National Bank Of Canada · TSX:NA
National Bank Of Canada — Investor Day (September 2016)
60 slides from National Bank Of Canada's investor day presentation, Sep 16, 2016
Slide 1: International Development Investor Day
National Bank of Canada 1 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 1 Caution Regarding Forward-looking Statements From time to time, the Bank makes written and oral forward-looking statements, such as those contained in the O
Slide 2: Today's Agenda
2 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Today’s Agenda International Strategy Overview Q&A Panel Louis Vachon, President and Chief Executive Officer Break Emerging Markets Development Framework Credigy Yves Jacquot, Senior Vice-President Brett M. Samsky Do
Slide 3: International Strategy Overview
National Bank of Canada 3 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 INTERNATIONAL STRATEGY OVERVIEW LOUIS VACHON PRESIDENT AND CHIEF EXECUTIVE OFFICER 4 Today’s Objectives Present our international strategy, oversight framework and the path forward Introduce our Emerging Markets deve
Slide 4: Consistent Performance Over Time; Superior ROE Performance
4 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Consistent Performance Over Time TOTAL REVENUES EARNINGS PER SHARE ($M)* ($)* 4-Year CAGR 4-Year CAGR +5.5% 5,982 +7% 4.70 5,638 5,230 4.48 5,075 4,833 4,647 4.04 3.85 3.59 3.11 2011 2012 2013 2014 2015 2016 2011 201
Slide 5: Solid Dividend Growth; Successful Canadian Super-Regional Bank
National Bank of Canada 5 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Solid and Consistent Dividend Growth DIVIDENDS PER COMMON SHARE $2.04 $1.88 $1.70 $1.63 $1.54 10-Year CAGR $1.37 +9% $1.24 $1.24 $1.24 Solid and $1.14 consistent $0.86 $0.98 dividend growth with 10-year CAGR of 9% 20
Slide 6: Emerging Markets Leading GDP Growth; Focused International Strategy
6 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Emerging and Developing Markets Are Leading GDP Growth GDP at constant prices, indexed to 2007 Emerging and Developing World Advanced Economies Forecast NBF Economics and Strategy (data via IMF WEO) 10 Focused and Di
Slide 7: Emerging Markets Investments; International Growth Pillars
National Bank of Canada 7 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Emerging Markets Investments West and Central African Economic and Monetary Unions NSIA Assurances & Banque (24%) Ivory Coast Republic of ASEAN Mauritius Economic Zone ABA Bank (90%) Cambodia AfrAsia (17.5%) 12 Inter
Slide 8: International Strategy: Key Success Factors; Capital Management Approach
8 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 International Strategy: Key Success Factors Diversification › Geographical – Africa, Asia, United States › Lines of business – Specialty consumer finance and Emerging Markets banking Control or exit Experienced and d
Slide 9: International Leadership Team
National Bank of Canada 9 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 International Leadership Team KAREN LEGGETT ASKHAT AZHIKHANOV Chief Marketing Officer Chief Executive Officer Executive Vice-President ABA Bank Corporate Development Experienced YVES JACQUOT MADI AKMAMBET executives
Slide 10: Blank
10 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
Slide 11: Emerging Markets Development Framework
National Bank of Canada 11 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 EMERGING MARKETS DEVELOPMENT FRAMEWORK YVES JACQUOT SENIOR VICE-PRESIDENT INTERNATIONAL DEVELOPMENT 17 Our Approach to Emerging Markets Identify Build comfort Invest attractive targets Initial minority in success in
Slide 12: Our Mandate; Target Geographies
12 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Our Mandate Emerging markets development › Target identification, business case, negotiation, due diligence, deal execution Portfolio management Focused team accountable for › Board representation, shareholder/strat
Slide 13: Investment Criteria; What We Bring
National Bank of Canada 13 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Investment Criteria Top 5 position in local market with diversified client base and growth potential Credibility and reputation of shareholders and management teams/ deep knowledge of local markets Significant initi
Slide 14: Emerging Markets Risk Overview; Resilience of Emerging Markets
14 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Emerging Markets Risk Overview Our investments are in the lower risk spectrum of emerging market banks › Easy to understand business models › No significant business relationships with local authorities › Shareholde
Slide 15: Active Management and Strict Governance; Monitoring Investments
National Bank of Canada 15 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Active Management and Strict Governance Mitigate Risks Clear accountability and hands-on approach › Dedicated International Development team responsible for investments in emerging markets › Frequent presence on the
Slide 16: Blank
16 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
Slide 17: Emerging Markets Portfolio and Performance
National Bank of Canada 17 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 EMERGING MARKETS PORTFOLIO AND PERFORMANCE DOMINIC JACQUES DEPUTY VICE-PRESIDENT INTERNATIONAL DEVELOPMENT 27 Diversified Emerging Markets Portfolio Investment, Country and Equity CET1 Debt NBC Participation (%) Inv
Slide 18: ABA Bank (Cambodia); Regional Market Dynamics
18 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA Bank (Cambodia) Rapidly growing commercial bank Amount Transaction P/BV F P/E with a diversified client base (US$) Proven business model and July 2014 (30%) 23M 1.3x 12.9x strong execution March 2015 (12%) 22M 1
Slide 19: NSIA Assurances & Banque; Bancassurance Model
National Bank of Canada 19 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 NSIA Assurances & Banque (Ivory Coast) Diversified banking/insurance group operating in 12 countries in Western and Central Africa Market position: Well-positioned › #1 insurance group in French-speaking Africa to b
Slide 20: Regional Market Dynamics; AfrAsia (Mauritius)
20 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Regional Market Dynamics Total regional population of 150M Two integrated economic zones › Single shared currency (Francs CFA) › Harmonized business law › 2 central banks: West Africa and Central Africa › Harmonized
Slide 21: Tenger (Mongolia); Emerging Markets Portfolio Financial Projections
National Bank of Canada 21 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Tenger (Mongolia) Former microfinance focused institution transforming into a full-fledged bank › Diversified financial group which owns 4th largest bank in Mongolia (XAC Bank) › “Best Bank in Mongolia 2016”, Global
Slide 22: Executive Biographies
22 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Executive Biographies YVES JACQUOT, SENIOR VICE-PRESIDENT, INTERNATIONAL DEVELOPMENT Yves Jacquot joined National Bank following a distinguished career with French financial institutions, including deep experience i
Slide 23: ABA Bank
National Bank of Canada 23 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA BANK ASKHAT AZHIKHANOV CHIEF EXECUTIVE OFFICER 37 ABA BANK OVERVIEW MARKET OPPORTUNITY AND COMPETITIVE POSITIONING FOCUSED LENDING AND DEPOSIT STRATEGIES PERFORMANCE 2012 – 2016 OUTLOOK 2016 – 2020 FOUNDATION FO
Slide 24: ABA Bank Overview
24 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA Bank Overview (As at August 31, 2016) Established in 1996 “Best Bank in Cambodia” awards 42 branches Clients › 22,577 borrowers / 125,291 depositors 1,500 employees Revenue CAGR 2010-2015: 49% ROE: 24% NPL: 0.1%
Slide 25: Cambodia: Positive Economic and Demographic Indicators
National Bank of Canada 25 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Cambodia: Positive Economic Indicators GDP Currency GDP Sector Composition Average Cambodia growth rate is a 10% 7.2% p.a. US$-based 9% 30% (2010-2015) economy 15% Inflation Inflation Rate FDI 19% 1.2% 17% Average (
Slide 26: Cambodia Under-Banked; ABA Competitive Positioning
26 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Cambodia: Under-Banked With Strong Growth Potential CREDIT PENETRATION1 BANKING LOANS TO GDP2 Cambodian banking sector is Number of loan accounts expected to grow 20%/year 3% to reach 100% loans to GDP Unbanked popu
Slide 27: ABA Market Share Growth; Outperforming Banking Sector
National Bank of Canada 27 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA Bank’s Market Share Growth 2010-2015 ASSETS DEPOSITS LOANS 5.2% 4.1% 4.1% ABA Bank’s market share in assets, 2.4% 2.7% deposits and loans 2.2% nearly doubled in five years 2010 2015 2010 2015 2010 2015 45 ABA Ba
Slide 28: Lending Strategy
28 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA BANK OVERVIEW MARKET OPPORTUNITY AND COMPETITIVE POSITIONING FOCUSED LENDING AND DEPOSIT STRATEGIES PERFORMANCE 2012 – 2016 OUTLOOK 2016 – 2020 FOUNDATION FOR GROWTH 47 Lending Strategy Client Segments Products
Slide 29: MSME: A Large and Growing Market
National Bank of Canada 29 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Micro Business and SME (MSME): A Large and Growing Market › 99.8% of businesses in Cambodia defined as Micro (max 10 staff & US$ 50K net assets) MSME Based or SMEs (max 100 staff & US$ 500K net assets) Economy1 › MS
Slide 30: Nationwide Branch Network; Loan Portfolio Diversification
30 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Nationwide Branch Network Supports Market Penetration 6-8 new branches opened annually since 2012 9 new branches opened in 2016 42 branches as at August 31, 2016 65 outlets by 2020 Current network Network expansion
Slide 31: Deposit Strategy; Digital and Self-Banking Platform
National Bank of Canada 31 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Deposit Strategy Client Segments Products Execution › Deposit products (Fixed, Flexi, CASA) › Leverage on Digital Banking › Payments cards (Visa, Master, UPI) products Retail individual clients › Internet banking ›
Slide 32: Growing Digital and Self-Banking Penetration; Modern Branch Network
32 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Growing Digital and Self-Banking Penetration Self-Banking Online Banking ATMs & Cards TRANSACTIONS NUMBER NUMBER OF USERS NUMBER OF CARDS BREAKDOWN, % (in thousands) (in thousands) 39 44 52 61 69 85 25 74 12 39 24 1
Slide 33: Deposit Portfolio Diversification
National Bank of Canada 33 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Deposit Portfolio Diversification DEPOSITS BY AMOUNT DEPOSITS BY TYPE < US$ 50K 25% Retail ˃ US$ 1M 73% 29% Diversified US$ 50K – 100K Corporate portfolio with 99% 12% 20% of deposits US$-denominated Financial Insti
Slide 34: Blank
34 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
Slide 35: ABA Bank
National Bank of Canada 35 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA BANK MADI AKMAMBET EXECUTIVE DIRECTOR 58 ABA BANK OVERVIEW MARKET OPPORTUNITY AND COMPETITIVE POSITIONING FOCUSED LENDING AND DEPOSIT STRATEGIES PERFORMANCE 2012 – 2016 OUTLOOK 2016 – 2020 FOUNDATION FOR GROWTH
Slide 36: Growth in Assets, Equity, Deposits
36 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Solid and Consistent Growth in Assets and Equity (US$ M) Assets 980 Equity 806 CAGR +45% Assets increased 505 threefold in three years and continue to grow steadily in 323 265 2016 100 112 42 64 37 2012 2013 2014 20
Slide 37: Interest Margin Improvement; Net Income Growth
National Bank of Canada 37 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 20,0% Steady Interest Margin Improvement YIELD 11.2% 11.5% 11.5% 11.8% 12.0% ON LOANS Improvement in loan yield and net NET INTEREST 5.7% 6.3% 6.5% interest margin is MARGIN 4.6% 4.9% driven by strategic focus on MS
Slide 38: Profitability Ratios; Efficiency and Credit Risk Management
38 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Solid and Consistent Improvement in Profitability Ratios ROE ROA 23.4% 19.5% 14.2% Profitability performance 9.5% 10.3% doubled in regard to equity and assets 2.4% 2.8% 1.5% 1.4% 1.8% 2012 2013 2014 2015 Q2 2016 64
Slide 39: Sound Fundamentals
National Bank of Canada 39 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Sound Fundamentals LIQUIDITY & CAPITALISATION RATIOS Credit to deposit (CDR) Liquidity (LCR) Capital adequacy (CAR) 80% 79% 74% 63% 65% 63% Benchmarks 56% 55% in Cambodia: 54% 51% CDR (avg.): 100% LCR (min.): 60 (50
Slide 40: Business Growth and Net Income 2016-2020
40 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Business Growth 2016 – 2020 (US$ M) 2605 Total assets Total deposits 2180 Total loans 1777 1831 1879 1559 1538 Expected CAGR 1425 1306 (2015-2020) 1112 1222 1071 Total assets: +26% 806 940 854 Total deposits: +23% 6
Slide 41: Solid Foundation for Growth
National Bank of Canada 41 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA BANK OVERVIEW MARKET OPPORTUNITY AND COMPETITIVE POSITIONING FOCUSED LENDING AND DEPOSIT STRATEGIES PERFORMANCE 2012 – 2016 OUTLOOK 2016 – 2020 FOUNDATION FOR GROWTH 70 Solid Foundation for Growth Rapidly growin
Slide 42: Executive Biographies
42 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Executive Biographies ASKHAT AZHIKANOV, PRESIDENT AND CEO, ABA BANK Askhat Azhikhanov joined ABA in 2009 as Deputy CEO and was appointed CEO in 2012. Mr. Azhikhanov started his career in 1998 in the Banking Supervis
Slide 43: ABA Bank Board of Directors; Management Team
National Bank of Canada 43 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 ABA Bank Board of Directors Yves Jacquot Damir Karassayev National Bank of Canada Member of the Board Chairman of the Board Chairman, Governance Committee Madi Akmambet Dominic Jacques Executive Director National Ba
Slide 44: Blank
44 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
Slide 45: Emerging Markets Summary
National Bank of Canada 45 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 EMERGING MARKETS SUMMARY KAREN LEGGETT CHIEF MARKETING OFFICER AND EXECUTIVE VICE-PRESIDENT CORPORATE DEVELOPMENT 72 Emerging Markets Summary ABA Bank: top-tier emerging market investment Disciplined and phased inve
Slide 46: Emerging Markets Q&A Panel
46 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 EMERGING MARKETS Q&A PANEL 74
Slide 47: Executive Biographies
National Bank of Canada 47 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Executive Biographies KAREN LEGGETT, CHIEF MARKETING OFFICER AND EXECUTIVE VICE-PRESIDENT – CORPORATE DEVELOPMENT As a member of National Bank's Office of the President, Karen Leggett is responsible for banking prod
Slide 48: Blank
48 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
Slide 49: Credigy: Who We Are
National Bank of Canada 49 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 CREDIGY BRETT SAMSKY CHIEF EXECUTIVE OFFICER 76 Who We Are Sophisticated consumer finance investment company › Founded in 2001 › NBC acquired an 80% interest in 2006 2016E Revenues Portfolio is 93% performing CA$ 31
Slide 50: What We Do; Investment Strategy
50 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 What We Do We provide creative solutions for the consumer industry Acquire Finance consumer Active consumer account We have flexibility across the receivables receivables market management capital structure to acqui
Slide 51: Portfolio Summary; Portfolio Evolution
National Bank of Canada 51 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Portfolio Summary AVERAGE ASSETS (US$ M) 3,000 Accelerated 1,658 investment driven by focus on performing 775 assets 546 346 402 144 248 41 59 78 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 E 80 Portfolio
Slide 52: Portfolio Diversification
52 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Portfolio Diversification 2016 BOOK OF ASSETS US$ 3.2 BILLION Student Loans 3% Mortgage Products 28% Diversified Auto Products across a wide 52% variety of asset Other Consumer classes 10% Non-performing Unsecured 2
Slide 53: Revenue Growth; NIBT Growth
National Bank of Canada 53 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Financial Performance: Revenue Growth (CA$ M) 316 232 216 191 * 168 154 2011 2012 2013 2014 2015 2016 E * Asset sales 84 Financial Performance: NIBT Growth (CA$ M) 316 NIBT after Minority Interest Revenues NIBT CAGR
Slide 54: Asset Growth and ROA; Key Risks and Mitigation
54 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Financial Performance: Asset Growth and ROA (US$ M) (%) Average Assets 3,000 ROA 8.9% 8.7% 8.9% 7.9% * 1,658 Minimum ROA target of 2.5% 775 3.8% 3.1% 546 346 402 2011 2012 2013 2014 2015 2016 E * Excludes gain on as
Slide 55: Strategic Priorities; Strong Foundation for Growth
National Bank of Canada 55 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Strategic Priorities Develop new asset classes in the markets that meet our investment criteria Deliver NIBT After Focus on creative structures within Minority Interest consumer finance of CA$ 125M in 2017 and Be th
Slide 56: Credigy Q&A Panel
56 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 CREDIGY Q&A PANEL 90
Slide 57: Executive Biographies
National Bank of Canada 57 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Executive Biographies BRETT SAMSKY, CHIEF EXECUTIVE OFFICER As one of Credigy’s founders, Brett has served as Chief Executive Officer since inception. Brett oversees all operations and investments, partnering with t
Slide 58: Executive Biographies
58 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Executive Biographies ASHLEY JOHNSON, CHIEF ADMINISTRATIVE OFFICER As one of Credigy’s founders, Ashley serves as Chief Administrative Officer. Ashley has a concentration on the corporate structuring of Credigy’s in
Slide 59: Closing Remarks
National Bank of Canada 59 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 CLOSING REMARKS LOUIS VACHON PRESIDENT AND CHIEF EXECUTIVE OFFICER 91 91 INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 92
Slide 60: Blank
60 National Bank of Canada INTERNATIONAL DEVELOPMENT INVESTOR DAY September 16, 2016 Blank
National Bank of Canada — Investor Day (September 2016) on 6ix