National Bank of Canada

Good morning and welcome to National Bank of Canada's Second Quarter Results Conference Call. I would now like to turn the meeting over to Marianne Ratté, Vice President and Head of Investor Relations. Please go ahead, Marianne.

Merci and welcome, everyone. We will begin the call with remarks from Laurence Ferreira, President and CEO, Marius Montagne Gras, CFO, and Jean-Sébastien Grévy, Chief Risk Officer. Also present for the Q&A session are Lucie Blanchet, EVP Personal Banking, Judith Ménard, EVP Commercial and Private Banking, Michael Denham, EVP and Vice Chair, responsible for the integration of CWB, Nancy Paquette, EVP Wealth Management, Etienne Dubuc, EVP Financial Markets, and Bill Bonnet, EVP International, responsible for ABA Bank. Before we begin, please refer to slide two of our presentation for information on forward-looking statements. The bank uses non-GAAP measures, such as adjusted results, to assess its performance. Management will be referring to adjusted results unless otherwise noted. I will now turn the call over to Laurent.

Merci, Marianne, and thank you, everyone, for joining us. This morning, we reported second-order results, which include CWB. We generated earnings per share of $2.85, up 12% year-over-year, and a return on equity of 15.6%. Our performance reflects organic growth in our business segments, including an excellent performance from financial markets driven by strong client activity and volatile markets, and as well, early momentum in cost and funding synergies from the CWV acquisitions. We ended the quarter with a CET1 ratio of 13.4%, in line with expectations. Our capital position is strong, allowing us to support business growth, and we also raised our quarterly dividend by $0.04, effective next quarter. Turning to the macroeconomic context, the uncertainty related to global trade tensions and ongoing negotiations continues to be an overhead on the economy. Increasing geopolitical and geoeconomic instability and projected fiscal deficits in major economies are making the path of growth and inflation difficult to forecast. This, in turn, is bringing instability to capital markets and is keeping long-term interest rates high. That being said, the latest developments regarding global trade negotiations seem to be progressing in the right direction. The effect of tariff rate being absorbed by Canada is lower than initially anticipated. Canadian businesses have been quick to initiate USMCA compliance, and as a result, the share of covered products has increased significantly. Despite the uncertainty, Canadian consumers and businesses are demonstrating resilience. As always, we will continue to support our clients, providing advice in these challenging times. and we will support investments in domestic projects across the country. Before turning to our results, I would like to say a few words on our acquisition of CWB. We are off to a strong start, and we are excited about the opportunities ahead. I am very pleased with the integration momentum, as well as the positive reception from clients. Employees have all been onboarded, and our teams across the country are working towards a smooth integration for our clients. Funding and cost synergies are progressing ahead of schedule, and with the first wave of client migrations starting this summer, this sets the table for revenue synergies starting towards the end of the year. Looking now at our business segment performance. PNC Banking generated net income of $316 million, including $45 million from the CWB transaction. Excluding CWB, PNC delivered 4% revenue growth year-over-year as we continue to grow our balance sheet. Our commercial booked in 14% with sustained opportunities in insured residential real estate and broad-based growth across our industries and geographies. Personal mortgages grew 4% year-over-year with strong origination levels and pointing to similar growth levels in the second half of 2025. Wealth management grew net income by 15% year-over-year on the back strong organic growth. Net sales in our channels combined with market levels generated double-digit fee-based revenue growth while our strong deposit base supported solid growth in net interest income. This quarter, operating leverage was negative for this segment because of the integration of CWB's wealth business. However, cost synergies will support our attractive efficiency ratio, which came in under 60% again this fourth. Financial markets generated net income of more than $500 million this quarter, with net income growth in the first half of the year well ahead of the expectations we had coming into 2025. Global markets benefited from volatility and higher than usual volumes in our trading businesses in the second quarter. Client activity remained robust despite macro uncertainty. Corporate and investment banking delivered resilient performance with revenues up 2% year over year. Clients remained active but prudent in the current context. Turning to the U.S., CreditGee delivered net income of $40 million this quarter. CreditG grew net interest income 4% year over year with underlying growth of 2% in average assets. We expect the market to remain competitive for the rest of the year. As always, CreditG will continue to be opportunistic as conditions evolve while maintaining discipline on new investments. At ABA Bank, we had a great quarter. Our client and deposit base grew 33% and 21% respectively, and loan growth came in at 7% year over year. I will now pass the call to Marie-Chantal.