Bank of Nova Scotia at National Bank Financial Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Well, actually that does lineup with, kind of, a product-by-product perspective, and obviously, the MD acquisition that you brought up, those all will be very interesting talking points. I'd like to start off with the biggest part of the business, the mortgage book. And it was growing at a, I guess, slower than planned or expected rate in the first quarter. I'd like to know what were the moving pieces behind that outcome. And was it anything other than just the B20 hangover, where originations were comped against really high volumes in the prior year?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : So 2 things in those comments that you're highlighting the spring season, mortgage season, as an area to watch, and of course, we will. Do you feel confident about a bit of a rebound here? And then I'll flip that over to the margin and how you're positioning the 5-year perspective afterwards.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. Now how about on the margin side of the mortgage business? It was cited as a factor behind some of the -- not just at Scotia, mind you, but mortgage pricing was cited as a factor for some of the margin softness we saw in Q1. We got a -- how quickly can you adjust your pricing to reflect the new rate environment of the yield curve? And are you even able to, given the competitive dynamics?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. And that's still your outlook for a bit of margin expansion despite the yield curve...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : So let's move on to the auto book, which you did touch upon in the last question -- or answering that rather. Can you walk me through the last few years of the retail, not necessarily -- well, maybe the floor plan as well, but the growth trend. We had a couple of years where auto loans were growing at double digits, volume driven, we were moving to peak sales volumes. And then in the last few years, obviously, that's come off, last 18 months. And you said you're growing the book now in 5% to 6%. How much of that decline is volume driven? And is there any element of that, that's conscious risk management because there are indications of some credit weakness at the fringes of the market that are getting attention?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Feel free to come back. I don't have anything on my calendar, I don't think, it may be a quiet period, I don't know. Okay, we got about 9 minutes left here. I do want to talk about MD. Big acquisition you made, obviously, and the focus has been on the wealth management, the fee business, and what about the loan business? Are we overlooking that as a growth driver from that acquisition? Like, how big is the opportunity?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Well, what I've learned in the last few years, doctors like to spend money. Is there any sense of how -- what the size of the loan book is today? And what you can conceivably get it to and including moving that 35% penetration of the physician community to something higher?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Bringing it back to the bank, you'd mentioned the desire to move into a top 3 position in business banking and growth across the board has been -- like, across the sector, I should say, has been phenomenal for a number of years now, double-digit commercial loan growth, I think that's what we'd become accustomed to. The biggest component in commercial loans or lending in Canada is commercial real estate and it's been growing for some banks at or above the overall portfolio rate. Some banks have started to give more disclosure on what's in that book, how big it is, what it's comprised of, et cetera. Is -- a, can you give me a sense of what's in your book? And b, how big of a role is that going to be playing to get you to a top 3 position?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : We're overtime slightly here. Is there a quick question in the crowd? No. Well, James, that was a good way -- overview of the business, and I appreciate your taking the time to come out here.