Pam Pitz
Senior Vice President
Group Risk Management
Presentation to analysts and institutional investors
Toronto – October 23, 2003
Credit risk
Quarterly PCL Trending $mm
Full Year PCL Trending $mm (YTD Q3/03
250
200
732
800
201
158
150
600
158
145
122
575
649
626
annualized)
565
136
130
400
305
100
200
50
0
0
Q1
2002
Q2
2002
Q3
2002
Q4
2002
Q1
2003
Q2
2003
1998 1999 2000 2001 2002 Q3
YTD
Q3
2003
Total PCL
Full Year PCL Trending
PCL as a % of total outstanding balances (bps)
55
50
45
PCL has been relatively stable over
the last 6 quarters. YTD Q3 2003
PCL annualized is $565mm or a 23%
decrease compared to 2001 levels.
PCL as a % of total outstanding
balances has shown significant
improvement in the last 3 years.
(YTD Q3/03 annualized)
53
53
50
45
40
40
1999 2000 2001 2002
Q3
YTD
2
Scored portfolios (Consumer and Small Business)
$23mm invested to improve Scoring capabilities by
developing a Customer Risk Indicator (a measurement
that determines the cash flow stability of our clients)
– $180mm in PCL savings and/or revenue growth over 5 years –
9 months experience to date with results tracking better than
planned
$1.5mm invested in intelligent Systems for early
detection of potential bankrupts
– $5.5mm savings - $7mm reduction in PCL less $1.5mm in
maintenance costs and reduction in interest spread on lower
volumes – 4 months experience to date with results tracking
as planned
3
Scored and non-scored portfolios
New MIS/reporting capabilities
– Facilitates detailed analysis across all portfolios to better
manage PCL
Optimizing risk/reward
– Allows for detailed Risk/Reward data leading to improved
risk based pricing grids
4
5
6
7
8
TRANSIT X IN ATLANTIC
9
Consumer lending products ROE
Year
Personal Loans
2000
3.80%
2001
12.91%
2002
13.56%
2003*
17.36%
* Q3/03 actual (annualized)
10
Operational risk
Risk Control Self-Assessment
Training – Financial Analysis Certification
Project Management Office
12
New performance management goals for
risk managers include joint sales calls
with Account Managers and opportunity
spotting
Active participation in various client
experience initiatives, working together
to streamline processes and resolve
client irritants
13