BNS - Earnings call transcript Q4 2018 | The Bank of Nova Scotia

Due to licensing restrictions, you must log in to view earnings call transcripts.

Phil Smith

Good morning, and welcome to Scotiabank’s 2018 Year-End and Fourth Quarter Results Presentation. My name is Phil Smith, Senior Vice President of Investor Relations. Presenting to you this morning is Brian Porter, Scotiabank’s President and Chief Executive Officer; Raj Viswanathan, our Chief Financial Officer; and Daniel Moore, our Chief Risk Officer.

Following our comments, we will be glad to take your questions. Also present to take questions today are Scotiabank’s business line group heads: James O’Sullivan from Canadian Banking; Nacho Deschamps from International Banking; and Dieter Jentsch from Global Banking and Markets.

statements. on to those presentation, Slide Scotiabank’s regarding and will today, which start caution you refer X forward-looking we behalf speaking of I contains Before of our call With over that, now I turn to Porter. will Brian the

Brian Porter

I’ll Thank Slide starting results XXXX. X. morning, strong on reported be you, Bank good Phil, in and everyone. The

investments and I take for time, and our the significant to investments continue over our important to high-quality attract team hard deliver technology people to all acquisitions, made Our efforts to in We our results. major the we Bank invest future would worked very in the talent to past employees thank At this Bank. growth. completed for their to the same year. position like made opportunity

will the and $X.X value of contributing a acquisitions completed shareholders. On estimate acquisitions to basis, roughly X% will our add revenue recently revenues our Bank, announced cumulative annualized base. for we these existing growth to in provide billion Our

the delivered plan. achieved leverage year-over-year and increased wealth this positive share, our X.X% per commercial medium-term acquisitions, a up points year. was Fraser. during We are slowing XXXX. Financial was asset particular, of exceed strong and XXXX. XX.X% period on Jarislowsky of $X.XX MD in high-quality our was our operating Tier generated our earnings of equity and growth. from and Bank or ratio meet proud In equity was Canadian basis of Return banking EPS businesses. and We X Management mortgage XX.X%, Canadian Adjusted a X% ahead objectives core operating Banking for closed all margins Banking from growth, up leverage XX to able is personal and rebuild last generated was positive capital year common strong at X% good two growth

core loan exceeding deposits growth. off with has Our focus on paid deposit growth

the the Tangerine against primary primary continues target X customers, Canadian our Tangerine during new net of million of deposit strong progress with one-third excluding millennial deposit market particularly customers. We Banking highly and customers. new delivered acquisitions, year. growth. good approximately outpace new gathering Banking contributed XXX,XXX our Targeted growth for to strongly International primary Bank’s also customers help added net strong also multi-year to performed of XX%, also Tangerine Pacific very Canadian countries. campaign in earnings results Alliance with popular be

Chile Our quarter BBVA and results acquisition this include Colombia. also the of Citibank

team earnings related in particularly some our of experienced While reflecting down market region management to this the the year, and manage the in our effectively. Markets and businesses and there trade is was X% delivered was conditions, year. some negotiations challenging we to Banking well-qualified record volatility second-half elections, Global

our the modest in We in and and investment Capital our have Bank, strong performances more growth banking expense well-controlled Markets was results businesses. total Across businesses corporate at X%.

past better points and risk Bank’s X%, for in customer in have billion, high-quality are than in our stable the the $X.X management. spend a an XX% growth in overall our the year-over-year us was higher ratio, four technology improving is note which allows technology grown the benefits improved which see management respectfully. XXXX our Our technology risk and years revenue non-technology expenses experience of reflective XXXX credit our XXXX. target provide while It track of culture to strong at as productivity The average expenses XXX to faster achieve XX.X%, the of by reflected productivity to performance has much investments are over of basis versus on we important portfolios. to or We better and to Bank XX%

Reuters objectives. said, meeting $X.XX, markets That closed to capital by Thomson XX the of The we to expected the were also these benefit divestiture as of Index five in the countries our financial expect the exceeding most year, in material divestitures while core strategy technology by or or X quality XXXX top [Commercials] our in top one & in XXXX, our X% and in businesses, and core places insurance and announced Caribbean the the Hired, in either of the sharpen remain quarterly of region. exit Turning as we desirable Tier exited also our year. and common X to a Tobago. non-core XX.X%, includes added during the consistent Trinidad across had the operations and some Index. basis Bank. and Magazine. which is In XX non-core acquisitions operations by This Exiting ratio Over geographies and we the our we increase capital reflecting the that scale great XXXX. medium-term intention points. operations work of which raised impact Fortune improve Year life the not have Caribbean equity countries or in Dow approximately a an earnings also Bank businesses, North of noted earnings dividend one is reduce with fiscal announced world’s of brands Sustainability Jamaica XXXX the that began is year morning, We smaller noted ago one LatinFinance, to added period, to to capital. this years of America. increase by named to ended during also workers X Jones to we Diversity of with nine Toronto The Inclusion the Bank We the for key We in we in focus, included some were being achievements impact risk were on these were the our still over

X. Slide to Turning

We acquisitions efforts closed track. on our integration have on four are and

of adjusted close for fiscal an earnings guidance We prior our accretion per Republic $X.XX Dominican in in XXXX. standpoint, XXXX. share to expect the committed of QX remain in our to we acquisition more From

Slide to X. Turning

against with digital our targets. progress We are our pleased

priority see retail and XX%, continue across a three to we strategy years of on since are metrics driving our increased tracking Digital X%. we of our good improved growth is products, all primary And adoption of in-branch with our digital launched sales financial plan overall improvement our X%, ago. sales. in accelerate or XX% lastly, by have continues by regions. ahead growth over two which We Digital to which declined transactions in

two but financial return risk completed will for call remarks outlook to discuss Raj is turn via over devices Canada, transaction grown and the our XX% the to will years Focusing XXXX. Daniel’s the mobile over most now now on past popular on to after channel financial financial I transactions customers. performance, our discuss our have for

Raj Viswanathan

fiscal X, Thanks, on XXXX. I’ll financial Brian. Slide begin shows performance metrics our for key which

my X% of will per an in comments All The $X.XX, adjusted be which year acquisition-related basis, XXXX. costs. share excludes Bank ended up of on diluted earnings with the

comprised HollisWealth Banking good fees additional of and XXXX, were from Canadian stronger delivered net year, revenue results from income and The of earnings to driven in Chile of that experienced the and by we prudent gathering, impacted provisions from and XX% growth. were the sale for for loan in credit Bank’s Banking acquisitions P&C alignment Pacific the up declined earnings, provisions well year’s partly acquisitions on X% lower offset strong lower reflecting growth. losses assets, of sale of last the was period the strong fixed losses. benefit year higher for partially by a as commodities of recent Markets results higher compared up businesses Global one deposit Our and by and continued XX% mainly businesses, month performance and reporting gain high to were the up X%. revenues. lower real driven growth the interest XX% on in markets expansion, income last adjusted expenses. period and by of Alliance Lower cost delivered and credit last X% margin X% net momentum reporting non-interest contributed from as gains and alignment lending income of earnings Banking the impact approximately where capital deposit The countries, the management in growth collectively. impact Thailand the the the year year. International current growth estate offset by in These

operating Banking. The strong focused was solid in leverage leverage in corporate a productivity franchise gains. lending from banking to our growing the investment X.X% strengthening benefits America. operating Canadian P&C or points basis We positive XXXX Latin quarter up-tiering and are performance businesses, our with ratio This and at Operating Banking relationships, positive in for X.X%, first in on improved leverage International our remeasurement XXX XX.X%. we the positive X.X% actively reflects XXXX our customer exclude very if base X.X%

the gain, declined remeasurement points benefit Excluding basis the QX XX.X%. XXXX ratio XXX productivity to

improvements on across mentioned driving remain earlier, we Brian the productivity Bank. As focused further

up QX Turning reported $X.XX, to results. Bank X% the of The year-over-year. share earnings diluted per

its growth-related basis of X% XX points. productivity card X the Our combined commercial up sale cost impact about portfolios X% of retail International X% as and solid in margin in strong excluding Slide initiatives, year was year-over-year were core our from points provide grew by of up resulted change investment included and of currency loans margins core with Canadian down strong growth. to growth was of on associated improved acquisitions. with was driven real on an internal ratio in The liability Canadian last estate negative million were remained last as Tier was the and acquisitions, XX, ratio generation loans points last of the Banking year, provisions due Partly higher XX.X%, Banking. credit acquisitions activities. by year-over-year, from reduction mix of down The revenues impact to reduced XX of businesses year, of basis growth approximately to gains with Global corporations. margin the versus in driven basis ratio X% higher Banking offsetting a net well last as impact interest by of very up loan on The Markets and investments PCL ratio the the lower impact from a from growth Non-interest further we from adjusted negative was and banking translations. personal net year. primarily management interest of Bank lending decrease the On X% and of impaired There was Banking The evolution acquisitions regulatory lower and lower increase assets. The impaired equity in quarter. reported of solid, the and XX business basis reversals impact and basis of on approximately savings of basis. income and an offsetting The were and growth. was strong X% income points, $XX common loan CETX Partly partly performing commercial of was retail net International points XX.X%, on earnings foreign securities, adjusted remaining the last basis credit from on of HollisWealth decrease income. growth year. X Revenues acquisitions, PCL or last Banking, mainly quality and XX both ratio the our XX% foreign Partly XX CETX line gain expenses reported quarter. the total the X% translations. compared banking this in offset increased were Net an risk-weighted business offsetting points. capital Expenses then initiatives. non-interest over strong trading banking currency and in sale The which The increased income in and provisions business impact technology which asset approximately to completion last Bank capital ratio due in and by of fees,

market quarter assets reduced X%, elevated by billion, due declined approximately primarily changes last $XX trading positioning book or risk-weighted and quarter. in the risk to This other were that

loans credit offset fewer quality organic and increases impacts, asset favorable in growth. partly defaulted by translation exchange other Foreign

shares transactions a XXXX for generation. total of selective closing we impact in the X.X non-core and million divestitures be offset CETX by in million capital expected repurchased quarter, of to $X shares XXXX. During is strong The common internal

equity common X is XXXX. to remain about the XX% expected result, a As ratio Tier through

investments margin or to income year-over-year, credit acquisitions for from reported on that grew by and growth gain income previously of from X% acquisition-related costs. now increases. regulatory interest for improved credit year. was X increases X%, adjusted but increased revenues operating year-over-year, X% loan basis, up this on growth spreads loan was lower expansion, beginning margin margins strong X growth, and $X.X points remained were in deposit strong of the of were Full-year of impact X% due expenses and improved we lowest asset X offset solid by XX.X% X% operating and at higher single-digit positive with net results Loans basis Canadian of growth reflect income point, year-over-year offset leverage. by Deposit initiatives. basis mortgages estate residential card up business basis of results continued growth last of was to line due losses mortgages an and Banking net last credit points spreads. quarter was income acceptances increased fees, technology X% Non-interest year-over-year. at card The X% of deposits, Sequentially, of up to XX. adjusted last quarter-over-quarter. at primarily the credit rate to line provision strong loans The XX XX%. reflecting Turning impaired Full-year down The was X.X%. from in year, on the performance HollisWealth Bank residential was in points surpassing Canada interest year-over-year, X%. productivity by mortgage credit partly X The gains. driven On indicated. basis leverage results due Non-interest offset growth growth. increased basis partly Slide by up card real billion, mid on marginally revenues and point adjusting impact ratio the credit business net year-over-year, improved sale adjusted X% the The and year, division’s X% X% residential

and volume excluding to loans acquisitions provision for business BBVA the points XX%, indicated the on XX% adjusted QX XX% $XXX of growth, up a XX% technology for basis higher impact ratio ratio year-over-year X% XX The were X the primarily combinations follow impact basis. year-over-year, or period loss year-over-year. currency a were we Turning on business of Pacific Net driven impact XX%, reflected are to due positive year-over-year. of was earnings incremental in and points. Operating impaired a to X.XX% year-over-year, Banking. were approximately benefits business XXXX basis the both the International of next down for QX inflation or X% million of results increased quarter. and earnings of impact million the of acquisition, to Bank. credit last growth The XX% X% and for or retail the of productivity growth the adjusting mix slide on as strong up Adjusting year alignment basis Loans on bolstered the The and of Earnings related strong the the had and acquisitions. year, points up good the leading XX%, the reported adjusted PCL $XXX Alliance of points. reporting The was ago, with credit M&A. the basis the grew an which leverage Alliance asset increase for region benefits comments up My XX% of year-over-year, revenue adjusted in margin XX%. ratio grew Alliance strong recently the by Expenses to a the compared XXX Alliance, excluding benefits increase was Revenues the benefit XX% in was operating adjusting an credit or card the acquisitions. recent XX% income commercial. the XX growth strong positive an quality in improved and of in costs. interest deposit strong Pacific M&A. last of leverage Pacific XX% closed of very by basis improvement full-year, acquisitions. in Pacific or for saw adjusting of X.X% by Loans net constant

X% growth moderated pace adjustments. turn to expectations. of United Moving fees, partly year-over-year, were by lower net ratio the expenses Markets. Net was improved compensation, lower advisory year. Expenses on The favorable activities. credit with by in underwriting X% line was PCL lower income interest technology interest to trading the of I’ll on year-over-year. Slide reversals fees. reflecting new interest benefit million of deposit regulatory well by performance-related impact corporate XX translation the Europe, and segment Banking partly year-over-year, the last impaired provisions include by operating X% basis Global investments. mainly and and offset The offset net income. lower our marginally Non- lower Slide improvement down non-interest XX, were down of group in currency interest lower line $XXX points offset up year-over-year. higher loan lower lending of also recoveries, year-over-year in units down partly The results Revenues income treasury, year-over-year, now foreign due Stronger primarily X% certain was incorporates the provision income income. revenues other was offset and loan were costs of were asset-liability margins. net as regulatory as results by to Net The with which driven States. and The have by and smaller technology in XX, impact management and driven

investment it risk lower net my interest financial I’ll loss net year-over-year turn increased management. a lower over net loss lower reported due completes the to of the Daniel, discuss segment net in other to from non-interest significantly quarter. securities million our on expenses. gains This partly asset-liability by results. management review segment of and The sale $XX of who’ll activities, this The income offset now

Daniel Moore

Raj, Slide we’ll XX. now to you, Thank turn and

We fundamentals Bank’s of the with the are portfolio. comfortable risk

Stage the a compared basis performing we in X PCL a basis XXXX, quarter. year on on performing a in Canadian improvements as business and mainly loss last is the commercial results quarter X by acquired as of third commercial which included million loans, primarily credit commercial loans impact provision, and relative ratio portfolio, impaired in higher were the was stable sale driven International the the in also on the On portfolio. points driven ratio and losses personal loan was reversal ago. Day required last quarter PCL hurricane-related $XX the period net excluding ratios stable to total last higher by book reversal versus and no the provisions. to was stable loans retail in longer referred are quality comparable Our our all-bank impaired asset quarter, The to the XX seeing Overall, Banking, loan credit banking

International Moving on to Banking.

provisions to see trends good the impaired to continue diversification. recoveries. We reversals impaired primarily the In in were and by lower were recoveries higher driven of quality of offset mainly while Europe, Markets, losses the to due full partly new Higher higher due credit and Banking provisions, driven by benefits acquisitions, impact were quarter provisions provision retail by commercial in our U.S. Global

relating we took which the this is Bank our we expect quarter, and restructuring profitability provisions operations additional return year. also This debt there not the full to Barbados, material to to to in

other declined last growth at $XXX last metrics, billion $X.X and formations loans gross impaired quarter, credit ratio to net looking versus declined nearest Now the from two-year million while average. were quarter, $X.X loans of impaired billion

XX. Slide Turning now to

impaired points, the by driven points in in last over Rico last America. ratio each portfolio to due can XXX improvements point You Canadian and from ratios quarter. the for trend of Banking’s XX the declined Latin XXX impaired loss credit our to versus points quarter X PCL recoveries commercial basis loss Banking’s businesses. basis increased Puerto basis ratio see in International recent in basis

PCL International and adjusted by of points As the diversification reflect to Overall, to our of believe continue ratio underlying ratio our remains benefits broad a basis portfolios basis declined total Banking’s credit last that PCL we the quarter. performance total compared strong. XX result, XXX points

Slide XX. Turning to

businesses. can recent trend write-off net each in You see the of our ratios for

declined and continue. Looking been focus on At due due write-offs. Banking, expect losses over in due quarters our current unsecured stable, to to that net provide collection write-off in net approximately ratio of year-over-year, the ratio and would portfolio us points X Canadian eight last trend primarily levels, up-tiering our our In five to seen we enhanced to quarters, continued improvements customers relatively have our lending the basis retail worth strategies. coverage portfolio of we has our

manage We a prepared continue risk we responsible a in a are manner. well and economic scenarios, of future prudent for variety in and will to

Slide Turning XX. to

in in providing are a of We view prices decline energy exposures Canada. the the recent our sector, oil in differentials here given rising and

As energy of one-fifth producers. see, is production exploration lending approximately and to Canadian you can our

have a billion, billion, our Western to our portfolio with We of analysis sources their customers, X% at revenue determined from is almost or Select portion thorough of portfolio have of diversified $X.X traded had Of have Canada XX% WCS. investment-grade and conducted coming a or $X.X nearly some WCS. only approximately a that revenue exposure corporate who publicly

Finally, to to related XXXX, we underwriting as changed. the XXXX and portfolio our from have in we better back expected. experience not remains of prices the our with our Today, portfolio quality, and look our lost energy experience, lower than high was nature strong which high-quality standards comfort draw

Turning our lines, credit be portfolio. in improvements portfolio, the improvement Brian year-over-year, of in managing and vigilant Delinquencies in represents our XX% including over I’ll stable to in now basis unsecured delinquency XX back over call cards XX% improvement this points to retail. now is XXX remarks. which to some as XX-plus-day closing we continue quality points basis for Alberta turn for of credit with secured. are retail

Brian Porter

Daniel. you, Thank

call open thoughts to for Before we provide up our questions, I’d outlook like on the for some XXXX.

well. that The to our we exceed perform integration outlook economic strongly our objectives. in and proceeding will continue again is acquisitions key markets of medium-term positive. optimistic is our The are We

impact and is accelerating. digital strong efforts is position the of capital our Our

environment, integrate be for the us a focus year acquisitions. successfully for area to is margins. rate positive in interest recent are important will ahead rising in An which our We of

the potential XXXX, revenue This think Bank about we acquisitions. will fact, In the unlocking earnings the be of to as a in and integration full for key critical theme

some target to XXXX. most by macro productivity the our towards definition with XX% mindful advance the our higher which anchor XX% Americas, the single-digit advisors. XXX we and emerging by card growth On where people, encouraged the Identifying million Bank. his analytics increase business Canadian of driving Alliance ex-wealth, specific small we Integrating margin team on on productivity will primary mix, of and acquiring are in higher customers. focused higher we of increase now recent data for Canadian Banking lines. retention including customers of expense economic acquisitions in I provide primary our outlook improved strong each conditions driving new leveraging Banking Pacific optimizing for our credit core growth rates and businesses banking, are be comments is opportunities our product for and to mid supported a prudently positive leading our and revenue in risks, its in business business Wealth, customers. countries, will also maintaining of while an the while by in region our front, James are is deposits,

Banking higher we XXXX. volumes, we in remain cards digits are see Overall, in XXXX. line generate target organic X%-plus in in Canadian expect higher which to exact medium-term the our growth and magnitude XXXX, margins mid by growth single in expected to any with credit rate are will in a and timing to XXXX, business expected margin increases Residential for determinant expect supported key We of grow increase. rates. be at The also be of mortgages higher to of interest robust

will singularly outlook For Chile, positive. focused on Dominican Banking International integrating acquisitions continues in International our be Colombia In remain XXXX, Peru, to Banking, and the recent Republic. the

commercial key Our time. management than productivity will remain banking focus. this pipeline at we is higher be improvements in of priority continue Expense corporate a saw to business and last a levels year and

system currency core growth for confident banking for help Overall, in Our X%. International Banking, growth caused will Mexico remain of we earnings productivity improvement. which further the constant new medium-term drive in outlook

to Banking grow businesses in Markets, Turning we to XXXX. and Global our expect

to some our have conditions, some as results market of We business. seen repositioning well weaker due challenging as

the our businesses Makoto we repositioning given of our we results, completed Asia Looking expect finance improved trade ahead, have business. and

ability are Day better and objectives. our look remains our provide to our achieve investment for Bank we we the Canada trading In improved our and our country. internationally, banking in hosting in external to the Chile presence medium-term In understanding confident business. business conditions We in building in market to also here markets out of first Investor our our capital expect corporate stakeholders XXXX, forward summary, and financial and a

we the December. more detailed BBVA in the and for to with Importantly, our in demonstrate with a The – our call capabilities Relations a have course in the to provide due save sending of I’ll Raj the will will opportunity out update later back progress Chile date Investor the Internet be team integration region. Q&A. And that, turn

Raj Viswanathan

call. everyone the questions. We’ll phone, on one our participate concludes be your yourself That have we to Operator, first pleased limit the Brian. Thanks, the then opportunity to take to please? now allow prepared in Please the can remarks. to question and question rejoin queue the

Operator

you. Thank

now Please from CIBC our will Capital Markets. question first take go ahead. We Sedran of Robert

Robert Sedran

competitive know perhaps there. in it’s been Okay, is doing Brian little Can it morning. weakness – now? the bit are mid about marginal adding about there think right A, and how mortgage what’s a environment bit importantly going considering to more of this a you’re at good I and not I sort margin them mortgage I’ll the that point, for hasn’t of the least few growth on there the at around and seasonal quarter singles you’re getting is the on Hi, this And James again. start that you mortgage XXXX, front, B, bring little that talk idea a some mentioned back?

James O’Sullivan

too, Good Rob. Sure. Happy morning.

say, expected. less as more would I continues, or growth mortgage residential So

So in the for full-year. X% X% we year-over-year and had growth balances average

in our on delivered we’ve think I So and outlook this plans regard our overall.

mid is also growth XXXX, single-digit think For outlook. our I

see of lower-end be today. that as if X%, So world we to the that thinking the Rob, X% about I’d of kind range,

interest mortgage So reduction I to room a depending income we calls has in growth think, I million growth previous net $XX mortgage here there’s million X% about decelerate overall. to levels for And impact from $XX that you, the spread. XXXX’s on some on this on remind discussed

So certainly. it’s be can replaced something that

very On that the the both market, been would market mortgage rates disruptive XXXX defending spent run. much a industry that share rates. and environment, both the short participants My seeing positive we’re probably have and had before they look, and long-term in BXX the say BXX rising mortgage competitive readily we of think higher I competitive view is in necessary

always continue also. risk declining we We’ve reward. So we’ll assessment look, our assessment our see to XXXX but risk, modest how be our governed appetite seen see will of unfolds. we’ve reward by that of said recently, And, here,

of to up like channel strategy. three sum talked the So position. we past on We’ve our our sort mortgages, about in

be us, to You would participant in three expect industry overall. should a this top I say,

Robert Sedran

you talk that in whole, enough manageable interest is terms that reward to XXXX? color you business, marginal margin margin should it see still for outlook do rise margin or impact and the a and for about we the as James, segment the a the expecting net to be think in the is of it

James O’Sullivan

But So each and it we peel X if back, I lost sequentially. basis on X basis we sequentially broker it margin mortgages credit on you X down basis of stable, as point describe points point of if you deposits. look at quarter-over-quarter, and was gained cards kind

by big the book – magnitude are largest mortgages the a the you book, as know. So quite it’s

fact, in certainly our said So Having believe and, rate XXXX, it direction the interest quarter. Rob, each and outlook. potential the we given does margin is up have influence does for every that,

of neutral the so rate We’re X.X%. rate range, the increases planning to that’s for low-end overnight

XXXX. expect So expansion in we margin good

we pretty going XXXX. we we’d in offset I in that expansion deposits. in in last this have on fact, impressive mortgage are faster is, saw loan it the Deposits think, than spot year-over-year, this margin And growth. And that X% averages. I XXXX saw a growing quarter, see more competitive what’s market than you at basis quarter, that’s think very to we expect momentum the In now

competitive help be look, So deposits a going in are but going dynamics momentum factor certainly is for margin our overall. to sure, to

Robert Sedran

you. All helpful. Thank

Raj Viswanathan

we question can the phone, the have next please? on Operator,

Operator

from go next take Meny question of sir. now Please will We Securities. ahead, Grauman our Cormark

Meny Grauman

markets instance, to you’re bulk on other look as strategy morning. good earlier hand the your you in in how those would that this for know Caribbean? then and Hi, at change And morning? want I describe nine divest up Dominican specifically, considerations the the you that the revealed in you the to deciding,

Brian Porter

bulk it’s for that’s we’ve dial this retained the have I’m comment as the at the you And of deem I’ll strategy to the that well. XX% our shareholders. we core we sure you thank customers geographies turn then and strikes the businesses – population. of that in start, look our and question. in Yes, for Brian. Caribbean, a we can our Meny, what not scale at important and When get up where and and markets

the insurance made is business, and the that goes, sense the of for we’ve a X.X want us didn’t in business. business. as terms the contrast DR, it’s that But to relatively to dispose country a that XX We DR far in off people is Jamaica bit people. of over business. different Jamaica. a million always million and to to in be said small underwriting so distribution is This As in be the we business want

over over scale. last So It a growth XX years market. for It dynamic has average has the We’ve GDP of DR has operated there size. years. X.X%. It’s XX the

in DR, there. comfortable and our we We’re growing operating look to very the forward business

Meny Grauman

as in to the these motivation understand, just main is terms is of timing as of the it really just capital motivation? the announcements, here And a follow-up trying

Brian Porter

strategy, No, it’s core Meny.

as for we’re our the XX in non-core the number exact the been years, And for my think redeploying or major of we said geographies we’ve viewed course this businesses text, markets working our five businesses. that capital in so as I bank we’ve last and and is I on the sometime. that over And major exited

Meny Grauman

you. Thank

Raj Viswanathan

the we can next question please? phone, from Operator, have

Operator

go We now question Steve Capital. sir. take of ahead, our Please will Eight from Theriault next

Steve Theriault

follow-up higher-margin for much. What a you’d higher cards some in But if terms a cards? question for I about I cashback this a a focus James is there to Nacho. next noticed Rob’s expect that on – mentioned question to your I’ve you of second, on that gas could helping just very about next products what margin quarter, That Brian with year, have promotional cards? talked or year. here the little the credit as Thanks upside indicative you card. activity deposits on growth that push bit on X% is of in

James O’Sullivan

a of Hopefully, upside. bit

a X% its for card, we up about the than And more are but whole actually whole year-over-year,. volumes balances bit X% XX% are year. year. Tangerine’s up very balances Purchase quite credit are much for talked average So, that. up about the haven’t

be A&B have we most working focus limit extending customers our for as digits base. worthy And a better we customer So, customers. on job ongoing single think increases, of targeting with Moore’s credit a example, with and of year, credit particular about we’d team, high next credit and card to growth thinking the risk about for better current done analytics credit A&B particular – focus Daniel a

Steve Theriault

upside I’d And your margin cards? to some hear more like discussion expect from we’ll margin there’s in potentially then

Brian Porter

Yes, absolutely.

as these as I and as business – certainly cards margin evolves, rates execute evolves will accretive plans. but to mix be So will evolve we margin

Steve Theriault

are the maybe Okay. this on in it year, an to Brian back comments. But acquisitions on operating some that time next And in does with a we his expect outlook of closed take next or closing are back-half in year, expenses, international, you’ve for it integrations little then Expenses and just acquisitions on Nacho. quickly leverage that of – touched the year, should the some a still of got get in front-half ongoing? bit track positive

Ignacio Nacho Deschamps

you, Thank Steve.

with management leverage. pleased this year X% of we about very are we While have and the operating expenses

Pacific Alliance IB. and deposit economic growth, and countries growth positive our Going on Pacific earnings growth for Overall, Alliance forward, we we will guidance are to in we confident support confident X%. are the the we’ll countries better our X% growth, that operating continue of leverage. And conditions deliver around asset expect our

Steve Theriault

saw year Are that growth expected growth? we down that little next months on is three XXXX what – And any deliver the from can ago. for notice less X% BBVA, maybe GDP just Nacho, on Chile with color for a I you feeling you GDP in enthusiastic lower the almost what is adding for Chile or

Ignacio Nacho Deschamps

about No, I’m feeling very Chile. confident

QX merger place. days took the update closed after in on the you Let XX me transaction

just you give me Let a few examples of progress. the

levels organization is management in the The of customers. focused business first the team integrated into have in been that and our one three fully

We customer had no have attrition.

we expected our to X% Next year, assets. grow

environment. positive There focused was Finance, of in be fully to the the growth in a additional were X% President and going XX,XXX Brian some Chile but between XX% we’ll there integration. important of Minister And next early grow very and to is is for very year, able myself and a customers, of above thinking, expectation XX%. growth, event Chile business year we’re our to be this strong we’re Now with

synergies to $XX we also $XX first the around overall, of pre-tax. expect to our earnings capture pickup And around We expect million million during be year.

very So going development positive very integration and really a the well.

Brian Porter

and close GDP of is So that, will Steve, may, where with year Finance, the that just to Nacho at I the President Minister X%. and I growth add met to if out this

Next X.X%. year, is country’s forecast the

strong still So growth. GDP

Steve Theriault

you. Thank

Raj Viswanathan

can the please? Operator, we phone, the have next on question

Operator

question take We Capital next Doug will Please Markets. our ahead, Young go sir. Desjardins now from of

Doug Young

Hi, good morning.

overall earnings But the when seems on Alliance be Alliance like delta. do if I Pac four on to Latin it the just quarter, Pacific up and big the I compare countries, nicely. XX, a just Just I there looks it earnings at to then and for for countries look was Page America your

of of But And American just I’m to the was is back lines Caribbean? four here? envelope consolidate or along noise out there big again, calculation you. the to then here. the going four to regions outside of think opportunity or in and you of Thank smaller any same noise any what big operate get bumps to outside you Latin in did the the which these some did what regions in Latin countries, about smaller similar American in so the And of there that an Caribbean,

Brian Porter

operation, probably other exiting we’ve it’s category The in for which and as we investment-grade around and is very got well very smaller profitable that on noise business. there. And has don’t in America companies, where – is banking Latin very small wholesale well providing services. is corporate public that It’s in run. and only that us Uruguay profitable banking, country contemplate fit Brazil, The business investment we’re operation our focused would that a great been really

So that we It’s like consistently profitable. business.

the non-core geographies business or they divestitures possible of years. hear Latin in where and We’ve terms I terms from Pacific you’ll America pertain don’t Alliance. said, but XXXX, in us year, this plan, in XX our to five exited couple more we’ve in go got last So, or to more a as of

Ignacio Nacho Deschamps

X% strong. XX% of sorry, deposits, in around our strong growth have I pickup – growth a is add, growth development XX%, if this Full a Alliance Pacific And in been growing – very of really positive commercial Q-over-Q. very in focus the in XX% retail, countries year-over-year. Brian, deposit in been And term X% is and and assets nice may our retail was earnings and has

confident Pacific countries our So on forward. guidance we for are Alliance the going

Doug Young

in was just was me quarter while the The have last And from one Chile, I you, for I’m $XX month, Nacho, just BBVA I follow-up. it correct wrong. What quarter it QX? one just quick just earnings for million, if think

Ignacio Nacho Deschamps

million. $XX

Doug Young

Great. Thank you.

James O’Sullivan

have we the please? can on the question next Operator, phone,

Operator

go ahead, now Markets. sir. our of will We Please question from RBC Capital take Mihelic Darko next

Darko Mihelic

Hi. energy a Thank little the you. Good into exposures to here. morning. dive just A questions bit. I wanted few

Is scenario on a assumptions sort stressed give the ideas allowances? you obviously can to I the prices, if nat guess, what of oil you’re or provided as could X or sort WCS, kind but well. to sort – of that us Stage guys the I outlook. a using I Is underlying or time, have some your of just you and a an anything we bit gas it as of X Stage question there of assumptions wonder provide I the is revisit. last relates And we basis. First, had concern go-forward mean,

Daniel Moore

here. Sure, Darko. Thank It’s for Moore questions. you Daniel the

been see in have and and of the we is most book obviously here, draw investment-grade well quality. would drives nat the growth for our disclosure the stress secondly, see I both We’ve that XX% Eco comfort from portfolios we WCS important material with focused either on that impact quality portfolio, So move thing the it first very, a the in regularly ECLs very book book. WTI in from can as for and gas, as our you you portfolios. the stress results, gas we outlook that in the our we the see don’t from do you or on from can

we think conservatively – for so and our our book And right we exposure. adequately are positioned now,

Darko Mihelic

view the there were would $XXX if at would been of was cumulative a these of, period it I’m is, to to over presumably prices years. there mean, in losses of million a couple would like getting right? That now, like be different of guess, such $XXX million I thing. past, no at a I what be stay sort levels, have of

assume for prices to Stage You would in – Stage fact, as take today. were stayed X X and if hit you you that would, the take low,

if – have book interpret this of And losses to no still built what reconcile these the there’s trying that that? recognized, sort of to I that, am been that I just just kind stay, I prices assume we in so you’re effectively should mean,

Daniel Moore

E&P look which authorizations XX% Both investment-grade. public to at on from from upstream appropriate the companies Yes. lagging positive XX% exposed WCS, perspective. WCS, look and There and IFRS a is crack that that E&P the benefit capacity to credit management adjustment we also Darko, internally – are and there there spread. are the market, of to access exposure extra many we refining X. the We is our see include – we when There’s of nature. for have But exercise operations right now from our focus conservative overall will book when at wider is that where again, models that we

that of look to exposures a to to can material And is exposed clientele. to as be his I that So today. Dieter are companies historically only some our E&P see see that’s position and we seeing it investment to he any Perhaps WCS. overall losses over X% what hand wouldn’t are us for to where

Dieter Jentsch

I And period to you and of that disciplined our the teams both since I feel up-tiered managing business very years. have even of I’m market. that been of never – our revenue-efficient. confident companies very say last a we the say we’ve cost-conscious a and And And the and with to have names XXXX, how portfolio a majority the you, of strong we’re see this settlement look, balance to XXXX And bank. as I’ve view they commodities withstand deal management have in very the this to proud and – in know are three And our that we that Darko, very discipline counterparties. we deployment. will sheets capital to being

Darko Mihelic

helpful. it, very appreciate that. just on one question then that’s Daniel. Okay, And I last

respect there’s WCS a to this it bit in Alberta that and with of with oil. stays a Just if with low, correlation unemployment we know low

is So – rising. overall upbeat view. and I GDP In actually other have noticed that words, you Canada’s an

and I’m And curious assuming So with Alberta, XX% the the an unemployment is in guess I books? to Alberta? enough exposure – impact in that’s you in are just uptick not material

Daniel Moore

be in perspective Darko, us that XX% retail unemployment driver. portfolio secured. not of one biggest today, you obviously, thing Yes, from unemployment is gives will the But we’re a in our we an there, know, Alberta how And uptick is closely. as that comfort, seeing very but monitor situation

that put derisking The other the have are that place that’s portfolio. analytics place and comfort in Alberta attention I’ll off key her this since eyes and portfolio The book derisking that, we quality credit measures recession been in after from that XXXX, paying took is to in that’s XXXX the message collections, we’ve that and still we the in significant scoring today, retail investments we of in we never place and in have with in close – position you a leave road.

forward. as are will measures paying proactive going James Our said, to continue and dividends, it

Darko Mihelic

Thanks very Okay. much.

Raj Viswanathan

please? question we have phone, can the the on next Operator,

Operator

take sir. from of We Ebrahim Bank Please ahead, will go next Merrill Lynch. our of now question Poonawala America

Ebrahim Poonawala

I around Raj, the I first, margin the with guess, Canada. to One, just Good question follow-up in want morning.

it’s sounds in for hike should don’t a be the higher rate that get first-half beneficial clear that if So Canadian we margin Where expectations to rate leave of next in year? it margin. – What your does the Banking? the the

Raj Viswanathan

moving pieces It’s one than XXXX XXXX. more many front – difficult answer. scenario are There I of very we have in have seen not a not in margin where me, that’s expansion a here. to do Yes. so

dynamics that going I don’t play in deposit a the of timing competitive this rate we I at and clearly think various ball and be acknowledging factor are kind and of say lending readily that’s to point markets crystal all increases can here. have significant a

Ebrahim Poonawala

growth color Is Having on said it about is deposit the growth loan competition the good at relative provided been robust. incremental assume the said talk fourth margin on you quarter? you you happening in like that, Can was spreads that safe to And to pricing the asset where deposit pricing. that side? the has better

Raj Viswanathan

there it’s what deposits competitive quite would Well, I on is, too. say

both a strongly be believe through the to retail lens, be increasing of And an this economic and an We those. remain think, deposit seeing source Through to conversation looks as preference our a so which value higher. out just as go money we’re there. I rising a I’m I lot sure of rates we’re shareholders. this clearly institutions, corporate very seeing, that an part Through lens, and between are, institutions banking deposits strategy. of move should that the customer look continue we campaigns seeing key But want we for feel through priority. a lens, institutions, lens. at funding our term We are three funding deposits got investment within rate is includes good we’re institutions Within lens between you and at a primary to in deposits lens, highlight. through let’s we customer moving, through lens, that to a in, look the it rate economic environment

to to that’s loan deposit – XXXX with into exceed very a going growth growth, what we to So, achieve. seek have we’re much continue we plan

Ebrahim Poonawala

add you’re of on relatively X.XX% Nacho, should but And this, who kind we International it to Got the still the sort relative to one wants trend sort expectations fourth expect quarter. it. not are Banking that guess, lower? margin of moving Is to one, of to or I in flat, to the

Ignacio Nacho Deschamps

No.

Our have XX to variation last been in our the XX we’re markets like quarter, they due footprint. plus/minus are stable bps

quarter, has the country. of Chile. assets Now BBVA It This lower in risk, is we a incorporated matured this lower have more margins.

again, margin plus/minus a So stable now to is XX bps expect we and variation. X.XX%, our with that be going forward,

Ebrahim Poonawala

some And that the change political be more you thoughts would pickup near-term, to last we’ve that – Nacho. of seen any obviously, does mean, that, few thought over for Mexico? Any helpful? how in on cause weeks. thanks approach terms you risk in And – I growth any the

Ignacio Nacho Deschamps

Well, to like the of leverage has only he Minister of would mentioned Scotiabank I the industry publicly, operating Canada at country, President seven the with Obrador highlight future XX%. Toronto, in sent and where situation. that transition importance of relationship mission conversation funds. We due a us Canada. the to seen and few to we Economy few Mexico ministers. We negative productive the was the over see before around the X, his growth due of the a inauguration, above December do government quarters a NAFTA on well the growth the where continue is to earnings some full-year this place We to XX%, to sentiment have in we really last political days going in of very strong take Mexico. of market The hosted of – pension here Lopez and had loan automotive also and

So have say, course, Minister noise to also there Finance President of we and quick his the been some that clarify.

commitment have public solid finances. a We expressed and fundamentals disciplined with macroeconomic

Mexico to we medium-term continue So forward. an for profile going see growth attractive

Ebrahim Poonawala

That’s helpful. Thank you.

Raj Viswanathan

please? have we next Operator, on question the can phone, the

Operator

National take Dechaine go Bank now question will Please We our sir. next from Gabriel of ahead, Finance.

Gabriel Dechaine

the morning. year more said and you if of the I’m outside ahead upon questions might update you on touched wondering LatAm. the be there’s an in Brian, disposition Good situation? earlier, And, Thanachart there

Brian Porter

know. that, markets, well goes and the as businesses. in started program, said, pattern specifics, our bank we and as, you here a get as we’re five years through But Gabriel, it major it three we’re can’t I to there’s back I geographies number a Chile. into on ago, the we’re is focusing theme And

DR. in We’ll bank business institutional the bank the we would the of high network Peru. said, category. added businesses. in that number to as We’ve and the be three We’re wealth number in the three our we terms

of generate we’ve capital ability that. has focused been And the integration. be always, year, internally. rebuild ahead bank our proud strategy this and a this capital on of is So lot on we’re to bang of it’s plan, And to on going

for this more so you’ll quarters. an in and important And from year these XXXX to bed is acquisitions get hear us subsequent down,

Gabriel Dechaine

much or want big the this from from have Okay. next And commercial And sustaining Canadian Canada. your like getting the your and you is don’t driving growth did I in component it wondering outlook pretty then have we guys how one been lending commercial just out, to here, single seems I construction you you these growth quarter. growth XX, see that? well range, double-digit numbers on levels bank we’re – the for my across in what’s quite every the at the do supplement X% I’m see again, growth real estate I double-digit a group. that in has – of GDP and what’s Page the portfolio. when still And

the hear of strong. your growth? levels, either, to growth the sustainable And know to like be not mortgage with peak slowing, Thanks. looking So falling starts think. off I’d I it’s I is now How going driver that thoughts? economy don’t

Brian Porter

few a thoughts. Sure,

Riley’s you I me represented Chilean real thoughts couple then. the XX% that estate pretty I if let on of – consistently development, think, mean, first, of a here has you business give So about overall.

high, observation, we companies Real country low. our is that tight. investing. quite markets as travel are are the is and utilization Capacity labor rates look, So, are interest

investing this. about nominal the good OECD in loan GDP, XXXXs, I time of or XXXX. loan business. GDP kind run I the their be through decade, of So early The started on view they across time we we’ve late than than the saw growth growth? owners not observation how to in relative XXXXs when have would this growth is economists a to of And this GDP are growth question our early concluded business late and it that for many exceed look seen through Gabriel, long – into is it their to this faster question business in be a – this business does countries. XXXXs Canada, XXXXs, speak nominal did levels business high can this And typically the – think loan more say, the

geographically and period a kind you that invest of we’ve what agriculture as and So past. the and our continue. there’s in that’s country this businesses together And about can talked investment is put including of in planning of we all that number areas we’re in heightened that, a of different on should sectorally, view across

Gabriel Dechaine

doesn’t mortgage acceleration have The in growth with or trickle areas? into really lending other any effect commercial wholesale

Brian Porter

going so is wouldn’t But on say they’re are real our of much estate the markets I that I not commercial to to disconnected. kind we are – focused I’m year. think expecting look, business our That very lending say, in overall the But surprised of it – commercial and we’ve a as special well real would estate business, and Tier be it grow all developers connected, XX% developers in X as next X financing moderated business, development Vancouver. focus these got Toronto small it’s Tier somewhat. I I if business days. said, moderated of on

for plan if it want to loan year. lending, So – our overall, double-digit you growth business it’s next Gabriel, see that, we is call

Gabriel Dechaine

here. taking for questions Okay. the over time Thanks

Raj Viswanathan

question the on the we can Operator, Okay. next have please? phone,

Operator

question will next now from Canaccord take of our We Chan Genuity. Scott

– please sir. ahead, We will go

Scott Chan

Good the over switch maybe big volatility and October. we’ve with since wealth Perhaps market I’ll morning. picture seen just to management,

net the Thank well? the institutional in related of Just MD on commentary flows JS terms And retail there’s you. to kind and of side. incremental as if any and

Brian Porter

Yes.

look, and the disposition XX% activity acquisition earnings the might is is HollisWealth. wealth at harder we that So Jarislowsky XX% to see year-over-year business organic past But for in full-year. what performing and well. if on the wealth, looked we and with I year Fraser up the wealth, the is MD, with think call It over business overall

underneath are of different management going wealth the strong. of Clearly So, that, there the a things particularly year on. think side overall business. organic is on business The to – strong it I is a solid bit

is, So discussed as need we’ve past, solutions in clearly of side is the asset of all delivering I’d say, want earning this clients and advice business to the of driver currently The holistically forward. who management going organization and that and headwinds is a product, good we But growth. of in a product modest to very more think that too channels you’re we sell-through. lot certainly good think and dealing overall, it have familiar levels performance with with the has of I retail

X% particular, in Organic organic year-over-year. year-over-year. X% you AUM, So, down wealth that in probably again, if at look down AUA would be about

fall the a but are So here, lower funds the business and contributing market solid printed to mutual year. pretty sales

Job well. Fraser intention On and very very, we’re going a is growth point. say, the executing head much said October defining and our is acquisition, on That’s one XXXX. as the we going two And plans retention. job MD that I’d very in into in MD, to this that’s the and to pleased Financial number closed to X. be reach Jarislowsky I’ve past past, very believe I we’ve said

Gabriel Dechaine

much. helpful. Perfect. Thank That’s you very very

Raj Viswanathan

on have Operator, next question please? the can phone, the we

Operator

BMO Sohrab question go Capital will ahead, We our of next sir. Markets. now Please from take Movahedi

Sohrab Movahedi

in closer just to I got buybacks pick plan the now to quarter, know million forma year. on the that million expect are Do I pro $X wanted the in capital a XX.X%? see relative the pace that basis you’ve now? where you $X up Brian, $X to capital deployment you to did million or

Brian Porter

as extremely option anything certainly year. Yes, with for acquiring we stock business always And trading we’re the Sohrab, us. attractive where in it’s this of not the in toolbox, and the an view that’s it is, it and

prior purchased. As we here. you strong internally what generate of as capital integrating question, have And business ability well I know, said a we’ve we’re to in the

here deploying comfortable and option buybacks levels is it very share and certainly that And we’re with so, an our capital have. we

Sohrab Movahedi

won’t And the you’ve should have will have – about? we earnings they think any implications small dispositions that noted, that they

Brian Porter

It’s Sohrab. material, not

Sohrab Movahedi

you. Thank

Raj Viswanathan

everyone, forward again great February for year. you, day. and in speaking next Thank look today, call a Have participating to our you with in we

The Bank of Nova Scotia (BNS) 27 Nov 182018 Q4 Earnings call transcript