RBC mortgage growth hits fastest pace since HSBC acquisition

Royal Bank of Canada’s mortgage business gained momentum in the third quarter, with quarterly growth reaching its fastest pace since the bank acquired HSBC Canada.

Residential mortgage balances grew 1.8% from the previous quarter and 5% year over year to $439 billion. RBC’s broader Canadian banking real estate secured lending portfolio, which includes HELOCs, rose to $479 billion from $456 billion a year earlier.

On an average-balance basis, residential mortgages were up 4% year over year and 2% from the previous quarter.

RBC chief executive Dave McKay pointed to stronger retention and an increase in borrowers switching to the bank as drivers of the acceleration.

“We’re seeing very strong client activity,” McKay said on the bank’s earnings call. “We’re winning market share, not always at the margin we wanted, but we’re winning market share.”

Competition remains intense, however. Chief financial officer Katherine Gibson said RBC expects Canadian banking margins to remain relatively stable next quarter, with structural tailwinds offset by competitive pressure on mortgages and term deposits.

Canadian banking net interest margin was 2.96%, up two basis points from a year earlier but down three basis points from the previous quarter.

LTV and delinquency measures move higher

The portfolio’s growth came as some credit measures weakened from a year earlier, although overall borrower quality remained strong.

RBC’s current calculated loan-to-value ratio rose to 56% from 52%, while the share of the portfolio with an LTV above 80% increased to 14%. The proportion combining an LTV above 80% with a borrower credit score below 685 rose to 2.07% from 1.20%.

The share of mortgages at least 90 days past due increased to 41 basis points from 31 basis points a year earlier. The rise was more pronounced in the Greater Toronto Area, where the rate climbed to 63 basis points from 42. Greater Vancouver increased to 35 basis points from 27.

Still, RBC said retail credit conditions have recently shown signs of stabilizing.

“In our home equity finance portfolio, while we continue to manage near-term renewal risk, we are encouraged by recent improvements in impairment formations,” chief risk officer Graeme Hepworth said.

The insured share of RBC’s Canadian residential mortgage portfolio declined to 19% from 20%, while the variable-rate share rose to 37% from 33%. The average borrower credit score remained high at 820, little changed from 819 a year earlier.

Bank-wide, RBC reported adjusted net income of $6.10 billion, up 10% year over year, while adjusted earnings per share rose 11% to $4.28. Total provisions for credit losses increased 14% to $1.0 billion, and the bank’s Common Equity Tier 1 capital ratio rose to 13.5% from 13.2%.

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Last modified: August 27, 2026