National Bank Of Canada · TSX:NA

National Bank Of Canada — Q3 2018 Earnings Presentation

25 slides from National Bank Of Canada's earnings presentation, Aug 29, 2018

  1. Slide 1: Analyst and Investor Presentation Q3-2018 Conference Call

    NATIONAL BANK OF CANADA ANALYST AND INVESTOR PRESENTATION Q3-2018 CONFERENCE CALL Wednesday, August 29, 2018 — 1:00 pm ia NATIONAL | BANK | yourideas

  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 this Annual Report, in other filings with Canadian securities regulators, and

  3. Slide 3: Overview

    OVERVIEW Louis Vachon President & Chief Executive Officer

  4. Slide 4: Strong Results with EPS Up 10%

    STRONG RESULTS WITH EPS UP 10% (millions of dollars) ADJUSTED RESULTS (1) Q3 18 Q2 18 Q3 17 QoQ YoY HIGHLIGHTS Revenues 1,856 1,820 1,743 2% 6%  Strong performance in all sectors Net Income(2) 573 551 524 4% 9%  Continued efficiency improvements Diluted EPS $1.53 $1.45 $1.39 6% 10%  Industry lead

  5. Slide 5: Solid Growth in All Business Segments

    SOLID GROWTH IN ALL BUSINESS SEGMENTS (millions of dollars) ADJUSTED NET INCOME Q3 18 Q2 18 Q3 17 QoQ YoY SEGMENT HIGHLIGHTS P&C Banking 248 213 235 16% 6% P&C Banking Pre-provisions / Pre-tax 400 348 365 15% 10%  P&C BANKING – Net income up 6% / PTPP up 10%  Strong momentum in Retail and Commerci

  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 Q3 18 Q2 18 Q3 17 YoY Revenues 1,856 1,820 1,743 6%  Solid cost control Expenses 1,009 989 966 4%  Positive operating leverage YoY: +2%  P&C: +3% Operating Leverage 2

  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) 72,834 73,268 70,173 71,179 69,156 0.42% 3,336 4,055 4,755 3,263 3,097 10,039 10,218 10,402 10,539 0.13% 0.02% 9,827 11.31% 11.60% 11.58% 11.58% 11.31% 56,066 57,037 57,625 58,377

  9. Slide 9: Risk Management

    RISK MANAGEMENT William Bonnell Executive Vice-President, Risk Management

  10. Slide 10: Provision for Credit Losses

    PROVISION FOR CREDIT LOSSES IFRS 9 HIGHLIGHTS PCL (millions of dollars) Q3 18 Q2 18 Q1 18 Q3 17 Total Stage 3 Total Total  Total provisions for credit losses of 21 bps ($76 million): Personal 35 39 45 44 39  Improved by 6 bps QoQ primarily due to Credigy’s Commercial 26 17 13 13 6 lower provisions

  11. Slide 11: Impaired Loans and BAs and Formation

    IMPAIRED LOANS AND BA’S(1) AND FORMATION (millions of dollars) IMPAIRED LOANS AND BA’S IMPAIRED LOANS AND BA’S FORMATION(2) IFRS 9 (millions of dollars) Q3 18 Q2 18 Q1 18 Q3 17 Personal 43 36 48 13 Commercial 48 30 8 36 Financial Markets - - - - Wealth Management 1 2 2 1 Credigy 36 20 27 - ABA Bank

  12. Slide 12: Retail Mortgage and HELOC Portfolio

    RETAIL MORTGAGE AND HELOC PORTFOLIO CANADIAN RETAIL MORTGAGE PORTFOLIO DISTRIBUTION DISTRIBUTION BY CANADIAN PROVINCE As at July 31, 2018 IFRS 9 130% 15 PCL (bps) 110% 2 2 2 1 1 -5 55% 90% Insured 31% 32% 32% 32% 33% 70% -25 Uninsured & HELOC 64% 26% 23% 24% 24% 25% 25% 50% -45 30% 57% 8% 46% 45% 44

  13. Slide 13: Appendix

    APPENDIX NATIONAL Powering BANK your ideas”

  14. Slide 14: Appendix 1: Strong Fundamentals in Québec Economy

    APPENDIX 1 │Strong Fundamentals In Québec Economy QUÉBEC: JOBLESS RATE STANDS AT 5.6% IN JULY 2018 GLOBAL PERSPECTIVE ON HOME PRICES Price per square feet in USD for downtown living* (Summer 2018) 16 % 15 14 13 12 11 10 9 8 Rest of 7 Canada 6 5 QC 4 1980 1985 1990 1995 2000 2005 2010 2015 Source: NB

  15. Slide 15: Appendix 2: Personal and Commercial Banking

    APPENDIX 2 │ PERSONAL AND COMMERCIAL BANKING (millions of dollars) Q3 18 Q2 18 Q3 17 QoQ YoY HIGHLIGHTS Revenues 832 777 784 7% 6%  Net income up 6% YoY and 16% QoQ due to higher volume, cost control and margin Personal 516 484 498 7% 4% expansion Commercial 316 293 286 8% 10%  Pre-provisions, pre

  16. Slide 16: Appendix 3: Wealth Management

    APPENDIX 3 │ WEALTH MANAGEMENT(1) (millions of dollars) Q3 18 Q2 18 Q3 17 QoQ YoY HIGHLIGHTS Revenues 444 433 405 3% 10%  Net income up 19% driven by all business lines Fee-based 249 243 232 2% 7% and strong operating leverage Transaction & Others 65 65 66 0% (2%)  Fee-based revenues growth driven

  17. Slide 17: Appendix 4: Financial Markets

    APPENDIX 4 │ FINANCIAL MARKETS (millions of dollars) Q3 18 Q2 18 Q3 17 QoQ YoY HIGHLIGHTS Revenues 416 437 389 (5%) 7%  Solid performance in Corporate Global Markets 211 260 207 (19%) 2% Banking and Financial Market Fees (M&A) Corporate Banking 97 94 81 3% 20%  Lower Global Markets revenues QoQ, F

  18. Slide 18: Appendix 5: US Specialty Finance & International

    APPENDIX 5 │ US SPECIALTY FINANCE & INTERNATIONAL (millions of dollars) Q3 18 Q2 18 Q3 17 QoQ YoY HIGHLIGHTS Revenues 146 174 147 (16%) (1%) Credigy 100 129 117 (22%) (15%)  Credigy’s revenues down 15% due to portfolio ABA 47 45 32 4% 47% maturity and repayment of loans Other (1) - (2) - - Operatin

  19. Slide 19: Appendix 6: Loan Portfolio Overview

    APPENDIX 6 │LOAN PORTFOLIO OVERVIEW (billions of dollars) Q3 18 % of Total HIGHLIGHTS  Secured lending accounts for Secured - Mortgage & HELOC 69.2 48% 91% of Retail loans Secured - Other (2) 8.9 7% Unsecured 5.3 4% Credit Cards 2.1 1%  Modest exposure to Total Retail 85.5 60% unsecured consumer l

  20. Slide 20: Appendix 7: Regional Distribution of Canadian Loans

    APPENDIX 7 │ REGIONAL DISTRIBUTION OF CANADIAN LOANS As at July 31, 2018 RETAIL WHOLESALE Secured Corporate Unsecured and Oil & Gas Mortgages & Secured Others Commercial Banking and Credit Card Sector REGION HELOC Other (1) Quebec 27.3% 3.5% 3.6% 0.0% 17.9% 4.7% Ontario 13.1% 1.4% 0.6% 0.1% 3.7% 5.0

  21. Slide 21: Appendix 8: Balance Sheet Overview

    APPENDIX 8 │ BALANCE SHEET OVERVIEW (Banking Book & Other) (billions of dollars) LENDING – LOANS AND BAs (MONTH END BALANCE) FUNDING – DEPOSITS AND BAs (MONTH END BALANCE) 139.9 142.8 134.8 136.5 136.4 5.6 159.5 162.0 5.9 6.0 5.7 5.9 152.3 150.9 14.6 15.2 147.9 13.3 13.6 13.1 28.0 28.6 8.0 8.1 28.0

  22. Slide 22: Appendix 9: Daily Trading and Underwriting Revenues vs VaR

    APPENDIX 9 │ DAILY TRADING and UNDERWRITING REVENUES vs VAR Q3 2018 RESULTS CONFERENCE CALL – August 29, 2018 I 22

  23. Slide 23: Appendix 10: VaR Trend

    APPENDIX 10 │ VaR TREND Q3 2018 RESULTS CONFERENCE CALL – August 29, 2018 I 23

  24. Slide 24: Appendix 11: Detail of Specified Items

    APPENDIX 11│ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Wealth Management acquisitions (8) (7) (7) (5) (4) Items related to TMX - - Income Before Income Taxes (8) (7) (7) (5) (4) Income Taxes 2 1 1 1 - Net Income (6) (6) (6) (4) (4) EPS Impact (0.02) (0.02) (0.02)

  25. Slide 25: 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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