National Bank: harmoniously balancing the aspirations of clients, employees, fellow citizens and shareholders

Montreal, 8 March 2006 - 

During the Annual Meeting of Shareholders held today, Réal Raymond, President and Chief Executive Officer of National Bank, tied the Bank’s success to the balance it has achieved between shareholder return, its diversified service offering, its qualified and engaged personnel and its commitment to the community.

Shareholders are reaping the benefits of this success. The Bank posted a total return of 25.1% in 2005 “a return far exceeding that obtained by the five other major Canadian banks in the past five years,” he added.

For Mr. Raymond, steady growth in client satisfaction and the engagement and professionalism of the Bank’s employees are other indicators of success. The proportion of “very satisfied” clients has gone up 27% since 2001 among individual clients and 31% among small and medium-sized businesses. In addition, the overall employee satisfaction rate has also increased steadily. These results explain, among other things, National Bank’s inclusion on the prestigious list of the 50 Best Employers in Canada. 

Another positive sign is the Bank’s community involvement as reflected in its participation in and its employees’ commitment to most major fund-raising campaigns.  Donations, sponsorships and other charitable giving totaled $18 million in 2005.

A matter of balance
According to Mr. Raymond, National Bank’s success is due to its ability to maintain a balance in developing its activities, with each of its three business lines making a significant contribution to growth in revenue and net income between 2000 and 2005.

“The Bank’s greatest success has, first and foremost, been its ability to develop business in a disciplined manner using an approach based on secular market trends, not on the flavour of the month,” Mr. Raymond continued. Growth must be sustained by dynamic growth areas such as wealth management, the ability to deliver a broader range of financial products and services to individuals, SMEs and corporations, and the ever-expanding role of capital markets, an area in which National Bank Financial plays an important part.

A promising future
For the future, National Bank is focusing on several high-potential growth areas. One such area is its partnership strategy which is generating revenues at a rate three times faster than costs and for which volumes are expanding rapidly. In addition, the consumer credit market, particularly mortgage credit, is providing a favourable environment for the development of new products.

Our sizable wealth management business, which has increased by about 10%, is also a high-growth area where the Bank occupies a position of strength, particularly in Quebec. Its loan insurance, life and health insurance, and property and casualty insurance activities are another success story, and the Bank is keen to continue its deployment of this business in order to further benefit from economies of scale.

Mr. Raymond reminded shareholders that “the regulatory framework imposes serious limits on our insurance strategy and our ability to participate in ongoing consolidation within the insurance industry. That our clients cannot obtain information on insurance products in Bank branches and are unable to benefit from an integrated product offering that includes insurance is entirely anachronistic and unjustified.”

In summing up, Mr. Raymond stated that “by being attentive to its clients and the markets and drawing on the skill, discipline, creativity and team spirit of its personnel, National Bank has developed a strategy that has enabled it to rapidly grow its business and make the highest profitability gains in the industry.” According to Mr. Raymond, this growth and profitability will continue in spite of a potentially less hospitable environment. 

About National Bank
National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management, as well as mutual fund and retirement plan management. National Bank has more than $105 billion in assets and, together with its subsidiaries, employs 16,993 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA: TSX). For more information, visit the Bank’s website at www.nbc.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives):

Denis Dubé
Director – Public Relations
National Bank of Canada
Tel.: (514) 394-8644