National Bank of Canada at Barclays Global Financial Services Conference Transcript

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

Question: Brian Morton - Barclays Capital Inc. - Analyst : Thanks for coming. Let's start with the recently announced acquisition of the Canadian Western Bank. This proposed acquisition adds significant scale to National Bank as well as the footprint. Can you talk more about some of the benefits of the transaction, both in terms of expenses and revenues? And any concerns on the credit quality of the portfolio?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Excellent. But one of the questions we get from clients is you're paying a nice premium compared to the price just prior to the announcement of the deal. Maybe kind of tell us how you kind of gain some comfort around the price that's being paid for CWB?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Okay. Great. Following the close of the CWB transaction, your business mix will be even more focused on Canada, how do you view growth and return opportunities in Canada compared to the US or your ABA subsidiary in Cambodia? And how does this impact your thinking on additional capital deployment?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. You mentioned Quebec a few times. And I know within Canadian Banking, your exposure is heavily weighted towards Quebec. We've heard from some of the other Canadian banks that have presented that the overall Canadian consumer has been probably a little bit more surprisingly resilient than what people would have thought at the beginning of the year kind of given the economic outlook. Maybe you can kind of talk to how the borrowers in Quebec are holding up compared to the rest of Canada from your perspective? And are there any real geographic areas of particular concern within Canada?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. And within your portfolio mix, you've talked about residential mortgage makes up a large portion. And commercial also makes a pretty sizable portion. How are you looking to expand maybe other parts of your existing consumer portfolio like credit cards or perhaps other lending products to add more diversity to your portfolio?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Okay. I just wanted to talk maybe a little bit of the impact from the recent rate cuts. And are you going to see customers benefiting from lower rates? Or is that more towards 2025? Are you seeing any other changes in customer behavior as rates come down?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. And then I just want to quickly move over to kind of the funding strategy, and maybe you can provide more color on your funding strategy. How do you feel about maintaining the wholesale funding at about 26%? And where are you seeing kind of your best sources for deposit growth? And do you feel any pressure to be like more aggressive on rates to attract deposits?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Just on financial markets, I did have a question. I mean, we're seeing pretty stable or pretty strong investment banking and trading revenues last couple of quarters, even though there has been some increased economic uncertainty. Do you expect this trend to continue in the near future? Maybe any comment on what's going on in the financial markets business.

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. And then maybe you're also seeing some good momentum in the wealth management business. Maybe also talk about some of the key drivers of that performance and the outlook for that segment?

Question: Brian Morton - Barclays Capital Inc. - Analyst : And one other segments that really maybe doesn't get as much attention is the ABA segment. It's less than about 5% of the loan portfolio. We actually see more than 36% of gross impaired loans. Are you seeing anything in that business that would give you concern there that these loans might turn into losses?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. And then also looking at the gross impaired loans in the non-retail loan portfolio, transportation and real estate, construction real estate on some increases year over year. What do you think is driving these increases? And are you taking any proaction to kind of take to address this?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Maybe we talked a lot about kind of on the revenue side of the income statement. But over the past year, National Bank has seen a nice improvement in the efficiency ratio towards 51%. Do you expect to continue generating positive operating leverage versus are you looking to make additional investments? Where do you think you stand compared to your competitors on technology investments?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Excellent. Maybe you can -- we have a little bit of time to open it up to questions if anyone in the audience wants up in the front, please. Unidentified Participant When I look at your credit ratings from Moody's and S&P, they're in the sort of A-, BBB+ range, which is fine, but like I look at your bank, and it's highly profitable, it's very well capitalized. You've got to kind of -- I would like to say (inaudible) it effectively in your home market. So they could be higher. And one of the things they dig you for is they say that there's a relatively high contribution of capital markets relative to the size of the 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 11, 2024 / 2:30PM, NA.TO - National Bank of Canada at Barclays Global Financial Services Conference bank. So firstly, I'm wondering what's your pushback to that? And then secondly, can you help us understand what your capital markets franchise is?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Thanks very much, Marie Chantal. Before we close, is there anything else we haven't covered? Or would you like to finish with any concluding remarks?

Question: Brian Morton - Barclays Capital Inc. - Analyst : Great. Thank you very much. Please join me in thanking Marie Chantal for her time today.