Annual Meeting of Common Shareholders s. April 5, 2018

Transcription

1 Annual Meeting of Common Shareholders s April 5, 2018

2 Robert Phillips, Q.C. Chair of the Board 2

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4 Election of Directors Robert Phillips Chris Fowler Andrew Bibby Alan Rowe Ian Reid Linda Hohol Albrecht Bellstedt Margaret Mulligan Raymond Protti Robert Manning H. Sanford Riley Sarah Morgan-Silvester 4

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6 Presentation Agenda Introduction & Financial Review Carolyn Graham, Executive Vice President & CFO 2017 Financial Performance Medium-term Performance targets Strategic Review Chris Fowler, President & CEO CWB s Balanced Growth Strategy 6

7 Advisory Forward-looking Statements From time to time, CWB makes written and verbal forward-looking statements. Statements of this type are included in the Annual Report and reports to shareholders and may be included in filings with Canadian securities regulators or in other communications such as press releases and corporate presentations. Forward-looking statements include, but are not limited to, statements about CWB s objectives and strategies, targeted and expected financial results and the outlook for CWB s businesses or for the Canadian economy. Forward-looking statements are typically identified by the words believe, expect, anticipate, intend, estimate, may increase, may impact, goal, focus, potential, proposed and other similar expressions, or future or conditional verbs such as will, should, would and could. By their very nature, forward-looking statements involve numerous assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that management s predictions, forecasts, projections, expectations and conclusions will not prove to be accurate, that its assumptions may not be correct and that its strategic goals will not be achieved. A variety of factors, many of which are beyond CWB s control, may cause actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, but are not limited to, general business and economic conditions in Canada, including the volatility and level of liquidity in financial markets, fluctuations in interest rates and currency values, the volatility and level of various commodity prices, changes in monetary policy, changes in economic and political conditions, legislative and regulatory developments, legal developments, the level of competition, the occurrence of natural catastrophes, changes in accounting standards and policies, the accuracy and completeness of information CWB receives about customers and counterparties, the ability to attract and retain key personnel, the ability to complete and integrate acquisitions, reliance on third parties to provide components of business infrastructure, changes in tax laws, technological developments, unexpected changes in consumer spending and saving habits, timely development and introduction of new products, and management s ability to anticipate and manage the risks associated with these factors. It is important to note that the preceding list is not exhaustive of possible factors. Additional information about these factors can be found in the Risk Management section of CWB s annual Management s Discussion and Analysis (MD&A). These and other factors should be considered carefully, and readers are cautioned not to place undue reliance on these forward-looking statements as a number of important factors could cause CWB s actual results to differ materially from the expectations expressed in such forward-looking statements. Unless required by securities law, CWB does not undertake to update any forward-looking statement, whether written or verbal, that may be made from time to time by it or on its behalf. Assumptions about the performance of the Canadian economy over the forecast horizon and how it will affect CWB s businesses are material factors considered when setting organizational objectives and targets. In determining expectations for economic growth, CWB primarily considers economic data and forecasts provided by the Canadian government and its agencies, as well as an average of certain private sector forecasts. These forecasts are subject to inherent risks and uncertainties that may be general or specific. Where relevant, material economic assumptions underlying forward looking statements are disclosed. 7

8 Fiscal 2017 Highlights STRONG EXECUTION OF OUR BALANCED GROWTH STRATEGY GROWTH THROUGH STRATEGIC ACQUISITION INCREASED BUSINESS FOCUS We expanded our geographic footprint We delivered increased industry diversification with a continued focus on business owners We made significant progress toward our upcoming transition to the Advanced Internal Rating Based approach for enhanced risk and capital management On October 30 th, 2017, we announced an agreement to acquire a portfolio of equipment loans and leases, and general commercial lending assets We closed the acquisition on January 31 st, 2018 and added $850 million to our loan balances Last August, we announced that Canadian Western Trust will re-focus its activities within business lines that are most aligned with the strategic objectives of. We will no longer offer self-directed account services to holders of certain securities and we initiated a process to appoint successor trustees for these clients and accounts. 8

9 Fiscal 2017 Highlights Common shareholders net income Pre-tax, pre-provision income (teb) Change $ 214 million $ 391 million $ 178 million $ 354 million 21% 10% Diluted earnings per share $ 2.42 $ % Adjusted cash earnings per share $ 2.63 $ % VERY STRONG CORE OPERATING PERFORMANCE NORMALIZED CREDIT QUALITY Record total revenue, up 10% Full-year net interest margin (teb) up 14 basis points to 2.57% Full-year provision for credit losses as a percentage of average loans of 23 bp, normalized from 38 bp last year 9

10 Balanced Growth Strategic Priorities 1. FULL SERVICE CLIENT GROWTH WITH A FOCUS ON BUSINESS OWNERS, INCLUDING FURTHER GEOGRAPHIC AND INDUSTRY DIVERSIFICATION 2. GROWTH AND DIVERSIFICATION OF FUNDING SOURCES 3. OPTIMIZED CAPITAL AND RISK MANAGEMENT THROUGH TRANSITION TO THE ADVANCED INTERNAL RATINGS BASED APPROACH FOR REGULATORY CAPITAL 10

11 Increasing Asset Diversification (*) BRITISH COLUMBIA % % SASKATCHEWAN % BC % ALBERTA AB SK MB MANITOBA ON ONTARIO & Others % % % % % % * Based on location of security 11

12 Increasing Asset Diversification Commercial mortgages - 18% General commercial loans - 27% Real estate project loans - 17% Equipment financing and leasing - 17% Personal loans & mortgages - 20% Oil & gas production loans - 1% 27% 17% 17% 20% 18% Increasing Funding Diversification 1% STRONG EXECUTION OF FUNDING DIVERSIFICATION STRATEGY Stable balances of relationship-based, branch-raised notice and demand deposits Growth of securitization capabilities and activity Record issuance of senior deposit notes in the capital markets 12

13 Very Strong Capital Position Regulatory Capital Ratios (Standardized Approach for calculating risk-weighted assets) 2017 Regulatory Minimum Common equity Tier 1 capital (CET1) 9.5% 7.0 % Tier 1 capital 10.8% 8.5 % Total capital 12.5% 10.5 % Basel III Leverage Ratio 8.3% 3.0% 13

14 Low Leverage Low Leverage (total assets-to-equity) IFRS Canadian Western Bank Canadian Bank Avg. (6)* 14

15 Strong Shareholder Return $1.00 $50.00 $0.80 (1) $40.00 $0.60 $30.00 $0.40 $20.00 $0.20 $10.00 $0.00 $10.70 $12.16 $14.08 $13.87 $15.94 $17.45 $19.52 $22.18 $23.58 $ Book value per share (right scale) Dividends (left scale) Share price (right scale) $0.00 (1) As of Q1 11, financial results are reported under IFRS, as opposed to GAAP, and are not directly compared. 15

16 Stable Credit Quality Provision for Credit Losses (as a percentage of average loans) 1.00% 0.80% 0.60% (1) 140, , ,000 80, % 60,000 40, % 0.23% 20, % Canadian Bank Avg. (6)* CWB CWB collective allowance ($000's) (right-scale) - (1) As of Q1 11, financial results are reported under IFRS, as opposed to GAAP, and are not directly comparable. * Canadian Bank Avg. (6) as referenced within this presentation is calculated based on information contained in the publicly available company reports of Canada s six largest banks (TSX trading symbols: BMO, BNS, CM, NA, RY, TD) 16

17 Stable Credit Quality Gross Impaired Loans & Write-offs (as a percentage of average loans) 1.75% (1) 1.50% 1.25% 1.00% 0.75% 0.50% 0.25% 0.00% Q Q Q Q Q Q Q Q Q Q $ Gross impaired loans as a % of avg. loans $ Write-offs as a % of avg. loans 17

18 Medium-term Performance Target Ranges Annual adjusted cash earnings per common share growth Mediumterm Target Range Fiscal 2017 Performance 7 12% 16% Annual return on common shareholders' equity 12 15% 11% Operating leverage Positive Positive Common equity Tier 1 capital ratio under the Standardized approach Strong Very strong Common share dividend payout ratio ~ 30% ~38% 18

19 Chris Fowler President and CEO 19

20 Balanced Growth Strategic Priorities 1. FULL SERVICE CLIENT GROWTH WITH A FOCUS ON BUSINESS OWNERS, INCLUDING FURTHER GEOGRAPHIC AND INDUSTRY DIVERSIFICATION 2. GROWTH AND DIVERSIFICATION OF FUNDING SOURCES 3. OPTIMIZED CAPITAL AND RISK MANAGEMENT THROUGH TRANSITION TO THE ADVANCED INTERNAL RATINGS BASED APPROACH FOR REGULATORY CAPITAL 20

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22 Executive Committee From left to right: DARRELL JONES, EVP & CIO, H. BOGIE OZDEMIR, EVP & CRO, KELLY BLACKETT, EVP, Human Resources and Corporate Communications, CAROLYN GRAHAM, EVP & CFO, CHRIS FOWLER, President & CEO, STEPHEN MURPHY, EVP Banking, GLEN EASTWOOD, EVP Business Transformation 22

23 Questions from the floor 23

24 Robert Phillips, Q.C. Chair of the Board 24

25 Board of Directors Robert Phillips Chris Fowler Andrew Bibby Alan Rowe Ian Reid Linda Hohol Albrecht Bellstedt Margaret Mulligan Raymond Protti Robert Manning H. Sanford Riley Sarah Morgan-Silvester 25

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