Adam Borgatti - VP, IR Brian Porter - President and CEO Sean McGuckin - CFO Daniel Moore - CRO James O’Sullivan - Canadian Banking Nacho Deschamps - International Banking Dieter Jentsch - Global Banking and Markets

Robert Sedran - CIBC Capital Markets Mario Mendonca - TD Securities Ebrahim Poonawala - Bank of America Merrill Lynch Gabriel Dechaine - National Bank Financial Doug Young - Desjardins Capital Markets Meny Grauman - Cormark Securities Sohrab Movahedi - BMO Capital Markets Nick Stogdill - Credit Suisse Scott Chan - Canaccord Genuity Mike Rizvanovic - Macquarie Capital Markets Steve Theriault - Eight Capital Sohrab Movahedi - BMO Capital Markets

Good morning and welcome to Scotiabank’s 2018 First Quarter Results Presentation. My name is Adam Borgatti, Vice President of Investor Relations. Presenting to you this morning is Brian Porter, Scotiabank’s President and Chief Executive Officer; Sean McGuckin, our Chief Financial Officer; and Daniel Moore, our Chief Risk Officer. Following our comments, we will be glad to take your questions. Following our comments, we’ll be glad to take your questions. Also in the room with us to take questions are Scotiabank’s business line group heads, James O’Sullivan from Canadian Banking and Nacho Deschamps from International Banking and Dieter Jentsch from Global Banking and Markets. Before we start and on behalf of those speaking today, I will refer you to Slide 2 of our presentation, which contains Scotiabank’s caution regarding forward-looking statements. With that, I will now turn the call over to Brian Porter.

Thank you, Adam and good morning everyone. I’ll start on slide 4; we are very pleased with the bank’s strong start to 2018. Scotia Bank delivered 2.3 billion in earnings and diluted earnings per share of $1.86 for the quarter, up 18% compared to last year. Our return on equity was strong at 16.2% and within our medium term objectives. We are increasing our dividend to shareholders by $0.03 to $0.82 per share. This represents an 8% increase over the prior year. Turning to our business clients, I’d like to make some comments. Canadian Banking had another strong quarter with earnings in excess of $1 billion. The division’s performance continues to be supported by growing primary customers, investments in digital banking capabilities to improve the customers experience and reducing structural cost. Taken together the Canadian bank produced very strong operating leverage. International Banking delivered another quarter of strong earnings, driven by double-digit loan growth in the Pacific Alliance, positive operating leverage and solid credit quality. Overall, our personal and commercial banking businesses are generating roughly 80% of Scotia Bank’s earnings with strong earnings growth and improving return on equity. Global Bank end markets also had a solid performance in Q1, with good results across our global equities, foreign exchange and fixed income businesses in the quarter. At the enterprise level, our structural cost initiatives are progressing well, one year ahead of schedule, and the bank generated adjusted operating leverage of 2.9% this quarter. The bank remains very well capitalized with a strong common equity tier 1 ratio of 11.2% or 11.75% on a pro forma basis. The bank’s strong financial position provides us with optionality to invest in our businesses organically, growth through acquisitions or return capital to our shareholders. On January 31, we reached an agreement to acquire the consumer and small and medium enterprise operations of Citibank in Colombia. The acquisition positions Banco Colpatria as the leading credit card issuer in Colombia, and increases our commercial banking presence. Along with the previously announced BBVA Chile transactions, these actions are fully aligned with our Pacific Alliance strategy and will create value for our shareholders. The quarter’s strong performance reflects the ongoing execution of our strategy and building on our momentum to sustainably grow earnings and dividends for our shareholders. Subsequent to quarter end, we announced our plan to acquire Jarislowsky Fraser Limited, a leading independent Canadian investment management firm. The firm has approximately 40 billion in assets under management for institutional and ultra-high network individuals. Jarislowsky Fraser has been widely recognized for its disciplined research process and high caliber team with a proven track record, and we are excited to join forces. The transaction significantly enhances our institutional investment capabilities and creates the third largest active asset manager in Canada with a 166 billion in assets under management. Through this acquisition we are following through on our strategic commitment to diversify our global wealth management business and build our platform across Canada and Pacific Alliance. Before I turn the call over to Sean, I wanted to make a few comments on our All Bank Investor Day which we held earlier in this month. At our investor day, we highlighted some of the transformational work we’ve done over the past several years to build a much strong and more competitive bank. Our heavy lifting was focused on five key areas that will turn the dial for the bank, achieving alignment across the bank both strategically and operationally, reshaping our leadership teams and developing a much more performance rated culture, being a digital leader by setting aspirational goals and getting the fundamentals right, transforming our cost structure which is critical to realizing our untapped potential, and strengthening our balance sheet including an improved funding and liquidity profile. Many of these efforts were front-end loaded and the benefits are now starting to materialize. Looking forward, we have three key areas of focus, building a superior experience for our customers and increasing our share of primary customers; harnessing our untapped potential including organic growth, leveraging our partnerships and making better use of our scale and geographic footprint; and strengthening the core of the bank by developing deeper capabilities and enhancing controls. These focused areas are all underpinned by our digital strategy which is the connected tissue across the bank. Finally, we raised our medium term EPS growth objective to 7% plus, reflecting the quality of the opportunities we see in front of us and our increased confidence in ceasing them. I will now turn the call over to Sean to discuss our financial performance and will return with some closing remarks.

Thanks Brian. I will begin on slide 8, which shows our key financial performance metrics for Q1 2018. The bank reported diluted earnings per share of $1.86 of 18% year-over-year. Included in our results is an employee benefit re-measurement credit resulting in 150 million of net income or $0.12 of diluted EPS. Our core retail and commercial banking businesses reported double-digit earnings growth and global banking and markets delivered a strong recovery versus last quarter, up 16%. Revenue growth was up 3% from Q1 of last year or almost 6% adjusting to the impact of foreign currency translation and the impact of the sale of HollisWealth last year. Net interest income was up 8%, with strong growth in retail and commercial lending in Canada and internationally, as well as higher deposits. The core banking margin was up 6 basis points compared to last year. On an adjusted basis, non-interest revenues grew at a more modest pace and good fee and commission and insurance growth was partly offset by lower trading revenues and lower real estate and securities gains. Expenses were down 5% on reported basis, primarily due to the aforementioned benefits re-measurement credit. Adjusting further for the impact of foreign currency translation, the impact of the sale of HollisWealth last year expenses were up 3%. Higher investments in technology, digital banking, employee-related costs and professional fees were partly offset by continued cost reduction initiatives. The bank delivered strong positive operating leverage this quarter, further improving the bank’s productivity ratio. The credit of our portfolios remain stable, but the provision for credit loss or PCL ratio on impaired loans are 43 basis points versus 45 basis points last year. There was a modest net reversal provisions on performing loans of 20 million from improved credit quality and when combined with provisions on impaired loans resulting in a key sale ratio of 42 basis points. On slide 9, we provide the evolution of our common equity tier 1 capital ratio over the last quarter. The bank continues to maintain a strong capital position for the common equity tier 1 ratio of 11.25%. Internal capital generation contributed to roughly 30 basis points of capital improvement partly offset by strong organic business growth. This quarter was also negatively impacted by the full transitional impacts of IFRS 9 of 14 basis points and an additional 10 basis points to the Basel I floor. However, a new Basel II is effective in the second quarter, increasing our common equity tier one ratio by 50 basis points or to 11.75% on a pro forma basis. The CET-1 risk-weighted assets increased roughly 2% quarter-over-quarter or $6 billion. Moving to slide 10 on IFRS 9, our current quarter of fiscal Q1 ’18 is based on IFRS 9, all prior period will not be stated that were based on IAS 39. The transition net reduction to equity was 610 million, and as I mentioned earlier the common equity tier one capital impact was negative 14 basis points. The Q1 total provision for credit losses included a net reversal of 20 million on performing loans also known as Stage I and Stage II due mainly to credit quality improvements in the Canadian Banking and Global Banking markets portfolios, primarily in commercial and corporate provisions. We saw minimal changes to our growth impaired loans, as a result of IFRS 9. And as part of transition to IFRS 9, certain allowances previously attributed to impaired retail loans are now attributed to performing retail loans. Turning to the business line results beginning on slide 11, Canadian banking produced a strong quarter with net income of 1.1 billion, up 12% year-over-year. The results reflect strong asset growth, margin expansion, improved credit performance and positive operating leverage. Total revenues were up 4% from last year, driven by net interest income growth of 7% partly offset by the impact of the HollisWealth sale last year. Loans and acceptance increased 7% from last year. Residential mortgage growth was up 6% and business loans are up a strong 14%. Provision for credit losses on impaired loans improved 3 basis points year-over-year and was stable quarter-over-quarter. Expenses were well controlled and decreased 2% year-over-year. Higher investments in technology, digital and regulatory initiatives were more than offset by continued progress on our cost reduction initiatives and the impact of the HollisWealth sale last year. Canadian Banking delivered strong positive operating leverage, driving an improvement in the productivity ratio to 48.6%. Turning to the next slide on international banking, earnings of 667 million in Q1 were up 16% year-over-year or 18% adjusting to the impact of foreign currency translation. Our comments that follow on international banking are on a constant currency basis. Q1 results reflected strong asset and deposit growth, positive operating leverage and lower taxes. Revenues grew 7% with net interest income up 8% including a 12% increase in Latin America. Loans grew by 11% compared to a year ago, led by the Latin America region growing by 16%. The net interest margin of 4.66% was down 7 basis points year-over-year, mainly driven by changes in business mix. The margin was stable with the previous quarter. The loan loss ratio on impaired loans was up 4 basis points year-over-year. Excluding acquisition related benefits last year, the underlined loan loss ratio on impaired loans improved versus both last year and the previous quarter. Expenses were up 3% as higher business volume growth, completion costs and increased technology and digital investments were partly offset by cost reduction initiatives. Operating leverage was strong a positive 4%, leading to an improvement in the productivity ratio. Moving to slide 13, Global Banking and Markets; net income of 454 million was down 3% compared to last year, primarily due to the impact of foreign currency translation. Higher contributions from corporate banking, global equities and investment banking were offset by lower global fixed income. On a quarter-over-quarter basis, net income increased 16%, as markets were more constructive. All bank trading revenues on a tax equivalent basis nearly doubled Q4 ’17 levels, but were down 17% year-over-year. Revenues were down 2% year-over-year reflecting lower global fixed income and precious metals trading revenues. However, net interest income was up 13% mainly from higher loan fees as well as higher deposit volumes and lending margins. The PCL ratio on impaired loans reflected a net reversal of 1 basis point, improvement of 5 basis points quarter-over-quarter and year-over-year. Expense growth was up 2% year-over-year driven by higher regulatory and technology cost probably offset by lower performance related and share based compensation and the positive impact of foreign currency translation. I’ll now turn to the other segment on slide 14 which incorporates results of good treasury, smaller operating units and certain corporate adjustments. The results include the net impact of assets and liability management activities. The other segment reported a net income of 56 million this quarter. Earnings in this segment included the employee benefits re-measurement credit I referred to earlier. Partly offsetting were lower gains on investment securities and higher expenses. This completes my review of our financial results; I’ll now turn it over to Daniel, who will discuss risk management.

Thank you, Sean. I’ll turn now to slide 15; we continue to remain comfortable with the fundamentals of the bank’s risk portfolios. Our PCL ratio on impaired loans or what is referred to as stage 3 in IFRS 9 terminology was 43 basis points increasing 1 basis points from last quarter, but improving by 2 basis points in the same quarter last year. On IFRS 9 basis, our all bank PCL ratio is 42 basis points and reflects a 20 million net reversal on performing loans that Sean spoke to earlier. Overall, we are seeing improvements in the PCL ratios across our personal and commercial banking businesses in Canada and internationally. Specifically in Canada delinquency rates improved from prior periods across all of our retail product categories. Our residential mortgage portfolio is of high quality and lower risk, 48% is insured and the uninsured portfolio has an average loan to value ratio of 53%, providing a substantial equity buffer. New originations this quarter continues to reflect an average loan to value of 64%, consistent with prior levels. These results are based on strong underwriting in credit margin practices we have in place and we maintain consistent mortgage adjudication standards across all of our origination channels. Moving on to International Banking; we continue to see good credit quality trends. Retail performance was generally stable to improving across Mexico, Peru, and Colombia. In the Caribbean and Central America region and Chile, the results are impacted by the benefits from acquisition adjustments which are no longer recognized. We continue to monitor the impacts of customer assistance programs in areas impacted by natural events and growth in unsecured lending across our international footprint. However, our portfolio is stable, but we (inaudible) appetite. In Global Banking markets, we exchanged reversals in both performing and impaired loans largely related to improved credit quality in the energy sector. Now looking at our credit metrics, gross impaired loans were generally stable at roughly 5 billion. Turning to slide 17, you can see the recent trend in loss ratio in each of our businesses. There again I drive your attention to PCLs on impaired loans or stage III for purposes of comparability to IAS 39 and as we move to more robust measures going forward. Canadian Banking’s credit losses are consistent with prior quarters. International Banking’s current losses improved 9 basis points over last quarter from 134 basis points to 125 basis points, excluding prior acquisition benefits under IAS 39. Overall, we believe our credit portfolios continue to reflect through our diversification and notwithstanding the expected impact around the adoption of IFRS 9 standards as Sean discussed. Our underlying performance remains strong. Turning to slide 18, you can see the recent trend net write-off rates for each of our businesses. As discussed during our recent All Bank Investor Day, we believe it is important to distinguish between accounting and economic performance, and we believe our net write-off experience is indicative of that economic performance. Looking over the last five quarters, our net write-off ratio has been normally stable and we would expect that trend to continue. I’ll now turn the call back over to Brian.

Thank you Daniel, I’d like to highlight some of the key takeaways from our presentation and comments on the outlook for Scotia Bank. We delivered strong results to start the year, continuing the momentum we built over the last year. In Canada, we continue to target revenue growth through increasing the number of primary customers and investing in digital capabilities while maintaining a sharp focus on improving productivity. For the International Bank, we continue to see a great potential across the Pacific Alliance countries, as we densify our presence in key markets and leverage our footprint to improve connectivity. More specifically, we are seeing strong global growth that we anticipate will be a tailwind for our International businesses. A strong US economy always benefits US trading partners, and an increase in US output typically leads to significant increases in GDP growth in lot of town, as we see in the current forecast for our key markets. NAFTA negotiations continue and we remain hopeful that parties can reach on modernized agreement. However, as we have said before we are confident in our footprint and particularly in the resilience of the Mexican market. To give some context, the private sector in Mexico grew approximately 3% last year and given the country’s extensive network of free trade agreements, Mexico is well positioned to adjust to any NAFTA outcome. In Global Banking and markets, we are expanding our investment banking capabilities to continue to improve results. We continue to transform the bank digitally and we are making further investments to redesign and streamline processes to make us more efficient, enhance the customer experience and support our growth efforts to grow primary customers. Our capital position remains strong allowing us to make strategic investments to grow our businesses and support higher returns of capital to shareholders as evidenced by our increase in the dividend. We have many areas of untapped potential and we are very optimistic about the banks future. I will now turn the call back to Sean for the Q&A.

Thanks Brian. That concludes our prepared remarks. We’ll now be pleased to take your questions. Please limit yourself to one question and then we join the queue to allow everyone the opportunity to participate in the call. Operator, can we have the first question on the phone please.

[Operator Instructions] our first question comes from Robert Sedran of CIBC Capital Markets. Please go ahead.

I actually just wanted to ask about the shares you intended to repurchase out for Jarislowsky deal close. Is there any reason why you’re or maybe you’re not planning to wait until that deal actually closes, and to do that – and I guess where I’m coming from Brian is that it feels like after Colombia, Chile and Jarislowsky you’re likely to land somewhere around 11% CET1. And I’m just curious if we’re still seeing a little bit creep higher in terms of the operating level towards that 11% level rather than something lower in the mid-10s.

It’s Sean, and I’ll take that one Rob. So after the acquisitions which will take place in a couple of quarters, you’re right after some capital accretion over the next couple of quarters, we expect to be in and around 11%. In terms of the buying back of the shares related to the Jarislowsky Fraser transaction, we will look to start that in due course. We will try to be opportunistic in terms of finding the right price level to buy that back. But as we’ve said before, being around 11% or towards the higher end of our peer group is as possibility optionality. You may find us for acquisition purposes dipping a bit below 11%, but I think we’re comfortable kind of targeting in and around 11% and being towards the higher end of our peers.

We’ll now take our next quarter from Mario Mendonca of TD Securities. Please go ahead.

Sean and maybe Daniel, the concerns about the Canadian housing market have resurfaced with a bit of a vengeance recently and we’re hearing it from a lot of different quarters. One theme or talking point in particular is the potential for more than just a modest amount of mortgage fraud in the country. Did you speak to what the bank does to both prevent and monitor and detect mortgage fraud and what your experience has been so far in terms of or what have you actually seen, what have your tests and all the work you’ve done, what does it uncover about mortgage fraud for Scotia.

I’ll ask James O’Sullivan to answer that question. James O’Sullivan: So Mario a few thoughts; first, as you well know we have of course three distribution channels and we have the exact same adjudication standards across those three channels with the same independent oversight led by Daniel Moore’s risk team. And I do think that quality of the portfolio overall is probably less reflected in the delinquency ratio. And to be specific there that delinquency ratio reached a record low in Q1 of 57 basis points. It was down quite remarkably year-over-year. And I’d say Mario, if we think about B20 and progress we’ve made as a bank and as an industry, we’ve made a lot of enhancements over the past few years to our underwriting policies, whether it’s risk or thresholds, whether its income verification. There’s been an awful lot of progress made in just tightening the whole thing up. And the other thing I’d point out is within our broker channel and in our direct sales force channel. We have specific claw-backs for credit and fraud issues. And so if we look at fraud, we have not seen an increase in fraud, in fact it has been quite stable for some time as Daniel may want to add to that.

I’ll just back stop what you said James, we apply the same process to our mortgages claims from all channels, and we continue to adjudicate how our credit policy is in line with the risk appetite. We’ve monitored the delinquency rate very closely as an early warning indicator and whether that’s 30 days or 90 day delinquency we’ve actually seen it on a positive and improving trend over the last number of quarters. So we’ve very comfortable with our portfolio Mario.

Now we all know that you can have very low delinquencies and fraud at the same time, I mean those two can happen simultaneously. So in the work you’ve done so far in reviewing it, can you talk about any – is there anything you can offer in terms of the propensity for fraud in your mortgage book and any differences you’ve seen between broker distributed mortgages and what I’m referring to as the intensity for the level of fraud in the mortgages originated by Scotia Proper and by the broker channels.

Mario, for as long as I’ve been in this chair, there has been no distinguishable trends amongst or across those three channels. And we have as you’d expect a significant fraud management unit, and again as long as I’ve been in this chair mortgage fraud has not been a topic. We do have frauds, we have them every quarter, but mortgages has not surfaced as a product where we have seen meaningful amount of fraud whatsoever.

We will now take our next question from Ebrahim Poonawala from Bank of America Merrill Lynch. Please go ahead

I was wondering if you can just talk about the outlook for the margin, if you’ve seen a marginal Canadian PNC flat line for the last few quarters. Would love to get sort of your outlook there in an attempt to what you expect the BOC to do this year. And also in terms of the international banking margin, do you expect that to continue to trend lower or what you’re expectations are? James O’Sullivan: Hi this is James, I’ll start with the Canadian Banking margin; so margin this quarter at 241, it continues to improve up 2 basis points year-over-year. It’s challenging to forecast as you know there are many moving pieces. The direction clearly is up to be more specific over the balance of this year assuming there’s no further rate increases, we’d expect to see further increase in the Canadian Banking margin up to 5 basis points. Roughly each 25 basis points increase in the Bank of Canada rate is worth roughly 60 million to 70 million to Canadian Banking kind of pre-tax. After tax and after some basic risk its worth than that obviously. But I’ve just a bit of a sense of the sensitivity of the Canadian Banking and the outlook as the year progresses.

This is Nacho. In terms of International Banking on a quarter-over-quarter basis our need was stable. And although there are many components as James says and more, but given the international franchise, really the main driver that is leading to some variations, the mix of commercial and retail growth, and year-over-year commercial has grown faster than retail that is the main component. More importantly we see our underlying risk adjusted margins stable, and we expect our risk adjusted margin to remain stable in the medium term.

Got it. And just to follow-up James in terms of – you think about sort of each rate hike, what are your expectations in terms of the longer term rates and how impactful are those going to be to sort of the 65 million to 70 million that you mentioned. James O’Sullivan: I’ll take that one. So obviously there’s fund transfer pricing between the center, so as long term interest rates go higher they will over time get higher value of capital ascribed to that division. So they will benefit from the near-term rate increases and overtime the longer term rate increases.

Our next question comes from Gabriel Dechaine from National Bank Financial. Please go ahead

I just want to go to slide 17 there and the impact of IFRS 9 and the [cost] for the quarter. And in the International business I see you released funds in your commercial portfolio and then added to the resale portfolio. Can you talk a bit about what’s changed in your outlook for these portfolios?

I can speak to that, its Daniel Moore. In the International Banking side we had an increase in our retail portfolio in stage 1 and 2 due to strong asset growth which is supported by good risk adjusted margin. On the commercial side, we’ve released and stage (inaudible) had to do with improved credit quality which was consistent with the release we had a clean backing and the [GBM] which is overall driven by credit quality.

So the retail change in the book growth I guess of that particular portfolio that makes you a bit more as higher expect the losses on it or what?

No, there’s a number factors that go in to these stage 1, 2 calculation and it has gotten more complicated than in previous standard, those three primary factors will be outright stock change of the portfolio that be volume growth, credit quality changes and economic indicator changes. And here we’re really seeing volume growth with the (inaudible) portfolio.

And then just another one to sneak in there. You Canadian margin flat for the past year or so and now we’re focusing on risk adjusted margin which is great. But I just want to get a sense, but why – it looks to be coming mostly from loan spread compression despite double-digit commercial loan growth, despite your current and personal balances still throwing at a pretty healthy rate. So why are we seeing that level of spread – or where is it coming from?

This is Sean, and what I would say is quarter-over-quarter we’ve seen expansion in deposit margin as you mentioned, primarily because of the recent Bank of Canada hikes. We have seen some asset compression, the spreads on mortgages was a bit tighter in Q1 as the longer term funding rates were moving up faster than the pricing of the assets. Over the next couple of quarters we’d like to see that reverse somewhat. So again as James mentioned, we would expect our margin in Canadian Banking over the coming year to go upwards of 5 basis points towards the end of the year.

Did you do an interact gain?

We did have a gain on that this quarter, yes.

Of 30 million?

It was around that level, but it’s important to note that the lower real estate gains recording Canadian Banking this quarter year-over-year was offset by that interact gains. So the underlying performance of Canadian Banking at 12% is the true underlying performance.

We’ll take our next question from Mr. Doug Young from Desjardins Capital Markets. Please go ahead.

I guess this question is probably for Nacho, but Pan America earnings were up 20% year-over-year, just hoping you can flush that out a little bit in terms of what you’re seeing in some of the divisions, and specifically Colombia, I know you’ve done the recent acquisition of Citi or during the recent acquisition of Citi’s business. But I know Colombia has been an area that’s been a bit more challenged. Just wanted to see if you’re seeing a bit of reversal there as well?

I’m very pleased with the quarter, (inaudible) crossed the lines and we have a strong performance in International Banking, particularly in the Pacific Alliance countries, the double-digit growth, strong deposit growth, revenues growing at 11%, and structural cost also under control and improving with a very strong operating leverage. I would say as you saw the performance of Mexico is very strong, the performance of Chile is very strong and Peru too, even considering the softer economy this year. In the case of Colombia, Colombia is coming out of a difficult economic cycle of commodities and high inflation. But we are seeing better trends; most of the financial system in Colombia has been affected by higher PCLs. What we are encouraged to see is that the underlying performance of Colombia is growing around 15% and we expect Colombia to have better results in 2018 compared to 2017.

And was there anything unusual or any benefits that came through in the quarter and any of those. I think Mexico had a bit of a tax gain, I don’t know if you’ve quantified that. But is there anything unusual that flowed through in the quarter?

We’ve had a very positive development in the quarter across the footprint. But even if you consider our performance, the Pacific Alliance earnings before taxes growing 17%. We had a very strong quarter in capital markets and corporate revenue in Chile, very strong wealth business particularly in Mexico due to repatriation program. So it was a solid quarter across the lines.

Your next question comes from Meny Grauman of Cormark Securities. Please go ahead.

We know that there was a pickup in trading volatility towards the end of the quarter, but when we applied [36] it just caught my eye, the spike up in trading revenue towards the end of the quarter and then immediately coming down and kind of trending down. So wondering if you could comment on that is there anything that’s notable that’s going on there specifically and just the outlook for trading so far in the second quarter.

It’s Dieter Jentsch. First two months of the quarter were relatively soft in terms of the volatility that we saw in the prior quarter. And it really picked up in January, and we saw the Bank of Canada increase its rate and so we saw lots of trading activity take place. As a matter of fact probably two-thirds of the trading revenue pickup was in the month of January. And then the equity markets began a little bit volatility near the end of the quarter and into February and you saw it calm down a little bit. But overseeing now is that the overall markets are more constructive and once we see more calmer way of equity markets, we see the market’s actually being quite constructive to ongoing trading revenues.

And just related questions just on Mocatta there was some news late last year about potential sale and some rumors about a buyer. Wondering if there was any update there on that, have you changed your view of that business at all?

Well we recently included a statutory review of this business and I’m pleased to confirm that most of our key services and our key markets and our key clients will be continuing. But that said, we’ll be exiting some markets, we will be simplifying our product suite and we’ll be much more judicious about our allocation of capital and liquidity.

Your next question comes from Sohrab Movahedi of BMO Capital Markets. Please go ahead.

Just a quick question for Daniel, when you look at under IFRS 9, but combine stages 1, 2 and 3. I guess if you have any thoughts on the outlook for the combined PCL and the level of volatility that you may expect to see out of the stage 1, 2, let’s say over the next 4 to 6 quarters.

Sure. Thank you Sohrab. I would say that with respect to Q1 obviously we had immediate volatility particularly stage 1, 2 volatility this quarter which was consistent with both the strong economic performance that we had in the quarter as well as improved credit quality that we had overall in our book, and that credit quality has been driven by our continued focus on originating A, B customers and increasing collections and analytical capabilities across retail and upgrading the portfolio across our corporate book. [unrewind] first nine, it’s certainly going to be the case that PCL movements are going to be more sensitive to economic cycles and more volatile going forward, especially that stage 1, 2. We will continue to draw your attention to the stage 3, the provision on tiered loans as we can see as a more robust measure going forward. But as an overall comment I feel that we will continue being as we’ve always been prudent on our reserves and appropriately conservative in our methodologies.

Daniel if I can just follow-up, I mean I would have thought with your geographic footprint and your business exposure to multitude of economic cycles in different jurisdiction, the volatility at least on a relative to the pure basis should be more moderate. Is that a fair supposition of my point?

Well I think it will be driven by a number of factors. So we do think that from an overall perspective and this is a comment away from IFRS 9 sort of that the strength and diversity of our platform is, the diversity of our platform is that we have strength to our overall business model. It’s something that we are very passionate about and of course of our strategy. The go-forward stage 1, 2 volatility will be driven by a variety factors; those include economic factors and growth and performance of the portfolio. But it would be our expectation that in the long run that diversity would be a strength both vis-à-vis IFRS 9 that evolves generally.

So you’re not going to manage the way your run the business any differently if you see undue volatility in that? Is that what you’re saying?

That is correct. We will continue our focus on robust measures and on the sets of credit metrics in this (inaudible) that we always had.

Your next question comes from Nick Stogdill of Credit Suisse. Please go ahead.

First just a quick follow-up on the 20 million benefit on the stage 1 and 2 loans under IFRS 9, is improvement Colombia driving any of that benefit and can Colombia get better from here, meaning we could see more improvement in stage 1 and 2 in 2018 on the Colombian market?

So overall we are very pleased with the performance of our Colombian portfolio, as you know we tend to lot of attention and energy to upgrade our technology, our people and our strategies throughout the course of the year. And that’s paying dividends, not to mention we had a turnaround in delinquencies, 13 basis points improvement quarter-over-quarter and [advantages] 71 basis points quarter-over-quarter and has been declining over the past several quarters. So from a go-forward perspective, I think I agree with Nacho that we would have a cautious outlook, given that we have Presidential elections and we have seasonality effects coming up, I am not sure, but we would – the effect that we would have a cautiously stable outlook vis-à-vis in Colombia going forward.

I’ll just add, if you’re looking at the Colombia performance on slide 34, the improvement is primarily stage 3 and not so much stage 1 or 2. But we are seeing improvement in the credit quality.

So if Colombia, the economic environment improves this year we could see maybe better performance in stage 1 and 2 in that market, I guess?

Other’s being equal that would be correct.

My second question just quickly for James on business banking in Canada. Your loan growth continues to accelerate which I know is a specific focus for the business. Can you just give us a sense on what regions and industries are driving the acceleration in business growth? James O’Sullivan: Sure, happy to. So on commercial it was the strong quarter and a very strong start to the year. We got momentum in this business. So I’ve said before if you think about it geographically, we’ve had a big push at Western [DC] in particular. If you think about it spectrally, agriculture is a sector that we wanted to be more significant participant in and we’re doing that. But again more broadly, we’re driving all the growth with the growth in customers working capital needs, there’s investments in plant and equipment, there’s commercial real estate development and the portfolio and there is business succession is a part of the business as well. So I think it’s fairly well diversified, but if I had to pick a region it would be [DC] and if I had to pick a sector Ag is something that we’re focused on. So 13% growth year-over-year in assets, 12% year-over-year in deposits, that business is doing very well.

Your next question is from Scott Chan of Canaccord Genuity. Please go ahead

If I look at the Jarislowsky transaction, 40 billion of assets, 77% institutional, 23% of high net worth. What client segment that (inaudible) you more to the transaction of JF or is it both.

Well it’s both for sure Scott. I mean this really extends our reach in to two customer segments where we believe we’re under penetrated institutional and ultra-high network. So as Brian has said, we really think that we can build a platform here or use this as a platform and overtime we’ll build a multi-asset class investment firm and it will disciplined investment process and our goal would be to carry that right across our footprint.

And is the potential overtime to put JF products on the retail side in Canada or internationally?

There is, but we’re going to be thoughtful about it. It’s an iconic brand, we want to think about how best to leverage that brand and we’re going to want to work with our new partners in making those decisions thoughtfully and carefully.

Your next question comes from Mike Rizvanovic of Macquarie Capital Markets. Please go ahead.

May be just a quick one for Nacho, just wanted to go back to International business and specifically the Pacific Alliance, just looking at your slide 28 and clearly your results have been very strong in light of decelerating GDP growth, and I think the common theory in the past has been around anything in the 2% to 3% GDP growth range would be conducive to strong growth in your banking businesses in that region. I’m just wondering very high level, but what would have to happen to the GDP growth before that resilience would in your view get tested, how low would it have to go before you start to have maybe some concerns that growth would not be as robust as its been lately.

I think the factor that I have faced very positively is our outlook for International Banking is the low level of credit and banking penetration across the Pacific Alliance countries. So we see always a factor. We see in general in the past decade there’s been a factor of two or three times growth of banking and lending in the Pacific Alliance countries and that has been very consistent in average. So the good news is that we are showing right now an improvement as you mentioned for the outlook in GDP growth for the four Pacific Alliance countries in 2018. So I would say it’s quite resilient because of this bonus of low credit and banking penetration.

And then to the upside, if you do get much better GDP growth, is it fair to say that the correlation is not necessarily that high. You just mentioned the three times GDP growth. So if you do see Chile get back to that 3% to 4% range, is it fair to say that maybe the upside is not quite as significant.

It’s still a factor. So the more GDP growth of course that has connectivity across the economy, I would say that what we are seeing in the case of Chile, for example, is a lot of strengthening of business confidence. So we would expect our corporate and commercial business to be quite dynamic in the coming years in Chile. But I would say it is a factor that affects positively our performance.

Your next question comes from Steve Theriault of Eight Capital. Please go ahead.

Just a quick one from me, Sean the gains on investment securities so long as we’ve seen in a number of years going back at least the last three or four, can we get some color on that, in particular I’m wondering if 2017 featured any go-forward gains that we’ve seen at, at least one of your peers that could account for lower run rate this year or anything IFRS 9 related. How should we think about that and then going forward if there is any implications?

Yeah, I think we’ve seen all of that in the past days that we expect some credit gains at lower run rate double than they have in the past. One of the main reasons is IFRS 9. Under IFRS 9, we have an equity and investment portfolio. If you want to realized gains to go to P&L, and you also have to take the unrealized gains to P&L. So we’re being very cautious on the volatility to our earnings. So we would expect lower equity gains going forward, but we will still have periodic debt security gains as we manage our treasury portfolios. But overall we would expect we running closer to these levels than what we’ve seen in the past.

Your next question comes from Sohrab Movahedi of BMO Capital Markets.

Sean just wanted reconfirm the savings expected to come through from the restructuring initiatives that were started a couple of years ago. Do you still expect to outperform the 550 million or so in 2018 that you had originally talked about?

Most definitely we had signaled 200 million additional savings in 2018, and we expect to track ahead of that. We’ve a standard program beyond the original target of 2016. So we’re having much broader base. And we’re still only 60% to 70% of our expense base. We still think this program will continue on for the next couple of years and then some. So yeah, definitely we would expect our savings this year to be higher than the 200 million that we’ve signaled as our plan for 2018.

Thank you.

Alright, I believe that’s the last call. Again thank you for joining us on the call. We look forward to talking to you again in May with our Q2 results. Thank you.