National Bank Of Canada · TSX:NA
National Bank Of Canada — Q1 2002 Earnings Presentation
22 slides from National Bank Of Canada's earnings presentation, Feb 28, 2002
Slide 1: Investor Presentation: Q1 2002 Results Conference Call
DW) NATIONAL BANK OF CANADA Investor Presentation Q1 2002 Results Conference Call | February 28" 2002 www.nbc.ca/investorrelations
Slide 2: Q1 2002 highlights
Cash EPS of $0.73, a 3% increase over Q1 01 Closing of sale of US asset-based lending operations to PNC Financial: Gain of $141 M Strong reduction of Gross impaired loans: from $970 M to $568 M Maintaining high capital ratios : Tier 1 at 11.1% Stabilized expense ratio at 62.2% Quarterly dividend inc
Slide 3: Cash basis results summary
(Millions $) Cash Basis Q1 02 Q1 01 Evolution n Revenues from continued operations (TEB) $805 $762 6% Net income $146 $142 3% EPS $0.73 $0.71 3% ROE 15.0% 16.1% Expense ratio 62.2% 62.6% 3
Slide 4: Provision for credit losses
(Millions $) Cash Basis Q1 02 Before taxes After taxes Provision for credit losses For current operations 60.2 - Revision of provision estimate 185.0 117.1 245.2 117.1 Net contribution from 117.8 discontinued operations 4
Slide 5: Sale of US asset-based lending operations
(Millions $) Cash Basis US $ CDN $ Premium $180.0 $285.7 Loan loss reserve on discontinued portfolio ($50.0) ($79.4) Goodwill write-off ($13.0) ($20.6) Transaction expense ($28.0) ($44.4) Gain before taxes $89.0 $141.3 Gain after taxes $50.0 $78.5 Recovery of general allowance of $65 M CDN after tax
Slide 6: Gross and net impaired loans
Millions $ Q1 02 Q4 01 Gross impaired loans $568 $970 Gross impaired loans as a % of tangible capital & reserves 13.6% 22.4% Net impaired loans Individuals and small business 96 211 Commercial Canada 144 210 Discontinued operations - 117 Corporate 20 15 Real Estate 39 32 Treasury 3 3 Other 5 3 Sub-t
Slide 7: Loans and BA's breakdown
Loans and BA’s As at January 31st 2002 Adjusted for securitization Corporate Personal 12% 13% Credit Cards 3% Commercial 24% Small Businesses Mortgages 6% 42% 7
Slide 8: Capital ratios
Q1 02 including Q1 02 redemption and 15.0% buyback 14.0% Q1 02 Capital ratios given 3.9% effect to: 3.9% • Redemption of Series 11 1.2% preferred shares ($100 M) 1.2% as of February 15, 2002 1.0% 0.8% • Buy-back of up to 5% of Tier 1 Tier 1 outstanding common 11.1% shares (9.5 million shares) 8.9% 1
Slide 9: Objectives and Q1 2002 results
2002 Q1 02 Objectives Results Growth in earnings per share 4% - 6% 3% Return on common shareholders’ equity 15% - 17% 15.0% Expense ratio (2003 target) 61% (1) 62.2% Tier 1 capital ratio 7.75% - 8.75% 11.1% (1) The 61% objective includes the impact of the sale of asset-based lending operations in th
Slide 10: Continued operations – Cash Basis
Continued operations – Cash Basis For period ending January 31st, 2002 Excluding Other segment 24% 32% 16% 9% 19% Personal Banking Wealth Management Commercial Capital Markets Treasury 10
Slide 11: Personal Banking and Wealth Management: Focus, Quality, Alliances
Personal Banking and Wealth Management Natcan acquires Placements Valorem: Focus $1.4 billion in assets Longer branch operational hours Quality NBDB ranks 1st in customer service according to Dalbar survey Launch of new National Bank/Fidelity Alliances True North Fund Expansion of self directed RRSP
Slide 12: Personal Banking and Wealth Management revenues and net income
Personal Banking and Wealth Management For the period ending January 31 in millions of dollars Total Revenues Net Income Wealth Management 67.5 471.6 484.1 63.7 Personal 18.7 15.0 Banking 143.9 142.1 Volume increase: + 3.9% for mortgages + 9.0% for credit card services 342.0 52.5 Margin compression
Slide 13: Personal Banking and Wealth Management volumes
Personal Banking and Wealth Management As at January 31 in billions of dollars h rat e: 5.7% G rowt 64.0 22.4 61.8 9.3 8.8 Others Deposits 21.2 Full Brokerage 32.3 31.8 Deposits 21.2 22.4 2001 2002 2001 2002 13 Others include Mutual Funds, Discount Brokerage and Trust Services
Slide 14: Commercial: Focus, Quality, Alliances
Commercial Focus Sale of US asset-based lending operations Quality Cross-selling opportunities : Increased Global Cash Management Managers and International Business Developers located in commercial banking centres Alliances IBM Canada participation in ClicCommerce means increased resources for the
Slide 15: Commercial revenues and net income
Commercial For the period ending January 31 in millions of dollars Total Revenues Net Income $103.4 $103.0 $35.1 $30.0 2001 2002 2001 2002 15
Slide 16: Financial Markets: Focus, Quality, Alliances
Financial Markets Integration of Corporate and Investment Focus Banking Increased participation in financial market Quality activities Good interest rate positionning Hydro One advisory contract awarded to NBF Edgestone Capital secures investments from Alliances Canada Pension Plan Investment Board
Slide 17: Financial Markets revenues and net income
Financial Markets For the period ending January 31 in millions of dollars Net Income 64.4 Total Revenues 206.2 44.1 168.3 Capital 9.2 25.7 Markets 95.5 125.7 Treasury 72.8 80.5 34.9 38.7 2001 2002 2001 2002 17
Slide 18: Financial Markets revenue components
Financial Markets In millions of dollars 73.3 69.3 44.0 42.8 2001 2002 16.9 7.9 Trading Capital Investment Revenues Market Fees Gains 18
Slide 19: Monthly share performance vs TSE 300
Ja n -9 -20 0 20 40 60 80 100 120 140 160 A 7 pr -9 Ju 7 l-9 O 7 Monthly Basis ct -9 Ja 7 n- 9 A 8 pr NBC -9 Ju 8 l-9 O 8 ct -9 Ja 8 n- 9 A 9 pr TSE 300 -9 Ju 9 l-9 O 9 ct -9 Ja 9 n- 0 A 0 pr -0 Ju 0 l-0 O 0 ct -0 Ja 0 TSE Financial Services n- 0 A 1 pr -0 Ju 1 l-0 O 1 ct -0 Ja 1 n- 02 CAGR = 16.5%
Slide 20: Annual dividend history
5 year historic $0.93 * R : 9.9% CAG $0.82 $0.75 $0.70 $0.66 $0.58 1997 1998 1999 2000 2001 2002 * Annual paid dividend based on the last dividend declared ($0.24 per share) 20
Slide 21: Strongly positioned for economic recovery
Strongly positioned for economic recovery Well capitalized Improved balance sheet: lowest level of non-performing loans to capital of industry For the business lines: Personal Banking and Wealth Management: Focus on business growth while continuing development of Specialized sales force Commercial B
Slide 22: Question and Answer Session
This presentation may contain certain forward looking statements about the operations, objectives and strategies of the National Bank of Canada. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulator
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