Bank of Nova Scotia Q1 2021 Earnings Call Transcript

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

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : I want to go back to not show on the international and about walking us to the $500 million earnings number with a few elements behind that was very helpful. I wanted to know, do you have a number in mind for pretax pre-provision profit, though, because getting back to $500 million PPLs being lower is going to help a lot. If I look at PTPP you're running at $1.5 billion quarter pre-COVID close to 1, 2 quarter. I know there's some divestitures, but what kind of number should I have in mind and timing thereof for that line item?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. I mean, is Nacho adding or I can do a quick follow-up? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 23, 2021 / 1:15PM, BNS.TO - Q1 2021 Bank of Nova Scotia Earnings Call

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. Great. And just from a quick margin standpoint in that segment. Because commercial is it away on the loan growth recovery, we shouldn't see too much NIM expansion because there was going to be lower spread in that region, right?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Me? I'm done.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I actually wanted to maybe ask a question of Jake and James. Obviously, a very good quarter, Jake, and James. The run rate ahead of what would have been implied out of 2020s quarterly results, I know capital markets tend to obviously be volatile. But all the work that has been done over the years, are you at a new run rate that could have a 5 handle quarterly earnings? Or do you still think it would be in that low to mid 400s?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. That's helpful. And if I can just quickly sneak one in for Brian. I mean, Brian, you talked about, obviously, the ROE being back at or slightly above the medium-term target. But you're doing that actually -- I mean, last time you were at these levels, you had about 100 basis points lower CET1 ratio. So I guess I guess, are we -- are you going to adjust that maybe medium-term target higher once there are there more flexibility around capital deployment, whether it's through share buybacks or otherwise, or do you think that still is the right number even if capital levels drift back to more normal levels?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Just a follow-up on the -- well, credit question, I guess. And the PCL guidance is pretty clear at this point or indication I just want to know if you have a sense, Daniel, of where the impaired loan ratio could trend? Could this thing top over 100 basis points or stay below that. You're talking about Q2, Q3, it sounds like those will be the peak formation reported? Daniel Moore Yes. I think the important thing that we're focused on here, Gabriel, is that we've built more institutional allowances for the anticipated increase in net write-offs. That's going to happen, as you said, through Q2 and likely peaking in Q3. And that's why the particular start or deliberate and detain approach to any releases that we might have this quarter. But here's what I can say, against that backdrop of being confident that we were all provisioned for those write-offs. We are seeing the portfolio, as I said, performed very well. And in fact, inside of our expectations. And so all of that leads us to believe that we're likely going to start seeing releases from our performing allowances in Q2 to offset any increase that might happen in the -- or likely will happen in the non-performing allowances in the same quarters, and you'll see that continue going forward. So the way we think about this overall, is that these allowances are on the balance sheet, they are for a reason. We view Q1 as not being the time to take the boards off the windows, but this is a balance sheet item, and where we're focused on from here is on top line revenue growth.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I thought I'd get one more in on another follow. We don't usually hear much from. Glen, the wealth business obviously had a bit of, I think, a onetime benefit in there. But we now have a couple of years' worth of back record since the acquisitions under our belt. Can you just paint a picture of how the acquisitions have gone relative to expectations? And secondarily, give us a sense of what we should be expecting as far as capital accretion out of your business in the next, call it, 4 to 8 quarters?