National Bank Of Canada · TSX:NA

National Bank Of Canada — Q2 2008 Earnings Presentation

19 slides from National Bank Of Canada's earnings presentation, May 29, 2008

  1. Slide 1: Analyst and Investor Presentation Q2 2008 Results Conference Call

    Analyst and Investor Presentation Q2 2008 Results Conference Call Montreal, May 29 2008 Caution Regarding one client Forward-Looking Statements one bank From time to time, National Bank of Canada (the “Bank”) makes written and oral forward-looking statements in publications, in filings with Canadian

  2. Slide 2: Q2 2008 Highlights

    Q2 2008 Highlights one client one bank Net Income : $165M – EPS $1.00 (reported) $229M – EPS $1.41 (adjusted) Good cost controls Tier 1 Capital ratio at 9.2% (Basel II) Maintain good credit quality Q2 2008 Results Conference Call – May 29, 2008 I 3 Financial Review Patricia Curadeau-Grou Executive V

  3. Slide 3: Performance Snapshot (reported and adjusted)

    Performance Snapshot (reported) one client one bank (m illions of dollars) Q2 08 Q2 07 Change 6M 08 6M 07 Change Revenues 873 998 (13%) 1,864 1,986 (6%) Expenses 634 660 (4%) 1,266 1,316 (4%) Net Income 165 233 (29%) 420 473 (11%) EPS $1.00 $1.40 (29%) $2.58 $2.83 (9%) ROE 14.3% 20.3% 18.6% 20.5% Ad

  4. Slide 4: Well-diversified Business Mix; Capital Management

    Well-diversified Business Mix one client Q2 2008 one bank Revenues1 Net Income 26% 34% 53% 47% 21% 19% Personal and Commercial Banking Wealth Management Financial Markets 1Adjusted for gains or losses attributable to third party investors using the Innocap platform Q2 2008 Results Conference Call –

  5. Slide 5: Capital Management

    Capital Management one client Q2 2008 one bank Capital ratio Active capital management 14.3% ƒ Basel II implementation: ƒ Impact of 70 bps on Tier 1 ratio 9.9% 13.3% ƒ Issuance of preferred 9.2% shares: $173M ƒ Impact of 31 bps ƒ Issuance of debentures May 1: $500M T ier 1 Total Basel I Basel II ƒ C

  6. Slide 6: Global Portfolio Composition; Risk Provisioning

    Global Portfolio Composition one client As at March 31, 2008 one bank Per business segment Per industry (Corporate and commercial) 2% 15% 25% 24% 13% 11% 64% 14% 12% 4% 4% 12% Personal Corporate Banking Primary Sector Manufacturing Commercial Banking Construction and real estate Communication Transp

  7. Slide 7: Impaired Loans; Impaired Loan Formation

    Impaired Loans one client one bank (millions of dollars) 6.6% 6.2% 6.1% Sound risk 5.7% 5.6% 252 management 236 249 249 232 ƒ Stable gross impaired 140 134 110 110 129 loans vs Q1 08 (179) (168) (174) (198) (198) Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Gross Impaired Loans Impaired Loans before general allowa

  8. Slide 8: Risk Management; Business Segment Review

    Risk Management one client Current Focus one bank Commercial paper liquidity lines to third party ƒ None asset-backed conduits Commercial paper liquidity lines to National Bank ƒ Backstop liquidity facilities – not significant sponsored asset–backed conduit ƒ No exposure to U.S. subprime mortgages U

  9. Slide 9: Personal and Commercial Banking Quarterly Results

    Personal and Commercial Banking one client Quarterly Results one bank TEB (millions of dollars) Q2 2008 – YoY 130 124 ƒ Net income up 1% 112 114 113 ƒ Good volume growth in 523 553 550 546 534 personal loans and deposits increased 342 revenues by 2% 319 332 318 309 ƒ Maintain cost control ƒ Efficien

  10. Slide 10: Personal and Commercial Banking Revenues and Volume

    Personal and Commercial Banking one client Revenues Breakdown one bank TEB (millions of dollars) Q2 2008 – YoY 553 550 546 534 ƒ Overall almost all 523 sectors contributed to 183 revenue increase 185 181 172 178 28 ƒ Good volume growth in 25 24 32 20 63 63 64 63 both Retail and 61 Commercial Banking

  11. Slide 11: Personal and Commercial Banking Margin Evolution

    Personal and Commercial Banking one client Margin Evolution one bank 2.82% Q2 2008 vs Q1 2008 2.80% 2.72% 2.68% 2.66% ƒ Slight increase in margin on most credit products 1.83% 1.84% 1.84% 1.82% 1.75% 1.68% 1.64% 1.58% 1.74% ƒ Prime / BAs back to 1.49% 1.66% 1.62% more normal level 1.55% 1.41% 1.46%

  12. Slide 12: Wealth Management Quarterly Results

    Wealth Management one client Quarterly Results1 one bank TEB (millions of dollars) 45 40 43 44 Q2 2008 – YoY 40 ƒ Net income down 2% 233 221 222 ƒ Revenues decreased by 213 213 9%, mainly due to 164 160 157 weaker financial markets 153 149 activities ƒ Efficiency ratio improved by 40 bps to 70.0% Q2

  13. Slide 13: Wealth Management Revenues and Assets Under Management

    Wealth Management one client Revenues Breakdown one bank TEB (millions of dollars) Q2 2008 – YoY 233 222 22 221 213 213 ƒ Growth of 4 % in 22 24 25 22 mutual funds 47 48 47 52 49 ƒ Decrease in brokerage of 13% related to weaker financial markets activities 164 151 146 141 142 Q2 07 Q3 07 Q4 07 Q1 08

  14. Slide 14: Wealth Management Summary; Financial Markets Results

    Wealth Management one client Summary one bank Slight growth in overall AUM Weaker financial markets activities affecting revenues Aquilon Capital Corp and Groupe financier Everest acquisitions closed Agreement to acquire Bieber Securities Inc. with $550M AUM Q2 2008 Results Conference Call – May 29,

  15. Slide 15: Financial Markets YTD and Revenues Breakdown

    Financial Markets one client YTD1 one bank TEB (millions of dollars) 170 151 589 543 332 325 2007 2008 Revenues Expenses Net Income 1Excluding specified items and adjusted for gains or losses attributable to third parties using the Innocap platform Q2 2008 Results Conference Call – May 29, 2008 I 29

  16. Slide 16: Financial Markets Trading Revenues and Summary

    Financial Markets one client Trading Revenues Breakdown1 one bank TEB (millions of dollars) 116 116 Q2 2008 – YoY 113 47 • Good equity trading 51 18 87 77 performance 13 7 96 77 85 90 79 (2) (9) (1) (21) (21) Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Equity Fixed income Commodity and foreign exchange 1Excluding

  17. Slide 17: Business Line Efficiency Ratio; 2008 Objectives

    Business Line Efficiency Ratio one client YTD one bank 70.1% 70.3% 59.4% 58.1% 59.9% 56.4% 1 Personal and Wealth Management Financial Markets Commercial Banking 2007 2008 1Adjusted for gains or losses attributable to third parties using the Innocap platform Q2 2008 Results Conference Call – May 29,

  18. Slide 18: Subsequent Events; Appendix 1 Challenging environment in Q2 2008

    Subsequent Events one client one bank Montreal Exchange/TSX Group Gain ABCP restructuring Q2 2008 Results Conference Call – May 29, 2008 I 35 Appendix 1 │ Challenging environment in Q2 2008 one client one bank CDX IG9 Evolution ƒ CDX IG9 Index peaked in March and is back to January level Q2 2008 Res

  19. Slide 19: Appendix 2 Detail of specified items

    Appendix 2 │ Detail of specified items one client one bank (millions of dollars) Q1 08 Q2 08 6M 08 Gain related to the sale of the Bank's operations in Nassau 32 - 32 ABCP financing costs (19) (15) (34) ABCP hedging - (73) (73) Revenues 13 (88) (75) ABCP other expenses 2 7 9 Income before income tax

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