Good morning and welcome to Scotiabank’s 2014 Fourth Quarter Results Presentation. I am Peter Slan with Scotiabank Investor Relations. Presenting to you this morning is Brian Porter, President and Chief Executive Officer; Sean McGuckin, Chief Financial Officer; and Stephen Hart, Chief Risk Officer. Following our comments, we will then be glad to take your questions. Also in the room with us today to address your questions are Scotiabank’s Business Line Group Heads. Anatol von Hahn, from Canadian Banking; Dieter Jentsch from International Banking; and Mike Durland from Global Banking and Markets. We are also joined by James O’Sullivan, Executive Vice President, Global Wealth Management. Before we begin, I would like to refer you to Slide number 2 of our presentation which contains Scotiabank’s caution regarding forward-looking statements. I will now turn the call over to Brian Porter.

Thank you, Peter and good morning. Turning to Slide 4. We had good results across our businesses in fiscal 2014. Scotiabank earned net income of $7.3 billion for the year or $7 billion excluding notable items. On an adjusted basis, the bank reported diluted EPS of $5.43 per share representing growth of 8% for 2013. Our performance in 2014 reflects good results from our portfolio of diversified businesses. Return on equity was 16.1% or 15.5% excluding notable items. Our topline adjusted revenue growth of 9% year-over-year reflects good asset growth, improved net margins and strong growth in non-interest revenue. Our capital levels are strong with a common equity Tier 1 ratio of 10.8%. From this position of strength we have repurchased a total of 4.5 million common shares during the year under our buyback program. Our strong earnings growth helped to generate significant capital allowing us to increase our quarterly dividend twice this year for a total increase of 7%. We are pleased with our results and remain confident we have the right strategies in place. Turning to Slide 5. Adjusting for notable items, our 2014 results were within the ranges of our medium-term financial objectives. In the appendix on Slide 22 we outline our notable items and include a reconciliation to our pre-announcement on November 4. Our adjusted earnings per share grew by 8% within our target range of 5% to 10%. Our return on equity, adjusted for notable items, remained strong at 15.5% within the target range of 15% to 18%. Our continued focus on efficiency resulted in positive operating leverage of 2% on an adjusted basis. As I mentioned earlier, our capital position continues to be strong with an all-in Basel III common equity Tier 1 ratio of 10.8%. Our medium-term financial objectives remain unchanged. We do…

Thanks, Brian and good morning. Slide 7 shows our diluted earnings per share of $5.43 which has been adjusted for notable items which includes the gain in Q3. In Q4, on an after-tax basis, we had restructuring charges of $110 million. The revaluation of unremitted dividends from our investment in Venezuela of $47 million, accelerated loan write-offs related to unsecured Canadian bankrupt retail customers of $46 million, a funding valuation adjustment of $22 million and legal provisions of $40 million. In total, the after-tax notable items impact was $265 million or $0.22 per share. Adjusting for notable items, we achieved solid underlying EPS growth of 8% for the year. Slide 8 shows our key financial performance metrics for the quarter. Excluding notable items which includes the gain last quarter of $555 million, this quarter's notable items of $265 million and last year's $90 million of notable items. Diluted earnings-per-share were $1.32, up 2% year-over-year on good results across our businesses which was dampened by the additional loan losses this quarter. Excluding notable items, underlying revenue growth continues to be strong at 8% year-over-year with higher net interest income from both asset growth and improved net interest margins. Stronger non-interest revenues including higher underwriting, banking fees and securities gains along with the positive impact of foreign exchange also contributed to the increase. Excluding notable items, expense growth was up 6% year-over-year. However, adjusting for the impact of foreign currency translation, underlying expense growth was well contained at 4%. This increase was due mainly to higher volume related expenses, higher pension and benefit costs and investment in growth initiatives. Expense discipline continues to be a major focus. Our productivity ratio in Q4 improved by 110 basis points from last year to 53.3%. For fiscal 2014, the bank delivered positive operating leverage of…

Thanks, Sean and good morning. The underlying credit quality of our portfolio has remained strong. Quarter over quarter the overall loan-loss ratio was up 16 basis points to 53 basis points. However, adjusting for the previously advised notable items, the ratio remained flat quarter over quarter at 37. The Canadian banking underlying loss rates were largely unchanged with slightly higher retail losses reflecting growth in the higher margin credit cards and the auto loans. International banking's underlying loss rates were up 5 basis points quarter over quarter reflecting higher retail loan losses in Mexico and the Caribbean and also the previously announced higher commerce loan losses in the Caribbean. Global banking and markets credit quality was strong with a loss rate of zero. We remain comfortable with our exposure to the oil and gas sector which has been a recent area of market interest. Our loan portfolio which includes upstream, midstream, downstream as well as the service sector, has been stable over the last several quarters, is less than 3% of our total loan portfolio and it remains of high quality. We run stress tests often and update our market pricing assumptions regularly. At present, the effective oil price assumption used in our borrowing base calculations is below the current market values. Our business model in the energy sector has proven itself to be very stable throughout the economic cycles. When oil prices were in the $40 range back in 2009, our loan losses were zero. Finally, we expect that lower oil prices will be a net positive to many other sectors of our overall loan book as the other industries and consumers stand to benefit from the lower cost. Net new formations of impaired loans in Q4 increased $816 million largely due to one commercial account in Puerto Rico. Our average 1-day all-bank VaR was $23.8 million, up from $21.5 million in the prior quarter with seven trading loss days in the quarter. During this quarter the markets were significantly volatile which resulted in a higher number of trading loss days. We are still confident that market risk remains well controlled in the bank. Slide 17 shows the trend in loss rates over the past five quarters for each of our businesses and indicates that on an adjusted basis our loss performance is consistent with the prior quarters and well within our risk appetite. And with that, I will now turn the call back to Brian.

Thanks, Stephen. I would like to comment briefly on each business line's performance this past year and summarize our 2015 outlook for each business and then I will comment on the all bank outlook for the year ahead. Canadian banking had a solid year overall with higher margins, double-digit growth in credit card and automotive lending volumes and strong growth in fees and commission revenues. We are confident with our focus on partnerships. Including the recent closing of the Canadian Tire Financial Services transaction and the ongoing success of our American Express offering. For 2015 strong volume growth is expected in higher margin credit cards, commercial and auto loans. We expect to see further expansion in the net interest income and wealth management and other fee income, offset by higher PCLs reflecting this modest adjustment in our asset mix. Importantly, we see the overall margin growing faster than the loan-loss ratio and we continue to grow our business on a risk-adjusted basis in a manner that is prudent and designed to serve our customers better. And we expect these achievements despite some competitive pressures in auto, the commercial lending business and deposits. International banking had a more challenging year in 2014. Despite strong asset growth in our retail and commercial businesses in Latin America and Asia, there were a number of offsets. In particular, we witnessed a combination of interest rate cuts and higher regulatory costs in Latin America which reduced our earnings by over $100 million. We also had higher provisions for credit losses due to the write-offs we took in Puerto Rico and the Caribbean hospitality portfolio as well as the run-off of the Colpatria credit Mark. Finally, we faced some challenges with two of our associated companies in Venezuela and Thailand. In total, these headwinds reduced international…

Thanks, Brian. That concludes our prepared remarks. We will now be pleased to take your questions. As in the past, please limit yourself to one question then rejoin the queue to allow everyone the opportunity to participate. Operator, can we have the first question on the phone?

(Operator Instructions) Our first question is from Sohrab Movahedi of BMO Capital Markets. Please go ahead.

Brian, I wanted to get a feel for the capital plan. Big common equity Tier 1 ratio number. You have some of it committed for the same pursuit. But where do buybacks fit in and have they shifted anywhere within the priority list as far as capital deployment is concerned?

Sohrab as you know, we closed on Canadian Tire in the past quarter. We expect Cencosud to close either later in Q1 or at the beginning of Q2. There is other things that we are looking at that are on strategy within our footprint and as I have said before in terms of buybacks, keep those in the toolkit and govern ourselves accordingly.

So the 2.5 million shares in Q4, I shouldn't read too much into that? Maybe you're allocating more of the excess capital towards buybacks next year?

I wouldn’t read anything into that. As you know we have got a buyback to buy 12 million shares. As it happens, we bought 2.5 million back in the quarter and, you know, more formulaic than anything else.

Your next question comes from Brian Klock of Keefe, Bruyette & Woods. Please go ahead.

My question is for Stephen. Stephen, on page 17 of the sub-pack, the oil and gas exposure to $12.8 billion. Can you give us the idea of, I guess, the mix of what is E&P borrowing base versus servicing and midstream? And then maybe even the geography mix of that portfolio as well?

Sure, Brian. Of that 12.8 about 6.8 is what we call the E&P side of the business. So the upstream portion. Of that 6.8, about 45% is reserve based. So we have our engineers review the underlying reserves. We have a price deck that’s based on a borrowing base which as I indicated is currently well below the current rates. The rest of that E&P portfolio is investment grade, high investment grade and is based more on a covenant pattern that you would in the rest of the industries. The rest of that portfolio, there is about $2 billion that’s sitting in what we call the energy services side. So that’s quite frankly the area that we are watching more carefully. Having said that, these are companies that, quite frankly, are quite large. The Schlumbergers, the Halliburtons. The ones that deal with cradle to grave well servicing. So they are fairly large, substantial across a number of different basins. Midstream area which is the pipes area, which is quite frankly relatively independent on price, is about $1.5 billion. And then the downstream section which is more the refinery and the gas stations which will actually benefit from oil prices dropping, is about another $2.5 billion.

Great. Thank you. And I guess from that, how much is in Canada versus U.S. or in any other sort of international?

It's probably 40% Canada, 50% the U.S. and the rest in Latin America.

Our next question comes from Steve Theriault of Bank of America. Please go ahead.

Quick question for Mike Durland on the FVA charge. I wanted to ask if you were reserving for the FVA leading up to Q4 and if so, for how long? I ask because it seems like the size of this charge that we've seen from all the banks this quarter is somewhat dependent in part on who was already taking reserves and who wasn't.

No, this is a reserve so we had not reserved to it prior. And one thing I will say, I know there has been a lot of back and forth on the size of it, just to let everybody know. Our methodology is based on a netted approach. There is no clip off, so we are not clipping off tail ends of it. And I think it reflects the size of our derivative business which in the context of our revenue is a relatively small business.

So was there some discretion on -- it sounds like there was some discretion on how to apply it at the end of the day?

No.

Okay. And this is, I gather this will be built into your, I guess, pricing going forward. We're not going to -- the FVA charge is not something that's going to resurface from time to time, or may it?

No. It will be built into the pricing.

Yes.

So the way to think about it from a quarter-to-quarter perspective, new transactions will be priced based on the FVA. That will not affect the revenues, so it will be done on a net revenue basis. Changes in interest rates and currency will change the funding obligations, expected funding obligations of the swap book. So they will have some effect on the FVA and the funding cost to the bank will have some effect on it. But it will be a relatively stable item going forward.

Your next question comes from Gabriel Dechaine of Canaccord Genuity. Please go ahead.

Brian, I just want to go back to your outlook for the business segments and the total bank. And I'm not asking for specific numbers, but if you want to maybe run through them and then tie into your 5% to 10% EPS growth target. Where could you think each one is positioned, whether it's the low end of the range or the high end of the range? Just a directional commentary would help.

I think that directionally, the Canadian bank, you are going to see a growth rate similar to what you have seen in the past year. For the international bank, as I said, I think the first two quarters are going to be similar to what you have seen in the last two or three quarters and then we expect some pick up in Q3 and Q4. And that’s a function of some structural reforms the governments are making there, increased infrastructure projects. I think every country we are in, every major country, Mexico, Peru, Chile, Colombia have all announced significant infrastructure projects. I would also point out that in each of those jurisdictions, we are making significant profitable market share gains against our competitors across all our products. So we see it sort of a division of two years in international. First half will be more the same and the second half we view as improving. And then in GBM we would say, we are expecting a pretty good year in GBM. We expect better loan volumes out of our corporate banking business. Mocatta, we see some pretty good growth, particularly in Asia. And the fixed income business is one that’s, as you have seen from ourselves and our competitors, it's been a tough business for a few years. But we would expect that at some juncture during the course of the year, you get more volatility and more activity in the business.

Okay. And then just on the capital deployment issue, you cited it as a bit of a challenge too. I go back 10 years and I think Scotia averaged about five acquisitions a year. So you've historically been very acquisitive and is that outlook still reliable, I guess, for the next couple of years. Maybe the pace slows down but you're still seeing a lot of opportunities out there for deployment?

Gabriel, it's that, as I said when I was named President of the Bank, that I felt that we had been very acquisitive as a bank. We had done something like 20 different transactions in the international business and it was time for us to make sure we executed well and integrated these acquisitions properly. I believe that we are well on track to do that. I don’t think we have missed anything out there that we had any interest in, candidly. There's still opportunities out there for us and we are looking at them and if they are on strategy, we will continue to be disciplined and opportunistic.

Your next question comes from Peter Routledge of National Bank Financial. Please go ahead.

I'd like to maybe ask Brian or Dieter to go a little bit more into your rationale and your optimism really around the second half in Latin America. And then maybe remind us of some of the market reforms there that you're counting on.

Sure. I gave you the macro view, so I will let Dieter expand upon it.

Good morning, Peter. We continue to see good loan momentum in both of those four markets. Both in Mexico, Chile and Peru and Colombia on the retail side as well as the commercial side and that will continue on. The challenge we have always seen is, where the asset growth falls to the bottom line and that’s a function of the headwinds that Brian articulated in his comments. But when you are looking at what the governments are doing, they all have a very strong fiscal and macroeconomic policy. The governments are very focused on moving their monetary policy around to promote growth. You saw the tax rate reductions in Peru, for example. So the governments are really proactive, very mindful of staying in front of keeping the economies moving. And when you move over to a country like Mexico which continues to be, by any definition, very optimistic from my point of view medium to longer term. The country has the fundamentals and the trade links together with the U.S. and other parts of the world to generate continued good growth. And while you may have some medium and short-term setbacks or slowdown, the fundamentals are pointed to continued growth. And that gives us a lot of optimism. Our footprint is well positioned to take advantage of that. Our coverage models are ready to go on all the countries. We have been optimizing our branch network and our sales teams take advantage of some of the opportunities and benefits to the medium to longer-term.

One thing in looking at that business is the price of copper, which as you know is down. And I'm not going to ask you to predict the price of copper, but if commodity prices stay depressed and for whatever reason you just don't get that pickup in the second quarter, what will you do then?

What we are still seeing though is that the demand for copper itself continues to stay reasonably strong and so the export market is vibrant. The prices are down but you are going to see the mines coming on place in Peru and continue production in Chile where the cost of production relative to the world standards remains very low. And so you are going to see what the mines have said and what the people, our people in the ground in Peru have said, is these mines are coming on production. So there is going to be more volume produced, recognizing ultimately if the price of copper drops dramatically, you are going to see some impact but you are going to see the mines producing more and the economies will slow down, but not dramatically to a point everyone perhaps thinks they are going to do. At the same time what are seeing is, the governments have amassed a considerable surplus in all over their budgets and they are prepared to invest in other parts of their economy to start them moving. So it's not as copper dependent as we once, always thought about, and we continue to expect that a lot of the internal consumption to drive some of the economies in these countries.

I know cost reduction in Latin American subsidiaries is sort of a slower process, it's not an easy thing to do. Can you move more quickly if you had to?

Peter, you saw an example of us announcing the restructuring charge to move fast forward the realignment of our branch footprint in Latin America. We closed 55 branches in the last year and we have plans to optimize another 123. That’s an example where we are going to fast forward right-sizing and optimizing our footprint after numerous acquisitions as Brian mentioned earlier. That will allow us to move forward some of our expense synergies and make ourselves a better bank in each of the countries.

Your next question comes from Robert Sedran of CIBC. Please go ahead.

I think I'd actually just like to stay on that theme for a second if I can. Brian, the back half recovery, I guess, you guys are on the ground and so your opinion of what the economy is going to do in the second half probably carries more weight than most. My question is, how much of the optimism is based on Scotia specific factors? In other words, the things that Dieter was talking about. And how much of it is dependent on some of those macro reforms actually having an impact? In other words, if the economy in the second half looks like the economy in the first half, does Scotia in the second half look like Scotia in the first half?

Yes, it's a good question. You know I think that -- and Dieter and I spend a lot of time in the region. We have got good relationships with the finance ministries and central banks in the region. And I would point out that there is two different Latin Americas out there. And the four countries we happen to be in are extremely well managed from a fiscal perspective and a financial perspective. They have got firepower. Debt to GDP as well -- debt to GDP in Peru for example, is 16%. It's negligible to zero in Chile. So these governments have the firepower and they have announced significant infrastructure projects. Now to your point, it gets down to execution. They have to get some of these done. So we are comfortable with the macroeconomic fundamentals. That’s point one. And point two is, keep in mind these are P&C businesses. And probably a bit of a moderation or slowdown we see in the last year is healthy in terms of overall consumer credit growth. But we like how our businesses are positioned from a competitive basis. And as Dieter said, we can -- Dieter and his team have done a very good job addressing a lot of our structural costs and our redundancies. And so we feel comfortable how we are positioned.

And you talk about some of the fire power that the central banks have. I mean as they've been using it, it seems like the margin has been a little bit more resilient to interest rate cuts than we saw perhaps a year ago. Are you comfortable that if more fire power is used, that the margin can hang in there on the international side?

I don’t -- you know it's always difficult forecasting margins so I will start with that premise, because there is so many different pieces to it. But look, I can't see further rate cuts coming. I don’t want to go too far on a limb but Colombia has increased rates this year. Their economy is growing at 4% plus clip. So it depends where you are. But I think we have probably bottomed out in terms of the rate cycle.

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

Just wanted to ask about recently proposed corporate tax hikes in Colombia and whether you think that will be a significant headwind for you?

They are going to have an impact on our earnings going forward but we will manage through that as we continue to see our operations continue to gain some momentum in the latter part of 2015. And the good news is that we have a portfolio of banks positioned in the countries we are going to do business in. And where we have a headwind in one country we will make up for it in another country.

And then just a follow-up, staying in the region. You recently announced a loan sale to Santander in Mexico and I'm just wondering sort of a little bit more of the background, the rationale behind deciding to sell to them?

No. To put the loan sale in context, the amount of the loans is less than 1% of our asset based in our operation in Mexico. So it's not material from that respect. And what we have done there is repositioned our portfolios versus our core competencies, allowing us to focus on our core businesses in which we have our strengths and we are ready to move on in all the regulatory reforms that have been announced in Mexico. And our branches and businesses are well positioned to take advantage of those.

Our next question comes from Stefan Nedialkov of Citigroup. Please go ahead.

I have got two questions. Number one, on assets under management. Those were largely flat Q on Q, while most of the your competitors showed at least small increases. Was just wondering whether it's FX related or outflows related? Anything fundamental going on or is it really more on the technical side of things? And number two, for your Latin American business, wanted to get some color on what regulatory costs are the ones that you incurred? Some more specifics on that. And also outlook for volumes by country going forward. Thank you.

Okay. The first question, I will ask James O’Sullivan to answer on the AUM. James O’Sullivan: Yes. So AUM was, as you observed, flat Q over Q. Year-over-year it was up 13%. AUA was also up 13% year-over-year. So on the sequential numbers, flat AUM. I would say that was two things. One was obviously the volatility and the market correction we experienced about six or seven weeks ago. The second thing that I would point out is in the Bahamas we had a couple of large accounts reclassified from AUM to AUA as the provision of services to those clients changed during Q4.

Dieter Jentsch here. On the regulatory challenges that we see, they generally are in area around what I call capital taxes. Caps on rates and restrictions on fees that we may encounter. That amounted to about $20 million to $25 million in earnings in 2014. Going forward in terms of our overall asset outlook, growth outlook, we are a high single digit, low double-digit in Latin America. So we are leaving out about high single digit overall for the division.

Your next question comes from Sumit Malhotra of Scotiabank. Please go ahead.

I want to start with Stephen Hart and a couple questions on the PCL outlook. So I think the statement was, the core number on PCL ex of the items that are specified was around 37 basis points but it's 53 on a fully-loaded basis. When you think about some of the issues that the business is facing particularly in international, what is the outlook that you have on the loan side and how we could see provisions migrate in that business as a couple other things work through, specifically Colpatria and maybe this issue in Puerto Rico.

Yes. As it relates to the international and particularly both commercial and retail, other than the adjustment for the Colpatria mark, we actually expect loan losses to grow in line with the volume of loans for the year going forward. We had a couple of those, ones that we indicated in the notables that we are effectively cleaning up some old legacy projects. But the rest of the portfolio is in actually fairly good shape. And as indicated with the drop in oil prices, especially in the Caribbean, that will actually show an improvement for a lot of the countries there which are all net oil importers.

Just on Puerto Rico, maybe two pieces to it. I know part of the loss share agreement, if I'm not mistaken, is set to expire halfway through fiscal 2015. I wanted to know if you have that resulting in any kind of a major impact for the Bank given the economic challenges the island has faced. Specifically for the one that you called out in Puerto Rico. Can you talk about your provisioning on that particular account?

Sure. As it relates to the FDIC, you are right. The five-year agreement on the commercial side will run out in 2015. On the retail side it does extend for another five years. We have actually gone through the portfolio that we picked up and have actually fully reassessed it and reappraised it. So we are comfortable on the corporate commercial side of Puerto Rico that that’s actually been covered and therefore there is no loss going forward that we haven't already covered. As it relates to the one large commercial account, of course I can't really comment on individual names but it is one that we are in the process of negotiating on along with a number of other banks. We are one small part of the very large equation that will work itself out over the next six months or so.

Thanks for that. And very quickly for Sean or Dieter, just a numbers question. In the supplement for international banking when we look at loan growth, on a quarter-over-quarter basis the consumer book looks strong but the business loan balance was down again. I know there's been a lot of noise in that business loan category because of trade finance. Is that the issue again this quarter or was there something in the core business, if I can call it that for the business book?

We had a couple of core -- it’s Dieter here -- we had a couple of big pay downs in the quarter as well where we continue to reposition our trade finance assets in Asia.

Your next question comes from Doug Young of Desjardins Securities. Please go ahead.

Just wanted to go back to $3 billion -- sorry, the excess capital. And I think you've been clear in your priorities in terms of M&A. What I'm wondering, because in your comments you also mentioned you've done a lot of M&A in the past and you thought the focus should be back now on execution which you're doing. Do you have the appetite to be acquisitive, I guess, in the international side while you're going through the restructuring or you feel you need to kind of wait to get some of that restructuring through before you become more acquisitive in that market? That's my first question.

I think what you will see us do is things that tend to be incremental. You are not going to see anything transformational from the bank. So these are going to be tuck-in acquisitions that make sense, that are on strategy, that are very manageable, that are easy to execute. That’s what you are going to see from us.

So nothing of size, more kind of tuck-in to the existing operations?

That’s correct.

And then Brian, is there any one particular market in those four regions which you're more attracted to or you see better opportunities?

Well, it's -- every market is different, pointing to the obvious. But we would like to be a bigger bank in Mexico, there is no question about that. We think Peru and Colombia hold a tremendous amount of promise for us and we like Chile as well. Chile is obviously more developed, well banked and the banking system has excess capital and any acquisition there would be very expensive. But we continue to monitor the landscape and you will hear from us as the year goes on.

Okay. And then just maybe a quick one for Sean. Just I noticed in your notable items there was certain items that you kind of detailed in your chart but you didn't actually exclude them or back them out. I think it related to the Caribbean and to Canadian on the PCL side, provisioning side. Just wondering why those weren't included in the notable items, just thinking through that? Thank you.

Well, we view those are just additional loan losses and the timing it hit Q4. So we view them as a cost of goods sold so we kept them in our underlying earnings result.

So there's nothing else to read into that in terms of ongoing pressure?

No, nothing at all. We just view it as loan losses and cost of goods sold and we are not going to normalize for that.

Your next question comes from Mario Mendonca, TD Securities. Please go ahead.

Just going back to the question about international margins. Brian, I follow your logic in saying it perhaps is unlikely rates are going to drop still further, but throughout the year we did see some rate cuts. Do you think that's been, and maybe this is for you, do you think that that's been sufficiently baked into the margin or could the first half of 2015 still reflect margin pressure associated with the rate cuts?

Mario, it's Dieter. I will take that one. It takes a while to reprice the asset and liabilities to the rate cuts. We don’t believe the rate cuts will continue. We think they have gone as low as they can go. They have bottomed out as Brian articulated. And underlying volumes continue to be strong in LatAm. So we are going to have some pressure and we will earn through those through our volumes in either of the businesses that we have. We had 12% asset growth in both retail and commercial year-over-year in LatAm. So those are positive numbers.

Right. But would it be fair to say that those rate cuts in 2014 will still manifest themselves in the margin in the first half of 2015?

Yes. In the first couple of quarters.

Okay. Now can you give us some sense, like what's left, a few basis points here and there or something more material? Sequentially, I'm thinking.

Mario, we have always given the guidance of generally being 394. Some quarters it's up, some quarters it's down and generally we see it being within that range.

394. Thank you.

390 to 394.

Your next question comes from Darko Mihelic, RBC Capital Markets. Please go ahead.

Please forgive me for asking this question because I was trying to run through and keep track of those things you were mentioning, Brian, in your opening remarks about the impacts that happened in international. I think you said there was $100 million of higher regulatory costs and so on and there was issues in Venezuela and Thailand and so on with another $250 million. So am I right in thinking that you've identified $350 million of negative headwinds that hit 2014 in international?

No. Sorry, the aggregate number was $250 million and the biggest piece of that was compression of NIM due to the interest rate cuts. The other component to that were lower earnings from associated companies in Venezuela and Thailand. Higher taxes, business taxes, capital taxes, asset taxes and the like.

Okay. So is your intention there to signal to us that you effectively think of the earnings power of international really being closer to about $1.8 billion for a full year rather than the $1.571 billion of adjusted. Is that what you're trying to signal?

I know you would ask me to extrapolate. But look, as I have said here before, in the international business because you have got so many moving parts, if we have the engine running on six cylinders, we are happy. Because you are always going to have a hurricane in the Caribbean or something somewhere that’s going to impact you for a quarter or two. But we have had a bit of a perfect storm. And there are six or seven different items. Whether it was Puerto Rico, whether it was the associated companies, the PCLs we took in the hospitality portfolio, compressed NIM. So you are always going to have one or two of those in a single year. We have had six or seven of those. So in that regard we are glad 2014 is over. But I think the team has done a very good job managing through it and we look forward to a better second half in 2015.

Okay. And maybe just a quick one then for Sean. On your Slide 11, one of the things you note is the strong performance from Asia. I wonder if you can give us order of magnitude and what it is that's helping you out internationally and whether or not you'd actually expect strong performance from Asia to continue in the first half of the year? If you can just help us with some order of magnitude and maybe perhaps also talk to the income from associated corporations and what your expectations would be on a go forward basis. Thanks.

Well, for Asia, we saw on a year-over-year basis, volumes were up but sequentially they are coming off. As Dieter had mentioned, we are shifting away from the low yielding trade finance. So on a year-over-year basis, Asia was up. And there is also some security gains in the fourth quarter that also helped Asia a bit there. And, sorry, what was your second question?

Just the associated corporations and your expectations there?

Yes. So as you have heard from Brian and Dieter, we had about $40 million less in associated corps earnings this past year. Venezuela will still low because we have now devalued to a much lower currency rate. But Thailand will start turning the corner and we would see some growth coming out of Thailand into next year.

Your final question will come from the line of Sohrab Movahedi, BMO Capital Markets. Please go ahead.

Sorry about that. My question has been asked and answered.

Thank you, everybody for being on the call. And I just wanted to say that, reinforce that 2014 was a transition year for the bank. We have realigned a number of our businesses to be closer to our customers and we believe our strategy is clear and we are confident that we on the right track and well positioned to create shareholder value in 2015 and beyond. Thank you for participating on today's call and wish you all a very best for the holiday season. Thank you.

Ladies and gentlemen, this concludes the conference call for today. We thank you for your participation. You may now disconnect your lines and have a great day.