Great-West Lifeco (GWO) Scotiabank’s 27th Annual Financials Summit summary

Returns and capital-light growth

• ROE rose from 17.5% at end-2024 to 18.2% at end-2025 and 19.3% in Q2; the 19% medium-term target remains unchanged for now, partly preserving flexibility for M&A targeting 15% returns.

• Capital-light businesses generate about two-thirds of earnings and are expected to exceed 70% over the planning period, supporting further ROE expansion.

AI and operating efficiency

• AI is expected to improve customer service and revenue growth, lower the efficiency ratio, and modernize back-office operations; the transformation is a multi-year journey, with a “minutes and seconds” operating model taking a couple of years.

• Current EPS growth target is 8%-10%, which is being exceeded; a deeper discussion next year may cover investment size, opportunity and timelines for AI benefits.

Empower retirement and wealth

• Retirement operating margin was 34.7% in Q2 versus just over 30% for FY2025; a full-year pullback is expected from expense timing and brand investment, while north of 35% is a reasonable longer-term destination.

• Scale, AI-driven lower cost per participant and new products are expected to support continued retirement margin improvement; pricing pressure has eased somewhat in recent years.

• U.S. wealth assets exceed US$100B and Q2 margin was 40%; some FY pullback is expected, with full-year 40% anticipated soon and further expansion thereafter.

• Wealth rollover rate returned to ~15% after net inflows of CAD1.8B in Q1-Q2; management expects recovery over coming quarters, with a longer-term path to the mid-to-high 20s versus 40%+ for established leaders.

• Retail brokerage and executive financial planning are planned areas for wealth-platform investment; development may be in-house or through acquisitions.