National Bank Of Canada · TSX:NA

National Bank Of Canada — Q4 2011 Earnings Presentation

22 slides from National Bank Of Canada's earnings presentation, Dec 8, 2011

  1. Slide 1: Analyst and Investor Presentation Q4 2011 Results Conference Call

    ANALYST AND INVESTOR PRESENTATION Q4 2011 RESULTS CONFERENCE CALL December 8, 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” and “Outlook

  2. Slide 2: Highlights and Mid-Term Objectives

    HIGHLIGHTS ADJUSTED RESULTS Q4 2011 YTD 2011 Net Income $303M $1,203M Diluted EPS $1.80 $7.00 Provision for credit losses $36M or 22 bps $134M or 22 bps ROE 17.7% 18.1% Tier 1 ratio (Basel II) 13.6% 13.6% Common Equity Tier 1 ratio (Basel III) 7.6% 7.6% Dividend payout 39% 39% (trailing 4 quarters)

  3. Slide 3: Financial Review: Performance Snapshot

    FINANCIAL REVIEW Ghislain Parent Chief Financial Officer and Executive Vice-President, Finance and Treasury NAME OF PRESENTATION – Date 1, 2010 I 5 PERFORMANCE SNAPSHOT (millions of dollars) Adjusted(2) Reported Q4 11 Q4 10 Change Q4 11 Q4 10 Change Revenues(1) 1,194 1,090 10% 1,194 1,087 10% Expens

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

    PERFORMANCE SNAPSHOT (millions of dollars) Adjusted(2) Reported 2011 vs. 2010 12M 11 12M 10 Change 12M 11 12M 10 Change (adjusted)  Net income up 11% Revenues(1) 4,597 4,295 7% 4,597 4,284 7% with positive operating leverage Expenses 2,891 2,723 6% 2,922 2,822 4% Net Income 1,203 1,084 11% 1,213 1,

  5. Slide 5: Well Diversified Business Mix and Segment Revenues Diversification

    WELL DIVERSIFIED BUSINESS MIX NET INCOME(1) (millions of dollars) 21 49 (3) 52 1,185 1,206 1,203 1,084 2010 Personal and Wealth Financial Markets Other Segment 2011 Commercial Management Banking (1) Excluding specified items Q4 2011 RESULTS CONFERENCE CALL – December 8, 2011 I 9 SOUND BUSINESS SEGME

  6. Slide 6: Business Line Efficiency Ratio and Basel III Impact to Common Equity Tier 1

    BUSINESS LINE EFFICIENCY RATIO TEB Excluding specified items 61.9% (1) NBFG 61.0% 60.5% 53.1% Financial (1) 54.7% Markets 49.6% 77.4% Wealth 74.5% Management 76.1% Personal and 58.5% Commercial 56.9% Banking 58.7% Q4 11 Q3 11 Q4 10 (1) Adjusted for gains or losses attributable to third parties Q4 20

  7. Slide 7: Quarterly Common Equity Tier 1 Evolution; Risk Management

    QUARTERLY COMMON EQUITY TIER 1 EVOLUTION -0.19% 0.30% -0.25% -0.22% 8.11% 8.00% 8.00% 7.86% 7.64% 7.64% Common Equity Profit less Organic growth Share Buy Backs Deduction Common Equity Tier 1 Q3 2011 dividends (Intangible) Tier 1 Q4 2011 Q4 2011 RESULTS CONFERENCE CALL – December 8, 2011 I 13 RISK M

  8. Slide 8: Global Portfolio Composition and Risk Provisioning

    GLOBAL PORTFOLIO COMPOSITION As at October 31, 2011 vs. (October 31, 2010) PER BUSINESS PER INDUSTRY SEGMENT (Corporate & Commercial) 1% (1%) 17% 20% 24% (16%) (19%) (25%) 14% (14%) 17% (16%) 11% (11%) 65% (64%) 4% (5%) 4% 10% (5%) (10%) 13% (14%) Personal Banking Primary sector Construction and rea

  9. Slide 9: Impaired Loans and Impaired Loan Formation

    IMPAIRED LOANS (millions of dollars) 7.23% 7.38% 6.67% 6.93% 6.86% 411 407 393 369 382 194 175 162 173 162 (146) (114) (135) (146) (133) $10M (1) $101M (1) $77M (1) $32M (1) (143) $121M (1) (178) (215) (212) (267) Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Gross Impaired Loans Impaired Loans before general allow

  10. Slide 10: Sound Market Risk Management; Business Segment Review

    SOUND MARKET RISK MANAGEMENT (millions of dollars) GLOBAL TRADING VAR(1) Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $(5.3) $(5.7) $(6.5) $(6.4) $(7.6) (1) Excluding ABCP VAR Q4 2011 RESULTS CONFERENCE CALL – December 8, 2011 I 19 BUSINESS SEGMENT REVIEW Jean Dagenais Senior Vice-President Finance, Taxation, and

  11. Slide 11: Personal and Commercial Banking: Quarterly Results and Revenues Breakdown

    PERSONAL AND COMMERCIAL BANKING Quarterly Results (millions of dollars) TEB 168 157 156 Q4 2011 vs. Q4 2010 147 149  Revenues: up 4% due to strong volume growth in loan’s and BA’s (+12%)  Net income: up 6% 645 653 625 633 618 Q4 2011 vs. Q3 2011 367 359 353 367 382  Revenues : up 1% due to 3% vol

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

    PERSONAL AND COMMERCIAL BANKING Loans & BAs Evolution Average Monthly Volume 12% 11% (billions of dollars) 10% 10% 9% 70.7 68.5 66.3 63.4 64.5 PERSONAL AND COMMERCIAL October 2010 January 2011 April 2011 July 2011 October 2011 12% 10% 10% 11% Q4 2011 vs. Q4 2010 10% PERSONAL 46.0 46.8 47.8 49.8 51.5

  13. Slide 13: Personal and Commercial Banking: Margin Evolution and Expenses

    PERSONAL AND COMMERCIAL BANKING Margin Evolution Q4 2011 vs. Q3 2011 2.48% 2.45% 2.38% 2.34% 2.27%  Lower spreads due to competitive environment, 1.81% 1.80% 1.80% 1.80% 1.80% business mix and yield curve 1.72% 1.72% 1.67% 1.66% 1.62% 1.29% 1.27% 1.23% 1.21% 1.20% Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 P&C

  14. Slide 14: Key Takeaways; Wealth Management Quarterly Results

    PERSONAL AND COMMERCIAL BANKING KEY TAKEAWAYS  Good volume growth in Personal and Commercial Banking  Efficiency ratio improved by 20 bps from Q4 2010 to Q4 2011  Fiscal 2011: 57 branch projects, including 8 new branches  Fiscal 2012: 8 new branches, 3 in Quebec, and 5 in CWA  Launch of Mobile

  15. Slide 15: Wealth Management: Revenues Breakdown and Assets

    WEALTH MANAGEMENT Revenues Breakdown (millions of dollars) TEB Q4 2011 vs. Q4 2010 234 218 222 36  NII up $5M or 16% mostly due 208 197 32 31 to brokerage balance and better margin 32 31  Fee-based revenues up $26M or 25% driven by: Wellington 109 112 128 West acquisition, strong net 113 sales at

  16. Slide 16: Wealth Management: Wellington West Integration and HSBC Update

    WEALTH MANAGEMENT Wellington West Integration: on plan and less expensive than budgeted  NBF retained 96% of IAs (181), representing 96% of assets (~$10B)  Full system integration successfully realized in November  Infrastructure optimization – 5 offices closed, 3 more to come  95% of cost syner

  17. Slide 17: Financial Markets: Quarterly Results and Revenues Breakdown

    FINANCIAL MARKETS Quarterly Results(1) (millions of dollars) TEB 146 Q4 2011 vs. Q4 2010 137 123 106 113  Lower trading revenues from client activities, offset by strong 380 Treasury trading results 375 341 343  Continued good performance 327 from Fixed Income and Equity Capital Markets despite di

  18. Slide 18: Financial Markets: Trading Revenues and Key Takeaways

    FINANCIAL MARKETS Trading Revenues Breakdown(1) (millions of dollars) TEB 141 134 133 Q4 2011 22 25 23  CVA / DVA: +$11.5 million 109  Proprietary Trading: 102 -$2.7 million 46 13 35 32 47 36 22 73 74 63 53 55 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Equity Fixed income Commodity and Foreign exchange (1) Exc

  19. Slide 19: Conversion to IFRS; Appendix 1 Detail of Specified Items

    CONVERSION TO IFRS IMPACT ON BALANCE SHEET  $9B increase in assets & liabilities mainly due to securitized assets included on balance sheet EQUITY ATTRIBUTABLE TO BANK’S SHAREHOLDERS  $0.8B decrease mainly due to impact of pension plan and securitization EPS, slight increase due to pension plan im

  20. Slide 20: Appendix: Wellington West Acquisition by the Numbers; European Exposure

    APPENDIX 2 │ Wellington West Acquisition by the Numbers May 26 NBC Q2 presentation Actual Results Add scale to NBF Retail operations: -Retail AUA +18% -Retail AUA: +17% - Investment advisors +29% - Investment advisor: +24% -Retail Revenue +25% - Retail revenues: +25% Expansion outside Quebec: - Inve

  21. Slide 21: Appendix: Results; Restructured ABCP

    APPENDIX 4 │RESULTS (1) (millions of dollars) – net income growth (%) TEB PERSONAL AND WEALTH COMMERCIAL MANAGEMENT FINANCIAL MARKETS 630 +9% +43% +4% 502 481 163 578 1,425 2,549 1,342 2,442 114 882 774 653 1,413 1,461 604 721 650 2010 2011 2010 2011 2010 2011 Revenues Expenses Net Income Revenues E

  22. Slide 22: Appendix 6: Common Equity Tier 1 Definition

    APPENDIX 6 │ COMMON EQUITY TIER 1 DEFINITION Under Base lII, a new measure of capital is 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, qualif

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