National Bank Of Canada · TSX:NA

National Bank Of Canada — Q2 2004 Earnings Presentation

18 slides from National Bank Of Canada's earnings presentation, May 27, 2004

  1. Slide 1: Analyst and Investor Presentation Q2 2004 Results

    Analyst and Investor Presentation Q2 2004 Results Conference Call May 27, 2004 www.nbc.ca/investorrelations Substantial increase in profitability Continued strong earnings momentum for Q2 04: Net income $180 M; up 30% y/y EPS at $1.01; +38% y/y ROE at 19%, compared to 14.8% as at Q2 03 YTD earnings

  2. Slide 2: Well on track to deliver on our targets

    Well on track to deliver on our targets Further strengthening of franchise 2004 Objectives Q2 04 YTD Growth in earnings per share 5% to 10% 38% 27% Return on common shareholders' equity 15% to 17% 19% 19% Tier 1 capital ratio 8.75% to 9.50% 9.6% 9.6% Dividend payout ratio (1) 35% to 45% 32% 32% (1)

  3. Slide 3: Year to date snapshot; Commitment to shareholder returns

    Year to date snapshot in millions of dollars 2004 2003 Change Total Revenues $1 797 $1 608 12% Operating expenses 1 181 1 077 10% Provision for credit losses 63 82 -23% Net income 366 304 20% EPS $2,04 $1,61 27% ROE 19,0% 16,3% 5 Commitment to shareholder returns • Dividend increase of $0.05 per sha

  4. Slide 4: Tier 1 ratio consistently strong despite share buybacks

    Tier 1 ratio consistently strong despite continuing share buybacks Buyback status as at April 30, 2004: Repurchased 5,969,576 shares out of 8,700,000, 12.0% 44.1 45.8 44.7 48.0 representing 69% 47.0 46.0 39.0 40.1 45.0 44.0 43.0 42.0 10.0% 41.0 40.0 39.1 39.7 40.1 38.6 40.2 39.0 38.0 9.6% 9.6% 9.6%

  5. Slide 5: Personal and Commercial Banking Quarterly

    Personal and Commercial Banking Quarterly in millions of dollars Y/Y Net income Drivers: increase +16% Y/Y Net income increase comes from all sub- 600 120 sectors: •Personal Banking +24% 500 104 100 •Commercial +11% 92 90 92 400 79 80 300 60 480 482 483 476 446 200 40 283 296 307 292 297 100 20 0 0

  6. Slide 6: Loans & BAs and Margin Evolution

    Loans & BAs and Margin Evolution in millions of dollars +10 bps vs Q2 03 + 41 bps vs Q2 03 Mortgage Loans Credit Card Receivables $18,000 $1,600.0 $17,500 $1,500.0 Volumes Apr. 04 vs Apr. 03 $17,000 $1,400.0 Loans $16,500 $1,300.0 • Mortgage loans +5% 0 $16,000 $1,200.0 • Credit card receivables +11

  7. Slide 7: Revenue line increase per contributor

    Revenue line increase per contributor Evolution 6 months, Apr. 03 vs Apr. 04 in millions of dollars $29 $12 $4 $959 $914 Q2 03 Revenues Retail Banking Credit cards Commercial Q2 04 Revenues Banking 13 Business Mix YTD 2004 Revenue contribution (y/y increase) 5% (+1%) 12% (+12%) 48% (+9%) 35% (+3%) R

  8. Slide 8: Wealth Management Quarterly

    Business Line Breakdown Year to date Net Income Wealth Management 57M Financial Markets 131M Personal and Commercial Banking 196M Sectoral net income is based on actual credit losses 15 Wealth Management Quarterly Y/Y Net income increase +74% in millions of dollars Revenue increase: • +31% Q2 04 vs

  9. Slide 9: Wealth Management YTD; Retail Assets under Management

    Wealth Management YTD in millions of dollars Net income 450 60 increase +50% 57 400 50 350 300 40 38 250 30 200 391 150 318 302 20 256 100 10 50 0 0 2003 2004 Revenues Expenses Net income 17 Retail Assets under Management composition in billions of dollars Year/year increases: 79.0 79.8 Total growth

  10. Slide 10: Financial Markets Quarterly

    Business Line Breakdown Year to date Net Income Wealth Management 57M Financial Markets 131M Personal and Commercial Banking 196M Sectoral net income is based on actual credit losses 19 Financial Markets Quarterly Y/Y Net income in millions of dollars increase +59% Revenue increase: • +32% Q2 04 vs

  11. Slide 11: Financial Markets YTD; Treasury and Capital Market Activity

    Financial Markets YTD in millions of dollars Net income 600 140 increase +30% 131 500 120 101 100 400 80 300 516 60 200 425 40 245 268 100 20 0 0 2003 2004 Revenues Expenses Net income 21 Treasury and Capital Market Activity Revenue composition Y/Y in millions of dollars 76 • Securities – excess of

  12. Slide 12: Treasury and Capital Market Activity; Trading breakdown

    Treasury and Capital Market Activity Revenue composition evolution in millions of dollars 275 268 248 231 32 24 4 12 25 38 188 21 64 18 23 72 0 56 20 76 50 20 35 20 26 41 43 16 26 37 119 82 84 63 63 Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Trading Corp. Banking ALM Capital Markets Inv.Gains Other Trading reven

  13. Slide 13: Diversification of Earnings

    NBC Trading/Securities Gains/ALM Revenues USD $ CND $ (16 000 000 ) 160 000 000 (14 000 000 ) 140 000 000 (12 000 000 ) 120 000 000 (10 000 000 ) 100 000 000 (8 000 000 ) 80 000 000 (6 000 000 ) 60 000 000 (4 000 000 ) 40 000 000 (2 000 000 ) 20 000 000 0 0 av r- 00 juil- 00 oc t-00 janv -01 av r- 0

  14. Slide 14: Operating Leverage; Risk Management

    Operating Leverage Business Line Expense Ratio Year to date 80.5% 77.2% 61.5% 61.4% 57.6% 51.9% Personal and Wealth Financial Markets Commercial Management Banking 2003 2004 27 Risk Management 28 14

  15. Slide 15: Provision for credit losses; Impaired loans

    Provision for credit losses Actual credit losses per sector in millions of dollars 2004 Guidance 50 40 to 50 bps of loans &BAs 45 44 41 19 19 13 21 As at Q2 04: 42 bps, 4 24 17 excluding the reversal of 3 1 general allowance 3 28 27 21 17 21 General allowance: Jan. 31: $405 M -20 April 30: $385 M, 0

  16. Slide 16: Impaired loan formation; VaR – Global Trading

    Impaired loan formation In millions of dollars Q2 03 Q3 03 Q4 03 Q1 04 Q2 04 Personal & Commercial * 3.1 13.3 (10.6) 14.6 24.5 Corporate 31.8 25.1 80.5 11.0 3.0 Treasury (0.3) (0.1) (0.3) 0 0.1 Other 1.4 1.8 (4.5) (8.8) 0.8 TOTAL 37.0 40.1 65.1 16.8 28.4 Formations include new accounts, disbursement

  17. Slide 17: Daily Trading P/L; Q2 04 Summary: Superior returns

    Daily Trading P/L Q2 04 Excludes underwriting Daily P/L for 2nd Quarter Global Trading - Treasury, NBF and FX International 6 000 000 5 000 000 4 000 000 3 000 000 2 000 000 1 000 000 0 01-m ars 03-m ars 05-m ars 09-m ars 11-m ars 15-m ars 17-m ars 19-m ars 23-m ars 25-m ars 29-m ars 31-m ars 02-av

  18. Slide 18: Investor Relations contact; Caution regarding forward-looking statements

    Investor Relations: 514.394.0296 www.nbc.ca/investorrelations investorrelations@nbc.ca • HIGHLIGHTS CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, National Bank of Canada makes written and oral forward-looking statements, included in this analyst and investor presenation, in other f

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