BNS - Earnings call transcript Q4 2020 | The Bank of Nova Scotia

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Philip Smith

Good morning. And welcome to Scotiabank’s 2020 Fourth Quarter and Full-Year Results Presentation. My name is Philip Smith, Scotiabank’s Senior Vice President of Investor Relations. Presenting to you this morning are 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. from questions Canadian the International Global Banking; Lawrence; James take Dan Scotiabank Banking; Wealth to Markets; and from and Rees, Nacho Neate, Management. present today Gowland following are executives: Jake and Also Glen Banking from Global Deschamps, from

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

Brian Porter

Thank the Daniel Day you, Raj risk. words year resilience. I discussing The efforts morning, resilience; reflect is on presentation were and to return turn good repositioning the to discuss and fiscal is fully everyone. as were I in after my remarks the to earnings then over loyalty would integrated progress, begin in conclude professionalism outlook four. the I to our like over on period. year, nine first our Phil, an would during quarter a would Many year, demonstrate leading four was had customers also and for support divestitures also showcased to over the the appear our first and expansion hosted the to like our and of to year strengths, which stressful tested with like second and a review today our acquisitions. a Bank’s course will then but to Santiago, challenging during call an to When our by for dedication three our the of slide competitive by I Beginning had many will for outlined for unusual XXXX important remarks Bank months wealth opportunities We power growth. respects, very global successful and incredible their completed in year and the began, Chile, future. our which the acknowledge our economy ahead. I the We and come strategic well employees and Bank it reviewing financial XXXX. the I first Daniel’s complete bank and for and progress progress to COVID. their the and in recognize for the opportunity. substantially difficult many tremendous past BVA, represented and position Investor our strength; strategic we mind: full the Chile, accomplishments When poised Americas. third highlighted is to this these very performance,

that results foreseen, scenario our resilience areas. first of quarter the gave could important clear a growth rapid XXXX. progress path spread It of one for in highlighted but and was Bank ahead. a not COVID-XX indication was it changed of The outlook the many Our our have which global anyone the

remote Our operations performed smoothly transitioned We extremely work to business environments. well.

robust technology Our highly was and reliable.

for networks remained our customers branch open Our throughout.

channels banking the also including digital record during year. demonstrated which volumes strength by the support of customer our call and Our networks, resilience our branches, centers, was handled

was also capital Our highly resilient.

provided during undeniable. Tier Furthermore, ability and of the Our The to quarter resilience of and clear today. earnings. the equity at settle uncertainty of common XX.X% capital generate ratio volatility is in QX market evidence rebounded strongly to X even Bank of QX this times has extreme

in expect our to full momentum to continue that our We returning XXXX positive we are profitability, this way on and beyond. and represents quarter well performance earnings to

activity was our lines business there that business and lines diversified weakness. a have Lastly, have conditions, played by four that by one model business during Due our of country, large important we years, offset as in difficult important role recent another we an When business investments times to now made bank. scale to in diversification business uncertainty. the provide our resilience encountered of

to strength. Moving now

testimony of strength to Our resilience the the is underlying Bank.

quality asset key Our is one of strengths. our

We throughout sources we pandemic, are of seen appetite of and benefits risk with the our few grade portfolios. primarily the our investment have lender. weakness a lending And secured in

While some of government customer that stands to and our programs, support government of can assistance scale and out. be attributed support quality believe I the asset

pandemic today For than assets example, year of ago. risk-weighted and below our are began a lower when levels the the

impaired ratio gross has loan our year-over-year. addition, declined In

billion during to to over provide customers our Our provided business period strength peak, also our direct of reflected relief At its facilities $XX actions support I financial billion important including approximately serve stability. payment to deepen objective in and further and is support relationships financial come. to customers, promoting of This additional assistance of stress. achieved providing customer for these to our deferrals billion customers. of a our $XX extensive ability we our years customer $XXX its believe of retail approximately support to will

satisfaction were one our response Canadian customer business In number among for as COVID-XX fact, ranked in owners. we to

our digital on the additional These accelerated look next forward banking in quarter in on customers year insights progress sales a as digital XXXX. rely prompted digital strong adoption metrics to all refine for digital important in of our almost XX% will to this customers was We digital an Finally, evident to lockdowns on future the we This a our while for channels. and continue strength trends role safety more in play banking. increase XXXX, focus XX% digital digital in providing of as to year. resulted to

new With Finally, discuss opportunities comes on crisis year. as I us opportunity. to before like would we the any a have embark we fiscal

initiatives reduce we leverage. and opportunities efficiency order expenses through moderate in to improve either multiple prioritization to operating our or First, have

ratio growth industry-leading in us to will in of productivity give XXXX. area the XXXX focus rate expense management. key and of the we a be benign priority reflects Our This expense for

benefits to customers going provided both, material for provide first an customers the Bank banking Secondly, acceleration This and which introduced many adoption, the XXXX digital to will time. in digital forward. has

vaccine capital deployment introduction businesses; with banking as are in we I and with These in existing fully the has turn underway, to Finally, over and bank Raj organic expected recovery our for strategy all value. are confident of avenues capital more our Bank to focus our discuss line Americas. the buybacks, The shift growth permitted; performance. opportunities economic a I a am the include leading that take financial deployment. multiple will in acquisitions. will will the in adequacy and share capital when they that, from advantage enhance the With shareholder call to of

Raj Viswanathan

pre-provision in X% Management my billion slide Bank, sales by line divestitures, outlined revenue, you, prudent and which stronger Thank of revenue X.X%, negative were for pandemic. Brian, record modestly, market lower growth up year-over-year good businesses under Banking be $X.XX. an XX. by of and All or provisions billion, X. assets Bank comments with that follow, including diluted appreciation the for were or adjusted of ended basis, acquisition will and our earnings were amounts modest $X.X from of performing I'll resulted on Global leverage the management. the $X expense driven up slide Global and positive the management higher credit and start excluding X.X% on the of Revenue impact Wealth earnings of excluding benefiting from other and on loans expense business divestiture-related excludes that had over X% X% operating everyone. up income per a down was prudent results, strong earnings morning, and losses discussion and impacted Earnings and impact divestitures. was on the expenses year management. or P&C net from of X%, The share excluding adjustments Pretax higher being by the driven flat impact Markets divestitures.

last points stable. X.XX%, asset basis The the delivered but improved down fees, year, reflecting partly increased market income evolution basis International was provide offset markets banking and last as bank rates quarter-over-quarter revenues. management primarily points Net foreign on adjusted XX partly $X.XX CETX PCLs the X% Daniel points in quarter. over were basis offset and points, basis more which Sequentially, Banking decline $X.X up basis XXXX. margin margins XX.X%, year-over-year, slide income Noninterest performance of the an led third a due due interest from by Banking, Wealth well strong impact a or Tier basis the fourth in Prudent slowdown our and XX increase will better capital EPS administrative and for excluding due being more Management margin down and expense that to basis, liability lower an most points as quarter. XX lower the insurance, translation. X. of offset quarter. capital Moving line this XX management asset consumer a the improving points, the fiscal year-over-year. banking, from income year-over-year slide to X% PCL excluding X% and and Canadian Bank we Common by ratio from diluted quarter positive lower Bank decreased through The foreign XX a revenue, of earnings billion core the impact to ratio or was year-over-year. ratio These markets for Revenue higher the and remain from X% On had all of currency XX% detail growth X divestitures, reported over X, other the strong quarter modest professional in points quarter, as basis a exchange. of quarter by liability commission in business The advertising revenues divestitures, X% asset On Equity to trading quarter-over-quarter development decreased contribution declined of lower activities X% and XX higher record negative XX% activity noninterest a quarter. driven for to in discuss XX business last to shortly. as and fee

higher of primarily growth was generation points This by points lower repayment XX and basis lower and quarter's risk assets. book size, credit of from capital Business basis internal market XX strong Banking mainly risk-weighted of driven

million, lending mainly receivables points line Noninterest by deposits compared declined Central Business due to rate XX%. to and prior weaker exchange economic changes to grew X% Banking Canadian quarter-over-quarter interest from XX The X%, at The year-over-year, were margin basis on points. residential XX driven but basis down driven PCL Banking points, lower mortgages of QX. by by the by X.XX%, card ratio by slide fees, declined advertising, asset foreign X. insurance Turning and was stable grew points for net declined banking, credit declined and business growth. year-over-year now business adjusted basis and increased by year-over-year, Year-over-year development driven cuts Bank mix. the total strong Expenses to XX%, X travel X% lower results, income environment. loans basis to costs. balances rebound beginning and XX reported grew income X%, quarter the in though net Canadian business personal $XXX a outpacing but

International on million. Compared QX, to My impact lower net driven Turning follow Banking. that $XXX of increased losses. a income on on reported the results constant adjusted comments are provisions Banking slide of for based dollar the International significantly, for basis, by adjusted divestitures. to earnings next loan

Compared declined and driven and activity, While margin investment a XX% for driven growth and income gains revenue was driven Loan up increased investment countries. or commission year-over-year was XX%, QX, revenues lower mainly income Net pre-provision banking and liquidity, X% to lending loans reductions by business down though, Alliance the business consumer for by by pretax in and down margin mainly by XX% income personal were trading million, card balances credit cost credit driven noninterest higher X%, across flat and fees rebound other grew The in credit interest lower basis XX%. slowdown declined the X%, and card was Residential X%. rate grew Expenses to XX%, year-over-year, net and Noninterest initiatives. receivables the while X%, in mortgages X% mix to grew fee points, $XXX the was year-over-year. while management by Pacific XX footprint. revenue. of but higher in personal QX losses decreased Compared costs impact stable. provision quarter-over-quarter. gains changes declined due

down highlight high X%, in modestly me Pacific was challenging the year, showed Let a International only Alliance country X%. pretax that Banking in while decreasing resiliency pre-provision income

strong Net $XXX Banking slide strong and fixed by growth driven and XX% income underwriting robust million levels last trading of more trading to Global the over was deposit income and year-over-year, couple and asset Very Moving revenues. revenues this of Markets. quarters to quarter. returned XX, up normal fees

record lower Expenses billion. expense strong leverage had management a as was of XX% due $X For costs while the personnel year-over-year, maintaining discipline. record to full primarily the operating year, net GBM GBM line. Adjusted decreased for income X% revenue business had year for the

Turning slide Wealth net $XXX million were trading on now and to X% driven up Management of year-over-year, strong Canadian earnings by strong appreciation. Global were XX. a Wealth Management Adjusted market higher XX%. up volumes earnings sales,

international Canadian loss of were revenues supported impact our grew last during X%, by management. improvement $XX from of driven the X% by results discuss it and up include were down administration Revenues noninterest Other liability the to activities, X%. of turn of asset due divestitures due reported management liability in Canadian operations, expenses. strong to net gains now mutual segment now impact strong million mainly risk activities. volume growth. higher AUA Wealth assets results due the investment divested year's was X% management turn with Management was compared Wealth net divestitures The and on X% also fund Excluding X% over by up operations. to year. The up and income $X partly divestitures excluding assets year-over-year, on higher under AUM fund who'll slide remain million. fees up Daniel, contributions asset to the I'll XX. Other The I'll under was X% impact Expenses higher management of year-over-year the to segment performance. losses offset to and the

Daniel Moore

and that's We credit expected; for portfolio comments quality, XX. is XXXX; you, our our address complete. performing items: begin morning, lower as important ACL a will our and thirdly, everyone. Today, good is I Firstly, build, well Thank outlook in my better remarks than in fiscal strong which my position PCLs XXXX on which three a Raj, or Secondly, concluded reserved. slide stable with will

and very the the have expired, remains exiting performance these strong. of customers customer Our assistance largely programs programs credit

of As quarters. reported year, allowances over estimated we XX% the past coverage we appropriate Bank increase ended the XXXX. through the of write-offs three $X.X means for total have net billion, an This

performing So, in in allowances XXXX. we do not foresee build a

same with of Our the give improved over basis from It's total basis points credit you QX. provision down The XX guidance PCL that detail significant $X.XX for points our QX total here ratio QX PCL was indicated we billion I'll in the by provisions period. loss ratio basis that XX, expected to by over billion highlight below that Recall quarter. QX some This in slide consistent were our improved to be $X ratio last On X performing on levels. more XX and points. impaired to our impaired PCLs. is

Let's reported retail $XXX International, and start of credit from last QX, quarter. because PCLs. in migrations improved. improved have We $XXX with provisions lower delinquencies down in the This Canada both, both million and impaired million

in mainly of QX, Our billion performing retail, million $XXX Roughly PCLs down XX% by were QX. driven $X decline in nearly from was International. the

performance International country. by On next additional we credit details the our of slide, provide retail

countries historical most across levels. QX above in significantly average Central and of still improved and ratios America, Caribbean but our PCL they're the Our Pacific Alliance

systems Let's have year-end programs bulk decline This turn from quarter of expired peak. balances approximately programs The of were its XX% slide our customer to XX. expected, is over on billion. as performance $XX.X our outstanding this a and these

commercial, end after into the of payment expired of over are as billion. saw of deferrals QX our high strong of a exiting a nearly $X.X our levels for percentage customers bulk pleased of November, portfolio. programs current note very provided important more retail is assistance Banking, the remain commercial deferrals I'm already XX%; half programs in What's to programs, the customers of XX%. of our by in have activity quality expired. XX% continued the the As we for and to these it's current on payments QX customer credit their retail customers And high to through that by the pandemic. declined The relief reflects this end of International Canada; it's and QX.

and noted that of lending secured also exposure last performance card remains LTV. towards want credit quarter, mortgage the note skewed unsecured exposure with low I personal strong. As deferral credit our is I to our

Turning to on XX. of the strong, It credit you'll portfolio. as remains slide our quality see

Our both flat basis retail. retail, international In X was we basis commercial, saw declined against of We GIL single and programs. a main reported by lower assistance to in the driven and assistance small programs a saw points XX increase was a GBM quarter driven slightly offset but reason lower GIL account customer migration customer higher due by also year-over-year. ratio points in formations, formation. The were a International. by Canada these by last

bank can both basis XX, X net to On improved down need points summary, which management points core and write-off customer allowances; quarter asset the at points, most. was by all are of for assistance third, basis In you driven us basis and secondly, has ago. our Canadian the from Banking, they when down International Scotiabank: see year the from a benefited the being of appropriate last customers from slide programs. three quality; things there This XX bottom Firstly, ratio having X and to strong risk

our Our net all with second foundation We're half because in payment return our is of for customers trends. solid we've line provided see We XXXX. deferral to status adequately current expectations. to the strong seeing we're or And absorb write-offs better three. than done

As to allowances the and estimated our our we in look year, allowance next build done. is write-offs covers net

XXXX of prior call We the I'll to expect to average level the over PCL turn our Brian. ratio years. close now to

Brian Porter

the outlook ahead. now would I like Daniel. you, Thank our discuss year to for

make year us pandemic, it's important forecast That uncertainties cautiously the are to difficult with optimistic the precision. that any said, being ahead. real the to for related quite factors Given several there

stimulus pension The support cuts, fund is of from a name scale pandemic. the few, of the economic withdrawals, wage is to in programs, first to stimulus scale interest The rate unprecedented. response

fiscal while the in and XXX decisive points. Central powerful. example, Chile and United For basis Policy GDP, has Colombia footprint Banks Peru averaged and has have of monetary governments numerous, stimulus XX% stimulus been States, over Canada, and by Mexico in across averaged our actions

is second The impact the stimulus. of

robust the clear is stimulus that pre-pandemic across evidence housing auto Canada, are is We dramatic desired figure. spending levels. seeing bounced and recovered. with reached have retail the GDP the having XX% of experiencing In Alliance The market has sales with XX% GDP impact largely footprint. our prior in growth posting QX growth growth quarter, the versus has average a Pacific Economic back growth Peru

is and evidence, and recovery well core Canada economic United commodity The the Pacific our there recovery such, recovery over to the and of growing be pace for economic will countries, China in XXXX. forecast States, Alliance GDP of likely we and ample prices, The countries growth with year-over-year as the As in returning different is bode also energy positive where times. growth at underway. economic markets different well in rebound X% and copper, such for the staggered

Finally, introduced a be shortly. vaccine will

introduced, certainly outlook our our towards effective does outlook. rely improve an this progress not on goal While current vaccine will any being

business our outlook. to now Turning line

the by activity. in income and strong the Business year fee transition rebound driven towards the We earnings margins Bank, economic continue power supported Canadian by PCL economic its Banking, of mortgages expected momentum a growth full stable expect a growth improvement quarter, interest from consistent in a recovery. next aligned XXXX past with Banking will to levels of an the return are net be a good volume to year this earnings to return with normal and

XXXX. recent the of Management Banking earnings and XXXX, fund towards to Alliance, GDP very Wealth line the our in and improved to economic position. this record growth targeted International earnings grow franchise the our grow by in uptiering earnings of positioned throughout to encouraged and are levels. an reflected continue conditions market year, had market with well we in Pacific expect is year, continue activity signs this GBM integration from We performance following relationships from acquisitions benefiting and strong in elevated rebounding to successful client

is forward is platform position Bank's operating remain in stronger positive. XXXX, and is capital from so a to will GBM and Looking strong The momentum XXXX.

advantage now I in year Thank I am of over adequacy formal in shifts capital well quarters we the In results strong and remarks, XXXX QX are positioned and of capital line as believe performance with focus confident the with arise indicative well Phil to As we strategy. QX, momentum. they started ahead. deployment, our we earnings questions. are to pass with opportunities from closing, solid earnings ended for in my This I the to in you. potential concludes these will take

Philip Smith

Thank you, Brian.

to can one pleased question Operator, we yourself limit allow We questions. please? the have rejoin to on participate everyone and opportunity will first question be queue the in the take the to call. Please now your the phone, to

Operator

Please Poonawala The Bank first go of America question from Securities. ahead. is from Ebrahim

Ebrahim Poonawala

touch Good around you for guess, provided your wanted just I segment. outlook decent International morning. to I upon overview Banking the the a And markets.

and to parts. noise, for for rate $XXX respond we what could expected volatility, very around Brian, I the Peru Talk interest Thank markets around I to before in different two for in COVID, a notes, terms segment? went of power been my the a question growth of realize for in Raj, income there's earnings about you million it realistic back anything north when lot means secondarily, has in to us quarter. think these year, COVID-related this backdrop. to think a the International political rate Scotia? in you. we're given earlier this I per mind And lot in changed, One, If what's for net your of the Chile of segment and be backdrop outlook you

Brian Porter

know would has I Raj Okay. And Clearly, Peru political start, The political comments. and an in President is left very center economies in at well-respected have new -- from the us is plus some circles. I'll Thanks, stabilized. known well I our may to center know Ebrahim. Nacho confusing look and outsider. in it's to governments center. change right the situation and the from XX during and But -- there, run from Peru, it's very I years

has grade rating. look maintained if it, So, S&P the country's investment you at

last see GDP is growth copper the comments, and is torque going by and and Peruvian voted be and we the the here the come to today That's there of economy going XX% of prices my in in lots mentioned very economy, with in trade China back to quarter, U.S. strongly. I As record

summary, in drag Alliance, of private is but look countries Peru, extremely trade, had if have on important this There's raise the the debt. not an rates just So, fiscal developed than countries, attract region that's less levels and you Pacific competitive capital. to at to low these And point. not

appreciating are over currencies U.S. past six months. the the dollar So, stable, versus

So, you'll of torque to there's see lots results. through our and left in these economies. in We're it, follow that starting see

Raj Viswanathan

the it's Ebrahim, I'll talked he wants it So, of projections and about start Nacho, to Raj. we countries. some if I'll about speak on earnings then to that on specific pass

that indicated We've quarter. of earnings business $XXX this per right. true potential be should north of You're million the

$XXX is nicely we going this to rebounded have very million sequentially, And improve quarter-after-quarter, this to Ebrahim. continue quarter. We to see

If points margin I has middle And the don't to footprint, earnings. across because we ahead we Revenue you going that you be factors. because quarter, margin, as XXXX would should of our by want going of be in X the continue growth achievable assets to put is footprint. basis driven starts even of net us. net be QX year think, a a say importantly, of compression a most to retail. It's which by Commercial to retail economic next activity, coming interest as you're saw drag stake, growth across large in this it the only been to see $XXX I natural going back, of -- of starting million will lack couple think start drop see solid that

You the is on when what projections a their economic might Bank, you We've Pacific say of same linked part see our completely impact and which a relate will revenue so, It's activity, seen the -- Over that fee in is the noninterest we'll think is growth of back but International revenues find continue should return to forward. and nothing quarter about but Nacho. Caribbean quarter, big And would finally, to across going the America, a Central that, earnings grow that to also coming the you, this few particularly revenue basis revenue. the retail or of the I sequentially commission Alliance. of points footprint. driver which to

Nacho Deschamps

comments, I first complementing add to question just your Brian's Ebrahim. can and maybe

-- I well about Francisco after ago, after bond issued emerging a centennial achieved week and markets. record election that of -- the think, have it interesting Peru that, And of markets responded was a Sagasti. appointment interest to relative bond Peru a a oversubscribed other the rate

Mexican the recovery Raj end the in in the manufacturing expect recovery volumes, I rather to as be positive a is for the driver. So, as say, very a the a is to have And I is well. -- a overall, exports. on presidential positive by we markets U.S. and of we’ll and to be XXXX, responded it's think, for around government, have -- of partner market the also that expenses -- Chile transition expect And driver side, be well Mexican This that addition continued the of million. in going a recovery sign election as the positive which is important also April economic I fees Peru. most $XXX would growth trade I highlight China to and Peru

in you As year-over-year down, saw the significantly went has and quarter, expenses accelerated. digital

So, year PTPP us helping Alliance flat countries. in the to keep our that Pacific is whole

Operator

Dechaine, National go Gabriel Financial. from ahead. is question Bank next Please The

Gabriel Dechaine

Good PCL the all commentary morning. as the Daniel, outlook and thanks well. on goalposts some for

to kind QX, somewhere like be provisions. guess, in half or impaired conditioned first to the wondering, peak been we've I for Just expect the of

XXXX, expect growth quick the could expenses. next of one year? sense there. to of on Thanks. get Now it like sounds expense want flattish on timing And more a a Just it then, year, the I'll end actually XXXX? be into Do throw you

Daniel Moore

here, would on Sure, start QX I'll the Yes, it would important into we've we hand very That very deferral think, We right. to to I'll other into write-offs the given peak as off, start obviously. the continue anticipate I Raj see government coming with customers, are expenses -- programs Gabriel. that QX. coming I and approval net very, indicated, the net and QX, really our current But we impacts quickly. performing programs and at look timing as Thank write-offs back grow on What's and through. increase. in now you. seen off coming you're deferral to is well will

be really end billion our small of a QX retail of So, we deferral. number, will $X.X at customers the to in about down very

to said, our XX% see Canada that's expiries. drive those of what I And in in commercial, percentage current, to a don't on allowances. And used of XX% those in of coming serve As we're we've also about importantly, deferral analysis perhaps we the back on high seeing international. our dependency XX% some

we don't our numbers cliff on I'll think there's effect to hand either. now expenses. over it our deferral So, leading Raj any in

Raj Viswanathan

I'll X%. to you of see a give flowing you in but we expenses context. bit XXXX, Sure. Gabe, grew more how a bit through gives about XXXX, of of so start XXXX little to perspective only try our expenses with, it

from a So, well lot talked as We've needs skew of expense a to that as in about or the line take that's prioritization. revenue management it grow always discipline Bank has.

that in XXXX. So, we have demonstrated

the need flat business, we Bank. of to well. any we We have It's expense diligent our get that 'XX. of investments see again At have time, GBM, his quickly growing in ensure low, both gains. to Nacho talked and comparable Canadian but Lots do don't finish going XXXX growth this be Banking very we base significant across or in opportunities expense enough expenses XXXX to to the magnitude to expense in we we that across remains levels to as Likewise, we opportunities comparable make, XXXX. across some opportunities perhaps have expect the to XXXX about as where footprint.

Operator

from John is Please Aiken from question ahead. next go The Barclays.

John Aiken

when segment, can decline the of loan average balances Good back look and pulling going talk actually in your how that morning. how we to at settle was Scotia much in driven Nacho, how the potentially from out? that was was to you risk see lower of just marketplace to by much demand,

Nacho Deschamps

now customers loans and in Canada whole had was loans. important And Sure. pandemic, X% mortgages this increase solidly, Well, it back, wholesale that XXXX. the their Business and I to rising, let's driven bit year, that unemployment in year take actually same continue X% important was unsecured decline into and and gradually lower in by was had pace. see of see look growth the whole expect I to end the we Business Due be think by in as of in growth, similar the XX% year. momentum we But, an growth good of as a recover, I growing our the Banking Banking That in because a only little longer, will at to lending. of should as lockdowns, the short-term it Business back the but mortgages. expect as Indeed XXXX, economies very at QX, I this Banking loan both retail, we temporary. paid corporate our the and that will it's book come there first

Operator

from from go Mario Securities. ahead. TD question is Please Next Mendonca

Mario Mendonca

Can hear you now? me

Philip Smith

Yes, we can hear you.

Mario Mendonca

your PCLs, referring understand you were to I Sorry Daniel, back go I about to to on make that. guidance, sure it correctly. to what want

we ratio ratio a year? any with I would just you expect the suggested, throughout contemplating suggested are impaired bit, cause prior loss expire be performing That climb XXXX, to off would little prior what PCLs loan losses release as periods years. actually the allowance be back You total had because that you as been to actually threw to deferral the it the of in me should see consistent and PCLs

Daniel Moore

period, we built this forecast we've and Mario at X Yes. our That's performance. performing portfolio our the the looked of allowances that performance is expect dynamic, as accounting through our from obviously, IFRS that we

As X. realization net these these accounts you IFRS migrate write-offs, go the of to in into various have that stages you

X migrate, X. stage X, from they move they performing stage into as so, And

the in And the performing X the increase go to stage by get so, in those write-off. offset build-ups they net as

And been on the the it's we that PCL credit numbers, to been at while total previous between or dramatic in saying two ACL XXXX, PCL just levels are has and year And for above so we're pretty done will that drive counterbalance now the that we're close written, a our why average. story levels story build. that's with to that confident, net the look when these in whole

Mario Mendonca

Okay.

just play in those offer how we impaired, out? a Like dynamics can years, so you can the a is then two like how The flavor there prior than to just going So, moment. in impaired higher there? get anything much the for for increase

Daniel Moore

Yes.

at to for of in increase look we're damage longer of can you write-offs, that XXXX. increase economy the going course a if ultimately had be our as beyond structural enduring the those year think, over result allowances allowances over some in and the that course, total the that in level the less maintain the than net of we see the we've the year, I impaired will in go in because that, of with, build this line but

Operator

ahead. question next is Please from go Securities. from The Cormark [indiscernible]

Unidentified Analyst

looks International expected extended [Technical there's have of as as granted not QX. you the in Nacho, quite much Banking in? could to It which any countries deferrals the talk if like Difficulty] off And extensions Maybe Thanks. are deferrals in having further risk rolled

Nacho Deschamps

XXst, have international, to XX% than of decline concentrated to had in as billion, later Sorry. Look, I where the to extended $X regulation. -- we Chile, as estimate Yes, declined or by that yesterday, active that November answer. started related program Daniel deferrals. mortgages billion happy and in in as and October we $X will mentioned, XX, and But it of Mexico where less a

current. It to more payments. withdrawal Peru countries. $XX of the been amounts to that resume of we the probably billion help XX% as of has Chile around the expired, in positive should strong early balances have words, other important in has highlight very So should to customers behavior XX% been in yesterday, at It's also with and and pensions their than be payment both

a their have positive So, customers overall, and health. regain had programs effect are assistant financial the helping

Operator

Young, Doug is question Markets. go Capital Please ahead. next from Desjardins The

Doug Young

Brian, to just Good deploy prepared mentioned this buybacks in remarks keep as morning. way your one acquisitions. I'll quick. you and capital

And And going when that total so, to think think on might you the lower capital? you any might restrictions or on is provide about acquisitions, terms of pool of when can Thank you you. you dividend come buybacks think when down that thoughts off? deploy you're increases in us the ways

Brian Porter

question, you for Thank the Doug. Okay.

force that. our well. perspective, And of our pretty HFA, sales there investment top of of unit businesses, we're Banking in in us our in to last allocation, there's investing for invest two our are in terms I sales our retail think, are of terms as And the examples we in in have own and and superintendent But Canadian lots opportunities and week. allowing his our capital in in business. here mortgage increases in priorities in dividend Global Management lot from buybacks terms our doing of force was own Wealth a clear speech

So, be one. point that'd

Second in and the would value be stock share a of organization. is our the buybacks. basis valuation We organization earnings potential this the on We think cheap. incredibly understand

be the own Bank with allocation or sheer top our We're for anything two the capital those And is a speculation. any to would from just now. So, do perspective. right acquisition on here potential focused driving business priorities acquisition

Operator

Please Darko question, Mihelic, ahead. Next Capital go RBC Markets.

Darko Mihelic

Hi there. is Dan, the question for help is to your maybe, My a reserve. And understand Good me preface, of morning. Dan this Moore. as adequacy

not went stack impaired, understand but if number. and program. I'm at can And against looking that I'm interested help wondering that in is, current. your deferral be that the percentage what was of not loss what the I'm you what And all eventually, that me current, if your is would is up in I the And So, how they interested percentage ACL?

Daniel Moore

Yes.

a that payment. have -- on the are essentially those So clear, let firstly, be very customers on me the all first current, made

about have current to flowing, Okay? So, we customers. return cash they're good for those those and that -- feel with they

performing question on metrics adequate. of the coverage had, and to couple a over of on this. feel Darko, a we coverage? course allowances our in We XX% that. that's Secondly, feel was the question about how your the We've build And very your

of look Business not got feels that if we've quarters the Banking, pretty of obviously, all, future I will XX historical now realizing, with coverage, good. losses losses, up First come at

that furthermore, fully Secondly, stock go the that deferral, net that delinquent on expired all of assume if we've expired the those XX-day delinquency delinquency customers And into a with with to all is if so customers, I rate to customers, they consistent go far. all rate seen the my all those go charge-offs. deferred

retail, On of cards, the loans, for coverage. So, times book whole X.X a times for pretty business. got and assumption I've coverage conservative X for

So, that's ratio strong assumptions. coverage extremely those pretty conservative on

forward. So, that's are. one our quality how going the metric strong about confidence and And can think our to our back what us of we outlook use, in gives Darko, allowances that's credit envelope

Darko Mihelic

a not they're Okay. across the that that number But payment, is currently big Dan, books? to be as -- impaired. the various currently just numbers clear, the classified made are across not have How

Daniel Moore

not or less Currently, X% about made to have X it's customers the less that have that -- returned of than payment it's and a current. than expired

Darko Mihelic

up follow Okay. may with you. I Thank you.

Daniel Moore

Okay.

Operator

Canaccord Please question Scott next ahead. The Chan is from Genuity. go

Scott Chan

your your due Maybe equated How significantly Nacho, core expense tying on to down was Good due noticed actions maybe kind that how branch just International divestitures, of overall kind morning. I much the count of to quarter-over-quarter. that was of from comment. -- of and it of and kind on and with then part? XX% core much was your

Nacho Deschamps

from with because but to There's adopted integration of the mostly the have of average is Well, in dividend. XX% tremendous both age seen a it digital we the XX the some technology adoption way sales do around to unprecedented. years to countries to I for in impact COVID really And Alliance XX%. have Pacific old, synergies, gone is XX% customers it truly has the our XX% and to that digital would consumers due growth, say, gone is that digital has have Scott,

branches the past that if this our So, But, have see our last reduced is branch XXX by network a trend in years. you gradually we four accelerated. years, four

it's to And not is and in only play branches, digital. the to also changes we productivity is of increasing during accelerated but acceleration this that continue Branches actually, are key a increasing So, on-boarding role. and due efficiency. experience, end-to-end in the improving one of digitally key COVID customer customers that

to So, I continue more this will in expenses that this expect future gradually in is I And expect will the down go XXXX. what years, happened. our continue but has

Operator

Next Movahedi question Sohrab ahead. Capital Please is BMO go Markets. from from

Sohrab Movahedi

a He's I ease to had little wanted bit. Dan just go to Rees. it

going a in there's remarks obviously, be him. good to that mentioned that as Brian his from good momentum up volume So, growth an your quarter-over-quarter. for Dan, if you, I'd in be that and momentum think some it to But, perspective? maybe going rebound mean, both the does drivers what continued business, I with and I thought catch about earnings a what are of

Dan Rees

their already. we're year, Thank and our you, course QX, in Sohrab. secured We mortgage. and books which next Look, we full Good collateral November higher cross-sell lending the the pleased have momentum we've And generating expecting specifically, about And where QX with or will as performance a seen us in how speaking good pleased to both to book, were product in mortgages the largest really with loan here, morning. of expand. step continue really through in I'm our estate we allows balance commercial margin as performed. program, of charge, general, well take the where sheet program real market-leading course, loan two we're

stage X. deferrals of of or not of or way by off in You're formations write-offs kind much terms turn seeing unexpected or net

grow course So through those two of to year. continue books the next will

as in both we Looking back a and That's of see line. as banking business of as opportunity natural portfolio, still improved at fees our Street at commercial well credit share. where undersized, nicely. noninterest to fee with income, looking we're sales our performance to the return our and business revenue small and pleased insurance the interest QX often retail a very which that result coming we're mutual know We're for on sequentially we and cards when saw subject I in seeing is fund

for would expectations of brick be We've performance been building the very prospects. in in we're time a I out Quebec, and in regional So, year brick continue comments, Quebec. little to those We of franchise addition this some improvements to our and double established underlying making steady by year next ago our just good. terms balance that

Sohrab Movahedi

mix to from have you it And you you maintain the on you just margins, that given Dan, more or the foresee do be pressures? able here margin should think

Dan Rees

for outlook regards think -- good I for optimistic we're to with mix year. this quarter. are We fiscal the the the pleased for stabilized think as to that think next we're I continues think I we margins Canadian And bank improve, 'XX.

Raj Viswanathan

through Canadian I XXXX in QX points. basis think, That's to we XXX was for margin expect specific, what Banking. Sohrab, to be continue

Operator

Holden, CIBC. ahead. is question Please next The Paul go from

Paul Holden

I'll quick. try keep to this

understanding Banking that might better from and As other return travel want million we how of International travel play to FX the $XXX get run even or to quarterly think generate a Like, I to transactions expense are the fees that do and about been have you return get that? such into rate, million to the travel, on we of if to as the you assume offsets, remains there normalization a you've help reductions $XXX subdued? focusing and travel

Nacho Deschamps

I think, if your for it’s you you question. Thank look, beyond Well, travel.

Let me put it this way.

commissions in We XX% that our had today and fees still, year below are QX, we ago. a

quarter. this I the we see will that in net gradually commissions And increase reduce X% a an and strong as said, gap So, an been this fees in these opportunity actually, rebound. there's as recover. already economies had I as And

this be recovery. So, to going a is gradual

Of course, of impact in have the half XXXX. particularly the a in Caribbean, will second as positive that travel recovers,

Operator

The next Rizvanovic Canada. Please ahead. Mike Suisse is from question Securities Credit from go

Mike Rizvanovic

wanted Alliance. I morning. Pacific to go on back Nacho Good to the

a on peers. there versus looks I'm on, color that given high bit you months. last focused to derisking few of underperformance Just there some peers, versus a But, on is and four the going Can know provide commercial just like it's your quite little has please? a So, countries, it really bit underperformance. been that I a I'm compare some wondering a been of can loan And if if growth. it's it industry all challenging just on like looks period the sort I that, in talk you bit? growth level,

Nacho Deschamps

question. a growth I There's distortion feel really feel -- some government very It's I of Sure. growth. new comfortable of guarantee programs because for But, our good level lending. with of

clients Once comfortable support align from I that I performance is with because balance countries, it. relative you Mexico will of continue with programs in very And and of our customers NIM, performing participation. in of are strong this in of come terms slower, -- in and Chile. I see as especially if greater government have the I our exclude will it to and that, terms retail, the growth a sourced, think, with some peers Pacific of But, in very up to And expect out already market. to programs trending. we recovers are need assistance gradually it customer as you to peers our will of peers is pick revenues, already, very but be employment mentioned it as good terms has Alliance actually, we profitability, a with well PTPP feel it very, our provided participation level the

Operator

of The will go from America question be Poonawala Please Ebrahim from ahead. Bank Securities. last

Ebrahim Poonawala

becoming XX.X%, rise, And if for Bank next the operate I on inflation what's you now was you Thanks CTEX your address terms Bank where the you RWA mentioned what's question at? a taking should capital from again. think like outlook impairments Brian, improving, ratio? are months factor steady Thank just if CETX XX be year. can remind deployment the Raj, operating state the Hey. the us you. at capital impact macro of as maybe, in outlook is that you'd to the wondering

Raj Viswanathan

no we we also answer that but to structural It's damage what north certainly Thank about difficult we you, quarter think will basis than to Ebrahim. you be will is when talked earlier generation, ratio year points growth, across up more seems is and indicate, Ebrahim. we little year. points, test internal -- through our the about rebound XX with to optimal strong our quarter, of XX.XX% see earnings, next as deployment about capital run be as for basis that next with with so on, when economy the portfolio. saw capital XX.XX% could normalized stress backed always And bank know, capital we per XX as The Strong recovers capital this a XX.X%. about the closer which, it's capital. what analysis think this to happen I think

in XX%. we've and test I been ratio with where capital stress that this comfortably one think, year you XX.X%, last of quarter been through of the it's north the largest optimal capital, can imagine our exception of

to going deployment range, think to XX% us, the around consistently we as I opportunities to arise through. very be it all it's capital our So, something provide would informed think But, easy that that we'll for deploying assume. it's manage shareholders. But, to capital by as we returns our be while

Ebrahim Poonawala

Got you. it. Thank

Raj Viswanathan

On to and call to thank wish entire hard deliver their and our season call analysts I the holiday participating our to their a and in February everybody. our Thank and XXXX. and our with for loyalty also our to you. all management thank All right. want our great our support. work day, today. stakeholders, speaking you, want all customers team, look employees behalf of and everyone, all shareholders Have QX focus investors participating in for for in forward and call you continued I Thank today. you to XXXX at a again happy We for safe

Operator

thank Please has conference now you. lines ended. And your your Thank this for time. you The disconnect participation. at

The Bank of Nova Scotia (BNS) 1 Dec 202020 Q4 Earnings call transcript