National Bank Of Canada · TSX:NA

National Bank Of Canada — Q1 2018 Earnings Presentation

26 slides from National Bank Of Canada's earnings presentation, Feb 28, 2018

  1. Slide 1: Analyst and Investor Presentation Q1-2018 Conference Call

    ye NATIONAL BANK OF CANADA ANALYST AND INVESTOR PRESENTATION Q1-2018 CONFERENCE CALL Wednesday, February 28, 2018 — 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 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: Highlights

    HIGHLIGHTS (millions of dollars) HIGHLIGHTS ADJUSTED RESULTS (1) Q1 18 Q4 17 Q1 17 QoQ YoY Revenues 1,868 1,760 1,707 6% 9%  Strong results driven by double digit growth in all business Net Income(2) 556 531 502 5% 11% Diluted EPS $1.48 $1.40 $1.35 6% 10%  Adjusted diluted EPS up 10% and positive

  5. Slide 5: Segment Snapshot – Q1 2018

    SEGMENT SNAPSHOT – Q1 2018 (millions of dollars) ADJUSTED NET INCOME Q1 18 Q4 17 Q1 17 QoQ YoY HIGHLIGHTS P&C Banking 230 234 208 (2%) 11%  P&C BANKING  Net income up 11% Wealth Management 126 115 104 10% 21%  Revenues up 6% due to loan and deposit volume growth Financial Markets 204 183 179 11%

  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) Total Bank Q1 18 Q4 17 Q1 17 YoY HIGHLIGHTS Revenues 1,868 1,760 1,707 9.4%  Solid cost control Expenses 1,020 971 965 5.7%  Positive operating leverage: +3.7% Operating Leverage 3.7%  P&C

  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) 70,173 71,179 0.42% 68,574 69,383 69,156 2,768 3,097 3,336 3,815 3,263 0.16% 10,039 10,218 0.13% 9,760 9,827 0.09% 9,611 11.20% 11.46% 11.20% 11.33% 11.24% 11.24% 55,148 56,855 56,

  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 (millions of dollars) IFRS 9 PCL (millions of dollars) Q1 18 Q4 17 Q3 17 Q2 17* Q1 17 HIGHLIGHTS  With the introduction of IFRS 9, Total Stage 3 Personal 44 36 36 39 38 37 total provisions for credit losses Commercial 13 8 14 6 8 15 Wealth Management 1 - 1 1 - 1 of 25 bp

  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) Q1 18 Q4 17 Q3 17 Q2 17 Q1 17 Personal 29 17 13 18 23 Commercial 8 (5) 36 14 (43) Corporate Banking - - - - - Wealth Management 1 2 1 1 - Credigy 2

  12. Slide 12: Retail Mortgage and HELOC Portfolio

    RETAIL MORTGAGE AND HELOC PORTFOLIO CANADIAN RETAIL MORTGAGE PORTFOLIO DISTRIBUTION DISTRIBUTION BY CANADIAN PROVINCE As at January 31, 2018 IFRS 9 55% Insured Uninsured & HELOC 62% 26% 50% 8% 38% 7% 5% 33% 44% 37% 50% 67% 56% 63% QC ON AB BC Other Provinces 62% 52% 66% 46% 54% Uninsured and HELOC -

  13. Slide 13: Appendix

    APPENDIX NATIONAL BANK Powering your ideas

  14. Slide 14: Strong Fundamentals in Quebec Economy

    APPENDIX 1 │STRONG FUNDAMENTALS IN QUEBEC ECONOMY QUÉBEC: JOBLESS RATE STANDS AT 5.4% IN JANUARY 2018 HOUSING AFFORDABILITY IN CANADA 16 Price per square feet in USD for downtown living* (summer 2017) % 15 Hong Kong 3,257 London 1,861 14 New York 1,328 Beijing 1,246 13 Paris 1,228 San Francisco 1,08

  15. Slide 15: Personal and Commercial Banking

    APPENDIX 2 │ PERSONAL AND COMMERCIAL BANKING (millions of dollars) Q1 18 Q4 17 Q1 17 QoQ YoY HIGHLIGHTS Revenues 799 786 755 2% 6%  Net income up 11% YoY due to strong revenue growth, and good cost control Personal Banking 366 363 349 1% 5% Commercial excl. Oil & Gas sector 283 283 253 - 12%  Good

  16. Slide 16: Wealth Management

    APPENDIX 3 │ WEALTH MANAGEMENT(1) (millions of dollars) Q1 18 Q4 17 Q1 17 QoQ YoY HIGHLIGHTS  Strong momentum continues in every Revenues 444 414 399 7% 11% business lines Fee-based 247 233 219 6% 13%  Fee-based revenues growth of 13% due to Transaction & Others 73 63 76 16% (4%) favorable market

  17. Slide 17: Financial Markets

    APPENDIX 4 │ FINANCIAL MARKETS(1) (millions of dollars) Q1 18 Q4 17 Q1 17 QoQ YoY HIGHLIGHTS Revenues 454 413 416 10% 9%  Higher trading revenues quarter- Trading 253 227 251 11% 1% over-quarter in all major asset classes Banking Services 85 90 78 (6%) 9%  Solid performance in M&A, ECM Financial M

  18. Slide 18: US Specialty Finance & International

    APPENDIX 5 │ US SPECIALTY FINANCE & INTERNATIONAL (millions of dollars) Q1 18 Q4 17 Q1 17 QoQ YoY HIGHLIGHTS Revenues 161 154 118 5% 36% Credigy 117 111 90 5% 30%  Credigy’s revenues up 30% due to:  Strong performance across all products ABA 43 38 28 13% 54%  Strong asset growth since Q1-17 Other

  19. Slide 19: Loan Portfolio Overview

    APPENDIX 6 │LOAN PORTFOLIO OVERVIEW (billions of dollars) Q1 18 % of Total HIGHLIGHTS Secured - Mortgage & HELOC 67.2 49%  Modest exposure to Secured - Other 5.0 4% unsecured retail lending Unsecured 9.2 7%  Secured retail lending accounts Credit Cards 2.0 1% for 53% of total loans Total Retail 83

  20. Slide 20: Regional Distribution of Canadian Loans

    APPENDIX 7 │ REGIONAL DISTRIBUTION OF CANADIAN LOANS As at January 31, 2018 RETAIL WHOLESALE Secured Corporate Unsecured and Oil & Gas Mortgages & Secured Others Commercial Banking and TOTAL Credit Card Sector REGION HELOC Other (1) Quebec 28.0% 2.0% 5.4% 0.0% 18.1% 4.9% 58.4% Ontario 13.1% 0.9% 1.1

  21. Slide 21: 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) 134.7 136.5 136.4 131.6 5.6 5.7 128.7 5.9 6.5 149.3 148.3 150.6 150.2 6.6 13.6 13.2 143.1 13.3 12.0 11.9 28.0 27.1 7.3 8.0 7.6 2

  22. Slide 22: Producers & Services

    APPENDIX 9 │ PRODUCERS & SERVICES HISTORICAL TREND IN EXPOSURES AT DEFAULT ($B) 4.9 4.6 4.2 4.3 4.1 3,9 IG 57% 3.7 3.7 3.8 IG 57% IG 57% IG 63% IG 75% IG 75% IG 73% IG 67% IG 67% IG 72% IG 40% IG 41% IG 46% IG 40% IG 57% IG 57% IG 57% IG 49% IG 54% 16Q1 16Q2 16Q3 16Q4 17Q1 17Q2 17Q3 17Q4 18Q1 Drawn

  23. Slide 23: Daily Trading and Underwriting Revenues vs VaR

    APPENDIX 10 │ DAILY TRADING and UNDERWRITING REVENUES vs VAR Q1 2018 RESULTS CONFERENCE CALL – February 28, 2018 I 23

  24. Slide 24: VaR Trend

    APPENDIX 11 │ VaR TREND Q1 2018 RESULTS CONFERENCE CALL – February 28, 2018 I 24

  25. Slide 25: Detail of Specified Items

    APPENDIX 12│ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Wealth Management acquisitions (6) (7) (8) (7) (7) Items related to TMX - (2) - - Income Before Income Taxes (6) (9) (8) (7) (7) Income Taxes 1 1 2 1 1 Net Income (5) (8) (6) (6) (6) EPS Impact (0.01) (0.02) (

  26. Slide 26: 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

National Bank of Canada — Q1 2018 Earnings Presentation on 6ix