National Bank Of Canada · TSX:NA

National Bank Of Canada — Q1 2017 Earnings Presentation

28 slides from National Bank Of Canada's earnings presentation, Mar 1, 2017

  1. Slide 1: Analyst and Investor Presentation Q1-2017 Conference Call

    an NATIONAL BANK OF CANADA ANALYST AND INVESTOR PRESENTATION Q1-2017 CONFERENCE CALL Wednesday, March 1, 2017 — 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 the 2016 Annual Report, in other filings with Canadian securities regulators,

  3. Slide 3: Overview

    OVERVIEW Louis Vachon President & Chief Executive Officer

  4. Slide 4: Highlights

    HIGHLIGHTS ADJUSTED RESULTS (1) Q1 17 Q4 16 Q1 16 QoQ YoY HIGHLIGHTS Revenues 1,707 1,632 1,530 5% 12%  Adjusted diluted EPS up 15% (2) Net Income 502 463 427 8% 18%  Strong performance driven by solid Diluted EPS $1.35 $1.24 $1.17 9% 15% revenue growth and effective cost Provision for Credit Loss

  5. Slide 5: Financial Review

    FINANCIAL REVIEW Ghislain Parent Chief Financial Officer and Executive Vice-President, Finance and Treasury

  6. Slide 6: Performance Snapshot – Q1 2017

    PERFORMANCE SNAPSHOT – Q1 2017 (millions of dollars) ADJUSTED (1) Q1 17 Q4 16 Q1 16 QoQ YoY HIGHLIGHTS Revenues (2) 1,707 1,632 1,530 5% 12%  Adjusted diluted EPS of $1.35, up 15% YoY Expenses 965 954 896 1% 8% Net Income 502 463 427 8% 18%  Adjusted revenues, up 12% YoY Diluted EPS $1.35 $1.24 $1

  7. Slide 7: Segment Snapshot – Q1 2017

    SEGMENT SNAPSHOT – Q1 2017 Adjusted Net income (millions of dollars) Revenues Net income Contribution Contribution % (1) % (1) Q1 17 Q4 16 Q1 16 QoQ YoY P&C Banking 45% 39% 213 191 180 12% 18% Wealth Management 23% 20% 106 92 84 15% 26% Financial Markets 25% 34% 183 176 149 4% 23% US Specialty Finan

  8. Slide 8: Transformation Driving Efficiencies

    TRANSFORMATION DRIVING EFFICIENCIES Excluding specified items Taxable equivalent basis Efficiency Ratio QoQ YoY  P&C efficiency ratio Q1 17 Q4 16 Q1 16 (bps) (bps) targets well in line with guidance provided in Total Bank 56.5% 58.5% 58.6% 200 210 our 2015 Investor Day Personal & Commercial 54.6% 5

  9. Slide 9: Strong Capital Position

    STRONG CAPITAL POSITION TOTAL RISK-WEIGHTED ASSETS COMMON EQUITY TIER 1 UNDER BASEL III UNDER BASEL III EVOLUTION (QoQ) 69,741 68,375 68,530 68,205 68,574 3,779 3,971 3,291 2,807 3,815 0.09% 0.15% 0.17% 9,278 9,254 9,391 9,495 9,611 0.39% 0.26% 56,684 55,150 55,848 55,903 55,148 10.62% 10.77% 10.60%

  10. Slide 10: Business Segment Review

    BUSINESS SEGMENT REVIEW Jean Dagenais Senior Vice-President, Finance

  11. Slide 11: Personal and Commercial Banking

    PERSONAL AND COMMERCIAL BANKING Q1 17 Q4 16 Q1 16 QoQ YoY (millions of dollars) HIGHLIGHTS Revenues 755 739 724 2% 4%  Net income up 18% YoY due to strong revenue Personal Banking 349 348 342 - 2% growth, good efficiency and cost control and Commercial excl. Oil & Gas sector 252 256 245 (2%) 3% dec

  12. Slide 12: Wealth Management

    WEALTH MANAGEMENT (1) (millions of dollars) Q1 17 Q4 16 Q1 16 QoQ YoY HIGHLIGHTS Revenues 399 375 358 6% 11%  Revenues up 11% mainly due to:  NII growth of 17% driven by strong deposits Fee-based 219 212 196 3% 12% growth of 19%  Fee-based revenues up 12% due to good Transaction & Others 76 65 73

  13. Slide 13: Financial Markets

    FINANCIAL MARKETS (1) (millions of dollars) Q1 17 Q4 16 Q1 16 QoQ YoY HIGHLIGHTS Revenues 419 401 348 4% 20%  Record trading revenues driven by solid clients activities and equity and foreign Trading 254 222 216 14% 18% exchange trading Banking Services 81 91 72 (11%) 13%  YoY Financial Market Fee

  14. Slide 14: US Specialty Finance & International

    US SPECIALTY FINANCE & INTERNATIONAL Q1 17 Q4 16 Q1 16 QoQ YoY (millions of dollars) HIGHLIGHTS Revenues 118 102 108 16% 9%  Credigy’s performance in line with guidance Credigy 90 80 103 13% (13%) from Investor Day:  NIBT after minority interest of ABA 28 24 17% ~ CA$125 million in 2017  Minimum

  15. Slide 15: Risk Management

    RISK MANAGEMENT William Bonnell Executive Vice-President, Risk Management

  16. Slide 16: Loan Portfolio Overview

    LOAN PORTFOLIO OVERVIEW (billions of dollars) Q1 17 % of Total HIGHLIGHTS Secured - Mortgage & HELOC 64.4 50%  Modest exposure to unsecured Secured - Other 4.9 4% retail lending Unsecured 8.1 6%  Secured retail loans accounts for Credit Cards 2.0 2% more than 54% of total loans Total Retail 79.4 6

  17. Slide 17: Regional Distribution of Canadian Loans

    REGIONAL DISTRIBUTION OF CANADIAN LOANS As at January 31, 2017 RETAIL WHOLESALE Secured Corporate Unsecured and Oil & Gas Mortgages & Secured Others Commercial Banking and TOTAL Credit Card Sector REGION HELOC Other (1) QC / ON 41.8% 2.9% 6.4% 0.1% 21.2% 9.1% 81.5% Oil Regions (AL/SK/NL) 5.0% 0.4% 0

  18. Slide 18: Retail Mortgage and HELOC Portfolio

    RETAIL MORTGAGE AND HELOC PORTFOLIO CANADIAN RETAIL MORTGAGE PORTFOLIO DISTRIBUTION DISTRIBUTION BY CANADIAN PROVINCE 130% 5 As at January 31, 2017 PCL (bps) 3 2 2 2 1 110% 0 55% 90% 34% 34% 34% 34% 31% -5 70% 21% -10 24% 24% 23% 23% 60% Insured 50% 25% Uninsured & HELOC -15 30% 46% 40% 48% 42% 42%

  19. Slide 19: Impaired Loans and BA's and Formation

    IMPAIRED LOANS AND BA’S AND FORMATION (millions of dollars) IMPAIRED LOANS AND BA’S IMPAIRED LOANS AND BA’S FORMATION (1) (millions of dollars) Q1 17 Q4 16 Q3 16 Q2 16 Q1 16 Personal 23 17 11 21 23 Commercial (excluding O&G) (11) 24 (23) 3 (35) Oil & Gas (32) 36 29 86 30 Corporate Banking - - - - -

  20. Slide 20: Provision for Credit Losses

    PROVISION FOR CREDIT LOSSES (millions of dollars) 67 63 2 1 59 60 1 HIGHLIGHTS 4 1 6  Specific provisions for credit losses were 21 27 45 1 18 15 stable QoQ at 19 bps 1 7  Specific provisions from the new US Specialty Finance and International sector of $7M 41 38 37 37 36  Maintain PCLs target of

  21. Slide 21: Appendix

    APPENDIX NATIONAL BANK Powering your ideas

  22. Slide 22: Appendix 1 | Detail of Specified Items

    APPENDIX 1 │ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Wealth Management acquisitions (9) (7) (7) (9) (6) Items related to TMX (18) - (1) (2) - MAV and Other Notes (2) (3) (2) (2) - Litigation provisions - - - (25) - Write-off of Intangible Assets - - - (44) - Res

  23. Slide 23: Appendix 2 | Balance Sheet Overview (Banking Book & Other)

    APPENDIX 2 │ BALANCE SHEET OVERVIEW (Banking Book & Other) (billions of dollars) LENDING – LOANS AND BAs (MONTH END BALANCE) FUNDING – DEPOSITS AND BAs (MONTH END BALANCE) 144.6 126.2 126.9 139.3 124.8 121.1 135.3 118.5 129.3 131.2 26.9 22.0 22.1 21.9 19.5 28.1 17.1 28.8 29.0 28.8 9.3 9.5 9.5 9.3 9.

  24. Slide 24: Appendix 3 | Comparative Performance – Capital Ratios

    APPENDIX 3 │ COMPARATIVE PERFORMANCE – Capital Ratios CAPITAL RATIOS UNDER BASEL III 15.9% 15.3% 14.7% Total 15.1% 14.2% Total 14.1% 13.5% 12.3% Tier 1 13.3% 11.9% Tier 1 10.6% 10.1% 10.7% CET1 9.9% 10.4% CET1 Q1 17 Q4 16 Q4 16 Q3 16 Q3 16 NBC NBC Canadian NBC Canadian (1) Peers (1) Peers Common Equ

  25. Slide 25: Appendix 4 | Producers & Services

    APPENDIX 4 │ PRODUCERS & SERVICES HISTORICAL TREND IN EXPOSURES AT DEFAULT ($B) 5.7 5.5 5.5 5.2 4.9 4.6 IG=64% IG=62% IG=68% 3.9 IG=67% IG=57% 3.7 3.7 IG=57% IG=63% IG=67% IG=67% IG=36% IG=41% IG=40% IG=41% IG=39% IG=35% IG=46% IG=40% IG=49% Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Draw

  26. Slide 26: Appendix | Daily Trading and Underwriting Revenues vs VaR

    APPENDIX 5 │ DAILY TRADING and UNDERWRITING REVENUES vs VAR Daily Trading and Underwriting Revenues vs Trading VaR - Q1 17 (CAD millions) 20.0 Trading and Underwriting Revenues Trading VaR Millions 15.0 10.0 5.0 0.0 (5.0) (10.0) (15.0) 1-Nov 8-Nov 16-Nov 23-Nov 30-Nov 7-Dec 14-Dec 21-Dec 30-Dec 9-Ja

  27. Slide 27: Appendix | VaR Trend

    APPENDIX 6 │ Var TREND Trading VaR Quarterly Average Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 -5.2 -5.5 -6.4 -6.7 -6.7 $ millions Q1 2017 RESULTS CONFERENCE CALL – March 1, 2017 I 27

  28. Slide 28: 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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