Scotiabank's investor relations officer details a busy week
Monday, August 24
Arrive at the office around 7.30 am, a little earlier than usual. Tomorrow we announce our third quarter earnings.
The Street is a little nervous about what Canadian bank stocks are doing at the moment. One of our competitors, Canadian Imperial Bank of Commerce, had to pre-release the news of very disappointing earnings a couple of weeks ago - reporting a large shortfall in their capital markets operations. Earnings at two of our other major competitors have come in a bit below Street expectations because of weaker capital markets.
And we have an additional issue to deal with. The markets are increasingly worried about Latin America and Asia - and we have above-average exposure to both these regions, being Canada's most international bank.
This morning, when I read the newspaper, it looks as if they had used the wrong earnings estimates for Scotiabank: the numbers are considerably higher than those shown by our own surveys of the analysts opinions.
So the top priority on my to-do list this morning is to look into this discrepancy. The first phone call is to the firm that compiles the earnings estimates. I have them fax over their raw data. My staff and I go over it and notice that one analyst is almost 20 percent higher than the figure she gave us. We contact her, and she confirms that the newspaper figure is incorrect. We make another call to the outside firm, and alert them to the problem. Later, we confirm that '67' cents EPS was mistakenly entered as a more optimistic '76'.
Bottom line: we are assured that when our results are published, we will be benchmarked against the correct earnings estimates.
Before leaving the office, I make some last minute changes to our presentation for the analysts' meeting tomorrow. Our graphics guru unfortunately left us a couple of weeks ago for a new opportunity too good to resist. However, she is kind enough to come in and help us fine-tune the product. I make a note that I owe her a nice lunch.
Something else different this quarter: we have two new presenters, and I spend a little more time with the CEO, CFO and other executives on the briefings.
I leave the office feeling comfortable I have everything nailed down.
Tuesday, August 25
We publish today. Although we recently moved to business casual attire, I note as my colleagues walk in today that they are all wearing suits. They are obviously keyed up for an important day.
Around 10 am the results of one of our competitors, Bank of Montreal, come out - strong and above Street estimates. I go over their results very quickly to see if there are any unusual items. I'll be doing the normal in-depth review next week when the figures are in for all the banks.
At 11.12 am I get the call from our chief accountant - the board has approved the financials, and he has confirmation from our PR department that they are now public. We can't be too careful here. I need to know the numbers are out before answering calls.
As soon as I put the phone down, I get a call from an analyst looking for a quick reaction to the results she's just seen on the wire. She always tries to be the first out of the starting gates with a fast note to clients. She's very appreciative that I am at my desk when she calls. This is followed by more calls from analysts and investors.
At 2.15 pm we start the conference call. The boardroom is full, and we have a record number on the phone, many from the US. The formal part of the presentation goes well.
Then the questions begin. Many of them relate to Latin America and Asia. We've anticipated most of these - our executives are well briefed - and this part of the meeting also goes smoothly.
Next, the issue of mergers is raised. From a public policy standpoint, we are opposed to two proposed mega-mergers (Royal Bank with Bank of Montreal and Toronto-Dominion Bank with CIBC) which would drop the 'big five' banks to three. This stance runs counter to the opinions of many of the people in the room and on the phone. Our president takes some pointed questions. He answers candidly, and while they may not like everything he has to say, they understand our position better.
In the scrum afterwards, the tone seems fairly good, and I hope that carries forward into positive write-ups tomorrow.
Before I go home, I check the stock price for the final time today - we are up 40 cents. The other bank reporting today, Bank of Montreal, is down a snick. I go home feeling buoyed by the news.
Wednesday, August 26
>I get in early to see what the analysts and the financial press have to say about our results. The commentary is generally quite positive. However, one of our analyst supporters drops her rating a notch. I'm not totally surprised, but I had hoped she would stick with her previous recommendation.
I have the analysts' reports copied and send them around the executive floor. I attach a note highlighting that as a group, the analysts are becoming less bullish about next year's earnings, for us and for the industry as a whole.
In the morning, I sign the authorization to move our analyst presentation from the staging site to our public web site. This is our first quarter with everything on the web. I eagerly check after lunch to confirm that the material is there. I can't find it. I call the web master who says our message must have disappeared among a 200-page fax they had this morning. Can we please fax him again? We do so and later, before I go home, I check the site again. This time, happily, it's in place.
In the afternoon, I see wire stories coming through about some US banks taking large trading hits on Russian bonds. The market is down a little but seems to be holding up.
Thursday, August 27
I start getting back into my day-to-day routine. I spend some time arranging upcoming meetings with key investors. I'm also fielding some follow-up calls from analysts and investors on the results.
The day seems to be going reasonably well. I start to get calls from people who are very worried about Russia, asking about our exposure there. But we do not have a concern - our exposure is virtually nil. As the day proceeds, the calls start to come in about exposure to Latin America. People are concerned about contagion. We have a short meeting to decide on data it would be most useful to give out, and start to put together an information sheet.
The market is down sharply, and bank stocks, including our own, take a bit of a beating.
By late afternoon, my plans to see my son's soccer game are up in the air. Eventually things quieten down enough for me to leave. I rush for the 5.43 pm train, and then manage to catch the second half the game. Unfortunately, they lose.
Friday, August 28
Mid-morning, a report crosses my desk from the leading Canadian bank analyst. He's cut his earnings estimates for the industry next year by ten percent - and his target prices even more. He's worried about the effect of weaker capital markets on future earnings. I call my CFO and immediately circulate this report.
In between, I squeeze in a little time to review the financial statements I have to present at an upcoming meeting of the Canadian Investor Relations Institute. Last year I was president of the Ontario chapter. This year, I'm treasurer for Ciri nationally.
I meet a lot of fellow investor relations people through Ciri. I've been involved with the organization for about four years now, and must say that it's been extremely worthwhile. For somebody like me, from a banking and finance background, it's been a very good broadening experience.
I check the market before going home. It's only down a bit.
I leave the office around 5 pm - early for a change. I head home to my second job: chauffeur/banker to my four kids. Ready for another fun weekend.