PCL Ratios and Provision for Credit Losses Review
INTERNATIONAL BANKING
Another record quarter driven by strong performance in the Pacific Alliance
FINANCIAL PERFORMANCE AND METRICS ($MM)1,2
Reported
Y/Y
YEAR-OVER-YEAR HIGHLIGHTS²
Reported Net Income down 16%, or up
15% adjusted
。 Strong asset and deposit growth in Pacific Alliance
o Positive operating leverage and lower taxes
Revenues up 9%
o Pacific Alliance up 15%
Q3/18
Q/Q
•
Revenue
$2,853
+9%
+4%
Expenses
$1,510
+7%
+6%
PCLS
$771
+142% +128%
Net Income
$519
(16%) (24%)
Productivity Ratio
52.9%
(160bps) +40bps
.
Net Interest Margin
4.70%
(7bps) (4bps)
PCL Ratio
2.58%
+142bps +136bps
PCL Ratio on Impaired Loans³, 4
Adjusted6
1.33%
+17bps (5bps)
Expenses
$1,476
+6%
+4%
•
NIM down 7 bps
PCLs
$367
+15%
+8%
Net Income
$715
+15%
+3%
Productivity Ratio
51.7%
(240bps) (40bps)
PCL Ratio³, 4
1.23%
+7bps +1bp
.
Loans up 10%
o Pacific Alliance loans up 14%
ADJUSTED NET INCOME 16 ($MM) AND NIM5 (%)
4.77%
4.67%
4.66%
4.74%
4.70%
623
613
675
683
715
•
Q3/17
Q4/17
1 Attributable to equity holders of the Bank
Q1/18
Q2/18
•
Q3/18
。 Business mix changes and lower loan rates in
Colombia
Expenses up 6%
6
。 Business volume growth, inflation and higher
technology costs
。 YTD productivity ratio improved 170 bps 6
Positive YTD operating leverage of 3.4%
PCL ratio 3, 4, 6 on impaired loans up 17 bps
。 Mainly impacted by credit mark benefits in the prior
year
2 Y/Y and Q/Q growth rates (%) are on a constant dollars basis, while metrics and change in bps are on a reported basis
3 2018 amounts are based on IFRS 9. Prior period amounts were based on IAS 39
4 Provision for credit losses on certain assets - loans, acceptances and off-balance sheet exposures
5 Net Interest Margin is on a reported basis
6 Adjusted for Acquisition-related costs, including Day 1 PCL impact on acquired performing loans, integration and amortization costs related to current acquisitions, and amortization
of intangibles related to current and past acquisitions
Scotiabank®
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