INVESTOR PRESENTATION Q1|19 February 27, 2019 CAUTION REGARDING - PowerPoint PPT Presentation

INVESTOR PRESENTATION Q1|19 February 27, 2019

CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, the Bank makes written and oral forward-looking statements, such as those contained in the Economic Review and Outlook section of the Report to Shareholders – First quarter 2019 and in the Major Economic Trends section of the 2018 Annual Report, in other filings with Canadian securities regulators, and in other communications, for the purpose of describing the economic environment in which the Bank will operate during fiscal 2019 and the objectives it hopes to achieve for that period. These forward-looking statements are made in accordance with current securities legislation in Canada and the United States. They include, among others, statements with respect to the economy — particularly the Canadian and U.S. economies — market changes, observations regarding the Bank’s objectives and its strategies for achieving them, Bank-projected financial returns and certain risks faced by the Bank. These forward-looking statements are typically identified by future or conditional verbs or words such as “outlook,” “believe,” “anticipate,” “estimate,” “project,” “expect,” “intend,” “plan,” and similar terms and expressions. By their very nature, such forward-looking statements require assumptions to be made and involve inherent risks and uncertainties, both general and specific. Assumptions about the performance of the Canadian and U.S. economies in 2019 and how that will affect the Bank’s business are among the main factors considered in setting the Bank’s strategic priorities and objectives and in determining its financial targets, including provisions for credit losses. In determining its expectations for economic growth, both broadly and in the financial services sector in particular, the Bank primarily considers historical economic data provided by the Canadian and U.S. governments and their agencies. There is a strong possibility that express or implied projections contained in these forward-looking statements will not materialize or will not be accurate. The Bank recommends that readers not place undue reliance on these statements, as a number of factors, many of which are beyond the Bank’s control, could cause actual future results, conditions, actions or events to differ significantly from the targets, expectations, estimates or intentions expressed in the forward- looking statements. These factors include credit risk, market risk, liquidity and funding risk, operational risk, regulatory compliance risk, reputation risk, strategic risk and environmental risk, all of which are described in more detail in the Risk Management section beginning on page 52 of the 2018 Annual Report; specifically, general economic environment and financial market conditions in Canada, the United States and certain other countries in which the Bank conducts business, including regulatory changes affecting the Bank’s business; changes in the accounting policies the Bank uses to report its financial condition, including uncertainties associated with assumptions and critical accounting estimates; tax laws in the countries in which the Bank operates, primarily Canada and the United States (including the U.S. Foreign Account Tax Compliance Act (FATCA)); changes to capital and liquidity guidelines and to the manner in which they are to be presented and interpreted; changes to the credit ratings assigned to the Bank; and potential disruptions to the Bank’s information technology systems, including evolving cyber attack risk. The foregoing list of risk factors is not exhaustive. Additional information about these factors can be found in the Risk Management section of the 2018 Annual Report. Investors and others who rely on the Bank’s forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Except as required by law, the Bank does not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time, by it or on its behalf. The forward-looking information contained in this document is presented for the purpose of interpreting the information contained herein and may not be appropriate for other purposes. 2

OVERVIEW Louis Vachon President & Chief Executive Officer

OVERVIEW - Q1|19 Highlights Good overall performance offset by ▪ lower activity in Financial Markets Q1 19 Q4 18 Q1 18 QoQ YoY ($MM, TEB) Revenues 1,862 1,874 1,865 (1%) - ▪ Continued cost control Net Income 552 566 550 (2%) - ▪ ROE of 17.2% Diluted EPS $1.50 $1.52 $1.46 (1%) 3% High capital levels ▪ Efficiency Ratio 55.1% 55.3% 54.9% -20 bps +20 bps Credit quality remains strong ▪ Return on Equity 17.2% 17.8% 18.7% Favorable economic conditions in CET1 Ratio ▪ 11.5% 11.7% 11.2% Under Basel III core Québec market 4

SEGMENT HIGHLIGHTS – Q1|19 P&C Banking ▪ Continued momentum driven by strong loan and NET INCOME ($MM) Q1 19 Q4 18 Q1 18 QoQ YoY deposit growth 246 257 230 (4%) 7% ▪ Positive operating leverage P&C Banking 125 118 114 6% 10% Wealth Management Wealth Management 170 192 204 (11%) (17%) Financial Markets ▪ Double digit growth driven by favorable business mix US Specialty Finance 60 55 50 9% 20% & International Benefiting from higher interest rates and volume ▪ growth Financial Markets Solid Global Markets performance and strong ▪ Corporate Banking offset by lower fee business USSF&I Disciplined portfolio acquisition strategy at Credigy ▪ Strong growth in ABA Bank ▪ 5

FINANCIAL REVIEW Ghislain Parent Chief Financial Officer and Executive Vice-President, Finance

TRANSFORMATION DRIVING EFFICIENCIES Highlights ▪ Efficiency remains a top priority Q1 19 Q1 18 YoY ($MM, TEB) Revenues 1,862 1,865 (0.2%) Ability to adjust costs rapidly in a ▪ lower growth environment Expenses 1,026 1,024 0.2% Efficiency ratio improvement of ▪ Operating Leverage (0.4%) 20 bps QoQ ▪ Positive operating leverage YoY QoQ YoY and efficiency ratio improvements Efficiency Ratio Q1 19 Q4 18 Q1 18 (bps) (bps) in P&C and Wealth Management Total Bank 55.1% 55.3% 54.9% (20) 20 Maintain target operating leverage ▪ Personal & Commercial 53.8% 52.5% 54.4% 130 (60) range of 1%-2% for F2019 Wealth Management 61.1% 62.5% 63.4% (140) (230) Financial Markets 42.7% 39.9% 38.8% 280 390 US Specialty Finance 39.8% 41.1% 37.3% (130) 250 & International 7

STRONG CAPITAL POSITION Highlights Total RWA under Basel III 77,036 73,654 73,268 72,834 71,179 3,964 Common Equity Tier 1 ratio at 11.5% ▪ 3,435 4,055 4,755 3,336 10,910 10,743 10,402 10,539 10,218 Total capital ratio at 16.3% ▪ ▪ Leverage ratio at 4.1% 62,162 59,476 57,625 58,377 57,974 ▪ Liquidity coverage ratio at 139% ▪ RWA growth mainly due to higher loan volumes Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Total Credit Risk Operational Risk Market Risk 1 million common shares repurchased ▪ CET1 under Basel III Evolution (QoQ) in Q1-2019 0.38% 0.08% 0.25% 0.29% 11.69% 11.99% 11.69% 11.74% 11.45% 11.45% CET1 Net Income Common shares Impact (1) RWA and CET1 Q4 2018 (net of dividends) Repurchase SA-CCR Others Q1 2019 8 (1) During the first quarter of 2019 the Bank applied several new regulatory requirements, in particular the SA-CCR (Standardized Approach for Measuring Counterparty Credit) rules and the revised securitization framework.

RISK MANAGEMENT William Bonnell Executive Vice-President Risk Management

PROVISIONS FOR CREDIT LOSSES Highlights Quarterly PCL Ratio (bps) PCL on impaired loans: 27 25 $77 million (21 bps), improved by 2 bps QoQ 25 ▪ 24 due to lower provisions in Commercial Banking 23 Excluding USSF&I, PCL on impaired loans ▪ 23 declined to $46 million (13 bps) remaining close 21 21 21 20 to cyclical lows 17 PCL on performing loans : 15 15 ▪ Increased by $2 million QoQ to $7 million 13 13 (2 bps) primarily due to portfolio growth, updated macro economic variables and inputs Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 in IFRS 9 models, and a reduction in provisions PCL on Impaired Loans excl. USSF&I PCL on Impaired Loans Total PCL at Credigy ▪ Excluding USSF&I, PCL on performing loans PCL by Business Segment increased to $15 million (4 bps) Q1 19 Q4 18 Q1 18 ($MM) Personal 43 42 36 Total PCL: Commercial 1 9 8 ▪ $88 million (24 bps), with the QoQ increase Wealth Management - - - primarily due to a POCI recovery last quarter Financial Markets 2 - - ▪ We maintain our total PCL target range of PCL on Impaired Loans x-USSF&I 46 51 44 20-30 bps for 2019 ABA Bank 1 2 2 Credigy 30 30 27 Total PCL on Impaired Loans 77 83 73 PCL on Performing Loans x-USSF&I 15 - 14 PCL on Performing Loans USSF&I (8) 5 5 POCI 4 (15) (5) 10 Total PCL 88 73 87