Investor Presentation Second Quarter 2018
CANADIAN BANKING
Strong loan growth, margin expansion and improved credit performance
FINANCIAL PERFORMANCE AND METRICS ($MM ) 1
YEAR-OVER-YEAR HIGHLIGHTS
• Net income up 5% or 7%4
Q2/18
Y/Y
Q/Q
Revenue
$3,231
+3%
(2%)
Expenses
$1,641
+3%
+2%
PCLS
$205
(13%)
(2%)
Net Income
$1,017
+5%
(8%)
Productivity Ratio
50.8%
(10bps)
+220bps
Net Interest Margin
2.43%
+5bps
+2bps
•
PCL Ratio 2, 3
0.25%
(6bps)
PCL Ratio
0.25%
on Impaired Loans 2, 3
(6bps)
(2bps)
NET INCOME ($MM) AND NIM (%)
2.38%
2.41%
2.41%
2.41%
2.43%
971
1,045
1,067
1,102
1,017
Q2/17
Q3/17
Q4/17
Q1/18
Q2/18
1 Attributable to equity holders of the Bank
2 2018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39
3 Provision for credit losses on certain assets-loans, acceptances and off-balance sheet exposures
○ Asset growth and margin expansion
o Lower provision for credit losses
Revenue up 3%
○ Net interest income up 8%
Loan growth of 7%
o Residential mortgages up 6%
○ Business loans up 14%
• NIM up 5 bps
•
o Rising rate environment and business mix
PCL ratio 2, 3 on impaired loans improved
by 6 bps
Expenses up 3%
o Higher investments in technology, digital and
regulatory initiatives
Positive YTD operating leverage
• YTD productivity improvement of 130 bps
4 Lower real estate gains impacted earnings by 5%, which was partially offset by the 3% benefit of additional earnings from the Alignment of reporting period of Canadian Insurance with the bank
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