National Bank Of Canada · TSX:NA

National Bank Of Canada — Q3 2003 Earnings Presentation

19 slides from National Bank Of Canada's earnings presentation, Aug 28, 2003

  1. Slide 1: Analyst and Investor Presentation Q3 2003 Results

    Analyst and Investor Presentation Q3 2003 Results Conference Call August 28, 2003 www.nbc.ca/investorrelations 1 Third Quarter Highlights Excellent results across the board (Presentation figures exclude Q3 02 reevaluation of investment) •Revenues up 8% q/q; 9% y/y * •EPS increase of 22% for q/q as w

  2. Slide 2: On target to meet all 2003 performance objectives

    On target to meet all 2003 performance objectives 2003 Q3 03 YTD Growth in earnings 5% to 10% 22% (1) 20% (1) per share Return on common 14% to 16% 17.3% 16.6% shareholders' equity Tier 1 capital ratio 8.75% to 9.50% 9.5% 9.5% Dividend payout ratio (2) 30% to 40% 32% 32% (1) Figures exclude Q3 02 im

  3. Slide 3: Nine month snapshot; Dividend per share

    Nine month snapshot in millions of dollars TEB 2003 2002 Change Total Revenues $2 525 $2 436 4% Operating expenses 1 635 1 500 9% Provision for credit losses 127 437 -71% Discontinued operations, after tax - 118 Net income 466 406 15% EPS $2,50 $2,09 20% ROE 16.6% 14.2% Reported 2002 figures exclude

  4. Slide 4: Capital ratios and share buyback; Q3 03 Net Income

    Continued strong Capital ratios 13.9% 13.5% Share buyback status as at July 31: 4.1% 4.0% • Buyback program completed 1.1% 1.1% • 9.1 M shares repurchased, representing $298M 1.3% 0.9% • Redemption of Preferred shares Series 12 for $125M Tier One Tier One 9.8% 9.5% 7.4% 7.5% Q2 03 Q3 03 Tangible Equ

  5. Slide 5: Personal and Commercial Banking highlights

    Personal and Commercial Banking highlights ƒ Agreement to sell banking products to MD Management ƒ New team of commercial account directors to offer new products and services to depositary clients ƒ First steps taken at making NBC banking products available to Investors/Great-West/London Life client

  6. Slide 6: Personal and Commercial Banking 9 months

    Personal and Commercial Banking 9 Months in millions of dollars +5.0% 1,396 1,329 +3.7% 820 850 +15% -6.0% 216 249 166 156 Revenues Expenses Expected Net income losses 2002 2003 11 11 Personal and Q3 03 Net Income Commercial Banking Wealth Management $21 M Financial Markets Personal and Commercial B

  7. Slide 7: Wealth Management highlights

    Wealth Management highlights ƒ Pick up in earnings momentum ƒ Improved performance for NBF Retail and NB Discount Brokerage ƒ Fundamentals of Altamira acquisition still intact 13 13 Wealth Management Quarterly in millions of dollars NBF Retail expense ratio 166 improvements: 154 Q3 03: 79.5% 138 Exc

  8. Slide 8: Wealth Management 9 Months; Assets under Management composition

    Wealth Management 9 Months in millions of dollars +5.9% 482 455 +3.7% 375 389 +14% 50 57 Revenues Expenses Net Income 2002 2003 15 15 Assets under Management composition in billions of dollars as at July 31 72.4 Growth rate: 69.8 •Y/Y +13% 63.9 6.7 7.2 •Q3 03 vs Q2 03 +4% 6.1 7.0 7.4 3.2 32.1 32.9 3

  9. Slide 9: Update on Altamira

    Update on Altamira Fundamentals of acquisition: ƒ Base of 130,000 direct clients (principally outside Quebec) and more than $4 billion of AUM with cross selling potential ƒ Strong sales force recognized for its quality of service and ability to offer broad range of products and services ƒ Potential

  10. Slide 10: Improving Altamira mutual fund performance

    Improving Altamira mutual fund performance July 2003 3 ms 6 ms 1 year 2 year 3 year 5 year 73.1 53.8 61.5 38.5 27.3 42.1 Altamira AUM evolution Equity Funds Above Median (%) (in millions $) Fixed Income Funds Above Median (%) 62.5 62.5 75.0 75.0 87.5 62.5 Q4 02 Q3 03 Funds Above Median (%) 70.6 55.9

  11. Slide 11: Financial Markets highlights; Realignment of Putnam Lovell NBF operations

    Financial Markets highlights ƒ NBF Research department recognized as one of the best in Canada by Brendan Wood ƒ Favourable trading environment ƒ Realignment of Putnam Lovell NBF operations 21 21 Realignment of Putnam Lovell NBF operations Acquisition consisted of : M&A and advisory Equity Capital M

  12. Slide 12: Financial Markets Quarterly and 9 Months

    Financial Markets Quarterly in millions of dollars 232 202 187 129 117 103 55 61 37 11 12 9 Revenues Expenses Expected Net Income losses Q3 02 Q2 03 Q3 03 23 23 Financial Markets 9 Months in millions of dollars +4.3% 656 629 +26.4% 374 296 -15% 190 162 -3.1% 32 31 Revenues Expenses Expected Net Inco

  13. Slide 13: Treasury and Capital Market Activity; Business Line Breakdown

    Treasury and Capital Market Activity in millions of dollars 91.2 61.9 54.5 57.1 50.7 33.4 28.3 25.5 24.5 18.0 * -9.4 -3.0 Trading Capital Investment ALM Revenues Market Gains Fees Q3 02 Q2 03 Q3 03 *Figure excludes Q3 02 impairment charge on investment 25 25 Business Line Breakdown Year to date Reve

  14. Slide 14: Business Line Expense Ratio; Provision for credit losses

    Business Line Expense Ratio Year to date 82.4% 80.7% 61.7% 60.9% 57.0% 47.1% Personal and Wealth Financial Markets Commercial Management Banking 2002 2003 27 27 Risk Management Provision for credit losses in millions of dollars 2003 Guidance revised: 62 45 to 50 bps of loans and BAs 53 (was previous

  15. Slide 15: Impaired loans; Telecom Exposure

    Impaired loans In millions of dollars Q3 03 Q2 03 Gross impaired loans $470 $467 Gross impaired loans as a % of tangible capital & reserves 13.2% 13.3% Net impaired loans Individuals and small businesses 39 40 Commercial Canada 114 116 Corporate 50 33 Real Estate 29 36 Treasury 0 0 Other 1 1 Sub-tot

  16. Slide 16: Electric Power and Aerospace Exposure

    Electric Power and Power Generation Exposure As at June 30, 2003 in millions of dollars Outstanding Invest. Non-Invest. Loans % of loans grade grade and BAs and BAs Loans and BAs Regulated Utilities $30 $0 $30 0.07 Generation Proj. with PPAs * 43 113 156 0.37 Other Generation Projects 12 17 29 0.07

  17. Slide 17: Impaired loan formation; Risk Management VaR

    Impaired loan formation In millions of dollars Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Personal and Commercial * 26.6 (0.9) 33.5 5.1 13.2 Corporate 1.6 18.7 (6.3) 31.3 25.1 Other 5.3 (0.5) 1.7 0.5 1.8 33.5 17.3 28.9 36.9 40.1 * Includes Real Estate Formations include new accounts, disbursements, principal rep

  18. Slide 18: Continued Earnings Quality

    Risk Management ƒ Excellent credit quality maintained again this quarter ƒ Stable impairment levels and formations 35 35 Continued Earnings Quality Positive trends this quarter: •Resilient earnings •Momentum of franchise value •Solid Business mix Seeing strong pick up in Retail Brokerage Maintaining

  19. Slide 19: Forward looking statements and contacts

    This presentation may contain certain forward looking statements about the operations, objectives and strategies of the National Bank of Canada. Such statements are subject to risk and uncertainties. Actual results may differ materially due to a variety of factors, including legislative or regulator

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