National Bank Of Canada · TSX:NA
National Bank Of Canada — Investor Day (April 2005)
26 slides from National Bank Of Canada's investor day presentation, Apr 6, 2005
Slide 1: Investor Community Presentation: Prospering in a Low Return Environment
Investor Community Presentation National Bank Financial: Prospering in a Low Return Environment Louis Vachon, Chairman, NBF Group Kym Anthony, President and CEO, NBF Group Toronto, April 6, 2005 Today’s Agenda • Changes in corporate structure • A look at our past performance • How we manage our busi
Slide 2: Changes in Corporate Structure of NBF Group
Changes in Corporate Structure of NBF Group Before Jean Turmel, President Financial Markets, Treasury, Investment Bank Kym Anthony, President Louis Vachon, Senior Vice-President Sam Reda, President and CEO and CEO National Bank Financial Treasury and Financial Markets Natcan Investment Management Si
Slide 3: A Look at Our Past Performance
A Look at Our Past Performance • During the last few years, National Bank has reduced its exposure to credit risk while taking on more market and business risk (related to capital markets and mutual funds) • The strong performance of the period (yearly growth of 5.8% from Q1 2000 to Q1 2005) was a r
Slide 4: Steady Growth of Quarterly Revenues
I - A Look at Our Past Perfomance Steady Growth of Quarterly Revenues In millions of dollars Financial Markets Segment NBF Group 450 + 5.8% 400 350 + 9.8% 300 250 200 150 100 00 01 02 03 04 Q1 05 National Bank of Canada Investor Community Presentation — April 6, 2005 7 I - A Look at Our Past Perfoma
Slide 5: Revenue Growth Financial Markets – Big 5
I - A Look at Our Past Perfomance Revenue Growth Financial Markets – Big 51 In billions of dollars We’re doing better than (From Q1 2000 – Q4 2004) our peers 4.5 4.0 3.5 3.0 2.5 2.0 00 01 02 03 04 (1) Big 5 includes RBC, CIBC, TD, BMO, Scotia Before RBC business realignment National Bank of Canada I
Slide 6: How We Manage Our Business: Two Separate Components
I - A Look at Our Past Perfomance Expense Ratio Financial Markets Size does not matter NA Big 5 70% 62.5% 60.8% 60% 57.0% 56.6% 54.2% 54.8% 49.8% 50.2% 50% 40% 30% 20% 10% 0% 2001 2002 2003 2004 Before RBC business realignment National Bank of Canada Investor Community Presentation — April 6, 2005 1
Slide 7: Risk Management: Financial Markets Four Phase Cycle
Risk Management National Bank of Canada Investor Community Presentation — April 6, 2005 13 II – Risk Management Financial Markets – Four Phase Cycle Liquidity Below Average Above Average Low Rising Rebound Calm Momentum Liquidity Credit Risk Falling High Turbulence Speculation High Low Market Risk S
Slide 8: Financial Markets – Four Phase Cycle
II – Risk Management Financial Markets – Four Phase Cycle Liquidity Below Average Above Average Low Rising Rebound Calm 2004 2003 Momentum Liquidity Credit Risk 1998 2002 1999 2001 2000 Falling High Turbulence Speculation High Low Market Risk Source: CrossBorder Capital Comment: Level of liquidity i
Slide 9: Three Different Types of Diversification
II – Risk Management Three Different Types of Diversification • Clientele base diversification: • Fixed income • Corporate lending & Finance • Retail brokerage • Equity Derivatives • Commodities • FX trading • Alpha product (Hedge Fund) • Client vs. proprietary • Time diversification: • Short term v
Slide 10: Risk Management Results
II – Risk Management Risk Management Results Q4 04 Q1 05 ALM Treasury $11 13 Trading Treasury 45 54 Institutional 19 24 Total $64 $78 Investment gains Treasury $11 $5 Institutional $26 $29 Total $38 $35 National Bank of Canada Investor Community Presentation — April 6, 2005 19 II – Risk Management S
Slide 11: Beneficial Effect of Diversification
II – Risk Management Beneficial Effect of Diversification Rolling 4 quarters, detrended for growth (From Q1 2000 – Q4 2004) 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% -6% Growth Trend WM Volatility WM Growth Trend FM Volatility FM National Bank of Canada Investor Community Presentation — April 6, 2005 21 II
Slide 12: Client Management: Principal Business Units
Client Management National Bank of Canada Investor Community Presentation — April 6, 2005 23 III – Client Management Principal Business Units • Wealth Management • Retail Brokerage • Correspondent Network • Natcan • Financial Markets • Fixed Income • Institutional Equities • Investment Banking • Cor
Slide 13: Retail Brokerage
III – Client Management: Retail Brokerage Retail Brokerage • Where we came from? • Strong Quebec franchise inherited from Lévesque Beaubien • Entrepreneurial culture • Large number of small accounts • First Marathon allowed us to set foot in Ontario and Western Canada • Unique positioning in the ind
Slide 14: Retail Brokerage: AUM
III – Client Management: Retail Brokerage Retail Brokerage • Where we came from? • Strong Quebec franchise inherited from Lévesque Beaubien • Entrepreneurial culture • Large number of small accounts • First Marathon allowed us to set foot in Ontario and Western Canada • Unique positioning in the ind
Slide 15: AUM Outside Quebec; Fee-Based Revenues
III – Client Management: Retail Brokerage AUM – Retail Brokerage Outside Quebec Geographical diversification 40% 35% 33% 33% 30% 29% 27% 25% 22% 22% 20% 15% 10% 5% 0% 2000 2001 2002 2003 2004 Q1 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 29 III – Client Management:
Slide 16: Average Gross Revenue Per Equity Trade; Pre-Tax Income Margin
III – Client Management: Retail Brokerage Average Gross Revenue Per Equity Trade Better pricing $210 $206 $205 $200 $195 $190 $185 $181 $180 $175 $170 $165 2004 Q1 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 31 III – Client Management: Retail Brokerage Pre-Tax Income
Slide 17: Correspondent Network
III – Client Management: Correspondent Network Correspondent Network • Where we came from? • Inherited from the First Marathon merger • AUM was $16 billion in 2000, now $44 billion in 2004 • Market leader in third-party clearing • Where are we going? • Continue to be the leader in this market: clear
Slide 18: AUM – Retail Brokerage and Corrnet; Number of Firm Clients
III – Client Management: Correspondent Network, where are we going AUM – Retail Brokerage and Corrnet In billions of dollars Combined force Correspondent Network Retail 100 87 90 82 80 68 70 57 44 60 40 51 46 30 50 25 40 21 16 30 20 42 43 38 30 30 32 10 0 2000 2001 2002 2003 2004 Q1 2005 National Ba
Slide 19: Fixed Income
III – Client Management: Fixed Income Fixed Income • Where we came from? • Fixed income has always been an important component of National Bank • Leading position in municipal and provincial bonds • One of the largest and diversified inventories of bonds • Large distribution network • Where are we g
Slide 20: Institutional Equity and Research
III – Client Management: Institutional Equity Institutional Equity and Research • Where we came from? • The merger has put us in a much better position: Market share is now constantly in the top 6 • Quality of research a strength • Where are we going? • Continue to have a strong presence in the mark
Slide 21: Top Ranked Analysts; Investment Banking
III – Client Management: Institutional Equity Number of Top Ranked Analysts Top quality research 18 16 16 14 12 10 10 10 8 6 4 2 0 2003 2004 Q1 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 41 III – Client Management: Investment Banking Investment Banking • National Ba
Slide 22: Investment Banking Deals and Market Share
III – Client Management: Investment Banking % of Deals as Lead or Co-Lead Improved credibility and leveraging our capabilities 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2000 2001 2002 2003 2004 Q1 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 43 III – Client Managemen
Slide 23: Corporate Banking
III – Client Management: Investment Banking % of Client Shared With the Bank Increasing integration with Corporate Banking 35.0% 30.0% 29% 28% 27% 25.0% 23% 20.0% 15.0% 10.0% 5.0% 0.0% 2002 2003 2004 Q1 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 45 III – Client Mana
Slide 24: Derivatives
III – Client Management: Derivatives Derivatives • The role of NBF Group is to design and provide innovative products that are well suited to respond to the needs of our retail clients, both our own and 3rd parties • Where are we going? • Canada’s population is growing older and that’s even more tru
Slide 25: Unusual Items; Key Takeaways
....So What About Those «Unusual Items»? • We look at total revenues, not by type nor individual business line results • Principal finance is integral part of diversification • Helps us develop partnerships • Gives us more reach • Better understanding of trends • No overexposure to one specific type
Slide 26: Q&A
Q&A Louis Vachon, Chairman, NBF Group Kym Anthony, President and CEO, NBF Group Toronto, April 6, 2005 National Bank of Canada Investor Community Presentation — April 6, 2005 51 Investor Relations: 514-394-0296 www.nbc.ca/investorrelations investorrelations@nbc.ca CAUTION REGARDING FORWARD-LOOKING S