RBC Capital Markets Canadian Financial Services CEO Conference 2004 January 21, Rick Waugh, President and CEO

Transcription

1 RBC Capital Markets Canadian Financial Services CEO Conference 2004 January 21, 2004 Rick Waugh, President and CEO

2 Record of consistent earnings growth Net income, $ millions YEAR CAGR = 13.2% 2, * 03 * excludes impact of charges related to Argentina of $540 million (after-tax) Record of consistent dividend growth - two increases in 2003 Annual dividend, cents/share increase:+16% $2.00* * based on current rate 1

3 Strong returns vs North American peer group 5-year compound annual total return on common shares (1) 20% 15% 10% JP Morgan Bank of New York Wachovia Bank One US Bancorp Key Corp Fleet Boston 5% PNC Bank Bank of America Wells Fargo TD Royal Citigroup CIBC BMO Scotiabank 0% -5% -10% (1) In Canadian dollars, assumes dividends reinvested, from Dec.31/98 to Dec.31/03. Source: Bloomberg Raised financial targets for targets EPS growth: 10-15% ROE: 16-19% productivity ratio below 58% maintain strong capital ratios and credit ratings 2

4 Key issues Credit quality improving trends Capital management maintain strength, flexibility and discipline Growth 3 strong platforms Domestic Scotia Capital International Leverage from improving credit quality Specific provisions, $ millions * * excluding Argentina 3

5 Capital Management Industry-Leading Ratios October 31, 2003, % Tier 1 Tangible Common Equity Scotia CIBC TD Royal BMO Capital Management Flexibility and Discipline Business expansion and acquisitions Dividend increases Share buybacks Cushion to handle unforeseen risks Disciplined use of capital 4

6 Strength from diversified earnings base % of net income, excluding Other 2003 International 27% 29% 44% Scotia Capital Domestic Domestic grow market share Retail Banking - leverage leadership in customer loyalty and a sales-focused platform Wealth Management - leverage partnership with Retail Banking Market leader in Customer Loyalty Scotiabank 34% 8% 38% 30% 6% Peer Group 28% Commercial streamline and focus on sales & service 5

7 Domestic increase share of customers business Disciplined execution Innovative bundled products Scotia Total Equity Plan (STEP) strong value proposition ScotiaLine VISA #3 VISA bank in Canada $4 billion balance growth in 4 years Award-winning data warehouse segment customer base sales leads & event triggers direct to branch desktop targeted marketing Domestic attract new customers Increased advertising and branding Emphasize products where we have a competitive advantage STEP, ScotiaLine VISA Money Master high interest savings account retail, small business RSP eligible 69 basis point increase in deposit market share Life. Money. Balance Both. 6

8 Domestic Wealth Management Significant Opportunity Grow share of wallet 500,000 BNS customers with $60 billion in assets at other FIs Increase referrals Retail Banking Commercial Banking Expand Investment Executive sales force up to 1,200 IE s by 2006 strong fee-based asset growth Retail Brokerage Mutual Funds Private Client Scotia Capital capitalize on longestablished relationships Leverage top 3 position in Canada Improve customer profitability in the U.S. Expand reach of Global Trading 7

9 Scotia Capital Strong Canadian Franchise Top 3 in many products lending (#1) mergers & acquisitions (#2) equity underwriting (#2) Cross sell success Scotia Capital Leverage Long- Standing U.S. Relationships Committed to profitable, long-term client relationships cross-sell additional products (derivaties, fixed income) exit underperforming relationships Opportunity to leverage international reach 8

10 Scotia Capital Global Trading Platform for Growth Top 3 in many products derivatives (#1) fixed income (#2)(corporate #1) foreign exchange (#2) precious metals (#2 globally) Low risk (VAR) Target new markets and clients U.S., Mexico debt underwriting, derivatives investment (buy-side) clients International leverage group strengths Emphasize sales & service focus on sales and customer satisfaction aggressive product launches leverage distribution network Improve productivity use best practices from Canada upgrade core systems and processes Expand in key markets Mexico Spanish Caribbean and Central America (e.g. Dominican Republic, Costa Rica, El Salvador) 9

11 Caribbean & Central America Investing for Growth Dominant franchise in the region Acquisition in the Dominican Republic increased market share to 10% Implement second phase of Sales & Service program sales management & measurement Install International Banking Platform (paperless banking) Scotiabank Inverlat Continued Earnings Growth Incremental earnings full year of 91% ownership expect to acquire remaining 9% in 2004 Sales & service deploy contact & sales management software expand product offerings eg STEP Enhance delivery network add 20 branches/yr Automotive Finance centre introduce Private Client centres Alliances/joint ventures/acquisitions bancassurance credit cards 10

12 Position of Strength! Earnings leverage from improving credit quality! Industry-leading capital! Growth from 3 diversified platforms Domestic Retail Banking, Wealth Mangement Scotia Capital Global Trading International Mexico, Caribbean Forward-looking statements This document includes forward-looking statements which are made pursuant to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of These statements include comments with respect to our objectives, strategies, expected financial results (including those in the area of risk management), and our outlook for our businesses and for the Canadian, U.S. and global economies. By their very nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, and the risk that predictions and other forward-looking statements will not prove to be accurate. The Bank cautions readers not to place undue reliance on these statements, as a number of important factors could cause actual results to differ materially from the estimates and intentions expressed in such forward-looking statements. These factors include, but are not limited to, the economic and financial conditions in Canada and globally, fluctuations in interest rates and currency values, liquidity, regulatory developments in Canada and elsewhere, technological developments, consolidation in the Canadian financial services sector, competition, judicial and regulatory proceedings, the possible impact of international conflicts and other developments including terrorist acts and the war on terrorism, and the Bank's anticipation of and success in managing the risks implied by the foregoing. A substantial amount of the Bank's business involves making loans or otherwise committing resources to specific companies, industries or countries. Unforeseen events affecting such borrowers, industries or countries could have a material adverse effect on the Bank's financial results, financial condition or liquidity. The Bank cautions that the foregoing list of important factors is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Bank, investors and others should carefully consider the foregoing factors, other uncertainties and potential events. The Bank does not undertake to update any forward-looking statements, whether written or oral,that may be made from time to time by or on behalf of the Bank. 11