If you don't know me, I am Jean-Philippe Cousineau. I am in charge of the institutional equity sales and trading at the National Bank Capital Markets. Hi, my name is Philippe Cousineau. I am head of sales and trading at National Bank Capital Markets, and I'd like to welcome everybody to this 24th annual financial conference. We're very proud of this event. It's been 24 years in the making, and I wanna thank everybody, institutions and corporates for attending again this year. On behalf of everybody at the National Bank, I would like to thank you. Thank you to everybody that took the time to come from far away sometimes to visit us at this financial conference. This being the time I find, and it leads up to very good discussions. Last year, we just had the Canadian election to have a new prime minister. Everybody was talking about tariffs, which, yeah, led to Liberation Day, and obviously the inflation that would result from it, which did not necessarily materialize as expected. This year, obviously, with what's going on in Iran, with the negotiation of the USMCA agreement coming up, and, you know, slowing economy and demographics, I'm sure will, you know, pave the way to have some great discussions over the next two days with all the corporates that are attending. Also, I'd like to stress that we are going to have two lunch events. The lunch is downstairs in the main room. Today, it's going to have Peter Routledge, the Superintendent of Financial Institutions, that will be discussing with Gabriel Dechaine. Stéfane Marion, Economist. Tomorrow, Stéfane Marion, Chief Economist- -at the National Bank, would be with us at lunchtime to talk about his vision of the world and of Canada. In the next two days, we're going to have several corporations that will be coming here at the front. Jaeme Gloyn is going to be the facilitator, and Gabriel Dechaine as well. I would like to give the floor right now to Gabriel Dechaine with our first fireside chat with Mr. Laurent Ferreira, CEO. Thank you. Thank you, everybody. Coming here. Thanks, Laurent, for, you know, taking the time to answer the questions- Yeah. -give your, you know, updated perspective on the world today. Thank you for having me. Welcome, everyone. You know, updated perspective on the world. As JP said, every year around this time, something major happens. 2023, we had Silicon Valley. Forget what happened in 2024. Last year was tariffs leading up to Liberation Day. Today, it's the Iran situation. Mm-hmm. You know, a simple question, I guess, of, related to a complex issue. Is this thing sufficient enough to dramatically change the outlook for the year, for the bank and for the Canadian economy, I guess, more broadly? No, I don't think we're changing our outlook for the year. I mean, it definitely is going to have impacts. I mean, day by day, I think the risk of a recession are increasing. You know, the Hormuz choke point is going to stoke inflation, right? The energy that flows through this is not just oil, it's LNG. You know, food will be impacted as well. It does not change our outlook, but we're definitely gonna be more prudent going forward with what's going on. I guess given the pattern of major world events happening more frequently, that you know probably gives a good opportunity to talk about the bank's risk appetite or risk management philosophy. Like, what do you think should comfort investors in a situation like this one? Well, I think if you look at our execution, the past, the way we've been managing capital, the way we've been managing also provisions, liquidity, you know, we're not gonna change our approach. You look at also our trading performance through, you know, stressful time, volatile times. I think shows that we know how to manage during stress periods. We're not changing the approach that we've had over the years. You do, you know, have a heightened level of awareness when, you know, stress comes when you have situations like we have in the Middle East. You know, by and large, we're not changing our strategy, our capital deployment. That does not change. You know, you can count on us being very focused on making sure that we continue to execute on our strategy. That, you know, when there are events like you know, the current crisis, we're on top of it, right, obviously. Okay. Now, bringing it back to Canada, and I'll get to Quebec in a moment, but you know, the past year, I guess, has been underpinned by a vibe of you know, optimism and rah-rah type of sentiment as far as you know, the nation's building projects reinvigorating the Canadian economy. I mean, there's a lot of hope. I'm just... Are you seeing enough activity taking place that you know, justifies that hope? And you know, related to the topic we were discussing earlier, do you think that could be a further catalyst to you know, stimulate- Well, there- -the Canadian. There's a lot to be excited about, right? Yeah. There's you know the shift that we've seen in Ottawa over the past year. You know, finally, there's an economic agenda and you know a clear focus from our government to put Canada back on track, productivity and being you know a world leader. Yes, there's a lot to be excited about. The engagement between Ottawa and the you know the business community is far better than it ever was. We're definitely feeling the engagement and the willingness to succeed. Obviously, there are challenges in terms of execution, but the willingness is there, and they're working extremely hard and engaging with you know everyone else. I think, you know, the government has put Canada back on the world stage clearly over the past year and re-engaging with, you know, powers around the world. That is also a very good thing for us in terms of our country. I mean, I wish we would go much faster. You know, a couple things here. The first one is, you know, on inter-provincial barriers, cost to our economy is ridiculous, and the only thing slowing down progress there is politics, nothing else. We should be moving very quickly on that. The other thing on becoming an energy superpower, it starts with that, right? Your security, your economic sovereignty. Anywhere in the world, it starts with being an energy superpower. We need to really look at all the options that we have to really unlock and have, you know, options to export our energy across the world. We need to revive Keystone right now. I think that you know the infrastructure's already partly built. It is a natural buyer much safer than Venezuela for the U.S. We need to revive that. There was a great article in The Globe a couple weeks ago. François Poirier, the CEO of TC Energy, talked about our second chance at LNG. We need to double down on LNG out west. That's, I think, something that we need to do. We need to bring natural gas to Quebec and Ontario. We talked about, you know, the manufacturing. The industrial strategy on defense will need energy. We need to increase, you know, natural gas flow to Quebec and to Ontario. I think there's also a case to make about a, you know, a eastern coalition. There's an economic and social case whereby we should look seriously at increasing offshore oil, natural gas, LNG in eastern Canada with Quebec. I was floored. Last month, we actually took delivery of LNG in New Brunswick. From Australia. From Australia. Mm-hmm. I was floored. Like, Canada, really? I think these are things that we need to accelerate. We are excited, but we need to really accelerate these things. We're gonna be there, and we're gonna be there to deploy capital. There's not a capital issue in this. You know, financial institutions in Canada are very well capitalized, so we're ready to support our government on this. Okay, speaking of Quebec, which you mentioned, in the past, I ask, you know, just for a general update on the Quebec economy and, you know, whatever else is related to Quebec. It's, you know, we usually talk about the housing market didn't get as frothy as in Quebec, so it's a risk mitigant. Percentage of dual parents working is higher than the rest of Canada, etc., etc. Now we've got to think about the risk elements as well. One that comes to mind is the manufacturing base facing risks due to trade tensions, obviously. Another one that's come up more recently and outside of Quebec, people may be catching up a bit on the political situation. I'm getting a call. How are you there. Yeah, I'm getting calls from people outside of Canada. The separatism, is that. I think, whoa, it's not the '90s anymore. People are asking about it. I threw a lot of stuff in there, but maybe you wanna, you know, give. Sure. Give your thoughts on the Fundamentals are robust. I mean, the... Let's talk about the consumer for a second. You know, less leveraged than the rest of Canada. You mentioned, you know, real estate, same thing. House prices between Montreal and Toronto, 50% difference in terms of pricing, so higher saving rates. All these things are real. Mm-hmm. We look at our credit data. You know, delinquencies are, you know, they're coming better in Quebec than the rest of Canada. So overall, still strong, robust. You talked about manufacturing. Now Quebec, the Quebec economy is, you know, well-diversified. So yes, but we don't have the concentration that Ontario has, for instance, in the auto industry. So more diversification. I think more resilient in the current environment. Aerospace. Aluminum is more resilient than steel. So yes, you know, Quebec is reliant on manufacturing. 12% of GDP is. National average is 9%, so we do have, you know, impact from tariffs, impact from trade tension. These are there. But I think there's a lot to get excited about the future. Mm-hmm CapEx and our position in Quebec. You know, hydro, having expertise in energy and building dams and transmission as well. We think about, obviously, critical mineral here. Our access to the Atlantic is another major advantage for us to be able to build supply chain around defense, around, you know, I mentioned critical mineral. I think, yes, I agree with you. Like, the current environment in manufacturing and tensions around that and slowing demand. I think the revival of manufacturing that Ottawa wants to enact, and defense spending and all the. These are good things for Quebec. They're good things for Ontario. Mm-hmm. Although there's the stress of the auto industry there. We have to jump on that. I think, you know, when you think about what's going on in the world, you know, rebuilding defense capabilities, building supply chains around defense, you know, we have the raw materials. We have the expertise. We have aerospace. We have, you know, shipbuilding capacity. You know, being against that right now is, you know, it should not even be up for debate, right? The world is dangerous, and I think that we have an opportunity to be able to be a market leader in the world. Okay. Before I go on with my questions, if there's anybody in the crowd that has a, you know, question, well, there you go. Feel free. There you go. Mr. Macklin. Do it. I'll just repeat the question. Yeah. Thank you. Laurent, can you give any thoughts on how our leadership in this country can make Canada a more attractive place to invest for Canadians and, for foreign investors? Because that's a big problem. Yeah, it is a big problem. Oh, I get it. Go ahead. The question was about the political climate in Canada, how to make it more attractive for domestic and foreign investment. You know, you mentioned leadership. It starts there. I think we do have the beginning of that in Ottawa. I think we need to work together. In the past year, we've seen our government in Ottawa bring all the provinces together at least three times. It hasn't been done in 20 years. It starts with that. We need to work together. We need to set politics aside and start thinking about our future, 'cause the world is dangerous. There's an opportunity for us, you know, to really leapfrog here, to move forward on a lot of issues. We have a lot to offer to the world. We have to, I think, be optimistic here, because you know it's now you know it's in mainstream. People are talking about it. People are talking about trade tensions. People are talking about you know war around the world. I think that there is a social license that our governments right now have that they did not have in the past. They know it. We're gonna be very vocal about what needs to be done. We're going to be you know supporting all government initiatives. I think the pension funds are also you know sort of in the same mindset is we need we really need to think about Canada now. It starts with leadership. I think it's moving positively, but we just need to keep working on it, and we need to work together and stop fighting with each other. You know, I remember five years ago, a dinner I had with Stephen Poloz, and he said one of the biggest problem in Canada is that, you know, you have every morning, the prime minister of every province, they get up, they're brushing their teeth, and they hear on the radio that the feds say brushing your teeth is good for you. Toothbrush comes down. It's one of the issues we have in our country and we should get along together and work. Thank you. Thanks. Okay. Just to bring it to National's- Yes -finance, financial targets, and there's big, you know, the 15% in 2026, 17% in 2027, and I guess a lot more granularity was provided in how you're going to achieve those numbers on the Q1 call. Two of the big swing factors were earnings growth, organic earnings growth, and RWA growth. Can you get one if the other doesn't? Like, so they seem to be two sides of the same coin. RWA growth will drive earnings growth. Mm-hmm. Organic growth has been weak for a while across the sector. Can you still achieve one without the other? It's been pretty good at National Bank. Yeah. True. Look, we, you know, I think we were pretty comfortable with our assumptions and putting those targets out. We obviously feel very comfortable in being able to achieve them. Our base case for 2027 what we put out there is a target ROE of 17+, is that we're gonna see in 2027 the same kind of momentum that we've seen in terms of organic growth in 2025, in Q1 of this year. This is gonna continue this year. We see that over the next year as well. You know, we have momentum in all of our businesses, P&C, our capital markets business, Credigy as well. We think we could see opportunities there. We talked about private credit. ABA is doing well as well. Then we also have, you know, a wealth and advisory ECM, DCM, so, you know, less RWA in these businesses and, you know, we see a lot of momentum as well there. So overall, we're very confident with our target growth. Now, having said that, yes, you know, we have a situation right now where the recession risks are higher. So could we see more, you know, larger PCLs down the road? Possibly. We are very confident with the targets that we've set. You touched. I'll skip ahead. While at Credigy, you mentioned there might be some better opportunities given some of the disruption in the private credit market. Is that- We haven't seen it yet. Right. This morning, I think Apollo, Ares just are capping withdrawals. There is still a lot of liquidity in the U.S. market, and we're seeing deals done where pricing covenants, the structures are not, you know, within our risk parameters, and we think that some of the trades that are being done do not address the potential risks. All the negative press that we've seen on private credit has not yet had an impact on our deal pipeline. Private credit is still. There's still a lot of liquidity there. Insurance company as well are buying assets. Now it might change. We're starting to have more discussions, but we haven't seen a big change in terms of our pipeline. Higher rates could exacerbate that. What's going on in the Middle East as well, inflation as well. For sure, those are things that we're keeping an eye on, but we haven't yet seen that flow through to our deal pipeline. Okay. You also, well, on the Q1 call, started talking about or touched upon rather the strategic review of some sort for the Canadian banking segment that raised some eyebrows, I guess. Are you gonna provide more details later this year on what that entails, and will there be an investor day type event that could be the, you know, platform for that? I won't come into an investor day today, but- Not answering. We are definitely thinking about it. Okay. We did mention a strategic review of P&C, but we're in a strategic process for the whole bank, right? It's not just P&C. It includes all of our segments. We're trying to, you know, a lot of talk about research and trying to find an AI agent to replace Gabriel. It's a big challenge. I put the artificial in AI. The randomness of Gabriel makes it really difficult. No, but seriously, personal banking is something that we're looking at, you know, our channels, you know, digital, our branch, our TM call center. What we've noticed is, they're not well integrated. We need to double down on really getting them to work together. We still have a lot of work to do on automation and digital across all of our networks. There's obviously a cost aspect to this review. Then there's the business model going forward. We believe that we're... Over the next five year, we're going to see an acceleration on you know, retail disruption. You know, whether AI, tokenization, stablecoins, digital assets. There's bank challengers that are knocking on our door that are applying for bank license right now. Then there's also bank competition that is an important file for our government. All of that means lower fees for retail, and it's gonna be pressure on deposits over the next five year. I think that the next five years we're gonna see an acceleration of all of these trends. It's how do you approach it, and we have to be prepared for that. I think it's you know. We just announced someone who took over our retail business, Julie Lévesque, who's ran IT and operations for us. She already has been working on simplifying and looking at all of our processes. She's definitely have the right mindset. She was very close to our retail business. We've got a lot of people working on this right now. Towards the end of the year, I'm not sure it's gonna be an investor day, but maybe. Towards the end of the year, we're gonna be able to provide more details on that, but also magnitude and upside on earnings and ROE. Well, can't talk about the bank without talking about CWB and we're in the phase now where you've done the expense and funding synergies. Yes. We're entering the revenue synergy phase. If I look at what CWB was when you acquired it, what it is at, you know, in Q1, it's pretty much the same size. Like, there hasn't been any growth. I'm wondering if, like, just focusing on those, that first phase is kind of taken away from the business as usual and, you know, growth type mandate that it would normally have. Now that that's behind you've got a clearer path ahead. I mean, I don't think we were distracted from growing the franchise. Having said that, you know, when you do a migration, and it was a big learning experience for us, and the execution was incredible. You know, you are migrating technology. You are still in an integration phase. Mm-hmm. You are training your people. You are, you know, reaching out to clients and explaining to them the new systems, the new, you know, cash management system and all these things. We are in that phase right now. Now, in terms of the balance sheet itself in CWB, there are two elements. First, we had commercial real estate that paid down. Right. That's one of them. We also deliberately lowered our exposure to broker deposits that are more expensive. Those two were deliberate. Right. They have flown through our balance sheet over the past quarter. But look, we look at the momentum early, foreign exchange, swaps, advisory, those things are working really well. I am quite confident that we're gonna be able to realize our revenue synergies for 2026, around CAD 50 million. What we're gonna see second half of the year is when we're gonna see growth, you know, where we're gonna engage a lot more with our clients. But also we're much more attractive platform now. Now, CWB was not competitive. Now they are. CWB now has full suite of product. CWB has technology. CWB has, you know, retail, has wealth as well. So all these things are gonna start kicking in at some point, and we think that we're gonna. You know, momentum is gonna start second half of the year, and that we should be able to deliver in 2027 an additional CAD 90 million of revenue synergies. You know, and look, I go across the country, talk to our teams. Everyone feels very confident about this, and I think we've proven that, you know, when we can execute and, you know, we set targets, and we know that we can achieve them. Got time for a couple more here, but moving from Western Canada to Southeast Asia. ABA looks like the credit story calmed down a little bit. Bigger picture, I think you've commented in the past that, you know, the next phase for that business is some sort of partnership. Is there any, you know, I don't know. Can you clarify what that could look like? Absolutely. Potentially or some of the few things you're. It could be anything. Yeah. I mean, one of the things that we are thinking about is technology. It's our digital platform. ABA has probably one of the best digital platform in Southeast Asia and possibly in the world, you know, from the payment app, the vendors, QR codes. As well as when I look at the risk management tools that they have and the performance tool, they're just incredible. So there is a possibility that we could take that and expand outside of Cambodia. What I've said in the past, and I'll repeat it, and you know, that's a possibility, is we do that with a local partner. We could also open the cap table to institutional investors, so that's something as well. We're not in a hurry, so it has to be, you know, someone who gets the market, sees the opportunity, could be a great partner and. You know, ABA's been performing extremely well. It's an asset that we really like and, for now, you know, we're very comfortable. It's definitely something that, you know, we would entertain. Okay, last one on the regulatory environment. I got Mr. Routledge on the stage later today, but you know, there's some things that you know, the uneven playing field, Canadian banks versus global peers, that's a term that gets used quite a bit. Fundamental review of the trading book is something that's been applied in Canada, not elsewhere. That maybe you know, could be on a wish list of things to roll back. Are there any other such items that you know, make it an uneven playing field? Well, FRTB is one of them, so the trading book. Now, I know the U.S. just announced something. Yeah. I'm not quite sure exactly what the impact would be for the U.S., but Peter knows really well that I think we should get rid of that one. Well, you know, we saw with Michelle Bowman coming in as Vice Chair of the Federal Reserve, supervision in the U.S. is going down significantly. Now what they would say is, like, the U.S. was here, Canada was here. We've gone up in terms of supervision. They've come down. Let's just make sure that doesn't cross, right, and we get more bogged down by supervision. These are things we're talking about. Let's also talk about RWA for SMEs. That's something that I think it has to be on treatment, right? You can't just lower DSB and play that yo-yo, you know, just, okay, we need banks to be more aggressive. It's not about that. It's really about RWA treatment for SME, and I think that's something that, you know, I'm all for that. What's good about, you know, our country and, OSFI and the relationship with the financial industries is, you know, it's respect, it's stable. There's an engagement between us, and I just wish sometimes things would move a little faster. You know, great relationship and open discussion on all these topics. Speaking of moving faster, we're out of time. Appreciate the catch up. Pleasure. As always, and I look forward to next year. Yes. Twenty-fifth. Uh, twenty-fifth for, uh- 25th, yeah -the conference. All right. Thank you, and have a great conference.