Laurentian Bank Of Canada · TSX:LB
Laurentian Bank Of Canada — Q2 2023 Earnings Presentation
32 slides from Laurentian Bank Of Canada's earnings presentation, Jun 1, 2023
Slide 1: Investor Presentation Second Quarter 2023
Investor Presentation Second Quarter 2023 June 1, 2023
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Caution Regarding Forward-Looking Statements From time to time, Laurentian Bank of Canada and, as applicable its subsidiaries (collectively referred to as the “Bank”) may make written or oral forward-looking statements within the meaning of
Slide 3: Rania Llewellyn, President & CEO: FY23 Priorities
Rania Llewellyn President & Chief Executive Officer FY23 Priorities
Slide 4: Strategic Plan Update | Key Topical Subjects
Strategic Plan Update | Key Topical Subjects Our liquid asset portfolio has no interest rate risk and has no negative mark to market exposure We have been optimizing our funding structure to be long-term, diversified, stable and cost-effective We remain comfortable with our Commercial Real Estate po
Slide 5: Strategic Plan Update | Q2/23 Results
Strategic Plan Update | Q2/23 Results Adjusted Net Income(1) $51.7 Highlights Reported Net Income $49.3 Adjusted EPS(2) $1.16 ✓ Continued commercial loan Reported EPS $1.11 growth Adjusted Efficiency Ratio(2) 69.7% ✓ NIM expansion Reported Efficiency Ratio(3) 71.0% ✓ Strong liquidity position Adjust
Slide 6: Strategic Plan | 5-Point Plan for Future Growth
Strategic Plan | 5-Point Plan for Future Growth Build One Winning Make Size Our Think Customer Make the Better Simplify Team Advantage First Choice Culture Commercial Banking Capital Markets Personal Banking Our Driving Force Our Growth Engine Focused & Aligned Offering Repositioning for Growth Unde
Slide 7: FY23 Priorities | Positioned for Growth
FY23 Priorities | Positioned for Growth We are focusing on three priorities in FY2023 1 2 3 Delivering excellent Deposits and Optimizing Driving Efficiencies customer service Funding Structure Through Simplification We will leverage data from We will optimize our We will continue to manage our NPS p
Slide 8: Q2 Accomplishments | Customer Service
Q2 Accomplishments | Customer Service Delivering Excellent Customer Service ✓ Take targeted actions to remove Improving Net Refreshed Public Improved Branch pain points Promoter Score (NPS) Website Locations ✓ Leverage data Improved our Personal Enhanced our public Improved the customer (NPS) to mak
Slide 9: Q2 Accomplishments | Deposits & Funding
Q2 Accomplishments | Deposits & Funding Deposits & Funding ✓ Grow core deposits to maintain strong balance sheet and Digital Account Retail Deposit Growth Securitizations support loan growth Opening ✓ Deepen customer Continued our digital Increased retail Issued $0.8B of cost- relationships and jour
Slide 10: Q2 Accomplishments | Driving Efficiencies
Driving Q2 Accomplishments | Driving Efficiencies Efficiencies through Simplification ✓ Reduce complexity Reduced Printing Improved Training Capital Markets Processes ✓ Streamline internal processes and Right-sized our Capital Re-evaluated printing Improved training and operations Markets franchise
Slide 11: Q2 Accomplishments | Culture & ESG
Q2 Accomplishments | Culture & ESG Culture & ESG ✓ Culture is our ESG Report Supporting our Corporate Donations driving force Customers Strategy ✓ We are focused on Launched our second Supported our Announced a donation living up to our annual ESG report, customers on their ESG to Windmill values wh
Slide 12: Yvan Deschamps, CFO: Financial Review
Yvan Deschamps Executive Vice President & Chief Financial Officer Financial Review
Slide 13: Solid Financial Results
Financial Review | Solid Financial Results Reported ($MM) Q2/23 Y/Y Q/Q Y/Y Highlights Total revenue $ 257.2 -1% -1% • Solid financial results with total revenue relatively in line to last year, Provision for credit losses (PCL) $ 16.2 +24% +5% as a result of strong loan growth in Commercial Banking
Slide 14: Net Interest Income and Net Interest Margin
Financial Review | Net Interest Income and Net Interest Margin Net Interest Income and Margin ($MM, %) Key Assets ($B) Q2/23 Y/Y Q/Q Liquid assets(1) $ 11.5 +3% −% 1.87% 1.83% 1.77% 1.77% 1.80% Personal loans $ 2.9 -17% -5% Residential mortgage loans $ 16.4 +5% +1% $180.1 $188.5 $183.8 $187.1 $184.2
Slide 15: Optimizing Funding Structure and Costs
Financial Review | Optimizing Funding Structure and Costs Funding(1) ($B) Y/Y Highlights Total funding increased by $1.9B • Debt related to securitization increased by $0.8B 42.8 42.3 40.4 • Total deposits increased by $1.3B 2.8 2.8 2.7 0.3 0.3 0.7 Q/Q Highlights 12.1 Shareholders' equity 12.6 Total
Slide 16: Other Income Impacted by Market Volatility
Financial Review | Other Income Impacted by Market Volatility Other Income ($MM) Q2/23 Y/Y Q/Q Y/Y Highlights Lending fees • Other income decreased by $6.5MM, mainly due to $ 16.7 -3% +2% unfavourable market conditions impacting financial markets Fees and securities brokerage related revenue, includ
Slide 17: Non-Interest Expenses (NIE) Support Growth
Financial Review | Non-Interest Expenses (NIE) Support Growth NIE ($MM) Q2/23 Y/Y Q/Q Y/Y Highlights Salaries and employee benefits $ 100.7 +2% -3% • Adjusted NIE increased by $9.9MM, mainly due to salary increases, talent Premises and technology $ 48.6 +11% +3% acquisition and higher technology cos
Slide 18: Strong Capital Position
Financial Review | Strong Capital Position Common Equity Tier 1 Capital Ratio (CET1)(1) Risk-Weighted Assets (RWA) ($B)(1) 9.3% 9.3% 22.6 23.5 23.9 23.9 23.8 9.1% 9.1% 9.1% Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Q2/22 Q3/22 Q4/22 Q1/23 Q2/23 Evolution of the CET1 Ratio (%) Y/Y Highlights • CET1 ratio remaine
Slide 19: Strong and Diversified Commercial Loan Portfolio
Financial Review | Strong and Diversified Commercial Loan Portfolio Commercial Loan Portfolio ($B)(1) A Pan-Canadian Portfolio and a U.S. 18.3 18.6 Presence (as at April 30, 2023) 16.7 Commercial Lending ($B) 4% British Columbia & Territories 4.5 4.8 4% 3.4 Inventory financing 24% Alberta & Prairies
Slide 20: Strong Commercial Real Estate Portfolio
Financial Review | Strong Commercial Real Estate Portfolio Commercial Real Estate Portfolio Portfolio Overview (as at April 30, 2023) 9% Insured Term Loans - Multi-Residential • 65% of our portfolio is residential: 55% Multi-Residential 6% Conventional Term Loans - Multi-Residential and 10% Condos 2
Slide 21: Diversified Inventory Financing Portfolio
Financial Review | Diversified Inventory Financing Portfolio Inventory Finance Main Product Lines Inventory Finance Overview (as at April 30, 2023) ➢ 5,500+ dealers in the U.S. and Canada Marine 16% Recreational Vehicle ➢ $800,000 average dealer line utilization 37% 11% Trailer 10% Manufactured Hous
Slide 22: High Quality Residential Mortgage Loan Portfolio
Financial Review | High Quality Residential Mortgage Loan Portfolio More than 80% of our residential mortgage portfolio is fixed rate of which >75% will mature in 2025 or later Insured vs Uninsured A Pan-Canadian Portfolio(2) (as at April 30, 2023) 4% 31% 31% 11% 34% British Columbia Conventional Al
Slide 23: Allowances for Credit Losses
Financial Review | Allowances for Credit Losses Allowances for Credit Losses (ACL) ($MM) Y/Y Highlights 211.6 • ACL increased by $14.7MM, mostly as a result of higher provisions on 196.9 201.2 203.5 193.2 commercial loans 52.3 50.4 54.5 68.6 53.4 Q/Q Highlights • ACL increased by $8.1MM, mostly as a
Slide 24: Provision for Credit Losses
Financial Review | Provision for Credit Losses Provision for Credit Losses (PCL) ($MM) Y/Y Highlights • PCL increased by $3.2MM, mainly as a result of higher provisions in impaired loans in the commercial loan portfolio, partially offset by releases 16.6 17.8 16.2 of provisions on performing persona
Slide 25: Impaired Loans
Financial Review | Impaired Loans Net Impaired Loans ($MM, bps) Gross Impaired Loans ($MM, bps) 52 33 34 49 32 43 45 29 28 42 188.1 129.6 170.6 184.1 119.6 120.1 159.0 157.7 105.7 105.4 61.1 48.6 65.7 79.2 124.4 94.8 109.5 126.4 51.1 97.3 50.0 47.5 45.0 41.8 33.7 52.1 50.4 47.6 44.0 35.4 11.5 13.9 1
Slide 26: Rania Llewellyn, President & CEO: Strategic Outlook
Rania Llewellyn President & Chief Executive Officer Strategic Outlook
Slide 27: Strategic Outlook | Delivering Shareholder Value
Strategic Outlook | Delivering Shareholder Value Focused on delivering against our strategic plan and our three core priorities We will continue to take actions to improve the customer experience Deposits and an optimized funding structure remain a priority, supported by our digital account onboardi
Slide 28: Appendices
si Appendices
Slide 29: Appendices | Adjusting Items
Appendices | Adjusting Items Q2/23 Q1/23 Q2/22 Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Pre-Tax After-Tax Impact Impact Impact ($ / Impact Impact ($ / Impact Impact ($ / ($MM) ($MM) Share) ($MM) ($MM) Share) ($MM) ($MM) Share) Strategic review-related $— $— $— $— $— $— $-0.3 $-0.2 $— charge
Slide 30: Appendices | Non-GAAP Financial Measures
Appendices | Non-GAAP Financial Measures In $MM Q2/23 Q1/23 Q2/22 Income before income taxes $58.5 $61.0 $74.5 Provision for credit losses 16.2 15.4 13.0 Pre-tax pre-provision (PTPP) income(1) 74.7 76.4 87.5 Pre-tax impact of adjusting items(1) 3.2 3.2 2.8 Adjusted PTPP income $77.9 $79.6 $90.3 Net
Slide 31: Appendices | Key Performance Indicators
Appendices | Key Performance Indicators ⚫ On track ⚫ Behind ⚫ At Risk 2024 2024 Culture 2021 2022 Progress Commercial Banking 2021 2022 Progress Target Target Employee Engagement Index 74% 77% ⚫ ≥80% Loan Growth ($) $14B $18B ⚫ >$18B Employee Turnover 27% 25% ⚫ <20% % of Commercial loans in U.S. 14%
Slide 32: Investor Relations Contact
Investor Relations Contact Andrew Chornenky Vice President, Investor Relations (416) 846-4845 Andrew.Chornenky@lbcfg.ca www.lbcfg.ca/investors-centre
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