Laurentian Bank of Canada at Scotiabank Financials Summit Transcript

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

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : <_ALACRA_META_ABSTRACT>Thank you for joining us today, and I feel like the best question to start with is on your strategic journey. Obviously, it's been a bit more than a year now, but a lot of moving parts there. Maybe you could just provide some high-level thoughts to start with in terms of progress you've made and things that you're proud of and areas where you may feel there's a bit more work to be done.

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, that's super helpful. And then just in terms of specialization, can you talk a bit about that value proposition just from a practical sense? Like what does it mean when you say we're specialized, like what is it that you do better without giving us too much detail from a competitive standpoint, but what does it ultimately mean in terms of the value that your customers get and why they want to bank with you in those specialized areas that you're focused on?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : And so you're sort of set on your specializations in terms of where you are now. Are you may be looking to expand around the edges or are you sort of set on this existing portfolio and running with that for the next couple of years?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, thanks for that thoughtful response. On inventory finance, just sticking to that, so what will move the needle the most in the next, say, couple of years? Is it the utilization rates, because interest rates are dropping, is it maybe the actual dealer network that you're using? Is it what you just talked about in terms of expanding the actual industries that you cover? What's -- there's partnerships as well you've talked about in the past and there's a lot of moving parts there and a lot of potential catalysts. Which ones are you most excited about among those?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : And just out of all those catalysts, which one is the most powerful? Is it just the organic growth?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay. Thanks for that. Maybe switching to personal banking. Obviously, the specialization in commercial is the big focus, but maybe talk about the -- you obviously have other business lines that you're still operating and you care about. So how do you move the needle now on personal banking on that side of the business and you know some of those monoline relationships on the mortgage side? How do you sort of monetize that and make that a bit more profitable for your shareholders?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : We had a couple of follow-ups on your comments on the retail banking side. So on the branch optimization, how difficult is it to reduce square footage? Does it come with upfront costs? You have to break leases? Like does it get a bit messy or is it pretty simple?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : And then in terms of just that duplication and different channels like that operational side, that's I'm guessing still another little bit to go, maybe another year or so?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : And how do you -- what's your view on technology and the spending required in a digitization of the retail business predominantly? It's mostly retail as opposed to the specialized commercial stuff. Like how do you sort of look at -- I know there's been a lot of good content you've provided on partnerships and that potential, but just high level like, does it ultimately get sort of figured out in the next certain period of time? Like is it like a 12- to 18-month period? I'm not trying to --

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, so thinking longer term, once you're fully optimized, at what point do you get confident that the efficiency ratio can start to improve and what's the pathway there? It's sort of a tough question to answer. I know there's still a lot of stuff you're doing in the background to get to that optimization level, but once you get there, do you then care a lot more about the efficiency ratio in terms of where it stands?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, and then as the complexity comes down in the business, then is it fair to say that maybe at that point LB's disadvantage from a scale perspective on the tech side maybe doesn't matter as much?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay. Maybe switching over to capital, obviously CET1 on a standardized basis, but really good number. Any -- and does that change anything in terms of deployment or your view on how that sort of trends going forward? Does it give you more optionality and maybe the ability to invest a bit more, change the pace of investments?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : So level 3 currently, obviously business lending, you'd like it to be a bit more robust. If it was at the level you wanted it to be at, what would that mean for your capital? And is there any possibility that you'd run into constraints on the capital side in terms of being able to deploy into lending?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, what about liquidity that can impact your margins from outside of the inventory finance seasonality. Any thoughts on liquidity and how you're managing that and how you sort of counterbalance that with --

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, thanks for that. And then obviously have to ask the question about credit just because I've been asking every bank today. Any high-level thoughts on credit, obviously you had a decent sized reserve release on performing loans, and I think the explanation was largely around the impairments that you have are actually better quality than what they might have been previously. That's exactly right. Maybe just touch on that a little bit. It's a bit of a counterbalance, I guess.

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Okay, so yeah, that's an interesting dynamic on the insured balance being a lot higher at LB. In terms of the spreads in that business, and we often hear the banks, the larger banks talk about how they'll come in and out of the market depending on spreads. And given that a bigger part of your book is in that business, how do you sort of see the competitive dynamics? Is it -- does it fluctuate a lot in terms of that spread, or where is it now and where do you see it heading in the current rate environment?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : So and that Alt-A book, I'm not sure if you've disclosed that publicly or not in terms of the size. Yeah.

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : So you're purposefully wanting to grow in Alt-A because you get better margins. What about the actual dynamics of Alt-A? Like, is there more growth to be had for that part of your customer base, or is it similar to the overall market?

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : And how complicated is it when you underwrite Alt-A versus you know the conventional way the banks have always sort of had an auto adjudication type of process where credit score comes in, verifiable income, the computer will spit out in two minutes whether or not you're approved, but Alt-A is a bit more complicated. Have you had to build out an infrastructure to move from that 6% to 13%, and it sounds like there could be some runway for you to, be a bigger player in that market, you want it to be.

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : Just to clarify, I didn't mean automated as in loosening credits. I just meant it was a pretty easier process versus Alt-A, which sometimes is not. Yeah, okay, awesome. So maybe just some final words for investors, some key messages as you look ahead to 2026 if you want to spend the last minute providing that for your investors here.

Question: Mike Rizvanovic - Scotiabank GBM - Analyst : So we'll stop there. Thank you very much, Eric, for your insights. Thank you for joining us today. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 03, 2025 / 6:00PM, LB.TO - Laurentian Bank of Canada at Scotiabank Financials Summit