National Bank Of Canada · TSX:NA

National Bank Of Canada — Q2 2011 Earnings Presentation

22 slides from National Bank Of Canada's earnings presentation, May 26, 2011

  1. Slide 1: Analyst and Investor Presentation Q2 2011 Results Conference Call

    ANALYST AND INVESTOR PRESENTATION Q2 2011 RESULTS CONFERENCE CALL May 26, 2011 CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, National Bank of Canada (the Bank) makes written and oral forward-looking statements, such as those contained in the “Major Economic Trends” section and unde

  2. Slide 2: Highlights and Broad-Based Earnings

    HIGHLIGHTS ADJUSTED RESULTS Q2 2011 YTD 2011 Net Income $295M $607M Diluted EPS $1.69 $3.49 Provision for credit losses $33M or 22 bps $72M or 24 bps ROE 18.1% 18.6% Tier 1 ratio (Basel II) 14.1% 14.1% Common Equity Tier 1 ratio (Basel III) 8.2% 8.2% Dividend payout: 39% 38%(trailing 4 quarters) Not

  3. Slide 3: Financial Review: Performance Snapshot

    FINANCIAL REVIEW Patricia Curadeau-Grou Chief Financial Officer and Executive Vice-President Finance, Risk and Treasury NAME OF PRESENTATION – Date 1, 2010 I 5 PERFORMANCE SNAPSHOT (millions of dollars) Adjusted(2) Reported Q2 2011 vs. Q2 2010 Q2 11 Q2 10 Change Q2 11 Q2 10 Change (adjusted)  Doubl

  4. Slide 4: Performance Snapshot and Well Diversified Business Mix

    PERFORMANCE SNAPSHOT (millions of dollars) Adjusted(2) Reported 6M 11 6M 10 Change 6M 11 6M 10 Change Revenues(1) 2,294 2,134 7% 2,294 2,129 8% Expenses 1,428 1,339 7% 1,428 1,414 1% Net Income 607 529 15% 607 476 28% EPS $3.49 $3.05 14% $3.28 $2.72 21% ROE 18.6% 17.9% 17.5% 16.1% (1) Adjusted for g

  5. Slide 5: Sound Business Segment Revenues Diversification and Efficiency Ratio

    SOUND BUSINESS SEGMENT REVENUES DIVERSIFICATION 2011 vs. (2010) PERSONAL AND WEALTH FINANCIAL COMMERCIAL MANAGEMENT MARKETS 22% (11%) 34% 36% (33%) 35% (37%) 48% 50% 6% (45%) (49%) (9%) (51%) 13% 14% 20% 5% (13%) (18%) 17% (12%) (17%) (5%) Trading Retail banking Transactions and other Corp. banking

  6. Slide 6: Basel III Impact to Common Equity Tier 1

    BASEL III IMPACT TO COMMON EQUITY TIER 1 (1) (2) Q2 2011 Ratio (%) -1.55% -1.98% -0.36% -2.01% 14.11% 10.58% 10.22% 8.21% 8.21% Q2 2011 Tier Preferred Innovative Basel II TCE Basel 2.5 Basel III Basel III 1 Capital shares instruments Q2 2011 Common Equity Tier 1 (1) Final text rules (2) Include IFRS

  7. Slide 7: Risk Management: Global Portfolio Composition

    RISK MANAGEMENT NAME OF PRESENTATION – Date 1, 2010 I 13 GLOBAL PORTFOLIO COMPOSITION As at April 30, 2011 vs. (April 30, 2010) PER BUSINESS PER INDUSTRY SEGMENT (Corporate & Commercial) 25% (24%) 18% 18% 19% 17% 15% 16% 10% 13% (14%) 16% 65% (62%) 4% 5% 4% 5% 11% 12% 14%13% Personal Banking Primary

  8. Slide 8: Risk Provisioning and Impaired Loans

    RISK PROVISIONING (millions of dollars) SPECIFIC PROVISION FOR CREDIT LOSSES (excluding specified items) 39 Risk Provisioning Q2 2011 36 37 33 28  Q2: $33M or 22 bps 19  2011: $72M or 24 bps 20 20 23 Next 2 quarters PCL Target 25 2  25 bps to 30 bps 20 18 14 15 7 -1 -4 -5 Q2 10 Q3 10 Q4 10 Q1 11

  9. Slide 9: Impaired Loan Formation and Market Risk Management

    IMPAIRED LOAN FORMATION(1) (millions of dollars) Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Retail 11 7 16 13 17 Commercial 12 (6) 6 52 (6) Corporate Banking (1) (48) (3) 0 (1) Total 22 (47) 19 65 10 (1) Formations include new accounts, disbursements, principal repayments and exchange rate fluctuation Q2 2011 RE

  10. Slide 10: Business Segment Review: Personal and Commercial Banking

    BUSINESS SEGMENT REVIEW Jean Dagenais Senior Vice-President Finance, Taxation and Investor Relations NAME OF PRESENTATION – Date 1, 2010 I 19 PERSONAL AND COMMERCIAL BANKING Quarterly Results (millions of dollars) TEB 160 157 Q2 2011 vs. Q2 2010 146 149 136  Revenues up 4% due to good volume growth

  11. Slide 11: Personal and Commercial Banking Revenues Breakdown

    PERSONAL AND COMMERCIAL BANKING Revenues Breakdown (millions of dollars) TEB 626 625 633 618 Q2 2011 vs. Q2 2010 594  Retail Banking : revenues up 214 3% due to good volume growth 212 215 209 in loans and BA’s 198  Credit cards : up 1% due to 31 28 32 higher spreads and transaction 29 32 fees 80 8

  12. Slide 12: Personal and Commercial Banking Deposits and Margin Evolution

    PERSONAL AND COMMERCIAL BANKING Deposits Evolution Average Monthly Volume 3% 3% 4% 3% 2% (billions of dollars) 37.8 37.4 38.3 38.3 37.2 PERSONAL AND COMMERCIAL April 2010 July 2010 October 2010 January 2011 April 2011 2% 1% 1% 1% 0% YoY Growth: PERSONAL 25.1 25.0 24.9 25.2 25.3 GIC's -1.6% (Includin

  13. Slide 13: Personal and Commercial Banking Expenses and Key Takeaways

    PERSONAL AND COMMERCIAL BANKING Expenses Breakdown 359 353 344 Q2 2011 vs. Q1 2011 Expenses up 2.6%  Salaries and staff benefits +3.7% 125 124 121  Operations and technologies +2.2%  Others +1.6% 95 93 Q2 2011 vs. Q2 2010 91 Expenses down 1.7%  Salaries and staff benefits -2.2%  Operations and

  14. Slide 14: Financial Markets Quarterly Results and Revenues Breakdown

    FINANCIAL MARKETS Quarterly Results(1) (millions of dollars) TEB 146 123 137 120 94 375 380 341 332 309 178 182 172 169 160 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Revenues Expenses Net Income (1) Excluding specified items and adjusted for gains or losses attributable to third parties Q2 2011 RESULTS CONFEREN

  15. Slide 15: Financial Markets Trading Revenues and Key Takeaways

    FINANCIAL MARKETS Trading Revenues Breakdown(1) (millions of dollars) TEB Q2 2011 148 141 134 133  Trading revenues 28 exclusively from client 22 25 23 facing activities. Proprietary trading contribution: nil. 45 88 46 35  CVA: -$0.5M 47 11 40 75 74 73 63 37 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Equity Fi

  16. Slide 16: Wealth Management Quarterly Results and Revenues

    WEALTH MANAGEMENT Quarterly Results(1) (millions of dollars) TEB 44 43 Q2 2011 vs. Q2 2010 33  Net income growth of 48% 29 29 driven by strong revenue growth of 13% 222  Expense ratio went from 218 78.1% to 72.5% an 196 197 improvement of 560 bps 188 156 161 153 150 146 Q2 10 Q3 10 Q4 10 Q1 11 Q2

  17. Slide 17: Wealth Management AUA/AUM and Wellington West Rationale

    WEALTH MANAGEMENT Assets Under Administration and Management (billions of dollars) ASSETS UNDER ASSETS UNDER ADMINISTRATION MANAGEMENT 189.6 190.3 55 56 182.6 53 175.5 175.8 50 50 14 14 13 13 13 15 15 16 13 13 24 24 25 26 26 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Institutionnal

  18. Slide 18: Wellington West Acquisition: Market Share and Research Coverage

    Wellington West Acquisition Rank = 1 Market Share of M&A and ECM Fees Fiscal 2011 YTD (as of May 6, 2011)* Rank = 5 Rank = 7 Rank = 10 Rank = 14 Rank = 13 Mid Market Mining Mid Market Oil & Gas NBF Market Share WW Market Share Combined *Source: NBFG analysis based on publicly announced transactions.

  19. Slide 19: Wellington West Acquisition: Transaction Summary

    Wellington West Acquisition FTEs in Investment Banking and Equities 272 239 33 NBF WW (Estimated) Combined (Estimated) Q2 2011 RESULTS CONFERENCE CALL – May 26, 2011 I 37 Wellington West Acquisition: Transaction Summary Aggregate Consideration  Equity Value: $333 million (includes ~$74mm of excess

  20. Slide 20: Wellington West Earnings and Capital Impact; Appendix 1 Specified Items

    Wellington West Acquisition: Earnings and Capital Impact  It is expected that the transaction will be neutral in 2011 and accretive in 2012 onwards  Majority of cost synergies are expected to be realized within 6-9 months after closing  Upside potential for cross-selling of NBFG products  Regula

  21. Slide 21: Appendix: Restructured ABCP and Preferred Shares

    APPENDIX 2 │ RESTRUCTURED ABCP AS AT APRIL 30, 2011 TRIGGERRISK TRIGGER RISK  Remote Trigger Risk - US spreads would have to widen by more than 651 bps from  Remote current Trigger levels Risk - US spreads would have to widen by more than 601 bps from current levels Note: assuming Note: assuming n

  22. Slide 22: Appendix 4: Common Equity Tier 1 Definition

    APPENDIX 4 │ COMMON EQUITY TIER 1 DEFINITION A new measure of capital under Basel III used to evaluate financial institutions ability to deal with unexpected losses. Common Equity Tier 1 includes common shares, contributed surplus, retained earnings, accumulated other comprehensive income, qualifyin

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