clean quarter, with solid performance across all of our business segments and positive operating leverage and strong credit quality and an ROE of over 19%. Year-to-date RBC has earned CAD4.3 billion delivering a strong return on equity and we are on track to achieve or exceed all of our financial performance objectives for the year. Our all in common tier 1 equity ratio remains strong at 9.7%. The strength of our capital position is a key competitive advantage and provides us the flexibility to continue investing in our businesses for long-term growth while returning capital to our shareholders through dividends and through share buybacks which we commenced this quarter. Our results reflect the strength of our diversified business model which is a key differentiator and positions us to benefit from opportunities across different business segments and geographies at different points in the economic cycle. We have leveraged our Canadian leadership position and the strength of our brand to grow our market share in the U.S. and targeted global markets. We were recently recognized by Brand Finance as having the most valuable brand in Canada and the 16th most valuable bank brand globally. In recent years our brand has become a distinct advantage for us as clients both domestically and global are attracted to the strength, stability and integrity of RBC. Our brand is more than a logo, it’s the people who represent it every day. As this is my last quarterly conference call, before turning it over to Dave, to speak to the performance of our business segments, I'd like to take this opportunity to thank our employees who's dedication and expertise have helped us earn the right to be our clients’ first choice. In particular, I’d like to thank my senior management team for their support over the years. Any success I have enjoyed is due in large part to the talented executives who run our businesses and functional areas. As an example, Janice, has just recently been named candidate CFO of the year, in recognition of both her leadership at RBC and her commitment to giving back to communities. From all of us at RBC, congratulation to Janice. I would also like to thank you, the investment community for your support and belief in RBC. While I have not always agreed with your conclusions, I've always respected them and enjoyed our exchanges. I had also appreciated that we have had honest, open and operable relationships. So many thanks to all of you. It truly has been an honour and a privilege to represent RBC over the past 13 years. It has been amazing to see the tremendous growth over that period but I am leaving with the confidence that we have the right strategy, the right culture and most importantly the right people in place to grow and create value and I look forward to being a shareholder, a client and a supporter for many years to come. And I can assure you the best is yet to come. So with that, thank you again and I now like to turn it over to our President, Dave McKay who is going to review the performance of our businesses.

Thank you, Gordon, good morning, everyone. Starting with personal and commercial banking, I am pleased to have Jennifer Tory, our new Group Head for the segment here with us this morning. We've just begun our transition and I am confident that Jennifer will be a great leader given her extensive banking experience. Canadian banking had a strong quarter with earnings up 8% over the last year reflecting volume growth of 4% and strong fee-based revenue and improved credit performance. Mutual fund revenue was up 18% compared to the prior year and Canadian banking exceeded CAD100 billion in mutual fund assets under administration driven in part by strong RSP season. We also had continued strong momentum in deposits which were up almost 6% over last year and had meaningful market share gains. With respect to business lending, while year-over-year growth was slower, we continue to gain market share in our core markets, of CAD25 million in loans and under. Overall our objective in Canadian banking remains to grow at a premium to our peers, and we continue to focus on achieving the right balance between driving volume growth and maintaining strong margins in order to deliver profitable earnings within our stated risk appetite. Turning to the Caribbean, we continue to navigate through challenging economic and market conditions in the region, and we are on track to close the sale of our banking operations in Jamaica next quarter. Across other parts of the region, we are making progress in restructuring and strengthening our business for the long term, this includes consolidating branches, fully implementing a new pricing model and pursuing quality asset growth. Turning to wealth management we had record earnings this quarter up 25% from last year while generating return on equity of 20%. We grow our average fee-based client assets by 14% driven by a favourable market environment and strong net sales. With a strong quarter and global asset management reflecting the breath of our product offerings, in particular we saw strong demand for balance and dividend funds in our Canadian retail asset management business, but we captured a greater proportion of industry sales. We also had strong flows in our institutional businesses globally, particularly in higher fee credit strategies in Europe and the U.S. In Canadian wealth management we extended our lead and in the U.S. we continue to improving advisor productivity and deepen client relationships, both businesses continue to benefit from our comprehensive approach to our clients, our extensive fee-based solutions and new technology which is making it easier for clients to do business with us. Moving to insurance, the business continues to focus on delivering innovative solutions to our clients, including enhancing our suite of segregated funds and paid annuities to meet our clients' guaranteed savings retirement in the state planning needs. Investor & Treasury Services continues to benefit from our efficiency management activities over the past year. Our cost structure is now more in line with our peers and we’re focused on driving top-line growth by deepening existing client relationships and winning new mandates. Finally, moving onto capital markets, we had a strong quarter demonstrating success of our strategy to focus on traditional corporate investment banking and origination activities. We continue to leverage our lending relationships to provide ancillary products and services which is strengthening our client relationships and driving more sustainable fee income. Even with our growing clients base, a proportion of clients with four more products with us has increased to 22% this quarter, the performance of our trading businesses was particularly strong this quarter, as we benefited from improved market conditions compared to last year and our on-going focus on origination drove a solid increase in new issue activity. Before concluding, I’d like to comment briefly on our U.S. strategy. In this market we have a strong and growing capital markets presence. Our wealth management business has scale and generates close to 1/3 of the segments revenue. And we also have a growing asset management business. Additionally, we had a U.S. based bank which serves over 190,000 clients through the internet, many of whom are Canadian clients who live in -- or have homes in the U.S. it also includes some of our high network clients. We would be interested in opportunities that complement our existing businesses, including areas such as wealth or asset management, credit, payments, private banking for high net worth clients or other financial services. We are not interested in mass market banking, through a bricks and mortar model. But where nothing is eminent from an acquisition perspective, we have a very strong franchise and remain on executing our current strategy. Overall, I am pleased with our solid result this quarter and the performances in each of our business segments. Looking forward I believe that our diversified business model backed by our strong balance sheet is a clear competitive advantage. I am confident that our long standing commitment to serving our clients will continue to drive our performance and extend our lead in Canada to U.S. and select global markets. I’ll now turn it over to Mark Hughes.

Thank you, Dave. Good morning everyone. So I could start by turning into Slide 7, our overall credit quality improved compared to the prior quarter. We are seeing credit trends at historic lows in part reflecting our strong risk management and a supportive economic backdrop in Canada. Provisions for credit losses on impaired loans were CAD244 million or 23 basis points down CAD48 million or 4 basis points from last quarter. This decrease was mainly driven by lower provisions in Canadian banking and wealth management, partially offset by increased provisions in Caribbean banking and capital markets. Let’s look at our credit performance in a little bit more detail. Provisions in Canadian banking were CAD204 million or 25 basis points, down CAD54 million or 5 basis points from last quarter. This was driven by lower provisions in the commercial loan book and the indirect lending portfolio. In Caribbean banking, provisions on impaired loans were CAD27 million up CAD11 million from the previous quarter, this was largely related to provisions on a few accounts reflecting, the continuing economic environment in the region. With respect to capital markets, this quarter we had a provision of CAD13 million largely attributable to a single account, compared to CAD2 million in recoveries in the prior quarter. And I would say the loan book here continues to perform well. For wealth management, you will recall we incurred incremental provisions of CAD19 million on a few accounts last quarter. No further impairments or provisions were taken in wealth management related to these loans or any of the rest of the portfolio this quarter. Turning to slide 8; which focuses specifically on our retail portfolio within Canadian Banking. Our credit card provisions remain near historic lows at 269 basis points although they were up 36 basis points sequentially. This is largely due to seasonal trends in the second quarter and reflected the same seasonal trend a year ago. The PCL ratio in our small business portfolio declined 30 basis points sequentially as the last quarter included an elevated level of PCL as we aligned Ally Canada to RBC’s methodology. We generally do see some variability in our small business portfolio from quarter-to-quarter and we do remain comfortable with its credit quality. Our Canadian residential mortgage portfolio which makes up 64% of our retail portfolio continues to perform well with provisions this quarter of one basis point. This is consistent with our recent historic performance. As you can see on slide 9, our mortgage portfolio is well diversified across Canada. We continue to actively watch our loan portfolios for any early warning signs of credit deterioration and perform ongoing stress testing for numerous scenarios including increases in unemployment and interest rates and a downturn in real estate prices. At this time we are very comfortable with our stress test results. We do not see signs of deterioration and the overall credit quality of our retail portfolios remains strong. Turning to market risk; in the second quarter, average market risk bar was CAD36 million, up marginally compared to last quarter driven by higher equity and interest rate risk. Average market risk stress bar was a CAD103 million, unchanged from the last quarter. During the second quarter there were no daily net trading losses continuing the positive trend experienced over the past two years. With that I will turn the presentation over to Janice.

Thanks Mark, and good morning. Looking at slide 11, we had a strong second quarter with earnings of CAD2.2 billion, up CAD292 million or 15% from the prior year. It was a clean quarter with solid performance across all of our businesses, positive operating leverage and strong credit quality which Mark highlighted. Excluding last year’s restructuring charge in Investor & Treasury Services of CAD31 million earnings were up 13%. Compared to last quarter earnings were up CAD109 million or 5%. Excluding two specified items from last quarter related to the Caribbean, totaling CAD92 million, net income was up 1% despite the fewer days in the quarter. Moving to capital on slide 12; our common equity tier one ratio remained at 9.7% this quarter as strong internal capital generation was offset primarily by growth in risk weighted assets and share repurchases. This quarter we repurchased a total of 1.4 million shares and we expect to continue our buyback activity through the remainder of the year. I would point out that the growth in risk weighted assets relates in part to an update to our retail risk parameters following our review. This increase reflects a recalibration to align with our peers. We are now reviewing the parameters in our corporate and business lending portfolios. We expect the review to be completed over the next few quarters and we're confident that we will continue to maintain our strong capital position. Let me now turn to the quarterly performance of our business segments starting on slide 13. Personal and commercial banking earned over CAD1.1 billion, up CAD76 million or 7% from last year, reflecting strong earnings growth in Canadian banking. Canadian banking net income of CAD1.1 billion was up CAD86 million or 8% from last year, reflecting volume growth across most businesses, higher mutual fund fees, strong margins, and improved credit performance. Sequentially Canadian banking earnings were down CAD27 million or 2%; primarily due to seasonality, which was partially offset by lower PCL in the quarter. Our net interest margin in Canadian banking was 2.74%, up three basis points over last year on an adjusted basis and one basis point sequentially reflecting a favourable funding mix. Going forward, we expect margins to remain relatively stable as we continue to manage through the low interest rate environment and competitive pricing pressures. We generated positive operating leverage in Canadian banking this quarter, up 0.9%. I would note that expenses were elevated this quarter due to higher marketing spend related to our Olympics sponsorship. Our efficiency ratio improved 40 basis points from the prior year to 45% reflecting our continued focus on driving our efficiency ratio down to the low 40s over the medium-term. Turning to the Caribbean, as Dave mentioned the environment continues to be challenging and we're disappointed with the higher provisions for credit losses this quarter. However, we're making progress in our restructuring efforts and we are starting to see some improvements in our core business which should translate into higher earnings and economic activity improves. Turning to wealth management on slide 14; we have record earnings of CAD278 million, up CAD56 million or 25% compared to last year reflecting higher average fee-based client assets from capital appreciation and strong net sales in positive operating leverage. Sequentially, net income was up CAD43 million or 18% mainly due to higher average fee-based client asset. We continue to benefit from strong growth in AUM and AUA up 15% and 14% from last year respectively. And pre-tax margins of 24.5% improved from 22.8% a year ago. Moving to insurance on Slide 15, net income of CAD154 million was down CAD10 million or 6% from last year, reflecting higher claim costs in international insurance. Compared to the prior quarter earnings were relatively flat as lower net claims cost in Canadian insurance were mostly offset by the impact of two new U.K. annuity contracts last quarter. Investor & Treasury services earned CAD112 million up CAD47 million from last year. Leading the prior year restructuring charge mentioned earlier, net income was up CAD50 million or 17%. Sequentially, net income was up CAD6 million or 6%, we continue to benefit from our efficiency management activities and growth in client deposits. Turning to capital markets on Slide 17, we had a strong quarter with earnings of CAD507 million up CAD124 million or 32% from the prior year. Strong equity and fixed income trading results were driven primarily by increased client activity and improved market conditions. We also have solid growth in our U.S. loan book and had high M&A activity relative to last year. I would point out that the trading revenue this quarter benefitted from a favourable accounting adjustment of CAD50 million due to the reversal of the fair value adjustment recorded in the prior quarter. This relates to our early adoption of IFRS 9 this quarter whereby changes in the fair value of our liability are now recognized in other comprehensive income instead of through the income statement. We believe this will reduce income volatility going forward. The impact of this favourable accounting net adjustment was more than offset by higher litigation provisions and related legal cost this quarter. Sequentially, net income was relatively flat as higher equity trading revenue and better originations was largely offset by lower loan syndication activity and higher litigation provisions and related legal cost. Excluding the IFRS adjustment trading revenue decreased modestly from the prior quarter. To wrap it up we’re pleased with the solid performance of all our business segments and our ability to generate positive operating leverage and maintain our strong capital position. At this point I'll turn the call over to the operator to begin the Q&A portion. Please limit yourself to one question and then re-queue so that everyone has an opportunity to participate, operator?

(Operator Instructions). First question is from Steve Theriault from Bank of America Merrill Lynch. Please go ahead. Steve Theriault - Bank of America Merrill Lynch: Thanks very much. Good morning everyone. So maybe for Doug McGregor trading very strong this quarter, maybe you can help us put your very strong results in context relative to the global players who had a fairly lacklustre Q1, recent warnings that calendar two is not looking particularly good, maybe you can help us reconcile that a little bit and anything you can help us within how Q3 is looking so far would be great?

Okay. I would say that in terms of the year-over-year performance I mean a lot of that is market related, I mean the second quarter in ‘13 was I think much more difficult trading environment. What we’re seeing in our trading business is in fact, per Janice’s comment, our results were down slightly if you take the adjustment out of the numbers, but we have been originating a lot of investment grade and non-investment grade business and convertible business in the U.S. And the trading around that origination and the fees relating to it are just increasing and I think that’s just a function of doing more business with more clients which is the route we’ve been trying to go on, so I would say origination in the fixed income business has really been quite good and continues to be quite good. And I think that’s supporting those numbers, you don’t see them falling off like some of the other investment banks have reported. I would say on the equity side that business has improved considerably. I think a lot of it is due to markets and rotation in to equities, there is a lot more activity, over again we’re leading and book running a lot more equity transactions now which brings secondary trading numbers up as well. So I would say overall, it’s a lot of origination, if the growth is really focused in the U.S. and our FIC Europe business has performed well in last quarter as well and I think really it’s just more origination in Europe and also the markets are much improved in Europe. Steve Theriault - Bank of America Merrill Lynch: Okay. And speaking of currency, was there much of a lift from currency, keeping in mind that there's such a big proportion of the revenues now come from the US?

Yes. The board rate changed, but it’s not significant.

The next question is from John Aiken of Barclays, please go ahead. John Aiken - Barclays Capital: Dave, thanks for the additional elaboration on your US strategy but diving a little bit more into what you're talking about in US retail and you stated that an acquisition is not imminent. I guess my question is, is an acquisition really necessary to grow the business? Can you not roll this out on an organic basis? Or would an acquisition be not necessarily for assets or clients but more on a technology front?

Thanks for your question, John. But we still see a very good opportunity to deploy capital for organic growth in the U.S. through our capital markets business. And organically, when you’re thinking about our broker dealer franchise and our high net worth and affluent customer base, there certainly is organic opportunities to provide credit and deposit related services that we don’t do today, through our bank or online bank capabilities. So we are exploring all those avenues which are very interesting avenues for us to continue to deploy capital and grow organically in United States market.

The next question is from Gabriel Dechaine of Canaccord Genuity, please go ahead. Gabriel Dechaine - Canaccord Genuity: Just a quick one, first of all on the risk-weighted asset increase that came from model refinements in the retail portfolio, Janice you mentioned that you're going to look at the business portfolios in the upcoming quarters. I'm wondering if that's stemming primarily from loss given default assumptions increasing; and do you think it's going to be a bigger impact than what we saw in the retail portfolios?

Hi Gabriel, we are reviewing the business and commercial and corporate portfolio across the board. So it would be an assumptions review as well as looking at the models our expectation is that likely there will be some impact on RWA but from a capital perspective we will still continue to maintain the strong capital ratios that you've seen over the past two quarters. So we think that the capital attributed to the possible model reviews and slightly more conservative posturing on that will be more than made up for by our earnings accretion, and we will maintain the capital position. So we're still in the process of sizing all of that and it's our on-going model review process. Gabriel Dechaine - Canaccord Genuity: Then my next one is on the -- for the Canadian business, specifically on the mortgages and I guess the fan out towards the outlook, I guess we saw another peer report this morning and the mortgage growth looks to be trending below 1% annualized anyway, close to 1% annualized. I'm wondering if there is any weather-related headwinds that hit the quarter. And if not, are we looking at moving down our expectations for loan growth in Canada for the full year?

Thanks for your question. It’s Dave. Certainly, I think we've got a bit of a slower start to the mortgage season, partly weather-related as you look at that. We still foresee the mortgage growth coming in, in that kind of single, mid-single digit, a little bit lower potential area, consistent with more the year-over-year number that you’re seeing today. So, it’s holding. The slowing is not a bad thing necessarily, and we're seeing positive growth. So I think, I would queue more off of the year-over-year number than the quarter-over-quarter because it’s -- Gabriel Dechaine - Canaccord Genuity: So you hint that may be a little bit softer, what's different other than the weather that and the market right now?

Yes. Certainly we're seeing very good quality bore come and apply it through our stores and through our channels, so its high quality bore. There may be some customers self-selecting out of the market at this point, given housing prices at certain markets. But overall I think you do see a little bit of a weakening quarter-over-quarter. But we’re starting to see increased activity in the market. We'll see how that translates into the final bookings at the end of the day. Gabriel Dechaine - Canaccord Genuity: All right. Just a final one, I guess more broadly on the business, if volume growth isn't coming in as expected, how quickly can you pivot on the initiative spending and then the spending overall? Because we've seen operating leverage remain positive for Royal for the past couple of quarters but it's still at the low end of your new guidance range. Just wondering how you're planning on managing that?

Well I think if you look across all our businesses, we have good volume growth albeit slowing as you said particularly we've had very strong volume growth in our deposit businesses on the commercial and the consumer side. With good volume growth and our consumer lending businesses where for the most part gaining share across those categories too. So we feel good about the volume growth which is driving with higher margins now. You saw our NIM's are up very good corresponding revenue growth and very good credit quality in those originations, so we watch our expenses and our operating leverage very carefully. We're constantly recalibrating, it’s a dynamic recalibration and it's something we'll continue to do to drive that positive operating leverage that we're very focused on.

Thank you. The next question is from Doug Young of Desjardins Capital Markets. Please go ahead. Doug Young - Desjardins Capital Markets: Hi, good morning. I guess probably a question for George, I think in the past you've expressed an interest in acquisitions in the wealth space and I think it’s been tough because of valuations and obviously there has been some opportunities globally and in Canada, potentially in Canada. I am just trying to get a sense of your appetite, is it more outside of Canada, more inside of Canada, you even need to do anything in Canada and when you look at how do you judge it in terms of size and looking at potential accretion? Thank you.

Sure, thanks very much, Doug. And I think in terms of our results this quarter, clearly our global asset management business was a significant driver and that is where we have focused our acquisition efforts over the last several years within the wealth segment. First with Phillips, Hager & North in 2008, the importance of that acquisition in addition to a great cultural fit in management team was that really secured our leadership in the Canadian asset management areas. So, we don’t have further acquisition needs or ambitions within Canada itself. And then secondly with the acquisition of BlueBay in early 2011 that really solidified our global fixed income franchise for us which we've been very successful in leveraging their mandates into our North American base. So, we continue to be interested in acquisitions in the asset management area. I'll say two things, one, given the strength of our platform now, we've actually been very successful in attracting teams to join the business, so we recently hired a global equity team in London which was attracted by our growing institutional distribution in North America. So that option is very much available to us now in terms of a viable organic strategy. And in terms of acquisitions, we feel we've gone two for two and we're much more focused on going three for three than five out of 10. This is a very challenging area to ensure you get the right cultural fit, business fit and financial fit, so we'll continue to be selective but it does remain a focus for us. Doug Young - Desjardins Capital Markets: And then George, well I just what I have, just one quick thing on the insurance side because I think that falls under yourself, correct me if I am wrong, but I think there was some losses or some higher claims specifically in the life retro side. Can you just describe what happened?

Yes, just on that Doug, in this particular quarter, we had a few claims in that business where we ensure high net worth individual lives from European counterparties. It was an unusual quarter in that regard. Also we had some adverse experience with respect to our disability business in Canada that began to turn towards the end of the second quarter. I'd say that from a normalized earnings perspective the result this quarter was towards the lower end of the range in terms of our expectations going forward. So, too early to call a turn in that trend but it’s looking better than the first half.

Thank you. The next question is from Mario Mendonca of TD Securities. Please go ahead. Mario Mendonca - TD Securities: Good morning. If you could go back to expenses for a moment in wealth, wealth expenses down sequentially for probably the first time as far back as I can see in the supplement. What would be helpful to understand is was this just the end of some significant investment spending or some other actions on the core expenses?

Sure, thanks very much. I think in terms of our -- again our results this quarter, we had, to my earlier comment very strong growth in our global asset management business, strong growth in our Canadian wealth business, relatively flat results in our U.S. international business that does reflect continued spending to strengthen our teams, our control infrastructure and our -- rationalizing our network particularly internationally. But I would say that given those trends, we do expect to deliver positive operating leverage going forward as we did this quarter. Mario Mendonca - TD Securities: May be I'll just follow-up quickly. Did investment spending decline this quarter relative to last quarter?

No, I don’t think that’s -- we'll get back to you on that. Mario Mendonca - TD Securities: May be just then if you could just address why expenses would have been down quarter-over-quarter, let’s keep it simple?

No, Mario, we will get back to you on that because there are a number of moving parts and one-timers and I think there is some impact of FX. So, why don’t we do a little more analysis and digging around the competition because there is a lot of moving parts in terms of one-time items that we don’t really talk about in our disclosure but they need to dial up and down.

And also don’t forget there are fewer days in the quarter too.

Thank you. The next question is from Meny Grauman of Cormark Securities. Please go ahead. Meny Grauman - Cormark Securities: Hi, good morning. My question is just about investor and treasury services and specifically, do you expect the fact that on deals have come in and maybe a little bit of downside? Would that have an impact on this business going forward and in terms of market share around the world, are you seeing -- what are you seeing there in terms of your market share versus the other global competitors?

In terms of the first question on bond yields, in the liquidity portfolio that we managed in this business, we’ve actually been -- we’ve been de-risking that portfolio over the course of the quarter and I wouldn’t say, like I don’t feel particularly vulnerable as to credit spreads, we don’t take much credit risk in that portfolio in the first instance. So I really wouldn’t comment that I am concerned about that revenue changing very much. I would say on the market share you were a smaller player that’s really offshore Europe and Canada focused, not so much in the U.S. where the very large global players are. We have a client strategy that we’re very focused on right now. We’re very interested in growing the business of course and widening out the client base. And I would say most of that activity is around our businesses in Dublin, Luxemburg and of course here in Canada. And it’s going well but it is a competitive low margin environment.

Thank you. The next question is from Robert Sedran of CIBC. Please go ahead. Robert Sedran - CIBC World Markets: First of Gord thanks and good luck with whatever comes next. I want to -- Dave you mentioned the business loan growth of 4% year-over-year, you talked about gaining share in the parts of the business that you’re trying to gain share in, but 4% seems a little light versus what we might have thought for the sector overall on the business loan growth perspective. Can you offer a little bit more colour in terms of which segments are seeing the most competition where you might be seeding share to protect profitability that kind of stuff or is 4% kind of a pretty good number for this time of the -- this part of the cycle.

So are you referring to the mortgage market or… Robert Sedran - CIBC World Markets: No 4% of the business loan growth.

Business loan growth. Couple of things, that business loan growth when you compare it across the market, there are different appetite and hold levels within each of the commercial banking segments, so it differs. So some of our business might get booked in capital markets versus another institution that will book it inside the retail, commercial banking business. So we tend to focus on companies up to 25 million loans, we do hold loans beyond that in our retail book but certainly that core focus which is why we report the market share up to 25. There is a lot of competition in the market particularly in the commercial real-estate sector as we try to balance that composition or portfolio with all other parts of the portfolio. A very aggressive market when it comes to covenant and terms and price rate now, we’re defending our core customer franchises but as you referenced, we don’t like the risk and the return and we will pass on the deal and we start with 28% market share, you've got a lot of market share to defend, so the fact that we’re largely holding in this type of environment we feel is good, albeit its leading to the lower growth that you’re seeing in the market space. Again we're trying to find a balanced margin, risk and volume and drive shareholder value and we take all three of those into consideration. Robert Sedran - CIBC World Markets: So definitional differences aside, you feel like you're holding share?

As you can see in our slides, we’re actually gaining share in the core market place, we would be losing shares in the 25 million to 150 million segment. Robert Sedran - CIBC World Markets: And just a quick follow up Janice, I am not sure if it’s you or George but in terms of the expenses in the wealth management side and this maybe another point of clarification afterwards. But can you give us a sense of what proportion of non-interest expenses in that segment is related to non-Canadian expense or expansion initiatives and it was just like a broad numbers, is it 5%, is it 20% and is that number likely to stay at that level for the foreseeable future like it's just part of run rate expenses.

Yes, just in terms of the expanse quarter-over-quarter, we also in the first quarter began reporting BlueBay, we reported BlueBay on a concurrent basis. So there is actually four months of both revenues and expenses from BlueBay Asset Management in our first quarter results, obviously three months in the second quarter results, so that accounts for a portion of the decline quarter-over-quarter in expenses. In terms of the international component that would have in terms of NIE growth that would definitely be a source of more growth versus our Canadian NIE and that’s a function of both our growth and our global asset management business as well as the items I was referring to earlier in terms of our U.S. international business where we have strengthened our front office teams, our control infrastructure and incurred some cost to rationalize our network this quarter as well. I’d expect those trends to continue.

Thank you. (Operator Instructions). The next question is from Sourav of BMO Capital Markets. Please go ahead.

Just a question for Mark Hughes. Mark, I mean the credit losses are embarrassingly low, sounds like the environment is such that it will stay low but if I just focus in on the leverage lending business that you've been growing in the U.S. Can you just remind us how big that book is and whether or not you are seeing pressure there with respect to aggressive underwriting standards and what sort of reactions you are having there?

Thank you very much for the question. Certainly our overall credit performance is at historic lows and we are obviously very pleased with how that’s been trending. With respect to your specific question on leverage lending, we've reported our exposure there as just over $15 billion on a global basis. I would say that about half of that is to sort of sponsor LBO type of exposures and the other half of it would be to more traditional corporate type of exposures that are actually leveraged so we do combine the two in our definition. It has been a growth opportunity for us in the United States. We've been able to drive significant ancillary business from participating in that market. In terms of how we manage it from a credit perspective, we do subject it to all of the strict risk management practices that we have across all of our portfolios. So, our lending book is aggregated to single name sector and country exposure limits both notional and economic capital. We do focus on both risk and concentration sensitivities. In terms of our overall corporate loan book 68% to 70% of it is still investment grade, so while we've been growing leverage lending, we are trying to maintain our overall proportions between investment grade and non-investment grade. I would also say the holes that we have in our leverage lending book, generally are about a third smaller than we would have in our normal corporate on-going book, so we try to manage the discipline there. And then of course in this particular type of activity, there is usually over 90% of our portfolio has some very strong security, collateral and subordinated funding beneath us to help again support the exposures we have. So, while it is growing, it is very much a key strategic effort on our behalf and we do subject it to our continued risk management practices.

: Okay. And so, if I can just do one quick follow-up on that, what would be the type of growth rates you would expect out of that book when you think over the next, call it, four to six quarters?

It’s Dough. I think the -- I would say that there is a couple of things going on there. The loan book growth, I have said in the past recently is, I expect high single digits and to Mark’s comments I think normally we would say that applies to the investment grade and the non-investment grade loan book. What we have seen recently is regulators giving guidance in the leverage lending space and that could slow the pace of growth in that business, in that market, we'll see how that goes. So, I don’t see the leverage book growing faster than the investment grade book and I see the overall book growing in high single-digits.

Thank you. The next question is from Sumit Malhotra of Scotia Capital. Please go ahead. Sumit Malhotra - Scotia Capital: Thanks, good morning. Just stay with Doug on the last comment, I think the bank has been pretty candid in tying some of the success you had in underwriting an advisory activity globally to the ability to use the corporate loan book particularly the time when some of your competitors were somewhat weakened on the capital side. Have you seen -- as that loan growth starts to slow and some of your competitors have obviously returned, do you think that has an impact on syndicate positions, advisory mandates and things of that nature?

I would say that our syndicate positions on the equity new issue side, the investment grade and non-investment new issue side and more recently on the convertible side, are picking up and I would say that’s because there is a lag between when you engage a client with credit and when you start doing other business with them. And we have been acquiring a lot of clients over the last couple of years. So I would say there is good momentum on the origination side. And I would say the activity on the lending side continues to be reasonably strong as well. Sumit Malhotra - Scotia Capital: And if I remember back to when the -- if I can call it the push, to grow the corporate loan book beginning a couple of years ago, both yourself and I believe Janice had talked about the cross-sell objectives in terms of fee income that came along with the loan book. If I am hearing you correctly that initial push on the lending side to engage clients has progressed to the fact that you’re now able to get the cross sell even of the loan volumes are starting to slow.

Yeah the cross sell is obviously very important, this loan book standalone is hurtling our cost to capital but obviously in terms of return on equity and the earnings we really have to do a significant amount of additional business with customers. So I would say that what we’re seeing in the U.S. is that our product groups are really getting traction, that is the debt capital markets calling off serves the equity capital markets as I said before and again the convertible team which has had a lot of success. So I’d say the people we’re putting in front of the customers are consistent and they are doing -- they’re very good at what they’re doing and they are doing a good job and so the origination is picking up. I would say also just the brand and the franchise value really building on success deal by deal is really starting to pick up. And so when it comes to the cross sell, we’re happy with where we are right now and we expect it will pick up going forward. Sumit Malhotra - Scotia Capital: Last question is on capital deployment as was mentioned, the share repurchase program restarted after a bit of a pause in Q2 and you commented it will continue for the rest of the year. But that occurred despite the fact the CET1 ratio was essentially unchanged quarter-over-quarter. So maybe just wanted to get your mind set here, what was the trigger point that said where we need to be on capital and we can proceed from here and should we think about that 9.7ish level that you’re at as the floor of that RBC will be managing to as far as the CET1 is concerned for what I call extra capital deployment.

It’s Janice, I think that when we look at the floor, we look at the 8% with the [indiscernible] and the 1% regulatory sort of targeting that we’re doing and maintaining a buffer over that for a balance sheet fluctuations in FX. So I think that when we’re also being slightly conservative because as we discussed, we’re looking at all of our model review and RWA reviews of the products and we’re still in slight on the business and the corporate loans. So at the margin we’re intending to be conservative, so I think that you have heard us say that we’re looking at ratios around the 9.5 range, so we may be targeting a little bit slightly higher just as a bit of conservatism. I think when you look at our capital generation capability, that’s why we’re saying that we believe that we are comfortable with going through the model reviews and also looking at continuing the resumption of the buyback as an effective capital deployment mechanism.

Thank you. There are no further questions at this time; I’d like to turn it back over to Mr. McKay.

Thank you operator and thank you everyone for joining us on the call. We do look forward to presenting to you next quarter. Have a good day. See you next time. Thank you.

Thank you. The conference call has now ended; please disconnect your lines at this time. We thank you for your participation.