National Bank of Canada at RBC Capital Markets Global Financial Institutions Conference Transcript

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

Question: Darko Mihelic - RBC Capital Markets - Analyst : So the topic (inaudible) tariffs. So I wanted to start on this topic and immediately dive into a few things. And I guess, Maybe we can just start with your intentions. So how do you intend to sort of run and operate the bank during this very uncertain period of time. And maybe after that we can dive into exposures and sensitivities, but maybe just your overall thoughts and and how national intends to to to operate now.

Question: Darko Mihelic - RBC Capital Markets - Analyst : And so maybe one of the questions that a lot of people would want to sort of understand a little bit better is maybe a discussion on where, what parts of your businesses would be most sensitive to tariffs, and then possible mittigants to that as well. So if you can maybe just touch on where you think tariffs might have a quick impact where it might take longer and is there anything that helps mitigate some of this impact for your clients.

Question: Darko Mihelic - RBC Capital Markets - Analyst : And maybe just to follow up on one of the things you mentioned there you said the agriculture is secured by whom? How is that secured?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And just 1% steel, automobile and aluminum. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 1:40PM, NA.TO - National Bank of Canada at RBC Capital Markets Global Financial Institutions Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : And there wouldn't be any other exposures and any of the other categories.

Question: Darko Mihelic - RBC Capital Markets - Analyst : And you mentioned $400 per month, but I'm assuming that that might be dropping.

Question: Darko Mihelic - RBC Capital Markets - Analyst : And then maybe just a follow up. You've closed the Canadian Western Bank acquisition. So what are your early thoughts there? Presumably, there might be some sensitivity to the tariffs as well, or were your comments inclusive of CWB?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. And maybe with that as a transition, we'll chat a little bit about CWB. First and foremost one of the things that I think a lot of investors were looking forward to was the close of CWB, the eventual migration from standardized to RWA, but also there was a view that there was going to be very strong capital and it is and it's a very small impact, but there's a hesitancy to buy back stock. So maybe you can speak a bit to, your plans on the buyback relative to the acquisition and all the equity that you've issued for it.

Question: Darko Mihelic - RBC Capital Markets - Analyst : You met this fiscal at the end of this fiscal year.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay, I'm going to pause there just as a reminder they reported last week, so if you have any questions on the quarter as well, but by all means, feel free to raise your hand and ask, and maybe just as we sort of wrap up on this discussion, I do want to talk about ABA and financial markets, but one of the things that's on a lot of people's minds is provisions for credit losses and, sort of, I guess the first question is do you see the need now that we've got more uncertainty in the world to build this, a performing provision, maybe in Q2, maybe throughout the year. I'd like to get your thoughts on that because you are the CFO so that'd be good to get your thoughts on that. And then given, even though you have some mittigants being in Quebec, having, retail portfolio there, by the way, I also think your credit card portfolio is relatively small, but that would be an area where we would have some concern.

Question: Darko Mihelic - RBC Capital Markets - Analyst : So in the wake of that, given everything that we've heard, so we've got uncertainty with respect to tariffs, but you have some mittigants, how should we think about the evolution of your credit provision for credit losses now going forward, because just last week you gave us a new range of PCLs, but now we're waking up to tariffs. So how would you, discuss the outlook now for credit? Has anything changed materially for you?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And so speaking on credit, one of the things that we continue to see and maybe we can just discuss this a little bit this morning is a little bit of a rise, or not rise, but I guess impaired loan formations at ABA always a topic of discussion amongst investors. I get asked about it a lot, and I'm by no means an expert on Cambodia. So maybe we can talk a little bit about the elevated formations and the longer resolution process. And what are some of the reasons for that?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And what is the growth prospect for the bank? Is it changing for you? Do you see continued elevated growth? I mean this has been an extraordinary growth over the last -- ever since you've acquired it actually -- it's had extraordinary growth. Is it slowing down? Is there anything, there that you might be more cautious on? Hitting the brakes or is it still all systems go and grow? I mean, we say that the economy is not a full potential, but I think it's 5% GDP still, so it's still a very high growth economy.

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay, so switching gears to maybe the financial markets business we saw last week you reported a tremendous Q1, as many Canadian banks did in their financial markets businesses, and it was primarily in trading revenues. I think you benefit from volatility. Can you maybe give us, some thoughts on the trading outlook today and what you're seeing and how you would position that your expectations for financial markets for the rest of the year, given where we're at in terms of the macro. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 1:40PM, NA.TO - National Bank of Canada at RBC Capital Markets Global Financial Institutions Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. And is there -- and how should we think about that business? Has anything changed for you there as a result of getting CWB in financial markets? Does it create more opportunities?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And just -- maybe as I think of that, is it that these will take time to develop or are there some revenue synergies or opportunities that could be quicker than others for. I mean I work in the financial markets, it can definitely move faster --

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay, just going to scan the room for any questions from the audience. If not, I want to dive. I want to go backwards a little bit and talk a bit about what we touched on and I wanted to talk a little bit about your expectations now for interest rates given where we are and how that might sort of evolve. I mean you've already mentioned that your variable rate mortgage borrowers are seeing a lower payment shock and likely if there's more rate cuts coming that will clearly just move, but there's also fixed rate, mortgage shock in the book as well. And so I wondered if we could maybe just talk a little bit about how that's changed and do you see mortgage growth as coming back? Do you see it or do you think that there's potential here for a little bit of a slowdown given all the uncertainty? So how do you see that shaping up for you and especially in the province of Quebec where it matters most?

Question: Darko Mihelic - RBC Capital Markets - Analyst : Does it seem healthier than commercial? Do you feel like there's more momentum on mortgages versus commercial loans?

Question: Darko Mihelic - RBC Capital Markets - Analyst : So sorry, do you mean to say that the term is three years, but they're choosing variable rate rather than fixed?

Question: Darko Mihelic - RBC Capital Markets - Analyst : And this is compares to a five year more fixed -- REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 04, 2025 / 1:40PM, NA.TO - National Bank of Canada at RBC Capital Markets Global Financial Institutions Conference

Question: Darko Mihelic - RBC Capital Markets - Analyst : Okay. Well, we've run out of time. So thank you for coming in and having this discussion. It's been very good. Thank you very much.