Good morning, and thank you for joining us on short notice. My name is John McCartney, and I'm Head of Investor Relations here at Scotiabank. The purpose of our call today is to review in more detail the investment in the bank announced earlier this morning. The bank has entered into an agreement to purchase an approximate 14.9% equity interest in KeyCorp, a leading U.S. regional bank, for approximately $2.8 billion. Here to discuss the transaction this morning are Scott Thomson, Scotiabank's President and Chief Executive Officer, and Raj Viswanathan, our Chief Financial Officer. Following our prepared remarks, we will be glad to take your questions. Before we start, and on behalf of those speaking today, I'll refer you to slide two of our presentation, which contains Scotiabank's caution regarding forward-looking statements. With that, I will now turn the call over to Scott. Thank you, John, and good morning, everyone. We are excited to share with you this important development in furtherance of our long-term strategic agenda to increase our capital deployment in one of our identified key priority markets. Today, the bank has entered into a definitive agreement to acquire a minority equity interest in KeyCorp, one of the largest U.S. regional banks, with operations across 15 states, with a well-established and diversified commercial banking business, supported by a complementary middle-market-focused capital markets and advisory practice, as well as a growing wealth management platform. In terms of fit with our strategic agenda, recall that over the course of 2023, our leadership team conducted a thorough review of each of our businesses, which resulted in a renewed vision and strategy for the bank. One of the core pillars of our renewed strategy identifies the opportunity to build scale through disciplined capital allocation in our priority markets. We remain focused on increasing the amount of capital we deploy to the developed markets in which we operate. We were clear at our Investor Day last December that our unique North American footprint is a competitive advantage that we can further leverage to offer differentiated cross-border capabilities and connectivity to existing clients of the bank. We view this investment as an important early step toward this longer-term vision, but also one that is accretive to our near-term profitability, with attractive financial returns on a capital-efficient structure that Raj will speak to in detail. As a top-tier Canadian bank, a top-five bank in Mexico, and a leader in the Caribbean, we have been clear that an enhanced U.S. presence will be necessary over time to fully execute on our North American vision. We've also indicated our intention to allocate capital with a bias to increasing our geographic mix to our more developed markets, with further investments at home in Canada, followed by the U.S., and thirdly, Mexico, to ensure we are positioned to benefit from the growth trend we see across the North American corridor. Including the impact of this transaction, the U.S. will become our second-largest market from an earnings perspective, with approximately 75% of the bank's total earnings coming from Canada, the U.S., and Mexico. Through this process, we've had the opportunity to thoroughly review KeyCorp's businesses and meet with their management team and believe there's a strong cultural fit between our teams. I'm very excited about this investment, in particular, as Scotiabank and KeyCorp share very similar growth ambitions aligned with our strategic priorities. KeyCorp is a top 15 U.S. bank with a presence in 15 states and approximately $187 billion in assets, with a strong commercial franchise driving approximately 75% of earnings. In addition, Key's consumer business is a deposit-led franchise, acutely focused on driving deeper client relationships. Notably, its strong consumer deposit base contributes 59% of total deposits. As part of this investment, we look forward to exploring mutually beneficial strategic opportunities in the future. I want to be clear that we remain committed to our organic growth, growth strategy and delivering on our medium-term financial objectives we communicated at our Investor Day in December. We view this investment as incremental to our organic commitments and believe this investment adds longer-term optionality to our North American growth agenda while providing near-term earnings and capital accretion to the bank. With that, I will pass it to Raj to discuss the transaction structure in more detail. Thank you, Scott, and good morning, everyone. I'll start on slide four of the presentation and walk you through the transaction structure in a bit more detail. This strategic investment will result in the bank holding approximately 14.9% of KeyCorp's pro forma shares. The total cash consideration is expected to be approximately $2.8 billion, or about CAD 3.9 billion, for common shares issued by KeyCorp at 11% premium to the 20-day VWAP. The investment will be executed in two stages, subject to receipt of regulatory approvals and clearances. The issuance price is fixed at $17.17 per share for both stages of the transaction. The initial investment will see us acquiring a 4.9% ownership and is expected to close in the fourth quarter of fiscal 2024. The second investment will increase our ownership of KeyCorp to approximately 14.9% and is expected to close in fiscal 2025. At this time, we also acquire the rights to appoint two members to the board of KeyCorp. Let me address the earnings benefit and the related capital impact for each stage of this investment. As Scott mentioned, the returns on the approximately 14.9% are very attractive in a highly capital-efficient transaction.... The investment, when completed, will contribute approximately CAD 300 million-CAD 350 million in the first fiscal year after closing. Importantly, the investment will be accretive to our medium-term financial objectives of EPS growth, return on equity, and positive operating leverage, while continuing to maintain a strong capital ratio. From an accounting perspective, the 4.9% ownership will be recorded as an investment, with changes in fair value recorded through other comprehensive income. Dividends received during this period will be recorded in the income statement. The CET1 impact of this investment will be approximately 10 basis points in the fourth quarter of this fiscal year. Upon completion of the additional investment, the bank will apply the equity method of accounting to the entire investment and recognize a pro rata share of KeyCorp's earnings on a go-forward basis. Based on current earnings expectations for KeyCorp, we expect this to be in the range of approximately CAD 300 million-CAD 350 million per annum and add approximately CAD 0.25 to the bank's earnings per share in 2026. From a regulatory capital perspective, the entire investment of approximately $3.9 billion will be treated as a significant investment in financial institutions. Recall, investments that are below 10% of the bank's CET1, after all deductions, are risk-weighted at 250%. The regulatory capital rules require that goodwill included in the valuation of the significant investment be deducted from CET1 capital, and the remaining consideration will be treated within the significant investment in financial institutions bucket, attracting a modest 250% risk weight. We estimate the additional impact of the bank's CET1 ratio will be approximately 40 basis points-45 basis points, for a combined impact of roughly 50 basis points-55 basis points. With our strong capital position, including the pro forma impact of this investment, the bank intends to suspend the discount on the DRIP effective following the dividend, expected to be declared on August 27th, 2024. Consequently, that will be the last dividend that will be eligible to participate in the DRIP discount. We are very excited about the investment as it is expected to generate near-term attractive returns while creating future optionality for the bank in the North American corridor. That concludes our formal remarks. We'd be pleased to take your questions. Operator, may we have the first question, please? Thank you. Please press star one at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Our first question is from Ebrahim Poonawala from Bank of America. Please go ahead. Hey, good morning. I guess, maybe, Scott, for you, I think the question that's come up this morning is the rationale for this transaction relative to maybe Scotiabank had excess capital. Why not use that towards buying back your own stock, given where it's trading? So if you don't mind, just, as a shareholder of Scotiabank, remind me what shareholders have gained for what seems like a relatively passive investment for now for the foreseeable future. If you could please start there. Sure, thanks. Why don't I start on the rationale, overall rationale and benefit to our shareholders, and then Raj can talk about in comparison to share repurchases. So first, as you think about the strategic agenda, moving capital from developing markets to developed markets is a huge part of building out this North American corridor. And, you know, through that process, we spent a lot of work thinking about the U.S., and Key was a great company that we had highlighted, you know, complementary to our wholesale capital markets business, wholesale business, strong commercial franchise, growing wealth business, and frankly, a great team, cultural fit. And I had the opportunity to spend a lot of time with Chris and his team. So aligned with kind of as we deploy capital into that North American corridor and finding a partner to do that with. Second, I'd say that there's attractive financials associated with this deployment of capital, given the capital efficiency, and Raj talked about that, that it results in returns of, you know, in excess of 20% for our shareholders, which is just very attractive. Three, we get board seats out of this, which will allow us to, you know, participate in the oversight of Key, but also, you know, learn as we've deployed this capital. And then lastly, it's a low risk, low-cost optionality in North America. And so when I put all those things together, I do think it's a, you know, it's not only a financial near-term benefit to our shareholders, but it does create this optionality and, you know, strategically aligned with the North American corridor. Yeah, and Ebrahim, on the analysis, obviously, we did multiple analysis, including, you know, why would we deploy 50 basis points if you could buy back our stock? The question that you directly asked. Some of the easy numbers to look at, Ebrahim, is, you know, if you bought back our stock, certainly it'll be accretive, somewhere between CAD 0.20-CAD 0.22 of EPS against the CAD 0.25+, which we believe is actually a conservative estimate of the contributions to the earnings. But I also think more importantly is the optionality that this investment creates. We want to grow the bank. We want to grow the bank in the areas that we talked about at the Investor Day, and the U.S. is a key component of our strategy. This sets us well on the path-... to executing on that, and it shows that, you know, we can increase the earnings power of the company. So to us, it—this felt definitely as a much attractive option, apart from all the reasons that Scott talked about from a strategic perspective. So this, we believe, is financially very accretive as well. Got it, and I agree. I think the strategy is consistent with doing more in the U.S. I guess maybe, Scott, on the strategy front, like the only outside of Scotia at some point buying the entirety of the bank, and not that you're proposing that today. I'm just trying to think about what combinations have worked in financials. The other thing that comes to mind is Morgan Stanley and UFJ, where you have a large holder, and that partnership's worked out for both parties. As we think about the strategy and growth, like, if you don't mind, like, how quickly do you think, or do you see yourself prepared to act? Like, in my, it feels like there's a lot to be done on commercial lending, capital markets, between what Scotia already does, what Key already does, and putting that together. We'd love to hear your thoughts, at least in terms of how you are thinking about the strategic sort of alignment of the two companies. Yeah. So I mean, I think the areas that we could explore in the future, there's obviously... I've talked a lot about wealth and that interconnectivity across the international markets and Canadian markets. Talked about commercial, we've talked about the importance of payments, and then the complementary nature of our GBM businesses. So they're middle-market focused. We're more corporate investment grade focused. So you can see that there's a lot - and then culture, great culture fit. But what I would like to reemphasize is, financially, this is a great deal for us, and given that capital-efficient nature and the, you know, partnership, strategic collaboration, et cetera, will come over time. So that's something that we'll look at in the future. And it's an obvious, you know, an obvious candidate to do that with because of the geographical adjacencies as well. I mean, if you put a footprint of the two companies with the adjacency relative to our Canadian bank is pretty significant. So, you know, first and foremost, attractive financial acquisition minority investment for our shareholders, and then we'll think about areas to collaborate with over time. And if one last one, if I could, on the capital efficiency, you've emphasized that, Raj. If I think about it purely, very simplistically, should I think about we are getting CAD 350 million in Canadian earnings for $2.8 billion in U.S. dollar capital that you're putting to work here? Yeah, I think so. I I think that's the easy math, Ebrahim, or looking at it like, you know, 50 basis points of capital generating, you know, in the range of $350 million of earnings. If you just convert the $350 million of earnings, that is about, you know, somewhere about 8 basis points-9 basis points of capital each year back to the payback that Scott was talking at the 20% level. Even if you look at it simplistically as an investment, the payback is like 5 years. So that's how we look at it as saying financially accretive, low risk entry approach from a capital deployment perspective into a market which we certainly believe is critical to us, makes a lot of sense. Well, thanks for taking my questions. Thanks, Ebrahim. Thank you. Our following question is from Matthew Lee from Canaccord Genuity. Please go ahead. Hi, guys. Thanks for taking my questions. Maybe just starting in terms of capital, it does feel like this transaction and the DRIP, maybe a signal to the street that you're pretty comfortable with your position relative to Basel III endgame. Is that the right way to think about it? And maybe as a follow-on, does it preclude you or this transaction preclude you from doing a buyback program over the next couple of years? Yeah, it's a good question, Matthew. You know, the whole thing was, you know, very attractive to us as we started realizing we have, you know, a better sight line of where the regulatory requirements are going. You know, when we talked at Investor Day, obviously we didn't know when the floors would be impacted, and we've seen the deferral that's come through more recently from OSFI's perspective. That helps. The second thing is, of course, you know, we probably have a little more certainty that the Domestic Stability Buffer will remain stable. And, you know, OSFI has held it for some time, as you know. So that gives us a little more certainty about how to plan the future. We have taken very decisive actions as we think about how we want to deploy our capital to profitable relationships since we announced at the Investor Day. We made some really good progress across our various businesses, GBM, as well as our two P&C businesses, to be very thoughtful. So that's helped with the capital accretion that we've built over a period of time, and now we feel like we're very comfortable doing a transaction of this size. As we look forward, definitely, now depending on how the capital rules evolve, you know, buybacks are always a tool in the toolkit at the appropriate time. But right now we're thinking about how we can grow this bank, and this is a great opportunity to grow this bank. And then there's also various other organic commitments that we made as part of the Investor Day, which will require capital. So those would be perhaps the first port of call at this time, but we never rule out buybacks. But we don't have any approval at this time, and it may not be in the short term. Okay, thanks. Then maybe just in terms of approvals, any regulatory hurdles to closing this deal? Yeah, so if you both U.S. and Canada, you have to think about both geographies. On the U.S. side, we've filed Hart-Scott-Rodino, and we don't expect any problems there. And then you will obviously need the U.S. Fed to approve the second tranche. And, you know, given the work done to date, you know, we wouldn't be here announcing this, either party, without a view that that would get done. And then on the OSFI side, OSFI is aware of what we're doing today. They don't have an approval right per se, but again, it's very important for us that OSFI is supportive. So you can assume that the right conversations have happened with our regulator here in Canada. All right, that's helpful. I'll pass the line. Thank you. Thank you. Thank you. Our following question is from Paul Holden from CIBC. Please go ahead. Yeah, fairly straightforward question to start for Raj. That's CAD 300 million-CAD 350 million of earnings. Is that net of the cost of capital? And if it's not, how should we think about, sort of what you're giving up, I guess, would be effectively on investment income? Thank you. Yeah, it is net of cost of funds because it's a cash deal, Paul. Mm-hmm. So it's got the earnings pickup that we tried to use analyst estimates for KeyCorp at this time for 2025 and 2026. Mostly 2026, because we think, you know, we'll get approved sometime in 2025. And then it's got the interest rate mark, which will come through, because as you know, when we do the equity accounting investment, we need to fair value the entire company, which is KeyCorp, and then do the 15%. So there'll be an interest rate mark that will accrete back through P&L over time. And of course, net of the funding costs that we have attributed to this transaction. So the net of it all will be in that range, we estimate. And we'll provide better estimates as we, you know, perhaps get to the end of the year and beyond. This is like a, you know, based on external data that we have, and we believe it's a fairly conservative estimate, to be honest. Understand. Okay, that's helpful. Thank you. Then second question, I guess, is more for Scott. I mean, look, you've already highlighted a number of reasons why you're attracted to KeyCorp, but I'm just curious in terms of the process you went through, because it sounds like you approached KeyCorp, or at least Scotia approached KeyCorp. Like, I imagine it didn't start with a potential investment set of one. It started with a potential investment set, looking at different regionals, but you really narrowed down on KeyCorp. So maybe walk us through a little bit through that process and how you arrived at KeyCorp as being the best option for Scotia. Yeah, that's great. Thanks for the question. So as you all recall, we went through a very intensive process with our investors, with our board, with our management team, to that culminated in the December Investor Day that we announced. And part, you know, of going through that process was looking at the North American landscape. And as we went through that, you know, the regional banks and saw which ones were attractive, which ones had a good fit, both culturally and business-wise, Key went to the top of that list. And so I did reach out to Chris, you know, a while back, and it's been fortunate that we've had lots of conversations since then. And so this has been, you know, a dialogue that's been ongoing, and we've had the opportunity to spend a lot of time with their team and due diligence as well. And, you know, I come back to, you know, it's a great company, right? And you look at the adjacencies to the Bank of Nova Scotia, which are very strong. As you think about what I've been talking about in terms of continuing to grow that wholesale and capital markets business. Remember, we're the tenth largest foreign bank in the U.S. right now. We have a great corporate banking and capital markets business, but we're actually focused on a different segment than Key there in the middle market space. As you hear me talk about commercial and the importance of commercial, and you look at that commercial business of Key, which is 75% of the earnings, you know, it's a very attractive and very low risk exposure to the real estate side, and then the wealth side. You know, as you think about the wealth opportunity for the Bank of Nova Scotia, we've talked about the need to have a U.S. offshore booking point, and, you know, that, that's something that we continue to work on. But, you know, hopefully, over time, there's some, you know, partnership opportunities in that realm as well. And then lastly, and more importantly, these things work based on culture. When I look at Key and what they have done, their focus on deposits, you know, deposit-led consumer strategy, you know, Chris's approach, which has been really helpful, and frankly, their whole mantra when they think about go-to-market is primacy. For us, primacy is what we've been talking about here. To see that cultural fit between the two organizations on primacy was very compelling. Thanks for that. And then I guess that leads to my last question, which is on U.S. wealth strategy, which has been discussed in the past. Should we view this sort of as the solution in adding the U.S. wealth capabilities, or is there potential to do something more? Yeah, no, this is a transaction with Key, which is important, but it's not exclusive. And so as we think about getting a, you know, a wealth strategy, we will continue down that path because that's important for our clients. As we said here with Key, over time, we'll spend more time with Key at the right time, talking about areas to collaborate, but it is not an exclusive transaction for the Bank of Nova Scotia. We'll continue to look at other opportunities as well. Got it. That's it for me. Thanks for your time. Thanks, Paul. Thank you. Our following question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. Good morning. Thank you for taking my questions. Maybe just to start off with, the timing is always curious. What was so interesting about August twelfth to make this announcement? Great question. I mean, listen, I think, Chris and I have been in this dialogue for a long time. I think it was a great comment on both teams that we were able to keep this confidential, and you're always worried about leaks. And then frankly, the volatility in the market over the last couple months, let's say, has created a desire on both teams just to get this announced. And, you know, we think about this as 11% premium to the 20-day VWAP, and there's some highs in there, and there's some lows in there, right? But that was the deal that Chris and I talked about, and so to get this done-... In a manner that, you know, was confidential and got it out before our earnings release in a couple of weeks. That was the desired approach. So no magic to August twelfth, other than trying to get it done sooner rather than later. Okay. And, Scott, I think, in response to the last question, you said, look, the tuck-in type approach to wealth acquisitions in the U.S. remains kind of part of the, I guess, part of the playbook. But, presumably, your capital deployment, at least for now, is limited to getting this transaction done and, I don't know, rebuilding the capital ratio to some level with you know, with some sort of a buffer to 12.5%. Is that the right way to think about it? Like, I'm just trying to understand what's the likelihood of another transaction in the next 12 months. Yeah, no, Sohrab, that's great. I should have... As we were thinking about-- we've been thinking about wealth for a while, and the type of things that we've been thinking about there have been relatively small, and so that wouldn't be, in my mind, at least, a meaningful impact on capital. I think you're right. I mean, I think we should be running this bank, you know, as we said on Investor Day, +12, so you're in that kind of 12%-13% range. Post this transaction, this keeps us well within this range. And I think as a bank, we've demonstrated the ability to continue to be thoughtful in growing in a disciplined fashion, that CET1 ratio. So we're feeling very good from a capital perspective and lots of flexibility going forward. Okay, and just one last question for me. Just, not to pick on this too much, but, I guess it does kind of help get a state of management mindset. You know, 3.5, or call it CAD 350 million+ in earnings, CAD 3.9 billion, you know, call it ±10%-11% return on that capital. Maybe it goes a little bit higher. I mean, this doesn't look overly accretive to the target of 14%-15%, or am I thinking about this the wrong way? Hey, Sohrab, it's Raj. I think the $3.9 billion or the $3.6 billion, as we called out, is not the capital, Sohrab, and I think that's the difference. It's the proceeds. The capital, if you translate the 50 basis points-55 basis points, that will be the right denominator to use, and you'll realize that the return on that capital that is consumed as regulatory capital is very high. 20%+. Okay, so... All right, so this, Raj, just to be crystal clear, this is indeed very much a financial transaction. I mean, it's hard... I mean, I think I listened to the Key call at 8 A.M. They positioned it very much as a financial transaction. And is that the right way to think about it from Scotiabank's perspective as well? I think in the short term, it's a very accretive financial transaction and will always be because of the significant investments pocket on the regulatory capital side. But I think the way we think about it is it creates a lot of optionality with a very strong regional bank. So that's secondary at this time because we need to, you know, get approvals and prove certain things around before we determine what is the size of that price. But it's definitely just attractive on financial terms at the outset, and that to us, was exceptionally important because we want this to generate capital and provide the appropriate returns on the capital that we're deploying. I mean, another way to think about it, if you think back a year ago, we had a Canadian Tire in the significant investment bucket and, not overly strategic. And we were able to sell that at a very good proceeds, proceeds, which, you know, left a significant investment bucket unutilized. So you want to have that utilized, given the favorable capital treatment, which drives the 20% type return. Here's an opportunity to have that financial attractiveness while also creating optionality for the North American corridor strategy. So I think it's a, it's a significant win for our shareholders, and it positions us to now have, an enhanced footprint in North America as we think about growing out that North American corridor strategy. Okay. Thank you. Thank you for taking my questions. Thank you. Our following question is from Gabriel Dechaine, from National Bank, sorry, National Bank Financial. Please go ahead. Hey, good morning. My first question, on the Key call, we heard from them that Scott, and you had been kind of reaching out to different banks for investment opportunities in the U.S., shortly after you became CEO. I'm just wondering what the, you know, the rationale was for doing so so early, I guess, in your tenure. I listened to the KeyCorp call. I didn't quite pick that up, that comment. But nevertheless, I think what I said is what happened, which is, as we went through the Investor Day and got aligned around the North American corridor, we obviously wanted to understand the footprint in the U.S., and KeyCorp was highlighted to us as something that was a, you know, very complementary fit for us. And so that's why the outreach to KeyCorp. Okay. And then you mentioned optionality on the strategy, the North American corridor strategy. I think a lot of people are going to look at this. There's a five-year standstill, I believe. You can't buy more Key until five years from now or so. Does that optionality... You know, people are going to assume that you want to buy 100% of this thing ultimately, but would you consider selling as well? Yeah, I mean, listen, I think the objective here is to get deployment of capital from developing, developed markets on a financially attractive basis, low cost, low risk option, which creates optionality for our shareholders long term into that North American corridor. And it's not any more complicated than that, Gabe. So I think it's consistent with what both Raj and I have been saying, and consistent with what Chris has been saying from the Key perspective. ...Okay, and then, like another basic, simple question. How do you, like your day-to-day involvement, I, I assume, is going to be limited. You'll have some board seats, but, you know, how do you advance a partnership? You know, what am I going to see, I guess, in terms of success rate on the North American strategy is working? Like, are you going to have more auto loans between, you know, Cleveland, Midwest, and Mexico, something of that nature? I'm just trying to figure out how it enhances that strategy, from a- Yeah, I mean- Execution standpoint. Yeah. A couple things. One, you're going to see Key be able to reposition their balance sheet and get more front footage in terms of how they deploy their capital into- Okay. Into the U.S., which I think will be very helpful for that bank. The primary capital injection was, you know, that was on our minds, too, in terms of allowing them to be more successful. That will be one proof point that you'll see. I think the second proof point that you'll see is, over time, in the future, there will be areas to collaborate. We're hopeful around wealth, commercial, and on the capital market side. So, you know, we'll keep you updated on those. That definitely will be post the closing of the second tranche, when we'll start to evaluate those. But something you should definitely look for over time. Raj, anything else on that? Yeah, and just from a financial perspective, Gabe, any number I've quoted does not include any benefits attached to those. Yeah, okay. Yeah. Okay, and the last one, just to sneak in there, because you gave us your, your growth targets for the next, few years at the Investor Day in December. You know, no growth this year, 5-7, I believe, next year, and then 7-8 beyond 2025. This deal doesn't change any of that, or does it? Because it's accretive, does it enhance or, or will we get updated at some point? No, it should enhance, Gabe, because those organic plans are still intact, and we expect to execute as we laid out at the Investor Day. This investment, depending on when we get Fed approval and so on, will be incremental to the earnings that we expected to generate based on our plan. Okay. Thank you. Thank you. That is all the time we had for questions. So back to you. Okay, thank you very much. I want to thank everyone for participating in our call today, and I apologize to the three or four of you who unfortunately we couldn't accommodate on the call. We'd be able to, you know, take direct calls from you and answer your questions. We look forward to speaking again at our Q3 call on August the 27th. Have a great day.