National Bank of Canada (NA) Barclays 23rd Annual Global Financial Services Conference summary

Business strategy and market position

• Fully integrated with parent bank since 2006, focusing on acquiring and financing financial assets in the U.S. across diverse asset classes, mainly mortgage and consumer-related products.

• Operates exclusively as a B2B business, building relationships with asset originators, funds, banks, and brokers, with no direct consumer origination.

• Prefers organic growth through partnerships rather than acquisitions, maintaining a lean and flexible approach.

• Continuously evolves asset mix to respond to market opportunities, with a high bar for entering new asset classes.

• Seeks to maintain a consistent risk framework, targeting strong ROEs and risk-adjusted returns.

Asset portfolio and performance

• Largest segment is structured mortgage credit investments, targeting high credit quality consumers and low LTV mortgages.

• Insurance-related segment focuses on consumer-facing products with credit exposure to high-quality insurers, providing diversification and low correlation with other portfolio drivers.

• Asset mix has evolved significantly over the past decade, reflecting responsiveness to market value opportunities.

• No current credit concerns, with a focus on high-quality assets and upper-end consumers.

• Portfolio growth target is 5%-10% per year, adjusted based on market conditions and risk-adjusted returns.

Competitive environment and opportunities

• Faces competition from asset managers, insurance company tie-ups, and fintechs, but leverages execution, flexibility, and liquidity to find niche opportunities.

• Partnerships with fintech originators and funds create additional opportunities, especially where larger competitors are less focused.

• Increased competition can also generate client opportunities, such as providing leverage to funds with liquidity needs.

• Growth constraints are primarily driven by risk framework and market opportunity, not capital availability.