BNS - Earnings call transcript Q2 2022 | The Bank of Nova Scotia

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

John McCartney

Good morning and welcome to Scotiabank's 2022 Second Quarter Results Presentation. My name is John McCartney and I'm Head of Investor Relations here at Scotiabank. Presenting to you this morning are Brian Porter, Scotiabank's President and Chief Executive Officer; Raj Viswanathan, our Chief Financial Officer; and Phil Thomas, 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 from Global Banking and Markets.

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

Brian Porter

return announced XX% Thank you, John, a equity $X.XX quarter results good on per morning, very or net and strong of billion growth share, increase reflect our in share. morning $X.X earnings XX.X%. everyone. earnings per second This and a we of representing XX% income of year-over-year The

and Continued of customer key very our The growth The underlying positions and while prudent expense XX% on loan earnings. the interest and for businesses maintaining bank margin, earnings balance terms expense geographies delivering improving resilient and remains strong prices strong bank well proving our the return balance of with households. its backdrop net commitments all in control, a to growth, of positive grow sheets, supported strength in combined macroeconomic rise equity, the management by is on commodity sheet.

spending in high-quality these Thomas origination detail in Credit portfolio showed expense positive current our International impressive leverage Phil consumer and in Banking resilience Canadian discuss a Management market quarter of the A business and in our positive recovery leverage Markets Global lines. of in and our more solid customer call. operating segment segments will factors prudent another growth sheets contributed period the and strong through operating favorable. by period to result These later trends environment. and delivered businesses. strong Global declines activity momentum and Banking in year-over-year the customer balance operating the and despite revenue Continued pressures heightened delivered Banking and of a across behaviors. operating our supported broad Wealth trading remain of of growth volatility volatility muted

deployed quarter as to our This X% capital share plans our reflecting shareholders. per ended organically, our confidence XX.X% to Tier morning outlook. in Our in bank announced at dividend earnings grow to ratio we with also common X capital capital quarterly the $X.XX a and our we the equity line returning our to increase while

revenue continue loan new to online to XXXXXX has Plus digital capital two in with The million our and the considerably RWA is in growth organic deploy capital of metrics members. over SCENE and past future strong since or points log-ins expect quarters internally program will The customer support We XX million up generated quarters through channel demand. best of $X.X mobile business. to our app. engagement growth with loyalty retention of focused support relaunch and $XX our scores Scotia results based showing across Plus Plus billion since to-date, our strong and in Rewards great basis in that advice. customers, relationships X quarters. January the lending SCENE combined our and launch, Transactions with multiproduct deepen each relationships strong domestic of been customer between satisfaction future business product Canadian initiatives customer offering, In Banking, on breadth connectivity, convenience, remain lines We driving we're focused of on on improving are Scotia over and redemptions our added retail increasing very

in year Canadian investment previously of to a delivery XX%, for investment commercial in to interest plant to partner, quick unique and minority clients to local by and Global banking growth earnings. loan of in in opened books of users. pipeline. Canadian penetration leading experienced corporate in Payments customer businesses multiemployer our earlier Financial all incorporated products. M&A announced client offering continues lead We launch a of payments, in and announced the validation. as momentum strong challenges across strong key clients, request XX% in continue in women our the Enterprise-wide in practice enhance management as in and This Management, initiative. our XX.X% the employment year just Finance, acquisition of excess across Digital and quarter the and markets only access continue to footprint commitment as the here in designed finance Global capital GBM's equipment. businesses to to was financing Scotiabank the In completed driver week, end for the $X.X finance Business strategically to over inclusive dealer recognized for to and bank. the from continued support quarter build to $XX recognition. MD past both higher already our XX,XXX to launched growth recent leadership efforts balances Raj investing third capital advice diverse sustainable had to bank customer and recently remaining Canadian top-ranked through award the Investor, our participation organic that more In Banking a Canada corporate also increased strong recently the with traction with in growth predictable Wealth continues We lending million by specifically and growth is last the their Smart the Banking grow lifetime deposit segment high-quality in identified allowing Scotiabank remains to banking And with are bank. financial places Canada Place from the our work of billion Scotia markets, recognized the jointly for in best platform and Chile the more growth and at detailed approximately ESG markets we real-time inventories our and of uncertainties advisory Institute. pipelines resilience We in GBM experience, in Work earnings seen for continues double-digit appetite. Canadian retirement International outstanding enabling in larger contribute turnaround Canada by for and complemented and Tangerine's to sustainable order create encouraged in deepen and to Great In cash face important stable experience our efficiencies in as nearshoring digital we real-time adding income. The leverage This our a Despite by customer payment adoption accounts macroeconomic drive gain Scotiabank bond to driven businesses, reaching women-owned best we satisfaction to the initiatives. interaction momentum global businesses and as customer grow which as for an physicians by loan with growth Pacific XXXX, service, with account retail risk inline chain will closed progress has Canadian supply and continues quarters. with mobile hybrid Banking from well sales. Scotiabank this operate Medicus, the also of digital economies. QX, In future global our international initiatives transparency opportunities, quarterly were anticipate Tangerine of we consecutive And growth also loan one a for benefit year-to-date. future enhancing and geopolitical advice Banking aimed customer efficiency the women-led operating the the We pension report. our for $XX call and sustainability, access billion. plan Alliance credit I'll for turn months, communities our and

Raj Viswanathan

Thank and you, Brian good everyone. morning,

due Year-over-year the X% of business expanded diluted mix strong International driven reinforcing capital All $XX.X and three quarter our Canadian an while provide basis Before results ratio spreads a strong in while I non-interest X. growth. XX% points XX.X% XX points level. the primarily the detailed professional margin business Banking lower strong the in of XX% of reported by underwriting deposit slightly all All shares. organic driven appendix. common Tier interest again point at management platform. XX the point $X.X X pre-provision spreads with adjusted line share-based driven in X% well I'd of trading of increase EPS and gains, quarter-over-quarter, strength excess technology-related as The Canada capital ratio growth Banking, Banking and quarter, my was as increases, as by risk-weighted X.X% due another offset repurchase X%. basis. last growth are billion. this expanded to points to The risk-weighted that International to points basis were revenues business wealth loan Net in compensation, year-over-year and earnings changes bank X% negative diversified while the quarter, ratio banking on was This quarter, year-to-date. this compared in expansion over net by our rate XX% of slide revenues personnel EPS XX Revenues of investment an the begin, related XX a equity a quarter banking billion and Return On Tier quarter. year-over-year, prior NIMs X costs results interest expenses $X.X adjusted assets. strong XX.X% grew and billion I'll fees, strong by margins business impact was up growth. income a of basis support the down Canadian by we productivity up of and bank income expansion of advisory Slide strong earnings a the the and on the and for year-over-year. higher higher to of reported in basis ratio improved Strong Year-over-year Bank of over again was to start The was down growth. assets evolution basis four performance on XX.X%, for X% in increased the represents supported were pre-tax driven while PCL revenue up to The by like and X% X%, were X operating the of review lines bank up of to common loan quarter net was modest and interest on the internal fees, and equity Slide $X.XX, approximately bank basis changes. note quarter advertising quarter generation comments year-over-year. equity this once X reported from an

has repurchased million capital. XX using During bank shares, points shares, Year-to-date, the of capital. basis using the quarter points the bank of XX.X repurchased basis XX.X million approximately XX

additional XX mentioned, of basis our of points. previously operations closing the Chilean stake the accounted As for

benefiting XX% growth Banking year-over-year. Pretax XX% slide up business grew manufacturing. of $X.X by Turning by XX% income business reported to loan strong quarter-over-quarter, higher year-over-year, and operating XX% reversal personnel grew and billion, support business quarter spreads. as the higher strong QX. distribution foreign the positive year-over-year, increase, basis share was very generated points strong sectors commercial growth, line banking of driven technology, by quarter, beginning Expenses was in sixth income revenue, XX% strong driven growth Net interest including ratio a higher pre-provision of X% year-over-year fees. British offset up by the growth quarter, X%, at rate advertising Net and impact which costs growing for in now fund Broad-based driven driven The to consecutive X%. positive business loans. was lower transportation margin of X on The Compared mutual another such and was seven. partially results grew revenue of the point. spreads of noninterest XX% while earnings mortgages growth. earnings to in increased strength deposit increased in interest in X.X% Bank build exchange of and year-over-year, Columbia and by Canadian PCL XX% reflects loans increase basis Canada X and efforts asset our The from focus agriculture, Quebec leverage growth. banking prior net by segment mortgages to

and was in generated sales controlled ratio net higher partly by leverage offset XX.X%, lower division The slide lower on points. discretionary moderating businesses. force revenues, expenses $XXX up lower flat quarter wealth offset of Turning technology million product fund with volumes. year-over-year, from to Management fees, XXX year. were income driven eight. was by continue partly and investments asset points and to Revenue by of expansion, were is innovation, advisory basis last brokerage well and Alliance, fee-based Expenses trading down digitization. positive interest basis XXX year-over-year. Productivity strong revenues grew X%, management, operating by Pacific Growth quarter results this Global our which across X% this investment Wealth broad-based, spend, discount underpinned be due and volume-driven now to Earnings

in solid to the our We volume growth loan banking business, deposit see with strong and pipeline a along continue for half. private with growth, double-digit second

under were higher net net X% and as appreciation. to was while slide nine. banking, driven prior $XXX down with loan markets billion, In modest million reflecting down, by sales under management line quarter, the impact challenging by Assets Markets a as Global of X% conditions. X%. earnings in under in year, Pretax X%. continued growth strong last market modest partly Banking generated X%, with income growth, depreciation. $XXX to decreased assets year, business market Canada, this pre-provision capital offset the of Revenue was while a assets to compared up market billion Referring $XXX administration sales offset decreased increased management to were

As accessing grew debt new to by businesses. the in GBM's in markets driven grew clients saw their Brian debt during volatile quarter-over-quarter. corporate loans and on year-over-year This and bank focus given existing was balances loan year-over-year. US growth QX, XX% market we mentioned, our growth clients to the growth, a X% more XX%

for mainly year year-over-year. of were the expenses Non-interest impact lines. up by Net and basis X% basis offset by the the this the strong residential a Central declined the XX% and loans X% increase and generated Total loss XXXX earnings Central results results. strong delivered the for also up mortgages year-over-year with pre-provision year-over-year. had Compared driven net the with loans basis XX GBM year-over-year line lines from loan growth, progress. driven seven and up mutes Non-interest highlight increased X%. mainly of economic points the Strong in Net other spot interest the On part year-over-year, a efficiency pre-COVID X% in recovery of expenses million, lines in restructuring which the million and Pre-tax net showed Alliance Central the constant growth top margin by XX, four Pre-tax in and demonstrate quarter. Caribbean well-above in to revenue metrics and coupled non-interest to business $XXX was potential X% have positive International LatAm's the Latin These segments. represents to grew last of net strong growth earnings grew a prior reflects has XX% charge investment business operating fees points. expanded follow all-bank Expenses strong strong Quarter-over-quarter to X%. higher basis and and the margin, mortgages operating quarters. reported America the results. Pre-tax year-over-year and grew and strong My that America net business for commercial quarters. commissions operating at growing slide line and up all demonstrates GBM XX franchise, quarter, the X%; average Year-over-year X% momentum grew higher X% costs net revenue strong were related from a up as of changes lending The grew benefits points, and of basis. X%; in positive GBM XX%. Revenue modest the Banking Banking X%, XX for a reflecting to which earnings, I'd on resilience, year impact shows are diversified year-over-year, like X% pipeline commercial quarter-over-quarter. America, credit were revenue. continued Pacific Provision Bank realizing growth key regions. On International basis our X.X% of and the technology leverage loans expenses by gains positive leverage with comments margin steady by of dollar expected by as was International balances was XX%. Slide GBM year-over-year X% ratio these while grew inflationary while our the segment year-over-year Pacific revenues interest Significantly results with on performance to initiatives we the $XXX from initiatives X% improving due balance that in impact pre-provision with XX with increased performance is positive prior reflects development. annual reported net support XX% loans four together up to Alliance, a by interest XXX the the future Central lower sheet, basis. for robust XX% in income banking earnings business strong interest growth business year-over-year combined year-over-year X.X% deposit was year-to-date. an up The up line which business while of another strength, Caribbean basis good the grow points. quarter America lines income and side our that aggregate of pre-provision the levels. and strategic level. business in banking and digital grew steadily business to operating Caribbean of Banking majority points, our XX% up adjusted was are across commercial grew higher LatAm's grew growth our segment's income lines investments XX% in healthy Alliance were metrics XX mix and earnings interest strong and points driven from in positions nine credit while Pacific fees income. strong cards

adjusted was $XX offset liability the to turn loss call million million non-interest to liability by management We net million $XXX of activities. prior slide was discuss. quarter of gains, the higher prior segment well. Phil in loss net higher lower and contribution change The turning that year. a the that as driver of the the investment partly over the in other a quarter of Now, reported expenses Year-over-year prior of from a result management asset change higher XX. from With the I'll $XX from to asset contribution modest was to the significant a on significantly as income compared

Phil Thomas

from credit themes moving the the Thank The will before driven Good credit strong, remained performance I the bank's first write-offs you, net Raj. quarter. We everyone. resilience details morning perspective key shown highlight of portfolios a business a our despite banking lower our performance outlook. and macroeconomic mix. by and positive given favorable an the business experienced retail across customers by into uncertain

our customer over across by than have the deposits start grown loan of since balance by average the while have investable by footprint have fallen portfolios highlighted are the assets the pandemic, significantly same key Our ever XX% X% improved, Canadian consumer stronger follow; sheets and balances customer period.

up geography of from we less the well industry. that probability credit affluent X%. by has with is strong strong of remains than of Banking XX% is and the improve. portfolio and the down from quality International high portfolio XX% this in uninsured XX% mortgage of in portfolio Business loan-to-value of our on is than to default Asset quality, a focus to XX% continue In pre-pandemic are is corporate diversified scores And Banking, Retail high Canadian XXXX. finally, the Of more balances our to Approximately as of average of quality FICO XX% continue XX% insured. segment. originations investment-grade

proactive such While inflationary the remain we cognizant the by persistent supply to about customers. continue forces ability due needed. economic economic of our optimistic years the chain challenges issues, unforeseen and be current risk bank's challenges overall we where supporting shortages two of manage labor the we The highlighted to posed wage are growth as elevated in effectively health customers to and financial our last have through

points QX loans XXXX to quality Turning peaking at credit of impaired of four continues in basis since by points. XX to slide ratio points XX, portfolio improve. to the overall our XX bank's The basis improved basis gross

trend positive lower see to with a continue formations. We

the Our prior down net to XX decline basis quarter-over-quarter basis quarter. write-off points continued from to two ratio points,

from We lower the write-offs level $XXX across shift across is see approximately and the This in million with our million ratio retail. also of secured X% $X.X quarter. towards ACL ended last prior for from footprint. billion, continue to reflective quarter XX quarter bank's lower down points of improvements losses of of of we the retail, a credit saw as We down $XXX trends basis portfolios broad allowances and allowances

Impaired due ACLs Canadian and XX% quarter portfolios from and across decreased GBM. retail international respectively. Our $XX million improvements are now retail mainly XX% to last and secured

net of improved of million a net offset reversal quarter, QX retail to had quarter. growth to retail. credit related Slide PCLs, $XXX performance million write-offs to Global Markets. lower Banking will by loans the we continued macroeconomic last reversal in bank were lower Impaired releases international by growth due and metrics. net improving $XXX credit performing I PCLs QX. continued Banking and by now improvement are driven Canadian of reversal to Canadian less million reversals in flat net forecast XX a in from PCLs the $XXX for driven All are in in or loan GBM performance. was in In PCL The review XX. basis PCLs retail points, performance and Strong Turning portfolio credit our a by in mainly performing offset favorable loan Canadian and

retail half offset quality was by mix to back PCLs gradually I latter We've would turn few increase the to quarter with I provisions floor like to in lending lower favorable by highlights. to stable and net and reached wrap PCL call and largely the expect Brian, the a growth, a in secured of for the up Before shift growth releases this year. driven write-offs. asset business

the to see that to for are are and positioned. continue our to strength we confidence and remarks. geopolitical Brian and us now will origination I trends portfolios And give resilience across back macroeconomic our cognizant environment well call continue closing the Improving We uncertain of portfolios. turn

Brian Porter

Phil. you, Thank

development. XXXX. The full bank Despite the our organization. with increased of power half We of in earnings global and is the first volatility performance are macroeconomic the reflecting the very pleased

and expect such, grow confident Growth core As our medium-term ability to been our bank continue, footprint healthy and our commercial remain sheets remain lending in continue Throughout given positive the commodity to pipelines resilient impact retail of secured to we prices. key strong and which we businesses. date in has corporate, against higher economic the balance deliver our to geographies objectives. consumer financial across

Our ability the with interest points supported and well investments in deal stable year-to-date enhanced deliver have net added bank growth our current high-quality $XX earnings. Strong in environment. has and XX to macroeconomic produce performance RWA Wealth environment. delivered to or improving in uncertainty interest of higher the The past consistently organic by periods diversification challenges will credit strong of the of sustainable very billion and basis a positioned net we margin feel income

all the to stakeholders. our management of prudent delivering times expenses leverage on to especially customers, that our generate yield business strong risk to results pass We with positive highly call I our uncertainty continue the through for John coupled year. manage balance over of for Q&A. model, for remain will will for diversification focus a We prudently the With long-term our operating confident that of and will

John McCartney

Thank you, Brian.

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

Operator

Thank you.

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

Ebrahim Poonawala

guess morning. a question expenses. on I Good

adjusted X%. expenses up So year-over-year,

and about about growth any talk around core discussion And the inflationary run segments we as basis, then for talk by like on we that? pressures, be wage just your much so growth. for rate being us a savings maybe And basis you surprised a the on forward Just you. Have what around these there's think would segment consolidated through there expense been how look us opportunities across a think as to mitigate are as or us, expense of Thank remind have backdrop? that impacted should year-to-date? macro you expenses to think kind you if outlook how this

Raj Viswanathan

line. consider how bank's of and with manage I it kind current we Ebrahim, previous question, part cornerstone of before to perspective, we the operations continuing line talked of revenue day-to-day a any technology. in my pick people the it in growth management bank. and that’s if said and colleagues invest Sure, a is business expense about it We will start to run calls, cost of philosophy we might From we while in our this

in expense X% over this to indicated year-over-year looking our of X.X%. really But in think but call half year. rates we year was as up Really higher in favorable could the November. last of to the in the quarter know that It like is compared something So outcome. look with growth which expenses we to we will X.X% Ebrahim single-digit months. go is to good by than half be of is go for back yes, up it numbers our first forward, FX, low the the first the helped that we some the still six it's going But

call see we management can levers specifically find will on it across expenses a because to the have various bank very go but just of our over offsets of is how Lots up that in of as example are that certain I'll to costs, But lines we happening number our talk not continuing the discretionary the we project of Ebrahim. time, there. There A use a opportunity about category. to us. lot from professional across business high. That's the bank, change as lot lot not will real related of whether been We've And long naturally this around densify up, we on benefits no it footprint us perspective. services team giving or it's inflation one one. a recently, there's it is and just way. for So estate for so go that Salaries working on it a what's on. and benefits.

it numbers but is of Some already in to the come. there’s more

investing So for many expenses we which continuing those go to that lines up. many, expense our expense But will half there we the balance said, to time. are this that opportunities there Like think between for small know the the it's Brian expect are lines offset while X.X% prudently. negative manage of future year. leverage quite operating confident to It's We're second positive year. generate managed, at this a we growth a at

should expense fiscal elevated positive XXXX. operating see we the for leverage With load,

Ebrahim Poonawala

lower just kind about first follow-up the a way XX% side. expansion we as half, quick that. of drifting to margin right it. that on it? Implied Got closer that's other the around think XX% Is on ratio productivity about And probably to maybe think

Raj Viswanathan

we'll clear. for think XX% year just to Yes. the I to get don't be

target been you get lower well, to see has always it trending XX%. Yes Our to yes. as should

Ebrahim Poonawala

my Okay. questions. taking Thanks for

Raj Viswanathan

you, Thank Ebrahim.

Operator

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

Gabriel Dechaine

morning. your good give I what be yeah anything I My and more today the interpret which there. you let's know worse. there doing nature? I'm and or much of regards marks to weighting is quarter conceptually where between come something Would see question leave concerned. gotten just on worst-case mean provision the you to April, guidance that on I'm with It this too you're your of you up too it mean, with? like inputs a can end maybe doesn't I wondering the comments sound Hey, forecast Econ have like end trying credit, performing but put scenario there, of

Phil Thomas

now. color consumer made right the Thanks I XX%. assets portfolio of in remarks. the down earlier, really last period on people -- increase We're some And Maybe seeing investable the focused I question. the my in opening seen Gabe. Canadian the We've two-year X%. Appreciate of add -- Canadian in me comments portfolio let our about mentioned Canadian quality consumer as the over loans to paying we're

improvements scores. from in over within couple also We've years our FICO things look on to average our like credit at XXX. had mortgage XXX in from of of FICO we our so customers our the XXX scores last And to XXX book book

we've confidence XX at all look gives would a really within of out with So confidence we're Canadian to last seen paying lastly seeing terms our mortgage us point their LTVs at stability just how seen And the I net some decrease in good XX%. a in is consumer maybe you portfolio, customers if portfolio points, those. like quarter is of if improve in customers. we've this you LTV have give our should points We've The our seeing off you how XX loans also basis also years. from terms two now basis with look write-offs, us healthy. to the over and this average been good what which our are

conscious So consumer point. the and headwinds, at Canadian are thoughtful we the macroeconomic are we're very health this despite in and -- confident of we about

Gabriel Dechaine

rearview there So and that. I'm Is to I looking more be looking the a -- deterioration, but to like maybe anything thinking and establish that want indicators. information, for of conservatism at just cautious. mind? loan what indicators about mean lot thereof, crossing forward-looking that they're just get I your we're more you

Phil Thomas

economy. the are our of this a and in will the we've mean, quarter as we how in course to listen year FLIs at happening continue the I Yeah. build trough the PCLs. terms hit the we of And things look over over

Brian Porter

our have the Yeah. Gabe, tests on of all update would we But would a Canada; it's rigorous inputs the a the in harsh of Phil's stress good given international, It's the corporate in Brian. portfolios year that tests run commercial. stress run today we given than we here a And, obviously, and more have status bank environment, portfolios. possibly macroeconomic -- ago.

hundreds important week reasons. a of process. We of run do to it's course rigorous during a them and the obvious that's for that So

Gabriel Dechaine

Thanks Nova bank. for same that. Great. Scotia, Thanks. I write seeing question off I’m think, not every Bank the of for

Operator

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

Paul Holden

Thank deposit be and that in both light of higher Just morning, and mix tightening impacting how then availability interest in I of in and you. also and how quantitative question deposits? deposit guess rates liquidity managing Good growth that's impacting might mix a terms have

Raj Viswanathan

Yes, I'll We different to really been of the and run loan when to yes. start particularly can the to Canadian more Paul growth level, good see bank. moderating the the in we would to been and at it it have are gets a gets deposit has pandemic, the the many and tight self-funded strong strategies through normal all what levels international very bank see. Deposit fairly Bank growth P&C operation, as deposits to us. how are but key in respects, be we business initiatives Deposit

manage two them. into ratios, for get won't it of reality closely, to on. so it we I on we externally liquidity NSFR talk details But LCR so I'll So, very the the ratios pass that something about in and is

that growth and to numerous strong of our to lot we through speak a metrics that there's So, seeing. ensures loan place used appropriately is externally in are support the balance metrics manage both and that there's sides that internally funding to we use of is sheet the

can about perspective. I So, all to that's the bank high at level about it pass International about and maybe Bank Bank on you Dan very Canadian talk Nacho the a from then please? How

Dan Rees

the in Raj. Thanks in and in Banking deposits that I you've to quarter-over-quarter at pleased growth on Canadian seen average X% the was closer Sure. X.X% spot. with very

If growing and the this in three almost expansion, we any basis you we've at businesses, in which seen loan last that spot two to that quarter, a business been years. recall haven't intentionally been has self-funds. point the significant two on bank during compare the balance QX those that's are that Of

were out expect term. would larger larger in me. deposits than in progress deposits repositioned also and And last the -- quarter where of improvement consumers retail in pardon into years. savings Red in very we balanced tremendous loans in made had best as retail We growth the growing Bank good and had softer a GIC. three you deposits as sorry last Tangerine quarter the loans So, than in sequential they faster

last are good as standpoint from and the shape quarter saw management this a and quarter. in So, Phil deposit consumers said liquidity portfolio than businesses growth better

Nacho Deschamps

International. on Thank Dan Good following morning. you.

had in strong deposits. also quarter a We

similar in international priority and to Canadian grew loan lines. X% a Banking deposit in is Q-over-Q line in Our business all this key growth with

faster XX% side, been of digital. country On countries deposits the opening retail a on have providing Pacific open accounts are we account much the in end-to-end -- Alliance deposit all

have Peru as well. in providing So, our technology scaling in much a And management Banking Mexico and productivity. cash Colombia this us we stronger Chile, in up Wholesale more business is

So, definitely a high priority for us as well.

Paul Holden

Okay, that's great.

for So, terms increased going growth? is in the wholesale of it sounds business like well consumer everything deposit deposits and no need

Nacho Deschamps

so I Yes, think Paul.

think yes. that's summary good I a

Paul Holden

Okay, you. great. Thank that’s

Operator

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

Scott Chan

morning. Good

side, lot the the spoke on curious Pacific international Canadian specifically about with just Alliance. the consumer, You a but

XX of pre-pandemic bps You in a kind XXXX, to couple PCL level. of of ago well quarters guided below a total ratio

Alliance terms update about maybe the guidance. in an change Pacific So situation any and on in you your could of COVID the or think thought process past

Phil Thomas

question. with the more the very a XX% portfolio, comments. shift the the secured over only quality not secured why from But We've perspective that for is -- the add work and which in terms seen And on just hand ratios. maybe great I'll that's portfolio. Scott, seen altogether. to affluent bit risk how to are happy PCL portfolios color our to Thanks, the been little look as portfolio from we the really a how and to quite originations new in international we've we're done confident retail outlook international a that XX% it Nacho of strategy, And start up-tiering of we've at our both and performing. from with the

Nacho Deschamps

you, Phil. Thank

the bit me Let Pacific Alliance -- more the markets countries. follow a our give color you on in little up, on

reflected GDP on strong growth recovery and very back and is X% quarter last in a growth. We the strong of our XX% this this expected year seeing a are

And also Raj Our loans also loan -- quarter grew, was and cards and mentioned, growth Q-over-Q. in X% this the strong for it strong consecutive was X% as credit commercial, third it was Q-over-Q quarter it it was personal in in mortgages.

are in year-over-year, digital execution sheet the and bps. in very say impact We XX X%, strong and -- to bps increases expenses Alliance I it's are that, X% countries increase these XXX And year. of inflation Pacific by and companies of our balance Credit seeing delivered in in of with we is around this Phil mix a even XX% in the are driven positive and continue quality, countries to specifically. also quarter. also that charge. it's the better, perform NIM, the year-over-year, PTPP half and remarkable to leverage, the interest continues as restructuring second rate strong operating business we're strong when the seeing a flat of progress also mentioned, households have momentum

Scott Chan

Thank you.

Operator

from Thank Mario you. is TD next The Securities. from question Mendonca

Mario Mendonca

Good morning.

organic finally, absorb certainly back deteriorates. to The a level capital. risk absorb the international as also ratio basis broad Do buy absolute environment at. is the Raj growth at Brian, strong in capital XX.X% bank's inorganic that get to to or increased may capital and for -- stock all of capital the done? maybe and the emerge do good. time, That's the XX.X% Just capital broad you the Is be the in it -- sufficient this to you question starting is then to able an commercial. growth And enough with on And start. believe on organic do some obviously that's to the question I'm have same density perhaps flexibility looking things both

Raj Viswanathan

Brian add some Thanks, to will have maybe my will comments start Mario. to thoughts. and I

short I this optimal about we talk a work when We is the lot answer capital. think yes. in bank

time a it’s north it. operate We to this At XX.X%. little capital? optimal what's So bit about like operate? want Where we'd to of

quarter said first the XX in multiple RWA And been high of dividends. has generate We points opportunities of to basis stock You've it. organic after have we every XX which you growth, year. seen the buyback of quite capital half like

to that's going moderate second in shares. I I XX year. to of the half think doubt million another buyback going the we're

As based X we on approvals we shares we an and that. we think in see it we'll to execute have another buyback place have today, the ability on million

will mentioned to not does all that our we this So think seen very but there before. growth that organic run, the half, the a will be be been how look tailwind has get how pretty XX% strong, we level, you capital anywhere on as at lot at strong could us the And probably saying made And across density We should at that closely. cushion of in capital. be continue say scenarios QX what of consumption. of migration businesses. today's I'll something you've see Brian But capital A first bank of we quickly. close mortgages the capital where us is move. this billion comment Even down is very a in level capital high I'd we what manage would some moderation quickly at least that as it should Canadian $X.X stress probably on what that, be be to double the RWA side, of based I've finally, might that what could end the might on up of to any portfolio to happen macroeconomics sort absorb gives deploy said capital

capital Brian? year the feel after of I So, the sure executing of taxes. the will rest for XX.X% be like all the for north

Brian Porter

thing and that's to is shareholders. obviously here part allocation And only a management's Mario. capital Yes. The one returning -- capital a job discuss management -- key good of question, we

all it's So, organically. and back balance. a look in And on that we've terms shares were and investing at about executing we focus if of it But our lot in businesses you dividend buying this been time spend increasing to high I'd you of terms supplementary, corporate stress, and commercial our of of up and where we're in you the our refer of the credit time end market, a competitors our quality. Caps, debt that vis-à-vis in Red can at to portfolios, see

and in to that's by capital customers. terms of we what allocating our here -- do design, So that's

about for talking bank of long arms at is on race optimal this a over. capital period The capital in time. So summary, been we've

the the US see and around operating banks level. same You in

and what We at the we environment are future. four, in eleven six. five, than that's us eleven see the more eleven given We think appropriate coming

Mario Mendonca

question. share-based others in this that might The just we payments this change then in Was one volatility detailed see there to zero quarter-to-quarter quarter. accounting, some sort And is quick dropped and of just the options line? or

Raj Viswanathan

because accounting, year. picked up gets to to It's be the quarter-to-quarter that of high have just seasonally No and change beginning there's retire QX no in at the the eligible Mario. tends you

This quarter-over-quarter. mark-to-market that impact see higher a will little performance of the was of the every year share-based because you'll So, year.

Mario Mendonca

Thank you.

Operator

Cormark next go is The from ahead. Securities. from Lemar Please question Persaud

Lemar Persaud

Thanks.

credit. Just want to to come Phil back on

Just wanted from all-bank to revisit the guidance QX.

when it admittedly the is different to makes at the come you QX. bank guidance today than backdrop the basis, very level macroeconomic sense? XXXX the all that given still mid-XX Just feel like the Does

Phil Thomas

now I some restate earlier give We're the of underlying core how comments, of you today. guidance back the we is quality terms of down. point it about headwinds would of portfolio we Lemar. any with to not guidance secured going just portfolio, a I come that, write-offs have feel to to XXXX between of And made trending. really or the like position should we're net in unsecured. Thanks, right We But the the positioning ratio in are the good and where

advanced be only stressed stress we do behave. leverage As our analytics Brian big mentioned the earlier, not to scenario we will I portfolio portfolio, we but under the identified able And stress to we mean about how We And stress XX,XXX. customers we same really and look had and at do we we under now pandemic customers. stress the identifying see the during vulnerable the did XX,XXX. same run

you So, loss were and if reach you customers. to We're now our collections to tools that at up we we're the proactively out combine in capacity. leveraging look to it to fact mitigation where that still

how good your in shape. year. maybe I like feel we really we're that And would about next guidance for you're So, of terms in thinking use just

Lemar Persaud

that's Okay, for And on then Canadian Dan fair. Banking. maybe

then pull some certain guys to in you're the discussion in for And of there overheated changes light And to higher underwriting any making year? on? standards looking that a rates but of you Solid that how backdrop balance the about QX, probability see evolving of you given of of talk mortgage are higher you growth of the the markets risk? Can higher about the back credit recession. kind materially are

Dan Rees

making XX% we're offering been is over proprietary this thank positive stand you. XX%. investments quarter. both with the we Yes, terms of result performance retention quarter very our in our again was our several now well the sales online we've in and over expanding years channel, capacity in Look of the pleased

were BC back there as we're So, pleased those for undersized. mortgage signaling the our of where been and the performed based business piece position the front presumed on expected end end in with investments I've some market and time and including Quebec

some seen mortgage slowing in growth. have You the

So, -- you sequentially to that opposed is as see year-over-year. this

credit point. making at softening, say the part X.X% buyers' some key If stance the plan credit have are that we not on do obviously need sales to anticipate adjusting to markets There believe which retail a want is grown I more or sequentially. this based to -- own don't the We at in think home, adjustments point. the but we're we own of are mortgage adjudication We strategy. be mortgage. favor we our this the let's

cross-sell in Our on continue take-ups. improve ratios particular our to deposits

So, outlook, with slowly performance slowing. date pleased it of the to we're is in terms

at prior year. QX So, single-digits quarter to quarter-over-quarter but QX be see growth the quarter, the rates versus -- high XX% loan unlikely prior do next perhaps versus we we expect will at and the

and with So, slowing we're how we slowly stand. pleased

Lemar Persaud

my taking Okay. Thanks questions. for

Operator

Thank is Stifel Rizvanovic Please question you. Mike GMP. go The from next from ahead.

Mike Rizvanovic

Dan line to same Wanted Hey that good morning. on with of stick discussion.

the So, residential just sector. on estate real

just not but mortgage, up I'm real also it's estate category your and looking XX% So, at just year-over-year. the construction

growth the changing But volume those of that months. heading are have fixed to rate you like saw the at variable this step-up not mortgages in we relative the I'm to is bit at Are in just rate looks a a the pretty on starting point potentially good starting at where concerned cost of may you in XXXX going get to have both few mortgage not and So, of credit some going a on now to environment business. what it in the level next get way in books be because, pretty looks wondering judication we're existing significant bit mentioned concern? lows both a steep carry to balances. the right pretty You this you're point time. just

Dan Rees

just through lending a Look the real are repeat mentioned Mike, I of part what the estate deceleration is which residential expansion seeing in relative I you would side.

of there would side in and short. On just is Canada structural that imbalance that we reemphasize commercial, the believe I supply is a

on higher And medium more health the market real to market, see construction growth will the estate residential is the the which balance rates supply in and side the in long-term. coming supporting increase our the over so and way Canada of to than of

row three quarter last a the the quarters balance across prior in you're and quarter, loan This seeing industry quarter so growth. better commercial

So agriculture. we saw in tremendous improvements

in share and two. could to in We're to expecting the the moved our quarter from market This all of grow health podium see number number position technology, logistics, terms care, in four level up relative number performance be in three transportation we've and at position rate.

So a estate they're view. the from majority have of we year than long-term in with taking And less the reliant and would or now clients growth on is we're been top-tier a clients, two ago. long-term real speaking

pausing substantially either they're the to they're So on will immigration land that because the or is here. bringing wave continuing know grow from they market and up Canada in picking population product

better So balance. is we around thing questions acknowledge there of in We and the real the a some marketplace estate prices. support good expansion supply moderation for

Mike Rizvanovic

it. Got

no change real of fair? going the peers. your Is So that of you share continue to are at to gain expense terms try to strategy, your in

Dan Rees

lowest I largest broad portfolios loan in the that's are Yeah. that I the would are growing mean. And fastest correct. yes -- the the and two risk.

PD real in the lending low. So residential the estate PD and in mortgages is extremely

on the for come those based book portfolios. mind, So along And we're by bear deposits ride consumer. also in derisking real growing large in the two the estate

pleased credit So we're very with our portfolios. two those in position

Mike Rizvanovic

Great. Thanks for the color.

Dan Rees

Welcome.

Operator

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

Doug Young

Just a question on International Banking.

to in want seems quarter-over-quarter. pre-provision dig earnings Just at look stall pre-tax to and out Peru, I

I capital or then little to an a was, maybe that's that can to due a of you market be and what might that think Nacho right, and then more give if bit you've foresee XXX, I little bit as to room you what about And that outlook? XXX activity, there in context think impact for Banking at still you're I bit? that or the International the achievable, Is midpoint a outlook to that up NIM talked now. is right push think quantify

Nacho Deschamps

your question. for you are Thank And right. you

was And QX strong retail recovery declined of was of and PTPP reduce growth driven originations X% shorter in Peru. Loan XX% XXX our revenue, the revenue has quarter all quite new And Credit capital in are expansion economic the well. retail leverage markets recovery markets by capital terms think the of are Peru bps. operating digital X in margin Peru slightly in of combination is terms commercial, positive. bps. following a flat quarter. that When a Q-over-Q you Peru done very both a an both allowing of exclude and despite in positive quality in expenses I trends is in the the charge in for restructuring very Peru progress, digital job year-over-year excellent business in retrends strong as in X% to is us execution and remain strong PTPP

year. quarter continued we last half see you pleased the of in XX So this X to We quarter. Peru see improved expansion see results will bps sequentially to very upside increase future still margin in an continue the And second quarters. are in bps

to margin continue interest positive. net expect would we to be So

course, conditions competition on and Of market curve steepness will on bank. the expansion about positive we on are But it would depend in so the say international I of on. NIM

Doug Young

you. Thank Okay.

Operator

ahead. from Thank you. The from next question Darko RBC Markets. Mihelic is Please go Capital

Darko Mihelic

of Thank on for question wanted just I of mortgages to Dan. and line you. is particular. some everyone. Good morning, real estate My in follow on Mike up for the questioning

payment up. mortgage rates variable – go which do rate in with when mortgage You goes unique the have a a guys feature a up

of the in now And situation of product rising is part significant rates? the is rapidly of this a that's you I a mortgage customers that today? forward? a probably stresses mean in and curious this Canada. overwhelmingly And I But portfolio of realize very it behavior just am of part the good. for I a product portfolio all is significant that choice portfolio is the right So it go

Dan Rees

the a think the we should fixed. of [ph] varies. when stressed of thousands their a Yes. – amount. reach rate about have and customers. payment Thanks, That's payment of bucket credit And VRM we that's for book months over book. prices vulnerable rising. a have was strongly out that Darko. might to out we've that last to that adjustment into fix the who monthly Two-thirds very been do trend customers be conversion Phil test saying in tens we We're been as as proactively an We think variable mortgage is believe anticipated. has The portfolio of good variable the worried not the of We number accelerating

This XX delinquency the Let is long put a me And for $XXXX. that XXX significant points rates have from household on up. is scores base should VRM plus basis VRM to that an rise basis expense customers $XXX,XX tend lower. average doing choose gone rates have $XXX and a the is change up a monthly income in mortgage in no points. of so levels the mortgage to on been Prices already and adjustment. rounding are balance The plus higher because are perspective. over product the XX here about I'm not seen higher XX The We've that FICO or the product. time payment and on are the levels adjustment

our a and customer anticipated. as so are this And is advice converting taking sophisticated to fixed

had with this we've have It credit to does a Phil's team to it risk extra and to those customer. make transition XX proactive think need transparent attached it's the is not So years. the on for product we've modest date. We supporting been who to

Darko Mihelic

of that mortgage taken rate going –I on And mean mortgage account, there and sort just a it just when some communication their are or your rates up going is of is hey they payments mechanical up? them question out is move

Dan Rees

change rate change VRM prime notice them a the of customer payment the their out there's receives comes the and written account. When of informing a to proactive

Darko Mihelic

very Okay. helpful. That’s

Dan Rees

a we positive feedback standpoint, respect. from in design from And received regulator the that

Darko Mihelic

And Dan choice is today? it the of mortgage

Dan Rees

flow significantly price It stock fixed. is the in differential fix of period. has out during changing and in changed more two-thirds the swing fixed. today based on BRM been variable between The the variable three last the that The is And months. has

I've each doing and very when is in that the the of comes time want As that you happens been as cross-sell meaningful for BRM been we've saying when quickly. better customer at retention conversion narrows, now ability time. to better And some the home job and to own a the for

Darko Mihelic

over I know going you. Okay. much. appreciate I that. very time here. Thank Thank we're you

Dan Rees

Darko. Thanks

Brian Porter

look Thank for you the everyone our earnings participating across quarter businesses. results QX our a momentum I you everyone XXXX call call. today. call to in our On very strong great with for year to Have the This again August. forward concludes in We're day. our in second and today at behalf participating thank management with with speaking entire start want the our pleased of to all team, call

Operator

conference for you. participation. and thank lines your has The Thank you your we ended. Please disconnect

The Bank of Nova Scotia (BNS) 25 May 222022 Q2 Earnings call transcript