[PDF] NA: Annual Report 2020 02-Dec-2020 Founded in

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Report

Annual

20 20

26,517 Employees

(2)

483 Branches

(3)

1,573 Banking Machines

(4)

2.7 million Clients

(1) $597 B

Assets Under Administration

and Under Management $332 B Total Assets $7,927 M Total Revenues $2,083 M Net Income $21.5 B Market Capitalization

Table of Contents

3 Mes sage From the President

and Chief Executive Officer

5 Members o f the Office of the President

6 Mes sage From the Chairman of the Board

8 Members o f the Board of Directors

9 Our One Mi ssion

10 Envir onmental, Social and Governance (ESG)

13 Ris k Disclosures

15 Management"s Discussion and Analysis

123 Audit ed Consolidated Financial Statements

226 St atistical Review

228 Glos sary of Financial Terms

230 Informat ion for Shareholders

(1) Clients o f the Personal and Commercial segment (2) Worldwide (3) 403 in C anada, 77 in Cambodia and 3 in the United States (Florida) (4) 940 in C anada and 633 in Cambodia (5) On a tax able equivalent basis and excluding the Other heading

Founded in 1859, National Bank of Canada offers

financial services to individuals, businesses, institutional clients and governments across Canada. We are one of Canada"s six systemically important banks and among the most profitable banks on a global basis by return on equity.

We operate through three business segments in

Canada—Personal and Commercial Banking, Wealth

Management and Financial Markets. A fourth segment— U.S. Specialty Finance and International—complements the growth of our domestic operations. We are a leading bank in our core Quebec market and also hold leadership positions across the country in selected activities.

We strive to meet the highest standards of social

responsibility while creating value for our shareholders.

We are proud to be recognized as an employer of

choice and for promoting diversity and inclusion. We are headquartered in Montreal, and our securities are listed on the Toronto Stock Exchange (TSX: NA).

At a Glance

19 %

2020 Total Revenues by

Business Segment

(5)

Personal and Commercial

Wealth Management

Financial Markets

U.S. Specialty Finance and International

2020 Total Revenues by

Geographic Distribution

(5)

Province of Quebec

Other Canadian provinces

Outside of Canada

23% 25%

15% 54%

31% 42% 10%

National Bank of Canada

2020 Annual Report

1

Ranking

(6)

National Bank

Canadian

Peers (6) TSX

1 year# 1(2)%(14)%(2)%

3 years# 15%(2)%2%

5 years# 113%6%6%

10 years# 111%8%5%

20 years# 113%9%5%

Industry-Leading Total Shareholder Returns

(CAGR (5) for the periods ended October 31, 2020) > Canadian super-regional bank with leading franchise in Quebec > Targeted growth strategy across Canada > Focused international strategy delivering high returns > Diversified business model and disciplined cost management > Defensive credit positioning with sound geographic and product diversification > Strong capital levels > Superior ROE (1) > Attractive dividend yield

Superior ROE

(1) 2020

Strong Growth in Income

Before Provisions for Credit

Losses and Income Taxes

(3)

2019-2020

Solid Capital Position

(4)

As at October 31, 2020

(1)

Based on Return on common shareholders" equity (ROE) as reported by Canadian peers, including Bank of Montreal, Canadian Imperial

Bank of Commerce, Royal Bank of Canada, Bank of Nova Scotia and Toronto-Dominion Bank (together, the “Canadian Peers")

(2) Excluding specified items. See the Financial Reporting Method section on pages 22 and 23 for additional information on non-GAAP financial measures.

(3)

See the Financial Reporting Method section on pages 22 and 23 for additional information on non-GAAP financial measures.

(4)

Common Equity Tier 1 (CET1) capital ratio

(5) Compound annual growth rate. Source: Nasdaq (6)

Among Canadian Peers, as defined above

8.0% 11.8%

Investing in

National Bank

14.9% 15.8% (2)

National Bank of Canada

2020 Annual Report

2

(1) See the Financial Reporting Method section on pages 22 and 23 for additional information on non-GAAP financial measures.

Financial

Overview

Medium-Term Objectives and Results

As at October 31 or for the year ended October 31

(millions of Canadian dollars, except per share amounts)20202019

Operating results

Total revenues7,927 7,432

Income before provisions for credit losses and income taxes (1)

3,3823,131

Net income2,083 2,322

Diluted earnings per share$ 5.70 $ 6.34

Return on common shareholders" equity14.9 %18.0 %

Dividend payout ratio49.6 %41.6 %

Operating results on a taxable equivalent basis and excluding specified items (1) Total revenues on a taxable equivalent basis and excluding specified items 8,216 7,666 Income before provisions for credit losses and income taxes excluding specified items3,8033,488

Net income excluding specified items 2,216 2,328

Diluted earnings per share excluding specified items $ 6.06 $ 6.36 Efficiency ratio on a taxable equivalent basis and excluding specified items 53.7 % 54.5 %

Dividends declared$ 2.84 $ 2.66

Total assets331,625 281,458

Financial Highlights

Growth in diluted earnings per share excluding specified items (1) 5-10%

ROE excluding specified items

(1)

15-20%

Dividend payout ratio excluding specified items

(1)

40-50%

CET1 capital ratio > 10.75%

Leverage ratio> 3.75%

2020

Results

Medium-term

objectives (4.7) %

15.8 %

46.6 %

11.8 %

4.4 % 2019

Results

7.1 %

18.0 %

41.6 %

11.7 %

4.0 %

National Bank of Canada

2020 Annual Report

3

Message From the President

and Chief Executive Officer

People First

Over the last year, the world went through extremely challenging times, both from a health and financial perspective. From the onset of the COVID-19 pandemic, our focus was on the well-being of our employees, our clients and our communities. Our mission of putting People Firstquotesdbs_dbs25.pdfusesText_31

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