BNS - Earnings call transcript Q3 2021 | The Bank of Nova Scotia

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John McCartney

Good morning and welcome to Scotia Bank's 2021 Third Quarter Results Presentation. My name is John McCartney, Head of Investor Relations at Scotia Bank. Presenting to you this morning is Brian Porter, Scotia Bank's President and Chief Executive Officer; Raj Viswanathan, our Chief Financial Officer; and Daniel Moore, our Chief Risk Officer.

Following our comments, we'll be glad to take your questions. Also present to take questions are the following Scotiabank executives: Dan Rees from Canadian Banking; Glen Gowland from Global Wealth Management; 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 will Brian. the

Brian Porter

conditions across progression Thank growth continued positive top against summary, Global in diversified remain strong. Banking levels. posted pre-pandemic In and good third leverage results a bank's Earnings business Capital by return with credit levels levels Global secured Canadian and Banking footprint. Wealth revenue Canadian double-digit of normalized businesses. earnings positive of strong by Management International asset platform of channels and an of year-to-date footprint. all businesses pre-COVID announced earnings quarter commercial bank third with our the everyone. by delivered Management and our it's strong million improving of by advisory earnings Markets reflect Wealth growth, our quarter growth of mortgage with growth earnings morning in are supported market management good earnings growth. ahead strong you, trends consecutive our commercial more $XXX all led double-digit revenue Banking outlook face and operating operating in Mexico this in asset XX%, businesses & an Canadian favorable to positive and line equity. Chile activity, John and corporate excess and another delivered contributions business retail improve improving a produced growth Wealth from earnings approaching environment. across Global and driven across morning, acceleration delivered lending geographic The backed economic our good grew international earlier P&C more leverage. generated and strong and our quarter, quality broad-based

$X.X entering to pandemic. Our common higher That than XX.X% was points over is billion capital QX compared equity basis to of it the XXXX. of ratio additional amounts XX

in markets of customers on our in customers in in us Global business. in bank. in the the recognition innovative results future it in quarter, challenging serve the relates particularly Our capitalize quarter our and Banking above gain our data Awards reflect peers Scotiabank communities and times. well again banking Autonomous we and data this Research our our the and we positioned to businesses top our leaders of standing the bank continued to analytics most in and respond do also to this economic global notable and rebounds commitment support investments in digital the to annual to laggards benefits that from banks have vulnerable as the use efforts to Investments Banker's past identify which as recently recognizing digitize has Innovation was moved recognized the in study, Digital Scotiabank progressed digitization. it's most The to highlighting our by XXXX, quadrant our

initiatives We the period. remained our to growth committed have throughout pandemic

the segments resurgence clearly our activity economies technology to from business of specific us investment people in sustained have well Our as benefit recover. and and positioned

and the to committed over for remains call detail. to four quarter our the Magazine I'll including a in sustainability Finance turn bank initiatives. to Recently, the more global from global recognitions Lastly, Scotiabank Global was outstanding awarded for leadership Raj that, transparency. discuss sustainability award With sustainability

Raj Viswanathan

everyone. morning, good and Brian you, Thank

that on my basis Before to all lines. comments and an I'd the note bank begin, our like business adjusted for I are

quarters will quarter in leverage X% will objectives I impact Quarter-over-quarter, of as to to XX.X% important $X.XX earnings numbers will comparables. pre-provision our of the discloses ROE, income quarter up all quarter-over-quarter past bank bank for maintaining lines. review Pretax quarters, by of strong the reinforcing of income with few translation, income corporations. excluding it's many year-to-date, is the the offset from foreign line another Revenue non-interest banking basis trading points begin quarter, the macroeconomic the quarter year-over-year capital was diluted on while This revenues exceeded the up X% segments increase down impact Return against pre-provision The this three excluding excluding outlook medium-term modest on growth. and partly X% associated decline an modest income the the a We've X%, currency The added fees basis segments quarter X% also basis which the driven reported The platform. gains in Slide interest and more to this bank remained strong currency changes declined XX performance basis points or pandemic of $X.X PCL the lines reported on points strong from areas XXX by growth. Slide FX up areas, management an revenues business lower X. I operating of of business footprint. quarter, strong Net the in translation I a margin increased falling earnings favorable Year-to-date, continued of with credit business and EPS did XX% All by as strength EPS were last strong higher mix the flat year-over-year. performance Total driven and increased year-over-year. four banking wealth all EPS relatively loan key X% quality was with and XX for XX gains, declined growth FX return year-over-year currency has of and management impact to investment has Core Revenue operating by for improvement revenues. a operating billion foreign in all X refer or pretax was by quarter, in results last X%, economic our from lower four impact diversified foreign offset improved as performance other the secured growth. the was or basis was up quarter, strong were translation. wealth XX.X%. growth. reported ratio points X% across levels. this many in investment points I stable earnings the equity for and excluding impact given the As to impact driven in segment. XXXX. XX.X% the to has continued and equity and a of is quarter-over-quarter. of report year-over-year decrease, year-over-year income representing and Quarter-over-quarter, quarter-over-quarter. Non-interest higher reflects past retail margin lending

prudently, our to businesses growth. future in manage to expenses while support continue investing We

impact growth productivity CETX was a loan translation. basis, adjusted common modest was equity a quarter the the growing the loans excluding a of we higher the evolution personal foreign adjusting XX technology by increase days growth, increased year-to-date. lending costs to with The from of On while QX provide X generation credit personnel positive Excluding X%, retail from ratio of currency X.X% the XX XX.X%, X business this basis for that our X% capital quarter. driven secured and On fees increased bank and over and points at businesses. Tier foreign currency ratio an an capital compared were benefits strong growth business the expenses in foreign decrease from but quarter. basis Year-to-date ago. Slide at year business of of last an was from of strong additional are assets three flat, points benefit professional points Quarter-over-quarter impact operating translation, earnings, offset Internal expenses year, a from in cards of mortgages currency. quarter-over-quarter, with the support reflecting solid ratio XX.X% across X by reported XX.X% line basis while XX and leverage year was strong ago, risk-weighted the X%,

also or was and This SVaR X% increased quarter, by basis in the our XX points. closing our the in increase the the Chilean the multiplier impacted business that by capital transaction of stake ratio

business year-over-year the quarter-over-quarter. and continued year-over-year earnings by the Pretax were X% billion. earnings rebound in results to $X.X billion, to over line favorable earnings about Slide XX% growth, strong quarter. $X.X for leverage XX% quarter-over-quarter banking The consecutive pre-provision Canadian quality a revenue beginning X% trends up operating now on of significantly and reported Turning very X; and grew credit underpinned second

were since declined line margin The Solid and leverage XX% mutual mortgages growing growth strong strategic the priorities and strong with X.X%. volume to strong lending growth a driven offset in with three grew by primarily by revenues and to X% and volumes margin XX% growth in quarter-over-quarter balances from interest income the Expenses XX% income margin across year-over-year and fees in and loans, higher revenues. fund modest The both card personnel X% in business. X% were by lending growth modest grew deposit higher-margin while net than from flat. unsecured commercial mortgage partly in grew points periods, and higher basis X.XX% XX QX. the basis points year-over-year which points strong year-over-year, compression. PCL Net cost higher assets year-over-year at increased X fee support ratio to business associated offset lower compression. The Revenue increased grew fee year-to-date an development. revenue higher points is and business that quarter-over-quarter, driven quarter-over-quarter quarter-over-quarter deposits X% the decreased costs deposit basis force interest X basis and than remains operating with in sales and X% line and lower QX Residential mortgages technology increase more as of in non-interest

Canada. grow were offset brokerage strong of XX% asset delivered Management Canadian all Revenue consecutive Wealth this a with to non-interest earnings note, a hold growth tenth it's constant Management partially $XXX million The strong X% XX% fee-based fund was seventh X.X%. Global higher again, market Management positive two expenses continue, quarter of is leverage. sales the grew by business AUA of retail a and volume-related consecutive dollar this to with and billion, broad-based to basis. appreciation. mutual strong though revenues year-to-date, the now continue AUM Slide Turning billion net business. Wealth by in Wealth a $XXX sales for operating as it's XX%. X; we positive growth number year-to-date International double-digit was of and year-over-year amongst once year-over-year across expenses. up was XX% increased operating strong position leverage year-over-year Of up earnings also Global quarter in $XXX continued and driven on banks strength quarter-over-quarter XX% Wealth This both respectively, the growing on lines. and the XX% positive growth growth

$XXX a quarter, that resulting of XX% is and QX. from GBM quarter-over-quarter This X% generated $XXX quarter XXXX. X% a record by in XX.X%. Slide earnings is year and reported line million Banking $XXX with last from from earnings earnings to compared in capital this operations the best and to modest X% third with had in line million with quarter performance Banking in this as quarter a prior part ratio of strong which Latin International earnings Banking, market the Markets XX%, generated prior it's down were excess region. strong Global the Markets. was of quarter, the strong million X; for America Moving XXXX. and Year-to-date expenses year-over-year, quarter, businesses in down consecutive in $XXX M&A QX which driven revenue Revenue were Year-over-year of capital million. since XX% in markets is up respectively, with GBM's declined in and contributions and earnings and productivity Global of

comments last Turning improving XX% it's follow of dollar quarter slide quarter-over-quarter. over next million, year income previous earnings to basis. and Banking are achieved on up my an constant our The has quarter International $XXX a business significantly adjusted net that expectations. reported and the same ahead Banking; of on the target International

basis income, earnings has and the from improvement with improved region X% and Quarter-over-quarter, prior Pacific there pre-provision pre-COVID the pre-provision about higher are a volumes Chile to personal X%, points was the balances benefiting declining in up compared and were longer X% Notably, a were markets net commercial GDP business Mortgages and up volatility business income Pretax conditions, while X%. positive driven from XX has Mexico X%, the business Provisions We Pacific X%. last margin services X% commercial with flat of X% year-over-year XX credit X% quarter interest remains down increased strong and earnings growth basis strong and quarter-over-quarter compared economic mortgages growth technology incurred up pace basis were by and some quarter-over-quarter capital of Alliance personnel quarter-over-quarter. Revenue to losses primarily, two-third sentiment mix. And are due in increased note While from last credit for were cards up year. higher in line unsecured declined, for loan XXX points the for which grew, QX declined non-interest Alliance, year-over-year in QX. to X% over Net revenues, lending ratio and X% in we to down expenses revenues interest been would pre-provision up X% changes as the that Expenses due loans the by and forecasted the the decreased. QX, quarter. while increased balances points. Pretax in by year-to-date to to quarter. earnings. insurance compared costs. pretax

by asset the costs was earnings driven associated reported risk. now of we Now primarily operations. improvement substantially over a turning modest lower gains. activities, due and other the to COVID-related lower million. $X year-over-year The call lower offset primarily management by liability that income lower loss was turn to strong from I'll to to discuss were gains investment Quarter-over-quarter, Daniel the investment segment;

Daniel Moore

I comment of the on the you, remarks lower view credit Thank pandemic, uncertain our quality an and on allowances everyone. PCL environment. built will good The Raj an my like we ratio. Slide I'd conservative took begin we onset as XX. intentionally to and in morning,

loans. at paid interest credit and and will TCL estimated. result and given the quarters customers had ACL were write-offs of improving the faster previously which speed higher government existing lower a rate subsequent conservative, in quality a programs ratio, back, unsecured The especially than moving driven revolving new their shifted mix sustainably the rapidly performance resulted in of are both of better Looking credit to high the bookings book has how appropriately by we lower secured, in business collections we lower ratio. This forward support has liquidity levels have and recent down with metrics

us for continue expect levels current we position well to allowances provided to Our be to continue appropriately as to strong. quality allowance high release and to credit be

Delinquencies has to our mix and banking from secured GBM both driven portfolio below quality grade. pre-pandemic Canadian demand, quarter-over-quarter business are shifted, increasing the remains high portfolio market at lines. the Banking banking our and XX% Canadian XX% all portfolios and and pre-COVID down also Banking levels portfolio Additionally, secured international Retail by resulting XX% retail to XX% both in investment International in in growing business products in and

pre-COVID is quality Our very new new and with early in stage both CB originations showing high, organization XB delinquency levels. on low

their impaired to Retail can you our basis see the write-off GIL XX improved ratio high our As and ratios Banking to loan the are contributing with points, and of reflecting declining, quality loan on books both basis the X slide, improvement. points Business

write-offs basis decreasing. importantly, while net lower International in write-off from So write-offs, by reduced and GILs more also net-net have are decreased Banking write-offs The ratio XX elevated driven all Retail. primarily points,

compared to Banking quarter, the age. have remain elevated deferrals this historical International the last write-offs of write-offs averages declined in While significantly as

by primarily the December. the where trending expected in late-stage expired last results deferral But we programs quarter, positively. Colombia, saw overall, higher the are driven This write-offs delinquencies

revolving pre-pandemic we quality net At the economies trends Banking and we and next as to pre-pandemic payment the all our write-offs below prepandemic portfolios remains in As remains of recover International Retail liquidity levels high levels. Canadian the therefore, customers and auto across high by in driven in write-offs decline the strong credit lower continue level, strong. write-offs expect writeoffs largely to footprint, our the to bank credit remain customer by are and expect to performance Meanwhile, quarter. decline levels below to with

ended million basis points elevated over remaining the Turning if approximately credit the due Approximately both in to and next credit quarter overall allowances balance $XXX to Performing losses loan $XXX Consequently, $X.X write-offs and to XX quarter billion, or two-third performing reduction. XX primarily ACL the the with quarter quality, to quality of this loan expect outlook. was as It's quarter our well. credit to of lower were with International second of write-offs ratio migration all our while to ratio of impaired million. The from occur, driven quarter Impaired in our million reducing that due sheet. basis improves last reduction impair, bank performing Banking. from allowances and trend declined released these million improved declined the XXX and ACL starting improving we approximately was quarter, loan credit a write-offs million that's quarter. worth by expected allowances. loan noting declined reducing due on the portfolio $XXX performance last the total points of transferred Slide performance to and $XXX This allowances prior macroeconomic better an credit a $XXX higher allowances

me and on turn statement income credit for Let the XX. to Slide loss provisions now

The last points, sequentially. from basis PCLs million both migration continues Our total decrease declined as total declined driven to improve. million. quarter. were Similarly, Retail down The impaired from XX million $XXX basis QX, the in $XXX Impaired retail and quarter. $XXX was mainly provisions was prior to Business Banking down credit international PCL provisions X Banking points Canadian for by ratio

X, net a that's $XXX This factors Turning we our improvement that was several driven no in macroeconomic provisions; allowance million built driven previously required. outlook. of reflects of in QX. versus migration this by the $XXX reversal of we mentioned discussed, performance release improved a this And I in And quality while to credit represents by performing the credit an better periods longer prior previously. and expectations, prior represents $XXX as to reversal Stage million million had

me with a conclude let So, comments. few

and trending quality positively. credit remains are the metrics asset high Our

further The this continues provisions our to we last and and expectation net improving footprint, forecasts with and in line better prior I quarter's write-offs credit PCL continue. across turn be performance high back our improving from expect performing trends to expect ACL growth performance levels outlook credit to economic to positive the call in remarks. performance releases. Our strong are see These liquidity will than we closing peak estimated and for now with Brian quarter of exceeds earlier. the impaired

Brian Porter

Global few to to fiscal consistent anticipation by observations each would date am has the divestitures. of closing, same To our it the Year-to-date witnessed the on has deliver date, year are before power of the in expectation earnings like above a high we growth a Reflecting Q&A. continues to results; I in are Wealth not a our in progression XXXX Daniel. comments across a by XXXX, full progress it's encouraged XX% Canadian In stated consistency bank businesses. you, at return turning with played earnings levels over make lines above the year, of Thank economic and that period in to PCL end the have excluding expectations. recovery. internationally but with only XXXX, levels normal earnings strong I'd This our Banking the of to be of transition out. of business towards double-digit for our we in to performance the XXXX beginning At XXXX. Canada the bank, return delivered supported the all and

growth levels Canada or growing Economic in high with meet and for economic markets a U.S. corporate both over of initiatives activity summary, our that long-term liquidity. in progress operate expectations interest leads am stimulative continued opportunities. previous position pursuit both Fundamentals growth and to invest COVID background. not variable expectations. on of capitalizing businesses each Our stance Low the future. sustainable in restrictions highly of to International is remain pass to very Incoming well capital long-term positioned continues for removal and well-diversified the GBM businesses continue my of earnings for I'll appropriate capital us against only our in stronger as produce household I and objectives of strong economic a the and beat but the rates bank range John in generate results in the as liquidity Q&A. activity. of has data and concludes demand to and in and to on fiscal date a economic an proud well which strategic to efficiency to high we major McCartney it stable goods In ahead and solid to the return in resulted has individual pre-pandemic always well pent-up of That to quarter With market growth the earnings business XXXX recovered services. levels, Banking formal the continue remarks earnings, strengthen.

John McCartney

Brian. Thank you,

have be questions. Operator, [Operator first will We question? please we the taking Instructions] now can your

Operator

first Instructions] [Operator from Ebrahim from is question of And Bank your Poonawala America.

Ebrahim Poonawala

Raj rates? to revenue the this. to on us about Banking. from raise I from margin could I your International growth loan can of about growth margin fourth if remind look point banks to wants handle assumptions too, region? we International as the little, outlook rates could Banking And in Raj, seeing guess on you or outlook, the Nacho, interest well of interest don't if of the as quarter just that as you in as who this we us the talk a and you if sensitivity into around central here some and If are know -- your But beyond. us talk

Raj Viswanathan

then question I'll Nacho so about on to Raj, growth It's Ebrahim. pass revenue growth. and sure, talk and on to talk asset margin your i'll Yes, it

basis So to we mix, pandemic. quarter-over-quarter was and rate the cuts XX happened quarters, points forward, to look other previous basis of the international mix relates margins international to through banking's points previous X/X margin business the of compared business -- as X relates because that the simply

business seen in you've they're coming as markets we back Brazil, you've us increases to in help to our as the the evidence going in as in asset obviously Nacho fall coming will give going we rate to and seen International region. talk well it floor seen you've expect bottom Banking and segment. both roughly it And expected, in line. but seen growth. have That's about to to of and basis I'm revenue, the So, of XX pass it in points it $XX also Chile early. million with come it start to in earnings Mexico, back other

Nacho Deschamps

Even are talk and tourism in Pacific are lagging. results the good Peru and me as for overall significant winter is countries was I Central and say strongly. international as Alliance that well to quarter, see important Q-over-Q PTPP. Revenues mentioned still the Alliance in expect and increased increased is increase the asset Well, a and Caribbean and the the in Brian about X% strongly Caribbean lower let the pre-COVID improvement that in compared banking, growth. PTPP above quite Mexico Chile, it's this dynamic that America very different earning PTPP offsetting in revenue levels dynamics will Q-over-Q. X% rebounding rebound with the the that would X% very Pacific had to improve we

in in particular, lagging In we terms spot Chile mortgage grew quarter solid a commercial, loan and case mainly anticipate is that balances declined in we by in and high of of in X% And X% markets, driven seeing Canada loan strong unsecured Q-over-Q, particularly balances growth, the liquidity respectively. what is are and very commercial is a Peru. the growth, this X% in and like the QX; and

XX% of pension support terms You have is our there of of disbursements Chile and deck. in fiscal level early in GDP. information The in

in there's lot So unsecured delaying that and is the the the of recovery a consumers loan. of liquidity

and QX. retail retail resume all loan growth expect products in a have bookings improved we to However, in significantly

gradually and which I going Alliance believe believe both in be coming, come gradual countries your Ebrahim hope I growth to Caribbean. growth, right So the will and loan question, going the I the answer Pacific revenue momentum it's in in the it's it strong direction, but -- in trends, these in is

economic vaccinations countries are X.X% continues Since quarter to the outlook to across to the compared last the improve. Pacific accelerating Alliance region. also quarter, for X% GDP is and Finally, expected last now reach

Operator

from Gabriel National Bank Financial. question next The is from Dechaine

Gabriel Dechaine

region across million point that's clarification, from quarterly a that's the the comment? Raj, earnings hike a Just -- like said figure rate kind XX you of $XX of basis

Raj Viswanathan

that's to just No, clearer. an number, Gabe, be annualized

Gabriel Dechaine

me numbers Okay, other classifications. today. Moore, X question sorry. is Daniel My just a for for question Stage

that quarter-over-quarter increase? of is was -- the portfolio, or regional how so model -- the or otherwise, Is up, performing sorry? that risk explains So that higher moved XX%, mortgage X% you book, I what driven? of Mostly that the or much in guess, there can anything it,

Daniel Moore

That recalibration of Yes, because driven, XXX% there Gabriel. your as no on for model-driven that Thank can And the you was results. as anticipate was you question. model. really was mortgage really impact allowances

Gabriel Dechaine

So what's by the -- the caused it Is what it -- of Is driven, international? is portfolio increase? was characteristic model the that it Canada?

Daniel Moore

again, Canadian in It our recalibration on mortgage impact a was but portfolio no balances.

Operator

is The next question from from Scott Chan Canaccord Genuity.

Scott Chan

place So even International on would kind a be your kind you at net into be for higher? looking sustainable of Raj, Banking And or QX high to XXXX reached level, fiscal in side, maybe target. that fiscal the income what of factors have to

Raj Viswanathan

Scott. you, Thank Yes.

a try have including we International That expecting asset had, give to in you and footprint. perspective. talk very we're earnings about importantly, I'll 'XX high-level the I think Banking, more growing that talk the region. about early to growth a seen, quarter-over-quarter, both Pacific you to little assets, to it's expectations but should as non-interest revenue across and our a growth the particularly little Alliance GDP bit see, continue not their

that believe we call we is well, growth see be that had, earnings the fairly and So of estimates about simply be Banking, Day our talked certainly. that to because the previous to ratio the of the I XXXX PCM in And for should November positive XXXX. good happened have more comp that will to International of we'll for X% Investor 'XX earnings easy expected specific be the has in compared in we target progression

Operator

from Holden Paul from is question next The CIBC.

Paul Holden

the if the to of little book So gearing? quick last changes quarter, order from the to in terms about update been just there's broadly. there any benefit in a higher treasury rates we Maybe a bit positioning of talked

Raj Viswanathan

it's I any think Paul, changes, Raj. substantial Paul. there's don't

consistent Our view think some points. sheet interest in that I show is which is the to put It from XXX -- of to still that with disclosures is increases. rate basis other banks benefit we the continues that balance naturally positioned out

In and would see that in uptick none there's sheet slight balance on changes I fact, of based a which material. you call

Operator

from The Capital Young question from is next Markets. Doug Desjardins

Doug Young

Just noticed non-interest I income on Canadian up. was Banking.

XX% this? that just Tire drivers in trying What lot key a around to quarter-over-quarter. was there's sense things anything of like it's think different I and in outlook unusual line? Because their I whatnot. And including the know contribution And for there? the if Canadian get of a and partnership there, the what's there's

what outlook? sustainable a what's get the little to hoping just of and bit drove is of this this And color So it quarter?

Raj Viswanathan

I'll start, then I Doug, have. if to over to got Sure. Dan, what pass and some comments Yes, absolutely. I'll it it's add Raj to he's

well revenue through -- partnership revenue look the as our ownership we think importantly, successful the Canadian banking And branches. same suspect pickup forward in That's we if we at contributor from wealth the or passed. same Gowland Bank have as you in is contributor have Banking's are when think big XX% being expect and a will have I the Canadian and I concerned. Canadian better; Their that seeing is the provisions Scotiabank. they be as come, at have positive. it look as we the we to quarter Tire Management the Tire has you're been quarters in network to But partnership with loan we're well that contributor business the portfolio as revenues, part and is see trends with that Definitely we their a Canadian quality look seeing more has the look the Wealth of seeing with that a loss that few therefore, to far I his back you a bank. trends quite as the lower we're Glen they for distribution

of revenues in Dan? all the continuous to so specific back card see far. quarter revenue it activity continuing to when more growth and credit beyond that So, coming non-interest increase expect should what that he's well. next suggest and can seeing line start We with to be on Dan as

Daniel Moore

in about the marketplace. we optimistic just Raj. Yes. some commercial grow a made couple opportunity rate we ago are to the Thanks, of I'd add faster at business years choices because a that the

make final been the of continue Raj growing faster with progress, And at working a has progression to sales so and piece the also mentioned, on commercial the see rate. wealth at I side. that you'll the we as And our NII line investment substantial a in function management is expect would

Operator

question D'Souza is Nigel next Veritas. from The from

Nigel D'Souza

I Stage Is had PCLs X. a that XX, quick of Slide migration Stage to loans you're to Stage first. On loan clarification I'm declined to noted you just $XXX million your to to X. that migration due referring X performing correct? assuming

Brian Porter

from performing migrations III, lower non-performing Phase That's II to to yes. from I,

Nigel D'Souza

your going on PCLs build Okay. And I if forward. expectations for could

versus low for you seeing from touch How a see lifted. from that you are ongoing developing you're reopening could fiscal of we're much environment on recovery And the the restrictions that as economy governments? your currently the fiscal across have forward? of versus support fiscal sense do in expectations With going attribute support you credit continued impairments seeing portfolio, and your the of to currently and rebound the support level you that would how economy much in

Brian Porter

maybe that can for out provide context. and I'll additional Thanks question. start Dan

think But our have changed remarkable and consumer the deposit a consumer of we've play our and a number about. balances seen a and stimulus led to as I it's in talked in both we changing International last preferences months. footprint whether changing that's lot in or Banking XX been increase things through has Canadian Banking. and That's behavior, remarkable through of government across liquidity, consumer

lower see ultimately, earning, very it of on been very improvement those those and write-offs. So has in course, basis which basis delinquency, a better in consumer very, mix. and which business by cash lower through behavior changes translating in lower driven that That's we outcome a changing driver are strongly to provisions our the that strong resulted driven has provisions on recovery

So that years balances spending additional over in liquidity. content on we mixture of a Canada, us see pre-COVID pandemic. through think the That gives comments? quite Canadian go of a If us additional has is we if for built in the Dan, time. here. with excess two up deposit from look consumer back course they've the sheet we outlook any And our of our lot measures at of to levels, balance some

Daniel Moore

It's adds. two quick Just Daniel.

dollars this month side both summer home again. grocery, in in grow of though credit every improvements. the side for a and reopening consumers the through period Even out in really units We slower on is shopping and quarter travel, First, saw debit which volume. encouraging the sometimes important purchase particular, the getting is across was and

chip summer I XX% wanted in other supply piece here bookings, shortage, auto. seeing QX, out a would in quarter in the notwithstanding account The year-over-year sat to how book so automotive into play mention as were saw is constraints go we openings we new through ago, we the the up interested

the remarkably dynamic engagement has the for And encouraged we're of book outlook in of dealers the the months. and next reopening so XX that been and like

Operator

from Mendonca is TD The Securities. next question from Mario

Mario Mendonca

but that number, card level. a There talk in of your you difference play rules disparity here, sources would I'm recover. Perhaps just not difference that two suggest And I've spending? seeing a what just about credit has being to big credit seeing on credit that card if that the credit slow a spending. the we in got domestic And that of could in right, card card up those and that side recovering performance. question XXXX spending terms we're international really in external to few around follow are in Could that's really out. revenue it Is the recovered function

Dan Rees

consumers so the reason to have here. book, expected had pleased is be revenues, fee want income, and It's In Mario. some book. The I Thanks, card revenues Rees us and in to think pass trend with cards the much it them Dan where transaction-driven we've than yet and deleveraged card that outlook. I'll of we we're aren't that then faster Nacho. rise seen start Canadian-based

and that that's think as across we to resume true don't the I expect street fast. quite

revolving So is in to impacted generating Nacho pass as pre-COVID And the heavily that for yet is to it or lending source nature that not by is comments of levels. important that given revenue that the use to of portfolio the I'll card fact back the yield, the mix international.

Nacho Deschamps

Really it's not too different.

of We the have high and the cards of lower. credit revolving but liquidity, are seen also a level payments due to higher recovery balances are of billings

see the for we revenue; is coming that's so So offset quarters. what delaying an that's in growth

Mario Mendonca

but what see the the was much so I other balances itself, to better a just have know, as to there in line spending not income, the referring there I You expected been. has recovery fee was would

So, menacing is the fee line [ph] really as spending not yet?

Raj Viswanathan

Let me see if I can help you, Mario.

referring quarter-over-quarter, think million, what thought by card you be is would the I you're it's higher. to about $X would down have revenues

Mario it do just million. of it that short also. you're is spending back of that FX levels that's $XXX I on point be, think to it that where think so what used to -- is right, the the Part to too, your is $XXX where to, be, IB million not I almost but and getting in it's should valid

Operator

is from question Cormark The next from Persaud Securities. Lemar

Lemar Persaud

Apologies been bit But asked, my if I had already question has this hop late Nacho. a here. to question is on for

margins, Just trough this on be for it International is forward? from we quarter moving the marks fair Banking would that to that order another it see or decline [indiscernible] suggest possible could

Raj Viswanathan

bit the term perspective seen points I Lemar. growth he basis we about Raj. I'll X.XX% to give it's book. and from right think seen secured and in Lemar, X% Yes, start mix, decline in the points relates to as fit. unsecured XX a X.XX%, business decline is complement The little of can the sees you lending We've have retail in commercial Nacho and basis quarter-over-quarter, XX the trough.

to as you to expect. contribute So a compression, going margin that's can

trend this the backing of reprice. talked rates growth that likely retail to net of last in marginally see for we reduction cuts points in we earlier, have net answer about really basis or in so. growth that be assets as the But quarter happened coming the that think interest Anything in Nacho? And higher, believe interest he region. might the QX, is happen lag back to started the X point start year other where increasing basis international. that the that expected The be line might with a this asset that's in we effect margin, add, of track margin rate the interest the is should the Nacho with And, the see point low to

Nacho Deschamps

unsecured. it's we because No, balanced now commercial I secured, more think growth expect between

rising and stable there's be going So the in to upside to interest potential relatively rates it's markets.

Lemar Persaud

another Would prevent margins Okay. reflect back used range from see be follow-up. talk we there could about the to something international it that If structural would pre-pandemic? or is just happening? X.X%-ish return to Or I in to nature squeeze in possible in that

Nacho Deschamps

No.

in sheet. I a think there's adjustment structural balance our

It secured Daniel gone retail. XX% as Our balance sheet XX% mentioned. is now has from to much in more secured

has But offset also earning. reduces in it -- our would PCLs. a that So positive

bps XXX levels. PCL Our which below is XX ratio is recovery bps

Operator

Capital is The Markets. from RBC from next question Mihelic Darko

Darko Mihelic

all pre-provision create and Quick some decision token something sort from increase a that's with the dividend The is in is catch help what pretax drive to Scotia? it respect of is down But increase that and Or I therefore, predominant How to dividend? consideration give will regulator bigger Brian. token a and else the in there your increase I'm probably that earnings to expecting. important of for that year-to-date. your provision really increase the think earnings it is restriction. decision way of sort Question want once is removes banks is

Brian Porter

for for move two in through time question. -- happened short I thank you divestitures. of is way million NIAT of earnings over reflect obviously, solid time and just to over in out And we last the We've period years remember, growth the any the the $XXX drives of back earned proud very it. good bank of PTPP Darko, we're took course solid But of and the what's that. of terms a asset good is at Okay. growth look on here bank. that

all four that look, bank we positioned the for businesses. think is across So well growth

quarter, investing the at in Canadian organic terms great opportunities. businesses look this been numbers. growth in bank you all our of We've If of

sales, growth, two that we So earnings number to and trend GBM demonstrated you're terms earnings Bank. expect out year to Management in growth Wealth going number has great see continue. consistent fund of the growth a in repositioned business. is Canadian of this mutual two

our here the forget people capital you business. GBM if the and about of sometimes And that's scale group two markets number peer take in Canada. LatAm, But the division GBM of

GDP earnings. good talked consistent is it's and earnings. business of And Banking, through and and what skewed is it this towards coming there's growth always and America, within Mexico Caribbean delivering appetite risk level Caribbean as a coming lags International so the So Chile and is tourism. economic morning, between Central about happens and happens, that are the stays back, recovery lag as because a it's back and because U.S. Peru we've pre-COVID big always in

going the kind growth. bank dividend PTPP very about the And the way of long-winded growth Darko. in is but rate of we a to of at forward, So terms feel answer look positive

Operator

The Movahedi next question is from from Markets. Capital Sohrab BMO

Sohrab Movahedi

I point about assuming X then [indiscernible] the you for think way Raj, basis gave answer all after by basis clarify that XX bump XX and were question that to Chile, ask banking net tax, points. Mexico, is that international basically of income to mean sensitivity a it? wanted Is rate to the I Colombia, Peru the going

Raj Viswanathan

Absolutely. It's basis answer. instrument very Yes, XX exactly, a points blunt the across footprint.

So you're right.

Sohrab Movahedi

million was earnings Okay. $XX And of about tax? that after

Raj Viswanathan

correct. That's

Sohrab Movahedi

now? of to that quarter could acquisitions back success bank the a the here You wealth answer question a a the couple tag in for try good space. this business. the and but Okay. Glen, in I of any you're enjoying years how obviously, made to ago of bit that is to mean, much there attribute another you Maybe tough way right

Glen Gowland

And and how Yes, I really business they our fair would at think are. of become the than a I cultural were additions. great it's fit say time, about they talked would question, Sohrab. we part these the that

road, the investment banking, businesses behalf. So asset businesses, look we're little primarily in are if completely own on record real those business, the numbers, in year-over-year. three the I businesses, -- XX% trading our continuing look seeing of with integrated. we're in record both bit to of I that management nitrate. the in Outside we're every and revenues, growth seeing down counsel, a ScotiaMcLeod our they're moderation industry across the businesses think Canadian across assets are whether the it's business, years businesses self-directed private Canada. But of single I those their both north behind If certainly organic But grow story

for continued I in you growth. is us iTRADE, invest to gives breadth all what's here that business. the for think really We're of story things that, apps that's that's up you kinds And quarters. flexibility real mobile for P&L can more reinvest and the and the So, the adding setting those future to people, continue

Brian Porter

extremely to it you just and XX of. Sohrab, that this down add years proud Brian. we're of business Management ago, consisted I obviously which here, bit our was to memory is if or X a go lane of Wealth very we're proud business, wanted it's XX that ScotiaMcLeod

ROE and to above now we do So, acquired like international we in the have acquisition, has we've built in through business produces all here lot a billion year of our and a organically business growth the U.S. $X.X bank than we've and excess a that profit of in business, more business potential the Canada

a doesn't with forward It's engine the his bank and really a great business. for due. it's be that have going So done the going we team job Glen get think to and the exposure growth

Operator

Ebrahim America. And of question is Bank from from Poonawala the next

Ebrahim Poonawala

some digital follow Just wanted thought as on from on Nacho, Banking we've International IB an the you having expense of lever side. made. efficiencies Maybe up get expense investments you as to

goes faster from is a Or look to that operating going expenses positive talk think the revenue level at and clip of we versus being be here? Just in function down growth the Do absolute around forward. rebounding leverage you us to expenses. a of coming just as

Nacho Deschamps

as as at variable look has would personnel, rebounded. in Thank expected operational revenue significantly technology is commercial you this for your And activity, question, really mentioned, loans I because and Raj this and on expenses. growth general, growth stepping Ebrahim. expenses, up expense

adoption opportunities expense is base increase Raj that digital to dividend a at is mentioned, significant quarter. are But year-to-date, improve continue digital as -- and pace, see I and the X%. Ebrahim. continue So to leverage very technology we an collected reducing expenses -- down in future significant we to our the is as high Digital we very really continues have this why our that's have

Ebrahim Poonawala

it. Got

that absent any fair? expenses go lower So still should revenue-driven growth. Is expense net-net

Nacho Deschamps

Yes.

trend going the continue expect to We lower.

Operator

from from is Bank question National next Gabriel Dechaine Financial. The

Gabriel Dechaine

for question Daniel. Another

years issue? burn statement to of one you it lines, it it bit. materializing a wrong comment it that shed through good, levels excess made it's some -- that but the slowly clarify two But returning but Maybe in going consumer don't something a to going spending, hear when light there little outcome. like if sense I lending those an along in pre-COVID get raises come to me doesn't and consumer question well, -- starting doesn't rebound to can the to that, can big about we're interesting have on you that think to You Canada impediment maybe make of the about QX, seems -- people liquidity this that sounds questions me like a it's in international back

Daniel Moore

you've seen and retail the consumer I'll elsewhere, footprint incredible side the outlook Canada Dan. Yes. liquidity this for on indeed, I'll in Bank and our over Gabriel, start of our disclosures then and the to of But increases pass things. translated really across yes, on

really levels. So demand the to the deposits, it checking gone that balances in Canadian retail, XX% up need versus pre-pandemic people And most. that's

really from that So to overall disproportionately here. customers. XX%, driving is that's you've balance that seen accounts our we That's about longtime the have in FICO the outlook score PCL reductions lower

pension in disproportionate a those we've Peru And up in IB, well. been in in really country Those the net good reduction releases driven allocation, deposits Similarly, been been increase are as larger, that's about a for and -- deposits. and bank the our that's footprint. So for that by Chile that result XX% that's had across deposits. that's

outlook. So, has in the to that notable customers. the thing But FICO I down think I'll lower on it turn increase gone lending is, deposits well, there the

Gabriel Dechaine

Okay.

XX% is is in international and end and demand credit -- the So of notice spectrum? the XX% to Canada, lower in going up the skewed is disproportionately

Daniel Moore

Correct.

Dan Rees

Dan That Yes, is here. correct. Gabe, -- it's that's

line. interest a matters took moment top highlight through to the receivables on to book standpoint. I I continuing earning think was lending a grow We our is why was basis our of the from to automotive great and see Credit single main did That's mortgage it's liquidity we spot risk X through quarter. message have in clearly lines. saw quarter which here. the the from grow every a product What one on consumer point options, consumers card strong

portfolio. interesting mortgage that will activating. will year when the role are be consumers it continue to I And the next look an think we given on line secured So play at year will market home roll that the improvements

management, you kind take position is out we I the quite more to well and the So, pause have deposit stickier And the for wouldn't great seeing relationship on called why are which give that's returning, move I that deposit consumer into balances the to opposite. lending as we clearly with mutual the fund for of products and side wealth fee consumers. good point

you. thank So

Operator

next is question Movahedi from The Capital Markets. Sohrab BMO from

Sohrab Movahedi

just as another X well. quarter here your obviously, business. ask Jake wanted also I in strong of Jake, here to

once But kind we had up about of maybe GBM earnings stable the quarterly. durable. XX% million about when earnings that's kind we time, of more to it's million contribution think I $XXX talked about on talking and of having were of $XXX

and of your how earnings is sustainable durability kind it is $XXX of of due much it just of Any how million. above to been thoughts as You've what to right is constructive And forward? much updated the markets? going now

Jake Lawrence

minus Sohrab, for probably Thanks, $XXX or is a Yes. do the this business, XXXX. million We plus think question.

continuing only best made move conditions results book. since on out, look come was in we income If use this as We very we it U.S. little before. talked line by a a the have we're come mentioned And And strong, that we look bit that a Brian will of We've accrual as grow focused won't do and have our away Americas earlier QX fade from the Raj. X We've GBM buoyed outside seen of we've M&A quarter, about great stability out clear. that been I footprint, market to the better we intellectual but did as of that very got capital. including at constructive our lending through quarters growing in strong XXXX. believe the of And fee we've from Canada. diverse business LatAm, but

cash management So sheet stronger DCM, ECM, of better products. into businesses, that balance cross-sell advisory

that is optimistic in out So, this want there repositioning, show to and actually year-to-date to our I pre-pandemic we're a are higher business get earnings great XXXX. than levels that repositioned stat the quite

this quarters into already earnings three XXXX. total we've So surpassed our year, in

as business, the not So and XXXX. also more we're a only business, durable outlook the we within IB GBM contribution larger about quite into a segment from the much in earnings move much but pleased

Operator

are more no There questions.

Brian Porter

Thank you, everyone.

Raj Viswanathan

concludes behalf for provide look participating team, to forward our call. results Have a in you you, On at our speaking Thank everyone, everyone we for with thank XXXX. quarter We our our call entire of the Yes. outlook quarter third call, for management participating. will This today. want also results again where fourth great fiscal day. I to

The Bank of Nova Scotia (BNS) 24 Aug 212021 Q3 Earnings call transcript