National Bank Of Canada · TSX:NA

National Bank Of Canada — Q2 2017 Earnings Presentation

29 slides from National Bank Of Canada's earnings presentation, May 31, 2017

  1. Slide 1: Analyst and Investor Presentation Q2-2017 Conference Call

    ye NATIONAL BANK OF CANADA ANALYST AND INVESTOR PRESENTATION Q2-2017 CONFERENCE CALL Wednesday, May 31, 2017 — 1:00 pm NATIONAL BANK Powering your ideas

  2. Slide 2: Caution Regarding Forward-Looking Statements

    CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, the Bank makes written and oral forward-looking statements, such as those contained in the Outlook for National Bank and the Major Economic Trends sections of the 2016 Annual Report, in other filings with Canadian securities regulators,

  3. Slide 3: Overview

    OVERVIEW Louis Vachon President & Chief Executive Officer

  4. Slide 4: Highlights

    HIGHLIGHTS (millions of dollars) HIGHLIGHTS ADJUSTED RESULTS (1) Q2 17 Q1 17 Q2 16 QoQ YoY Revenues 1,654 1,707 1,507 (3%) 10%  Adjusted diluted EPS up 117% YoY Net Income(2) 492 502 237 (2%) 108%  Adjusted diluted EPS excluding 2016 Diluted EPS $1.30 $1.35 $0.60 (4%) 117% sectoral provision up 14

  5. Slide 5: Segment Snapshot – Q2 2017

    SEGMENT SNAPSHOT – Q2 2017 (millions of dollars) HIGHLIGHTS (YoY) ADJUSTED NET INCOME Q2 17 Q1 17 Q2 16 QoQ YoY P&C Banking 233 213 (13) 9% N/A  P&C BANKING P&C Banking  Net income up 20% (excl. sectoral provision) 204 213 170 (4%) 20% excluding sectoral provision (1)  Revenues up 5% due to incre

  6. Slide 6: Financial Review

    FINANCIAL REVIEW Ghislain Parent Chief Financial Officer and Executive Vice-President, Finance and Treasury

  7. Slide 7: Transformation Driving Efficiencies

    TRANSFORMATION DRIVING EFFICIENCIES Excluding specified items Taxable equivalent basis (millions of dollars) HIGHLIGHTS Total Bank Q2 17 Q1 17 Q2 16 YoY Revenues 1,654 1,707 1,507 9.8%  Positive operating leverage: +2.3%  Improvements across all segments Expenses 936 965 871 7.5%  Efficiency rati

  8. Slide 8: Strong Capital Position

    STRONG CAPITAL POSITION TOTAL RISK-WEIGHTED ASSETS COMMON EQUITY TIER 1 UNDER BASEL III UNDER BASEL III EVOLUTION (QoQ) 68,574 69,383 0.37% 68,375 68,530 68,205 3,971 3,291 2,807 3,815 2,768 0.09% 0.11% 9,391 9,495 9,611 9,760 9,254 10.60% 10.87% 10.60% 10.77% 10.77% 55,150 55,848 55,903 55,148 56,8

  9. Slide 9: Risk Management

    RISK MANAGEMENT William Bonnell Executive Vice-President, Risk Management

  10. Slide 10: Retail Mortgage and HELOC Portfolio

    RETAIL MORTGAGE AND HELOC PORTFOLIO CANADIAN RETAIL MORTGAGE PORTFOLIO DISTRIBUTION DISTRIBUTION BY CANADIAN PROVINCE 130% 5 As at April 30, 2017 PCL (bps) 2 2 2 1 1 110% 0.6 0 55% 90% 0.5 34% 34% 34% 31% 31% -5 0.4 70% 61% 21% 22% -10 24% 23% 23% 0.3 25% 50% Insured Uninsured & HELOC 0.2-15 48% 30%

  11. Slide 11: Impaired Loans and BA's and Formation

    IMPAIRED LOANS AND BA’S AND FORMATION (millions of dollars) IMPAIRED LOANS AND BA’S IMPAIRED LOANS AND BA’S FORMATION (1) (millions of dollars) Q2 17 Q1 17 Q4 16 Q3 16 Q2 16 Personal 18 23 17 11 21 Commercial (excluding O&G) 22 (11) 24 (23) 3 Oil & Gas (8) (32) 36 29 86 Corporate Banking - - - - - W

  12. Slide 12: Provision for Credit Losses

    PROVISION FOR CREDIT LOSSES (millions of dollars) 67 2 HIGHLIGHTS 59 60 1 56  Specific provisions for credit losses 4 6 1 1 1 decreased to 18 bps 27 45 9 1 18 15  O&G sectoral allowance decreased by 7 8 $57 million ($40 million reversal and $17 million transfer) 38  Collective allowance for non-i

  13. Slide 13: Appendix

    APPENDIX NATIONAL BANK Powering your ideas

  14. Slide 14: Performance Snapshot – Q2 2017

    APPENDIX 1 │ PERFORMANCE SNAPSHOT – Q2 2017 (millions of dollars) ADJUSTED (1) Q2 17 Q1 17 Q2 16 QoQ YoY HIGHLIGHTS Revenues (2) 1,654 1,707 1,507 (3%) 10%  Adjusted diluted EPS of $1.30, up 14% Expenses 936 965 871 (3%) 7% YoY excluding 2016 sectoral provision Net Income 492 502 237 (2%) 108%  Ad

  15. Slide 15: Performance Snapshot – YTD 2017

    APPENDIX 2 │ PERFORMANCE SNAPSHOT – YTD 2017 (millions of dollars) ADJUSTED (1) 6M 17 6M 16 YoY HIGHLIGHTS Revenues (2) 3,361 3,037 11%  Adjusted diluted EPS of $2.65, up 15% Expenses 1,901 1,767 8% YoY excluding 2016 sectoral provision Net Income 994 664 50%  Adjusted revenues up 11% YoY Diluted

  16. Slide 16: Personal and Commercial Banking

    APPENDIX 3 │ PERSONAL AND COMMERCIAL BANKING Q2 17 Q1 17 Q2 16 QoQ YoY HIGHLIGHTS YoY (millions of dollars) Revenues 734 755 698 (3%) 5%  Net income up 20% YoY due to strong revenue Personal Banking 339 349 330 (3%) 3% growth, good cost control and decrease in PCL Commercial excl. Oil & Gas sector

  17. Slide 17: Wealth Management

    APPENDIX 4 │ WEALTH MANAGEMENT (1) (millions of dollars) Q2 17 Q1 17 Q2 16 QoQ YoY HIGHLIGHTS YoY Revenues 395 399 355 (1%) 11%  Revenues up 11% mainly due to:  NII growth of 12% driven by strong Fee-based 222 219 192 1% 16% deposits growth of 15%  Fee-based revenues grew by 16% due to Transactio

  18. Slide 18: Financial Markets

    APPENDIX 5 │ FINANCIAL MARKETS (millions of dollars) Q2 17 Q1 17 Q2 16 QoQ YoY HIGHLIGHTS YoY Revenues 404 419 358 (4%) 13%  Higher financial market fees driven by a Trading 215 254 198 (15%) 9% very strong performance from Fixed Income particularly in corporate debt capital Banking Services 81 81

  19. Slide 19: US Specialty Finance & International

    APPENDIX 6 │ US SPECIALTY FINANCE & INTERNATIONAL (millions of dollars) Q2 17 Q1 17 Q2 16 QoQ YoY HIGHLIGHTS Revenues 122 118 76 3% 61%  Solid quarter for Credigy driven by a good performance in the mortgage portfolio and Credigy 91 90 71 1% 28% investments made during fiscal year ABA 27 28 -  Cre

  20. Slide 20: Loan Portfolio Overview

    APPENDIX 7 │ LOAN PORTFOLIO OVERVIEW HIGHLIGHTS (billions of dollars) Q2 17 % of Total  Modest exposure to unsecured Secured - Mortgage & HELOC 64.8 50% retail lending Secured - Other 4.8 4%  Secured retail loans accounts for Unsecured 8.8 6% almost 54% of total loans Credit Cards 2.0 2% Total Ret

  21. Slide 21: Regional Distribution of Canadian Loans

    APPENDIX 8 │ REGIONAL DISTRIBUTION OF CANADIAN LOANS As at April 30, 2017 RETAIL WHOLESALE Secured Corporate Unsecured and Oil & Gas Mortgages & Secured Others Commercial Banking and TOTAL Credit Card Sector REGION HELOC Other (1) Quebec 28.3% 2.0% 5.4% 0.0% 18.4% 5.4% 59.5% Ontario 12.9% 0.9% 1.1%

  22. Slide 22: Balance Sheet Overview (Banking Book & Other)

    APPENDIX 9 │ BALANCE SHEET OVERVIEW (Banking Book & Other) (billions of dollars) LENDING – LOANS AND BAs (MONTH END BALANCE) FUNDING – DEPOSITS AND BAs (MONTH END BALANCE) 129.8 149.4 126.2 126.9 124.8 143.1 121.1 139.3 18.7 135.3 19.4 18.7 131.2 28.0 19.5 26.9 18.1 4.3 28.1 2.7 3.2 28.8 2.5 1.4 9.9

  23. Slide 23: Oil & Gas Sector & Related Segments

    APPENDIX 10 │ OIL & GAS SECTOR & RELATED SEGMENTS OUTSTANDING LOANS – Q2 17 1.7 $B 1.1 $B IG 58% 0.8 $B 0.5 $B 0.4 $B IG 71% 0.1 $B IG 100% IG 26% Producers Services (OFS) Midstream Refinery and Commercial Retail - Unsecured Integrated and Credit Cards Oil and Gas Sector Other Wholesale - Related Se

  24. Slide 24: Producers & Services

    APPENDIX 11 │ PRODUCERS & SERVICES HISTORICAL TREND IN EXPOSURES AT DEFAULT ($B) 5.7 5.5 5.2 4.9 4.6 IG 64% IG 68% 3.9 IG 67% IG 57% 3.7 3.8 3.7 IG 57% IG 63% IG 67% IG 67% IG 72% IG 36% IG 35% IG 41% IG 40% IG 41% IG 46% IG 40% IG 49% IG 54% 15Q2 15Q3 15Q4 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 Drawn Undraw

  25. Slide 25: Daily Trading and Underwriting Revenues vs VaR

    APPENDIX 12 │ DAILY TRADING and UNDERWRITING REVENUES vs VAR Daily Trading and Underwriting Revenues vs Trading VaR - Q2 2017 (CAD millions) 20.0 Trading and Underwriting Revenues Trading VaR Millions 15.0 10.0 5.0 0.0 (5.0) (10.0) (15.0) 1-Feb 8-Feb 15-Feb 23-Feb 2-Mar 9-Mar 16-Mar 23-Mar 30-Mar 6-

  26. Slide 26: VaR Trend

    APPENDIX 13 │ Var TREND Trading VaR Quarterly Average Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 -4.9 -5.2 -5.5 -6.7 -6.7 $ millions Q2 2017 RESULTS CONFERENCE CALL – May 31, 2017 I 26

  27. Slide 27: Comparative Performance – Capital Ratios

    APPENDIX 14 │ COMPARATIVE PERFORMANCE – Capital Ratios CAPITAL RATIOS UNDER BASEL III 14.5% 15.9% 14.9% 15.3% 14.7% Total Total 14.2% 14.1% 12.7% Tier 1 13.5% 12.3% Tier 1 10.8% 10.6% 11.2% CET1 10.1% 10.7% CET1 Q2 17 Q1 17 Q1 17 Q4 16 Q4 16 NBC NBC Canadian NBC Canadian (1) (1) Peers Peers Common E

  28. Slide 28: Detail of Specified Items

    APPENDIX 15│ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Wealth Management acquisitions (7) (7) (9) (6) (7) Items related to TMX - (1) (2) - (2) MAV and Other Notes (3) (2) (2) - - Litigation provisions - - (25) - - Write-off of Intangible Assets - - (44) - - Restru

  29. Slide 29: Investor Relations

    INVESTOR RELATIONS Financial analysts and investors who want to obtain financial information on the Bank are asked to contact the Investor Relations Department. 600 De La Gauchetière Street West, 7th Floor, Montreal, Quebec H3B 4L2 Toll-free: 1-866-517-5455 Fax: 514-394-6196 E-mail: investorrelation

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