Bank of Nova Scotia Q4 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 : A couple of questions. One, on this restructuring charge in International. I know you're -- I mean you get the rationale, it makes a lot of sense, but how you handle any political sensitivity that there might be around these types of charges, especially the climate down there, if that's a consideration? And if so, what do you do about it? How do you downplay that concern?

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : My other question, I guess it ties in to the -- some of the credit performance guidance like the lower ACL ratio you than the pre-pandemic that you expect in the coming year and presumably 2023, the lower loan loss rate here in next year and in 2023 than you had pre-COVID? Is there also a statement in there that you're just not expecting the unsecured lending categories to come back until much later than some people expect? So -- and that's also reflected in that guidance in Canada and international, where a lot of these balances are way below pre-COVID levels? Phil Thomas Gabriel, it's Phil Thomas. Nice to hear your voice, and thanks for the question. As we look out for the next 2 years, we've seen significant growth in our retail portfolio in the secured lending business. So we've gone from 6% to 71% in real estate secured lending. We've also looked at how do we deepen the customer relationship through the acquisition of mortgages. So we're seeing a lot of great opportunity deepening through the mortgage acquisition through the -- and then providing more products and services through their like unsecured lending. We also have been investing heavily in international and data and analytics as well as digital, and we've been seeing some great uptick through this. And through that, we know our customers better. We're able to get and understand their profiles and their behaviors, and it's allowing us to have even higher quality of originations. And the normal course of business, too, we look at how we're managing our portfolios. And there's always going to be times where we're going to exit some higher-risk portfolios that we don't like. And we're going to build up portfolios that we think have a higher risk-adjusted return for the bank.

Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst : So if I summarize denominator effect, a lot more secured loans pushing those ratios down and some lending activities that you're no longer doing?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Just wanted to quickly go back to Nacho. Nacho the restructuring charge, $126 million pretax, let's call it, I don't know, $18 million after tax. Is it as simple as if this initiative had been in place than the segment earnings, for example, this quarter could have been $20 million higher?

Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst : Okay. And then so Nacho, when you think about the International segment, I guess, across specific Alliance region and the Caribbean, if you were going to focus us on maybe 1 or 2 geographies, which 2 would you say you're most excited about over the coming year that you want us to pay particular attention to and not get distracted necessarily by headlines that may come out of elsewhere outside of those 2 jurisdictions?