National Bank Of Canada · TSX:NA

National Bank Of Canada — Q2 2018 Earnings Presentation

26 slides from National Bank Of Canada's earnings presentation, May 30, 2018

  1. Slide 1: Analyst and Investor Presentation Q2-2018 Conference Call

    ye NATIONAL BANK OF CANADA ANALYST AND INVESTOR PRESENTATION Q2-2018 CONFERENCE CALL Wednesday, May 30, 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: Strong Results with EPS Up 12%, ROE of 18.7% and Strong Capital Levels

    STRONG RESULTS WITH EPS UP 12%, ROE OF 18.7% AND STRONG CAPITAL LEVELS (millions of dollars) ADJUSTED RESULTS (1) Q2 18 Q1 18 Q2 17 QoQ YoY HIGHLIGHTS Revenues 1,820 1,868 1,654 (3%) 10%  Strong performance in all sectors Net Income(2) 551 556 492 (1%) 12%  Operating leverage of 4% Diluted EPS $1.

  5. Slide 5: Solid Growth in All Business Segments

    SOLID GROWTH IN ALL BUSINESS SEGMENTS (millions of dollars) ADJUSTED NET INCOME Q2 18 Q1 18 Q2 17 QoQ YoY SEGMENT HIGHLIGHTS P&C Banking 213 230 226 (7%) (6%)  P&C BANKING – Net income up 8% P&C Banking  Good revenue growth in retail and commercial 213 230 197 (7%) 8% excluding sectoral provision

  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 18 Q1 18 Q2 17 YoY Revenues 1,820 1,868 1,654 10%  Solid cost control Expenses 989 1,020 936 6%  Positive operating leverage YoY: +4.4%  P&C: +3% Operating Leverag

  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) 71 179 72 834 69 383 69 156 70 173 3 336 4 055 0.40% 2 768 3 263 3 097 10 039 10 218 10 402 0.13% 9 760 9 827 0.20% 11.24% 11.51% 11.24% 11.31% 11.31% 56 855 56 066 57 037 57 625 5

  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 PCL (millions of dollars) Q2 18 Q1 18 Q2 17* HIGHLIGHTS Total Stage 3 Total  Provisions on impaired loans of 23bps ($78 million): Personal 45 41 44 38  Up $22 million YoY, driven by increase in Credigy Commercial 13 6 13 8 ($21 million) due to portfolio growth an

  11. Slide 11: Impaired Loans and BA's 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) Q2 18 Q1 18 Q2 17 Personal 36 48 18 Commercial 30 8 14 Financial Markets - - - Wealth Management 2 2 1 Credigy 20 27 - ABA Bank - 4 2 Total 88 89 3

  12. Slide 12: Retail Mortgage and HELOC Portfolio

    RETAIL MORTGAGE AND HELOC PORTFOLIO CANADIAN RETAIL MORTGAGE PORTFOLIO DISTRIBUTION DISTRIBUTION BY CANADIAN PROVINCE IFRS 9 As at April 30, 2018 PCL (bps) 62% 52% 66% 46% 55% Uninsured and HELOC - Average LTV (1) (1) Average LTV are updated using Teranet-National Bank sub-indices by area and proper

  13. Slide 13: Appendix

    APPENDIX NATIONAL BANK Powering 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 APRIL 2018 WORLD: HOME PRICES DO NOT SEEM EXTREME IN CANADA 16 Price per square feet in USD for downtown living* (May 2018) 2,858 15 London 2,025 1,603 14 Paris 1,578 1,455 13 San Francisco 1,175 1,170 12 Sydney

  15. Slide 15: Appendix 2: Performance Snapshot – YTD 2018

    APPENDIX 2 │ PERFORMANCE SHAPSHOT – YTD 2018 HIGHLIGHTS ADJUSTED (1) 6M 18 6M 17 YoY Revenues (2) 3,688 3,361 10%  Adjusted diluted EPS of $2.93, up 11% YoY Expenses 2,009 1,901 6%  Adjusted revenues up 10% YoY Net Income 1,107 994 11%  Expenses up 6% YoY Diluted EPS $2.93 $2.65 11%  Adjusted ne

  16. Slide 16: Appendix 3: Personal and Commercial Banking

    APPENDIX 3 │ PERSONAL AND COMMERCIAL BANKING (millions of dollars) Q2 18 Q1 18 Q2 17 QoQ YoY HIGHLIGHTS Revenues 777 799 732 (3%) 6%  Net income up 8% YoY due to good Personal 484 504 463 (4%) 5% revenue growth, and good cost control Commercial 293 295 269 (1%) 9% Operating Expenses 429 428 417 - 3

  17. Slide 17: Appendix 4: Wealth Management

    APPENDIX 4 │ WEALTH MANAGEMENT(1) (millions of dollars) Q2 18 Q1 18 Q2 17 QoQ YoY HIGHLIGHTS Revenues 433 444 395 (2%) 10%  Net income up 19% driven by all business Fee-based 243 247 222 (2%) 9% lines and strong operating leverage Transaction & Others 65 73 71 (11%) (8%)  Fee-based revenues growth

  18. Slide 18: Appendix 5: Financial Markets

    APPENDIX 5 │ FINANCIAL MARKETS (millions of dollars) Q2 18 Q1 18 Q2 17 QoQ YoY HIGHLIGHTS Revenues 437 454 400 (4%) 9%  Net income up 11%, our second Trading 260 253 208 3% 25% highest quarter after Q1-18 Banking Services 94 85 78 11% 21%  Strong trading revenues mainly driven by attractive opport

  19. Slide 19: Appendix 6: US Specialty Finance & International

    APPENDIX 6 │ US SPECIALTY FINANCE & INTERNATIONAL (millions of dollars) Q2 18 Q1 18 Q2 17 QoQ YoY HIGHLIGHTS Revenues 174 161 122 8% 43% Credigy 129 117 91 10% 42%  Credigy’s revenues up 42% due to: ABA 45 43 27 5% 67%  Strong asset growth since Q2-17 Other - 1 4 - -  Higher PCLs in line with exp

  20. Slide 20: Appendix 7: Loan Portfolio Overview

    APPENDIX 7 │LOAN PORTFOLIO OVERVIEW (billions of dollars) Q2 18 % of Total HIGHLIGHTS  Secured lending accounts for 91% Secured - Mortgage & HELOC 67.8 48% of Retail loans Secured - Other (2) 8.8 7% Unsecured 5.5 4%  Modest exposure to unsecured Credit Cards 2.0 1% consumer lending (5% of total To

  21. Slide 21: Appendix 8: Regional Distribution of Canadian Loans

    APPENDIX 8 │ REGIONAL DISTRIBUTION OF CANADIAN LOANS As at April 30, 2018 RETAIL WHOLESALE Secured Corporate Unsecured and Oil & Gas Mortgages & Secured Others Commercial Banking and TOTAL Credit Card Sector REGION HELOC Other (1) Quebec 27.6% 3.6% 3.7% 0.0% 18.1% 4.4% 57.4% Ontario 13.0% 1.4% 0.6%

  22. Slide 22: Appendix 9: Loan and Deposit Growth

    APPENDIX 9 │LOAN AND DEPOSIT GROWTH (billions of dollars) AVERAGE NET LOANS AND BAs - CANADA AVERAGE DEPOSITS - CANADA 102.6 102.2 123.1 125.1 98.3 117.8 46.3 48.0 48.3 48.4 44.0 45.7 16.0 16.5 16.6 60.2 60.5 52.6 54.3 53.8 57.8 Q2-17 Q1-18 Q2-18 Q2-17 Q1-18 Q2-18 Residential Mortgages Personal Lend

  23. Slide 23: Appendix 10: Daily Trading and Underwriting Revenues vs VaR

    APPENDIX 10 │ DAILY TRADING and UNDERWRITING REVENUES vs VAR Q2 2018 RESULTS CONFERENCE CALL – May 30, 2018 I 23

  24. Slide 24: Appendix 11: VaR Trend

    APPENDIX 11 │ VaR TREND Q2 2018 RESULTS CONFERENCE CALL – May 30, 2018 I 24

  25. Slide 25: Appendix 12: Detail of Specified Items

    APPENDIX 12│ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Wealth Management acquisitions (7) (8) (7) (7) (5) Items related to TMX (2) - - Income Before Income Taxes (9) (8) (7) (7) (5) Income Taxes 1 2 1 1 1 Net Income (8) (6) (6) (6) (4) EPS Impact (0.02) (0.02) (0.

  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

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