Royal Bank of Canada today announced it expects to record a charge in its capital markets segment in the fourth quarter associated with the valuation of subprime collateralized debt obligations (CDOs) and subprime residential mortgage-backed securities (RMBS) of approximately $360 million pre-tax ($160 million after-tax and reflecting compensation adjustments).

RBC also expects to record a gain in its Canadian banking segment in the fourth quarter ended October 31, of approximately $325 million pre-tax ($270 million after-tax).

This gain relates to the Visa Inc. restructuring and the exchange of RBC’s membership interest in Visa Canada Association for shares of Visa Inc., as previously announced on October 3. The amount of the gain is based on an independent valuation of RBC’s shares in Visa Inc.

In addition, RBC expects to record a charge of approximately $120 million pre-tax ($80 million after-tax) relating to an increase in our credit card customer loyalty reward program liability. The bank says this reflects higher redemption rate assumptions, consistent with its strategy of encouraging clients to more fully use the Visa points they accumulate by providing them with a broader range of redemption options.

In a statement RBC said it “expects its fourth quarter earnings to be only modestly affected by these items due to largely offsetting impacts.”

RBC will release its fourth quarter and fiscal 2007 results on November 30.