Amy Cairncross - Vice President & Head-Investor Relations David I. McKay - President, Chief Executive Officer & Director Janice R. Fukakusa - Chief Financial & Administrative Officer Mark Hughes - Chief Risk Officer Jennifer Tory - Group Head-Personal & Commercial Banking, Royal Bank of Canada

Sumit Malhotra - Scotia Capital, Inc. (Broker) Doug Young - Desjardins Securities, Inc. Stephen Theriault - Bank of America Merrill Lynch Gabriel Dechaine - Canaccord Genuity Corp. John Charles Robert Aiken - Barclays Capital Canada, Inc. Meny Grauman - Cormark Securities, Inc. Sohrab Movahedi - BMO Capital Markets (Canada) Mario C. Mendonca - TD Securities Robert Sedran - CIBC World Markets, Inc. Peter Routledge - National Bank Financial, Inc. (Broker)

Good morning, ladies and gentlemen, and welcome to the RBC 2016 First 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. Amy Cairncross - Vice President & Head-Investor Relations: Good morning and thank you for joining us. Presenting to you this morning are Dave McKay, President and Chief Executive Officer; Janice Fukakusa, Chief Administrative Officer and CFO; and Mark Hughes, Chief Risk Officer. Following their comments, we will open the call for questions from analysts. The call is one hour long and will end at 9 AM. 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 for your questions are Doug Guzman, Group Head, Wealth Management & Insurance; Doug McGregor, Group Head, Capital Markets and Investor & Treasury Services; Jennifer Tory, Group Head, Personal & Commercial Banking; Zabeen Hirji, Chief Human Resources Officer; and Bruce Ross, Group Head, Technology & Operations. As noted on slide two, 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 Dave McKay. David I. McKay - President, Chief Executive Officer & Director: Thank you, Amy, and good morning, everyone. RBC had a solid first quarter in an operating environment that was challenging for both us and some of our clients. We delivered earnings of CAD 2.4 billion, flat from a strong first quarter last year. Our results reflect strong execution of our growth strategy. We continue to build our core client franchises while managing expense growth. We closed City National which had robust first quarter results, and even after making the largest acquisition in RBC's history, we maintained a strong CET1 ratio of 9.9% through effective balance sheet management. I'm pleased to report that this morning, we announced a CAD 0.02 or 3% increase to our dividend, bringing our quarterly dividend to CAD 0.81 a share. Before I comment on our business segment performance, let me share some views on the macro environment. Market conditions were volatile during the quarter, given concerns about the outlook for global growth and the fluctuating price of oil. These periods of volatility are challenging for our clients, but I would highlight that most major economies are expected to grow this year. In Canada, we continue to believe that pressure from low oil prices will be largely contained to oil-exposed regions, and that strength in other regions will support modest GDP growth this year. In fact, we started to see the economic benefits of low oil prices and a weaker Canadian dollar on manufacturing and export activity. There's no question that the persistently low oil prices are tough for clients in the affected regions. They're driving an increase in credit provisions in our portfolio. It's important to note, the increases off historic lows we've experienced in recent years and, further, I want to highlight that we've managed through many cycles, and we plan our business based on expected losses rather than historic lows. Our experience this quarter was within the range of outcomes we had planned for. Turning to the performance of our business segments, it was a record quarter for Personal & Commercial Banking. Canadian Banking performed well, notwithstanding the low interest rate environments and challenges in oil-exposed regions. We had solid volume growth across most products. We extended our market-leading position in residential mortgages, and balances were up 7% from last year, as clients continue to take advantage of historically low interest rates. In addition, our promotional programs drove customer activity to our channels. With this growth, we remain disciplined from a risk perspective, and our mortgage portfolio continues to perform well, with provisions remaining at historic lows. We've also continued momentum in business loans, which were up 9% from last year. We've seen confidence rise among clients, particularly in the retail sector, as the weak dollar encourages Canadians to stay home to shop. We also saw strength in the manufacturing sector, as our clients take advantage of strong export conditions. In addition, we're seeing the benefits of investments we've made to grow in key markets. Our margins held up relatively well in recent years, but continue to be pressured by the low interest rate environment and competitive pressures, particularly given our relatively high proportion of fixed rate mortgages and our strong and growing core deposit base. This quarter, we also extended our lead as the number one deposit franchise in Canada, with an industry-leading market share of combined consumer and business deposits. We achieved 13% growth in core checking accounts, a key anchor product for us. Beyond deepening client relationships, deposit growth improves our funding position and provides leverage to higher rates in the future. Our expense growth was well controlled this quarter, and we achieved positive operating leverage. Given the current environment, we continue to closely manage costs, at the same time, we're continuing to invest in digitizing the bank, but maintain the leading share of digital sales volumes in Canada, capturing almost half the market. Turning to the Caribbean Banking, we delivered record results this quarter. This was our third consecutive quarter of solid core results following two years of significant restructuring, which demonstrates our ability to turn around an underperforming business and reposition it for long-term growth. Moving to Wealth Management, this is our first quarter with City National, which closed on November 2 and is now part of our new U.S. Wealth Management business line. I'm very pleased with the underlying performance; City National generated earnings of over CAD 100 million this quarter, driven by double-digit loan and deposit growth. Even with the accounting adjustments and integration costs that Janice will walk through, this business made a net positive contribution to earnings this quarter, which was ahead of plan. While it's early days, we're rapidly firming up plans to deliver on our synergies, and I'm excited to tell you more about this great franchise at our City National Investor Day which be held here in Toronto on March 4, 2016. Moving to Global Asset Management, as expected, lower market returns drove lower fees, but we still achieved positive net sales. However, in January in particular, we saw some clients move assets into cash products as they waited for market volatility to subside. This remains a key growth business for us, and we continue to develop new investment solutions for our retail and institutional clients, including expanding our suite of U.S. dollar investment solutions for Canadian investors. Canadian Wealth Management had solid growth in client assets, and we extended our number one position in the high net-worth segment. While market conditions resulted in lower client transactions, we saw good growth in insurance solutions, demonstrating that our clients value our holistic approach to Wealth Management. Lastly, we're continuing to work through the restructuring of International Wealth Management. Given the complexity, it's taking longer than planned, but we're committed to optimizing this business for the long term. Moving to Insurance, on January 21, we announced that we reached an agreement to sell our home and auto insurance manufacturing capabilities to Aviva Canada, which will allow us to focus on underwriting products where we see the greatest potential for growth, including our life, health and wealth insurance offerings. In addition, we signed a 15-year strategic agreement with Aviva which will allow us to sell their broad product suite of property and casualty products to our clients under our own brand. Investor & Treasury Services delivered a solid quarter. We continued to drive top-line growth by leveraging our leadership position in Canada and in the offshore fund markets of Luxembourg and Ireland to win new business and strengthen existing client relationships. We also increased investment in technology to enhance the client experience. Capital Markets performed well in a difficult environment. Our results were solid compared to a very strong quarter last year, and we improved from the prior quarter, even with higher PCL, which Mark will expand on. Corporate & Investment Banking revenue was down slightly from very strong levels last year, but up sequentially, even with the significant slowing of new issuance activity. In fact, there were no IPOs both in Canada nor in the U.S. in the month of January. There are also fewer debt instruments this quarter, as credit spreads remain wide. However, global M&A activity remained strong during the quarter, and reached a record high in November. Against this backdrop, we advised our clients on over CAD 29 billion of completed M&A transactions, including several high-profile deals in the U.S. And we advised on the largest infrastructure deal in Australia's history. We're also seeing – or we also had double-digit revenue growth in Europe as our market position continues to strengthen and benefit from the investments we've made over time. Turning to Global Markets, trading revenue was lower compared to the strong first quarter last year, as market conditions impacted both originations and secondary trading. But trading revenue improved from the last quarter as client activity increased particularly in our fixed income business. Overall our results in Capital Markets demonstrate the strength of our client-focused businesses and the value of our diversification across products, industry sectors, and geographies. So, to wrap up, I'm pleased with our performance this quarter. We had solid underlying results in our core client businesses, we continue to optimize some underperforming businesses, and we enhanced our digital capabilities for our clients while demonstrating very good expense management. And the closing of City National creates a powerful platform for long-term growth in the U.S., RBC's second home market. In the current environment, there is tremendous value in being a leader across a diverse set of global businesses. I'm confident that we'll continue to deliver long-term value to shareholders, given the strength of our leading client franchises, our strong execution capabilities, and a disciplined approach to risk and cost management. And with that, I'll turn the call over to Janice. Janice R. Fukakusa - Chief Financial & Administrative Officer: Thanks, Dave, and good morning, everyone. As shown on slide six, we had a solid first quarter earnings of over CAD 2.4 billion, flat from last year despite the challenging operating environment and lower market returns. Our results reflect higher earnings in Wealth Management which benefited from the inclusion of City National, record earnings in Personal & Commercial Banking, and higher earnings in Investor & Treasury Services, offset by lower results in Insurance and Capital Markets. Provisions for credit losses increased from last year, mainly due to the impact of sustained low oil prices which Mark will discuss. Compared to last quarter, earnings were down 6% mainly due to the last quarter's net favorable tax adjustments recorded in the Corporate Support. Higher earnings across most business segments were partly offset by lower Insurance results. We demonstrated good expense management. Net of the Insurance fair value change, our operating leverage was negative 2.3%, or positive 1.3% excluding City National. This quarter, our return on equity was 15.3%, down 260 basis points from the last year, largely reflecting the additional shares we issued to fund half the purchase price of City National. As we discussed last quarter, we've maintained our medium-term objective for return on equity of 18% plus, based on our confidence that we will be able to build back up to that target level over time. We continue to focus on optimizing our balance sheet as we work towards this objective. Turning to capital on slide seven. Our Common Equity Tier 1 ratio was strong at 9.9%, down 70 basis points from last quarter, as the closing of City National was partially offset by internal capital generation. City National impacted our CET1 ratio by 94 basis points, slightly more than our previous estimate largely due to the impact of foreign exchange translation on risk-weighted assets. In addition, our capital ratio was impacted by a lower discount rate, which increased our pension obligation. Let's move to the performance of our business segments, starting with slide eight. Personal & Commercial Banking reported record earnings. Canadian Banking had earnings of over CAD 1.2 billion, up CAD 11 million, or 1%, from last year. Our results were driven by solid volume growth of 6%, including loan growth of 5% and deposit growth of 7%, although the related revenue was impacted by lower spreads. Our net interest margin was 2.62%, down 6 basis points from last year reflecting the low interest rate environment and competitive pressures. Overall, funding costs have increased due to ongoing market volatility, which has resulted in margin compression, particularly on our prime-based products. As we expect ongoing pressure from low interest rates and the competitive environment, we will continue to remain disciplined about managing our margins. Our performance this quarter also reflects modest fee-based revenue growth. Expenses were up 2% from last year reflecting higher costs in support of business growth, partially offset by our continued focus on efficiency management activities. We had positive operating leverage at 0.2% this quarter, and our efficiency ratio of 43.7% improved 10 basis points from last year. We believe there's more we can do to drive further efficiencies and we continue to target operating leverage in the 1% to 2% range. Sequentially, Canadian Banking earnings were flat as solid volume growth, higher fee-based revenue, and lower marketing costs we're offset by higher PCL and lower spreads. Caribbean and U.S. Banking had record earnings of CAD 59 million, up CAD 24 million from last year, largely reflecting the favorable impact of foreign exchange translation. Ongoing efficiency management activities also contributed to core earnings growth. Sequentially, earnings were up CAD 60 million, largely reflecting higher fee-based revenue. Turning to slide nine, Wealth Management had earnings of CAD 303 million, up 32% from last year, and 19% from last quarter. City National added CAD 53 million to our earnings this quarter, or a CAD 107 million excluding amortization of intangibles of CAD 31 million after-tax and acquisition and integration costs of CAD 23 million after-tax. As Dave mentioned, City National's performance reflects strong operating results, with loan and deposit balances up 14% and 12%, respectively, from last year. Its credit quality also remains stable. Our integration is proceeding well and City National's results are ahead of plan given strong core performance helped by a favorable exchange rate. Excluding City National, our Wealth Management results were impacted by challenging markets. We also incurred restructuring charges of CAD 18 million after-tax related to the repositioning of our International Wealth Management business mostly related to the announced sale of our Caribbean Wealth business, which is expected to close in the latter half of the year. As we discussed, we're taking steps to improve our operating performance for this segment. We're pleased that focused expense management and savings from restructuring activities have helped drive 9% earnings growth. Global Asset Management revenue was down 5% from last year and largely due to lower performance fees. Assets under management grew 3% from last year, even in challenging market conditions reflecting solid net sales. Canadian Wealth Management revenue was up 6% compared to last year, as higher earnings from growth in fee-based client assets was more than offset by lower transactional revenue given decreased trading volumes and fewer equity issuances. Moving to Insurance on slide 10. Net income of CAD 131 million was down CAD 54 million, or 29%, from last year, reflecting higher claims costs, largely in our life retrocession business and lower earnings from a new UK annuity contract this quarter compared to two new contracts last quarter. Sequentially, net income was down CAD 94 million, or 42%, reflecting favorable actuarial adjustments in the prior quarter and higher claims costs in the current quarter. As Dave mentioned, this quarter we announced the strategic sale of our home and auto insurance business. We expect to record a gain of approximately CAD 200 million after-tax when the transaction closes, which is expected in the third quarter of this year. Turning to slide 11, Investor & Treasury Services had earnings of CAD 143 million, relatively flat from last year. Earnings from better spread capture in our Treasury portfolio, the positive impact of foreign exchange translation, and growth in client deposits were offset by increased investments in technology. Compared to last quarter, earnings were up CAD 55 million, or 63%. I'll remind you that last quarter, credit spreads widened considerably, and as a result, we recognized mark-to-market losses on securities held in our Treasury portfolio. This quarter, credit spreads stabilized which improved the performance of the portfolio. Turning to slide 12, Capital Markets had a good quarter in a difficult market environment. Net income CAD 570 million was down CAD 24 million, or 4%, from very strong results last year, driven by lower equity trading revenue and lower debt origination activity across most regions and, in addition, we had higher PCL. These factors were partially offset by lower variable compensation, the positive impact of foreign exchange translation, and a lower effective tax rate, which helped to significantly improve our efficiency ratio. Sequentially, earnings were up CAD 15 million, or 3%, driven by higher fixed income trading revenue reflecting stabilizing credit markets, as well as lower litigation provisions and related legal costs. We also benefited from higher M&A activity and equity origination in the U.S. These factors were partially offset by higher PCL. In addition, our results last quarter included a favorable income tax adjustment. Before I hand it over to Mark, let me take a moment to discuss our allowance for loan losses, because we've had questions about the accounting differences between Canada and the U.S. Our accounting for provisions follows an incurred loss model. As you can see in our disclosures, at the end of Q1, we had an allowance of CAD 2.3 billion, of which CAD 800 million was for our specific losses and CAD 1.5 billion was for our general allowance for losses that have been incurred, but we haven't been able to specifically identify yet. Depending on the type of loan, we typically allow 9 to 12 months for the losses to become identifiable to us. For residential mortgages, we extend this timeframe to 18 months. Currently, the major source of potential new loan losses relates to the impact of low oil prices on our wholesale loan portfolio, and possible impacts to our retail portfolios through lower employment and the wind-down of severance packages, mainly in oil-exposed regions. During the past few quarters, we've scrubbed our oil and gas exposures with a bottoms-up name-by-name analysis and macro stress test, which Mark will discuss. We understand the portfolio extremely well and in the scenarios we have tested, we believe that our general allowance is adequate to cover our losses over the next 12 months, as it covers the unknown items. This contrasts with U.S. accounting, which is moving towards expected losses. We understand that a number of U.S. banks effectively incorporate an expected loss model in their current provisioning. As we transition to new IFRS loan accounting, we will be closer to the expected loss model. With that, I'll turn it over to Mark. Mark Hughes - Chief Risk Officer: Thank you, Janice, and good morning. Turning to slide 14, as a result of sustained low oil prices and a rise in unemployment in oil-exposed regions, provisions for credit losses on impaired loans increased from last quarter's low levels of 23 basis points to 31 basis points this quarter. For context, this time last year, the price of oil was around USD 50 a barrel, a level that we noted challenged the profitability of the sector. Throughout 2015, many of our clients in the oil and gas sector raised capital, delayed capital spending, cut dividends or sold assets to help mitigate the impact. The extended duration of low oil prices, which averaged USD 37 a barrel in Q1, has put additional pressure on some of our clients. Given the challenging environment, our credit performance this quarter was in line with our expectation. As seen on slide 15, provisions of CAD 410 million increased by CAD 135 million this quarter, mainly driven by higher provisions in Capital Markets and Personal & Commercial Banking. In Capital Markets, provisions were CAD 121 million, or 53 basis points, up CAD 84 million, or 36 basis points, from last quarter, primarily due to losses on four oil and gas accounts and one utility account. Wholesale provisions can be lumpy. In this quarter, we had one large provision on a syndicated exploration and production company which accounted for approximately two-thirds of the Capital Markets provisions. The remaining oil and gas provisions are related to two drilling and service accounts, one in Canada and one in the United States, and one exploration and production account in the United States. In Personal & Commercial Banking, provisions were CAD 284 million, or 30 basis points, up CAD 44 million, or 5 basis points, from last quarter. Provisions in Canadian Banking were CAD 266 million, or 29 basis points, up CAD 38 million, or 4 basis points, from the prior quarter, due to higher provisions, mainly in our personal lending and cards portfolios. As expected, a rise in unemployment in oil-exposed provinces is affecting retail clients, and largely explains the increase in provisions this quarter. Provisions in Caribbean & U.S. Banking were CAD 18 million, up CAD 6 million from last quarter, reflecting higher recoveries in Q4. Provisions in Wealth Management were CAD 5 million, or 4 basis points, up CAD 4 million, or 2 basis points, sequentially due to the addition of City National. Turning to slide 16. Gross impaired loans increased CAD 835 million from last quarter, largely due to credit impairments of CAD 657 million acquired with City National. These impairments consist mainly of FDIC covered loans, which should not result in any material losses. Excluding City National, our gross impaired loan ratio was up only 2 basis points sequentially, reflecting new impairments in Capital Markets and the impact of foreign exchange translation. Now, let me provide some additional color on what we're seeing in our portfolios as a result of the sustained oil prices, starting on slide 17. Our drawn wholesale loan book to the oil and gas sector, while continuing to represent only 1.6% of RBC's total loan book, has increased by CAD 693 million this quarter. This largely reflects the impact from foreign exchange translation, as well as higher drawings on some existing facilities. Approximately 60% of our drawn exposure is to exploration and production companies, typically governed by borrowing basis and sized to the proven reserves of the borrowers, which provides good protection against credit losses. Our total drawn and undrawn exposure to the sector, excluding the impact of foreign exchange, was flat sequentially, with no significant change in mix. Over the past few months, we ran an updated name-by-name wholesale stress test, assuming a USD 30 oil price flat throughout 2016, followed by a discounted futures price curve thereafter. Based on this stress test, we added nine new names to our energy watch list for closer monitoring, and anticipate our PCL to fall within a 30-basis-point to 35-basis-point range. We also ran an enterprise-wide macro stress test based on oil at USD 25 a barrel in 2016, which looked at the impact on our retail and wholesale portfolios in Alberta, and the contagion effect on the rest of Canada, should this cause a Canadian recession. In what we believe to be an unlikely scenario at this point, provisions based on this macro stress test would increase to 40 basis points to 50 basis points, which is within our historic average through a cycle. As we've seen this quarter, we expect the current environment will likely result in further liquidity challenges for some of our clients, causing increased drawings on committed lines. Further, as we look ahead to the spring redetermination, we expect a further decline from the price deck we used last fall, which will likely result in reduced credit for some clients. These conditions will likely lead to continued losses, although they won't necessarily materialize in a linear fashion. I would add that in this environment, we work with our clients to assess their situation on a case-by-case basis. This includes assessing covenants in relation to cash flows. In some cases, we may provide covenant relief, as our goal is to help support our clients, while also minimizing our losses. As for our commercial clients, so far they have remained relatively isolated from the impact of low oil prices, given the strengths of their balance sheets and geographic diversification. Let's now turn to our retail exposure on slide 18. As I mentioned earlier, sustained low oil prices have led to increasing unemployment rates. Alberta's unemployment rate increased from 4.6% to 7.4% over the past year and severance packages have started to wind down. The unemployment rate now exceeds the national average. We are also seeing similar trends in other oil-exposed region such as Saskatchewan and Newfoundland and Labrador. As a result, provisions in these regions have increased largely in our personal lending and cards portfolios where the first signs of stress typically occur. Against this backdrop, we continue to actively monitor shifts in our clients' financial patterns to ensure we maintain visibility into early signs of stress. We did see delinquencies move up this quarter from historical lows in our residential mortgage portfolio in Alberta and are proactively working with these clients. Overall, however, our mortgage portfolio continues to perform well given our strong underwriting practices and geographic diversification with provisions of 2 basis points this quarter. Turning to slide 19. The vast majority of our clients' credit profiles are strong and have remained stable over the past year. In fact, the average FICO score in Alberta is in line with the national average. Also, the debt service ratio in Alberta is stronger than the national average and we have a greater percentage of insured mortgages in that region. While we do expect to see further credit deterioration in our retail portfolio in oil-exposed regions, we did not see any signs of deterioration outside of these regions this quarter. Turning to market risk on slide 20. Our average value at risk increased by CAD 5 million from last quarter due to foreign exchange translation and higher equity market volatility. This was partially offset by lower interest rate and credit spread exposures from reductions in our fixed income portfolios, which also impacted our average stressed value at risk reducing it by CAD 8 million sequentially. Both remain low relative to our revenue streams. This quarter, we had three days of net trading losses totaling CAD 13 million, largely due to higher market volatility in Q1 driven by uncertainty over China's economic growth, which adversely affected commodities and equities globally. This is down from six days of net trading losses last quarter. To conclude, while the ongoing market and the economic headwinds underpin a cautious outlook and we are continuing to monitor for any signs of contagion, we do expect to continue to benefit from the diversification of our portfolios both in terms of geography and industry as well as our prudent risk management practices. With that, we will open the lines for Q&A.

Thank you. We will now take questions from the telephone lines. The first question is from Sumit Malhotra from Scotia Capital. Please go ahead. Sumit Malhotra - Scotia Capital, Inc. (Broker): Thanks. Good morning. Just want to start with Mark, please. And specifically on the wholesale portfolio, a two part here. At – it was in January, David made mention about, I think, 40 basis points being a reasonable outlook as far as the loss rate in the Capital Markets or wholesale segment was concerned in the interim. Wanted to check with you, as to whether under this scenario, you're now envisioning that still holds? And maybe related to that, we've talked a lot about the oil and gas portfolio, but we did note and you mentioned that there was a utilities provision booked in the quarter as well. How should we think about your utilities exposure, as it relates to the current oil and gas environment? Mark Hughes - Chief Risk Officer: Thank you for the question. I'll answer the first one on the 40 basis points. Obviously with, as I did mention with Capital Markets situation, they tend to be lumpy. And we did have the one loan PCL, which caused that to jump to the 53 basis points. We do believe that the 40 basis points would still hold over a number of quarters. On utilities, I would stress that the loan that we have the PCL on was an individual situation that is not really an industry problem. It was a situation where a parent company outside of Canada and the United States has had difficulties and has caused some investment issues in terms of building the operation. So, I would call that as certainly unique and not an industry issue. Sumit Malhotra - Scotia Capital, Inc. (Broker): Just want to clarify something here. So, we're focused mostly or we have been anyway on the direct oil and gas portion of what you breakout on energy. When we think about that utilities component in some of the scenarios you've described the U.S. stress testing, where – does that come into play in a major way in terms of your forecast of losses or is it more on the P&P and services component that you're still focused? Mark Hughes - Chief Risk Officer: The majority of our expectation under stress would be in exploration and drilling and the services. Sumit Malhotra - Scotia Capital, Inc. (Broker): All right. I have one on capital, but you know what, I'll re-queue and we'll try it later on the call.

Thank you. The next question is from Doug Young from Desjardins Capital. Please go ahead. Doug Young - Desjardins Securities, Inc.: Hi. Good morning. Just further on the oil and gas portfolio. And just saw that the undrawn facility increased I think from CAD 13.7 billion from CAD 11.7 billion. So, I'm just trying to get a sense of the quantity of increase that was more FX related and about the increase, where that's related to; what type of clients and so forth? Thank you. Mark Hughes - Chief Risk Officer: The undrawn increase was solely related to foreign exchange. Doug Young - Desjardins Securities, Inc.: So, it's 100% foreign exchange, okay. And so, since I was fairly quick, maybe I can just kind of double back on another question here. In Canadian Banking, obviously, the NIM compression, down 3 basis points, and there was a number of drivers of that given in the prepared remarks. Just wondering when you look at through fiscal 2016 if – what sense do you have in terms of other contractual – what do you think the impact for the full year will be in NIMs considering nothing else changes in the environment that we're in right now? Or is this a NIM where we should see stabilization? Thank you. Jennifer Tory - Group Head-Personal & Commercial Banking, Royal Bank of Canada: Thanks, Doug. It's Jennifer. Obviously, the current environment is challenging our margins given the low interest rates and the competitive pressures. We also have a fully loaded funding model, so the cost of hedging, et cetera, are all reflected in our NIM, and this year-over-year decrease is actually in-line with the 1 basis point to 2 basis points per quarter that we expect to given the current environment. And going forward, we expect to continue to guide to a compression of 1 basis point to 2 basis points per quarter, but we will remain disciplined about managing our margins. David I. McKay - President, Chief Executive Officer & Director: Doug, this is Dave too, (36:30) and as we talked about in the last call, asset mix has an impact given the ratio between fixed rate consumer lending and variable rate consumer lending. We're still – continue to see kind of very high by historic terms, margins on the variable rate book, which has a lower component in our overall portfolio than many of our other peers. Doug Young - Desjardins Securities, Inc.: Great. Thank you very much.

Thank you. The next question is from Steve Theriault from Bank of America Merrill Lynch. Please go ahead. Stephen Theriault - Bank of America Merrill Lynch: Thanks. Had a quick question on City National, but if I could just ask Mark a follow-up question. I was going to ask, if you think the 31 basis points this quarter is a reasonable run rate or if – we might see some reversion to the downside. Obviously, that number can bounce around a lot and I'm sure it will depend on if there are any sort of lumpy charges but, it seemed from your prepared remarks, Mark, that you think that – my interpretation anyway was that, that 30 bps to 35 bps is probably what we should expect in the near term and there is going to be some noise through the oil and gas portfolio unless oil arises meaningfully from here. So, maybe just your thoughts on that, please? Mark Hughes - Chief Risk Officer: Yes, I think if oil continues at the level it is, the 30 bps to 35 bps is what I would think is our more normalized PCL for going forward. Stephen Theriault - Bank of America Merrill Lynch: Okay. Thanks. And just on City National, you go on to some detail around the rising gross impaireds from the impact to City National. Can you give just a little detail on the FDIC covered loans that I saw mentioned, just in terms of their nature and the size and is it from a portfolio or an acquisition that's – or a book of business that's running off or something that's being built on? Mark Hughes - Chief Risk Officer: Yeah. It's a book of business that's being run off. It was coming out of the financial crisis. A number of financial institutions in the United States purchased FDIC covered loans as essentially investment opportunities. These were impaired loans that are, say, FDIC covered. This is a portfolio that's winding down quite satisfactorily. It's been I think a very good investment for City National, but it is – it was a once-in-time opportunity and – but they still had some left as we acquired them. Stephen Theriault - Bank of America Merrill Lynch: Got you. And it was a loan sale not a bank acquisition per se? Mark Hughes - Chief Risk Officer: It was a purchase of a loan portfolio. Stephen Theriault - Bank of America Merrill Lynch: Got you. Thanks very much.

Thank you. The next question is from Gabriel Dechaine from Canaccord Genuity. Please go ahead. Gabriel Dechaine - Canaccord Genuity Corp.: Hi. Good morning. I have a two-pronged one for Mark, just quick numbers. When you do your stress test, what's the impact of credit downgrades on your RWAs and therefore on your core Tier 1 ratio? And then just want to talk about the range of PCL that you quote for your stress scenario, 40 basis points to 50 basis points. If I look at your capital disclosures, page 42 of the supplement, I see average historical actual loss rate of 43 basis points. That's within that range, but that's an historical average going back to 2003, which included some very good years and two or three really bad ones that were – I don't want to downplay the financial crisis, but it was brief in retrospect. I'm just wondering, how come that number is within your stress range? It kind of doesn't make sense to me. And we're apples-to-oranges here a bit, but I'm looking for a connection. Mark Hughes - Chief Risk Officer: Okay. If I answer the first question, in the stress scenarios, I think you're asking what would be the impact on RWA, is that what you were asking? Gabriel Dechaine - Canaccord Genuity Corp.: Yes. And – or if you just want to summarize in core Tier 1 terms? Mark Hughes - Chief Risk Officer: So, I think that the thing I need to stress is the exposures in oil and gas still is only 1.6% of our total loan portfolio. So, while we are – we would expect some increases in RWA, and I think it would be in the region of CAD 1 billion to CAD 3 billion that in the overall scheme of our capital management, that is still a relatively small number. Gabriel Dechaine - Canaccord Genuity Corp.: So a CAD 1.3 billion – sorry, it would be... Mark Hughes - Chief Risk Officer: CAD 1 billion to CAD 3 billion of incremental RWA. Gabriel Dechaine - Canaccord Genuity Corp.: CAD 1 billion to CAD 3 billion? Okay. Mark Hughes - Chief Risk Officer: So, I'm also having a little bit of trouble understanding your question with respect to the 40 basis points or 50 basis points. So let me try, and then... Gabriel Dechaine - Canaccord Genuity Corp.: Yeah. Mark Hughes - Chief Risk Officer: ...don't quite get it, get back to me. What we do is, is we do a macro stress across all of the portfolios, and that stress has shown that our PCL would increase in that Canadian recession type scenario to 40 basis points to 50 basis points. What we then say is that an increase that would be within what we call our risk appetite and how we define our risk appetite is that we look at our historical through-the-cycle loan losses and determine, is this going to be outside of that historical through-the-cycle experience? If it's beyond that, then that would suggest a stress test that's beyond our risk appetite. If it's in our results, in this macro stress that I'm quoting are actually within that historical through-the-cycle. Does that answer your question? Gabriel Dechaine - Canaccord Genuity Corp.: Yeah. It does. So, the results of your stress test lead to a PCL ratio that is essentially your historical average, not like, as we think of it, a stress test – or a stress scenario where PCLs really, really spike. That's kind of what it sounds like. Mark Hughes - Chief Risk Officer: I think what I'm trying to say is, is that I guess it's a positive in a sense of, what we're trying to say is that, even when we construct a Canadian recession scenario, we do not see PCL going beyond our historical through-the-cycle PCL. Gabriel Dechaine - Canaccord Genuity Corp.: Okay. But that's kind of the point here is that, how is that possible if – and I'm being very simplistic here, and not as detailed as what you guys are doing, but all the stuff that goes in these stress tests, unemployment spikes, oil for USD 25 for a number of years, and interest rates doing whatever, and all that does is result in your historical loss rate. Is that – that's what you're saying? Mark Hughes - Chief Risk Officer: Yes. Gabriel Dechaine - Canaccord Genuity Corp.: Okay. Thank you.

Thank you. The next question is from John Aiken from Barclays. Please go ahead. John Charles Robert Aiken - Barclays Capital Canada, Inc.: Good morning, Mark. Apparently you're very popular this morning. Wanted to circle back on the consumer side of the loan portfolio. The increase in charge offs on the credit card portfolio not terribly surprising, but the uplift on the personal lines was a little bit higher than I would have expected it at this stage in the game. Can you tell us what type of products are driving this? Was this almost completely on the unsecured lines, or were some of this secured by auto or other products? Mark Hughes - Chief Risk Officer: That would include some auto, some unsecured revolving credit lines, as well there is also some student loans in that grouping. John Charles Robert Aiken - Barclays Capital Canada, Inc.: And that is principally out of the provinces that are impacted by the energy prices? Mark Hughes - Chief Risk Officer: That's correct. John Charles Robert Aiken - Barclays Capital Canada, Inc.: Are you, as a bank, doing anything at this stage going forward to try to mitigate the growing losses that are emanating out of the consumer book? Mark Hughes - Chief Risk Officer: Certainly, and Jennifer may want to also join in here, but in Alberta, certainly we do have – we're looking at our policies, our programs, and essentially I think the easiest way of saying it is, where we had exceptions to grant credit, those exceptions are not being given. We're sticking to our disciplined policies, and I think that's proving to be a good way to at least manage the portfolio at the moment. Jennifer Tory - Group Head-Personal & Commercial Banking, Royal Bank of Canada: What I'll add to that, John, is that obviously, we're continuing to work with our clients through these difficult times, but we're constantly updating our credit strategies, and those credit strategies are used for both origination and for monitoring our portfolio. So, we've added some additional dimensions in the oil-exposed provinces, to be able to mitigate some of the rising concerns. And also, we've got very well-developed strategies to support our clients through the difficult times, where we give them advice on restructuring their credit. John Charles Robert Aiken - Barclays Capital Canada, Inc.: Great. Thanks for the color.

Thank you. The next question is from Meny Grauman from Cormark Securities. Please go ahead. Meny Grauman - Cormark Securities, Inc.: Hi. Good morning. Just thought maybe I'd just follow-up on Gabe's question, just maybe from a different angle. You talk about PCL sort of staying in historic range. Just from someone kind of looking in maybe more cynically, how can we talk about sort of historical range when we're looking at the kind of oil shock that we're seeing? It seems like we're not in normal times. So, I'm just wondering what – kind of, what's your perspective on that, in terms of, how do we define normal? Mark Hughes - Chief Risk Officer: Again, maybe what I would try to – maybe say here is, what we're looking at is, how do our stress tests reflect from where we were? If you look at 2015, our PCL was in the 24-basis-point level, which was a very benign credit environment. When we do our name-by-name wholesale stress test, we believe that that would push our PCL back up to what we would call more normalized 30-basis-point to 35-basis-point range. If we then do the macro stress test, which is essentially trying to assume that there is a contagion effect across all of our portfolios into a Canadian recession, that would push our PCL up into the 40-basis-point to 50-basis-point range. So while I think, you're sort of struggling that 40 bps and 50 bps doesn't seem to be that high in a stress scenario, it is actually working off a base of 24 bps. So, it is a fairly stressful situation, relative to the experience we've been having over the last 12 months or so. Meny Grauman - Cormark Securities, Inc.: Okay. Mark Hughes - Chief Risk Officer: Does that help? Meny Grauman - Cormark Securities, Inc.: Yeah, that definitely helps. Just wondering, I'm not sure if you mentioned, but what kind of real GDP growth are you assuming in your more extreme stress case scenario ex-Alberta? Is that something you've – you can mention or you've talked about? Mark Hughes - Chief Risk Officer: We have multiple stress tests, so I'm struggling to remember. We do actually have – somewhere we actually have decreases in GDP, 3% to 4%, and unemployment going up 4% to 5%, and house prices coming down 20% to 25%. So, those are the three – oil price is obviously a big variable in this particular situation, but we do see GDP go down in a stressed scenario, we see house prices down, and we see unemployment up. Meny Grauman - Cormark Securities, Inc.: Thank you very much.

Thank you. The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. Sohrab Movahedi - BMO Capital Markets (Canada): Thanks. Quick question for Janice. Janice, it was very helpful, the color around generals and specifics. Trying to kind of get a feel for, is there any flexibility on the part of the management to think beyond the 12-month timeframe that seems to be the norm – the (49:05) identifiable losses and – specific to the generals allowance. Janice R. Fukakusa - Chief Financial & Administrative Officer: That's a great question, Sohrab. And I think that when we look at accounting like general allowances and that, it's all about what the accounting guidance is. And I think that that's a difference case. When Mark talks about looking at borrowers on a case-by-case basis and looking at how we're you evaluating losses in that , that's a different perspective, that is the working perspective. From an accounting perspective, we can't really deviate from the accounting without having brought discussions around why we're different. So that's why I think the IFRS have addressed this whole issue by looking maybe more towards expected losses which, from our perspective, it's probably reasonable given the cycle and it would be a little bit closer to what's happening in the U.S. provisioning. But at that point in time, there's no point in switching around what we're doing given that the IFRS accounting changes happening in the next couple of years. Sohrab Movahedi - BMO Capital Markets (Canada): Okay. That is tremendously helpful, and I'm happy to take this offline, but with IFRS new accounting rules, does that essentially mitigate the need to have general allowances? Janice R. Fukakusa - Chief Financial & Administrative Officer: There is nothing called general allowance in IFRS.. Sohrab Movahedi - BMO Capital Markets (Canada): Collectives or unidentified or... Janice R. Fukakusa - Chief Financial & Administrative Officer: Exactly. So it would – and I think what you will see, with the move towards expected loss is less of a reason to have an unassigned allowance, but the collective losses on portfolios may have a little bit more volatility and there may be more front ending of portfolio losses with an experience coming in and revising the assumptions, but it's hard to say. Sohrab Movahedi - BMO Capital Markets (Canada): Thank you very much. Janice R. Fukakusa - Chief Financial & Administrative Officer: Okay.

Thank you. The next question is from Mario Mendonca from TD Securities. Please go ahead. Mario C. Mendonca - TD Securities: If I could first go back to something Dave McKay said. You said that the – and this is something you've talked about in prior calls as well that Royal's more heavier weighting to fixed rate mortgages, puts it at a bit of a disadvantage with the wider prime/BA spread. I think that's something you've talked about. Now, that prime/BA spread has really narrowed recently. So, is it your view that, that disadvantage narrows over time? David I. McKay - President, Chief Executive Officer & Director: Yeah. I think if you expect a reversion to the mean of 166 bps over time, we're in unprecedented territory for four or five quarters now, I think while it has narrowed, it's still slightly up year-over-year. So, if it holds where it is now, it's around 180 bps, 185 bps, you'll see Q3-Q4 will be actual (52:00) decrease from 195 bps, I think it reached that peak. So, right now it's still stable year-over-year to a slightly up but certainly given we're 75% fixed, and our margins are fixed there that we don't get the same lift on our variable rate mortgage book and the impact on our P&L that you did if you had to reverse the 75%-25% variable fixed. So, when you're talking about CAD 250 billion book, it's quite a significant margin shift. Mario C. Mendonca - TD Securities: Yeah. My only observation is that it did seem to be narrowing somewhat but I guess time will tell. David I. McKay - President, Chief Executive Officer & Director: It had sequentially, absolutely, but still if you look year-over-year, I think January 15 was around 182 bps I think, roughly 183 bps, right? Mario C. Mendonca - TD Securities: Okay. Can we go to the ROE discussion and -- because I feel like I'm missing something here. You talk about – perhaps Janice, Dave again. You talk about maintaining the 18% plus ROE and when I think about that in the context of potentially being a G-SIFI, the 9.9% Basel III Common Equity Tier 1 ratio, potentially higher risk weights on mortgages, although in a more sort of modest way standardization. There's just so many reasons why capital requirements would be going higher. So, what am I missing? When you talk about 18%, are you talking about managing the capital lower? Are you talking about managing earnings materially higher? Or am I just looking at this over a period of time that's different from yours? Are you thinking 5, 10 years out when you think 18%? Can you help me think through that, Janice. David I. McKay - President, Chief Executive Officer & Director: I'll start and maybe Janice will jump in. So, we certainly spend a lot of time talking about our targets and we look at – these are medium-term objectives. So, they're not in-year objectives and we've certainly made a large strategic acquisition which has reduced us from our target range back down. And we sit down with the management team, we say, as we look at where the growth is going to come from in the future and how we're going to grow our business, are we going to grow back to that ratio. And we sit here today saying there is a number of positives. And you're right; there are headwinds around uncertain regulatory environments, around market trading risk and around potential Basel IV capital for us, all uncertain, where we are in the future. But having said that, we're in record low margins for a very, very large business, and if you protract where the – project where the net neutral rate is in the economy, and if you assume we can get back to some type of net neutral rate which the Bank of Canada forecast to be in the 300 basis point to 350 basis point, if you can get your head to the net neutral rate which is a lot lower than it's ever been in the past and you look at the impact on our Wealth businesses, on our ITS businesses, on our very significant core deposit book, you can see a benefit that's not realized in current margins that really helps you along with a growth trajectory of the acquisition we made and others, you can see a path forward. So, I think those are some of things that you think about as you balance off the headwinds and you look at the path of your business. Janice R. Fukakusa - Chief Financial & Administrative Officer: So, Mario, Dave talked about really the numerator and the flip side of that is that you'll see a lot of very effective capital management through balance sheet optimization. We are constantly at it. So, you saw that there was effectively the RWA growth was because of the add of City National plus FX this quarter. So, our businesses are still expanding, but we are trying to use capital more efficiently. So, it's about more earnings and at the margin adding less capital to support the earnings growth that we have. Mario C. Mendonca - TD Securities: So time, rates, and management actions around capital? Janice R. Fukakusa - Chief Financial & Administrative Officer: Right. Mario C. Mendonca - TD Securities: That's what gives you the confidence to talk about 18% still? Janice R. Fukakusa - Chief Financial & Administrative Officer: Yes. Mario C. Mendonca - TD Securities: Okay. Janice R. Fukakusa - Chief Financial & Administrative Officer: Yeah. Mario C. Mendonca - TD Securities: Thanks.

Thank you. The next question is from Robert Sedran from CIBC. Please go ahead. Robert Sedran - CIBC World Markets, Inc.: Hi. Good morning. Sorry, if I missed it; just a quick clarification. That large loan loss in the Capital Markets segment, that was a U.S. credit? Mark Hughes - Chief Risk Officer: No; it was outside both Canada and the United States. Robert Sedran - CIBC World Markets, Inc.: Oh, okay. And then just returning to Jennifer. Jennifer, you talked about the margin pressure continuing. Thoughts on operating leverage in that environment? I know Janice mentioned still targeting 1% to 2%, but is that a likely or a possible outcome in an environment where revenues are sluggish or should we assume sort of flat operating leverage for the balance of the year? Jennifer Tory - Group Head-Personal & Commercial Banking, Royal Bank of Canada: No. We're still targeting 1% to 2% given the cost management initiatives that we have underway. And lot of those are first through reducing cost to digitization and optimizing our processes, but also we're looking to achieve economies of scale by putting things through – in home of best fit and some organizational and operational structures that we're using to be able to make things happen a little more quickly. We've reduced our head count in Canadian Banking by 500 year-over-year, most of which was through attrition and we still see a way to continuing to maximize the use of efficiencies to be able to continue to get at that (57:25) in some of our larger environment. Robert Sedran - CIBC World Markets, Inc.: Was there anything unusual or seasonal about this quarter in terms of the expense base? Jennifer Tory - Group Head-Personal & Commercial Banking, Royal Bank of Canada: This quarter, there was actually just staff costs, which at this time of year are in the first quarter given timing of salary and benefit increases and also are eligible to retire, and some higher occupancy costs, but overall – other than that, just normal. Robert Sedran - CIBC World Markets, Inc.: Okay. Thank you.

Thank you. The next question is from Peter Routledge from the National Bank Financial. Please go ahead. Peter Routledge - National Bank Financial, Inc. (Broker): Thanks. A question for Mark. Thank you for the data on the enterprise-wide stress test, I think the clarity of it kind of sparks 100 different questions in my mind, so that's your word for doing a good job. But the most important question I have is what do you assume of that house prices in that scenario? Mark Hughes - Chief Risk Officer: In the macro stress test, I think it was 25% down. Peter Routledge - National Bank Financial, Inc. (Broker): So, that would be nationwide peak to trough? Mark Hughes - Chief Risk Officer: Yes. Peter Routledge - National Bank Financial, Inc. (Broker): Okay. And then would that be uniform across the country or you say (58:33) Vancouver and Toronto might be worse than your... Mark Hughes - Chief Risk Officer: At the moment, in that stress test, it was uniform across the country. We do other stress tests that look at different regions and variations, but in the one that I've been quoting relative to what could oil do, that's been across the country. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Thanks. A question I think Gabe sort of touched on it that perplexes me anyway. I appreciate the 40-basis-point to 50-basis-point guidance range, but if I look back, even with Royal we see the PCL ratio going well above that for isolated short periods of time. So, I mean, how do we reconcile that 40 basis points to 50 basis points guidance with a historic record where occasionally we did see that ratio blow well above 50 basis points. I mean, how should we think about that? Mark Hughes - Chief Risk Officer: Well, I mean all we're trying to do with the stress test is to give you information as to what we could see could happen if the variables that we put into the stress test occur. Obviously, if any of those variables are different, then the numbers and the output would also be different. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Mark Hughes - Chief Risk Officer: So it could be less, it could be higher. But we are using our best management judgment on what could happen if oil prices cause a greater contagion across the country into a Canadian recession. But all of those variables is really what brings you to a result. Peter Routledge - National Bank Financial, Inc. (Broker): Yeah. Are there one or two variables that are particularly or that would particularly drive it higher, the assumptions that you take might be more volatile? Mark Hughes - Chief Risk Officer: Well, out of them and if you look again at our portfolios, the biggest portfolio that we have is residential mortgages. So, if our assumptions around house prices and consumer ability to service those debt is worse than what we put in our scenarios, that would have a material impact. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Mark Hughes - Chief Risk Officer: Our corporate lending is based on a more individual type industry basis. We're assuming a recession that would be across all of the industries. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Mark Hughes - Chief Risk Officer: But generally is in how it occurs, it tends to be more individual industries are affected and others. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Mark Hughes - Chief Risk Officer: So, it could be either one of those. Peter Routledge - National Bank Financial, Inc. (Broker): Right. Thanks. It's very helpful. Appreciate it.

Thank you. This concludes the question-and-answer session for today. I would now like to turn the meeting back to Mr. Dave McKay. David I. McKay - President, Chief Executive Officer & Director: Thanks, everybody, for joining this morning and your questions. We certainly understand your interest in the oil and gas and the portfolio, and appreciate your questions and look forward to talking to you again next quarter. Thanks very much.

Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your participation.