The Bank of Nova Scotia (NYSE:BNS) Q3 2016 Earnings Conference Call - Final Transcript

Aug 30, 2016 • 08:00 am ET

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The Bank of Nova Scotia (NYSE:BNS) Q3 2016 Earnings Conference Call - Final Transcript

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Presentation
Operator
Jake Lawrence

Welcome to Scotiabank's 2016 Third Quarter Results Presentation. My name is Jake Lawrence. I am the Senior Vice President of Investor Relations for the Bank.

Presenting to you this morning is Brian Porter, Scotiabank's President and Chief Executive Officer; Sean McGuckin, our Chief Financial Officer, and Stephen Hart, the Bank's Chief Risk Officer. Following this morning comments, we'll be glad to take your questions. Also in the room with us to join the Q&A session are Scotiabank's business line group heads, James O'Sullivan from Canadian Banking; Nacho Deschamps from International Banking, and Dieter Jentsch from Global Banking and Markets.

Before we start the call and on behalf of those speaking today, I would like to refer you to slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements.

And with that, I'll turn the call over to Brian.

Executive
Brian Porter

Thank you, Jake, and good morning everyone. I'll start on slide four. We are pleased to report third quarter results to our shareholders. For Q3, the Bank delivered a strong quarter of both financial and operating results. The Bank earned almost $2 billion, delivering diluted earnings per share of $1.54 and a 6% increase from last year. These strong results were supported by earnings growth across all three of our business lines, each of which I'll touch on briefly.

While we are Canada's International Bank, it is important to note that our Canadian banking business generates more than half the Bank's earnings. The Canadian banking team, under James O'Sullivan's leadership, has done a very good job continuing to improve the customer experience, working to further optimize the business mix, and enhancing productivity.

I'd like to highlight two proof points. To better serve customers, we are developing greater digital capabilities to eliminate pain points and simplify on-boarding experiences for our customers. For example, we are reducing online bank account openings to less than five minutes, and in constructing Canadian Banking's balance sheet, we are deepening relationships in a thoughtful and risk sensitive manner. As proof, we are growing our core deposit and payments businesses, which have improved the returns we are able to generate for shareholders. This quarter's financial results provide evidence of Canadian Banking's success.

Turning to International Banking, I am very pleased with the financial and operating momentum we see in the business, particularly in the Pacific Alliance countries of Mexico, Peru, Chile and Colombia. Over a year ago, we indicated that the financial performance of International Banking would improve and it has.

International Banking has earned at least $500 million in four consecutive quarters. These strong earnings performances for our combination, excellent volume growth, primarily in the Pacific Alliance where we are gaining profitable market share paired with good operating disciplines.

As proof, International Banking has achieved five consecutive quarters of year-over-year positive operating leverage, and as we indicated in January at our Investor event in Mexico City, we remain confident in the medium and long-term growth prospects of the Pacific Alliance. Overall, our Canadian and International Banking businesses