Address by Brian Porter
To the 181st Annual General Meeting of Shareholders
Halifax, Nova Scotia
April 9, 2013
"Our culture governs how we operate, how we interact with our customers and other employees, and how we contribute to the communities in which we live and work."
Thank you and good morning everyone.
It is an honour for me to address the Bank's annual meeting for the first time as your new President.
I'd like to begin by thanking the Board of Directors and Rick Waugh for giving me this opportunity.
It is a distinct privilege, and I am very fortunate to have been entrusted with this important role.
In my new role – and in my previous roles in International Banking, Global Risk Management and Global Banking & Markets – I have travelled extensively to meet with employees, customers and other stakeholders.
In my meetings with employees, I have always been struck by two important observations:
In fact, we believe that our employees and our culture are key drivers of our success, now and in the future.
In terms of our customers it is very important to me that I meet with them as often as possible.
In fact, it is critical for all senior leaders of the Bank to interact with customers frequently so that we can understand their concerns, and ensure that we are delivering on our commitments.
I also meet regularly with shareholders, community leaders, regulators, government officials and many others.
One of the important impressions that I take away from these meetings is that Scotiabank is highly regarded in all circles, both here in Canada, and abroad.
To me, this reinforces the great reputation that Scotiabankers have all worked so hard to build and maintain.
For the balance of my remarks, I will touch on three important areas:
Let me begin with our recent performance.
The Bank had a very successful 2012. A record year in which we met or exceeded all of our financial objectives.
We believe we're achieving the right kind of success – and there are three main reasons:
As a result, we have every confidence that we can continue to generate high quality earnings on a sustainable basis.
In my mind the quality of our earnings is every bit as important as the quantity, and we have continued to deliver in this regard.
In the years since the financial crisis, we have been able to take advantage of market opportunities because:
By doing so, we continued to build out our footprint – completing some 40 transactions for more than $13 billion, including our recent acquisition of ING DIRECT in Canada and our investment in Banco Colpatria in Colombia.
As a result, we are tremendously well positioned going forward and our footprint is the envy of many financial institutions around the globe.
This brings me to some of the key opportunities for each of our business lines.
To begin with, in Canadian Banking, we have a heightened focus on deposits and payments.
Deposits are the lifeblood and circulatory system of any bank.
Therefore, it is a key priority for us to ensure that our deposits are growing in lock-step with loans.
It is important that we build a deposit base that is stable and well-diversified to ensure that our growth is prudent, sustainable and well-funded.
We are pleased that with our recent acquisition of ING DIRECT Canada we have solidified our position as having the 3rd largest deposit base in Canada.
But deposits are only part of the exciting story with ING Direct. It has the potential to be much more.
ING Direct has developed a unique value proposition.
Strong and profitable growth over the past several years provides ample proof of their successful business model.
We believe there is considerable potential for us to leverage a similar model in some of our international locations -- over time.
Payments is another important focus.
Payments encompass all the different ways that funds are transferred from one party to another, including debit and credit cards, electronic funds transfers, internet banking and mobile banking.
This is an area that's undergoing rapid innovation, with increased competition from traditional financial institutions, and new entrants.
As one of the first Canadian banks to introduce mobile banking, we are continuing to progress with mobile payment technology and we look forward to giving our customers more options when making purchases in the near future.
We're also achieving innovative growth in our credit card business.
Last year, we announced the launch of three Scotiabank American Express cards, which offer some of the best travel rewards in the Canadian market.
Turning now to International Banking.
We are continuing to build our diversified, customer-focused personal and commercial footprint, particularly in the higher-growth markets of Latin America and Asia.
We have been acquisitive. Since 2007, we added more than 8 million customers outside Canada, doubled the number of branches to 2,900 and grew revenue by a healthy 13% per annum.
And while we have grown our international footprint significantly, we continue to demonstrate patience, discipline and strategic thinking in our approach to acquisitions.
These acquisitions not only increase our footprint and our customer base, but they also enhance our opportunities to drive organic growth.
And, of course, we are also focused on making sure that all these acquisitions operate in accordance with Scotiabank's high standards in critical areas such as risk, governance, financial & operational controls, and sales & service.
Now let me comment on the opportunities in our Global Wealth Management division.
Here, we are driving strong organic growth, as we continue to ramp up our newest business line.
It's only been two years since we acquired Dundee Wealth Management – which continues to have a transformational effect on the business.
We have now firmly positioned ourselves as one of the leading providers of wealth management services to Canadians.
Our mutual fund business ranked second among the Canadian banks in assets under management at year end.
Internationally, Latin America is an important focus for expansion of our wealth and insurance operations – most recently, we acquired a majority stake in Colfondos, Colombia's 4th largest pension fund company.
Colfondos aligns nicely with our investments in Profuturo in Peru and Scotia Crecer in the Dominican Republic, and adds significantly to our overall expertise in pension fund management.
Going forward, we see great opportunities for our wealth, insurance and cash management businesses in Canada and internationally.
And finally, I'll turn to our fourth business line, Global Banking & Markets which is our wholesale business.
In a time of continued market volatility, our wholesale business stands out for its consistent, predictable and high quality earnings.
We are confident that our wholesale/retail mix is appropriate, and that it helps us achieve growing, but stable results.
The quality of our business is underpinned by a well-diversified product suite and deep and long-lasting relationships with top tier customers.
We are banking the real economy with a focus on core industry sectors such as mining, energy and infrastructure.
And, there is tremendous potential as we expand our wholesale operations within our footprint in Latin America and Asia.
I'd like to conclude with some remarks about our strategy.
There is no doubt in my mind that we have the right strategy.
We have the big picture right, and we believe our strategy is crystal clear. Our business model is effective, well-balanced and it positions us well for the future.
We have the key elements in place that are essential for success:
And, we are focused on three critical areas that underpin our success:
Secondly – our people.
The strength of our team is our biggest differentiator and that's why we place great importance on having a diverse and talented group of employees, and on developing our leadership depth and capabilities.
In an organization of some 82,000 employees, our long term success depends on having a team with the right values, skills and experience.
More than anything else, this will determine our ability to execute our strategy – today, and in the future.
In my travels across the Bank, I've had the privilege of seeing our team in action.
I've witnessed the power and commitment of Scotiabankers working together towards a common purpose and it's delivering great results for our customers and our shareholders.
Our team of Scotiabankers gives all of us tremendous confidence in the future of the Bank.
And finally – let me comment on our culture.
We know that Scotiabank's culture is one of the most important factors to our success, and I also know that it may be our greatest competitive advantage.
Our culture governs how we operate, how we interact with our customers and other employees, and how we contribute to the communities in which we live and work.
On each of these dimensions, we can all be extremely proud.
So, I want to thank the entire Scotiabank team for your commitment to our customers, to your fellow employees, and to our communities.
And finally, I also want to thank our shareholders for the trust you place in us and for your continued loyalty and support.