BNS - Earnings call transcript Q1 2019 | The Bank of Nova Scotia

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Philip Smith

Good morning, and welcome to Scotiabank’s 2019 First Quarter Results Presentation. My name is Philip 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 are Scotiabank’s business line group heads: James O’Sullivan from Canadian Banking; Nacho Deschamps from International Banking; and Jake Lawrence and James Neate 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 Thank on be slide morning, starting will you, good Phil and everyone. X.

This execution our a de-risk increase objectives, During if Thanachart us stronger Bank which completed, quarter, the our X ratio, common for continued non-binding we in a most with footprint transaction, by and strategy us morning, further to allow progress investments This monetize demonstrated first our strategy bank. Bank equity achieving by simplify equity larger, to tier Bank. and the memorandum a position the of retaining interest in operations that would the announcing in has growth, of combined while even understanding we of adapted and several important Thai signed smaller further Bank combine bank. our Military the Thanachart

In quarter, earnings the of terms diluted and bank in per $X.XX. earnings the performance X.X billion adjusted of delivered our financial of share

on shareholders share. return $X.XX dividend are quarterly increasing $X.XX equity to the results, Based X% was our these Our on per increase a This we year. represents to over by XX.X%. prior

negatively positive while basis, businesses. earnings growth X%, up year-over-year digit XX% assets invest volatility businesses operating in up strong up revenue, on banking leverage. the to of a International market impacted While our double in experienced and some in quarter, and we delivered growth still continuing X% our deposits

and work their for acquisitions important achieving this the investment hard Higher in their our in our reach and impact trillion businesses. first tracking very strong and the in be assets would loyalty expenses integration well. bank to time. for of reflected ratios like continued I our are allows the continue thank efforts trust milestone. capital to Our for and This dedication growth employees $X customers to our and

clients and will We also have Financial announced the Raj bank the are say integration five assets, and more we strategically asset being experiencing moment. previously Chile quality. to have Alliance, demonstrated efforts markets outlined. in To previously of realized, the the have key we excellent remain and acquisitions, our good BBVA of market synergies our balance progress, Pacific integrating growth earnings our in over while for priorities progress on recap, year. MD share key both These a are years, retention increase to scale and and Canada last improving across invested as and

by either bank XX selling higher grade operations our that rated unrated, Chile. and the simplified grade redeploying countries Canada have such were in for in jurisdictions We while investment as rated capital non-investment

announced fall, banking Republic the addition in Salvador. we our In business to El last we and our are insurance Dominican in and pension divestitures selling operations

consistently invested to strengthened customers. the we bank, functions include and a security These the our Finally, in cyber technology investments investments in the digitization AML and have core in and bank. of bank protect the of

and improved As bank strategy, returns. long positioned growth shareholder better consistent the continue be we for our term execute will to

guidance in The Turning some saw to quality. lines, of strong a Canadian deposit our business in brief signs of and to moderation few had range. credit We and low our comments. mortgage loan good make with growth I'd like growth, the end Bank line

volatile The net acquisitions. period from markets, contribution growth up the the year, also quarter. with remains good last tight quarter, BXX Given to environment were very demand strong solid with and forward of in same Wealth competitive demonstrated year-over-year and the income mortgage asset our guidelines. X% due pull the stable during Management spreads levels in the despite

was to year. last compared demonstrating growth a Our highlight, private strong banking segment very

in awards quarter. operating by leverage. a our continued positive increasing the of International recognized delivering strong overall in and the management banking’s wealth quarter earnings Importantly, industry business XX% first performance number with first was the quality of performance record

continuing growth with the are contributing Our acquisitions in or to line our expectations.

our volatility corporate and global over for January challenging US Canada trading bank impacted stronger conditions, industry the both markets within results We delivered are we've and countries. the in positive Despite and these business. quarter results better overall directly Pacific growth seeing fundamentals and Alliance secondary the and this year. of remainder the in in Capital strong the our in loan was the the for our support outlook markets origination businesses

the announced banking capital deployment. Our in with solutions variety our bank digital and payments further Thanachart XX.X% in XX.X% data approximately would which accelerator of well, capital digital sales XX even cyber another areas, and adoption. establishment develop our of or our tier Bank in security. interest continues of to of This fintech for basis Mexico digital provide technology. steady pro well progress common City, increase remains example with represents basis. position a forma in a points including strategy flexibility analytics, leadership the commitment recently to retail will yet monetization digital The We and of The ratio electronic progress and one our capitalized equity by a greater on in

I'll across our which region the In we balance immigration, creation in constructive for our positive a GDP growth in economic recent economy. Canadian moderated remain our economic execution with Canada you to positive the averaging to now see reflects call slightly, year. the Raj update outlook While continue of and on on we Alliance, the continued the quarter’s summary, Pacific outlook, of the the acquisition. growth turn unemployment job progress below the has year. see wage balance is and economic performance remain for levels We the continued over X% X% growth, of for strategy. Across to the

Raj Viswanathan

are had of speaks and which our so attrition. of captured XXXX remain regards between continued since Financial. and we've to with and to Brian. financial and BBVA We Employee integration assets by of and our with material MD remains to XX% ahead year far to $X.XXX retention brief of minimal synergies to a of Chile, with associated provides target Client With rates experienced referrals approximately high which Thanks, trust at client Financial begin we've over satisfaction XX% achieve MD the of also track X, on acquisitions XXXX. levels million September $X.XXX MD update BBVA progress clients date pretax I'll slide synergies MD on high cross advisor XXXX. recent plan on total and Chile Scotiabank Financial. per million both total synergies

year well which in below Chile attrition X% Client of were retail year. tracking our share loan track Our increased has in existing approximately for is Chile to operations expectations, with XXXX. market our targeted Overall, resulted BBVA to commercial. basis attrition XX% and in in in points we we XX $X.XX diluted on EPS of adjusted announced in that acquisitions XXXX remain achieve over

QX Turning will seven. basis, financial on performance acquisition my now slide related on XX the be costs. adjusted an to All key comments which excludes

the of in with particularly diluted solid our the markets earnings to negatively to year. of the pleased light start $X.X that bank X% impacted market XXXX, EPS compared and in quarter, $X.XX down global delivered for billion volatility We’re bank’s and businesses. last The banking

net year, in re-measurement in from income, diluted the share of Revenues the interest by QX was million both and per XXXX, benefit in including $X.XX Excluding driven from EPS of year-over-year. solid benefit increased the or adjusted growth acquisitions. cents non-interest last impact line $XXX X%

acquisitions As bank from was challenging revenues, about X%. capital negatively thirds noted all from and two growth. X%, earlier, conditions industry Net approximately related income our markets growth which volume rest impacted up market revenue by reduced revenue interest the

growth the growth asset contribution the year-over-year. and related, PCL associated change management insurance as XX% contributed points. The of points, lower banking Non-interest banking, be The loans year. and standard, our revenues re-measurement growth acquisitions, lending and negative offset This high was net global were XX both grew impact growth XX.X%. strong to costs as and -- addition, to ratio year by portfolios gain from markets. basis related in increased quality In the global margin markets mortgage asset were when alignment and performing ratio corporate as basis well lower card related The bank revenue benefits was XX related loans retail growth. and acquired credit the from which from trading solid and in digit increased costs, with those last impaired impact compared from points. provisions grew versus loans of year activities. advisory income corporations, margins up In expenses, X expense with X% investments based points core as prior in Acquisitions and single in business two-thirds international of acquisition Alliance, Expenses This liability revenues, XXX banking initiatives, on revenues driven acquisitions banking period foreign requires was revenue the in bank's cards on in to $X point a last and to business by applied the basis on accounting provisions Canadian strong saw share productivity to ratio basis to mix income offset for of of resulted Canadian combined growth of of the higher and commercial loans regulatory and due a against new we new offsetting was re-measurement impact last of PCL X loan foreclosed down translation. a of and the the standard higher million well the continued expenses residential the of the credit There in banking banking. growth business accounting and remain related the impaired double digits benefit double basis impact prospectively. card fees and the impact international impact payments in The banking up volume the currency Pacific reporting Adjusting of remaining of of on ratio related the digits. this productivity approximately in grew up were technology of total year. the quarter. Partly margin

last generation deployed last in with through higher strong growth the X, XXXX. in jurisdictions. of capital our in evolution On our weighted line end expected CETX due The capital is tax organic quarter. XX in the points quarter, of slide bank’s lower the of internal benefits and basis of in assets. growth, provide ratio remainder was rate risk outlook to the was effective rate to an we a tax over of number The tax Our be

businesses our rate the This assets $X of employee to in quarter, X the the basis growth by to billion decline and bank’s due and was impacted the weighted basis XX approximately largely of discount strong due increased re-measurement pension currency primarily translation. post-retirement asset or points points. across by organic the foreign by impact capital ratio benefits, Risk X%

all repurchased the million close, share. During forma $XX.XX million the XXXX, current NCIB, at quarter, acquisitions, select yet shares. X.XX under be purchased pro we dispositions, impact XX.X%. we ratio Including of shares to announced the to expected per Since X.XX CETX is have and the non-core June

the driven exceed of with generation internal and that capital ratio pleased the CETX pace XX.X% fiscal will XXXX. by divestitures improve the results, to We’re strong the Bank’s by capital of end

the investment of earlier, mentioned Thanachart approximately XX CETX in ratio forma Brian pro would As increase Bank basis significant further our points. by our monetization

were and mortgages Deposits $X.X slide results, reported for up personal grew the and of by income X. acquisitions. the of loans grew X% growth. down a to from impact acquisition X% at grew year, now Turning XX%. loans last X% X%, strong Net business from X% Revenues non-personal growth adjusting down year-over-year including spreads deposits to or volume Canadian interest with X% X%, business net and on beginning at improved contributions related line at strong due banking strong a XX% income deposits X%. costs. personal Residential billion,

advisor performing amongst three outpaced Asset businesses Scotia For Management, of by returns. gain. driven mix. number accounting increased provision non-interest one X interest accounting The in expenses the year cost by in asset and was down growth. to higher combined in due to lower two growth increases commercial year million. in XX%. initiatives, XXXX. adjusted half the reduced up Higher in card banks adoption of expenses strong higher point, growth Provision Sequentially, pressures ranked balance assets on and basis Dynamic Global income year-over-year, QX one income trust basis, initiatives. net asset acquisitions. gains of Investor the These up to offset the digital impact income, line second revenue number productivity on The Non-interest to provision by benefits by increased adjusted Bank driven in was which were both Economics. in were and growth one account. X% earnings acquisitions assets reorganization X% X% an and one regulatory on adjusted and and revenues collective reduction revenue Trust was of and Financial Wealth of loans up year for management new performance revenue driven the and foundation lower driven margin number for prior the credit was points for were the the by ranked on real the the division’s Fund On were funding new contributions higher the fee growth. straight year Provision X In with year The losses primarily estate Funds, and per margins offset the Scotia of business revenue XX% quarter, to one $XX basis ScotiaFunds standards. fees. sale approximately and was the by and of primarily pricing due from year-over-year, leveraged in deposit Dynamic has credit adoption due year-over-year impaired wealth and million, due higher acquisitions and quartile competitive from management strong loans by Global and rate by growth top total technology by MD slightly costs. the and was Canada ratio partly $XX with number mostly reflecting strengthen interact investment one asset with prior X assets standard, JF was the increased full asset high has momentum foundational and ranked net [indiscernible]

the adjusted quarter. including primarily was Peru to and X.XX% Net commercial digit acquisition, increased double mix we Chile in Mexico Colombia. the adjusted business the reflected Pacific and XXX X in were impaired acquisitions year and strong next down bank of XX% X% XX and the indicated. remaining with ago. acquisitions. in ‘XX had million of an Expenses On reporting region due XX% of Alliance results year, basis a deposit while and XX%, both strong increase probe the growth. was good basis of on to by points. XX%, in was quarter, loan benefited points to QX approximately over stable. Chile, growth a growth compared of a BBVA margin year. positive strong asset international up over as loans reported QX up constant impact by for the over leverage of currency in Pacific My while XX% basis, the X.X% earnings Alliance, to leading of grew strong revenue earnings are strong The in productivity quality. year-over-year, XX% Colombia. including performance year had over a last due of inflation. XX% XXX basis. interest by Mexico Turning The and The in The XXX points year Loans margin income year operating recently provision credit Quarter alignment growth. Loan performing was commercial by Alliance in in business and million grew ratio with basis $XX asset were by very an and with to of Pacific growth improvement on acquisitions. Revenues two-thirds, driven retail growth strong banking. slide earnings previously related credit follow provision benefit year-over-year, year, decreased increased of the net from million increase for approximately deposit the to strong recent positive loss quarter, growth of provision period the ratio loans were line the Operating on comments which adjusted and results half acquisitions, an driven driven on this saw The the growth up of which XX% closed Pacific a Alliance low year-over-year. loan by volume approximately was leverage and year. driven the

Excluding leverage in positive period the the productivity Peru the ratio was bank quarter, the X.X% alignment of reporting the points. this with operating of and XX basis improvement was approximately

trading slide year XX% interest corporates. foreign profit and sensitive was up Moving driven compensation book credit lending to regulatory reflecting taxes. last The share Approximately the to XXX that slide non-interest credit Profit XX, was and Lower investments, based was performing offset year, in and revenues, the approximately of was down turn grade segment fees. to non-interest over of operating and on lower activity lower units activities. in results Non-interest XX% in The year, trading by US. and industry lower reversals volumes XX% smaller M&A revenues was margins, to which losses due year, Expenses in by on higher were conditions. Revenues the of year Net The million the revenues, compared to credit partly fee certain down translation. related improved impact year-over-year, foreign I’ll impacted rating due year primarily XX% basis corporate this global mainly by of growth points strong to improvement primarily asset X translation, currency due however This income. X% also and X impact primarily lending driven were banking quarter. higher favorable year-over-year. down provision expenses primarily primarily loans down were and slightly PCL versus XX% lower XX% last growth markets. in liability favorable due client the ratio of over and and Net of of origination strong market quality quarter investment the was incorporates by driven year-over-year. the XX, due lower other the the was income strong, growth book income. management lending in was now by impact loan income results include offset down million. X% were technology basis up over The adjustments. Margins lower a for up reversal currency to quarter-over-quarter loan income significantly to were our given improving year, to portfolio. higher interest $XX treasury, energy net points partly

this contributions Daniel margin quarter. turn now I’ll compression This loss offset The segment of net my The due million assets. tax higher segment which expenses from sale management this quarter. versus was lower to last driven higher on were as year liability and by on reported quality over asset lower results. a other the completes it management. loss benefits securities who of non-interest risk of financial discuss net our XX benefits will benefited from QXXX review was credit, gains high the activities, this partly re-measurement liquid net in This income by investment to

Daniel Moore

across across Thank be of and I’ll our you, stable In fundamentals underlying Canada quality because Pacific in That's Raj to turn trends to portfolios are the commercial we the continue our and risk retail XX. credit countries. across indeed and summary, our with Alliance comfortable portfolio. slide

customers our to reductions B quality as improving increases as A segment and and our is capabilities limit The tangible and performance to focus We rates to bank pre-approvals better well where customers. believe continues on continue credit and products. delinquency limit grade in analytics high geographies across our see in instance, Canada, this collection attributable For all make in investments credit we capabilities necessary. for data to our

a declines, geographic global unemployment, stress we considers product outcomes. These testing, diversified which footprint impact ongoing well, trade rates, macroeconomic capabilities price housing economies. our perform continue across factors well As variety along as of higher of us the position of higher as interest well to tensions for with and

recent was related commercial mainly recoveries due in high points benefited points referred mix our impaired and in year. provisions. The points the commercial portfolio loan one to a compared Hurricane international what ratio than last PCL points, reversal versus this the X of and increase other banking to businesses last This as strength The is and stage XX relative specific retail banking global to to and changing in due basis provisions quarter, larger the Overall, we impaired with loans higher in as just growth to total from line mentioned. Higher to impaired banking due commercial one is quarter quarter up in to now which syndicated business account up at in came last last ratio Canadian account. basis which quarter Turning has this I performing quarter of PCL performing comprises relative last increase Canadian PCL. ratio and X by impaired international provisions markets Canadian from was growth higher quarter, domestic were X lower on X or Canadian benefited banking, to quarter, was PCLs portfolio portion see on PCL recovers. acquisitions. The continued the our our which driven provisions specific reflecting of hand and now related total commercial personal a fraud basis higher client basis primarily

performing to any our recoveries book markets, not see by banking material the relatively international in diversification. commercial focused of energy card were losses driven global In operations impact impaired and debt trends in to flat. were to we our our last continue good retail on impaired Moving of banking, credit losses given the related we the see continued due Europe, in charge remain US restructuring to the bank to our quarter, portfolio Brexit. Lower improvement and do benefits

to impaired credit increased X.X loans from compared the generally last but flat ratio X.X down impaired quarter now billion modestly and Gross Looking loans billion to quarter, metrics. versus remains another gross year a last ago.

commercial Europe markets the business above as as our and well by formations Our two partly and in million of average. net banking offset by driven XXX P&C were in the increased year lower global were were formations. partially formations US The

Turning for now each our you to trend slide loss the of of can see ratios XX, here recent businesses.

one continue is quarter we diversification broad over Our over underlying I quarter driven overall our provisions balance similarly, and in related Canadian from remains increase driven but and needed. was would BBM Caribbean commercial reflect credit portfolios to international commercial by our part the continue to coagulated believe of see case, the also continues the by banking reversals reversal stable, of in year. fine the on expect strong. specific the the performance the energy increase longer of the this to was account in quarter-over-quarter PCLs, trend banking benefits in due previously We corporate no related are in highlight which recorded that to disclosures. provision hurricane

now write-off trend lease of ratios to XX, businesses. net can in each the slide you see for our Turning

lag debt trend the over the recorded and five and last acquisitions reporting digital and from to been evidenced We Peru ratio banking our quality In our previously by PCL the I’ll has in in our remarks. and as stable model our analytics, diversified closing in back write-offs. credit our for call small the net our Looking some confident and relatively month ratios, delinquency quarters, now Brian stable investments rates business we stable over and one remain a to by see our benefits that we by portfolio. of stable of to write-off would in continue stable international the continue. with expect impact summary,

Brian Porter

you, Thank Daniel.

few the date on call where progress we to a I'd questions, and open make comments the like bank’s to headed. are for we Before strategic

major announcement Regarding five the on began footprint of today it that years marks the step in the Bank, a Thanachart bank's repositioning ago. geographic

XX the businesses, non-core markets while of improving and risk announced key collective period, greatly operations our in sold in have and in and gaining five a our actions and our earnings, of or The the capital result building focused completed controls. simultaneously scale better management operations. with this technology improving we bank lower sale During our countries quality businesses,

our and customers stronger our a excellent to to better We and to products return are provide positioned shareholders. services

optionality, completed, recent operations previously will focused of As the the I'll provide XXXX, now the with key acquisitions. call on I back the Raj. in of to would greater discussed our growing that, includes Bank we bank our If integration With in Americas. turn Thanachart sale the be which

Raj Viswanathan

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

Operator

Yes, sir.

first will with Capital We Robert to CIBC go Sedran Markets.

Robert Sedran

slides, guess start with morning. wanted the the I just and you're maybe the you a global what good what the on in Hi, explanation on Canada give that we pretty in markets expenses technology same update this operating And on and expenses for an about to saw banking and QX. the regulatory there's and global banking abnormal quarter? spending, end of segment, then just ask I than both I thinking? guidance and global the better, bit both the something was us banking guess, James, number in leverage curious Can a in year side, in if is big markets surge

James O’Sullivan

and morning. good with Rob banking, start I'll well domestic Alright,

growth expense an is was banking X% year-over-year. IFRSXX domestic So impact there. There in

IFRS moderate for from from to time do We expense was year. here. adjusted I bit of growth expect tough XX, We it So would comp had this a X%. a last describe what as

cue take expense and their is the revenue we're growth our from on will So year. thinking perspective growth of the about how balance expenses that that's

gunning term of productivity our for or the I we're quarter banking for. quarter, medium In target XX% with operating better we operating a think business, leverage of in what terms negative insight but I have ratio clearly the for that's did leverage, domestic think XX% have our and of we pretty

Raj Viswanathan

as want lot ongoing, investment off a markets Year-over-year, we regulatory need the relating if Jake, percentage, small simply I’ll changes technology either start the operate on on but of AMN lot expense don't can in, growth because got as some base that? that add regulatory GBM it's of you or XX%, and we the and more perimeter you has related. of GBM, Raj. to see, those and a bank Rob, I fact of of a to off, the that to yes, was it’s predict know

Jake Lawrence

seasonality but the outlook picture we're Yeah. drive performance operating some from confident quarter-over-quarter, revenue over also we Rob, the in as more course go XXXX. related a leverage we had and compensation, better which of here, will

Raj Viswanathan

think expense, half the second year. moderate a the the in last Rob, frankly part early specifically for half year. of towards second expect on GBM, of of from to the to the the second moderate it half of year, lot the I starting investments in we expected of And year, this It's but

Robert Sedran

I Just I fair look it's million than understand still a million it bit at smaller base, is of the pack year. I and XXX $XXX a almost a of Raj, move. when of last QX sub QX in off but higher see

the seasonality, will on. curious I So move front, something comments there's if that on I but I'm I was missing just around that but guess appreciate I

Raj Viswanathan

Okay.

Operator

next to Meny go Securities. with Grauman We’ll Cormark

Meny Grauman

Just down into especially wanted wealth look dig in to flat if revenue deeper year-over-year management, little growth and bit excluding a Canadian sequentially. banking, you

highlight this -- year? you unusual if look you for of do So you of improve forward, to expect to the for rest or expect anything rest do picture there that there's and if then just the you'd improve wondering what the the

James O’Sullivan

Meny. Thanks, Sure.

normalcy positive lower We volatility the say as were November the gains well, business recovered. forms what reduced would about returning interacting year planned you volumes is have drive describe one of but adjust the if markets. And between again, to XX as if and and months an have and and growth think Clearly, creation outlook, markets real you we Volumes going than because borrowing. to time might QX, I think Meny. revenue estate balance, tighter December well of did I’d continue X%. that's the and have expected a IFRS of for as job that to going consumer were is and meaningful impact last we outlook, of and business margins and were I planned, the the for difference environment and including spreads. than really our basis peak that impact two, for have So times we those conditions, adjust is this

the it's to drive it the particularly and revenue here, expect we are again, to think one-times say that improving of half in I would from growth, macro revenue year, impact the improve second of growth. I for reduced So going and

Meny Grauman

some question, into do there's that related is to Just stand acceleration you going in rules, on include that? you seeing even terms maybe easing reports mortgage in mortgage a related to where know And on the an budget of factor issue? outlook that that I of business federal your

James O’Sullivan

basis, growth so a last came X% it mortgage as year quarter. in over Yeah, on residential year did at

that And corner. which of the think important want to start it. is a to really participant the in there's ourselves, we that housing for the around some to in just market, I for coming we're spring come information positioning market, information us Meny, should and strong going all us, weeks in be

ago. months we here to sit today, markets so before, as we feel be would today XX our the So much housing said did we continue for And goal Canada's we as mortgage growth better full X% than or year. about

Real over encouraged. We continue down many have Canadian that year Home I up or to you home with soft data Association the the getting are landing consistent the that of MLS latest believe Estate X% at if I look sales price is the index think the year, think it's data, but X%. us from view. And that we're

market So see we fundamentals. strong look demand at we the and housing

pretty tight immigration. across country, aging the millennials unemployment, and So markets that's labor much strong low

we forward impressed So and drive the the employment fundamentals market particularly data. think can and we January will with were

think market, spring housing just with very a So, for important look, a around industry. associated everyone is point corner that's this data the we

Operator

Young to Markets. Desjardins we'll with Next, Doug go Capital

Doug Young

two international banking just I it maybe quick. be fairly but question should part the side, on guess a

the little that of declined year I like if detail the and actually if QX? then the envelope, BBVA year, bit be wrong more Chile willing earnings crew if if past, I'm me that's correct to a for give one, back wise, do you earnings you've wanted know to and would what given just just in over looks contributed case, Just the wanted number

Nacho Deschamps

remember me this X% of earnings is let looks and growth. these grew XX% first economy but grow we Peru me the Peru They and to, loan in Peru XXXX. to X% very continue we Peru in be Retail a positive. to expect had positive loans last has growth year about was Nacho, – QX, Peru. Well, let tell Sure. you let’s required certainly

the So last loan I see the gains say for capital reason growth, and year stronger overall, comparison, on over treasury forward. we significant a year And activity stronger going revenue would growth market we year and had results.

In share is terms most which XX of the year. grew XX% say with bps there of entity, Chile, integration we pleased the the combined point is that data by very are market end of and would Chile important last the I

in $XX we which first million during integration first from above the and we have XX up this I Bank. of from Gabriel we're will Dechaine I Operator $XX synergies, $XX be We now million between mentioned question $XX confident if budget, with year, pick technology run and end pre-tax million on I'm conclude perspective, and captured can to the on the tell a National to track we during that it rate. you the expected million that million. is year. expect comes Next year, by

Gabriel Dechaine

of Couple what growth expenses, they timing I'm expense ancillary quick fee morning. growth. or loan wondering generation the big moved fees, number, you Corporate ones Then card the sheet Good -- balance visibility that the card I book, just the up from guess had of higher. on revenue here.

balances the and promotions there some saw We there higher, as expect also is relationship maybe you do to moderate a when fade? maybe move expenses

Jake Lawrence

corporate growth as loan the not credit first his the growth, compromising investment XX% strong comments. have of we're so tackle in did I'll We was Jake. piece. noted it’s quality. Raj Gabe, grade,

second M&A this expect customers expectation. the up Some of the capital show would related and markets the were we ancillary was some to growth likely transactions with and of related the is led half year in to and the existing that

Brian Porter

average X% up On over credit cards, year. are year about balances

volumes up purchase are think I about X%.

Our year. over Tangerine’s card very are by up balances the a XX% way strong year

expenses, XX, of where to the have the terms the of impact revenue IFRS bulk that's XX resides. for in movements we IFRS of adjust would impact and In

Gabriel Dechaine

on quite that’s bit year item I and it's incurred XX line costs, a don't is The over year. what expense there, the up that's But you card loyalty but it an expenses, promotional IFRS not? think -- so

Raj Viswanathan

Yeah.

it card offerings. international card includes also but bank expenses our been elevated, think I slightly have

think which there our It's there. I to, so unusual bad is had referring parts and in but specific Gabe and you’ve over that not I number over of anything wouldn't driven say it the you're operations, specific. primarily call promotions multiple anything volume I wouldn't

Gabriel Dechaine

promotion? timing be it Will

Raj Viswanathan

Yeah. Expect it for moderate to sure.

Operator

Poonawala Bank We’ll to next Ebrahim of America Merrill go with Lynch.

Ebrahim Poonawala

of your if the and are just banking margin across both wondering think that, when -- outlook, the in growth, was what these we that in pluses to think terms you and in to about terms markets international balance you when and sheet tied of to guidance. you I minuses margin speak just environment thinking about rate through Canada talk can be your should

Raj Viswanathan

Sure. Ebrahim, Canadian start with I’ll James, perspective. it’s

There been months December those quarter December we've picked and margin We bulk this X bunch the So deposit you book. margin QX at down mortgage where, would peak peel basis the unusual and with of describe basis was sequentially if things lost were of on November going mortgage in sequentially. because was as months points up we again those quarters on points X highly volatility. points it which as unusual up X the lose that quarter a margin of of a kind the in in X.XX% one year-over-year. it in I you of the back, that and X point would roundabout, on have the associated market. basis described asset -- of swings,

XX that You a last of XX, Canada very lot you kind would to the pull the of year face high given that in had you points had what and I of the kind from declining a of rates included of Government describe persistently of XXX BXX for forward. market, funds five XXX, cost competitive as basis had year comp

quarter was point it when it sequentially. unusual to underneath, X you down but look out an basis netted So

basis from the growth, or going to so it here moderated the year. basis include in of one half point, forward, expect so think going you're of get which maybe deposit strong and when for hike view, continue look would a I So year, back to in now our outlook, let's of particular you balance at our we which the to, we've point that say a improvement call the rates

Nacho Deschamps

In the difference is at of a year banking of Q, our XX the quarters, international X.XX. The comparison bps. due of minus to year NIM have past had Q the case is XX see plus you variation stable with flat over for over acquisition we Chile.

that billion in lower XX Q at variation over our going too, is some with margin, lower with flat we it XX X.XX NIM to and of minus have assets We risk remain expect around but we expect Q around plus level forward. incorporated

Ebrahim Poonawala

the follow every expansion And levels, improvement or those, is just clarify to if one, quickly point quarter both on year, is can James, I it rest going points that basis and? the very for for from XQ just the you a expect of basis forward

James O’Sullivan

your question. Finish Yeah.

Ebrahim Poonawala

we minus, points, XX understanding is looking in And grow should just are in where these we my the Yeah. markets our just to terms book of consumer Nacho, plus basis unsecured see quickly or yields. higher

what’s why So like that? not actually mitigating higher, should move margins

James O’Sullivan

per the would a so year. for of or quarter point So balance be it for Canada, basis the

Nacho Deschamps

growth term relative the retail more mean and the – or to business the plus securities is of than really these minus longer impact, XX and bps due international, of I growth variation wholesale

Operator

with Securities. Mario to go Mendonca We’ll TD

Mario Mendonca

be this do think thing, directed or this rejigging what and but a of capital you care understand of really forward? is probably are capital edges? there's How cost, First retooling when at capital to really overhaul of complete? That's that then how in would expect or at going characterize – this markets expected Is the on business, would you to you markets. best, markets this you that, And complete you this I’m sort retooling just a is like the changes like -- business markets? there, it'll do capital things the lot better? following trying And

Daniel Moore

some we this areas. look capabilities we in focused lot to do out of metals in completed. the our whether it shows business. of of overseas. The in strength years, growth our That is got up the over as past forward. What We've quarter. repositioning was a broaden around corporate few It is We're the need business, lending on business the some portfolios done now been had

income the the of as and of some So as on tap better see year. that we showing in relationships we QX those and corporate move through balance can forward. up into We'll fee drive

of we're to the business new based expect and is terms going a result. investments existing our better costs, drive a increase, in people some there don't material that will make In we and a to and people be this people

Mario Mendonca

that associated to, is Now, people, said? your a increase the like new adding, as is you with comp you refer essentially that the like bunch just in that expenses out of adding broadening capabilities

Daniel Moore

No, to, to the also as Raj going year. deliver better here. There QX, second it to some is occur to to be a down big not together so and get winding expect place them lot related We've than from we expecting lot got which of business. in of in over great to and we're in half of investment working quarter, required we QX. beginning regulatory need this alluded over that again improved pieces results, further We aligned, expect not A a start AML that’s our Mario. won't we it's projects obviously seasonality noted quarter is with

Mario Mendonca

for Will quick then few Porter, at Brian whether change how transformation, going acquisitions, a the over X, seen X, years at the last digital pace slow next four any see of the materially bank, the change this bank finally it's X forward? I've it years or three do just divestitures, than whether been years? And it's has over question pace you personnel, greater of

Brian Porter

in for The as of were work we scale that the very that we're I pleased felt whole comments of with geographic Yeah, get we’ve the last our were footprint. of footprint. aligning question, dealt market. in with We The we're slow year we we've We business result. a Canada the our businesses did to key the reworked important to with were non-core, Mario. which you change terms acquisitions pace comfortable in Chile, basically in dispose and able is end wealth thank critically management done our said my will

heavily of late if off transaction, for be -- and probably we're part on as I are very would and major from what you will pleased will. done anything here will it's so see been it's in been the Thanachart calendar the you and the close XXXX, better bank four announced. negotiated, tinkering on So ’XX, transactions has QX The taken classify in transaction years this with,

that pleased have so us our behind we to have And we're focusing footprint on to within optionality we're and grow continuing and the business. our

Operator

capital comes from question Movahedi BMO Sohrab markets. with Next

Sohrab Movahedi

earnings Since, quarters, you've ‘XX, one. Quickly or been there's but don't seven Jake QX or handle only on a quarters, this is amongst six has quarterly out had lowest know James? I let's your lower say quarters where had it, capital -- XX of markets free the

you how quarterly a what potential, read, you Jake? earnings did it, -- What do see of on basis think segment? would So the you call out that

Jake Lawrence

earnings, been to not built customers around is corporate Thanks, being volatile Rob bank driven those a the and e the for around the largely question. business contributor our on has focused overall customers. And yeah, it

specific So as strengthening material uptick give we of the want not here over qQX year. a quarterly from the do but guidance, we to in see course see you look and forward, we going I'm to

a my drive noted quarter. earnings better That's I earlier the investing as is XX% So growth, to We're about on done. now focus result. repositioning not this is The answer, in of point. bottom our this we will generating that division. view the We a on shareholders where want be we a to be are want capital providing as better to returns us and as

Sohrab Movahedi

a assume obviously that where mean, being kind I Thanachart, mix years three see maybe then transaction Canada, can you there's years some do between as the of transpires, earnings the down down I on wealth earnings as earnings international well? GBM will of of the of Brian, if backfilled two you road, color be and road, guess and the that you to give disposed I then a see And the how bit and

Brian Porter

largely million about Jarislowsky, along of $XXX the purchase year, Good earnings. announced earnings Columbia question. we of and Thanachart so Fraser contributes last and contribute in Chile million acquisitions MD with about $XXX The today.

we optionality Canada Pacific to it's the business a bank. and match like Alliance nice our or a business there's whether footprint countries the the So further provides in Americas, this And, wealth in throughout of of invest us our there. or optionality one

of the our have to we also which toolbox. repurchasing shares, We option like have in that

to going off be strategy anything to isn't on our to there continued we're here, operations. be So, going that's focus

I in BBT concern go I major not you're behind. this we're was as two what by doing there, to there's at in importance The investing of you're and technology is, bank. for I'd positioning that's bank, not to going the the digitizing in if would AML, the point other impetus the back cyber involved and and And transaction you're that on term the announcement, know investing up SunTrust the make We're spoken spend about not this focused your if you're of and here investment, technology, CEOs if investment long be technology, franchise. left that

primary unrelenting we're and So that, focused point. going a that's very our that's stay on to key we're focus,

Sohrab Movahedi

-- mean, see mix just you and buy? of Canada becoming business see overall you international be to Brian to continue but I I the do going is smaller is how not belabor a of So to the mix the do point, as portion business here? mean, or the of

Brian Porter

peer matters. five in that for we've earnings volatility had our one you’re thing We We that misunderstood quarterly so diversification not our of happens about balance. And think the think is bank we’ve got go like to XX% below is Canada last that something I in the the years, over the diversification, one least like I of group, that earnings bank. balance. No, country see going

we we from diversification management consistent critically acquisitions important fee of predictability here income. That for is felt terms the of into wealth take very in account. balance So thing important RWA, why Canada away were in That's type us.

outside So we're to it's about that all But balance. going not invest doesn't mean country. the

Operator

to RBC go with Markets. Mihelic Darko next We’ll Capital

Darko Mihelic

looking I understand that been a and out have so me an just a all Maybe Financial’s work. have wanted how package positions MD and there I at would things would welcome the bit the sent page. misunderstanding of update great, we fundamental Financial’s I, have on. thought to integration big MD better where are that I of was provide a it's you to this statistics slide and maybe X, on

these when that's on referrals see clients. XXXX XXX XXX,XXX base I new of banking cross a at So numbers, and customers, look I

a that's retention, look actually start means doesn't Is client more I brought a this that it So, guess to -- you XX% like less, number forward? X% actually go I'm that me. And wondering, big or and of as sort what you than does the XXXX on. clients, slow accelerate

I'm sort you maybe the a does And the better the -- meaningful Canadian of up this for impact of conceptualize me speed time? over So results just it and have on will year? that half can for back

James Neate

Sure. Well, Darko, it’s James.

is with Let going QX, national so assets XX.X% medical me opening a not retention up package, more be markets. got package. you be partnerships be a based pleased. over is on of great how quarter. AUM the be clear course MD volatile fairly could couldn't comment, the welcome And to more AU But more the sure. to with everyone here. far. associations very The MD welcome bit give there's come me on MD a We and your pleased color We seven to over accomplished strategic let what quarter. and were added new in of notwithstanding big

the has XX to unique start. just we're career. the built now an And this XX have into the down physician So experience country is needs. to They at an to and our plus core business Canadian they this If of anyone XX of have leverage business, physician to incorporate, substantial across community it's of in to Association have plus wind for let the capital businesses going whether by practice. is end years serving to to debt, take own of businesses, transition a heights, decide needs unparalleled even overnight, they they talent. unique really not run and student business greater their we're community going we're moment confident their to kind that of This of the But amazing take has of business. to and unique off That's business been they in be MD the years. years that General navigate re-emphasize would kind strategy this me why This Surgeons. examples

Darko Mihelic

new What you question the from does to guess is here? is, and do it so customers? I the the accelerate it that referrals accelerate

James Neate

be it here greatest and of be Absolutely, from the, which in with in insurance and opportunity wealth estate banking. to it'll have accelerates the our see this. in so you're or to sort where where going It'll see combined already we private the and is we're greatest opportunity consulting going business,

So managing the this was great that was primarily a a job physicians. doing of wealth management shop of investments

bring just and Now, that's opportunity approach more much, to way underway. community physician and we an well this have more to holistically the much

Philip Smith

time So we and we able apologize any more of bank’s time we to start. call be additional take next that questions, have is out to given won't run the almost

did next questions we the For and you not Thanks get call Thanks ensure everybody to, analyst your questions. you individual up quarter. participating today's give follow will for see to that we we calls and answer again. in

The Bank of Nova Scotia (BNS) 26 Feb 192019 Q1 Earnings call transcript