National Bank Of Canada · TSX:NA
National Bank Of Canada — Q4 2024 Earnings Presentation
37 slides from National Bank Of Canada's earnings presentation, Dec 4, 2024
Slide 1: Investor Presentation Fourth Quarter 2024
INVESTOR PRESENTATION Fourth Quarter 2024 December 4, 2024
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
FORWARD-LOOKING STATEMENTS AND NON-GAAP FINANCIAL MEASURES Certain statements in this document and made orally are forward-looking statements. These statements are made in accordance with applicable securities legislation in Canada and the United States. The forward-looking statements in this docume
Slide 3: Overview
OVERVIEW Laurent Ferreira President & Chief Executive Officer
Slide 4: FY 2024 – Strong Earnings Growth and Superior ROE
FY 2024 – STRONG EARNINGS GROWTH AND SUPERIOR ROE ▪ Medium-term growth objective for adjusted EPS: 5-10% Strong earnings growth ▪ FY 2024 EPS growth : Reported 16% ; Adjusted 10%(1) ▪ Medium-term objective for adjusted ROE: 15-20% Superior ROE ▪ FY 2024 ROE(2) : Reported 17.2% ; Adjusted 16.7%(1) Pr
Slide 5: Q4 2024 – Strong Financial Performance
Q4 2024 – STRONG FINANCIAL PERFORMANCE Revenues ($MM; YoY) Reported: $2,944; 15% ▪ Strong earnings growth and returns reflecting continued execution Adjusted(1)(2): $2,989; 10% ▪ Solid growth on both sides of the balance sheet PTPP(3) ($MM; YoY) Reported: $1,352; 40% Adjusted(1)(2): $1,408; 11% ▪ Po
Slide 6: Q4 2024 – Solid Momentum Across All Business Segments
Q4 2024 – SOLID MOMENTUM ACROSS ALL BUSINESS SEGMENTS P&C Banking (YoY) ▪ Solid revenue performance driven by volume growth ▪ Personal: Loans up 3% YoY and 1% QoQ(2) Revenues: 6% ▪ Commercial: Loans up 14% YoY and 3% QoQ(2); broad-based loan growth, PTPP(1) (Reported ; Adjusted) 25% ; 8% including c
Slide 7: Financial Review
FINANCIAL REVIEW Marie Chantal Gingras Chief Financial Officer and Executive Vice-President, Finance
Slide 8: FY 2024 – Strong Execution Throughout the Year
FY 2024 – STRONG EXECUTION THROUGHOUT THE YEAR 2024 Performance (YoY) ▪ Strong performance in FY 2024 Reported Adjusted(1) - Double-digit PTPP growth, with strong contribution from Q4 FY Q4 FY all business segments Revenue growth 15.0% 13.3% 9.7% 10.3% - Continued expense discipline across the Bank,
Slide 9: Delivering NII Growth in Q4
DELIVERING NII GROWTH IN Q4 NII and NIM ($MM; NIM on Average Interest-Bearing Assets) ▪ Reported net interest income and margin reflect the financing costs to support growth in our trading activities(1) 1,632 1,546 1,437 1,372 1,423 2.22% 2.26% ▪ Adjusted NII (excl. trading)(2) up 6% QoQ, or 2.14% 2
Slide 10: Continued Growth on Both Sides of the Balance Sheet
CONTINUED GROWTH ON BOTH SIDES OF THE BALANCE SHEET Loans and BA’s(1) ($B) Total loans of $243B(1), up 8% YoY and 1.5% QoQ 243.0 ▪ Personal banking: +4% YoY; +1% QoQ 234.8 239.5 225.4 230.2 ▪ Commercial banking: +13% YoY; +2% QoQ ▪ Corporate banking: +3% YoY; +1% QoQ ▪ Credigy ($US): +16% YoY; +1% Q
Slide 11: Strong Capital Position
STRONG CAPITAL POSITION CET1 Ratio(1) ▪ Robust CET1 ratio of 13.7%, up 25 bps QoQ 0.64% - Strong organic capital generation (37 bps) 0.02% 0.03% - RWA expansion (-17 bps ex. FX) primarily driven by (0.27%) 13.71% Credit Risk (0.17%) 13.46% (2) Q3 24 Net income - Dividends RWA CWB-related Other Q4 24
Slide 12: Risk Management
RISK MANAGEMENT Jean-Sébastien Grisé Executive Vice-President and Chief Risk Officer
Slide 13: Provisions for Credit Losses (PCL)
PROVISIONS FOR CREDIT LOSSES (PCL) 70 FY 2024 PCL PCL (1) ▪ Total PCL of $569MM: 24 bps ($MM) POCI 325 Performing ▪ Impaired (excl. POCI)(2): 20 bps Impaired (excl. POCI) 50 275 Total (bps) ▪ Performing: 4 bps 25 27 24 30 225 21 21 Q4 Total PCL $162 $3 ▪ $162MM (27 bps), reflecting resilient portfol
Slide 14: Allowance for Credit Losses (ACL)
ALLOWANCE FOR CREDIT LOSSES (ACL) ACL ($MM) Total Allowances +3.9% ▪ 2.0x pre-pandemic level $1,573 ▪ Strong coverage of 4.1x LTM Net Charge-Offs $1,514 $1,377 $1,416 $1,421 ▪ Maintaining a prudent level of allowances in Impaired (1) light of continued uncertainties Impaired (1) Impaired (1) Impaire
Slide 15: Gross Impaired Loans and Formations (excluding POCI)
GROSS IMPAIRED LOANS AND FORMATIONS (excluding POCI) Gross Impaired Loans (GIL) Excluding POCI Loans(1) ▪ Gross impaired loans (excl. POCI) of $1,652MM, $1,965 increase of 9 bps QoQ at 68 bps ($MM) $1,652 ▪ GIL excl. USSF&I(2): 41 bps (up 2 bps QoQ) $1,426 $1,465 ▪ Net formations of $340MM, increase
Slide 16: Retail Mortgage and HELOC Portfolio
RETAIL MORTGAGE AND HELOC PORTFOLIO (As at October 31, 2024) Canadian Distribution by Province ▪ Uninsured mortgages and HELOC in GTA and 54% GVA represent 12% and 2% of the total RESL portfolio and have an average LTV(1) of 53% ▪ Uninsured mortgages and HELOC for condos Uninsured & HELOC represent
Slide 17: Retail Mortgages Rate Type and Maturity Profile
RETAIL MORTGAGES RATE TYPE AND MATURITY PROFILE (As at October 31, 2024) Canadian Mortgages Distribution by Rate Type ▪ 65% of our Canadian Mortgage portfolio has been repriced, absorbing the impact of rate increases ▪ 27% of mortgage portfolio is variable rate and the Variable monthly payments are
Slide 18: Appendices
APPENDICES
Slide 19: Appendix 1 – FY 2024 Total Bank Results
APPENDIX 1 │ FY 2024 – TOTAL BANK RESULTS Total Bank Summary Results – FY 2024 ($MM) ▪ Double-digit earnings growth Reported Results Adjusted Results(1) ▪ Positive operating leverage FY 24 FY 23 YoY FY 24 FY 23 YoY Revenues 11,400 10,058 13% 11,628 10,546 10% ▪ Strong ROE Non-Int. Expenses 6,054 5,7
Slide 20: Appendix 2 – FY 2024 Segment Results
APPENDIX 2 │ FY 2024 – SEGMENT RESULTS P&C Banking Wealth Management ($MM) ($MM) Reported Results Adjusted Results(1) Reported Results Adjusted Results(1) FY 24 FY 23 YoY FY 24 FY 23 YoY FY 24 FY 23 YoY FY 24 FY 23 YoY Revenues 4,673 4,404 6% 4,673 4,404 6% Revenues 2,786 2,521 11% 2,786 2,521 11% P
Slide 21: Appendix 3 – Q4 2024 Total Bank Results
APPENDIX 3 │ Q4 2024 – TOTAL BANK RESULTS Total Bank Summary Results – Q4 2024 ($MM) ▪ Strong earnings growth and ROE Reported Results Adjusted Results(1) Q4 24 Q3 24 Q4 23 QoQ YoY Q4 24 Q3 24 Q4 23 QoQ YoY ▪ Positive operating leverage Revenues 2,944 2,996 2,560 (2%) 15% 2,989 2,982 2,725 0% 10% No
Slide 22: Appendix 4 – Personal and Commercial Banking
APPENDIX 4 │ PERSONAL AND COMMERCIAL BANKING P&C Summary Results – Q4 2024 ($MM) ▪ Revenues up 6% YoY, mainly reflecting (1) Reported Results Adjusted Results balance sheet growth Q4 24 Q3 24 Q4 23 QoQ YoY Q4 24 Q3 24 Q4 23 QoQ YoY - Average loans up 7% YoY and average Revenues 1,190 1,198 1,118 (1%
Slide 23: Appendix 5 – Wealth Management
APPENDIX 5 │ WEALTH MANAGEMENT Wealth Management Summary Results – Q4 2024 ($MM) ▪ Strong net income of $219MM Reported Results Adjusted Results(1) - FY 2024 double-digit net income growth Q4 24 Q3 24 Q4 23 QoQ YoY Q4 24 Q3 24 Q4 23 QoQ YoY 727 716 638 2% 14% 727 716 638 2% 14% Revenues ▪ Revenues o
Slide 24: Appendix 6 – Financial Markets
APPENDIX 6 │ FINANCIAL MARKETS Financial Markets Summary Results – Q4 2024 (TEB, $MM) ▪ Strong quarter with net income of $306MM (1) Reported Results Adjusted Results ▪ Global Markets: Pickup in Equity Structured Q4 24 Q3 24 Q4 23 QoQ YoY Q4 24 Q3 24 Q4 23 QoQ YoY Products origination and continued
Slide 25: Appendix 7 – USSF&I – Credigy
APPENDIX 7 │ USSF&I – CREDIGY Credigy Summary Results – Q4 2024 ($MM) ▪ Revenues up 14% YoY Q4 24 Q3 24 Q4 23 QoQ YoY - NII up 19% YoY and 16% QoQ, driven by asset Revenues 144 139 126 4% 14% growth and favourable impact of $12MM from Net Interest Income 150 129 126 16% 19% overperformance on fair v
Slide 26: Appendix 8 – USSF&I – ABA
APPENDIX 8 │ USSF&I – ABA ABA Summary Results – Q4 2024 ($MM) ▪ Net income up 18% YoY Q4 24 Q3 24 Q4 23 QoQ YoY Revenues 234 223 187 5% 25% ▪ Loans up 11% and deposits up 19% YoY(1), with client base up 29% Non-Interest Expenses 79 76 68 4% 16% Pre-Tax / Pre-Provisions 155 147 119 5% 30% - Leading p
Slide 27: Appendix 9 – Other
APPENDIX 9 │ OTHER Other Segment Summary Results – Q4 2024 ($MM) ▪ Reported results in Q4 2024 reflect items related to our intention to acquire CWB(3) (1) Reported Results Adjusted Results Q4 24 Q3 24 Q4 23 Q4 24 Q3 24 Q4 23 ▪ Adjusted results reflect: Revenues (79) (60) (244) (34) (74) (79) Non-In
Slide 28: Appendix 10 – Total Loan Portfolio Overview
APPENDIX 10 │ TOTAL LOAN PORTFOLIO OVERVIEW (As at October 31, 2024) Loan Distribution by Borrower Category(1) ▪ Secured lending accounts for 95% of Retail loans $B % of Total Retail ▪ Indirect auto loans represent 2.6% of total loans Secured - Mortgage & HELOC 104.7 43% ($6.5B) (2) Secured - Other
Slide 29: Appendix 11 – Canadian Loan Portfolios
APPENDIX 11 │ CANADIAN LOAN PORTFOLIOS Geographic distribution (As at October 31, 2024) Within the Canadian loan portfolio: Maritimes (2) Oil and ▪ Limited exposure to unsecured consumer Quebec Ontario Regions (1) BC/MB Territories Total loans (2.7%) Retail Secured Mortgage & HELOC 24.4% 13.3% 3.7%
Slide 30: Appendix 12 – Prudent Provisioning in Uncertain Economic Environment
APPENDIX 12 │ PRUDENT PROVISIONING IN UNCERTAIN ECONOMIC ENVIRONMENT Strong Performing ACL Coverage Total Allowances Cover 4.1x NCOs Performing ACL / LTM PCL on Impaired Loans Total ACL / LTM Net Charge-Offs (Excluding POCI) 8.7x 6.4x 6.6x 5.9x 4.4x 4.5x 4.6x 3.4x 4.1x 2.9x 2.7x 2.4x 1.8x 2.6x Q1 20
Slide 31: Appendix 13 – Real Estate and Construction Real Estate
APPENDIX 13 │ REAL ESTATE AND CONSTRUCTION REAL ESTATE Total Portfolio by Sector ($30.8B) Corporate Banking (8%) (As at October 31, 2024) ▪ Primarily diversified Canadian REIT Short Term Construction (19%) ▪ Mainly residential construction ▪ No US exposure Commercial Banking CRE (73%) ▪ 59% of 5-yea
Slide 32: Appendix 14 – Daily Trading and Underwriting Revenues vs. VaR
APPENDIX 14 │ DAILY TRADING AND UNDERWRITING REVENUES VS. VAR ($MM) 32
Slide 33: Appendix 15 – Diversified Funding Profile & Sound Liquidity Metrics
APPENDIX 15 │ DIVERSIFIED FUNDING PROFILE & SOUND LIQUIDITY METRICS Balance Sheet Overview ($B, as at October 31, 2024) Balance sheet reflects our diversified business $462 $462 model ▪ Core banking activities well-funded through Business & Government Loans 99 (2) Business & Government Deposits 159
Slide 34: Appendix 16 – Range of Macroeconomic Scenarios – IFRS 9
APPENDIX 16 │ RANGE OF MACROECONOMIC SCENARIOS – IFRS 9 Canada Real GDP NBC Macroeconomic Forecast: Q4/24 vs. Q3/24 ($ Trillions) (Full Calendar Years) 2.50 Base Scenario C2024 C2025 C2026 Real GDP (Annual Average % Change) As at July 31, 2024 0.7 % 1.2 % 2.0 % 2.40 As at October 31, 2024 1.0 % 1.3
Slide 35: Appendix 17 – Reconciliation of Non-GAAP Financial Measures
APPENDIX 17 │ RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ($MM, except EPS) Q4 24 Q3 24 Non- Non- Total (6) Income Net Diluted Total (6) Income Net Diluted Interest PTPP PCL Interest PTPP PCL Revenues taxes Income EPS Revenues taxes Income EPS Segment Expenses Expenses Reported Results 2,944 1,592
Slide 36: Appendix 17 – Reconciliation of Non-GAAP Financial Measures (Cont'd)
APPENDIX 17 │ RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONT’D) ($MM, except EPS) FY 2024 FY 2023 Non- Non- Total Income Net Diluted Total Income Diluted Interest PTPP(12) PCL Interest PTPP(12) PCL Net Income Revenues taxes Income EPS Revenues taxes EPS Segment Expenses Expenses Reported Result
Slide 37: Investor Relations Contact Information
Investor Relations Contact Information W: www.nbc.ca/investorrelations investorrelations@nbc.ca 1-866-517-5455
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