National Bank Of Canada · TSX:NA
National Bank Of Canada — Investor Day (May 2015)
42 slides from National Bank Of Canada's investor day presentation, May 1, 2015
Slide 1: Caution regarding forward-looking statements
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Caution regarding forward-looking statements From time to time, the Bank makes written and oral forward-looking statements, such as those contained in the Major Economic Tr
Slide 2: Agenda
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 LOUIS VACHON PRESIDENT AND CEO Agenda Opening Remarks Unlocking Efficiency Louis Vachon, President and Chief Executive Officer Jacques Chamberland, VP Business Strategy and
Slide 3: Today's objectives
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Today’s objectives Solid growth opportunities in and outside Quebec More investments in technology Key drivers of efficiency gains 5 Strong total shareholder return TOTAL S
Slide 4: National Bank: consistent performance over time
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 2015 ROE consensus higher for National Bank 7 Source: Thomson Reuters National Bank: consistent performance over time EARNINGS PER SHARE1 (in dollars) Consensus 5-year CAGR
Slide 5: National Bank: P/E not reflecting its consistent performance
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 National Bank: P/E not reflecting its consistent performance CANADIAN BANKS P/E premium or discount1 8.9% 7.8% 4.0% 3.6% -12.0% -11.6% National NA Bank Bank 1 Bank 2 Bank 3
Slide 6: Positive economic indicators from Central Canada
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Common shares outstanding down 2% since 2004 FOR YEARS ENDED OCTOBER 31 (in millions of shares) -2% 11 Positive economic indicators from Central Canada EMPLOYMENT GAINS Jan
Slide 7: Diversified business mix
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Diversified business mix All our business segments will contribute to consolidate REVENUE BREAKDOWN (%) our strong Quebec franchise and grow our revenues (Q1 2015) outside
Slide 8: Driving P&C efficiency by investing in people and technology
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Driving P&C efficiency by investing in people and technology KEY DRIVERS IN P&C BANKING Consolidating our position in our Quebec franchise Continued emphasis in commercial
Slide 9: Driving P&C efficiency by accelerating investment in people, capabilities and technology
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 DIANE GIARD EVP, PERSONAL AND COMMERCIAL BANKING Driving P&C efficiency by accelerating investment in people, capabilities and technology 2008-2014 Powering our potential:
Slide 10: The business today
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 The business today A STRONG QUEBEC FRANCHISE Employees 8,500+ (1,300 outside Quebec) GROWING STEADILY ACROSS CANADA Branches 450+ Total Revenues Banking machines 2,515 (931
Slide 11: Continued strong top line performance expected through 2018
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Continued strong top line performance expected through 2018 TOTAL REVENUE ($) REVENUE BY GEOGRAPHIC MIX (%) +5-6% CAGR +4% ~$3.3B CAGR $2.8B $2.6B Commercial Retail Outside
Slide 12: Our loan volume growth is outpacing our peer average
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Our loan volume growth is outpacing our peer average while maintaining stable margins and a low risk profile LOAN VOLUME ($B) +7% PCL (bps) CAGR Target PCL: +7% $106 CAGR 2
Slide 13: Cost transformation is key to improving our P&C efficiency ratio
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Cost transformation is key to improving our P&C efficiency ratio RETAIL AND COMMERCIAL BANKING Efficiency ratio (%) We have delivered 2-4% significant growth improvement an
Slide 14: Focus areas to achieve our targets
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Focus areas to achieve our targets INCREMENTAL REVENUE AND NIBT BREAKDOWN BY 2018 Approximate numbers Retail Banking Commercial Banking P&C Revenue 2015F $1.8B $1.0B $2.8B
Slide 15: Building on 1C1B, a structure with clear distinction between Marketing and P&C
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Building on 1C1B, a structure with clear distinction between Marketing and P&C sales & distribution MARKETING P&C P&C Client Strategy P&L Management Retail & Commercial Pro
Slide 16: We are using data & analytics to anticipate clients' intentions
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 We are using data & analytics to anticipate clients’ intentions and personalize interactions INTERCEPT INBOUND CONTACTS Digital Capitalize on 300M channels inbound interact
Slide 17: This distinctive model will enable us to outperform
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 This distinctive model will enable us to outperform in client acquisition, cross-sell, retention and loyalty OUTCOME BY 2018 +40bps +7% Client Acquisition Products per Clie
Slide 18: We are well positioned to deliver our targets as we increase our investments
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 We are well positioned to deliver our targets as we increase our investments in client and staff enabling capabilities DELIVERED IN LAST 18 MONTHS 2015-2018 AVERAGE P&C INV
Slide 19: Optimize cross-channel interactions to put the right personalized offer in front of clients
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 …optimize cross-channel interactions to put the right personalized offer in front of clients to drive significant sales opportunities CAMPAIGN AUTOMATION AND ORCHESTRATION
Slide 20: We are well positioned to embrace the emerging payments landscape
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 We are well positioned to embrace the emerging payments landscape CANADIAN PAYMENT MARKET CONDITIONS OUTCOME BY 2018 New players are entering the value chain Our approach i
Slide 21: Enabling our sales force to drive top line growth
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Enabling our sales force to drive top line growth SALES EXCELLENCE IMPACTS 1 OUTCOME BY 2018 15% 35% 10% Sales time Proactive Conversion contact rate rate ~ $45M 20% 10% in
Slide 22: Align sales force to the highest value opportunities
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Align sales force to the highest value opportunities OUTCOME BY 2018 Evolve client Anticipate 20% of client migration to a assignment model relationship based value proposi
Slide 23: Enable the sales force with more relevant and personalized leads
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Enable the sales force with more relevant and personalized leads, and more effective sales tools Increase volume and relevance of sales leads from our distinctive marketing
Slide 24: Our plan will enable us to sustain growth while reducing costs
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Our plan will enable us to sustain growth and increase our investments while reducing costs through proven initiatives 57% 53–55% P&C 2015 2018 EFFICIENCY RATIO $90M recurr
Slide 25: Increase branch productivity
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Increase branch productivity Streamline operations and eliminate non-value added tasks OUTCOME BY 2018 ~$15M Improve scheduling and workforce management run rate savings Re
Slide 26: Digitize and automate to transform our processes in operations
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Digitize and automate to transform our processes in operations OUTCOME BY 2018 Reengineer processes end-to-end ~$30M Digitize documents and implement workflow run rate savi
Slide 27: Retail Banking: the business today
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 YANN JODOIN SVP, MARKETING, CLIENT STRATEGY AND RETAIL SOLUTIONS Retail Banking: the business today Employees 7,400+ Retail clients 2.3M Branches 450+ $1.8B in Revenue and
Slide 28: We have maintained strong retail market share despite increased competition
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 We have maintained strong retail market share despite increased competition QUEBEC MARKET SHARE 16% Market share in personal lending We are focused on growing our retail ba
Slide 29: 2018 product volume growth targets
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 2018 product volume growth targets 2015-2018 VOLUME GROWTH FORECASTS +24% CAGR Well diversified portfolio with solid +7% growth across all +5% +5% CAGR +3% CAGR CAGR produc
Slide 30: Key strategic initiatives to achieve our targets
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Key strategic initiatives to achieve our targets OUTCOME BY 2018 ACQUIRE Attract and acquire new clients in key segments Deepen share of wallet by leveraging ~$100M CROSS-S
Slide 31: Our operating model will shorten our cross-sell cycle and deepen share of wallet
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 CROSS-SELL Our operating model will shorten our cross-sell cycle and deepen share of wallet TOTAL VOLUME FROM CLIENTS WITH 5-9 YEARS TENURE TOTAL VOLUME FROM CLIENTS 2% WIT
Slide 32: We will double the number of clients in our high value affinity programs
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 EXPAND We will double the number of clients in our high value affinity programs AFFINITY GROUPS 2014 Increase the percentage of clients in affinity programs +60% from 6% to
Slide 33: Continue to grow mortgage volumes through our market leading platform
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 EXPAND Continue to grow mortgage volumes through our market leading platform OUTCOME BY 2018 Mortgage Volume OPTIMIZE NEW ORIGINATION PLATFORM 5% 7% CAGR Fastest mortgage o
Slide 34: Expand credit cards and payments franchise
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 EXPAND Expand credit cards and payments franchise CREDIT CARDS Purchase Volume Growth EXTEND REACH 5% 6% CAGR Establish new partnerships CAGR Further penetrate SME, commerc
Slide 35: Commercial Banking: the business today
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 DAVID PINSONNEAULT SVP, COMMERCIAL BANKING AND INTERNATIONAL Commercial Banking: the business today Clients 135,000 Employees 1,100 Commercial Banking 46 Business Centres i
Slide 36: Building momentum on solid foundations
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Building momentum on solid foundations Leading position in Quebec for lending 24% market share Loan volume: +6% CAGR Solid market position Deposit volume: +8% CAGR in Quebe
Slide 37: Market fundamentals support 8% asset growth, we target 9%
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Market fundamentals support 8% asset growth, we target 9% Strong balance sheet provides easier access to capital Additional capacity anticipated to meet market demand Debt-
Slide 38: Key strategic initiatives to achieve our targets
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Key strategic initiatives to achieve our targets Scaling our client relationship model Leveraging our leading position in lending to grow cash management and deposits Accel
Slide 39: Leveraging our leading position in lending to grow cash management and deposits
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Leveraging our leading position in lending to grow cash management and deposits TARGET AND PEER REVENUE DISTRIBUTION OUTCOME BY 2018 27% 1.3x 35% 40% Cash management and de
Slide 40: Accelerating growth across Canada through major industries
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 … through major industries … REAL ESTATE AGRIBUSINESS SUCCESS 25% YOY loan volume growth +25% loan growth in Ontario in 2014 in 2014 OPPORTUNITIES Under penetrated industry
Slide 41: Achieving superior growth while improving our risk profile through diversification
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Achieving superior growth while improving our risk profile through diversification INDUSTRY VOLUME MIX GEOGRAPHIC REVENUE MIX Maintain a balanced portfolio across Improve d
Slide 42: Focus areas to achieve our targets
National Bank of Canada Client connected. Powering our potential. Personal and Commercial Banking Investor Day - May 1st , 2015 Focus areas to achieve our targets INCREMENTAL REVENUE AND NIBT BREAKDOWN BY 2018 Approximate numbers Retail Banking Commercial Banking P&C Revenue 2015F $1.8B $1.0B $2.8B