BNN - Monday, May 27, 2024 - 03:00 p.m. (ET) - Segment #6

reflecting these problems. We worry that there may be more risk and downside than a lot of investors appreciated. And so we decided to redeploy the capital like more than so right now, I would say consensus is talking about 2 billion dollars in fine. Maybe the chance. >> That they can't grow and do another deal. And I've had come on and say they're well capitalized bank, so they can handle the fine. And if they're penalized and they can't grow in the U.S. still use all that excess capital, just buy back their own stock. >> Yeah, and that the 2 billion, you know, it sounds like a scary number. Really thought we would. And so just for the the the issue that we've got the other issue. So you've got 3 regulatory bodies in the U.S. about one in canada and they're all essentially competing to do a good job as compliance officers to help solve this problem. So they're going through and you know, setting up camp with td going through tax and going through emails looking to find you know, where the deficiencies or in the money laundering. The fear is you got this army of regulators going to tax and emails. What else to verify. Find there's a problem somewhere else o do they find maybe there's not a problem, you know, in canada you have money laundering issue, but they did have deficiencies in their, in their controls. Do they find other deficiencies and then how much of a distraction is tv and and so you know, we agree with what the analysts have been saying that we also look at it just from management side and how much of the destruction that is and that's a rather fear with td. And we've seen banks go through this and it's, it's difficult when you're in the regulators crosshairs. >> Management change solve any of this. >> Probably probably does. Yeah. It probably helped and I think, you know, it will depend again, how serious these issues turn out to be. There are some signs that. There is some, some some risk here. But a lot of times what we've seen in the past and we saw with wells fargo, we saw originally with bank of america, we've seen that before, where there is a major issue. Often it requires a management change for the regulators to feel confident that the issues really being taken serious and the management about sort of trying protect its past track record. >> Wells fargo, I that would seem to me like such a broad issue that they were facing right, that upselling of accounts and people not really being aware does seem so pervasive to the culture. And you know, I listen to the td conference call and they were as clear as they could be saying, this is just a U.S. issue. We know where we fail. We don't think that this is a broader beyond just a U.S. issue. But it sounds like kevin subscribing to cockroach theory where there's one there's many. >> A little bit better and you know, I I guess the warren buffett line, has always been good at that. >> If you, if you, no matter how well you to a traffic cop falling down the highway for 2000 kilometres, probably going to find something you did wrong. And so we're a little bit concerned on point. You know, I think td is ultimately a recently well-run back. >> It's, it's just we've seen before when you've got all these regulators, you know, looking for going to find, they're going to find something, it's their job to find something. And then the risk is that uncover more people hope for and that's what we've seen before. Even the wells fargo issue. You know, it was outselling to start with that, you know, they found more and more issues and they went through a number of ceos there before, I think they finally got place for now, they're difficult issues to go through. >> Let's put this elephant behind the curtain for a moment just look at the operational results at td. You know, they fared well and the number of categories did you did you take comfort while you didn't take comfort in that because he sold the stock. But what do what are you taking from that that you think might apply to your bank holdings are? Yeah, the trigger ready to sell all of them at >> No, we're we're pretty comfortable with the other ones. And I think, you know, >> This issue has been crept into near-term results, which we weren't expecting it to. >> I think that there's a lot of positives there. The that the risk on the lending, the provisions were fine. The investment banking has been a great asset management's been great. So they a pretty strong quarter, which we're I think it's a good read through to the other banks. All the banks are well capitalized, including tv. So that, you know, as you mentioned, that all of opportunities to buy back shares dividends are fine. So we feel pretty good about the rest of the canadian backs. Again, not really about short-term results, more about that long-term risk

>> Before I let you go, one of the the more controversial lately has been killed and of course, tomorrow is the agm and it looks like it will be the triumphant return of glen. She mondi, how are you about that? I imagine, you know, the pressure must be really high now that it's spot to come back to the company. What are you gonna do? >> Well, and so I think this is the first time that talked about go down weather hasn't been huge controversy. So it's kind of nice. It's a bit of a relief, I think for for for we have spoken with him and I think is probably pretty reinvigorated right now. Very excited to come you know, go down, was already a good company doing well. Well, they obviously had dismiss alignment with the with the board. I think we've got past I know there's the they put out a plan. Browning put out the plan, but it was with endorsement from from glenn everyone's on the same page. The management, the ceo or the shareholders. I think they're excited and energetic. I think they've got something to prove. I think it's a great plan. And so we're still sticking around with go down and we think there's lots of upside from here. >> Evan, thank you so much for joining us with all of your appreciated that 7 mansour president and c I o of cardinal capital management. And speaking of guild. And we're going to find out just how reinvigorated glenn she monday is. I've got to exclusive broadcast interview with him. Hours after his agm, which is tomorrow at 10:00am eastern time. The live interview with clan will broadcast tomorrow at 3:30pm eastern time. So don't miss that. You won't want to miss what's coming up either. Paul soubry, the president and ceo of bus manufacturer nfi stick with us. Mulvihills Canadian Bank Enhanced Yield etf gives investors premium exposure to Canada's big six banks with monthly distributions and a 9.3% yield. Cbnk is the highest yielding Canadian Bank etf. Mulvihill. (vo) Explore the world the Viking way from the quiet comfort of elegant small ships with no children and no casinos. We actually have reinvented ocean voyages, designing all-inclusive experiences for the thinking person. Viking - voted World's Best by both Travel + Leisure and Condé Nast Traveler. Learn more at Viking.com. When anyone in this house wears white, it doesn't stay white for long. White? To art class? That's risky. Art has no rules, mom. Huh. White with coffee? A dangerous endeavor. Mom: White? To soccer? I'm not gonna slide tackle. He's gonna slide tackle. Mom: But now with Tide Oxi White, we can clean our white clothes without using bleach. It even works on colors. I slide tackled. Mom: I see that. Keep your whites white even without bleach with Tide Oxi White. We got this. ( ) This is not just another E-Class. Because it evolves with you. It adapts to you, the generic It is the first E-Class made just for you. For you, for you ( ) This is not just design. Because your E-Class: it adapts to you, recognizes you, understands you, empowers you, energizes you, feels you. It evolves with you. The new E-Class. ( ) Looking to maximize your monthly income? Our yield maximizer your ETFs, combine your favorite sectors with a high yielding, income first strategy to help you meet your goals. More income every month from Hamilton ETFs. >> Winnipeg based nfi group is a bus manufacturer with a focus on their ev models, aiming to have 40% of their vehicle deliveries in 2025 to be electric. Now the last 5 years have had a lot of ups and downs over the last year. The stock is at 65%. But as we zoom out, you can see that there's been a lot of trials and tribulations. A lot of this started during the pandemic where they were caught in a pretty extreme supply chain crunch. But the company is promising better days ahead, saying that sales can be 4 billion dollars by the end of next year. That would be double what it was a couple of years ago. I spoke with paul soubry, president and ceo of nfi group about what it's a like what it's like to emerge from that tumultuous period. >> We managed our way from covid, but as we come out covid the global supply chain

challenges really kicked in and most of them were largely systemic issues like the availability of microprocessors are than those kind of things. Absolutely hammered our around the world. All of our product lines, the inability to get certain components to complete a created such a tremendous amount of pressure and balance. She loves working process and of course, a massive refi. At the end of 2022 really has set us up now for recovery of one now not only record market demand, but absolutely incredible backlog that we have here for coming across that this is and I assume that informs your target of getting to 4 billion in sales by the end. >> And next year, how confident are you that everything is working right now and then that you can hit that target. >> Well, a couple things amber, to think about, first of all, most of our business, two-thirds, almost 80% of it is based public pressure months in those public procurement are multi years in the making and most of them are flea renewal strategy is going from either diesel or natural gas for hybrids to some form of zero emission vehicle. So the backlog now has 14,700 units just for contacts last year, a company deliveed in total more than 1000 units of target of five-thousand. The sure are slaughter effectively sold out for this year. A good portion next year on summer business lines were already booking. Now the 2026. So we don't have demand problem. We have strong government funding and we have recvering commercial operators. Wilson, north america, where the private, is a river in the u.k.. Issue to us has been the pace of recovery is governed by 2, 6, availability of skilled labour. You are building very sophisticated zero emission vehicles in their bill, largely by hand because they're most our customer manufactured for customers and the same issues that pays, which are supply chain keep up with our recovery. Could be nothing worse in our recovery. Has record order to start really in a pace that we just can't deliver to wish. Says our customers increase found she challenges for ourselves. So we governing the recovery, not based on demand based on availability people, which has gotten considerably better. And the supply chain, which is cutting materially better as I think that's important for investors to understand, as you know, the last 3 years that the company has given the forecast, especially on the top line in each year, has undershot that. >> And you identified some of those issues like labour, like supply chain are you saying are increasingly confident that that those kind of issues are not going to crop up. >> Well, it always a risk of certain issues. The supply things that really killed us in 21 22 in part, 23 were global supply dynamics. The inability to get microprocessors, for example, there's probably 70 80 parts on the bus that have michael processes in them. And so our ability now to think through the supply chain to actually work with our suppliers on their supply chains has notably improve the supply reform. And so we too, are factored. We still have some suppliers that are challenged. We've dramatically beefed up. Our supplier inventor development teams. We have people inside or archie vendors, facilities during the pandemic. And as we came over supply chain, we had somewhere in the neighbourhood out, you're so high and critical suppliers, we're down to 2 or 3 now and we're, we're always managing and we're doing you know how to customize environment, never say never, but boy, we are materially more coffin, our ability to execute to the forecast just context. Amber. In 2019, we did about 6,000 deliveries in 2022 that dropped the trot and 3,000 deliveries. We 4,000 last year. We're turning 5,000 approximately this year, about 6,000 next year. So we're not talking about getting off the charts. Volumes to our were talking about getting back volumes we had pre-covid been a difference. We've it really reduction in our competitors. We have significantly better margins built into our backlog. And we have very, very firmly we're going to build to manage the engineering and the bills schedules to much confident than I did in the last 4 years. For example, one where we're going to go. If there a risk, some analysts will point to as a result of the challenges that you had to deal with. >> And you know, if there is a misstep, you know, for example, with one of the suppliers, I don't know what happens. But to your point, things happen. Do you have additional levers to paul financially to make sure that you know, that you have enough liquidity to get to where you're trying to go. >> A really good question and you're no question he's been on the minds of our, you know, our and was not investors for a couple years. A couple of major we refinanced a business that brought new and additional debt, but also issued equity. So that right-size the balance sheet from the get-go when it was completed. The second issue,

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