This the Review are described in Appendix A.

This report represents the results of our review of Royal Bank of Canada (Bahamas) Ltd corporate governance, compliance culture, ethics, and values of the Bank and places it in the context of the Bank’s Governance and compliance strategy. The Review was set up by Royal Bank of Canada as an independent review reporting to a Board of Directors of Royal Bank of Canada. We believe that the research, findings, and framework of this report translates to efficiently analyze the ethics and compliance structure at Royal Bank of Canada and the information that we have obtained is sufficient and appropriate to provide a basis for our opinion. The views, findings, and recommendations included in this Report are entirely those of the author and consultant of this report. Royal Bank of Canada will consider and decide for itself whether, and if so how, to act on the views, findings, and recommendations contained in this Report. The Review’s Terms of Reference and the approach to the Review are described in Appendix A. The views, findings and recommendations are based the Consultant’s assessment of the documents provided by Royal Bank of Canada (Bahamas) Ltd in response to requests and information gained from interviews. In summary, through document review and our firm’s knowledge of the financial services sector in The Bahamas, we found that the Bank’s Compliance and Know Your Client tests needs to be strengthened as we have discovered that they are not done on a consistent basis, in addition to other Operational Risk, reviews must be completed to ensure adherence to policy guidelines. Any gaps or deficiencies are monitored and tracked to resolution. The bank satisfactorily met all regulatory requirements and the bank’s operations are considered safe and sound in its operations. There are also concerned about the persistently high levels of delinquent and non-performing loans and the recovery of these loans despite best collection efforts by our Loans Collection Center. Notwithstanding, we are cautiously optimistic that our 2016 business plan is achievable.