Laurentian Bank of Canada Q3 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 a follow-up on the -- those credit questions. The -- if I just look at the stage 3 provisions, commercial had an uptick versus what we saw in Q1 and Q2. Can you tell me where geographically those provisions occurred, or those impairments?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : You can't tell me if it's Canada or the U.S.?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. How about the sector, industrial sector?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. And just so I understand the messaging there, you've stated that you've added to collective provisions, i.e., stage 1, stage 2. You've taken a more conservative economic outlook and you still believe...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. So that's -- if not for that, the releases from stage 1 and then stage 2 would've been $2 million higher. Is that then...

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Got you. Then the branch -- let's talk about the strategy here. And I just want to make sure I understood that correctly. Part of the new structure of the bank and the manner in which you expect to gain efficiencies involves outsourcing. Did I hear you correctly that you've outsourced some of your credit adjudication and collections function?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Right. I'm looking at it more from a strategic -- efficiency is obviously important, but when you're moving in this direction, credit adjudication, underwriting and collections, those are core parts of -- core functions of what a bank does, and I just make sure we're not -- I'm not hearing that you're outsourcing those functions entirely, are you? 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. AUGUST 29, 2019 / 1:00PM, LB.TO - Q3 2019 Laurentian Bank of Canada Earnings Call

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : Okay. All right. Cool. Then lastly on the mortgage book and the, I guess, bank service revenues. Mortgage book, you've indicated that you expect the growth to turn positive in the latter parts of 2020, if I understand that correctly. Any indication of when we could see this poised-for-growth mantra start turning into positive revenue growth in the services line in the other income?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : I was a little bit late getting on, so I apologize if some of these were covered off in your commentary or in earlier questions. But just with respect to the balance sheet growth that you are expecting now to come, if I kind of look at the slides, Pages 23 and 24, you've got the geography kind of listed out. And if you start with commercial, 17% from the U.S., the rest in Canada. As you think ahead, I don't know 12, 18 months, how is that -- how are those percentages going to shift?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : But is the mix going to stay kind of as it is right now geographically? Or in other words, do you -- or do you think the U.S. is going to represent a bigger proportion overall, let's say, in the commercial loan portfolio?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : And so Liam, when you talk about the credit considerations and the PCLs, you're taking into consideration that you may have higher growth in the U.S.?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : So just one last question on that, Liam. How much room do you have in your current reserve levels to accommodate further growth in your, call it, performing stuff without having to add to the reserves?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. But my question was a little bit more specific as to within your stage 1 and 2, how much more growth can you accommodate without having to add more to it? 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. AUGUST 29, 2019 / 1:00PM, LB.TO - Q3 2019 Laurentian Bank of Canada Earnings Call