Brian Porter Speech, April 9, 2019

An address by Brian Porter, President and Chief Executive Officer, presented to the 187th Scotiabank Annual Meeting of Shareholders, Toronto, Ontario.

Building for the Future 

Thank you, Tom, for that kind introduction.  

It’s my pleasure to welcome all of you to the Scotiabank Centre for our 187th Annual Meeting, and greetings to everyone who is tuning in via webcast.

In just a moment, I’ll outline the Bank’s financial performance in 2018, and highlight the progress we’re making towards our strategic goals. 

Firstly, I want to take this opportunity to recognize and thank our Board of Directors for their commitment to the Bank.

In particular, I want to extend my sincere gratitude to the Chair of our Board of Directors, Mr. Tom O’Neill. 

For the past 5 years, we have had a Chair who has personified good governance and strong leadership. 

Scotiabank has benefitted greatly from Tom’s guidance and steady hand.

Personally speaking, I have deeply appreciated his wise counsel and support. 

I know that I speak on behalf of all Scotiabankers in extending my sincere thanks to Tom for his tremendous contributions to Scotiabank.

Would you please join me in showing Tom our appreciation. 

Turning now to the Bank’s financial performance. In 2018, we delivered another year of record earnings for our shareholders.

Our adjusted net income was $9.1 billion – up 10% from 2017. 

And our adjusted operating leverage, which measures the difference between year-over-year revenue growth and expense growth, was strong at +3.7%.

At the same time, we continued to return meaningful capital to our shareholders.

In 2018, we returned $4 billion in dividends compared to $3.7 billion in 2017. That’s an increase of 8%.

When it comes to balancing the competing demands for short-term results and creating long-term value, I’m proud of what we’ve accomplished in 2018. 

Over the past year, we made very good progress in executing the Bank’s Strategic Agenda.

I want to use this opportunity to elaborate on two aspects of it.

Firstly, I’ll highlight the ways we are re-shaping the Bank’s geographic focus and business mix.

And Secondly, I’ll update you on some important progress we have made regarding technology.

Turning to our geographic focus and business mix, some of the changes are more obvious.

Back in 2014, the Bank operated in more than 50 countries, spanning 17 time zones.

Over the past five years, we have exited – or we are in the process of exiting – approximately 20 countries and 5 non-core businesses, while continuing to grow.

Our divestitures are helping to de-risk the Bank, and we are highly focused on their completion.

Our world, the banking industry, and the regulatory environment are much more complex today than they were, even a decade ago.

This trend is only increasing.

Our sharper geographic focus allows us to:

  • better serve our customers
  • better manage complexity
  • reduce our exposure to risk
  • and better protect the perimeter of the Bank

Sharpening our Focus 

Within the Bank, we like to say that we “Bank the Americas”, a region that spans from Canada’s Arctic all the way down to the tip of Patagonia, in Chile. Within our strategic footprint, we have a particular focus on Canada, the US, and the high-growth and stable countries of the Pacific Alliance trading bloc, which are: Mexico, Peru, Chile and Colombia.

In fact, in 2018, approximately 85% of the Bank’s earnings were generated from our 6 core geographies.

Broadly speaking, the Pacific Alliance countries have:

  • business-friendly environments
  • healthy democracies and a commitment to good governance
  • above-average economic growth
  • AND, most importantly, a rapidly expanding middle class

The combined population of the four countries is 230 million, more than 6 times the population here, in Canada.

I should note that our footprint will continue to include some markets in the Caribbean and Central America, as well as select operations in Europe and Asia, which provide connectivity to the Americas for our corporate and institutional clients.

In terms of the big picture, we are focused on strengthening our presence in markets that we are comfortable operating in, and that provide higher returns to our shareholders. 

As I’ve communicated to the Bank’s stakeholders for many years, the benefits of scale across our footprint are considerable. 

Scale matters in banking, now, more than ever

That is why we are focusing on building scale through organic efforts, buying scale through key acquisitions and better leveraging our existing scale and generating efficiencies.

Overall, our efforts to sharpen our focus and grow within our risk appetite have enhanced the quality of our earnings.

Last year was particularly busy for the Bank on the acquisition front.

We invested more than $7 billion to acquire several high-quality businesses.

We are pleased with those businesses, which bring with them strong franchises, talented people and very good technology.

We are highly focused on integrating our acquisitions to generate synergies.

When it comes to integrations, the Bank has a long and successful track record.

And, in the case of our current integrations, we are very comfortable with how each of them is proceeding.

Let me elaborate on our acquisition of B.B.V.A. Chile, which closed last fall.

The acquisition doubled our market share, and made us the 3rd largest private bank in Chile.  

We have big expectations for the Bank’s operations in Chile and look forward to showcasing our Chilean business and our team at our next Investor Day, which we are hosting in Santiago, this fall.

Last year, we also made very good progress in reshaping the Bank’s business mix through two important wealth management acquisitions right here, in Canada.

Wealth is a critically important segment where we wanted to gain even greater scale.

The purchase of Jarislowsky Fraser and MD Financial - two iconic Canadian firms - added material scale, and upgraded the quality of our wealth management business, more broadly.

The two transactions, have improved our business mix and have enabled us to make meaningful inroads in a very valuable client base.

In particular, Jarislowsky Fraser has improved our business mix by adding meaningful Assets Under Management in the Institutional and High Net Worth segments.

In fact, since the end of 2017, Assets Under Management are up approximately 50%, making us the third largest active asset manager in Canada.

The acquisitions also advance our goal of adding 1 million new Canadian Banking primary customers over the next 3-5 years. The integrations of both wealth acquisitions are progressing very well.


I’d now like to shift my remarks to technology, which is absolutely integral to running any bank. Technology and banking are continuing to blend in a powerful – and irreversible – way. The number of people who choose to interact with their bank through digital channels, versus face-to-face, is increasing each year.

At the Bank, we have thousands of dedicated employees working behind the scenes to give our customers a seamless digital experience. I want to take a few minutes to provide three examples within our broader technology agenda. Firstly: how we are driving a better customer experience. Secondly: some of the great work we are doing to enhance our technology infrastructure. And thirdly: how we are using technology to improve operational efficiencies. By investing in software, data, and analytics, we are developing a deeper understanding of our customers’ needs and financial goals. In doing so, we are providing our customers with a better banking experience that is much more personalised. One of the best examples is Scotiabank eHOME, which we were proud to launch last month. 

eHOME is the first truly digital, end-to-end mortgage process here, in Canada. With eHOME, Canadians can now complete a mortgage application, obtain approval, and close on a home purchase without having to visit a branch or meet with a mortgage broker. In fact, the only document a customer has to sign is at their lawyer’s office on the day of closing, to pick up their keys. Available anytime, anywhere, on any device. We are extremely proud of the Scotiabank eHOME team and the platform we are offering to our customers. Shifting now to the Bank’s technology infrastructure. We continue to invest significantly and thoughtfully to enhance our capabilities.

In 2018, we made great progress in a number of critically important areas, including:

  • Investing in our data and analytics
  • Enhancing our speed and velocity
  • Secure migration to the cloud
  • And select upgrades to some of our core banking systems

In Mexico, for example, we just replaced our core banking system. This was a highly complex project that spanned 4 years and required an investment of approximately $180 million. I’m proud to tell you that the project was executed on time, within budget and will generate roughly $30 million in operational efficiencies each year. Our new core banking system has many other benefits, including greater operational resilience and more effective integration with our digital applications. Building on our success in Mexico, we are in the process of upgrading our core system in Colombia, as part of our integration of our Citibank Colombia purchase. 

With regards to secure migration to the cloud, this is an area where we are making great progress, and we are particularly proud of our approach. Our industry-leading platform helps to harness the benefits of the cloud. It is secure, efficient and allows us to deploy our digital banking applications at scale across our footprint. The benefits of moving to the cloud are highly significant. We are seeing faster time to market, higher productivity and a more consistent and integrated view of our customers. Finally, we are using Artificial Intelligence – or AI – to drive operational efficiency, and by extension, create tangible business value. As an example, we have an extensive program that is simplifying and automating hundreds of paperbased business processes that are overly complex and time consuming. To date, we have more than 200 automated processes in place, which are freeing up time for our employees to focus on more value-added tasks and, at the same time, creating tens of millions of dollars in value for our shareholders. And we are implementing a new automation, every single business day. By our reckoning, we are leading our peer group in this space and we expect to realize the significant untapped potential that exists across our Bank.

Supporting our Communities 

Overall, 2018 was another important year for our Bank. We made very significant progress across our entire Strategic Agenda. Looking forward, we remain focused on creating value over the longer term We are confident that the decisive actions and tough choices we have taken this past year will build an even better bank for years to come.

Building a better bank also means building for every future.

And building for every future requires a clear vision, thoughtful planning and a passion for doing what is right for our customers, employees and our communities. Scotiabankers have long-believed that we are a critical part of the economic and social fabric of the communities in which we live and work. And it’s a responsibility we take very seriously. In fact, just last year, our employees contributed more than 370,000 volunteer hours, as well as funding and support to causes within their own communities. At the same time, the Bank invested well over $100 million in community organizations through donations, sponsorships and other forms of assistance. Most of that money was invested to improve the lives of young people.

We believe that with the right support, young people can realize their potential and unlock a future of success that benefits, them, their families and their entire community. 

In that regard, we are fortunate to have a number of tremendous philanthropic partners throughout the Americas. Here, in Canada, we support many outstanding charitable organizations such as the Children’s Aid Foundation, MLSE Launchpad and, of course, the United Way. Next to government, United Way is the largest funder of social services in Canada.

It provides social infrastructure and fill gaps that governments simply cannot. More specifically, through their unique agency model, United Way provides essential services to millions of Canadians, including shelter spaces, meals and mental health support. The Bank’s relationship with the United Way goes back some 50 years. In the past 25 years, Scotiabank employees have contributed more than $145 million to the United Way. It was my honour to chair United Way’s Greater Toronto Giving Campaign. The largest fundraising campaign of its kind in the world. The 2018 Campaign raised more than $110 million for people in need in our communities. And I’m proud to say that the Bank and our employees raised more than 10% of the overall total. I want to use this opportunity to offer my sincere thanks to Scotiabankers and the Team at United Way For a job very well done in 2018.

Giving back has always been the right thing:

  • for the Bank
  • for our employees
  • for our communities
  • and for society, more broadly

You have been generous with your time and attention, so let me close with this. A few months ago, I came across a quote from a former President of our Bank. The quote resonated with me, And many of my colleagues, and I wanted to use this opportunity to share it with you. 

And I quote:  


We work for an institution that has always made integrity one of its watchwords: it is, in fact, one of the three words that make up the Bank’s motto.

It is through this quality of integrity that Scotiabank has always been able to understand customer service and employee needs, and I believe that it is through this quality that we will successfully meet the challenges of the future.

These words are as true today as they were 34 years ago. Integrity, along with Service and Strength, - the other two values that are displayed on the Bank’s Coat of Arms - continue to serve as the foundation for everything we do here, at the Bank. From the investments we make, the organizations and people we bank and the employees we hire and promote. It is our adherence to these values that has helped us grow into one of Canada’s longest-enduring companies, and one of the world’s top financial institutions. We are committed to maintaining that strong foundation today, and for generations to come.

I want to thank our customers, and you, our shareholders, for the trust you have placed in us, and thank you, once again, for your time and kind attention.