Q3 2024 The Bank of Nova Scotia Earnings Call

August 27, 2024

Please stand by, your conference will begin momentarily. To ask a question, please wait for the moderator to start the conference, then press star 1. A system tone will be heard when your request has been accepted. To cancel your question, press star 2.

Unknown Executive: To ask a question, please wait for the moderator to start the conference, then press star 1. A system tone will be heard when your request has been accepted. To cancel your question, press star 2.

Unknown Executive: Do not be patient. Your conference will start soon. To ask a question, press star 1. Then the moderator will begin the conference. A system tone will confirm that your request has been accepted. To cancel your question, press star 2.

Speaker Change: You don't want to see your conference as soon as possible. To ask you a question, please answer 1, after the moderator and debate the conference. A system of the system will confirm that your demand has been accepted. Please answer your question, please answer 2.

John McCartney: This conference has been recorded. Good morning and welcome to Scotia Bank's 2024-3rd quarter results presentation. My name is John McCartney, and I'm head of investor relations here at Scotia Bank. Presenting to you this morning are Scott Thompson, Scotia Bank's president, chief executive officer, Rajas Swanathan, our chief financial officer, and Phil Thomas, our chief risk officer. Following our comments, we'll be glad to take your questions. Also, present to take your questions to the following Scotia Bank executives. Eris Bogdan Eris from Canadian Banking, Jackie Alard from Global Wealth Management, Francis Gore-Rista Gata from International Banking, and Travis Machen from Global Banking and Markets.

Speaker Change: This country has been recorded, but it is confirmed that it has been recorded.

Speaker Change: Good morning and welcome to Scotia Banks 2024, third quarter results presentation.

John McCartney: My name is John McCartney and I am head of Investor Relations here at Scotiabank. Does any of you this morning or Scott Thomson, Scotiabank's President, Chief Executive Officer, Rajas Wannethin, or Chief Financial Officer, and Phil Thomas, or Chief Risk Officer?

John McCartney: Follow our comments, we'll be glad to take your questions.

Speaker Change: Also present to take your questions or the following Scotia Bank executives.

Speaker Change: Harris Bogdanaris from Canadian Banking, Jackie Elard from Global Wealth Management, Francisco Aristigata from International Banking, and Travis Meachon from Global Banking and Markets.

Unknown Executive: Before we start, and on behalf of those speaking today, I'll refer you to slide 2 of our presentation, which contains Scotia Bank's caution regarding forward-looking statements.

Speaker Change: Before we start, we have our most speaking today, a free to slide two of our presentation, which contains Gosha Banks caution regarding forward-looking statements, with that I will now turn the call over to Scott.

Scott Thomson: With that, I will now turn the call over to Stop.

Scott Thomson: Thank you, John, and good morning, everyone. We are pleased to share our Q3 results, which demonstrate another quarter of progress in focused execution against our strategy. Through a challenging market environment, we achieved quarter-over-quarter EPS growth and continued positive operating leverage. Our results reflect the strength of our balance sheets while demonstrating revenue acceleration led by performance in our Canadian banking business and ongoing positive momentum in global wealth. Importantly, we are seeing the profitability benefits of our shifting focus from volume to value.

Scott: Thank you, John, and good morning, everyone.

Scott: We are pleased to share our Q3 results, which demonstrate another quarter of progress in focus execution against our strategy.

Scott: Through a challenging market environment, we achieved quarter of a quarter EPS growth and continued positive operating leverage.

Speaker Change: Our results reflect the strength of our balance sheet while demonstrating revenue acceleration, led by performance in our Canadian banking business, and ongoing positive momentum and global wealth.

Speaker Change: Importantly, we're seeing the profitability benefits of our shifting focus from volume to value.

Scott Thomson: Let me take a moment to recap a few key enterprise initiatives. Personal and commercial deposit growth. We remain laser-focused on developing primary and finite relationships, and while we expect this to be an ongoing and incremental journey, we are well underway with PNC deposit growth across our Canadian and international retail businesses, up 7% on a year-over-year basis. Since we started this journey 18 months ago, deposits on our Canadian banking business are up $43 billion.

Speaker Change: Let me take a moment to recap a few key enterprise initiatives.

Speaker Change: Personal and commercial deposit growth.

Speaker Change: We remain laser-focused on developing primary-fiant relationships and while we expect this to be an ongoing and incremental journey, we're well underway with P&C to pause and grow across our Canadian and international retail businesses up 7% on a year over year basis.

Speaker Change: Since we started this journey 18 months ago, deposits on our Canadian banking business are up 43 billion dollars.

Scott Thomson: Capital discipline. We are deploying our incremental capital to our priority businesses in line with our medium-term objectives. We are starting to see the benefits of this repositioning with strong revenue and earnings growth in Canadian banking and wealth, and a sharpened focus on returns in GBM and international banking. Today's results demonstrate our ability to generate earnings growth while focusing on disciplined capital deployment to priority clients.

Speaker Change: Capital Discipline. We are deploying our incremental capital to our priority businesses, in line with our medium-term objectives.

Speaker Change: We're starting to see the benefits of this repositioning with strong revenue and earnings growth and Canadian banking in wealth, and a sharpened focus on returns in GBM and international banking.

Speaker Change: Today's results demonstrate our ability to generate earnings growth while focusing on discipline, capital deployment to priority client segments.

Scott Thomson: Conference, cost and process efficiencies. Our efforts to increase our productivity will be an important contributor to meeting our medium-term profitability metrics. All bank positive operating leverage driven by cost-disciplining Canadian in a national banking will be an important driver of results going forward.

Speaker Change: Cross and process efficiencies.

Speaker Change: Our efforts to increase our productivity will be an important contributor to meeting our medium-term profitability metrics.

Speaker Change: All bank positive operating leverage driven by cost is a twin and Canadian in a national banking. We'll be an important driver of results going forward.

Scott Thomson: And finally, maintaining a strong balance sheet remains a high priority. Through the challenging rate environment over the past 18 months, we have strengthened our balance sheet with SETI-1 capital, ACL coverage, and liquidity metrics all significantly improved levels.

Speaker Change: And finally, maintaining the strong balance sheet remains a high priority. Through the challenging rate environment over the past 18 months, we have strengthened our balance sheet with 71 capital, ACL coverage, and liquidity metrics, all as significantly improved levels.

Unknown Executive: To ask a question, please wait for the moderator to start the conference, then press star one. A system tone will be heard when your request has been accepted. To cancel your question, press star two.

Operator: To ask a question, please wait for the moderator to start the conference, then press star one. A system tone will be heard when your request has been accepted. To cancel your question, press star two.

Rajagopal Viswanathan: Turning to our Q3 results, the bank reported adjusted earnings of $2.2 billion, or $1.63 per share in the quarter. The bank delivered solid top-line revenue growth, again this quarter, driven by higher net interest income and non-interest revenue. We are realizing on the productivity initiatives that are already underway at the bank. Specifically, in our international and Canadian retail businesses, our productivity ratios improved by 210 basis points and 130 basis points, respectively, on a year-to-date basis. Credit costs are at the high end of our previously communicated range, as we see the impact of sustained higher rates on retail portfolios.

Speaker Change: Turning to our Q3 results, the bank afforded adjusted earnings of $2.2 billion or $63 per share in the quarter.

Unknown Executive: To ask a question, press star one, then the moderator will begin the conference. A system tone will confirm that your request has been accepted. To cancel your question, press star two.

Operator: To ask a question, press star one, then the moderator will begin the conference. A system tone will confirm that your request has been accepted. To cancel your question, press star two.

Speaker Change: The bank delivered solid top line revenue growth again this quarter, driven by higher net interest income and non-interest revenue.

Speaker Change: We are realizing on the productivity initiatives that are already underway at the bank.

Speaker Change: Specifically, in our international and Canadian retail businesses, our productivity ratios improved by 210 basis points and 130 basis points respectively on a year-to-day basis.

Speaker Change: Credit costs are at the high end our previously communicated range as we see the impact of sustained higher rates on a retail portfolio.

Rajagopal Viswanathan: In our international markets, we expect to see credit conditions begin to stabilize in response to the monetary easing over the past few quarters. And we remain focused on delivering favorable risk-adjusted margins in returns. Despite higher credit costs, it is important to note that risk-adjusted margins have trended higher year-to-date in both Canadian and international banking. Loans grew sequentially in the Canadian bank in line with our strategic objectives to deploy capital to our priority businesses and with our profitable primary relationships. Loan balances trended lower in international banking and GBA. This lending discipline, coupled with early success, and will be a relentless ongoing effort to strengthen our deposit franchise, is already showing clear progress.

Speaker Change: In our international markets, we expect to see credit conditions begin to stabilize and response to the monitoring easy over the past few quarters.

Unknown Executive: This conference has been recorded. [inaudible] Conference, Cost and Process Efficiencies. Our efforts to increase our productivity will be an important contributor to meeting our medium-term profitability metrics. All bank positive operating leverage driven by cost-disciplining Canadian in a national banking will be an important driver of results going forward. And finally, maintaining a strong balance sheet remains a high priority. Through the challenging rate environment over the past 18 months, we have strengthened our balance sheet with SETI-1 Capital, ACL coverage, and liquidity metrics all significantly improved levels.

Unknown Executive: This conference has been recorded.

Speaker Change: and we remain focused on delivering favorable, risk-adjusted margins and returns.

Speaker Change: Despite higher credit costs, it is important to note that risk adjusted margins of printed higher year-to-date in both Canadian and international banking.

Unknown Executive: [inaudible] Conference, Cost and Process Efficiencies. Our efforts to increase our productivity will be an important contributor to meeting our medium-term profitability metrics. All bank positive operating leverage driven by cost-disciplining Canadian in a national banking will be an important driver of results going forward.

Speaker Change: Loans Bruce sequentially in the Canadian Bank, in line with our strategic objective to deploy capital to our priority businesses and with our profitable primary relationships.

Speaker Change: Lone Balance is trended lower in International Bank even GBR.

Speaker Change: This winding discipline coupled with early success and will be a relentless ongoing effort to strengthen our deposit franchise is already showing clear progress.

Rajagopal Viswanathan: Our whole self-funding requirement has been reduced over the past year by $33 billion, resulting in a 250 basis point reduction in our whole self-funding ratio.

Speaker Change: Our whole self funding requirement has been reduced up to the past year by $33 billion, resulting in a 250 basis plan reduction in our whole self funding ratio.

Rajagopal Viswanathan: A few performance highlights across each of our businesses. We were pleased with the strong performance of our Canadian banking business, which delivered $1.1 billion of earnings in the quarter, up 6%. Pre-tax, pre-favision earnings grew at 11% year-over-year. We are making good progress towards our medium-term 1 million new primary client growth objective in domestic retail and 500,000 primary client growth target in Tangerine. Year-to-date, we've added 143,000 net new primary clients in our Canadian retail in Tangerine franchises. Although balances in the Canadian residential mortgage portfolio are down slightly year-over-year, we have clearly reached an inflection point as we've seen the success of our multi-product mortgage plus offerings, resulting in sequential residential mortgage growth.

Speaker Change: A few performance highlights across each of our businesses.

Speaker Change: We were pleased with the strong performance of our Canadian banking business, which delivered $1.1 billion of earnings in the quarter up to 6%.

Speaker Change: Pre-Tax Pre-Fvision earnings grew 11% year over year.

Speaker Change: We're making good progress towards our medium-term 1 million new primary client growth objective in domestic retail and 500,000 primary client growth target in Tangerine.

Speaker Change: Here today we've added 143,000 net new primary clients in our Canadian retail and Tangerine franchises.

Speaker Change: Although balances in the Canadian residential mortgage portfolio are down slightly year over year, we have clearly reached an inflection point as we've seen the success of our multi-product mortgage-plus offerings, resulting in sequential residential mortgage growth.

Rajagopal Viswanathan: Specifically, 82% of mortgage originations in Q3 were mortgage plus offerings with new clients, average and additional 3.1 products. Mortgage portfolio retention rates have also improved to 190 basis points year-over-year to over 90%. Enhancing the profitability of our Canadian banking franchise will be a key driver of shareholder value creation.

Speaker Change: Specifically, 82% of mortgage originations in Q3 were mortgage plus offerings with new clients, average in additional 3.1 products.

Speaker Change: Mortage portfolio retention rates have also improved 190 basis points year over year to over 90%.

Speaker Change: In Hansen, the profitability of our Canadian banking franchise will be a key driver of shareholder value creation.

Rajagopal Viswanathan: I was encouraged by the sequential 150 basis point improvement in Canadian banking return on equity. Discord Global Wealth delivered a very strong contribution of 450 million this quarter as a result of continued franchise momentum in our Canadian wealth business led by growth in our advice channels, as well as double-digit growth from international wealth. A Canadian wealth management advisory business saw a 19% increase in earnings year over year, led by very strong performance from Scotia McLeod and private banking. We continue to invest in advisor growth and technology within Scotia McLeod and have recently achieved a record assets managed in that channel. Our total wealth approach to provide full client solutions is driving growth in assets and relationship depth with new and existing clients. Financial clients in place, for example, which we know reflects stronger relationships and, importantly, better outcomes for our clients, are up 29% year over year. Stronger collaboration and client process all were highlighted as a clear priority for our domestic businesses at our investor day. We've seen good success in terms of the partnership between our businesses, driving a 21% year-to-date increase in close referrals from the Canadian retail bank to our wealth business. These are tangible, measurable metrics that confirm our advisors are working more successfully with their clients and with partners across our organization to bring more value to those clients.

Speaker Change: I was encouraged by the sequential 150 basis point improvement and Canadian banking return on equity this quarter.

Speaker Change: Global Welp delivered a very strong contribution of 415 million this quarter, as a result of continued franchise momentum in our Canadian Welp business, led by Growth and our Vice-Channel as well as double-digit growth from international wealth.

Speaker Change: Our Canadian Welfth Management Advisory Businesses saw 19% increase in earnings year over year, led by very strong performance from Scotion Applied and Private Banking.

Speaker Change: We continue to invest in advisor growth and technology within Scotem Applied and have recently achieved a record asset managed in that channel.

Unknown Executive: And finally, maintaining a strong balance sheet remains a high priority. Through the challenging rate environment over the past 18 months, we have strengthened our balance sheet with SETI-1 Capital, ACL coverage, and liquidity metrics all significantly improved levels. Turning to our Q3 results, the bank reported adjusted earnings of $2.2 billion or $1.63 per share in the quarter. The bank delivered solid, top-line revenue growth, again this quarter, driven by higher net interest income and non-interest revenue.

Speaker Change: Our total wealth approach to providing full client solutions is driving growth and assets and relationship depth with new and existing clients.

Unknown Executive: Turning to our Q3 results, the bank reported adjusted earnings of $2.2 billion or $1.63 per share in the quarter. The bank delivered solid, top-line revenue growth, again this quarter, driven by higher net interest income and non-interest revenue. We are realizing on the productivity initiatives that are already underway at the bank. Specifically, in our international and Canadian retail businesses, our productivity ratios improved by 210 basis points and 130 basis points respectively on a year-to-date basis.

Speaker Change: Financial Plions in place, for example, which we know reflects stronger relationships and importantly better outcomes for our clients are up 29% year over year.

Speaker Change: Schroner collaboration and client process are highlighted as a clear priority for our domestic businesses that are investor day.

Unknown Executive: We are realizing on the productivity initiatives that are already underway at the bank. Specifically, in our international and Canadian retail businesses, our productivity ratios improved by 210 basis points and 130 basis points respectively on a year-to-date basis. Credit costs are at the high end of our previously communicated range as we see the impact of sustained higher rates on our retail portfolios. In our international markets, we expect to see credit conditions begin to stabilize in response to the monetary easing over the past few quarters.

Speaker Change: We've seen good success in terms of the partnership between our businesses, driving a 21% year-to-date increase in close referrals from the Canadian retail bank to our wealth business.

Speaker Change: These are tangible, measurable metrics that confer our advisors are working more successfully with their clients and with partners across our organization to bring more value to those clients.

Unknown Executive: Credit costs are at the high end of our previously communicated range as we see the impact of sustained higher rates on our retail portfolios. In our international markets, we expect to see credit conditions begin to stabilize in response to the monetary easing over the past few quarters. And we remain focused on delivering favorable risk-adjusted margins and returns. Despite higher credit costs, it is important to note that risk-adjusted margins have trended higher year-to-date in both Canadian and international banking.

Rajagopal Viswanathan: We expect to see similar significant benefits from the partnership between global wealth and our commercial banking business going forward. In a global banking and markets business, we reported solid earnings of 418 million this quarter, despite lesser activity in the capital markets business, offset by stronger corporate banking and US business results. I have been impressed by GBM's ability to substantially earn through the headwind created by the elimination of the dividend received deduction this year. We were encouraged by strong growth in our fee businesses; underwriting and advisory fees were up over 30% on both a year-over-year and year-to-date basis, benefiting from the continued buildup of our product capabilities in the US capital markets business.

Speaker Change: We expect to see similar significant benefits from the partnership between global wealth and our commercial banking business going forward.

Speaker Change: In our global banking and markets business, we reported solid earnings of 418 million this quarter, despite less activity in the capital markets business, offset by stronger corporate banking and U.S. business results.

Unknown Executive: And we remain focused on delivering favorable risk-adjusted margins and returns. Despite higher credit costs, it is important to note that risk-adjusted margins have trended higher year-to-date in both Canadian and international banking. Loans grew sequentially in the Canadian bank in line with our strategic objectives to deploy capital to our priority businesses and with our profitable primary relationships. Loan balances trended lower in international banking and GBA. This lending discipline coupled with early success and will be a relentless ongoing effort to strengthen our deposit franchise is already showing clear progress. Our whole self-funding requirement has been reduced over the past year by $33 billion, resulting in a 250 basis point reduction in our whole self-funding ratio.

Speaker Change: I have been impressed by GBM's ability to substantially earn through the headwind created by the elimination of the dividend received deduction this year.

Unknown Executive: Loans grew sequentially in the Canadian bank in line with our strategic objectives to deploy capital to our priority businesses and with our profitable primary relationships. Loan balances trended lower in international banking and GBA. This lending discipline coupled with early success and will be a relentless ongoing effort to strengthen our deposit franchise is already showing clear progress. Our whole self-funding requirement has been reduced over the past year by $33 billion, resulting in a 250 basis point reduction in our whole self-funding ratio.

Speaker Change: We were encouraged by strong growth in our feed businesses.

Speaker Change: Underwriting and Advisory Fees, rock over 30% on both a year-over-year and year-to-date basis, benefiting from the continued build-out of our product capabilities in the US capital markets business.

Rajagopal Viswanathan: A critical component of our client privacy strategy is a more connected transaction banking capability across our primary markets to generate higher deposit growth. Scotia Connect, our new cash management platform, will elevate our capabilities in both Mexico and Canada, with our focus now squarely on enhancing capabilities in the US to make it easier for our multinational corporate and commercial clients to do business with us. In our international banking business, we delivered strong earnings, up 6% or 9% PTT growth year-over-year, representing a solid 14% return on equity despite elevated credit costs. And more normalized GBM Latin results compared to prior quarters.

Speaker Change: A critical component of our client-primacy strategy is a more connected transaction banking capability across our primary markets to generate higher deposit growth.

Speaker Change: Let's go and check our new cash management platform. We'll elevate our capabilities in both Mexico and Canada with our focus now squarely on enhancing capabilities in the US to make it easier for our multinational corporate and commercial clients to do business with us.

Unknown Executive: A few performance highlights across each of our businesses. We were pleased with the strong performance of our Canadian banking business, which delivered $1.1 billion of earnings in the quarter up 6%. Pre-tax, pre-favision earnings grew at 11% year-over-year. We are making good progress towards our medium-term 1 million new primary client growth objective in domestic retail and 500,000 primary client growth target in Tangerine. Year-to-date, we've added 143,000 net new primary clients in our Canadian retail in Tangerine franchises.

Speaker Change: In our international banking business, we delivered strong earnings up 6% or 9% PTTT growth year over year, representing a solid 14% return on equity despite elevated credit costs and more normalized GBM left hand results compared to prior quarters.

Rajagopal Viswanathan: We continued to reposition capital deployed within our international footprint. Customer deposits grew 4% year-over-year, while loans were managed 2% lower. The resulting loans and deposit ratio in international banking was down 9 points to 126% over the period. We are pleased with the early results of our productivity efforts, expense control, and capital repositioning in this business. We are confident that the retail client segmentation initiatives underway and are plans to develop a more regional standardized operating model will position our international banking business well for improved efficiency and greater profitability going forward. Our international banking business is doing more with less, generating impressive earnings growth with lower capital deployed.

Speaker Change: We continue to reposition capital deployed within our International Footprint.

Speaker Change: Customer deposits grew 4% year over year while loans were managed 2% lower. The resulting loan to deposit ratio in international banking was down 9.226% over the period.

Unknown Executive: Although balances in the Canadian residential mortgage portfolio are down slightly year-over-year, we have clearly reached an inflection point as we've seen the success of our multi-product mortgage plus offerings, resulting sequential residential mortgage growth. Specifically, 82% of mortgage originations in Q3 were mortgage plus offerings with new clients, average and additional 3.1 products. Mortgage portfolio retention rates have also improved to 190 basis points year-over-year to over 90%. Enhancing the profitability of our Canadian banking franchise will be a key driver of shareholder value creation.

Speaker Change: We are pleased with the early results of our productivity efforts, expense control and capital Repositioning in this business.

Speaker Change: We are confident that the retail client segmentation initiative is underway and are plans to develop a more regional, standardized operating model. We'll position our international banking business well for improved efficiency and greater profitability coming forward.

Speaker Change: Our International Banking Business is doing more with less, generated in impressive earnings growth with lower capital deployed.

Unknown Executive: I was encouraged by the sequential 150 basis point improvement in Canadian banking return on equity this quarter Global Wealth delivered a very strong contribution of 450 million this quarter as a result of continued franchise momentum in our Canadian Wealth business led by growth in our advice channels as well as double-digit growth from international wealth A Canadian Wealth management advisory business is saw 19% increase in earnings year over year led by very strong performance from Scotia McLeod and private banking we continue to invest in advisor growth and technology within Scotia McLeod and have recently achieved our record assets managed in that channel our total wealth approach to providing full client solutions is driving growth and assets and relationship depth with new and existing clients financial clients in place for example which we know reflects stronger relationships and importantly better outcomes for our clients are up 29% year over year stronger collaboration and client process are highlighted as a clear priority for our domestic businesses that are investor day we've seen good success in terms of the partnership between our businesses driving a 21% year-to-date increase in close referrals from the Canadian retail bank to our wealth business these are tangible measurable metrics to confirm our advisors are working more successfully with their clients and with partners across our organization to bring more value to those clients we expect to see similar significant benefits from the partnership between global wealth and our commercial banking business going forward In a global banking and market business we reported solid earnings of 418 million this quarter despite lesser activity in the capital markets business offset by stronger corporate banking and US business results I have been impressed by GBM's ability to substantially earn through the headwind created by the elimination of the dividend received deduction this year We were encouraged by strong growth in our fee businesses underwriting and advisory fees were up over 30% on both a year over year and year-to-date basis benefiting from the continued buildout of our product capabilities in the US capital markets business A critical component of our client privacy strategy is a more connected transaction banking capability across our primary markets to generate higher deposit growth Scotia Connect our new cash management platform will elevate our capabilities in both Mexico and Canada with our focus now squarely on enhancing capabilities in the US to make it easier for our multinational corporate and commercial clients to do business with us In our international banking business we delivered strong earnings of 6% or 9% PTT growth year-over-year representing a solid 14% return on equity despite elevated credit costs and more normalized GBM Latin results compared to prior quarters We continued to reposition capital deployed within our international footprint Customer deposits grew 4% year-over-year while loans were managed 2% lower the resulting loans and deposit ratio in international banking was down 9 points to 126% over the period We are pleased with the early results of our productivity efforts expense control and capital repositioning in this business We are confident that the retail client segmentation initiatives underway and are plans to develop a more regional, standardized operating model will position our international banking business well for improved efficiency and greater profitability going forward. Our international banking business is doing more with less, generating impressive earnings growth with lower capital deployed. Since the beginning of the year, risk-weighted assets deployed by the region are lower by $6.7 billion.

Rajagopal Viswanathan: Since the beginning of the year, risk-weighted assets deployed by the region are lower by $6.7 billion.

Speaker Change: Since the beginning of the year, risk-weighted assets deployed by the region are lower by $6.7 billion.

Scott Thomson: Turning to the current economic environment, interest rate increases over the past two years are now weighing on consumers and, to a lesser extent, are commercial and corporate clients. In Canada, we expect the economy to improve modestly in response to further monetary easing but remain below average historical growth rates for the foreseeable future. We do expect policy rates in Canada to trend gradually lower into mid next year, providing welcome early release to the Canadian consumer and driving a likely rebound in home and vehicle sales activity. US data in recent weeks has resulted in a repricing of the entire yield curve, suggesting much lower policy rates in the near term than were expected a few months ago.

Speaker Change: Turning to the current economic environment, interest rate increases over the past two years are now weighing on consumers and to a lesser extent are commercial and corporate clients.

Speaker Change: In Canada we expect the economy to improve modestly and respond to further monetary easing, but remain below average historical growth rates for the foreseeable future.

Speaker Change: We do expect policy rates in Canada to trend gradually lower into mid next year, providing welcome early release to the Canadian consumer and driving a likely rebound in home and vehicle sale of activity.

Speaker Change: You have data in recent weeks has resulted in a repricing of the entire yield curve to just in much lower policy rates in the near term that we're expected a few months ago.

Scott Thomson: This will be a benefit to our earnings in 2025. The larger economies in our Latin American footprint are all now well into a period of monetary accommodation. Central bank policy rates in Chile at 5.75% and Peru at 5.5% have continued lower from double-digit levels last year, and Mexico and Colombia have more recently lowered policy rates as well. The Latin region has experienced relative political stability and stronger growth than anticipated this year because of the proactive policy action of the cycle and should benefit further going forward from a strengthening global economy. We are not anticipating recessionary conditions in any of our key operating geographies in the foreseeable future.

Speaker Change: This will be a benefit to our earnings in 2025.

Speaker Change: The larger economies in our Latin American footprint are all now well into a period of monetary accommodation.

Speaker Change: Central Bank policy race in Chile at 5.75% and peruot 5.5% have continued lower from double-digit levels last year and Mexico and Colombia have more recently lowered policy races as well.

Speaker Change: The last-hand region has experienced relative political stability and stronger growth and anticipated this year, because of the proactive policy action cycle, and should benefit further going forward from a strengthening global economy.

Speaker Change: We are not anticipating recessionary conditions in any of our key operating geographies in the foreseeable future.

Scott Thomson: In closing, I would like to provide a few additional thoughts on the recent announcement of our agreement to purchase an approximately 14.9% interest in Key Corp, a leading US regional commercial focus banking franchise. This investment is consistent with our commitment to reallocate capital from developing to developed markets with a focus on the North American corridor. Our investment in Key Corp represents a low cost, low risk approach to deploying capital in the US banking market at a time when valuations are favorable and as the regulatory and competitive environment evolves. The additional primary capital will allow Key Corp to optimize their balance sheet and be more front-footed in growing their business, which will also result in increased income discussion bank over time.

Speaker Change: In closing, I would like to provide a few additional thoughts on the recent announcement of our agreement to purchase an approximately 14.9% interesting key corp, leading U.S. regional commercial focus banking franchise.

Speaker Change: This investment is consistent with our commitment to reallocate capital from developing to develop markets with a focus on the North American corridor.

Speaker Change: Our investment in T-Corp represents a low cost, low risk approach to deploying capital in the US Bankie market at a time when valuations are favorable and as the regulatory and competitive environment evolves.

Speaker Change: The additional primary capital will allow T-Corp to optimize their balance sheet and be more front-footed and growing their business, which will also result in increased income disclosure bank overtime.

Scott Thomson: This capital-efficient transaction is expected to add greater than 25 cents to EPS in the first full year of ownership and approximately 45 basis points to Scope Bank's return on equity. Given both confidence in our capital plan and greater clarity on future capital requirements, we evaluated a range of capital deployment options, including share buybacks. The investment in key is 65% more EPS accreted than the buyback alternative and 20 basis points better from an ROE perspective. The capital impact of a full transaction will be approximately 50 to 55 basis points. We believe that in the current environment, a 12.5% setty-one ratio represents an appropriate capital level at which to run the bank, 100 basis points above the regulatory minimum.

Speaker Change: This capital efficient transaction is expected to add greater than 25 cents to EPS in the first full year of ownership, and approximately 45 basis points to social banks return on equity.

Speaker Change: Give in both confidence in our Capital Plan and greater clarity on future capital requirements. We evaluate a range of capital deployment options, including share-by-backs.

Speaker Change: The investment in tea is 65% more EPS accreted than the buyback alternative and 20 basis points better from an hourly perspective.

Speaker Change: The capital impact of the full transactional will be approximately 50 to 55 basis points.

Speaker Change: We believe that in the current environment, a 12.5% steady-one ratio represents an appropriate capital level at which to run the bank. 100 basis points above the regulatory minimum.

Scott Thomson: Therefore, shareholders need not be concerned about Scotia Bank holding excess capital as we continue to execute on our North American corridor strategy. Our investment in T is financially attractive to our shareholders in the near term and has strategic value in terms of optionality on future U.S. platform growth in the long-term.

Speaker Change: Therefore, Sheryl must need not be concerned about Scotia Bank holding access capital as we continue to execute on our North American corridor strategy.

Speaker Change: Our investment in tea is financially attracted to our shareholders in the near term and adds strategic value in terms of optionality on future US platform growth in the long term.

Scott Thomson: It is also important to note that our organic growth plans within our well-established U.S. Global banking and markets business remain unchanged. We continue to enhance our U.S. capital markets product offering in highly rated market segments. Our recent mortgage capital market team hire within our structured credit business is the most recent example.

Speaker Change: It is also important to note that our organic growth plans within our well established U.S. global banking and markets business remain unchanged.

Speaker Change: We continue to enhance our U.S. capital markets product offering in highly rated market segments.

Speaker Change: Our recent mortgage capital market team hire within our structured credit business is the most recent example.

Unknown Executive: Turning to the current economic environment, interest rate increases over the past two years are now weighing on consumers and to a lesser extent are commercial and corporate clients. In Canada, we expect the economy to improve modestly in response to further monetary easing but remain below average historical growth rates for the foreseeable future. We do expect policy rates in Canada to trend gradually lower into mid-next year, providing welcome early release to the country.

Scott Thomson: In summary, I am pleased with the bank's results this quarter in terms of delivering positive earnings progression. While at the same time building balance sheet strength, despite a challenging economic backdrop. We are making measurable progress against our strategic plan, and our performance in 2024 sets a strong foundation for the resumption of organic earnings growth in 2025 in line with our investor-day commitments.

Speaker Change: In summary, I am pleased with the band's results this quarter in terms of delivering positive earnings progression, while the same time building balance sheet strength despite a challenging economic backdrop.

Speaker Change: We are making measurable progress against our strategic plan and our performance in 2024 sets a strong foundation for the action of organic earnings growth in 2025, in line with our investor day commitments.

Rajagopal Viswanathan: With that, I will turn it over to Raj for a more detailed financial review of the quarter. A legal provision related to certain value-added tax-assessed amounts relating to certain client transactions that occurred prior to the bank acquiring the Peruvian subsidiary and the usual acquisition related to intangible amortization amounts. Moving to slide six for a review of the third quarter results, the bank reported quarterly earnings of $2.2 billion and illiterate earnings per share of $1.63. The return on equity was 11.3%, and the return on tangible common equity was 13.7%. Revenues were up 5% year-over-year as net interest income grew 6% driven by net interest margin expansion, while non-interest income grew 4% year-over-year.

Unknown Executive: This will be an exciting consumer and driving a likely rebound in home and vehicle sales activity. US data in recent weeks has resulted in a repricing of the entire yield curve suggesting much lower policy rates in the near term than we expected a few months ago. This will be a benefit to our earnings in 2025.

Speaker Change: With that, I will turn it over to Raj for a more detailed financial review of the Porter.

Raj: Thank you, Scott and good morning everyone.

Raj: All my comments that follow will be on an adjusted basis, which includes the following items

Raj: The loss, mostly relating to goodwill associated with the sale of credit's kioshia, a consumer finance business in Peru, with the bank expects to receive regularly approval in fiscal 2025.

Unknown Executive: The larger economies in our Latin American footprint are all now well into a period of monetary accommodation. Central bank policy rates in Chile at 5.75% and Peru at 5.5% have continued lower from double-digit levels last year and Mexico and Colombia have more recently lowered policy rates as well. The Latin region has experienced relative political stability and stronger growth than anticipated this year because of the proactive policy action of the cycle and should benefit further going forward from a strengthening global economy. We are not anticipating recessionary conditions in any of our key operating geographies in the foreseeable future.

Raj: A legal provision related to certain value added taxes as amounts relating to certain fine transactions.

Raj: that I could prior to the bank acquiring the proven subsidiary.

Raj: and the usual acquisition related and tangible magnetization amounts.

Unknown Executive: We are not anticipating recessionary conditions in any of our key operating geographies in the foreseeable future.

Speaker Change: Moving to slide thanks for a review of the third quarter results.

Speaker Change: The banks reported quarterly earnings of $2.2 billion and they're literally earnings per share of $1.63.

Speaker Change: The turnaround equity was 11.3% and the turnaround tangible common equity was 13.7%.

Unknown Executive: In closing, I would like to provide a few additional thoughts on the recent announcement of our agreement to purchase an approximately 14.9% interesting key corp, a leading US regional commercial focus banking franchise. This investment is consistent with our commitment to reallocate capital from developing to develop markets with a focus on the North American corridor. Our investment in key corp represents a low cost, low risk approach to deploying capital in the US banking market at a time when valuations are favorable and as the regulatory and competitive environment evolves.

Speaker Change: Revenue is over up 5% year over year as an ADC for 6%

Speaker Change: Driven by net interest margin expansion, while non-interesting come grew 4% year or a year.

Rajagopal Viswanathan: The all-bank net interest margin expanded 4 basis points year-over-year. Margin was down 3 basis points quarter quarter, driven mainly by lower margins in international banking and Canadian banking, as well as higher levels of low yielding liquid assets. We expect the margin to modestly improve in Q4 and expand beyond Q4 as the benefits of the rate cuts are fully realized. Non-interest income was $3.6 billion, up 4% year-over-year, primarily from higher wealth management revenues, underwriting and advisory fees, and the positive impact of foreign exchange. The provision for credit losses was approximately $1.1 billion, and the PCL ratio was 55 basis points, up 1 basis point quarter quarter.

Speaker Change: The All Bank net interest margin expanded for basis points year to year

Martin: Martin was down 3 basis points quarter quarter driven mainly by low margins in international banking and Canadian banking, as well as higher levels of low yielding liquid assets.

Unknown Executive: The additional primary capital will allow key corp to optimize their balance sheet and be more front-footed in growing their business, which will also result in increased income to Scotiabank over time. This capital-efficient transaction is expected to add greater than 25 cents to EPS in the first full year of ownership and approximately 45 basis points to Scotiabank's return on equity. Given both confidence in our capital plan and greater clarity on future capital requirements, we evaluated a range of capital deployment options including share buybacks.

Martin: We expect the margin to modestly improve in Q4 and expand beyond Q4 as a benefit to the rate cuts of fully realized.

Martin: Non-interesting commos 3.6 billion dollars up 4% year over year primarily from higher wealth management revenues, underwriting and advisory fees and the positive impact of our next change.

Martin: The provision for current losses was approximately $1.1 billion and the PCL ratio was if had basis points up one basis point quarter quarter.

Unknown Executive: The investment in key is 65% more EPS accreted than the buyback alternative and 20 basis points better from an ROE perspective. The capital impact of a full transaction will be approximately 50 to 55 basis points. We believe that in the current environment, a 12.5% steady one ratio represents an appropriate capital level at which to run the bank, 100 basis points above the regulatory minimum. Therefore, shareholders need not be concerned about Scotia Bank holding excess capital as we continue to execute on our North American corridor strategy.

Rajagopal Viswanathan: Extences grew 5% year-over-year, driven by higher personal costs from inflationary adjustments and amortization and other technology-related costs that support business growth. Quarter-over-quarter expenses were up a modest 1%, driven by amortization and other technology-related costs and professional fees. The productivity ratio is 56% this quarter, in line with the prior quarter, and year-to-date operating leverage was a positive 0.9%.

Martin: Experances grew 5% year a year, driven by high personal costs from inflationary adjustments

Martin: and amortization and other technology related cars that support business growth.

Martin: Water over quarter, expense over up a modest 1% driven by amortization and other technology related costs and professional fees.

Martin: The productivity ratio is 56% of the squatter in line with the fry quarter and year to date operating leverage was above the 10.9%.

Rajagopal Viswanathan: Moving to slide 7, which shows the evolution of the C-T1 capital ratio and resquitted assets during the quarter. The Bank C-T1 ratio was 13.3%, an increase of 10 basis points quarter-over-quarter and 60 basis points year-over-year. Total-risk weighted assets was $454 billion, up from $450 billion in the prior quarter, driven by growth in pound-sheet assets and undrawn commitments, book quality changes that were partly offset by lower market risk. Earnings contributed 16 basis points; the drift contributed 11 basis points; and the revaluation of security through OCI contributed a further 7 basis points. This was offset partly by higher risk weighted assets consuming 11 basis points and effects and other impacts of another 11 basis points.

Martin: Moving to slide 7, which shows the evolution of the C-1 capital ratio and was created after skewing the quarter.

Unknown Executive: Our investment in T is financially attractive to our shareholders in the near term and has strategic value in terms of optionality on future US platform growth in the long term. It is also important to note that our organic growth plans within our well-established US global banking and markets business remain unchanged. We continue to enhance our US capital markets product offering in highly rated market segments. Our recent mortgage capital market team hire within our structured credit business is the most recent example.

Speaker Change: The bank seat you want ratio will 13.3% and increase of 10 basis points quarter to a quarter and 60 basis points year over year

Speaker Change: Total Resquit Adafits was $454 billion, up from $450 billion on the private quarter, driven by growth and aid assets, and on drone commitments.

Speaker Change: Book Quality Changes that were partly offset by lower market risk.

Speaker Change: Earlings contributed 16 basis points.

Unknown Executive: In summary, I am pleased with the bank's results this quarter in terms of delivering positive earnings progression. While at the same time building balance sheet strength despite a challenging economic backdrop. We are making measurable progress against our strategic plan and our performance in 2024 sets a strong foundation for the resumption of organic earnings growth in 2025 in line with our investor-day commitments.

Speaker Change: The drip contributed 11 basis points and the reevaluation of security through OCI contributed for the 7 basis points.

Speaker Change: This was offset partly by higher-resquainted assets consuming 11 basis points and effects another impacts of another 11 basis points

Rajagopal Viswanathan: As a reminder, the Q3 dividends that the bank announced this morning will be the last dividend eligible for the drift discount.

Speaker Change: As a reminder, the Q3 dividends at the bank account this morning will be the last dividend eligible for the Drupthas song.

Rajagopal Viswanathan: Turning now to the business line results, beginning on slide 8. Canadian banking reported earnings of 1.1 billion, an increase of 6% year-over-year, as higher revenues were partly offset by higher loan-loss provisions and expenses. The business generated another quarter of positive operating leverage, resulting in year-to-date positive operating leverage of 3.1%. Average loans and acceptances were up 1% quarter to a quarter and roughly in line with the prior year. Business loans grew 7% year-over-year for the card balances grew 16%, while residential mortgage balances declined 2%. We continue to see deposit growth as year-over-year deposits grew 8%, including an increase in personal deposits of 5%.

Rajagopal Viswanathan: With that, I will turn it over to Raj for a more detailed financial review of the quarter.

Speaker Change: Turning now to the business finder of screening on Flight 8.

Speaker Change: Canadian banking deported earnings of 1.1 billion and increase of 6% year over year, as higher revenues were partly offset by higher loan loss provisions and expenses.

Speaker Change: The business generated another quarter of positive operating leverage resulting in year to date positive operating leverage of 3.1%.

Unknown Executive: A legal provision related to certain value-added tax-assessed amounts relating to certain client transactions that occurred prior to the bank acquiring the Peruvian subsidiary and the usual acquisition related to infangible amortization amounts.

Speaker Change: Average loans and acceptances were up 1% quarter of a quarter and roughly in line with the prior.

Speaker Change: Business loans grew 7% year over year for the car balance of grew 16%, while residential mortgage balances.

Speaker Change: Decline 2%

Phil Thomas: Moving to slide six for a review of the third quarter results, the bank reported quarterly earnings of $2.2 billion and illiterate earnings per share of $1.63. The return on equity was 11.3 percent and the return on tangible common equity was 13.7 percent. Revenues were up 5 percent year over year as net interest income grew 6 percent driven by net interest margin expansion while non-interest income grew 4 percent year over year. The all-bank net interest margin expanded 4 basis points year over year, margin was down 3 basis points quarter quarter driven mainly by lower margins and international banking and Canadian banking as well as higher levels of low yielding liquid assets.

Speaker Change: We continue to see the positive growth as year over year to positive growth, 8% including an increase in personal deposits of 5%.

Rajagopal Viswanathan: The loan-to-deposit ratio improved to 120% compared to 129% in Q3, 2023. Net interest income increased 11% year-over-year, primarily from solid deposit growth, margin expansion, and the benefit from conversion of bankers' acceptances due to the cessation of C-dor. Net interest margin expanded 16 basis points year-over-year to win by higher loan margins and favourable changes to business banks. Margin was down 4 basis points quarter to quarter as asset margin expansion was more than offset by lower deposit margins reflecting the impact of rate cuts and makes shifts. Non-interesting income was down 1% year-over-year, primarily due to bank lower banking fees impacted by the bankers' acceptances converting to loans.

Speaker Change: The loan to deposit ratio improved to 120% compared to 129% in Q32023.

Speaker Change: Nineter's incoming increased 11% year over year, primarily from solid deposit road, margin expansion, and the benefit from conversion of bankours, exceptances due to the cessation of seed ore.

Speaker Change: and Edentras Margin expanded 16 basis points here over year, driven by higher loan margins and favourable changes to business banks.

Speaker Change: Martin was down 4 basis points quarter to a quarter as asset margin expansion was more than offset by lower deposit margins reflecting the impact of rate cups and makes shifts.

Phil Thomas: We expect the margin to modestly improve in Q4 and expand beyond Q4 as the benefits of the rate cuts are fully realized. Non-interest income was $3.6 billion up 4 percent year over year primarily from higher wealth management revenues underwriting and advisory fees and the positive impact of foreign exchange. The provision for credit losses was approximately $1.1 billion and the PCL ratio was 55 basis points up 1 basis point quarter quarter. Extences grew 5% year-over-year driven by higher personal costs from inflationary adjustments and amortization and other technology-related costs that support business growth quarter-over-quarter expense were up a modest 1% driven by amortization and other technology-related costs and professional fees.

Speaker Change: Non-interesting come was down 1% year over year. I'm early due to banked lower banking fees, impacted by the bank as acceptance is converting to loans.

Rajagopal Viswanathan: Aris, partially offset by higher deposit and mutual fund fees and insurance revenue. The PCL ratio was 39 basis points, down 1 basis point for zero quarter. Extences increased 5% year over year, primarily due to higher technology, professional, and personal costs. Quarter quarter expenses grew a modest 1%, primarily due to the impact of two more days in the quarter, higher professional fees that were offset by good expense management controls.

Speaker Change: partially offset by higher deposit and be to fund fees and insurance revenue.

Speaker Change: The BCN ratio was 39 basis points, down one basis point, what's it all for us?

Speaker Change: Expenses increase 5% year over your primarily due to high technology, professional and thoughtful cars.

Speaker Change: Order O'Korea expenses grew a modest 1% primarily due to the impact of two more days in the quarter, higher professional fees that were offset by good expense management controls.

Rajagopal Viswanathan: Turning now to global wealth management on slide nine, earnings of $415 million were up 11% year over year, driven by higher brokerage revenues and net interest income in Canada and higher mutual fund fees across the Canadian and international budget businesses, partly volume-related. Water over quarter earnings were up 7% primarily due to higher brokerage revenues and mutual fund fees and net interest income, partly offset by higher expenses. Revenues of $1.5 billion were up 10% year over year, driven by higher brokerage revenues and net interest income, as well as higher mutual fund fees driven by AUM growth.

Speaker Change: Turning note the global wealth management on slide 9

Speaker Change: On each of $415 million worth up to 11% year over year, driven by high brokerage revenues and net interest income in Canada and higher mutual fund fees across the Canadian and international bug businesses.

Speaker Change: Acleos said by higher expenses largely volume related.

Speaker Change: Quartzed over quarter earnings were up 7% primary due to high brokerage revenues and useful fund fees and net interest income are the offset by high expenses.

Phil Thomas: Total risk-weighted assets was $454 billion up from $450 billion in the prior quarter driven by growth in pound-sheet assets and androan commitments, book quality changes that were partly offset by lower market risk. Earnings contributed 16 basis points, the drift contributed 11 basis points and the revaluation of security through OCI contributed a further 7 basis points. This was offset partly by higher risk-weighted assets consuming 11 basis points and effects and other impacts of another 11 basis points.

Speaker Change: revenues of $1.5 billion would up 10% year over year, driven by high brokerage revenues and added to the income as well as high mutual fund fees.

Rajagopal Viswanathan: Expenses were up 9% year over year due to higher volume-related expenses, sales force expansion, and higher technology costs to support business growth. The spot AUM increased 10% year over year to $364 billion, as market appreciation was partly offset by net redemptions. AUA grew 10% over the same period to $694 billion from market appreciation and higher net sales. International wealth management earnings of 68 million were up 11% year over year, driven by higher mutual fund fees primarily from Mexico and strong deposit and loan growth across Latin America.

Speaker Change: driven by HEUM Gross.

Speaker Change: Expenses were up 9% year over year

Speaker Change: Due to higher volume-related expenses, sales force expansion and higher technology costs to support business growth.

Speaker Change: The spot AUM increased 10% year over year to $364 billion, as marketer precision was partly offset by net redemption.

Speaker Change: AUA, group 10% of the same period to 694 billions from market appreciation and higher net sales.

Unknown Executive: As a reminder, the Q3 dividends that the bank announced this morning will be the last dividend eligible for the drift discount.

Speaker Change: International World Management Learnings of 68 million World Up 11% year over year, driven by high immune to fund peace primarily from Mexico and strong deposit and loan growth across Latin America.

Phil Thomas: Turning now to the business line results beginning on slide 8, Canadian banking reported earnings of 1.1 billion an increase of 6% year-over-year as higher revenues were partly offset by higher loan-loss provisions and expenses. The business generated another quarter of positive operating leverage resulting in year-to-date positive operating leverage of 3.1%. Average loans and acceptances were up 1% quarter to a quarter and roughly in line with the prior year. Business loans grew 7% year-over-year credit card balances grew 16% while residential mortgage balances declined 2%.

Rajagopal Viswanathan: Turning to slide 10, global banking and market generated earnings of $418 million, down 4% year over year, significantly impacted by the denial of the dividend received deduction. Capital markets revenue was down 8% year over year, primarily from lower fixed income revenues that were partly offset by higher effects. Water over quarter capital markets revenue was down 5% from lower fixed income revenues, partly offset by higher equities and foreign exchange revenues. Business banking revenues grew 8% year over year and 9% quarter over quarter due to higher corporate and investment banking, including higher underwriting and advisory fees. Loans and acceptances were down 5% quarter over quarter to $109 billion, reflecting market conditions and management's continued focus on balance sheet optimization.

Speaker Change: Donning to flight 10

Speaker Change: Global Banking in market generated earnings of $418 million, down 4% year over year, significantly impacted by the denial of the dividend received deduction.

Speaker Change: Capremockett's review was down 8% year over year, primarily from lower fiction, come revenues that were partly offset by higher fx.

Speaker Change: Watered over quarter, capital markets revenue was down 5% from low fixed income revenues, partly offset by higher equities and for next change revenues.

Phil Thomas: We continue to see deposit growth as year-over-year deposits grew 8% including an increase in personal deposits of 5%. The loan-to-deposit ratio improved to 120% compared to 129% in Q3, 2023. Net interest income increased 11% year-over-year, primarily from solid deposit growth, margin expansion and the benefit from conversion of bankers' acceptances due to the cessation of C-dor. Net interest margin expanded 16 basis points year-over-year to win by higher loan margins and favourable changes to business banks, margin was down 4 basis points quarter to quarter as asset margin expansion was more than offset by lower deposit margins reflecting the impact of rate cuts and makes shifts.

Speaker Change: Business Banking revenues grew 8% year over year and 9% quarter of quarter

Speaker Change: due to higher corporate and investment banking, including higher underwriting and advisory fees.

Speaker Change: Lones and acceptances were down 5% quarter of quarter to $109 billion. Reflecting market conditions and management continued focus on balance sheet optimization.

Rajagopal Viswanathan: Net interest income increased 16% year over year primarily due to higher corporate lending and deposit margins, and higher loan fees. Non-interest income, however, was down 4% year over year due to lower trading-related revenue, including the impact from dividend received deduction, partly offset by higher fee and commission. Adonios, expenses were up 5% year over year, due mainly to higher personal costs and technology costs to support business growth, as well as the impact of foreign exchange. Water over quarter expenses were up a modest 2%, largely driven by higher personal costs.

Speaker Change: Nineter's income increased 16% year over year, I am only due to higher corporate lending and deposit margins and higher loan fees.

Speaker Change: Non-enters income, however, was down 4% year over year due to lower trading related revenue, including the fight from dividend received deduction, are clearly offset by higher fee and commission revenues.

Phil Thomas: Non-interesting income was down 1% year-over-year, primarily due to bank lower banking fees impacted by the bankers' acceptances converting to loans. Andrews, partially offset by higher deposit and mutual fund fees and insurance revenue. The PCL ratio was 39 basis points, down 1 basis point for zero quarter. Extences increased 5% year over year, primarily due to higher technology, professional and personal costs. Quarter quarter expenses grew a modest 1%, primarily due to the impact of two more days in the quarter, higher professional fees that were offset by good expense management controls.

Speaker Change: Experiences were up 5% here over here, do you mainly lead a high personal cost and technology cost? The support business growth is the same factor for an exchange.

Speaker Change: Water work order expenses were up to modest 2% last week driven by higher personal costs.

Speaker Change: The U.S. business generates strong earnings of $244 million, up 12% year over year, driven by higher corporate and investment banking revenue, equity revenues and lower funding costs, partly offset by higher expenses.

Speaker Change: GBM Latin America, which is reported as part of international banking, reported earnings of $285,000, down 9% compared to the prior and down 2% compared to the prior quarter.

Phil Thomas: Turning now to global wealth management on slide 9, earnings of $415 million were up 11% year over year, driven by higher brokerage revenues and net interest income in Canada and higher mutual fund fees across the Canadian and international budget businesses, partly offset by higher expenses, largely volume related. Quarter quarter earnings were up 7% primarily due to higher brokerage revenues and mutual fund fees and net interest income partly offset by higher expenses.

Rajagopal Viswanathan: Moving to slide 11 for a review of international banking, my comments that follow are on an adjusted and constant dollar basis. The segment delivered earnings of $674 million that was up 6% year over year. Revenue was up 6% year over year, as net interest income was up 7%, mainly in Chile, Mexico, and Peru. Net interest margin expanded 33 basis points year over year. NEM was down 5 basis points quarter over quarter, mainly due to lower inflation benefits in Chile and the impact of rate cuts that reduced asset margins in excess of lower cost of funds.

Speaker Change: Moving to slide 11 for a review of International Banking

Speaker Change: My comment said follow, I don't know just shit and constant dollar basis.

Speaker Change: The segment delivered earning of $674 million that was up 6% year over year.

Speaker Change: Revenue was up 6% here over year as net interest income was up 7% mainly in Chile, Mexico and Peru

Phil Thomas: Revenues of $1.5 billion were up 10% year over year, driven by higher brokerage revenues and net interest income as well as higher mutual fund fees driven by AUM growth. Expenses were up 9% year over year due to higher volume related expenses, sales force expansion and higher technology costs to support business growth. The spot AUM increased 10% year over year to $364 billion as market appreciation was partly offset by net redemptions. AUA grew 10% over the same period to $694 billion for market appreciation and higher net sales. International wealth management earnings of 68 million were up 11% year over year, driven by higher mutual fund fees primarily from Mexico and strong deposit and loan growth across Latin America.

Speaker Change: Nettaker's margin expanded 33 basis points year over year.

Speaker Change: Nambo is down 5 basis points quarter over quarter mainly due to lower inflation benefits and chilly and the part of rate cuts that reduce asset margins in excess of lower cost of funds.

Rajagopal Viswanathan: Year over year, loans were down 2% primarily in Chile and Peru. Total business loans declined 7%, partly offset by 5% growth in residential mortgages. The deposits grew 4% year over year, primarily in Mexico, Chile, and Colombia. Known personal deposits grew 5%, while personal deposits grew 1% year over year, mostly term. The loan deposit ratio improved to 126% from 135% in the prior. The provision for credit losses was $589 million, translating to 139 basis points, up only 1 basis point quarter over quarter. The expenses were up 4% year over year, driven mainly by highest salaries and employee benefits and technology costs.

Speaker Change: Year over year, loads were down 2% from Lincheli and Pro

Speaker Change: Total business loans decline 7% partly offset by 5% growth in residential mortgages.

Speaker Change: The deposits grew 4% year over year, primarily in Mexico, Chile and Colombia.

Speaker Change: 9% of the process grew 5% who are personal deposits, grew 1% here over year, mostly term.

Speaker Change: The local deposit ratio improved to 126% from 135% in the prior.

Speaker Change: The provision for credit losses was $500 and $89 million translating to $139 basis points, up only one basis point quarter to a quarter.

Phil Thomas: Turning to slide 10, global banking and markets generated earnings of $418 million dollars down 4% year over year significantly impacted by the denial of the dividend received deduction. Capital markets revenue was down 8% year over year, primarily from lower fixed income revenues that were partly offset by higher effects. Water over quarter capital markets revenue was down 5% from lower fixed income revenues partly offset by higher equities and foreign exchange revenues. Business banking revenues grew 8% year over year and 9% quarter over quarter due to higher corporate and investment banking including higher underwriting and advisory fees.

Speaker Change: The expenses were up 4% year over year driven mainly by highest salaries and employee benefits and technology costs

Rajagopal Viswanathan: Quarter over quarter expenses were flat as the business continues to see the benefits of restructuring, prudent expense management, and the focus on regionalization that offers the challenges of operating in a high inflationary environment. Year-to-date operating leverage was a very strong positive 4.6%.

Speaker Change: Quarterwood Quarter expenses were flat as the business continues to see the benefits of re-structuring, grudent expense management and the focus on regional elevation that also can determine this of operating in a high inflationary environment.

Speaker Change: here today, operating leverage was a very strong positive 4.6%.

Rajagopal Viswanathan: Turning to slide 12, the other segment reported an adjusted net loss attributable to equity holders of $465 million compared to a loss of $421 million in the prior quarter. Net interest income was in line with last quarter and is expected to improve going forward, benefiting from rate cuts. The non-interest revenue declined mainly due to lower non-interest revenue and higher expense.

Speaker Change: Turning to Slice Air 12

Speaker Change: The other segment reported an adjusted net loss attribute to build equity holders of $465 million, compared to a loss of $421 million in the prior quarter.

Phil Thomas: Loans and acceptances were down 5% quarter over quarter to $109 billion, reflecting market conditions and management's continued focus on balance sheet optimization. Net interest income increased 16% year over year, primarily due to higher corporate lending and deposit margins and higher loan fees. Non-interest income however was down 4% year over year due to lower trading-related revenue including the impact from dividend received deduction, partly offset by higher fee and commission revenue. News, Expenses were up 5% year-over-year, due mainly to higher personal costs and technology costs to support business growth as well as the impact of foreign exchange.

Speaker Change: Nedator Syncum was in line with last quarter and is expected to improve going forward benefiting from great cups.

Speaker Change: The Norman Trust revenue declined, mainly due to lower, lower interest revenue and higher expenses.

Phil Thomas: I'll now turn the call I would have failed to discuss risk.

Speaker Change: I'll now turn the call over to Phil to discuss West.

Phil Thomas: Thank you, Raj.

Phil Thomas: Good morning, everyone. All bank PCLs were 55 basis points, slightly above last quarter, and are expected to remain around this level for Q4. As we look to finish 2024, we continue to maintain our prudent approach in responding to the evolving macroeconomic landscape, but we are encouraged by the following trends. Table delinquency rates in Canada, despite elevated unemployment and household expenses, flat net write-offs and gills, quarter-reporter and international banking, despite a mixed macroeconomic environment, healthier balance sheet for our borrowing clients, with both quarter-reporter and year-to-year deposits growing faster than loans. The resulting all bank PCL of approximately 1.1 billion was up $45 million quarter-reporter.

Phil: Thank you, Raj. Good morning, everyone. All bank PCLs for 55 basis points, slightly above last quarter, and are expected to remain around this level for Q4.

Speaker Change: As we look to finish 2024, we continue to maintain our prudent approach and respond to the responding to the evolving macroeconomic landscape, but we are encouraged by the following friends.

Speaker Change: Fable Delinquency rates in Canada, despite elevated unemployment and household expenses, flat net write-offs in guilt, quarter-reporter in international banking, despite a mixed macroeconomic environment.

Phil Thomas: Water over quarter expenses were up a modest 2% largely driven by higher personal costs. The US business generated strong earnings of $244 million, up 12% year-over-year driven by higher corporate and investment banking revenue, equity revenues and lower funding costs, partly offset by higher expenses. GBM Latin America, which has reported as part of international banking, reported earnings of $285 million, down 9% compared to the prior and down 2% compared to the prior quarter.

Speaker Change: Help your balance sheet for our borrowing clients with both quarter of a quarter and year of a year deposit growing faster than loans.

Speaker Change: The resulting All Bank PCLs approximately 1.1 billion was up, $45 million for the report.

Phil Thomas: We continue to maintain sufficient allowances for credit losses. Over the last four quarters, we have increased total allowances by approximately $800 million, of which $500 million was for performing loans, bringing our ACL coverage ratio to 89 basis points, up 11 basis points from last year. Canadian banking PCLs of 435 million were up the modest 7 million, but down one basis point quarter-reporter, as increased provisions for performing loans were partially offset by lower impaired provisions. Canadian retail PCLs were flat quarter-reporter, with decreased impaired provisions offset by an $84 million performing build. Canadian retail clients continue to show resilience and are managing their budgets prudently, as discretionary spending hovered around 20% of total spending for the last six quarters.

Phil Thomas: GBM Latin America, which has reported as part of international banking, reported earnings of $285 million, down 9% compared to the prior and down 2% compared to the prior quarter.

Speaker Change: We continue to maintain sufficient allowances for credit losses.

Speaker Change: Over the last four quarters, we have increased total amounts of by approximately $800 million, of which $500 million was for performing loans, bringing our ACL coverage ratio to 89 basis points up 11 basis points from last year.

Phil Thomas: Moving to slide 11 for a review of international banking, my comments that follow are on an adjusted and constant dollar basis. The segment delivered earnings of $674 million that was up 6% year-over-year. Revenue was up 6% year-over-year as net interest income was up 7% mainly in Chile, Mexico and Peru. Net interest margin expanded 33 basis points year-over-year. NEM was down 5 basis points quarter over quarter mainly due to lower inflation benefits in Chile and the impact of rate cuts that reduced asset margins in excess of lower cost of funds.

Speaker Change: Canadian banking PCLs of 435 million were up to about 7 million, but down one basis point quarter of a quarter, as increased provisions for performing loans were partially offset by lower impaired provisions.

Speaker Change: Canadian retail PCLs were flat quarter-recorded with decreased impaired provisions offset by an $84 million performing build.

Speaker Change: Canadian retail clients continue to show resilience and are managing their budgets prudently as discretionary spending hovered around 20% of total spending for the last six quarters.

Phil Thomas: Expected rate relief will serve as a tailwind. Product performance remained strong in the meantime. The number of tail-risk clients in our mortgage portfolio continue to improve sequentially and represents less than 1% for total retail loan balances. The bank has set aside allowances to cover expected losses on these accounts. 90-day delinquency in our variable rate mortgage portfolio has increased by a modest two basis points quarter-reporter. Our fixed rate mortgage portfolio has maintained a stable 90-day delinquency rate of 15 basis points, and our variable rate mortgage performance gives us confidence in our books' credit quality. We are comfortable with the amount of allowances for the fixed rate mortgage portfolio.

Speaker Change: Accepted rate relief will serve as a tail width, product performance remains strong in the meantime.

Phil Thomas: Year-over-year loans were down 2% primarily in Chile and Peru. Total business loans declined 7% partly offset by 5% growth in residential offices. The deposits grew 4% year-over-year primarily in Mexico, Chile and Colombia. Nome personal deposits grew 5% while personal deposits grew 1% year-over-year mostly term. The low deposit ratio improved to 126% from 135% in the prior. The provision for credit losses was $589 million translating to 139 basis points up only 1 basis point quarter over quarter.

Speaker Change: The number of tail risk clients are mortgage portfolio continued to improve sequentially and represents less than 1% of our total retail loan balances. The bank has set aside allowances to cover expected losses on these accounts.

Speaker Change: 90 day delaying with the Intervariable Rate Mortgage portfolio has increased by a modest 2 basis points of quarter of a quarter.

Speaker Change: Our fixed rate mortgage portfolio has maintained a stable 90 day delay and curate of 15 basis points and a variable rate mortgage performance gives us confidence in our books credit quality.

Speaker Change: We are comfortable with the amount of allowances for the six-rate mortgage portfolio.

Phil Thomas: Turning to international banking, international banks from PCLs were 589 million, translating to a PCL ratio of 139 basis points. Total retail PCLs were stable and in line with expectations. We are encouraged by the performance in our retail portfolios to link and see remain flat quarter-reporter for the first time in two years. Our clients remain resilient given the macroeconomic environments in the region. We remain confident in our clients' resilience as central banks continue managing inflation across our footprint. The overall portfolio continues to perform as expected, and we continue to remain within the top end of our outlook for the full year 2024.

Speaker Change: Turning to International Banking, International Bank from PCLs for 589 million, translating to a PCL ratio of 139 basis points.

Phil Thomas: The expenses were up 4% year-over-year driven mainly by highest salaries and employee benefits and technology costs. Quarter over quarter expenses were flat as the business continues to see the benefits of restructuring, prudent expense management and the focus on regionalization that offers the challenges of operating in a high inflationary environment. Year-to-date operating leverage was a very strong positive 4.6%.

Speaker Change: Total retail PCLs were stable and in line with expectations.

Speaker Change: We encourage by the performance in our retail portfolio is the Lincoln Sea Remain flat quarter quarter for the first time in two years.

Speaker Change: Our clients remain resilient to give them the macroeconomic environments in the region.

Phil Thomas: Year-to-date operating leverage was a very strong positive 4.6%.

Speaker Change: We remain confident in our clients' resilience, a central banks continue managing inflation across our footprint.

Speaker Change: The overall portfolio continues to perform as expected and we continue to remain within the top end of our outlook for the full year 2024. With that, we'll pass it back to John for Q&A.

Phil Thomas: Turning to slide 12, the other segment reported an adjusted net loss attributable to equity holders of $465 million compared to a loss of $421 million in the prior. Net interest income was in line with last quarter and is expected to improve going forward benefiting from rate cuts. The non-interest revenue declined mainly due to lower non-interest revenue and higher expense.

John McCartney: With that, we will pass it back to John for Q&A. Great, thank you, Phil. Operator, please queue up questions.

John McCartney: Great, thank you, Philip, operator to please queue up questions.

Ebrahim Poonawala: Thank you. The first question is from Ebrahim Poonawala, from Bank of America. Please go ahead; your line is open. Good morning, I guess maybe Raj for you just around the neck and just margin outlook, so I heard your comments earlier.

Speaker Change: Thank you. The first question is from Ibrahim Punelewala from Bank of America. Please go ahead. Your line is open.

Ibrahim Punelewala: Good morning.

Unknown Executive: I'll announce on the call I would have failed to discuss risk.

Speaker Change: I guess maybe Raj for you just around the neck and the smudging outlook.

Phil Thomas: Thank you, Raj.

Phil Thomas: Good morning, everyone. All bank PCLs were 55 basis points, slightly above last quarter, and are expected to remain around this level for Q4.

Rajagopal Viswanathan: If we get a series of rate cuts from the Bank of Canada, which is expected at this point, give us a sense of the trajectory of where you see both the Canadian name playing out over the next four to six quarters and the consolidated name. And I'm assuming the corporate segment has to play a role somewhere in there, which holds this funding course coming down. Thanks. Good morning, Ebrahim. Happy to do that.

Ibrahim Punelewala: So, I heard you comment earlier.

Speaker Change: If we take a series of great cards from the Bank of Canada, which is expected at this point.

Phil Thomas: As we look to finish 2024, we continue to maintain our prudent approach in responding to the evolving macroeconomic landscape, but we are encouraged by the following trends. Table delinquency rates in Canada, despite elevated unemployment and household expenses, flat net write-offs and gills, quarter-reporter and international banking, despite a mixed macroeconomic environment, healthier balance sheet for our borrowing clients, with both quarter-reporter and year-to-year deposits growing faster than loans. The resulting all bank PCL of approximately 1.1 billion was up $45 million quarter-reporter.

Speaker Change: Give us a sense of the trajectory of where you see both the Canadian name are playing out over the next four to six quarters and the consolidate name and I'm assuming the corporate segment has to play a role somewhere in there, which holds his funding cost coming down. Thanks.

Rajagopal Viswanathan: A couple of points before I start on where this would go. So we disclosed in our analyst saying every 25 basis points is about a hundred million dollars of benefit in the NII over a full fiscal year. To be clear, it doesn't go as you know equal each month, you know, a little bit back ended because of our assets and liabilities reprise. The second thing is, you know, we've seen two rate cuts in Canada. The full quarter benefit of it shows through our wholesale funding benefits that come from cost of earnings reductions over there. As you know, most of these are on a 90-day rate pricing schedule.

Speaker Change: Yeah, everyone in here, I'm happy to do that. A couple of points before I start on you, where this would go. So we disclose in our analysts saying every 25 basis points is about $100 million of benefit in the NII.

Speaker Change: Over the full fiscal year, to be clear, it doesn't go as, you know, equally each month, you know, little bit backended because of our assets and liabilities reprise.

Phil Thomas: The resulting all bank PCL of approximately 1.1 billion was up $45 million quarter-reporter. We continue to maintain sufficient allowances for credit losses. Over the last four quarters, we have increased total allowances by approximately $800 million, of which $500 million was for performing loans, bringing our ACL coverage ratio to 89 basis points up 11 basis points from last year. Canadian banking PCLs of 435 million were up the modest 7 million, but down one basis point quarter-reporter, as increased provisions for performing loans were partially offset by lower impaired provisions.

Speaker Change: The second thing is, you know, we've seen two red cuts in Canada, I'm the full quarter benefit of it shows, who are also funding benefits that come from cost-of-funnings reductions over there.

Rajagopal Viswanathan: So we'll see some benefits in Q4 in the other segment, but we'll see the full quarter benefits starting from fiscal, you know, first quarter and fiscal 2025 and through. And likewise for every rate cut that will happen both in Canada and the United States. Our current focus is we should have two more rate cuts in Canada before the end of the calendar year. And likely, you know, starting in the United States in September, two rate cuts for the remainder of the calendar year and four more rate cuts for 2025 and so on in both countries.

Speaker Change: As you know, most of these are on a 90-day reprisings schedule. So we'll see some benefits and Q4 in the other segment, but we'll see the full quarter benefits starting from fiscal, you know first quarter in fiscal 2025 and through. And likewise for every red card type, we'll have to both in Canada and the United States.

Speaker Change: Our current forecast is we should have to more a cousin Canada before the end of the calendar year and likely starting in the United States in September.

Speaker Change: to record for the remainder of the calendar year and for more record for 2025 and so on in both countries.

Phil Thomas: Canadian retail PCLs were flat quarter-reporter, with decreased impaired provisions offset by an $84 million performing build. Canadian retail clients continue to show resilience and are managing their budgets prudently as discretionary spending hovered around 20% of total spending for the last six quarters. Expected rate relief will serve as a tailwind. Product performance remained strong in the meantime. The number of tail-risk clients in our mortgage portfolio continued to improve sequentially and represents less than 1% for total retail loan balances.

Rajagopal Viswanathan: So all of these benefits should show up in the other segment, as you point out. Even this quarter, if you look at the other segment, Abraham, the NII number, the loss is exactly the same as last quarter. So it's plateaued in our opinion, and the benefits should start showing up starting next quarter. The Canadian banks division them will continue to show some level of decline because deposit margins will go down in a declining rate environment, as you know. But it will pick up as the asset reprising starts happening in line with, you know, the fixed rate mob is as the schedulers, you know, 2025 and 2026.

Abraham: So all of these benefits should show up in the other segment as you point out. Even this quarter if you look at the other segment Abraham, the NII number, the loss, is exactly the same as last quarter. So it's plateaued in our opinion and the benefits should start showing up starting next quarter.

Speaker Change: The Canadian banks division them will continue to show some level of decline because their boss at margins will go down in a declining rate environment as you know.

Speaker Change: But it will take up as the asset preparation starts happening in line with, you know, the fixed rate mob is the schedulers, you know, 2025 and 2026

Rajagopal Viswanathan: But likely towards the latter part of 2025.

Phil Thomas: The bank has set aside allowances to cover expected losses on these accounts. 90-day delinquency in our variable rate mortgage portfolio has increased by a modest two basis points quarter-reporter. Our fixed rate mortgage portfolio has maintained a stable 90-day delinquency rate of 15 basis points and our variable rate mortgage performance gives us confidence in our books' credit quality. We are comfortable with the amount of allowances for the fixed rate mortgage portfolio. Turning to international banking, international banks and PCLs were $589 million, translating to a PCL ratio of 139 basis points.

Rajagopal Viswanathan: So that's the dynamic you will see in the business line. The international banking nearby suspect will be around the range that we operated this quarter. And, as you know, it moves around a little bit. You know, multiple factors, different countries, inflation, and many things that impact IPM, but I think it'll be around the level that you saw this quarter.

Speaker Change: but like it towards the latter part of 2025.

Speaker Change: So, that's the dynamic you will see in the business line.

Speaker Change: The international banking name my suspect will be around the range that we operated this quarter and as you know it moves around a little bit you know multiple factors different countries, inflation, many things that impact I paid in but I think it will be around the level that you saw this quarter

Rajagopal Viswanathan: So the summary would be we should start seeing NII and NIM benefits modestly in Q4 and then see it accelerate through 2025.

Speaker Change: So, the summary would be if we should start seeing NI and NIM benefits modestly in Q4 and then see it actually right through 2025.

Phil Thomas: Turning to international banking, international banks and PCLs were $589 million, translating to a PCL ratio of 139 basis points. Total retail PCLs were stable and in line with expectations. We are encouraged by the performance in our retail portfolio as delinquency remained flat quarter-reporter for the first time in two years. Our clients remain resilient given the macroeconomic environments in the region. We remain confident in our clients' resilience as central banks continue managing inflation across our footprint.

Unknown Executive: Got it.

Scott Thomson: And I guess maybe a separate question.

Scott Thomson: Maybe if you use Scott, the investment you made, I think, caught folks by surprise. I think to me, the fact that Scotia was back to playing offense.

Speaker Change: Godhead. And I guess maybe the separate question, maybe if you use Scott the investment you made I think caught.

Phil Thomas: Total retail PCLs were stable and in line with expectations. We are encouraged by the performance in our retail portfolio as delinquency remained flat quarter-reporter for the first time in two years. Our clients remain resilient given the macroeconomic environments in the region. We remain confident in our clients' resilience as central banks continue managing inflation across our footprint. The overall portfolio continues to perform as expected and we continue to remain within the top end of our outlook for the full year 2024.

Speaker Change: Post by surprise, I think to me, the fact that Scotia was back to playing offense.

Scott Thomson: And this was wondering if you could give us an update like the two core pieces in terms of the strategic sort of priorities one. Give us a mark to market on where we are in improving the deposit franchise within Canada, like early signs of success, like outside of rates coming down. What's actually happening from an execution standpoint. And then with Travis coming on in the capital markets business, if there's a kind of a heightened focus in terms of growing the US dollar business going forward. Thanks. Sure.

Speaker Change: and this was wondering if you could give us an update like the two core pieces in terms of the strategic sort of priorities.

Speaker Change: Give us a mark to mark it on where we are in imping.

Speaker Change: improving the deposit franchise within Canada, like early signs of success, like outside of great coming down, what's actually happening from an execution standpoint.

Phil Thomas: The overall portfolio continues to perform as expected and we continue to remain within the top end of our outlook for the full year 2024.

Speaker Change: and then with Travis coming on in the capital markets business, is there kind of a heightened focus in terms of growing the U.S. dollar business going forward? Thanks.

Rajagopal Viswanathan: With that, we'll pass it back to John for Q&A.

Unknown Executive: Great, thank you Phil, operator to please queue up questions.

Operator: Great, thank you Phil, operator to please queue up questions.

Scott Thomson: So there's three parts of that. So I'll start with the key investment.

Eris Bogdan: I'll give it to Eris on the deposit franchise, and then Travis. Maybe you can talk about the fee business in the US. So on the key investment, you know, we've gotten increased confidence over the last quarter in terms of the capital site. You know, capital peak in terms of what we need to run from a steady one ratio with the Basil deferrals and frankly, the strength of our balance sheet. And so we evaluated a whole bunch of redeployment options to capital. And the investment in key was the most financially attractive than the best for our shareholders.

Eris: Sure, so there's three parts so that's all start with the key investment. I'll give it to Eris on the deposit franchise and then Travis, maybe you can talk about the fee business.

Ebrahim Poonawala: Thank you, the first question is from Ebrahim Poonawala, from Bank of America, please go ahead, your line is open. A couple of points before I start on where this would go. So we disclosed in our analyst saying every 25 basis points is about $100 million of benefit in the NII over a full fiscal year. To be clear, it doesn't go as, you know, equal each month, you know, little bit back ended because of our assets and liabilities reprise.

Eris: and the U.S.O.R. on the key investment.

Speaker Change: We've gotten increased confidence over the last quarter in terms of the capital site, you know, capital peak in terms of what we need to run from a city one ratio with the baslo.

Speaker Change: Defurals and frankly the strength of our balance sheet and so we evaluated a whole bunch of redeployment options to capital.

Speaker Change: and the investment in key was the most financially attractive and the best for our shareholders. There's a page in the investor day which highlights the differences relative to a shared purchase. So that's first and foremost, I think the second aspect of that, however, is it's a low cost, low risk way to get into the US market.

Travis Machen: And there's a page in the investor day which highlights the differences roles that do a sherry purchase. So that's first and foremost; I think the second aspect of that, however, is it's a low cost, low risk way to get into the US market. In a market that's very uncertain right now, both from a political, regulatory, and economic perspective. And so the ownership interest in T, which you know has a five-year stand still, allows us to, you know, get Parto in the water, learn about the market and actually get the benefits of NII from developed market earnings over time, which has been part of the strategy in the North American corridor.

Speaker Change: in a market that's very uncertain right now, both from a political regulatory and economic perspective.

Speaker Change: the ownership and trust and key, which you know have a five-year stamp that allows us to.

Jeff Arto: Jeff Arto in the water, learn about the market and actually get the benefits of NII from developed market earnings over time, which has been part of the strategy of the North American Corridor. We are going to continue to focus and Travis will come to this on growing our USGBM business.

Travis Machen: We are going to continue to focus, and Travis will come to this on growing our US GBM business, particularly through the fee side. That business, so with that, maybe Travis, you can start on. I'll look for the US business, then we'll come to Arizona deposits. Sure. Thanks for the question. You know, Scott mentioned we see great opportunities in the US, obviously. One of the largest markets we see increase in connectivity between our Canadian and US clients, where we can capitalize on some of the fee opportunities that come across. And you saw a week or so ago, we did announce an investment in a new team there.

Ebrahim Poonawala: The second thing is, you know, we've seen two rate cuts in Canada are in the full quarter benefit of it shows through a wholesale funding benefits that come from cost of earnings reductions over there. As you know, most of these are on an 90 day rate pricing schedule. So we'll see some benefits in Q4 in the other segment, but we'll see the full quarter benefits starting from fiscal, you know, first quarter and fiscal 2025 and through.

Jeff Arto: particularly through the feed side of that business, so with that, maybe Travis, you can start on a look for the U.S. business, then we'll come to Arizona deposits.

Travis: Sure, I had that, this track, thanks for the question, you know, Scott mentioned, we see great opportunities in the US, obviously, when the largest markets we see.

Speaker Change: Increased in a kick at activity between our Canadian and US clients where we can capitalize on some of the the opportunities that they come across.

Ebrahim Poonawala: And likewise for every rate cut that will happen both in Canada and the United States. Our current focus is we should have two more rate cuts in Canada before the end of the calendar year. And likely, you know, starting in the United States in September, two rate cuts for the remainder of the calendar year and four more rate cuts for 2025 and so on in both countries. So all of these benefits should show up in the other segment as you point out.

Speaker Change: and I'm going to solve it.

Speaker Change: Week or so ago, we did announce an investment in a new team there, so as we start to build our expertise in our products, I think you'll see continued growth in the U.S. above some of the other markets within GBM.

Eris Bogdan: So as we start to build our expertise and our products, I think you'll see, you know, a continued growth in the US above some of our other markets within GBM.

Eris Bogdan: Harris, do you want to talk about the policy? Sure. We grew, and it's kind of looked at this in the last year. We've added more than 28 billion in deposits to the Canadian business, and you see it primarily in the loan to deposit ratio has gone down, I think, from 130 to 128 or 9 points. And this is something I mentioned back at it yesterday about building a more balanced business, and we start to see that now quarter on quarter. I think what I particularly want to highlight is, in the third quarter, we actually saw day-to-day banking balances grow, and that is a new development but is an offshoot of all the work we've done.

Ebrahim Poonawala: Even this quarter, if you look at the other segment, Abraham, the NII number, the loss is exactly the same as last quarter. So it's plateaued in our opinion and the benefits should start showing up starting next quarter. The Canadian banks division them will continue to show some level of decline because deposit margins will go down in a declining rate environment as you know. But it'll pick up as the asset reprising starts happening in line with, you know, the fixed rate mob is as the schedulers, you know, 2025 and 2026.

Speaker Change: and Eric, do you want to talk about the vlog you're going to?

Speaker Change: We grew and it's kind of looped to this in the last year we've added more than 28 billion in deposits to the Canadian business and you see it primarily in the loan to deposit ratio as gone down I think from 130 to 120 or 8 or 9 points

Speaker Change: and this is something I mentioned back at the best of day about building a more balanced business and we start to see that now quarter on quarter. I think when I particularly want to highlight this in the third quarter we actually saw a day-to-day banking balance as a growth and that is a new development but is a...

Ebrahim Poonawala: But likely towards a lot of part of 2025. So that's the dynamic you will see in the business line. The international banking nearby suspect will be around the range that we operated this quarter. And as you know, it moves around a little bit, you know, multiple factors, different countries, inflation, many things that impact IP them. But I think it'll be around the level that you saw this quarter. So the summary would be we should start seeing NII and NIM benefits modestly in Q4 and then see it accelerate through 2025. Got it.

Eris Bogdan: Whether it's booking our mortgage, originating our mortgages, and getting the mortgage plus and driving deposit for strategies and day-to-day banking strategies, when we lend, we see it in the commercial banking business, small business, retail. And so you're starting to see day-to-day balances. Despite the difficulty in the market in the consumer, we're seeing these balances grow. We added, I think, 60,000 next day-to-day banking clients in the third quarter. So the strategy is working, and it's a continuous focus of ours in all our channels to build this deposit day-to-day banking muscle and then lend on the back of it.

Speaker Change: is an offshoot of all the work we've done, whether it's booking our mortgage originating our mortgages and getting the mortgage plus and driving.

Speaker Change: Deposit for Strategies and Data Day Banking Strategies when we land. We see it in the commercial banking business, small business, retail. And so you're starting to see Data Day Bound is despite the difficulty of the market in the consumer. We're seeing these bounces grow, we added, I think, 60,000 next.

Ebrahim Poonawala: So the summary would be we should start seeing NII and NIM benefits modestly in Q4 and then see it accelerate through 2025. Got it.

Scott Thomson: And I guess maybe a separate question. Maybe if you use Scott, the investment you made, I think, caught folks by surprise. Just I think to me, the fact that Scotia was back to playing offense. And this was wondering if you could give us an update, like the two core pieces in terms of the strategic sort of priorities. One, give us a market market on where we are in improving the deposit franchise within Canada.

Speaker Change: Day-to-day banking clients in the third quarter, so the strategy is working and it's a continuous focus of ours and all our channels to build this deposit.

Eris Bogdan: I think today 56% of our mortgage customers have a day-to-day banking account, and conversely 46% of our term deposit holders have a day-to-day banking account. So this continues to be the focus and will continue to be a focus going into next year and will build more product muscle, will build more incentives in the branch network. We're also, of course, focusing, as I mentioned also during Investor Day, to get more mutual fund sales out of our branch network, and that also showing early signs of success. The mutual fund sales coming out of our branches increased on a growth basis 44% year-on-year.

David: David Day, banking muscle and then lend on the back of it. I think today...

Speaker Change: 56% of our mortgage customers have a day-to-day banking account.

Speaker Change: and conversely.

Speaker Change: 46% of our term deposit holders have a day-to-day banking account. So this continues to be the focus and we'll continue to be the focus going into next year. And we'll build more product muscle, we'll build more.

Scott Thomson: Like early signs of success, like outside of rates coming down, what's actually happening from an execution standpoint. And then with Travis coming on in the capital markets business, if there's a kind of a heightened focus in terms of growing the U.S, all the business going forward. Thanks. Sure. So there's three parts of that. So I'll start with the key investment. I'll give it to Eris on the deposit franchise and then Travis.

Speaker Change: Incentives in the branch network, we're also, of course, focusing as I mentioned, also during

Speaker Change: Investor Day, to get more mutual funcels out of our branch network and that also showing early signs of success, the mutual funcels coming out of our branches increased on a road space is 44%.

Scott Thomson: Maybe you can talk about the fee business in the U.S. So on the key investment, you know, we've gotten increased confidence over the last quarter in terms of the capital site, the capital peak in terms of what we need to run from a steady one ratio. We share with the basil deferrals and, frankly, the strength of our balance sheet. And so we evaluated a whole bunch of redeployment options to capital. And the investment in key was the most financially attractive than the best for our shareholders.

Eris Bogdan: So again this balanced business model we continue to push, and we're seeing successes will continue going into the long quarters.

Speaker Change: year on here. So again, this balance business model we continue to push and we're seeing successes while continuing going to the fallen quarters.

Unknown Executive: Thank you very much. Thank you.

Speaker Change: Thank you very much.

Gabriel Dechaine: The next question is from Gabriel Deschein from National Bank Financial. Go ahead. The line is open.

Speaker Change: Thank you.

Speaker Change: The next question is from Gabriel Dishain, from National Bank Financial, people who are here, you know, when it's open

Scott Thomson: And there's a page in the investor day, which highlights the differences roles that do a shared purchase. So that's first and foremost, I think the second aspect of that, however, is it's a low cost, low risk way to get into the U.S, market. In a market that's very uncertain right now both from a political regulatory and economic perspective. And so the ownership interest in key, which you know has a five-year stand still allows us to, you know, get Parto in the water, learn about the market, and actually get the benefits of NII from developed market earnings over time, which has been part of the strategy in the North American corridor.

Phil Thomas: Good morning. On the international segment, I think you were saying that the margin is going to be, you know, kind of in and around this level for the foreseeable future. I don't know if you said anything similar about the long loss ratio. It gave it still. I hope you're well. Good to hear you. We are, as I said earlier, really encouraged by what we're seeing in I.D. guild flat, net write-off flat. So that's an early positive sign.

Gabriel Dishain: Good morning. On the International segment that you were saying that the margin is going to be kind of in and around this level for the foreseeable future. I don't know if you send anything similar about the long-lost ratio.

Gabriel Dishain: gave it to Phil. I hope you're well good to hear you. As I said earlier, I really encouraged by what we're seeing in I.D. that guilt flat.

Scott Thomson: We're going to continue to focus and Travis will come to this on growing our U.S. GBM business, particularly through the fees side of that business. So with that, maybe Travis, you can start on, I'll look for the U.S, business, then we'll come to Arizona deposits. Sure. Thanks for the question. We see great opportunities in the U.S, obviously. One of the largest markets we see increase in activity between our Canadian and U.S, clients where we can capitalize on some of the fee opportunities that come across.

Gabriel Dishain: Uh-huh

Speaker Change: Yeah, net right off flat. So that's an early positive sign. I'll give you guidance into Q4 and then happy to come back next quarter and sort of give more clear guidance into 25. But we're generally seeing things as they look into the next quarter in line with this quarter.

Phil Thomas: I'll give you guidance into Q4, and then happy to come back next quarter and sort of give more clear guidance into 25. But we're generally seeing things, as I look into the next quarter, in line with this quarter.

Phil Thomas: Okay. Now if I look further ahead and you know you're lost right now is kind of - in line-ish with historical levels, there's been obviously some volatility there over the years but kind of eyeballing it looks at a normalized level if you will. Yet your consumer portfolio, not the mortgage, but mostly on secured consumers, is still nearly 20% below where it was in the pre-COVID days.

Speaker Change: Okay, now if I look further ahead and you know your your loss right now is kind of

Speaker Change: In lineish with historical levels, there's been obviously some volatility there over the years, but kind of eyeballing it looks at a normalized level if you will.

Scott Thomson: And then you saw a week or so ago we did announce an investment in a new team there. So as we start to build our expertise and our products, I think you'll see, you know, a continued growth in the U.S, above some of our other markets within GBM. Harris, do you want to talk about the policy? Sure. We grew and it's kind of looked at this. In the last year we've added more than 28 billion in deposits to the Canadian business and you see it primarily in the loan to deposit ratio has gone down I think from 130 to 128 or 9 points and this is something I mentioned back at it yesterday about building a more balanced business and we start to see that now quarter on quarter.

Speaker Change: Yet, your consumer portfolio, not the mortgage, but the most guaranteed consumer is still, you know, nearly 20% below where it was.

Phil Thomas: Just wondering why maybe be on next quarter, if you fact during the rate cuts, you factor in the portfolio, the change to the portfolio mix, why that that loss rate couldn't actually trend lower in the segment or is there some other factor I'm not considering? No, I think you've done a thorough analysis there.

Speaker Change: and the pre-COVID days. Just wanting why maybe, you know, be on next quarter, the factor in the rate cuts, the factor in the portfolio, the taste of the portfolio mix, why that loss rate couldn't actually try to lower in the segment or is there some other factor of not considering?

Speaker Change: No, I think you listen, you've done a thorough analysis there, you know, Francisco and I have been very focused on

Scott Thomson: I think what I particularly want to highlight is in the third quarter we actually saw a day-to-day banking balance is grow and that is a new development but is an offshoot of all the work we've done whether it's booking our mortgage originating our mortgages and getting the mortgage plus and driving deposit for strategies and day-to-day banking strategies when we lend. We see it in the commercial banking business, small business retail. And so you're starting to see day-to-day balance is despite the difficulty in the market in the consumer we're seeing these balances grow.

Phil Thomas: Francisco and I have been very focused on developing high quality in our portfolios. We've been very focused on primary customer acquisition; we're focusing on our math and top of math segments. And so, we're encouraged by what we're seeing, Dave, and I think there's more to come from me next quarter on outlook.

Speaker Change: Developing High Quality.

Speaker Change: and our portfolios have been very focused on primary customer acquisition with focusing on.

Speaker Change: sort of our mass and top of mass segments. And so, we're encouraged by what we're seeing, Gabe. And I think there's more to come from me next quarter on Outlook.

Unknown Executive: I wasn't that thorough, actually, but thanks for that. Have a good one.

Gabe: I wasn't that thorough actually, but thanks for that. Have a good one. Thank you.

Scott Thomson: We added I think 60,000 next day-to-day banking clients in the third quarter so the strategy is working and it's a continuous focus of ours in all our channel to build this deposit day-to-day banking muscle and then lend on the back of it. I think today 56% of our mortgage customers have a day-to-day banking count and conversely 46% of our term deposit holders. Have a day-to-day banking account. So this continues to be the focus and we'll continue to be a focus going into next year and we'll build more product muscle, we'll build more incentives in the branch network.

Paul Holden: Next question is from Paul Holden from CIBC. Please go ahead. The line is open. Thank you. Good morning. A couple of questions, maybe just continuing with international. I think if you look at the macro backdrop, particularly in Chile and Peru, seems to be improving. And then also, you know, there's a focus on the client primacy.

Speaker Change: Thank you, and this question is from Paul Holden from CBC, please go ahead, your line is open.

Paul Holden: Thank you. Good morning. A couple questions, maybe just continuing with International. I think if you look at the macro.

Speaker Change: backdrop, particularly in Chile and Peru seems to be improving and then also you know there's a focus on the client primacy. So what I'm trying to figure out is as as as as the demand environment improves for loans but put that again sort of your strategic strategy.

Francisco Silva: So what I'm trying to figure out is, as the demand environment improves for loans, but put that against sort of your strategic strategy. How should we think about balance sheet growth for international and 2025 system where balance sheet will still be flatish, or can we expect some decent growth next year? Thank you. Well, thank you for the question.

Speaker Change: How should we think about balance sheet growth for international and 20-25s this somewhere where balance sheet will still be flat-ish or can we expect some decent growth next year? Thank you.

Scott Thomson: We're also of course focusing as I mentioned also during investor day to get more mutual fun sales out of our branch network and that also showing early signs of success. The mutual fun sales coming out of our branches increased on a growth basis 44% year-on-year. So again this balanced business model we continue to push and we're seeing success is what continue going into the long quarters. Thank you very much. Thank you.

Francisco Silva: This is Francisco here. A couple of thoughts. The first is 2025 going back to our commitment and invested a was part of our transitional year. So you're going to see throughout 2025, but you've seen in 24 the combination of a refocusing or targeted penetration effort on existing relationships on particularly top of mass, emerging afloen and afloen. While an exercise of clienty selection drives a repro filing of our balance sheet, so the net effect has been an overriding reduction of our OUA. All delivered, all intended tours, focusing on the right clients and the right returns. That exercise will continue throughout 2025 where we're going to be very delivered on where we place balance sheet, both on retail, commercial and GVM, ensuring that we have a balanced relationship where lending is not the driver or the anchor, but rather the ability to transact on a day-to-day basis with our clients.

Speaker Change: Well, thank you for the question.

Speaker Change: This recipe goes here. A couple of thoughts. The first is 2025, going back to work a bit meant in the best of day, was part of our transitional year.

Speaker Change: So, you're going to see throughout 2025 up to you seen in 2024 the combination of a refocusing of a targeted penetration effort on existing relationships on particularly top-of-mass emerging affluent and affluent.

Gabriel Dechaine: The next question is from Gabrielle Deschein from National Bank Financial. Go ahead. The line is open.

Speaker Change: Wow, an exercise of client deselection.

Speaker Change: drives a reprofiling of our balance sheet. So the net effect has been an overriding reduction of our railway UAE, all delivered, all intended doors.

Paul Holden: Good morning. On the international segment I think you were saying that the margin is going to be kind of in and around this level for the foreseeable future. I don't know if you said anything similar about the loan loss ratio. That gave it to Phil. I hope you're well. Good to hear you. We are, as I said earlier, really encouraged by what we're seeing in IB, guild flat, net write-off flat. That's an early positive sign.

Gabriel Dechaine: Good morning. On the international segment I think you were saying that the margin is going to be kind of in and around this level for the foreseeable future. I don't know if you said anything similar about the loan loss ratio. That gave it to Phil. I hope you're well. Good to hear you. We are, as I said earlier, really encouraged by what we're seeing in IB, guild flat, net write-off flat. That's an early positive sign.

Speaker Change: focusing on the right clients and the right returns. That exercise will continue throughout 2025, where we're going to be very deliberate on where we place found sheet.

Speaker Change: Both on retail, commercial and at GVM, ensuring that we have a balanced relationship where lending is not the driver or the anchor, but rather the ability to transact on a day-to-day basis with our clients.

Francisco Silva: So you will see on the commercial and GVM side, a deliberate focus on cash management penetration, and on the retail front, it will be about a balanced relationship where payroll, investments, insurance, and ultimately transactional credit drive the relationships.

Speaker Change: So you will see on the commercial and GVN side a deliberate focus on cash management penetration and on the retail front it will be about a balance relationship where payroll, investments, insurance and ultimately transactional credit drive the relationships.

Paul Holden: I'll give you guidance into Q4 and then happy to come back next quarter and give more clear guidance into 25. We're generally seeing things as I look into the next quarter in line with this quarter. Okay, now if I look further ahead and you're lost right now is kind of... In line-ish with historical levels, there's been obviously some volatility over the years, but kind of eyeballing it looks at a normalized level, if you will.

Gabriel Dechaine: I'll give you guidance into Q4 and then happy to come back next quarter and give more clear guidance into 25. We're generally seeing things as I look into the next quarter in line with this quarter. Okay, now if I look further ahead and you're lost right now is kind of... In line-ish with historical levels, there's been obviously some volatility over the years, but kind of eyeballing it looks at a normalized level, if you will.

Francisco Silva: So you will see 2025 as a flatish balance sheet year just because of the net effect of deselections and refocusing of our portfolio. Understood. That's a helpful answer. Thank you for that.

Speaker Change: So, you will see 2025 as a flourish down in the year, just because of the net effect of the selection of our portfolio

Phil Thomas: Second question, and I guess it's for Phil. If I look at slide 34, shows Canadian retail, PCL trends, and what I see here is sort of, I think it's suggesting that, you know, the impaired are actually starting to improve. Well, I think you're pretty conservative still on total provision. So does that suggest that at a point in time when macroeconomic forecasts are to improve, there's potential for performing allowance releases? Would that be a correct assessment? Thank you. That's a great question, Paul, and obviously it's something we're spending a lot of time thinking about right now.

Speaker Change: understood that's a helpful answer. Thank you for that. Second question, and I guess it's for Phil. If I look at slide 34, shows Canadian retail, PCL trends and what I see here is sort of, I think it's suggesting that.

Paul Holden: Yet your consumer portfolio, not the mortgage, but mostly on secured consumers, is still nearly 20% below where it was in the pre-COVID days. Just wondering why maybe be on next quarter, if you fact during the rate cuts, you factor in the portfolio, the change to the portfolio mix, why that loss rate couldn't actually trend lower in the segment or is there some other factor I'm not considering? No, I think you, listen, you've done a thorough analysis there.

Gabriel Dechaine: Yet your consumer portfolio, not the mortgage, but mostly on secured consumers, is still nearly 20% below where it was in the pre-COVID days. Just wondering why maybe be on next quarter, if you fact during the rate cuts, you factor in the portfolio, the change to the portfolio mix, why that loss rate couldn't actually trend lower in the segment or is there some other factor I'm not considering? No, I think you, listen, you've done a thorough analysis there.

Phil: You know, the the interior actually started to improve, well, I think you're pretty conservative still on to hold all

Speaker Change: Provision. So, that's a just set up a point in time when macroeconomic forecasts start to improve there's potential for performing allowance releases with that be a correct assessment. Thank you.

Speaker Change: It's a great question that Paul and obviously something we're spending a lot of time thinking about right now

Phil Thomas: I have to say I, the numbers came in as we had expected at a quarter of a quarter, but I continue to be impressed by how resilient the Canadian consumer has been. Through this period, the trade-offs that they continue to make, you know, we see that coming through our VRM portfolio for sure. I think I've been signaling auto stress in the auto portfolio for about a year now, and I was really encouraged this quarter to see we're finally stable as it relates to net write-offs and in that portfolio. So, have we turned a quarter? I mean, you know, one quarter is not a trend, but I'm really encouraged by what I'm seeing for this quarter.

Paul Holden: Francisco and I have been very focused on developing high quality in our portfolios, been very focused on primary customer acquisition, we're focusing on sort of our math and top of math segments. And so, you know, we're encouraged by what we're seeing Gabe. And I think there's more to come from me next quarter on outlook. Okay, I wasn't that thorough, actually, but thanks for that.

Gabriel Dechaine: Francisco and I have been very focused on developing high quality in our portfolios, been very focused on primary customer acquisition, we're focusing on sort of our math and top of math segments. And so, you know, we're encouraged by what we're seeing Gabe. And I think there's more to come from me next quarter on outlook. Okay, I wasn't that thorough, actually, but thanks for that.

Speaker Change: I have to say...

Speaker Change: Dude, I...

Speaker Change: The numbers came in as we had expected a quarter of a quarter, but I continued to be impressed by how resilient the Canadian consumer has been through this period, the trade-offs that they continued to make. You know, we see that coming through our BRM.

Unknown Executive: Thank you.

Paul Holden: Thank you.

Speaker Change: our VRM portfolio for sure. I think I've been signaling auto-stress in the auto portfolio for about a year now and I was really encouraged this quarter to see we're finally stable as there relates to net write-offs and in that portfolio. So have we turned to Porter?

Speaker Change: You know, one quarter is not a trend, but I'm really encouraged by what I'm seeing for this quarter. And as even as I look into next quarter, I look at accessibility in these portfolios moving forward.

Phil Thomas: And as even as I look into next quarter, I look, I see stability in these portfolios moving forward.

Mario Mendonca: Next question is from Paul Holden from CIBC, please go ahead, the line is open. Thank you, good morning. A couple questions, maybe just continue with international. I think if you look at the macro backdrop, particularly in Chile and Peru seems to be improving. And then also, you know, there's a focus on the client primacy. So what I'm trying to figure out is, as the demand environment improves for loans, but put that against sort of your strategy.

Paul Holden: Next question is from Paul Holden from CIBC, please go ahead, the line is open. Thank you, good morning. A couple questions, maybe just continue with international. I think if you look at the macro backdrop, particularly in Chile and Peru seems to be improving. And then also, you know, there's a focus on the client primacy. So what I'm trying to figure out is, as the demand environment improves for loans, but put that against sort of your strategy.

Unknown Executive: Okay. That's it for me.

Unknown Executive: Thank you. We have talked about somewhere around the 475 million dollar range.

Speaker Change: Okay, that's it for me, thank you.

Mario Mendonca: How should we think about balance sheet growth for international and 2025 system, where balance sheet will still be flat-ish, or can we expect some decent growth next year? Thank you. Well, thank you for the question. This is Francisco here. A couple of thoughts. The first is 2025 going back to our commitment and invested a was part of our transitional year. So you're going to see throughout 2025, but if you see in 24, the combination of a refocusing of our targeted penetration effort on existing relationships on particularly top of mass, emerging affluent and affluent, while an exercise of clienty selection drives a repro filing of our balance sheet.

Francisco Silva: How should we think about balance sheet growth for international and 2025 system, where balance sheet will still be flat-ish, or can we expect some decent growth next year? Thank you. Well, thank you for the question. This is Francisco here. A couple of thoughts. The first is 2025 going back to our commitment and invested a was part of our transitional year. So you're going to see throughout 2025, but if you see in 24, the combination of a refocusing of our targeted penetration effort on existing relationships on particularly top of mass, emerging affluent and affluent, while an exercise of clienty selection drives a repro filing of our balance sheet.

Speaker Change: [inaudible]

Speaker Change: Here we have talked about somewhere around the $475 million range. Bottom line is the right number for this year. And it's going to improve significantly next year. It's in line with the NII improvements. You know, driven by the rate cuts that we talked about a little earlier on the whole Insounding benefits that will translate and show up in the corporate funding segment. I think just new term next quarter likely around this range.

Rajagopal Viswanathan: Bottom line is the right number for this year, and it's going to improve significantly next year. It's in line with the NII improvements, you know, driven by the rate cuts that we talked about a little earlier, and the wholesale funding benefits that will translate and show up in the corporate funding segment. I think just near term next quarter, likely around this range.

Mario Mendonca: So the net effect has been an overriding reduction of our UI, all delivered, all intended tours, focusing on the right clients and the right returns. That exercise will continue throughout 2025, where we're going to be very delivered on where we place balance sheet, both on retail, commercial and GVM, ensuring that we have a balanced relationship where lending is not the driver or the anchor, but rather the ability to transact on a day-to-day basis with our clients.

Francisco Silva: So the net effect has been an overriding reduction of our UI, all delivered, all intended tours, focusing on the right clients and the right returns. That exercise will continue throughout 2025, where we're going to be very delivered on where we place balance sheet, both on retail, commercial and GVM, ensuring that we have a balanced relationship where lending is not the driver or the anchor, but rather the ability to transact on a day-to-day basis with our clients.

Rajagopal Viswanathan: A couple of other comments on the corporate segment. It's got multiple components, as you probably know by now. You know, there is a lot of trans-surprising movements that happen between the corporate segment and others. There's investment gains. Sometimes, you know, there's master market gains that happen; highly difficult to predict over there. And, you know, the investment gains have been fairly small in the last few quarters because we've been holding on to it for NII income, and that's kind of the change in philosophy on how we want to manage the portfolio. We're going forward, but master market gains are a little hard to predict, particularly in a volatile environment.

Speaker Change: A couple of other comments on the copper segment. It's got multiple conferences you probably know in the by now. You know there is a lot of Anti-pricing movements that happen within the copper segment or in others.

Speaker Change: There's investment gains sometimes, you know, this market gains that happen highly difficult to predict over there and you know, the investment gains have been, you know, fairly small in the last few quarters because we've been holding on to it for an I, I income and that's kind of the change in philosophy on how we want to manage it portfolio going forward. But, Mark to market gains are a little hard to predict particularly in a volatile environment.

Rajagopal Viswanathan: So, near term, I think this would be about the right number somewhere around the 4.50 to 4.75 million dollar range.

Speaker Change: So near term I think this would be about the right number somewhere around the 450 to 475 million dollar range and we'll talk in November but directionally should be significantly better in 2025.

Mario Mendonca: So you will see on the commercial and GVM side, a deliberate focus on cash management penetration and on the retail front, it will be about a balanced relationship where payroll, investments, insurance and ultimately transactional credit drive the relationships.

Francisco Silva: So you will see on the commercial and GVM side, a deliberate focus on cash management penetration and on the retail front, it will be about a balanced relationship where payroll, investments, insurance and ultimately transactional credit drive the relationships.

Rajagopal Viswanathan: And we'll talk in November, but directionally, it should be significantly better in 2025. Thank you for that.

Speaker Change: So, thank you for that.

Phil Thomas: The next question is from Mario Mendonca from TD Securities. Please go ahead. Your line is open. This is on high investment grade corporate lending. Business and government; we have very little on the watch list right now. There's maybe, there's a few things that I'm watching mostly on the commercial side of the business, but I'm feeling really good about where we are on the corporate side. Obviously, we're a very disciplined organization from a credit perspective. We are very conservative in terms of how we approach these segments. We're seeing downgrades, some downgrades higher than upgrades, obviously, during this period, but I've got no major file on my desk that I'm working out right now.

Mario Manunka: Thank you. The next question is from Mario Manunka, from T.D. Securities, please go ahead, your line is open. We're going to fill up how to understand what proportion of your business and government loan book would be on your watch list. I'm curious as to what that is currently versus what it's been in the past.

Phil Thomas: So you will see 2025 as a flatish balance sheet year, just because of the net effect of deselections and refocusing of our portfolio. Understood, that's a helpful answer. Thank you for that.

Francisco Silva: So you will see 2025 as a flatish balance sheet year, just because of the net effect of deselections and refocusing of our portfolio. Understood, that's a helpful answer. Thank you for that.

Phil Thomas: Second question, and I guess it's for Phil. If I look at slide 34, shows Canadian retail, PCL trends, and what I see here is sort of, I think it's suggesting that, you know, the, the impaired are actually starting to improve. Well, I think you're pretty conservative still on total provision. So does that suggest that at a point in time when macroeconomic forecasts are to improve, there's potential for performing allowance releases. Would that be a correct assessment?

Phil Thomas: Second question, and I guess it's for Phil. If I look at slide 34, shows Canadian retail, PCL trends, and what I see here is sort of, I think it's suggesting that, you know, the, the impaired are actually starting to improve. Well, I think you're pretty conservative still on total provision. So does that suggest that at a point in time when macroeconomic forecasts are to improve, there's potential for performing allowance releases. Would that be a correct assessment? Thank you.

Speaker Change #100: Thanks for a good question. We continue to focus on high investment grade corporate lending.

Speaker Change #100: Business and government, we have very little on the watch list right now, there's maybe...

Speaker Change #100: is a few things that I'm watching mostly on the commercial side of the business, but I'm feeling really good about where we are in the corporate side. Obviously, we're a very disciplined organization from a credit perspective. We are very conservative in terms of how we approach these segments.

Speaker Change #100: You know, there's we're seeing, you know, downgrades, some downgrades higher than, they're not crazy, obviously, during this period.

Phil Thomas: Thank you. That's a great question that Paul and obviously it's something we're spending a lot of time thinking about right now. I have to say, I, the numbers came in as we had expected a quarter of a quarter, but I continue to be impressed by how resilient the Canadian consumer has been. Through this period, the trade-offs that they continue to make, you know, we see that coming through our VRM portfolio for sure.

Phil Thomas: That's a great question that Paul and obviously it's something we're spending a lot of time thinking about right now. I have to say, I, the numbers came in as we had expected a quarter of a quarter, but I continue to be impressed by how resilient the Canadian consumer has been. Through this period, the trade-offs that they continue to make, you know, we see that coming through our VRM portfolio for sure. I think I've been signaling auto stress in the auto portfolio for about a year now, and I was really encouraged this quarter to see, we're finally stable as it relates to net write-offs and in that portfolio.

Speaker Change #100: But I've got no major file on my desk that I'm working out right now.

Phil Thomas: We are looking at; there's a couple pockets of softness in Canada on the commercial side. Agriculture would be one of them; transportation. And then we're watching some pockets in some of our Latin America markets as well, but there's nothing that's standing out to me that I'm losing sleep on on the corporate side right now. There'd be fair to say that it would be well below, like far less than 5% of your corporate business and government loan book. The watch list that is well below.

Speaker Change #100: We are looking at there's a couple pockets of softness in Canada on the commercial side, you know, agriculture would be one of them transportation. And then we're watching, you know, some pockets in some of our Latin America markets as well, but there's nothing that's standing out to me that I'm losing sweep on on the corporate side right now.

Phil Thomas: I think I've been signaling auto stress in the auto portfolio for about a year now, and I was really encouraged this quarter to see, we're finally stable as it relates to net write-offs and in that portfolio. So, have we turned a quarter? I mean, you know, one quarter is not a trend, but I, I'm really encouraged by what I'm seeing for this quarter, and as even as I look into next quarter, I look, I see stability in these portfolios moving forward. Okay.

Speaker Change #100: There'd be fair to say that it would be well below what, like less, far less than 5% of your corporate business and government loan book.

Speaker Change #100: The watch list that is like well below.

Phil Thomas: Maybe sort of a follow-up question on the auto side. I like others that have been waiting for unsecured Canadian consumer credit to accelerate materially at some point and drive every bank's PCLs higher. And it just seems like that's not happening. And I guess what I want to ask you is that you've been surprised or encouraged by the resilience of the Canadian consumer. Do you think that rates have dropped sufficiently, or maybe the outlook for rates has, has the elevator races that they will be lower over the next 12 months? Is that sufficient that we could be looking at a bit of a no landing scenario for the unsecured Canadian consumer that we will never see that spike in losses?

Phil Thomas: So, have we turned a quarter? I mean, you know, one quarter is not a trend, but I, I'm really encouraged by what I'm seeing for this quarter, and as even as I look into next quarter, I look, I see stability in these portfolios moving forward.

Speaker Change #100: Okay, yes.

Speaker Change #101: Maybe sort of a follow-up question on the autoside. I like others that have been waiting for unsecured Canadian consumer credit to accelerate materially at some point.

Speaker Change #102: and drive every bank's PCL's hire. And it just seems like that's not happening. And I guess what I want to ask you.

Phil Thomas: That's it for me. Thank you. We have talked about somewhere around the 475 million dollar range. Bottom line is the right number for this year, and it's going to improve significantly next year. It's in line with the NII improvements, you know, driven by the rate cuts that we talked about a little earlier on the wholesale funding benefits that will translate and show up in the corporate funding segment. I think just near term next quarter, likely around this range, couple of other comments on the corporate segment.

Phil Thomas: Okay. That's it for me. Thank you. We have talked about somewhere around the 475 million dollar range. Bottom line is the right number for this year, and it's going to improve significantly next year. It's in line with the NII improvements, you know, driven by the rate cuts that we talked about a little earlier on the wholesale funding benefits that will translate and show up in the corporate funding segment. I think just near term next quarter, likely around this range, couple of other comments on the corporate segment.

Speaker Change #103: You've been surprised or encouraged by the resilience of the Canadian consumer.

Speaker Change #104: Do you think that rates have dropped sufficiently, or maybe the outlook for rates has the outlook for rates that they will be lower over the next eight, 12 months? Is that sufficient that we could be looking at a bit of a no-lanning scenario for the unsickered Canadian consumer?

Phil Thomas: Is that a possibility now?

Speaker Change #105: We will never see that spike in losses. Is that a possibility now?

Phil Thomas: But it's a really interesting question. I have been a proponent of the soft landing as I sort of look through how the Canadian economy is performing. And interestingly enough, when I look at our credit card repayments, I mean we've got a really small credit card portfolio compared to our peers. But credit card payments have actually been improving. And as people have been saving money, they've actually been paying off their credit card fairly regularly, which is encouraging. Again, I mentioned auto before; that's always been the dull weather. We focused really our credit card portfolio. We focused on sort of a higher prime, super prime fight goes in terms of our origination strategies there.

Speaker Change #106: but it's a really interesting question.

Speaker Change #107: I have been the proponent of the soft landing as I sort of looked through what how the Canadian economy is performing and you know, interestingly enough, you know, when I look at

Speaker Change #107: are credit card repayments. I mean we've got a really small credit card portfolio compared to our peers.

Speaker Change #107: but credit card payments have actually been improving and you know that there are as people have been saving money, they've actually been paying off their credit card fairly regularly, which is encouraging.

Phil Thomas: It's got multiple components as you probably know by now. You know, there is a lot of unsurprising movements that happen between the corporate segment and others. There's investment gains. Sometimes, you know, there's market market gains that happen highly difficult to predict over there. And, you know, the investment gains have been fairly small in the last few quarters because we've been holding on to it for NII income, and that's kind of the change in philosophy on how we want to manage the portfolio going forward.

Speaker Change #107: Um...

Speaker Change #107: I mentioned auto before that, but that's always been the bell letter. We focused really our credit card portfolio and we focused on...

Phil Thomas: But market market gains are a little hard to predict particularly in a volatile environment. So near term, I think this would be about the right number somewhere around the 450 to 475 million dollar range. And we'll talk in November, but directionally, it should be significantly better in 2025. Okay, thank you for that.

Phil Thomas: Thank you.

Speaker Change #107: sort of the higher prime super prime flight those in terms of our origination strategies there.

Aris Bogdan: But I've got, obviously, Mary, I'm not seeing any major concerns coming through the Canadian unsecured credit card portfolio. I mean we're looking at our lines of credit really closely as it relates to our people drawing down on those lines to make payments to the mortgage as that sort of thing. But again, I'm super encouraged by the fact that this quarter, those levels of delinquency or any stress seem to be leveling off.

Speaker Change #107: Um...

Speaker Change #107: But I've got, you know, I'll see, Mary, I'm not seeing any major concerns coming through the Canadian on secure credit card portfolio. I mean, we're looking at her.

Phil Thomas: Okay, thank you for that. Thank you.

Speaker Change #107: Our lines of credit really closely as it relates to our people drawing down on those lines to make payments to the mortgage, that sort of thing. But again, I am super encouraged by the fact that this quarter, you know, those levels of delinquency are any stress seem to be leveling off.

Unknown Executive: Thank you.

Phil Thomas: The next question is from Mario Mendonca, from TD Securities. Please go ahead. Your line is open. This is on high investment grade corporate lending. Business and government, we have very little on the watch list right now. There's maybe, there's a few things that I'm watching mostly on the commercial side of the business, but I'm feeling really good about where we are in the corporate side. Obviously, we're a very disciplined organization from a credit perspective.

Mario Mendonca: The next question is from Mario Mendonca, from TD Securities. Please go ahead. Your line is open. This is on high investment grade corporate lending. Business and government, we have very little on the watch list right now. There's maybe, there's a few things that I'm watching mostly on the commercial side of the business, but I'm feeling really good about where we are in the corporate side. Obviously, we're a very disciplined organization from a credit perspective.

Aris Bogdan: I'd just like to add to something that Phil said. It's Aris here. I think from my experience in unsecured rates matter, but what matters most is unemployment and how that tracks. And I think when we look at unemployment, that's a real bellwether and how the unsecured vocal perform. Obviously, rates matter, but I think you also have to look at the unemployment picture going forward.

Speaker Change #108: I just like to add to something that's filled up.

Speaker Change #109: said it's ours here. I think from my experience in unsecured rates matter, but what matters most is unemployment and how that tracks. And I think when we look at unemployment, that's a real bell weather and how the unsecured book will perform. Obviously rates matter, but I think you also have to look at the unemployment picture going forward.

Unknown Executive: Thank you. Yes.

Darko Vialich: The next question is from Darko Vialich from RBC Capital Markets. Please go ahead. The line is open. Hi, thank you. Good morning. My question is directed to Francisco.

Francisco Silva: And I'm just trying to maybe get a gauge for where you are in your journey with respect to maybe, maybe the proper term is deselecting clients. When I look at your revenue growth, when I go back to investor day, and I think about kind of the way you were depicting it, there was a momentary point in time where there would be stress on your revenues because you were reducing certain portfolios or selling things. And I just want to maybe think about that for a moment and get your perspective on whether or not there could be some revenue pressures coming up or whether or not.

Phil Thomas: We are very conservative in terms of how we approach these segments. There's, we're seeing downgrades, some downgrades higher than upgrades obviously during this period, but I've got no major file on my desk that I'm working out right now. We are looking at, there's a couple pockets of softness in Canada on the commercial side. Agriculture would be one of them transportation. And then we're watching, you know, some pockets in some of our Latin America markets as well, but there's nothing that's standing out to me that I'm losing sleep on on the corporate side right now. There'd be fair to say that it would be well below, like far less than 5% of your corporate business and government loan book. The watch list that is well below.

Mario Mendonca: We are very conservative in terms of how we approach these segments. There's, we're seeing downgrades, some downgrades higher than upgrades obviously during this period, but I've got no major file on my desk that I'm working out right now. We are looking at, there's a couple pockets of softness in Canada on the commercial side. Agriculture would be one of them transportation. And then we're watching, you know, some pockets in some of our Latin America markets as well, but there's nothing that's standing out to me that I'm losing sleep on on the corporate side right now. There'd be fair to say that it would be well below, like far less than 5% of your corporate business and government loan book. The watch list that is well below.

Francisco Silva: You're far enough along the journey that maybe you don't have to do more. So I don't know if there's a proportion. You can tell me; I don't think you ever actually told us how much revenue you expected to lose from removing certain books of business and so on and so forth. Hopefully you get the idea of what I'm asking. And you can give me some perspective on where revenues can go from here, knowing that maybe there's some pressures around the corner or maybe there isn't. Hopefully, my question makes sense, Francisco. It does. And thank you for it.

Speaker Change #110: Tell me I don't think you ever Oxy told us how much revenue you expected to lose.

Phil Thomas: Yes, yes, maybe sort of a follow up question on the auto side. I like others have been waiting for unsecured Canadian consumer credit to accelerate materially at some point and drive every every bank's PCL's higher. And it would just seems like that's not happening. And I guess what I want to ask you, you said it, you've been surprised or encouraged by the resilience of the Canadian consumer. Do you think that rates have dropped sufficiently, or maybe the outlook for rates have, has the elder for races that they will be lower over the next 12 months.

Mario Mendonca: Yes, yes, maybe sort of a follow up question on the auto side. I like others have been waiting for unsecured Canadian consumer credit to accelerate materially at some point and drive every every bank's PCL's higher. And it would just seems like that's not happening. And I guess what I want to ask you, you said it, you've been surprised or encouraged by the resilience of the Canadian consumer. Do you think that rates have dropped sufficiently, or maybe the outlook for rates have, has the elder for races that they will be lower over the next 12 months. Is that sufficient that we could be looking at a bit of a no landing scenario for the unsecured Canadian consumer that we will never see that spike in losses? Is that a possibility now?

Speaker Change #111: From removing certain books of businesses and so on and so forth.

Speaker Change #112: Hopefully you get the idea of where what I'm asking.

Speaker Change #113: And you can give me some perspective on.

Speaker Change #114: On where revenues can go from here knowing that maybe there are some pressures around the corner or maybe there isn't.

Speaker Change #114: My question makes sense Francisco.

Francisco: Does it does thank you for it I think the first thing to.

Francisco Silva: I think the first thing to position here is the decision-making process for us is about profitability and returns. Given the amount of capital we have deployed in the region to get to where we need to be, it has to be a combination of making the right decisions on the clients we can compete and win for business on a balanced relationship while being significantly more efficient in serving those clients. On the first portion of that, we have done a lot of work in understanding segmentation better. And that is generating our ability to tackle the wallet of those clients, be it in GBM, in commercial, in retail, or in wealth on a more integral fashion.

Francisco: Position here is the decision making process for us is about profitability and returns given the amount of capital we have deployed.

Speaker Change #116: The region.

Speaker Change #117: To get to where we need to be it has to be a combination of.

Phil Thomas: Is that sufficient that we could be looking at a bit of a no landing scenario for the unsecured Canadian consumer that we will never see that spike in losses? Is that a possibility now? But it's a really interesting question. I have been a proponent of the soft landing as I sort of look through how the Canadian economy is performing. And interestingly enough, when I look at our credit card repayments, I mean we've got a really small credit card portfolio compared to our peers.

Speaker Change #117: Making the right decisions on the clients, we can compete and win for business on a balanced relationship.

Speaker Change #117: While being significantly more efficient.

Speaker Change #117: Serving those clients on.

On the first portion of that we have done a lot of work in understanding segmentation better and that is generating our ability to tackle the wallet of those clients be it in GBM and commercial retail wealth on a more integral fashion and.

Francisco Silva: And that is resulting in the performance you're seeing this year, which in spite of the fact that we have been restructuring and repositioning our organization, we have been able to capture a disproportionate amount of business coming our way. Therefore, having revenues grow at 6% in the quarter, 7% year and year. We believe that performance to be sustainable in that range. Now, the most important aspect of the progress is in expenses as well. We have been able to maintain expenses flat quarter on quarter. And when you look at year on year, 4% growth in an environment that has inflation north of 5% on average.

Speaker Change #117: That is resulting in the performance Youre seeing this year, which in spite of the fact that we have been restructuring our repositioning our organization, we have been able to capture a disproportionate amount of business coming our way therefore, having revenues grow at 6%.

Phil Thomas: But credit card payments have actually been improving. And as people have been saving money, they've actually been paying off their credit card fairly regularly, which is encouraging. Again, I mentioned auto before. That's always been the dull weather. We focused really our credit card portfolio. We focused on sort of a higher prime, super prime fight goes in terms of our origination strategies there. But I've got, obviously Mary, I'm not seeing any major concerns coming through the Canadian unsecured credit card portfolio.

Phil Thomas: Again, I mentioned auto before. That's always been the dull weather. We focused really our credit card portfolio. We focused on sort of a higher prime, super prime fight goes in terms of our origination strategies there. But I've got, obviously Mary, I'm not seeing any major concerns coming through the Canadian unsecured credit card portfolio. I mean we're looking at our lines of credit really closely as it relates to our people drawing down on those lines to make payments to the mortgage as that sort of thing. But again, I'm super encouraged by the fact that this quarter those levels of delinquency or any stress seem to be leveling off.

Speaker Change #117: In the quarter, 7% year on year.

Aris Bogdaneris: Thank you.

Speaker Change #117: We believe that performance to be sustainable in that range.

Speaker Change #117: Now the most important aspect of the progress is in expenses as well, we have been able to maintain expenses flat quarter on quarter and when you look at year on year, 4% growth on an environment that has inflation in north of 5% on average creates the opportunity to continued operating leverage.

Francisco Silva: Rage, create the opportunity to continue operating the leverage while we're repositioning the business. So overall, we are on track to where we need to be in terms of repositioning our client franchise for primacy and multi-product. While on the five-year horizon, targeting the $800 million expense roll rate reduction, we are on track also to position our organization by the end of 2025 to be reorganized, refocus from the client perspective and embracing a different level of efficiency. When you look at our productivity, where we started the journey, I'd invest a day we were at 53; this quarter we are at 50.9. We committed to be at 45.

Phil Thomas: I mean we're looking at our lines of credit really closely as it relates to our people drawing down on those lines to make payments to the mortgage as that sort of thing. But again, I'm super encouraged by the fact that this quarter those levels of delinquency or any stress seem to be leveling off.

Speaker Change #117: While we reposition the business. So overall, we are on track to where we need to be in terms of repositioning our client franchise for primacy and multi product while on the five year horizon targeting the $800 million expense roll rate reduction.

Aris Bogdaneris: Thank you.

Phil Thomas: I'd just like to add to something that Phil said, it's Aris here. I think from my experience in unsecured rates matter, but what matters most is unemployment and how that tracks. And I think when we look at unemployment, that's a real bellweather and how the unsecured vocal perform. Obviously rates matter, but I think you also have to look at the unemployment picture going forward. Thank you. Yes.

Aris Bogdaneris: I'd just like to add to something that Phil said, it's Aris here. I think from my experience in unsecured rates matter, but what matters most is unemployment and how that tracks. And I think when we look at unemployment, that's a real bellweather and how the unsecured vocal perform. Obviously rates matter, but I think you also have to look at the unemployment picture going forward.

Speaker Change #117: We are on track also to position our organization by the end of 2025 to be reorganized refocus from the client perspective on embracing a different level of efficiency and when you look at our productivity, where we started the journey at Investor Day, We were at 53 this quarter we are at.

Unknown Executive: Thank you.

Unknown Executive: Thank you. Yes.

Unknown Executive: Thank you.

Speaker Change #117: 59, we committed to be at 45, so we're making powerful progress here across the three important component of our strategy.

Francisco Silva: So we're making powerful progress here across the three important components of our strategy.

Francisco Silva: The next question is from Darko Vialitz from RBC Capital Markets. Please go ahead. The line is open. Hi, thank you. Good morning. My question is directed to Francisco. And I'm just trying to maybe get a gauge for where you are in your journey with respect to maybe maybe the proper term is deselecting clients. When I look at your revenue growth, when I go back to investor day, and I think about kind of the way you were depicting it, there was a momentary point in time where there would be stress on your revenues because you were reducing certain portfolios or selling things.

Darko Mihelic: The next question is from Darko Vialitz from RBC Capital Markets. Please go ahead. The line is open. Hi, thank you. Good morning. My question is directed to Francisco.

Francisco Silva: And so specifically then with respect to portfolios or businesses that you'd look to dispose of, would you say that you are kind of complete with that process, or could there be a continuation on that process? And I'm just thinking about potential revenue headwinds from some dispositions that may or may not be coming in the next year. Yeah, well, again, going back to the principles that are driving our decision making, primarily returns on profitability. We're not done. We need to make sure that our portfolio across the board contributes to the higher ROE we targeted and sustainable return revenue growth on profitability.

Speaker Change #118: And so specifically then with respect to portfolios or businesses that you would look to dispose of would.

Francisco Silva: And I just want to maybe think about that for a moment and get your perspective on whether or not there could be some revenue pressures coming up or whether or not. You're far enough along the journey that maybe you don't have to do more. So I don't know if there's a proportion. You can tell me, I don't think you ever actually told us how much revenue you expected to lose from removing certain books of business and so on and so forth.

Francisco Silva: And I'm just trying to maybe get a gauge for where you are in your journey with respect to maybe maybe the proper term is deselecting clients. When I look at your revenue growth, when I go back to investor day, and I think about kind of the way you were depicting it, there was a momentary point in time where there would be stress on your revenues because you were reducing certain portfolios or selling things.

Speaker Change #119: Would you say that you are kind of complete with that process or could there be.

A continuation on that process.

Speaker Change #120: I'm, just thinking about potential revenue headwinds.

Speaker Change #121: Some dispositions that may or may not be coming in the next say year.

Francisco Silva: Hopefully you get the idea of what I'm asking. And you can give me some perspective on where revenues can go from here knowing that maybe there's some pressures around the corner or maybe there isn't. Hopefully my question makes sense, Francisco. It does. And thank you for it.

Speaker Change #122: Yeah, well again going back to the principles that are driving our decision making primed.

Speaker Change #123: Primarily returns our profitability, we're not done.

Speaker Change #123: We need to make sure that our portfolio.

Speaker Change #123: Across the board on previous to the higher ROE, we targeted and sustainable return revenue growth on profitability. So we are making progress and the assets or with the assets that have been underperforming.

Francisco Silva: So we are making progress in the assets or with the assets that have been on the performing. But as we committed on invested a when we don't see a path to getting to where we need to be, we would we deploy and that remains our discipline way forward. That has not changed. Okay, thank you.

Speaker Change #123: But as we committed on Investor day, where we don't see a path to getting to where we need to be we would redeploy and that remains our disciplined way forward that has not changed.

Speaker Change #124: Okay. Thank you.

Lemar Persaud: Thank you. The next question is from Lamar Perso from Carmark Securities. Please go ahead. Your line is open. Yeah, thanks. My first question, maybe for Harris here. One of the things I've been watching closely is this evolution of mortgage growth at Scotia to kind of suggest that we might be moving past some of these profitability actions. Let's say in the domestic retail business. This quarter, you guys mentioned that, you know, you've turned the corner on mortgage growth sequentially.

Speaker Change #125: Thank you.

Speaker Change #125: Question is from Lamar Purcell from <unk> Securities. Please go ahead. Your line is open.

Yes. Thanks, My first question maybe for.

Erez: Erez here.

Erez: One of the things that I've been watching closely.

Francisco Silva: I think the first thing to position here is the decision making process for us is about profitability and returns. Given the amount of capital we have deployed in the region to get to where we need to be, it has to be a combination of making the right decisions on the clients we can compete and win for business on a balanced relationship while being significantly more efficient in serving those clients. On the first portion of that, we have done a lot of work in understanding segmentation better.

Speaker Change #127: Is this evolution of mortgage growth at Scotia.

Speaker Change #128: Kind of suggests that we might be moving past some of these profitability actions, let's say in the domestic retail business.

Speaker Change #129: This quarter you guys mentioned that you have.

Speaker Change #129: Turning the corner on.

Speaker Change #130: Mortgage growth sequentially. So my question is this has Scotia has been cross an inflection point here in domestic P&C because it sounds like you are.

Eris Bogdan: So my question is this: how Scotia has then crossed an inflection point here in domestic P and C because it sounds like you're trying to go in that direction. Or should we just look at it as you're happy on the progress, but you know, it could be a bumpy road as we move forward in Q4 into 2025. So soft, there would be helpful. Okay, thank you for the question. So let me give you a brief summary of the mortgage business to date. We added five billion spot in the third quarter in terms of volume growth net; that compares to two billion in the second quarter.

You're trying to go in that direction or.

Speaker Change #131: Should we just look at it as Youre happy on the progress, but it could be a bumpy road as we move forward in Q4 and into 2025, so thoughts there would be helpful.

Francisco Silva: And that is generating our ability to tackle the wallet of those clients, be it in GBM in commercial in retail or in wealth on a more integral fashion. And that is resulting in the performance you're seeing this year, which in spite of the fact that we have been restructuring and repositioning our organization, we have been able to capture a disproportionate amount of business coming our way. Therefore having revenues grow at 6% in the quarter, 7% year and year.

Speaker Change #132: Thank you for the question. So let me give you just a brief summary of the mortgage business to date.

Speaker Change #133: We added $5 billion spot in the third quarter in terms of volume growth net that compares to $2 billion in the second quarter. So youll see some two to five as we start to ramp up a bit.

Eris Bogdan: So you see from two to five as we start to ramp up a bit. This is obviously the mortgage market is heating up; rates are coming down. There's activity there. You're right; July was an inflection point where the actual balances of our mortgage business are now starting to grow, and it will continue into the fourth quarter. I think Scott alluded to it earlier; 71% of our new originations are coming from our brokers, but more importantly, 90% of that volume is coming with additional products and day-to-day accounts, etc. We're focused our branches on retention, and retention rates we're seeing are very strong.

Speaker Change #133: This is obviously the mortgage market is heating up rates are coming down there is activity there.

You're right July was an inflection point, where the actual balances of our mortgage business are now starting to grow and it will continue into the fourth quarter I think Scott alluded to it earlier.

Francisco Silva: We believe that performance to be sustainable in that range. Now, the most important aspect of the progress is in expenses as well. We have been able to maintain expenses flat quarter on quarter. And when you look at year on year, 4% growth on an environment that has inflation north of 5% on average. Rearage, Create the Opportunity to continue operating leverage while we're repositioned to business. So overall, we are on track to where we need to be in terms of repositioning our client franchise for primacy and multi-product.

Scott: 71% of our new originations are coming from our brokers, but more importantly, 90% of that volume is coming with additional products and day to day accounts et cetera.

Scott: We're focused our branches on retention and retention rates. We're seeing are very strong we have also added.

Eris Bogdan: We've also added something new: virtual retention specialists. So this is a group of folks who are virtually based and are driving retention across the country. Archery. This whole idea that we've been talking about for a while now about value versus volume, you see it actually in the mortgage PNL, where revenue growth is double digit, 20% here on year, as we focus on margin, quality customers, etc. So will this continue? Yes, it will continue into the fourth quarter; we'll probably see a slightly higher growth rate, slightly. But we're not driven by market share; we over index on mortgages for many years. We're interested in strong relationships with our brokers, strong retention, multi-product, and focusing on value over time.

Scott: Something new virtual retention specialists. So this group of folks who are virtually based and are driving retention across the country.

Francisco Silva: While on the 5-year horizon, targeting the $800 million expense rule rate reduction, we are on track also to position our organization by the end of 2025 to be reorganized refocus from the client perspective and embracing a different level of efficiency. And when you look at our productivity where we started the journey, I'd invest today, we were at 53, this quarter, we are at 50.9, we committed to be at 45. So we're making powerful progress here across the three important component of our strategy.

Scott: This whole idea that we've been talking about for a while now about value versus volume you see that in the mortgage P&L, where revenue growth is double digit 20% year on year as we focus on margin quality customers et cetera. So will this continue.

Speaker Change #134: Yes, it will continue into the fourth quarter, we'll probably see a slightly.

Speaker Change #134: Higher growth rates slightly, but we're not driven by market share we over index on mortgages for many years, we're interested in strong relationships with our brokers strong retention multi product and focusing on value over time.

Francisco Silva: And so specifically then, with respect to portfolios or businesses that you'd look to dispose of, would you say that you are kind of complete with that process or could there be a continuation on that process? And I'm just thinking about potential revenue headwinds from some dispositions that may or may not be coming in the next year. Yeah, well, again, going back to the principles that are driving our decision making primarily returns on profitability, we're not done.

Eris Bogdan: So that is really the story. And so have we turned the point yet, but we're just going to continue what we've been doing up to now and maintain this model that we're trying to build this balance.

Speaker Change #134: So that is really the story and so have we turned the point yet, but we're just going to continue what we've been doing up to now and maintained.

Speaker Change #134: This model that we're trying to build this balance.

Unknown Executive: Open that answers your question. Yeah, that's all for now.

Speaker Change #134: Hope that answers your question.

Speaker Change #135: Yeah. That's helpful and then what about like earnings growth at the segment level.

Unknown Executive: What about earnings growth at your segment level, like regardless of the mortgage business, just taking it up to the segment level? Should we expect increased earnings growth as we kind of move forward into 2025, just trying to think through that as well. Well, again, earnings are driven by, of course, the volumes and revenue, the cost, the PNL; they're all in combination, as Phil talked about. It will be interesting, and we're watching how the PNL will evolve; that will have a big impact on the profitability going forward. But I think what we continue to see, again, is day-to-day banking, growing retail, customer primary growth, continuing goods.

Speaker Change #136: Regardless of the mortgage business is taking it up to the segment level should we expect.

Francisco Silva: We need to make sure that our portfolio across the board, on trivages to the higher ROE we targeted, unsustainable return revenue growth on profitability. So we are making progress in the assets or with the assets that have been underperforming, but as we committed on invested a when we don't see a path to getting to where we need to be, we would we deploy. And that remains our discipline way forward, that has not changed. Okay, thank you. Thank you.

Speaker Change #137: Earnings growth as we kind of move forward into 2025.

Speaker Change #138: Just trying to think that think through that as well.

Speaker Change #138: Well again earnings is driven by of course, the volumes and revenue the cost the PCL Theyre all the combination as Phil talked about it will be interesting and we're watching how the <unk> will evolve that we'll have it be.

Speaker Change #139: Impact on the profitability going forward, but I think what we continue to see again is day to day banking.

Speaker Change #138: Growing.

Speaker Change #140: Retail customer primary growth continuing.

Phil Thomas: The next question is from Lamar Perso from Cornmark Securities. Please go ahead. Your line is open. Yeah, thanks. My first question maybe for Eris here. One of the things I've been watching closely is this evolution of mortgage growth at Scotia to kind of suggest that we might be moving past some of these profitability actions. Let's say in the domestic retail business. This quarter you guys mentioned that you know you've turned the corner on mortgage growth sequentially.

Eris Bogdaneris: Thank you. The next question is from Lamar Perso from Cornmark Securities. Please go ahead. Your line is open. Yeah, thanks. My first question maybe for Eris here. One of the things I've been watching closely is this evolution of mortgage growth at Scotia to kind of suggest that we might be moving past some of these profitability actions. Let's say in the domestic retail business. This quarter you guys mentioned that you know you've turned the corner on mortgage growth sequentially.

Unknown Executive: Good cost discipline. This is operating leverage three quarters in a row is positive as we really focus on our customer-facing channels to optimize them: branches, contact centers, mobile advisors. We're working all the levers, is what I'm trying to say. And we continue to hopefully see the ROE improving and the RAM improving, all the quality metrics that we monitor. Appreciate the time.

Phil: Good cost discipline. This is operating leverage three quarters in a row as positive as we really focus on our customer facing channels to optimize them branches contact centers.

Phil Thomas: So my question is this how Scotia has then crossed an inflection point here in domestic PNC because it sounds like you're trying to go in that direction. Or should we just look at it as you're happy on the progress, but you know it could be a bumpy road as we move forward and Q4 into 2025. So soft there would be helpful. Okay, thank you for the question.

Eris Bogdaneris: So my question is this how Scotia has then crossed an inflection point here in domestic PNC because it sounds like you're trying to go in that direction. Or should we just look at it as you're happy on the progress, but you know it could be a bumpy road as we move forward and Q4 into 2025. So soft there would be helpful.

Phil: Mobile advisors were working all believers is what I'm trying to say and we continue to hopefully see the ROE improving in the Rand improving all the quality metrics that we monitor.

Speaker Change #141: Appreciate the time.

Thank you.

Speaker Change #141: The next question is from Nigel D'souza from Veritas investment Research. Please go ahead. Your line is open.

Nigel D'Souza: Good morning. Thank you for taking my question I wanted to touch on the.

Nigel D'Souza: EPS accretion that you had on page 18, comparing to buyback versus key Corp.

Rajagopal Viswanathan: Could you understand why 2.3 billion was used in the calculation rather than 3.9 for the buy-backs and the 80 million net funding cost, but that represents? Yeah, sure, Nigel. It's a good question. It's 2.3 billion dollars we used. That increased to the 50 to 55 basis points on capital. If you want to do the comparison to the key transactions, that's apples to apples. If I use the 3.9 billion, it'll equate about 72 to 75 basis points of capital. Therefore, it's a different basis to use and will likely not be comparable for the outcome. That's right.

Eris Bogdaneris: Okay, thank you for the question. So let me give you a brief summary of the mortgage business to date. We added five billion spot in the third quarter in terms of volume growth net. That compares to two billion in the second quarter. So you see from two to five as we start to ramp up a bit. This is obviously the mortgage market is heating up rates are coming down there's activity there.

Speaker Change #143: Because you have to understand why $2 3 billion was used in the calculation rather than three nine for the buybacks and the $80 million and net funding costs.

Phil Thomas: So let me give you a brief summary of the mortgage business to date. We added five billion spot in the third quarter in terms of volume growth net. That compares to two billion in the second quarter. So you see from two to five as we start to ramp up a bit. This is obviously the mortgage market is heating up rates are coming down there's activity there. You're right to live with an inflection point where the actual balances of our mortgage business are now starting to grow and it will continue into the fourth quarter.

Speaker Change #143: Represents.

Speaker Change #143: Yeah sure Nigel it's Raj, it's a good question, but the $2 $3 billion, we use that equates to the $50 to 55 basis points on capital.

If you wanted to do the comparison to the key transaction, so thats apples to apples, if I use a $3 9 billion in <unk>, 70% to 75 basis points of capital. Therefore, it's a different.

Eris Bogdaneris: You're right to live with an inflection point where the actual balances of our mortgage business are now starting to grow and it will continue into the fourth quarter. I think Scott alluded to it earlier. 71% of our new originations are coming from our brokers, but more importantly 90% of that volume is coming with additional products and day-to-day accounts, etc. We're focused on branches on retention and retention rates we're seeing are very strong.

Speaker Change #143: Basis to use and are likely gone compatible for the outcome. So that's that.

Phil Thomas: I think Scott alluded to it earlier. 71% of our new originations are coming from our brokers, but more importantly 90% of that volume is coming with additional products and day-to-day accounts, etc. We're focused on branches on retention and retention rates we're seeing are very strong. We've also added something new virtual retention specialists. So this is group of folks who are virtually based and are driving retention across the country. Archery, this whole idea that we've been talking about for a while now, about value versus volume, you see it actually in the mortgage PNL, where revenue growth is double digit, 20% here on here, as we focus on margin, quality customers, etc.

Rajagopal Viswanathan: The 80 million dollars is actually quite simple. It's really the funding cost of the 2.3 billion dollars, or you can look at it as the opportunity cost. The 2.3 billion dollars is invested in some securities worth the return that we would lose. And that's the half-attacks number that we have calculated based on average. I think it will help work out to somewhere between 4.8 to 5 percent.

Speaker Change #144: $80 million is actually quite simple.

Speaker Change #144: It's really the funding cost of the deployment of $1 billion. All you can look at it as the opportunity costs $2 $8 billion is invested in some securities was sort of done that we would lose and thus the after tax number that we've calculated based on average I think it will invoke over to somewhere between four 8% to 5% I think if you did the math.

Eris Bogdaneris: We've also added something new virtual retention specialists. So this is group of folks who are virtually based and are driving retention across the country. Archery, this whole idea that we've been talking about for a while now, about value versus volume, you see it actually in the mortgage PNL, where revenue growth is double digit, 20% here on here, as we focus on margin, quality customers, etc. So will this continue? Yes, it will continue into the fourth quarter, we'll probably see a slightly higher growth rate slightly, but we're not driven by market share. We over indexed on mortgages for many years, we're interested in strong relationships with our brokers, strong retention, multi-product and focusing on value over time.

Rajagopal Viswanathan: I think if you did. Matt.

Rajagopal Viswanathan: Okay, I guess where I was going with that is, no, I'm trying to understand why not look at the actual capital outlay, and then you look at the key accretion. Why isn't the option you cost netted off against that as well to reduce the benefit by 80 million, but maybe something to follow up on. Thank you.

Speaker Change #145: Okay, I guess, where I was going with that is.

Speaker Change #146: No I can understand why not look at the actual capital outlay and then when you look at the key accretion why isn't the opportunity cost netted off against that as well to reduce the.

Speaker Change #146: Benefit by $80 million, but maybe something Tom to follow up offline. Thank you.

Rajagopal Viswanathan: Now I actually help you now because the key income that we have shown, the 300 to 350 million dollars, has gone three components. It's a potential equity pickup that we will have. Net of the cost of funds relating to what we are deploying, which is on the entire 3.9 billion dollars proceeds that we will deploy. And it's got a benefit because of interest rate mark accretion that will come through after we do purchase for its accounting. So that's got cost of funds to include it in it, and it's a net number.

Speaker Change #147: I can actually help you know because the key income that we have shown that $300 million to $350 million is going to take confidence as to potential equity pick up that we will have net of the cost of funds relating to what we are deploying which is on the entire $3 9 billion proceeds that we will deploy.

Phil Thomas: So will this continue? Yes, it will continue into the fourth quarter, we'll probably see a slightly higher growth rate slightly, but we're not driven by market share. We over indexed on mortgages for many years, we're interested in strong relationships with our brokers, strong retention, multi-product and focusing on value over time. So that is really the story, and so have we turned the point yet, but we're just going to continue what we've been doing up to now and maintain this model that we're trying to build this balance, open that answers your question.

Speaker Change #148: <unk> got a benefit because of interest rate market accretion that would come through after we do participate accounting. So that's got cost of funds to included in attendance a net number.

Unknown Executive: That's all, folks. Thank you.

Speaker Change #149: That's helpful. Thank you.

Unknown Executive: You're welcome. Thank you.

Speaker Change #150: Youre welcome.

Speaker Change #150: Thank you. The next question is from Sohrab <unk> from BMO capital markets. Please go ahead. Your line is open.

Sohrab Movahedi: The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. The line is open. Okay, I appreciate we've gone over time. Thank you for squeezing me, and I had two hopefully quick questions.

Eris Bogdaneris: So that is really the story, and so have we turned the point yet, but we're just going to continue what we've been doing up to now and maintain this model that we're trying to build this balance, open that answers your question. Yeah, that's all for now. What about earnings growth at your segment level, regardless of the mortgage business, just taking it up to the segment level? Should we expect increased earnings growth as we've kind of moved forward into 2025?

Sohrab: Okay. I appreciate we've gone over time. Thank you for squeezing me in I had two hopefully quick questions.

Scott Thomson: Scott, I think the 12.5% CT1 being the right level, and so does that suggest that the optimization exercise in GBM is complete now? We shouldn't expect to see further rationing of credit and RWA there. That's the first one.

Sohrab: Yes, Scott I think the 12, 5% CET one.

Phil Thomas: Yeah, that's all for now. What about earnings growth at your segment level, regardless of the mortgage business, just taking it up to the segment level? Should we expect increased earnings growth as we've kind of moved forward into 2025? I'm just trying to think through that as well. Well, again, earnings are driven by, of course, the volumes and revenue, the cost, the DCL, they're all in combination as Phil talked about, it will be interesting, and we're watching how the PCLs will evolve, that will have a big impact on the profitability going forward.

Speaker Change #152: Being the right level and.

Speaker Change #153: And so does that.

Speaker Change #154: Suggest that the optimization exercise in GBM is complete we shouldnt expect to see further rationing of credit than ours. The bofa there.

Eris Bogdaneris: I'm just trying to think through that as well. Well, again, earnings are driven by, of course, the volumes and revenue, the cost, the DCL, they're all in combination as Phil talked about, it will be interesting, and we're watching how the PCLs will evolve, that will have a big impact on the profitability going forward. But I think what we continue to see, again, is day-to-day banking, growing retail, customer primary growth, continuing good cost discipline.

Scott Thomson: You know, I mean, listen, I think the GBM optimization I wouldn't actually put characterizes as an optimization. I would characterize as a focus on primary clients with relationships where we can add value to the client and it's beneficial for the shareholder as well. And so we're going to continue to be very disciplined on how we allocate our capital. That's going to allow us to continue to allocate capital to primary client relationships where there's a mutual win-win. And it will continue to allow us to build capital to the overall bank, which we can then redeploy into other uses.

Speaker Change #155: No I mean listen I think the GBM.

Speaker Change #156: Optimization I wouldn't actually.

Speaker Change #157: Characterize it as an optimization I would characterize as a focus on primary clients with relationships, where we can add value to the client.

Speaker Change #157: It's beneficial for the shareholder as well and so we're going to continue to be very disciplined on how we allocate our capital that's going to allow us to continue to allocate capital to primary client relationships, where there's a mutual win win and it will continue to allow us to build capital and the overall bank, which when we can then redeploy into other uses.

Phil Thomas: But I think what we continue to see, again, is day-to-day banking, growing retail, customer primary growth, continuing good cost discipline. This is operating leverage three quarters in a row as positive as we really focus on our customer facing channels to optimize them, branches, contact centers, mobile advisors. We're working all the levers is what I'm trying to say, and we continue to hopefully see the ROE improving and the RAM improving all the quality metrics that we monitor.

Unknown Executive: Thank you.

Eris Bogdaneris: This is operating leverage three quarters in a row as positive as we really focus on our customer facing channels to optimize them, branches, contact centers, mobile advisors. We're working all the levers is what I'm trying to say, and we continue to hopefully see the ROE improving and the RAM improving all the quality metrics that we monitor. Thank you.

Scott Thomson: So that would be a continuing strategy similar to what how Francisco talked about IV and somewhere how Travis talked about the fee business that we're talking about in the GBM. And so I guess that leads me into the key investment and some of the 10 10 10 general benefits over there. So is the expectation here that some of the balance sheet would reside with Key, for example, and you'll get some fee businesses. Is that the way to think about it if this is executed on kind of to to dream like levels.

Francisco: So that would be a continuing strategy similar to what how Francisco talked about IV and somehow travels talked about the fee business that we're talking about in GBM.

And so I guess that leads me into the into the key investment and some of the tenants.

Speaker Change #158: Tangential benefits over there.

Speaker Change #159: Is the expectation here that some of the balance sheet, which resides with key for example, and you'll get some fee businesses is that the way to think about it.

Nigel Sousa: The next question is from Nigel Sousa from Veritas Investment Research. Please go ahead. The line is open. Good morning. Thank you for taking my question. I wanted to touch on the EPS accretion that you had on page 18, comparing the buyback versus keycorp. Could you understand why 2.3 billion was used in the calculation rather than 3.9 for the buybacks and the 80 million net funding cost, but that represents. Sure, Nigel Sousa.

Speaker Change #158: Executed on.

Speaker Change #160: Kind of two two dreamliners levels no not at all I mean, the key investment.

Scott Thomson: No, not not at all. I mean the key investment I would separate from our GBM organic growth key investment as I talked about. Near term creation better than a share repurchase. It gives us some optionality over time in a low cost, low risk fashion in terms of our GBM business. You see what we're doing on the fee side where we're up 30% year over year, 30% year to date. Continues build up the capital markets capabilities and in really attracted businesses you know the capital markets higher the Travis reference is another example the CLO business is another example.

Speaker Change #160: Separate from our GBM organic growth key investment as I talked about near term accretion better than a share repurchase gives us some optionality over time and a low cost low risk fashion in terms of our GBM business.

Speaker Change #161: You see what we're doing on the fee the.

Speaker Change #161: The fee side, where we're up 30% year over year or 30% year to date continue to build out the capital markets capabilities.

Nigel Sousa: It's a good question. This is 2.3 billion dollars we used. That equates to the 50 to 55 basis points on capital. If you want to do the comparison to the key transactions, that's apples to apples. If I use the 3.9 billion, it'll equate about 70 to 75 basis points of capital. Therefore, it's a different basis to use and will likely not comparable for the outcome. That's right. 80 million dollars is actually quite simple.

Speaker Change #161: In really attractive businesses in the capital market is higher the travelers referenced.

Speaker Change #161: As another example, the CLO business as another example, so I would separate our GBM organic opportunities in that key investment.

Scott Thomson: So I would separate our GBM organic opportunities and that key investment; those are different, different, different strategic paths. Perfect and Scott a couple of times I think on this call on the August 12th I think all you've talked about the optionality that that longer term key I think provides. Can you talk to prior experience of the bank with options like this and how shareholder creative they've been over time. Yeah, I mean, I think you're referring to Tauy entered into Mexico, which obviously it's been a great outcome for the bank. I think it's a 25% tight borrowy business and work position well.

Speaker Change #161: Those are different different.

Speaker Change #161: Strategic.

Speaker Change #161: Paths.

Speaker Change #161: Perfect and Scott a couple of times I think on this call on the August 12, I think call you've talked about the optionality that that law.

Nigel Sousa: It's really the funding cost of the 2.3 billion dollars or you can look at it as the opportunity cost. The 2.3 billion dollars is invested in some securities worth the return that we would lose and that's the after tax number that we have calculated based on average. I think it will it will work out to somewhere between 4.8 to 5 percent. I think if it is. Matt.

Scott: Turn key I think provides.

Pryor: Can you talk to Pryor.

Speaker Change #163: Experience of the bank with options like this and how shareholder accretive to have been overtime.

Speaker Change #164: Yes, I think youre referencing in Tau, we entered into Mexico.

Phil Thomas: Okay, I guess where I was going with that is, no, I'm trying to understand why not look at the actual capital outlay, and then you look at the key accretion, why isn't the option you cost netted off against that as well to reduce the benefit by 80 million, but maybe something to follow up on. Thank you. Now, I can actually help you now because the key income that we have shown the 300 to 350 million dollars has gone three components.

Nigel Sousa: Okay, I guess where I was going with that is, no, I'm trying to understand why not look at the actual capital outlay, and then you look at the key accretion, why isn't the option you cost netted off against that as well to reduce the benefit by 80 million, but maybe something to follow up on. Thank you. Now, I can actually help you now because the key income that we have shown the 300 to 350 million dollars has gone three components.

Speaker Change #165: Which obviously, it's been a great.

I will cover the bank I think it's a 25% type ROE business and we're positioned well.

Scott Thomson: That wasn't in my mind as I thought about this transaction. We thought about this transaction again as financially creative, you know, good for shareholders and optionality long term. Remember, there's a five-year standstill. And so, you know, that's a long way out. Right now, we're going to focus on building out our GPM business organically with a fee focus, optimizing the capital we deploy to that business to make sure we're getting good returns for our shareholders.

Speaker Change #165: That wasn't in my mind as I thought about this transaction we thought about this transaction again is financially accretive.

Good for shareholders and Optionality long term remember there is a five year standstill and so that's a long ways out.

Phil Thomas: It's a potential equity pickup that we will have net of the cost of funds relating to what we are deploying, which is on the entire 3.9 billion dollars for our seats that we will deploy. And it's got a benefit because of interest rate mark accretion that will come through after we do purchase rights accounting. So that's got cost of funds to include it in it, and it's a net number. That's all folks. Thank you. You're welcome. Thank you.

Nigel Sousa: It's a potential equity pickup that we will have net of the cost of funds relating to what we are deploying, which is on the entire 3.9 billion dollars for our seats that we will deploy. And it's got a benefit because of interest rate mark accretion that will come through after we do purchase rights accounting. So that's got cost of funds to include it in it, and it's a net number. That's all folks. Thank you. You're welcome. Thank you.

Speaker Change #165: Right now we're going to focus on building out our GBM business organically with our fee focus optimizing the capital we deploy to that business to make sure. We're getting good returns for our shareholders.

Unknown Executive: Thank you for taking my questions.

Thank you for taking my questions.

Thank you.

Doug Young: The next question is from Doug Young from Digital Bank Capital Markets. Please go ahead. The line is open. I'll hopefully keep this relatively quick. Just focus on international banking. I guess there's two questions. You know, one, there seems to be a bit of an uptick in PCLs in Mexico.

Speaker Change #165: The next question is from Doug Young from Desjardins capital.

Speaker Change #166: Capital markets. Please go ahead your line is open.

Speaker Change #166: Yes.

Sohrab Movahedi: The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. The line is open. OK, I appreciate we've gone over time. Thank you for squeezing me and I had two hopefully quick questions. Scott, I think the 12.5% CT1 being the right level and so does that suggest that the optimization exercise in GBM is complete now. We shouldn't expect to see further rationing of credit and RWA there. That's the first one.

Scott Thomson: The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. The line is open. OK, I appreciate we've gone over time. Thank you for squeezing me and I had two hopefully quick questions. Scott, I think the 12.5% CT1 being the right level and so does that suggest that the optimization exercise in GBM is complete now. We shouldn't expect to see further rationing of credit and RWA there. That's the first one.

Doug Young: Keep this relatively quick just focus on international banking and I guess, there's two question one.

Speaker Change #168: And it seems to be a bit of an uptick in <unk> in Mexico.

Phil Thomas: Just hoping you can give a little bit of color. Is this impaired forming? Is this corporate or retail to see if you can give some color.

Speaker Change #169: Hoping you can give a little bit of color in Armenia.

Sohrab Movahedi: I mean, listen, I think the GBM optimization, I wouldn't actually put characterizes this optimization. I would characterize it as a focus on primary clients with relationships where we can add value to the client. And it's beneficial for the shareholder as well. And so we're going to continue to be very disciplined on how we allocate our capital. That's going to allow us to continue to allocate capital to primary client relationships where there's a mutual win win, and it will continue to allow us to build capital to the overall bank, which when we can then redeploy into other uses.

Scott Thomson: I mean, listen, I think the GBM optimization, I wouldn't actually put characterizes this optimization. I would characterize it as a focus on primary clients with relationships where we can add value to the client. And it's beneficial for the shareholder as well. And so we're going to continue to be very disciplined on how we allocate our capital. That's going to allow us to continue to allocate capital to primary client relationships where there's a mutual win win, and it will continue to allow us to build capital to the overall bank, which when we can then redeploy into other uses.

Speaker Change #169: Armenians this corporate or retail.

Speaker Change #169: So if you can give some color and then second Colombia still continues to lose money and just helping.

Francisco Silva: And then second, you know, Columbia still continues to lose money and just hoping to be thinking to provide a bit of an update on the plans for this particular region. Hey, Doug, it's Phil.

Speaker Change #169: Provide a bit of an update on the plans for or this particular.

Speaker Change #169: In the region.

Speaker Change #169: Hey, Doug itself I'll start and then I'll hand, it over to Francisco.

Phil Thomas: I'll start, and then I'll hand it over to Francisco. In the case of Mexico, that's one account in the retail, one commercial account in the retail sector that's driving that increase. Yeah, on Colombia. Thank you for the question. Two things to keep in mind. First, we are a reflection of the markets we serve. The Colombian market has been challenged throughout last year. We continue to believe the challenge will remain for the next two to three years. As you look at the system performance, around half of the banks in the system are consistently losing money. And what we've done is focus on a number of decisions that allow us to improve our efficiency and performance in country.

Speaker Change #170: In the case of Mexico, Thats, one account in the the one commercial account in the retail sector, that's driving that increase.

Speaker Change #171: Yeah on Colombia. Thank you for the question.

Speaker Change #171: Two things to keep in mind first.

Francisco: We are a reflection of the markets we serve.

Speaker Change #171: The Colombian market has been challenged.

Speaker Change #171: Throughout last year, we continue to believe the challenge will remain for the next two to three years as you look at the system performance around half of the banks in the system are consistently losing money.

Sohrab Movahedi: So that would be a continuing strategy similar to what how Francisco talked about IV and similar how Travis talked about the fee business that we're talking about in the GBM. And so I guess that leads me into the into the key investment and some of the 10 10 10 general benefits over there. So it is the expectation here that some of the balance sheet would reside with key, for example, and you'll get some fee businesses.

Scott Thomson: So that would be a continuing strategy similar to what how Francisco talked about IV and similar how Travis talked about the fee business that we're talking about in the GBM. And so I guess that leads me into the into the key investment and some of the 10 10 10 general benefits over there. So it is the expectation here that some of the balance sheet would reside with key, for example, and you'll get some fee businesses.

Speaker Change #171: And what we've done is focused on a number of decisions that allow us to improve our efficiency and performance in country and to that effect, what we've done with great discipline is reduced expenses, 2% year on year.

Francisco Silva: And to that effect, what we've done with great discipline is reduce expenses 2% year in year, generate positive operating leverage, and remain on a very disciplined approach as to how we explored credit in a very challenged market. So that is that is the fast forward is continue to operate on a difficult environment trying to improve our position consistently over time.

Speaker Change #171: Generate positive operating leverage and remain on a very disciplined approach as to how we these lowered credit.

Sohrab Movahedi: Is that the way to think about it? If this is executed on kind of to to dream like levels. No, not not at all. I mean the key investment I would separate from our GBM organic growth key investment as I talked about near term, a creation better than a share repurchase gives us some optionality over time in a low cost, low risk fashion in terms of our GBM business. You see what we're doing on the fee, the fee side where we're up 30% year over year, 30% year to date, continues build up the capital market capabilities.

Scott Thomson: Is that the way to think about it? If this is executed on kind of to to dream like levels. No, not not at all. I mean the key investment I would separate from our GBM organic growth key investment as I talked about near term, a creation better than a share repurchase gives us some optionality over time in a low cost, low risk fashion in terms of our GBM business. You see what we're doing on the fee, the fee side where we're up 30% year over year, 30% year to date, continues build up the capital market capabilities.

Speaker Change #171: Very challenged market. So that is that as the path forward is to continue to operate on a difficult environment trying to improve our position consistently over time.

Sohrab Movahedi: And in really attractive businesses, you know, the capital market higher the Travis reference is another example, the CLO business is another example. So I would separate our GBM organic opportunities and that key investment those are different different strategic paths. Perfect. And Scott, a couple of times, I think on this call on the August 12th, I think all you've talked about the optionality that that longer term key, I think, provides. Can you talk to prior experience of the bank with options like this and how shareholder three to take being over time?

Scott Thomson: And in really attractive businesses, you know, the capital market higher the Travis reference is another example, the CLO business is another example. So I would separate our GBM organic opportunities and that key investment those are different different strategic paths. Perfect. And Scott, a couple of times, I think on this call on the August 12th, I think all you've talked about the optionality that that longer term key, I think, provides. Can you talk to prior experience of the bank with options like this and how shareholder three to take being over time?

Francisco Silva: We maintain our view that, to the extent that there's no improvement, we will really play, and that is the principle we apply to all the businesses we run. Appreciate the comment.

Speaker Change #171: We maintain our view that to the extent that there is no improvement we will redeploy and that is the principal we apply to all of the businesses we run.

Speaker Change #172: Appreciate the color. Thank you.

Unknown Executive: Thank you.

Speaker Change #173: Thank you.

Unknown Executive: There are no further questions on the line.

Speaker Change #173: There are no further questions on the line I will now turn the call back to Raj was one of them.

Rajagopal Viswanathan: I will now turn the call back to Raju's. Thank you on behalf of the entire management team. I want to thank everyone for participating in our call today.

Raj: Thank you on behalf of the entire management team I want to thank everyone for participating in our call today.

Rajagopal Viswanathan: We look forward to speaking again at our Q4 call in December.

Raj: Look forward to speaking again at our Q4 call in December.

Unknown Executive: This concludes our third quarter results call.

Speaker Change #174: This concludes our third quarter results call have a great day.

Unknown Executive: Have a great day.

Thank you. The conference has now ended please disconnect your lines at this time.

Sohrab Movahedi: Yeah, I mean, I think you're referencing Tauy entered into Mexico, which obviously has been a great outcome for the bank. I think it's a 25% tight borrowy business and work position well. That wasn't in my mind as I thought about this transaction. We thought about this transaction again as financially creative, you know, good for shareholders and optionality long term. Remember, there's a five year stand still. And so, you know, that's a long ways out.

Scott Thomson: Yeah, I mean, I think you're referencing Tauy entered into Mexico, which obviously has been a great outcome for the bank. I think it's a 25% tight borrowy business and work position well. That wasn't in my mind as I thought about this transaction. We thought about this transaction again as financially creative, you know, good for shareholders and optionality long term. Remember, there's a five year stand still. And so, you know, that's a long ways out.

Sohrab Movahedi: Right now, we're going to focus on building out our GPM business organically with a fee focus, optimizing the capital we deploy to that business to make sure we're getting good returns for our shareholders. Thank you for taking my questions.

Scott Thomson: Right now, we're going to focus on building out our GPM business organically with a fee focus, optimizing the capital we deploy to that business to make sure we're getting good returns for our shareholders.

Phil Thomas: Thank you.

Sohrab Movahedi: Thank you for taking my questions.

Phil Thomas: Thank you. The next question is from Doug Young from Digital Bank Capital Markets. Please go ahead. The line is open. I'll hopefully keep this relatively quick. Just focus on international bank. I mean, I guess there's two questions. You know, one, there was, there seems to be a bit of an uptick in PCLs in Mexico. Just hoping you can give a little bit of color is this impaired forming is this corporate or retail to see if you can give some color. And then second, you know, Columbia still continues to lose money and just hoping to be thinking to provide a bit of an update on on the plans for for this particular region.

Doug Young: The next question is from Doug Young from Digital Bank Capital Markets. Please go ahead. The line is open.

Phil Thomas: I'll hopefully keep this relatively quick. Just focus on international bank. I mean, I guess there's two questions. You know, one, there was, there seems to be a bit of an uptick in PCLs in Mexico. Just hoping you can give a little bit of color is this impaired forming is this corporate or retail to see if you can give some color.

Francisco Silva: And then second, you know, Columbia still continues to lose money and just hoping to be thinking to provide a bit of an update on on the plans for for this particular region. Hey, Doug, it's Phil. I'll start and then I'll hand it over to Francisco. In the case of Mexico, that's one account in the retail, one commercial account in the retail sector that's driving that that increase. Yeah, on Columbia. Thank you for the question.

Phil Thomas: Hey, Doug, it's Phil. I'll start and then I'll hand it over to Francisco. In the case of Mexico, that's one account in the retail, one commercial account in the retail sector that's driving that that increase. Yeah, on Columbia. Thank you for the question. Two things to keep in mind. First, we are a reflection of the markets we serve. The Columbia market has been challenged. Throughout last year, we continue to believe the challenge will remain for the next two to three years.

Francisco Silva: Two things to keep in mind. First, we are a reflection of the markets we serve. The Columbia market has been challenged. Throughout last year, we continue to believe the challenge will remain for the next two to three years. As you look at the system performance around half of the banks in the system are consistently losing money. And what we've done is focus on a number of decisions that allow us to improve our efficiency and performance in country and to that effect what we've done with great discipline is reduce expenses 2% year in year, generate positive operating leverage and remain on a very disciplined approach as to how we explored credit in a very challenged market.

Phil Thomas: As you look at the system performance around half of the banks in the system are consistently losing money. And what we've done is focus on a number of decisions that allow us to improve our efficiency and performance in country and to that effect what we've done with great discipline is reduce expenses 2% year in year, generate positive operating leverage and remain on a very disciplined approach as to how we explored credit in a very challenged market.

Francisco Silva: So that is that is the path forward is continue to operate on a difficult environment trying to improve our position consistently over time. We maintain our view that to the extent that there's no improvement, we will really play and that is the principle we applied to all the businesses we run. Appreciate the comment. Thank you.

Phil Thomas: So that is that is the path forward is continue to operate on a difficult environment trying to improve our position consistently over time. We maintain our view that to the extent that there's no improvement, we will really play and that is the principle we applied to all the businesses we run. Appreciate the comment. Thank you.

Unknown Executive: There are no further questions on the line.

Rajagopal Viswanathan: I will now turn the call back to Raju's. Thank you on behalf of the entire management team. I want to thank everyone for participating in our calls today.

Rajagopal Viswanathan: I will now turn the call back to Raju's. Thank you on behalf of the entire management team. I want to thank everyone for participating in our calls today. We look forward to speaking again at our Q4 call in December.

Unknown Executive: We look forward to speaking again at our Q4 call in December. This concludes our third quarter results call. Have a great day.

Unknown Executive: This concludes our third quarter results call.

Unknown Executive: Have a great day.

Q3 2024 The Bank of Nova Scotia Earnings Call

Request a DemoDemo

BNS

Scotiabank

Earnings