National Bank Of Canada · TSX:NA

National Bank Of Canada — Q3 2010 Earnings Presentation

18 slides from National Bank Of Canada's earnings presentation, Aug 26, 2010

  1. Slide 1: Analyst and Investor Presentation Q3 2010 Results Conference Call

    ANALYST AND INVESTOR PRESENTATION Q3 2010 RESULTS CONFERENCE CALL August 26, 2010 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 and Outlook" s

  2. Slide 2: 2010 and Q3 2010 Highlights

    2010 AND Q3 2010 HIGHLIGHTS Q3 2010 (adjusted) Net Income $273M EPS $1.57 ROE 17.7% Provision for credit losses $28M or 18 bps Dividend payout: 39% 2010 YTD (adjusted) Net Income $802M EPS $4.62 Provision for credit losses $107M or 24 bps ROE 17.8% Tier 1 ratio: 13.0% Dividend payout: 41% (trailing

  3. Slide 3: Performance Snapshot

    PERFORMANCE SNAPSHOT (millions of dollars) Adjusted(2) Reported Q3 10 Q3 09 Change Q3 10 Q3 09 Change Q3 2010 vs. Q3 2009 (adjusted) (1) Revenues 1,063 1,143 (7%) 1,060 1,137 (7%) Ž Revenues down 7% due to Expenses 681 668 2% 681 663 3% lower contributions from trading and securitization Net Income

  4. Slide 4: Well-Diversified Business Mix

    WELL-DIVERSIFIED BUSINESS MIX TEB YTD 2010 vs. (YTD 2009) Q3 2010 vs. (Q3 2009) 30% 28% REVENUES(1)(2) (35%) (31%) 53% 55% (52%) (50%) 17% 17% (16%) (17%) 41% 34% NET INCOME(2) 50% (53%) (44%) 56% (45%) (39%) 10% 9% (8%) (11%) Personal and Commercial Banking Wealth Management Financial Markets (1) A

  5. Slide 5: Business Line Efficiency Ratio; Capital Management

    BUSINESS LINE EFFICIENCY RATIO TEB 80.1% 78.4% 78.1% Quarterly improvement Q3 2010 vs. Q2 2010 59.0% 56.7% 55.7% 56.5% 56.8% 60.3% 60.9% Ž P&C: 55.7% vs. 56.7% 47.1% Ž WM: 78.1% vs. 78.4% 39.5% (1) Personal and Wealth Management Financial Markets NBFG Commercial Banking Q3 2009 Q2 2010 Q3 2010 (1) A

  6. Slide 6: Risk Management

    RISK MANAGEMENT GLOBAL PORTFOLIO COMPOSITION As at July 31, 2010 vs. (July 31, 2009) PER BUSINESS PER INDUSTRY SEGMENT (Corporate & Commercial) 17% 19% 24% (15%) (22%) (23%) 14% (12%) 16% 10% (16%) (13%) 66% 4% (64%) (4%) 5% 11% (5%) (12%) 14% (14%) Personal Banking Corporate Banking Primary sector

  7. Slide 7: Risk Provisioning; Impaired Loans

    RISK PROVISIONING (millions of dollars) SPECIFIC PROVISION FOR CREDIT LOSSES (excluding specified items) 54 Risk Provisioning Q3 2010 46 Q3: $28M or 18 bps 43 36 YTD: $107M or 24 bps 28 46 38 38 Q4 2010 & 2010 PCL Target 37 32 25 bps to 30 bps 8 8 5 -1 -4 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Financial Mark

  8. Slide 8: Impaired Loan Formation; Sound Market Risk Management

    IMPAIRED LOAN FORMATION(1) (millions of dollars) Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Personal & Commercial Banking 37 46 67 23 1 Retail 27 18 20 11 7 Commercial 12 28 26 12 (6) Real estate (2) 0 21 0 0 Corporate Banking 48 7 3 (1) (48) Total 85 53 70 22 (47) (1) Formations include new accounts, disburseme

  9. Slide 9: Business Segment Review: Personal and Commercial Banking

    BUSINESS SEGMENT REVIEW Jean Dagenais Senior Vice-President Finance, Taxation and Investor Relations PERSONAL AND COMMERCIAL BANKING Quarterly Results (millions of dollars) TEB 162 Q3 2010 vs. Q3 2009 139 141 123 Ž Revenues up 6% due to loan growth 108 621 Ž Net income up 32 % 586 585 593 591 Ž Net

  10. Slide 10: Personal and Commercial Banking Revenues Breakdown

    PERSONAL AND COMMERCIAL BANKING Revenues Breakdown (millions of dollars) TEB Q3 2010 vs. Q3 2009 Ž Retail Banking: up 5% due to good 621 591 volume growth 586 585 593 188 Ž Credit Card: up 5% due to higher spreads 190 189 203 and transaction fees 191 31 Ž Insurance: up 10% 28 30 30 30 75 78 79 77 79

  11. Slide 11: Personal and Commercial Banking Deposits and Margin Evolution

    PERSONAL AND COMMERCIAL BANKING Deposits Average Monthly Volume (billions of dollars) 1% 23.1 23.3 10% 12.0 10.9 Personal Commercial July 2009 July 2010 NATIONAL BANK OF CANADA – August 26, 2010 I 21 PERSONAL AND COMMERCIAL BANKING Margin Evolution 2.52% 2.49% 2.46% 2.46% 2.46% Q3 2010 vs. Q2 2010 Ž

  12. Slide 12: Personal and Commercial Banking Key Takeaways; Wealth Management

    PERSONAL AND COMMERCIAL BANKING Key Takeaways Ž Good volume growth in Personal and Commercial Banking Ž Efficiency ratio improved by 100 bps (QoQ) Ž One client, one bank Ž Gaining momentum, thanks to new distribution model, more client-facing employees, over 80 branches relocated or revamped Ž Q3 20

  13. Slide 13: Wealth Management Revenues Breakdown

    WEALTH MANAGEMENT Revenues Breakdown (millions of dollars) TEB Q3 2010 vs. Q3 2009 193 194 186 191 187 27 26 25 24 29 Ž NII at $29M due to higher interest rates Ž Fee-based revenues up 90 96 98 98 9% mainly due to market 98 Ž Transaction revenues down 13% due to reduced number of transactions and lo

  14. Slide 14: Wealth Management Key Takeaways; Financial Markets

    WEALTH MANAGEMENT Key Takeaways Ž Higher revenues driven by increased interest rates and market (YoY) Ž Better cost control reduced expenses by 200 bps (YoY) Ž Recent developments: Ž Industrielle-Alliance Securities signed with NBFG Correspondent Network Ž Natcan obtained mandate to manage corporate

  15. Slide 15: Financial Markets Revenues Breakdown

    FINANCIAL MARKETS Revenues Breakdown(1) (millions of dollars) TEB 410 400 371 Q3 2010 vs. Q3 2009 88 61 345 20 60 45 319 - Unfavorable market conditions 32 reduced trading revenues by 59 35 29 82 $78M 58 59 60 - Investment gains down $14M 64 18 66 - Capital Markets up 12% 67 63 65 66 196 166 150 148

  16. Slide 16: Financial Markets Key Takeaways

    FINANCIAL MARKETS Key Takeaways Ž Trading activities impacted by unfavourable market conditions Ž Revenue diversification permitted to deliver sound profitability in third quarter Ž Recent Rankings (by Thomson Reuters): Ž Number 1 in government bond underwriting in Canada for first six months of 201

  17. Slide 17: Appendix: Detail of Specified Items; ABCP

    APPENDIX 1 │ DETAIL OF SPECIFIED ITEMS (millions of dollars) Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Gain on available for sale securities (Revenues $88 M) 86 - - - - - - - - Projects write-off - (54) - - - - - - - Restructuration charge - (66) - - - - - - - Income taxes (29) 40 - - -

  18. Slide 18: Appendix: Sectorial Results YTD; Investor Relations

    APPENDIX 4 │ SECTORIAL RESULTS - YTD(1) (millions of dollars) TEB 1,035 1,032 574 566 502 490 453 435 1,805 1,702 367 998 366 1,018 79 87 442 374 Revenues Revenues Expenses Expenses Net Income Net Income 2010 2009 2010 2009 2010 2009 Personnal & Commercial Banking Wealth Management Financial Markets

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