Investor Presentation First Quarter 2020 February 25, 2020
Caution Regarding Forward-Looking Statements From time to time, our public communications often include oral or written forward- changes to accounting standards, rules and interpretations on these estimates; global looking statements. Statements of this type are included in this document, and may be capital markets activity; the Bank’s ability to attract, develop and retain key executives; included in other filings with Canadian securities regulators or the U.S. Securities and the evolution of various types of fraud or other criminal behaviour to which the Bank is Exchange Commission, or in other communications. In addition, representatives of the exposed; disruptions in or attacks (including cyber-attacks) on the Bank’s information Bank may include forward-looking statements orally to analysts, investors, the media technology, internet, network access, or other voice or data communications systems and others. All such statements are made pursuant to the “safe harbor” provisions of or services; increased competition in the geographic and in business areas in which we the U.S. Private Securities Litigation Reform Act of 1995 and any applicable Canadian operate, including through internet and mobile banking and non-traditional securities legislation. Forward-looking statements may include, but are not limited to, competitors; exposure related to significant litigation and regulatory matters; the statements made in this document, the Management’s Discussion and Analysis in the occurrence of natural and unnatural catastrophic events and claims resulting from such Bank’s 2019 Annual Report under the headings “Outlook” and in other statements events; and the Bank’s anticipation of and success in managing the risks implied by the regarding the Bank’s objectives, strategies to achieve those objectives, the regulatory foregoing. A substantial amount of the Bank’s business involves making loans or environment in which the Bank operates, anticipated financial results, and the outlook otherwise committing resources to specific companies, industries or countries. for the Bank’s businesses and for the Canadian, U.S. and global economies. Such Unforeseen events affecting such borrowers, industries or countries could have a statements are typically identified by words or phrases such as “believe,” “expect,” material adverse effect on the Bank’s financial results, businesses, financial condition or “foresee,” “forecast,” “anticipate,” “intend,” “estimate,” “plan,” “goal,” “project,” and liquidity. These and other factors may cause the Bank’s actual performance to differ similar expressions of future or conditional verbs, such as “will,” “may,” “should,” materially from that contemplated by forward-looking statements. The Bank cautions “would” and “could.” that the preceding list is not exhaustive of all possible risk factors and other factors By their very nature, forward-looking statements require us to make assumptions and could also adversely affect the Bank’s results, for more information, please see the “Risk are subject to inherent risks and uncertainties, which give rise to the possibility that our Management” section of the Bank’s 2019 Annual Report, as may be updated by predictions, forecasts, projections, expectations or conclusions will not prove to be quarterly reports. accurate, that our assumptions may not be correct and that our financial performance Material economic assumptions underlying the forward-looking statements contained objectives, vision and strategic goals will not be achieved. in this document are set out in the 2019 Annual Report under the headings “Outlook”, We caution readers not to place undue reliance on these statements as a number of as updated by quarterly reports. The “Outlook” sections are based on the Bank’s views risk factors, many of which are beyond our control and effects of which can be difficult and the actual outcome is uncertain. Readers should consider the above-noted factors to predict, could cause our actual results to differ materially from the expectations, when reviewing these sections. When relying on forward-looking statements to make targets, estimates or intentions expressed in such forward-looking statements. decisions with respect to the Bank and its securities, investors and others should The future outcomes that relate to forward-looking statements may be influenced by carefully consider the preceding factors, other uncertainties and potential events. Any many factors, including but not limited to: general economic and market conditions in forward-looking statements contained in this document represent the views of the countries in which we operate; changes in currency and interest rates; increased management only as of the date hereof and are presented for the purpose of assisting funding costs and market volatility due to market illiquidity and competition for the Bank’s shareholders and analysts in understanding the Bank’s financial position, funding; the failure of third parties to comply with their obligations to the Bank and its objectives and priorities, and anticipated financial performance as at and for the affiliates; changes in monetary, fiscal, or economic policy and tax legislation and periods ended on the dates presented, and may not be appropriate for other purposes. interpretation; changes in laws and regulations or in supervisory expectations or Except as required by law, the Bank does not undertake to update any forward-looking requirements, including capital, interest rate and liquidity requirements and guidance, statements, whether written or oral, that may be made from time to time by or on its and the effect of such changes on funding costs; changes to our credit ratings; behalf. operational and infrastructure risks; reputational risks; the accuracy and completeness Additional information relating to the Bank, including the Bank’s Annual Information of information the Bank receives on customers and counterparties; the timely Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR development and introduction of new products and services; our ability to execute our section of the SEC’s website at www.sec.gov. strategic plans, including the successful completion of acquisitions and dispositions, including obtaining regulatory approvals; critical accounting estimates and the effect of 2
Good start to the year Balanced performance across business lines Summary Repositioning substantially complete; Brian Porter President & CEO acquisitions are integrated Strong asset quality 3
Strong performance against medium- term objectives: • Adjusted EPS growth of 5% Q1/20 Overview • Strong ROE of 13.9% • Positive operating leverage of 1.3% Raj Viswanathan Group Head & CFO • Strong capital ratios 4
Q1 2020 Financial Performance Strong revenue growth and positive operating leverage $MM, except EPS Q1/20 Y/Y Q/Q YEAR-OVER-YEAR HIGHLIGHTS Reported Adjusted E Ad EPS PS g growth u h up 5% 2 • Net Income $2,326 +4% +1% Adjuste ted N Net I t Inc ncome u up 2% 2% 2 • Pre-Tax, Pre Provision Profit $3,723 +8% +2% Excluding divestitures net income grew by 8% 2 Diluted EPS $1.84 +8% +6% o Pre-tax, pre-provision profit (PTPP) up 7% 2 Revenue $8,141 +7% +2% o Expenses $4,418 +6% +2% Adjusted ed R Rev even enue up 5% p 5% 2 • Productivity Ratio 54.3% (60 bps) +20 bps Net interest income up 3% o Core Banking Margin 2.45% - + 5bps Non-interest income up 8% 2 o PCL Ratio 1 61 bps +14 bps +11 bps Adjusted E d Expe pense growth o h of 4% 4% 2 • PCL Ratio on Impaired Loans 1 55 bps +8 bps +6 bps Adjusted O Ad Operatin ing lev ever erage o of +1.3% 2 2 • Adjusted 2 Net Income $2,344 +2% (2%) Pre-Tax, Pre Provision Profit $3,724 +7% (1%) ADJUSTED NET INCOME 3 BY BUSINESS SEGMENT ($MM) Diluted EPS $1.83 +5% +1% Revenue $7,989 +5% - +5% Y/Y -17% Expenses $4,265 +4% +2% Y/Y 4 Productivity Ratio 53.4% (70 bps) +70 bps +35% +11% Y/Y PCL Ratio 1 51 bps +4 bps +1 bp Y/Y PCL Ratio on Impaired Loans 1 53 bps +6 bps +4 bps 908 865 743 615 451 318 286 335 CB IB GWM GBM Q1/19 Q1/20 1 Provision for credit losses on certain assets – loans, acceptances and off-balance sheet exposures 2 Refer to Non-GAAP Measures on Slide 36 for adjusted results 3 After non-controlling interest 4 Y/Y growth rate is on a constant dollars basis 5
Strong Capital Position CET1 remains strong; CET1 ratio of 11.4% 11.4% +49 bps +26 bps -19 bps -6 bps 11.1% -6 bps -18 bps +4 bps Q4/19 Earnings Less RWA Growth Share Buybacks Pension Regulatory Other Non-core Q1/20 1 Reported Dividends (ex. FX) (Net of Issuances) Changes (net) Divestitures Reported Internal capital generation Strong capital generation from earnings. Good organic RWA growth • Repurchased 3.6 million common shares in Q1 2020 • 1 Includes the Bank’s operations in Puerto Rico, US Virgin Islands, El Salvador, Colfondos, and Thanachart Bank 6
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