National Bank Of Canada · TSX:NA
National Bank Of Canada — Q2 2005 Earnings Presentation
19 slides from National Bank Of Canada's earnings presentation, May 26, 2005
Slide 1: Analyst and Investor Presentation Q2 2005 Results
Analyst and Investor Presentation Q2 2005 Results Conference Call May 26, 2005 www.nbc.ca/investorrelations Highlights • Q2 05 Results: • Net income $202 M; up 12% y/y • EPS at $1.17; +16% y/y • ROE at 20%; was 19% as at Q2 04 • For the 6 months • Net income $441 M; up 20% y/y • EPS at $2.56; +25% y
Slide 2: 2005 Objectives and Performance Snapshot
2005 Objectives Strong first half of the year 2005 Objectives Q2 05 YTD Growth in earnings per share 5% to 10% 16% 25% Return on common shareholders' equity 16% to 18% 20% 22% Equal or greater Tier 1 capital ratio than 8.5% 9.5% 9.5% 1 Dividend payout ratio 35% to 45% 35% 35% (1) Trailing 4 quarters
Slide 3: Dividend per Share and Revenues – Business Line Mix
Dividend per Share Quarterly 0.44 Highlights: 0.42 0.42 0.38 0.38 0.33 0.33 • Increase in quarterly 0.26 0.26 0.28 0.28 dividend of 5%, now at $0.44 per share • 2.8 M shares Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 repurchased in Q2 05, 03 03 03 03 04 04 04 04 05 05 05 totalling an amount of Annual $149M $1
Slide 4: Personal and Commercial Banking – Quarterly and YTD
Personal and Commercial Banking – Quarterly In millions of dollars Highlights: Revenues Expenses Y/Y increase: Net Income Revenues: 3% 114 Net income: 16% 108 93 96 98 The 3% top line 493 508 503 494 growth is driven from 479 Net Interest Income 312 316 and Other revenues 298 304 308 Expense ratio s
Slide 5: P&C Revenue Composition and Volume Evolution
P&C Revenue Composition In millions of dollars Highlights: Contributor increases 508 503 494 y/y: 479 493 166 176 173 173 170 Majority of sectors contributing to the 22 22 34 25 23 64 65 68 65 growth, split 2/3 Net 61 Interest Income and 230 236 1/3 Other revenues 231 237 236 Retail banking 3% Q2 04
Slide 6: P&C Loan and Deposit Volume Evolution
P&C Loan Evolution Quarterly average volumes Mortgage Loans Millions Personal Loans excl. Indirect Loans Millions Loan growth : $19,500 $10 000 $19,000 $9 000 Mortgage 8% $18,500 $8 000 Personal 27% $18,000 $7 000 Credit cards 9% $17,500 $6 000 Commercial 3% $17,000 $5 000 Q2 04 Q3 04 Q4 04 Q1 05 Q2
Slide 7: P&C Margin Evolution and Expense Ratio
P&C Margin Evolution Evolution : Important volume increase Q/Q supported 3,12% 3,05% 3,02% 3,03% by: 2,97% •Product mix due to 1,95% solid growth in volume 1,92% 1,89% 1,88% 1,87% with lower margin •Combined with a slight 1,57% 1,56% 1,55% 1,60% 1,59% decrease in the prime/ BAs in the Commercial Q2
Slide 8: Wealth Management – Quarterly and YTD
Wealth Management – Quarterly In millions of dollars Highlights: Revenues Expenses Revenue increase Net Income driven by Retail 32 31 brokerage and 27 Segregated fund 205 207 activity. 23 22 195 180 172 155 159 153 136 141 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Analyst and Investor Presentation Q2 2005 Resul
Slide 9: Wealth Management Revenue and Retail AUM Composition
Wealth Management Revenue Composition In millions of dollars Revenue growth: 207 Driven mainly by the 205 195 3 180 brokerage and 16 172 3 3 4 3 19 18 segregated and 46 13 20 42 42 41 41 private investment management 140 132 144 113 116 activities. Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Other Trust (Segregat
Slide 10: Wealth Management Expense Ratio; Financial Markets – Quarterly
Wealth Management Expense Ratio Highlights : Stable level maintained, unusually 79.1% 78.3% 78.5% low Q2 04 75.6% 76.8% Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Analyst and Investor Presentation Q2 2005 Results Conference Call — May 26, 2005 19 Financial Markets – Quarterly In millions of dollars Highlights: R
Slide 11: Financial Markets – YTD and Revenue Composition
Financial Markets – YTD In millions of dollars Highlights: Revenues Expenses Y/Y Net income Revenue growth of Net Income increase +7% 2% 132 141 Net income increase of 7% lead by 517 524 decrease in loan losses 306 268 2004 2005 Analyst and Investor Presentation Q2 2005 Results Conference Call — May
Slide 12: Financial Markets Revenue YTD and Trading Breakdown
Financial Markets Revenue Composition – YTD In millions of dollars Highlights: Revenue driven by 524 wide scope of 517 38 64 activities 425 66 49 52 27 148 163 112 36 19 40 82 76 68 126 147 153 2003 2004 2005 Trading Corp. banking ALM Capital markets Inv. gains Other Analyst and Investor Presentatio
Slide 13: Trading/Securities Gains/ALM Revenues and Expense Ratio
Trading/Securities Gains/ALM Revenues CDN $ CDN $ -25,000,000 160,000,000 140,000,000 -20,000,000 120,000,000 -15,000,000 100,000,000 80,000,000 -10,000,000 60,000,000 40,000,000 -5,000,000 20,000,000 0 0 Ap -0 1 Ap -0 2 Ap -0 3 Ap -0 4 Ap -0 5 O l-00 O l-01 O l-02 O l-03 O l-04 Ju 00 Ju 01 Ju 02 Ju
Slide 14: Risk Management
Business Line Expense Ratio – YTD Highlights: 77.7% 77.6% P&C Banking and Wealth Management 61.2% 61.4% 58.4% stand steady while 51.8% Financial Markets reflect a mix of business impact and some discretionary expenses in Q1 05 Personal and Wealth Management Financial Markets Commercial Banking 2004
Slide 15: Quarterly highlights: Another low provisioning quarter
Quarterly highlights Another low provisioning quarter • Provisioning environment continues to be excellent: • Credit indicators mirror economic data • Quebec Personal and Commercial bankruptcy rates remain stable • Continued proactive surveillance of specific industries • At quarter end, the level o
Slide 16: Allowance for Credit Losses
Risk Provisioning In millions of dollars Highlights : Release of general 19 allowance driven by 31 decrease in corporate -8 17 1 12 17 volume 29 2 2 22 19 15 16 Guidance for year-end -2 -20 -17 2005: 19 to 23 bps of -35 total loans and BAs Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 P&C Financial Markets General
Slide 17: Impaired Loan Formation and Impaired Loans
Impaired Loan Formation In millions of dollars Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 6M 05 Personal & Commercial * 25 20 7 2 5 7 Corporate 3 (6) (20) (14) (3) (17) Treasury 0 0 0 0 0 0 Other 1 (2) 0 0 0 0 Total 29 12 (13) (12) 2 (10) Formations include new accounts, disbursements, principal repayments and e
Slide 18: Daily Trading P/L and VaR – Global Trading
18 35 36 29-avr 28-avr 27-avr 26-avr 25-avr 27-avr-05 22-avr 21-avr 20-avr 19-avr 18-avr 20-avr-05 15-avr 14-avr 13-avr 12-avr 13-avr-05 11-avr 08-avr 07-avr 06-avr 06-avr-05 05-avr 04-avr 01-avr 31-mars 30-mars-05 30-mars 29-mars 28-mars 24-mars 22-mars-05 23-mars 22-mars 21-mars 18-mars 15-mars-05
Slide 19: Building for the future
Building for the future • Satisfying Q2 results, important volume and asset growth; diversified financial market activities are solid bases to build on • Continued investments in our technological infrastructure, key to our future performance • On track to attain 2005 objectives Analyst and Investor
National Bank of Canada — Q2 2005 Earnings Presentation on 6ix