National Bank Of Canada · TSX:NA
National Bank Of Canada — National Bank Financial Canadian Financial Services Conference (April 2004)
23 slides from National Bank Of Canada's conference presentation, Apr 7, 2004
Slide 1: Strong momentum to meet our 2004 objectives
National Bank Financial Canadian Financial Services Conference Réal Raymond President and CEO Montreal, April 7, 2004 1 Strong momentum to meet our 2004 objectives 2004 Objectives Q1 04 Growth in earnings per share 5% to 10% 17.0% Return on common shareholders' equity 15% to 17% 19.0% Tier 1 capital
Slide 2: The Bank's Strategy
The Bank’s Strategy Growth in revenues and net income Q1 2004 Revenues Net Income % 30 25 26.3 20 15 14.8 12.0 13.1 12.5 10 10.6 9.3 5 0 3.2 Total Personal & Wealth Financial Markets Commercial Management 3 Two pronged Super Regional Business model 1. Quebec domination 2. Develop opportune and strat
Slide 3: Strength of Quebec base
Strength of Quebec base Quebec market gives us strong leverage and excellent platform to pursue further growth A diversified economy: Modern manufacturing facilities Key knowledge-based industries Dynamic service sector Substantial hydroelectric capacity Stable primary base 5 Real GPP Spread From Tr
Slide 4: Commercial and Personal Bankruptcies
Commercial Bankrupcies Volume Quebec Ontario Others 6000 5000 4000 3000 2000 91 92 93 94 95 96 97 98 99 00 01 02 03 7 Personal Bankrupcies Volume Que be c O n t a rio O t h e rs In thousands 33 30 27 24 21 18 15 91 92 93 94 95 96 97 98 99 00 01 02 03 8 4
Slide 5: Loan Losses; Capital Market operations
Loan Losses Commercial Canada Millions $ 30 25 20 15 10 5 0 0202 Q2II02 Q3III02 Q4IV02 Q10303 Q2II03 Q3III03 Q4IV03 Q104 Q1 04 9 Capital Market operations as a geographical diversification tool Revenues Wealth Management 21% Financial Markets 26% Personal and Commercial Banking 53% Net income Wealth
Slide 6: National Bank Financial
A value creating merger creates National Bank Financial Areas of strength Fixed income Market making for derivatives Investment Banking M&A Sector, geography and deal-size diversification 11 «National Bank Tops Canadian Mergers on IAMGOLD Takeover»(1) National Bank Financial led all Canadian banks f
Slide 7: Investment Banking Group
Investment Banking Group New Issuance of Equities Corporate Equity Participation: April 1, 2003 – March 31, 2004 280 236 232 225 240 205 191 186 184 200 Number of Deals 160 123 122 115 120 80 40 0 CIBC NBF BMO TDSI RBC Scotia Canaccord Raymond Dundee Desjardins James Source: Financial Post New Issue
Slide 8: Institutional Fixed Income; Unique Distribution Power
Institutional Fixed Income Corporate Debt Financial Participation 14000 10% Volume Market share 9% 12000 8% 10000 Volume millions $ 7% Market share 8000 6% 5% 6000 4% 4000 3% 2% 2000 1% 0 0% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 15 Unique Distribution Power Unique distribution power Comb
Slide 9: Momentum
All Phases of Financial and Economic Cycle Liquidity Below Average Above Average Rising Rebound Calm Low Rebound Calm Macro Macro Trading Trading Equity Equity Trading Trading FX FX Trading Trading Retail Retail Brokerage Brokerage Credit Risk Momentum Credit Credit Spread Spread Products Products C
Slide 10: Quarterly Revenues; Growth and Volatility
Quarterly Revenues Financial Markets Millions $ 275 Trend: +11.8% 250 225 200 175 150 125 2000 2001 2002 2003 2004 19 Growth and Volatility Financial Markets Revenue Volatility 25% 20% Total 15% BIG 5 10% NBC 5% Individual Banks 0% -15% -10% -5% 0% 5% 10% 15% Growth Trend 2000/04 20 10
Slide 11: Financial Markets Revenues
Financial Markets Revenues Deviations from Trend Line NBC Big 5 20% Correlation : +0.49 15% 10% 5% 0% -5% -10% -15% -20% 2000 Q3 2001 Q3 2002 Q3 2003 Q3 2004 21 Other Sources of Geographical Diversification Goals: Accelerate business growth by tapping new and faster growing markets Create opportunit
Slide 12: Canadian Bank Merger opportunities
Canadian Bank Merger opportunities Opportunity to acquire P&C networks Need to properly address competition issues Sale of large cluster of branches and commercial lending offices would constitute strong viable franchise Changes proposed to Competition Bureau would resolve competitive situation in P
Slide 13: Moving in new markets: diversification & synergies
Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C FM WM 25 Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C Energy Branches/ Partnerships lending Commercial offices FM ? NBF Wholesale NBF Retail
Slide 14: Mature slow-growth operations
Mature slow-growth operations P&C outside Quebec 108 branches outside Quebec Of which 71 are in Ontario, 28 are in francophone area of NB 28 commercial offices Generate 1/6 of income from branches and commercial lending offices 27 Mature slow-growth operations P&C outside Quebec Strategy Refocusing
Slide 15: Moving in new markets; Repositioning
Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C Energy Branches/ Partnerships lending Commercial offices FM ? NBF Wholesale NBF Retail WM NBCN Altamira 29 Repositioning Acquisition strategic reasoning remains unchanged Unique opportunity to parti
Slide 16: Repositioning
Repositioning Maximize Altamira brand by deployment in branch network outside Quebec Financial targets met Brand built through superior service quality, intensive marketing and generating good returns for investors Profit from synergies that will come from being part of large financial group 31 Movi
Slide 17: Assets Under Administration
Well-established high-growth operations: NBF’s Correspondent Network Founded in 1990, NBCN now encompasses: More than 91 associated organizations 5100 Investment Advisors over 420,000 active accounts Significantly increase National Bank’s distribution power: Better position in new debt and equity is
Slide 18: Energy Lending
Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C Energy Branches/ Partnerships lending Commercial offices FM ? NBF Wholesale NBF Retail WM NBCN Altamira 35 Well-established high-growth operations: Energy Lending 20 year track record Excellent prof
Slide 19: Energy Lending Assets
Energy Lending Assets From Nov. 02 to Feb. 04 Millions $ 900 800 700 600 500 02 03 04 37 Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C Energy Branches/ Partnerships lending Commercial offices FM ? NBF Wholesale NBF Retail WM NBCN Altamira 38 19
Slide 20: Retail brokerage; Share of Retail Brokerage
Emerging high-growth operations: Retail brokerage Expansion of retail brokerage activities in rest of Canada Decision to maintain brokerage operations separate from bank-related wealth management activities: Preserves entrepreneurial spirit Natural synergies between retail and wholesale 39 Share of
Slide 21: Partnerships
Moving in new markets : diversification & synergies Roll out Fast Growth Mature phase phase phase P&C Energy Branches/ Partnerships lending Commercial offices FM ? NBF Wholesale NBF Retail WM NBCN Altamira 41 Partnerships Unique Positioning IA’s outside Quebec don’t consider us direct competitors Li
Slide 22: Partnerships; Enhancing Shareholder Value
Partnerships Unique positioning Nov 2002 August 2003 Nov 2002 May 2002 Nov 2002 May 2001 Nov 2001 Jan 2001 Edward Jones 43 Enhancing Shareholder Value Through select geographic expansion Tackle new markets outside Quebec Drawing on our competitive advantage Several niches are result of acquisitions
Slide 23: Q&A
Q&A Réal Raymond President and CEO Montreal, April 7, 2004 45 Investor Relations: 514.394.0296 www.nbc.ca/investorrelations investorrelations@nbc.ca HIGHLIGHTS CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, National Bank of Canada makes written and oral forward-looking statements, i