National Bank Of Canada · TSX:NA
National Bank Of Canada — Q1 2020 Earnings Presentation
26 slides from National Bank Of Canada's earnings presentation, Feb 27, 2020
Slide 1: Investor Presentation Q1|20
INVESTOR PRESENTATION Q1|20 February 27, 2020
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 Economic Review and Outlook section of the Report to Shareholders - First Quarter 2020 and of the 2019 Annual Report, in other filings with Canad
Slide 3: Overview
OVERVIEW Louis Vachon President & Chief Executive Officer
Slide 4: Overview - Q1|20 Adjusted Results
OVERVIEW - Q1|20 ADJUSTED RESULTS(1) ADJUSTED RESULTS(1) Highlights – Q1|20 ($MM, TEB) Q1 20 Q4 19 Q1 19 QoQ YoY ▪ Strong performance in Q1/20 Revenues 2,010 2,008 1,862 - 8% Net Income 620 612 552 1% 12% ▪ Continued momentum in all businesses Diluted EPS $1.70 $1.69 $1.50 1% 13% PCL 89 89 88 - 1% ▪
Slide 5: Segment Highlights - Q1|20
SEGMENT HIGHLIGHTS - Q1|20 Highlights – Q1|20 NET INCOME ($MM) Q1 20 Q4 19 Q1 19 QoQ YoY P&C Banking P&C Banking 251 265 242 (5%) 4% ▪ Good performance with positive momentum Wealth Management 135 129 123 5% 10% on both sides of the balance sheet Financial Markets 184 203 168 (9%) 10% ▪ Balance betw
Slide 6: Financial Review
FINANCIAL REVIEW Ghislain Parent Chief Financial Officer and Executive Vice-President, Finance
Slide 7: Transformation Driving Efficiency
TRANSFORMATION DRIVING EFFICIENCY ADJUSTED RESULTS(1) Total Bank Highlights ($MM, TEB) Q1 20 Q4 19 Q1 19 QoQ YoY ▪ Significant improvement in all-bank Revenues 2,010 2,008 1,862 0.1% 7.9% efficiency ratio and solid operating ($MM, TEB) Q2 19 Q2 18 YoY 6M 19 6M 18 YoY Revenues 1 850 1 818 1,8% 3 712
Slide 8: Strong Capital Position
STRONG CAPITAL POSITION Total RWA under Basel III 86,206 Highlights 83,039 80,984 4,397 79,008 77,036 3,788 3,972 4,276 ▪ Common Equity Tier 1 ratio at 11.7% 3,964 11,664 11,509 11,319 10,910 11,096 ▪ Leverage ratio at 4.0% ▪ Liquidity coverage ratio at 144% 70,145 62,162 64,124 65,693 67,254 ▪ RWA
Slide 9: Risk Management
RISK MANAGEMENT William Bonnell Executive Vice-President Risk Management
Slide 10: Provisions for Credit Losses
PROVISIONS FOR CREDIT LOSSES Quarterly PCL Ratio (bps) Highlights 24 23 23 23 23 PCL on impaired loans: 23 ▪ Stable total impaired PCL of 21 bps 21 21 20 20 ($82 million) 19 18 ▪ Lower impaired PCLs at Credigy, offset 16 15 by higher impaired PCLs in Financial 13 Markets 4 4 3 3 3 PCL on performing
Slide 11: Gross Impaired Loans and Formations
GROSS IMPAIRED LOANS(1) AND FORMATIONS(2) Gross Impaired Loans (GIL) ($MM) Highlights ▪ GIL ratio of 43 bps ($677 million), -1 bp QoQ ▪ Net formations of $78 million - Lower formations in Personal and Credigy - New formations in Financial Markets related to one account in the electricity generation
Slide 12: Retail Mortgage and HELOC Portfolio
RETAIL MORTGAGE AND HELOC PORTFOLIO Canadian Distribution by Province Highlights (As at January 31, 2020) ▪ Distribution across product and geography remained stable. Insured mortgages account for 39% of the total ▪ Uninsured mortgages and HELOC in GTA and GVA represent 10% and 2% of the total portf
Slide 13: Appendices
NATIONAL BANK Powering your ideas” APPENDICES
Slide 14: Strong Fundamentals in Québec Economy
APPENDIX 1 │STRONG FUNDAMENTALS IN QUÉBEC ECONOMY Jobless rate at historical lows Affordable home prices Jobless rate % - Rest of Canada and Québec Median home price in different cities ($) $1,022K $881K $432K $359K Household leverage below national average Sound public finances Household debt as a
Slide 15: Personal and Commercial Banking
APPENDIX 2 | PERSONAL AND COMMERCIAL BANKING ($MM) Q1 20 Q4 19 Q1 19 QoQ YoY Highlights YoY Revenues 880 875 851 1% 3% ▪ Good revenue growth supported by Personal 547 545 527 - 4% solid loan and deposit volumes Commercial 333 330 324 1% 3% ▪ Lower expenses driven by: Operating Expenses 468 455 463 3
Slide 16: Wealth Management
APPENDIX 3 │ WEALTH MANAGEMENT ($MM) Q1 20 Q4 19 Q1 19 QoQ YoY Highlights YoY Revenues 465 446 434 4% 7% ▪ Solid performance with net income Fee-based 273 263 242 4% 13% up 10% Transaction & Others 73 72 68 1% 7% ▪ Favorable markets and good Net Interest Income 119 111 124 7% (4%) volumes led to sol
Slide 17: Financial Markets
APPENDIX 4 │ FINANCIAL MARKETS ($MM, TEB) Q1 20 Q4 19 Q1 19 QoQ YoY Highlights YoY Revenues 458 495 410 (7%) 12% ▪ Another robust performance in Global Global Markets 289 299 250 (3%) 16% Markets driven by both equity and fixed Corporate & Investment Banking 169 196 160 (14%) 6% income Operating Exp
Slide 18: US Specialty Finance & International
APPENDIX 5 │ US SPECIALTY FINANCE & INTERNATIONAL ($MM) Q1 20 Q4 19 Q1 19 QoQ YoY Highlights YoY Revenues 195 192 171 2% 14% ▪ ABA Bank: Credigy 98 95 105 3% (7%) ABA 95 90 65 6% 46% - Strong growth with earnings up Other 2 7 1 71%, loans up 50% and deposits Operating Expenses 78 74 68 5% 15% up 59%
Slide 19: Other
APPENDIX 6 │ OTHER ADJUSTED RESULTS(1) Highlights YoY ($MM, TEB) Q1 20 Q4 19 Q1 19 ▪ Higher contribution from Treasury Revenues 12 - (4) Operating Expenses 51 75 50 Provision - - - for Credit Losses Pre-tax Income (39) (75) (54) Net Income (35) (63) (41) REPORTED RESULTS ($MM) Q1 20 Q4 19 Q1 19 Spec
Slide 20: Total Loan Portfolio Overview
APPENDIX 7 │TOTAL LOAN PORTFOLIO OVERVIEW Highlights Loan Distribution by Borrower Category ▪ Secured lending accounts for 93% of As at ($B) January 31, 2020 % of Total Retail loans Retail - Secured - Mortgage & HELOC 75.7 48% ▪ Limited exposure to unsecured retail - Secured - Other (1) 9.0 6% and c
Slide 21: Regional Distribution of Canadian Loans
APPENDIX 8 │ REGIONAL DISTRIBUTION OF CANADIAN LOANS Highlights (2) Oil Maritimes Quebec Ontario Regions(1) BC/MB and TOTAL Within the Canadian loan Territories As at January 31, 2020 portfolio: Retail Secured 27.2% 13.1% 4.8% 3.6% 1.1% 49.8% ▪ Limited exposure to - Mortgage & HELOC Secured unsecure
Slide 22: Loan & Deposit Overview
APPENDIX 9 │ LOAN & DEPOSIT OVERVIEW ($B) Loans & BA's Deposits 145.3 152.0 151.3 153.3 156.2 136.7 143.1 146.7 148.7 133.8 54.0 55.4 56.5 57.2 58.9 90.6 76.0 78.5 84.1 85.3 92.7 93.3 94.9 96.1 97.2 57.7 58.2 59.0 60.1 61.4 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Retail Business
Slide 23: Daily Trading and Underwriting Revenues vs. VaR
APPENDIX 10 │ DAILY TRADING AND UNDERWRITING REVENUES VS. VAR ($MM) 23
Slide 24: Trading VaR Trend
APPENDIX 11 │ TRADING VaR TREND ($MM) 24
Slide 25: Specified Items
APPENDIX 12 │ SPECIFIED ITEMS Q1 20 Q4 19 Income Income Before Net Before Net Specified items ($MM) Taxes income EPS Taxes income EPS Charge related to Maple (1) (13) (10) ($0.03) (11) (8) ($0.02) Total impact (13) (10) ($0.03) (11) (8) ($0.02) (1) The Bank recorded charges related to the company Ma
Slide 26: Investor Relations Contact Information
INVESTOR RELATIONS CONTACT INFORMATION W: www.nbc.ca/investorrelations investorrelations@nbc.ca 1-866-517-5455 Linda Boulanger, Vice President 514-394-0296 | linda.boulanger@bnc.ca Marianne Ratté, Senior Director 514-412-5437 | marianne.ratte@bnc.ca Arslan Benbakouche, Chief Analyst 514-412-8027
National Bank of Canada — Q1 2020 Earnings Presentation on 6ix