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National Bank says Quebec must restore trust

Quebec’s new Liberal government must immediately restore a “climate of trust” to reverse two years of lagging confidence that has hurt the province’s economic growth, National Bank’s CEO said Thursday.

Quebec’s new Liberal government must immediately restore a “climate of trust” to reverse two years of lagging confidence that has hurt the province’s economic growth, National Bank’s CEO said Thursday.

“Just restoring a better climate for investment could increase growth by 0.5 per cent on a yearly basis and you don’t have to cut taxes or spending,” Louis Vachon said in Calgary after the bank’s annual meeting.

It was the 154-year old bank’s first annual meeting held in Western Canada and the second to be held outside of Quebec.

Vachon said investor confidence in Quebec has taken a beating since 2012 from the investigation into the construction industry, student strikes, the debate on mining royalties and the charter of values.

He told shareholders that National Bank’s shares trade at a discount to its Canadian peers, in part, because of the perception that the province is “condemned to grow slower than the rest of the country.”

“I think it should be a priority for any Quebec government to prove the consensus wrong and show we can grow at least at the Canadian average and I think that is feasible,” he said in response to a shareholder’s question.

Vachon said real efforts have been made by the last two governments to address the province’s deficit and he encouraged the Canadian business community to look favourably at investing in Quebec and partnering with Quebec’s largest bank.

The shareholder meeting in Calgary was designed to raise National Bank’s profile in a part of the country where it has been growing, particularly in the energy sector.

However, Vachon laughed off suggestions that he was on a charm offensive, calling the shareholder meeting and an event with about 200 customers “business development.”

“Charm and bankers — you want to put that into the same sentence?” he said.

National Bank (TSX:NA) launched its western operations in St. Boniface, Man., about a century ago mainly to serve that community’s francophone community. It expanded to Alberta about 30 years ago and grew with the acquisition of the Mercantile Bank in 1986.

It now employs more than 300 people in Alberta and 800 in Western Canada and has more than $8 billion of financing with some 800 business clients in Alberta, about half in the energy sector.

Meanwhile, Vachon said he’s “cautiously optimistic” about the Canadian, U.S., and global economies this year, adding that the weaker loonie should accelerate growth to the benefit of Ontario and Quebec.

And while high Canadian consumer debt remains a concern, he says the bank isn’t part of the “doom and gloom crowd.”

Shareholders elected two new board members — Alimentation Couche-Tard co-founder Richard Fortin and former astronaut Julie Payette.

Women now account for one-third of the bank’s directors.

Although Payette has no banking experience, Vachon said she brings experience as an astronaut in technology and project management, noting the bank has invested significantly in IT and major projects.

“We felt she was a very good addition and on top of that she’s been trained to be cool in tough situations. That makes her a pretty damned good board member if you ask me.”

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