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    Nigel D'Souza • Veritas Investment Research

    Nigel D'Souza's questions to Canadian Imperial Bank of Commerce (CM) leadership

    Nigel D'Souza's questions to Canadian Imperial Bank of Commerce (CM) leadership • Q3 2024

    Question

    Nigel D'Souza asked about the drivers of rising delinquencies in uninsured GTA mortgages, credit performance differences between homeowners and renters, and potential pressure on performing provisions from rising unemployment.

    Answer

    Chief Risk Officer Frank Guse stated the mortgage book's quality is strong and material losses are not expected, attributing the delinquency uptick partly to a slow market. He confirmed homeowners generally perform better on credit. Regarding provisions, he noted their forecast already assumes unemployment will trend higher and it remains a key factor they are watching.

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    Nigel D'Souza's questions to Bank of Nova Scotia (BNS) leadership

    Nigel D'Souza's questions to Bank of Nova Scotia (BNS) leadership • Q3 2024

    Question

    Nigel D'Souza sought clarification on the EPS accretion comparison between a share buyback and the KeyCorp investment, specifically the capital amount used and the nature of the net funding cost.

    Answer

    CFO Rajagopal Viswanathan explained the $2.3 billion figure was used for the buyback to create an 'apples-to-apples' comparison based on the 50-55 basis point capital impact of the KeyCorp deal. He clarified the projected income from the KeyCorp investment is a net number that already accounts for the cost of funds on the entire capital outlay, making the comparison appropriate.

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    Nigel D'Souza's questions to Toronto-Dominion Bank (TD) leadership

    Nigel D'Souza's questions to Toronto-Dominion Bank (TD) leadership • Q3 2024

    Question

    Nigel D'Souza asked why the bank's disclosure on "reasonably possible losses" had not decreased following the large AML provision. He also questioned if liquidity needs drove the Schwab sale and what caused performing PCLs to decline despite a weakening labor market.

    Answer

    CFO Kelvin Vi Tran stated the bank does not comment on the components of reasonably possible losses (RPLs) and confirmed the Schwab sale was not driven by liquidity needs. Chief Risk Officer Ajai Bambawale explained that lower performing PCLs were due to portfolio-specific factors, including seasonality in U.S. retail, loan repayments in wholesale, and some migration from performing to impaired status.

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    Nigel D'Souza's questions to Toronto-Dominion Bank (TD) leadership • Q2 2024

    Question

    Nigel D'Souza from Veritas Investment Research questioned the lower-than-peer loss rates in TD's U.S. commercial real estate (CRE) portfolio and asked for clarification on a 'civil matter' provision.

    Answer

    Chief Risk Officer Ajai Bambawale explained that TD's disciplined, bottom-up analysis and early reserve building have resulted in CRE reserves over 2.5 times pre-pandemic levels. Leo Salom, President and CEO of TD Bank, AMCB, added that the bank has been strategically reducing its office CRE exposure since 2020. CFO Kelvin Tran confirmed the civil matter is in the U.S. but declined to provide specifics.

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    Nigel D'Souza's questions to Manulife Financial Corp (MFC) leadership

    Nigel D'Souza's questions to Manulife Financial Corp (MFC) leadership • Q2 2024

    Question

    Nigel D'Souza of Veritas Investment Research questioned how weaker private equity performance impacts ALDA dispositions tied to reinsurance deals. He also asked about the impact of upsizing the NCIB to over $3 billion on the LICAT ratio and earnings accretion.

    Answer

    Retiring CIO Scott Hartz stated ALDA sales for the LTC deal are nearly complete and were done at a gain, with Canadian deal sales on track. CEO Roy Gori explained the upsized buyback is supported by a strong capital position and should not impact the LICAT ratio. CFO Colin Simpson added that using surplus, currently earning 2.9%, for buybacks is value-enhancing.

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    Nigel D'Souza's questions to Sun Life Financial Inc (SLF) leadership

    Nigel D'Souza's questions to Sun Life Financial Inc (SLF) leadership • Q2 2024

    Question

    Nigel D'Souza inquired about the timing of the restructuring savings, asking if the flow-through to earnings would be linear or back-end loaded. He also asked for a breakdown of the 'other fee income' line item and guidance on its future run rate.

    Answer

    Timothy Deacon, EVP & CFO, explained that the expense savings would flow through ratably from H2 2024 through 2026, at which point the full $200 million pre-tax benefit will be realized. Regarding 'other fee income,' he attributed the quarterly increase to strong performance in wealth businesses in Canada and Asia, driven by higher AUM and net inflows. He suggested that if markets remain favorable, the current level is a healthy run rate.

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