Laurentian Bank of Canada Q2 2019 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 : Just want to ask about the -- a quick one on the union contract, just the timing. I know it matures or expires December 31, 2021. That's a 4-year contract I guess it would be.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Yes. It's a little -- might be just a technical thing, but why is it shorter than the last one and the prior one?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. Thanks for that. My other question is on the business itself, the loan book. That seems like the growth is coming from commercial and Northpoint is a big part of that. But the Canadian business mortgages and personal loans, they've been -- those balances have been declining for a number of quarters now. I'm just wondering where you see that -- sorry, I'm just wondering where you see the loan balances kind of settling out considering you're making investments in digital offering and ways to stay relevant with your customer base.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : So there's no -- it might be more of a function of having allocated resources into the union situation and now that that's done, you are going to move resources back to growing a loan book, and both in the mortgages and maybe personal lending as well, you're going to start to see an increase?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : And then last one on the provisioning. We've seen some reversals out of stage 1 and 2, particularly in the personal loan book. I suspect that because the loan book has been declining. Correct me if I'm wrong, there. And then if that's the case, then we should see that trend reverse as growth resumes?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Frantois, I know, obviously, lot is on the go over the last few years and especially in the last year or so, you have some financial targets out there, focus is on 2021. You've made some kind of trade-off decisions internally, one of which is to delay the AIRB implementation. And I wonder how without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 30, 2019 / 1:00PM, LB.TO - Q2 2019 Laurentian Bank of Canada Earnings Call does that factor into the ROE targets that you had set for the bank, closing the gap over there and presumably with the delay, the gap closing or narrowing to the group is going to be pushed out a little bit. And if you could just share with us what was the thought process in that regard, when you made the internal decision to delay the AIRB implementation.

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. So then maybe just quickly for Liam. Liam, where do you see the RWA to kind of -- the total asset density kind of trending towards with the expected portfolio mix shifts under the standardized approach?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Yes. Like where RWA-to-asset ratios are right now? And given the portfolio mix shifts that you're talking about more commercial, maybe a little bit more higher-yielding stuff. Just trying to kind of get a feel the next call it 12 to 18 months. Where do we see those RWA to asset trends -- trending really to try to figure out what under the standardized approach you see the capital requirements of that loan growth being?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So where do you see the ratio going? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. MAY 30, 2019 / 1:00PM, LB.TO - Q2 2019 Laurentian Bank of Canada Earnings Call

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Sorry. I just want to be crystal clear. When you say an improvement, you see the business being becoming less capital-intensive from an RWA growth perspective or more capital-intensive?