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CANACCORD GENUITY GROUP INC. REPORTS THIRD QUARTER FISCAL 2022 RESULTS

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Third quarter earnings per common share excluding significant items of $0.69 (1)Third quarter capital deployment initiatives include $100 million common share buyback and quarterly common share dividend increase to $0.085

La version française du présent communiqué sera déposée sur SEDAR. / A French-language version of this communication will be made available on SEDAR

TORONTO, Feb. 9, 2022 /PRNewswire/ – Canaccord Genuity Group Inc. (Canaccord Genuity Group, the Company) (TSX: CF) today announced its financial results for the third fiscal quarter, ended December 31, 2021.

“All of our businesses delivered strong performances and we earned our second-highest quarterly revenue on record,” said Dan Daviau, President & CEO of Canaccord Genuity Group Inc. “Our third quarter was also a very productive period for strategic activities, including acquisitions in our wealth management and advisory businesses to increase our long-term value and enhance stability, in addition to a $100 million dollar share buyback. While we are navigating broad market headwinds, our franchise has never been stronger.”

Third quarter and nine-month fiscal year-to-date highlights:(All dollar amounts are stated in thousands of Canadian dollars unless otherwise indicated)

  • Third quarter revenue excluding significant items(1) of $550.8 million, a year-over-year improvement of 3.3% and our second-highest quarterly revenue on record ($552.2 million on an IFRS basis)
  • Nine-month fiscal year-to-date revenue of $1.5 billion, an increase of 18.8% over the same period in the prior year
  • Third quarter net income before taxes excluding significant items(1) of $113.4 million, a year-over-year improvement of 2.6% ($95.0 million and a year-over-year decrease of 4.3% on an IFRS basis)
  • Net income before taxes excluding significant items(1) of $323.0 million for the first nine months of fiscal 2022, an improvement of 59.3% year-over-year ($281.7 million and year-over-year improvement of 54.6% on an IFRS basis)
  • Diluted earnings per common share excluding significant items(1) for the third fiscal quarter of $0.69 per share ($0.52 per share on an IFRS basis), an increase of 11.3% compared to the third quarter of fiscal 2021
  • Diluted earnings per common share excluding significant items(1) for the first nine months of fiscal 2022 of $2.00 per share ($1.64 on an IFRS basis), an increase of 73.9% compared to first nine months of fiscal 2021
  • Record quarterly advisory revenue of $153.3 million, reflecting substantially increased contributions from our Canadian capital markets business and continued strong performance in the US and in the UK and Europe
  • Total client assets(1) in our global wealth management business grew to a record $101.9 billion, an increase of 19.6% from Q3/21 reflecting year-over-year increases of 28.0% in Canada, 14.8% in the UK & Crown Dependencies, and 21.3% in Australia
  • Purchased 2,808,316 common shares for cancellation under our normal course issuer bid (NCIB) during the nine months ended December 31, 2021
  • Fiscal year-to-date capital deployment initiatives including dividends and share buybacks totalled $161.7 million including the substantial issuer bid of $100.0 million announced during the quarter
  • Third quarter common share dividend of $0.085 per common share

Three months endedDecember 31

Year-over-yearchange

Three monthsendedSeptember 30

Quarter-over-quarter change

Q3/22

Q3/21

Q2/22

Third fiscal quarter highlights- adjusted1

Revenue excluding significant items1

$550,817

$533,077

3.3%

$475,161

15.9%

Expenses excluding significant items1

$437,385

$422,503

3.5%

$379,509

15.3%

Diluted earnings per common share excluding significant items1

$0.69

$0.62

11.3%

$0.58

19.0%

Net Income excluding significant items1

$84,632

$78,971

7.2%

$69,719

21.4%

Net Income attributable to common shareholders excluding significant items1,3

$75,098

$75,160

(0.1)%

$63,326

18.6%

Third fiscal quarter highlights- IFRS

Revenue

$552,217

$533,077

3.6%

$475,161

16.2%

Expenses

$457,234

$433,803

5.4%

$388,124

17.8%

Diluted earnings per common share

$0.52

$0.54

(3.7)%

$0.49

6.1%

Net Income2

$66,732

$68,451

(2.5)%

$61,785

8.0%

Net Income attributable to common shareholders,3

$56,254

$64,640

(13.0)%

$54,232

3.7%

1. Figures excluding significant items are non-IFRS measures. See Non-IFRS Measures on page 62. Before non-controlling interests and preferred share dividends paid on the Series A and Series C Preferred Shares3. Net income attributable to common shareholders is calculated as the net income adjusted for non-controlling interests and preferred share dividends

Core business performance highlights:

Canaccord Genuity Wealth Management

The Company’s combined global wealth management operations earned revenue of $184.9 million for the third fiscal quarter, and $546.1 million for the first nine months of fiscal 2022, year-over-year increases of 2.4% and 17.6% respectively. Net income before taxes excluding significant items(1) for this segment increased by 0.5% year-over-year to $39.4 million and 32.0% fiscal year-to-date, to $119.3 million.

  • Wealth management operations in the UK & Crown Dependencies (CGWM UK) generated third quarter revenue of $81.7 million, an increase of 8.8% compared to Q2/22 and an increase of 16.6% compared to the same period last year. Net income before taxes excluding significant items(1) for this business was $22.2 million in Q3/22, up 38.9% year over year and 12.6% sequentially
  • Canaccord Genuity Wealth Management (North America) generated $82.6 million in third quarter revenue, an increase of 14.1% compared to Q2/22, and a year-over-year decrease of 10.9%, reflecting reduced new issue activity in the current quarter compared to Q3/21. Net income before taxes excluding significant items(1) for this business was $15.2 million in Q3/22, which represents a year-over-year decrease of 24.4% and a sequential increase of 53.3%
  • Wealth management operations in Australia generated $20.6 million in third quarter revenue, an increase of 9.7% compared to Q2/22 and an increase of 16.6% compared to the third quarter of last year. Net income before taxes excluding significant items(1) for this business was $2.0 million in Q3/22, down from $3.1 million in Q3/21 and down from $2.1 million in Q2/22 reflecting the cost of certain new hire incentives and technology enhancements

Total client assets(1) in the Company’s global wealth management businesses at the end of the third fiscal quarter reached a new record of $101.9 billion.

  • Client assets(1) in North America were $37.5 billion at December 31, 2021, an increase of 4.8% from $35.8 billion at the end of the previous quarter and an increase of 28.0% from $29.3 billion at December 31, 2020
  • Client assets(1) in the UK & Crown Dependencies were $59.4 billion (£34.8 billion) at December 31, 2021, an increase of 3.3% from $57.5 billion (£33.6 billion) at the end of the previous quarter and an increase of 14.8% from $51.8 billion (£29.7 billion) at December 31, 2020
  • Client assets(1) in Australia were $5.1 billion (AUD 5.5 billion) at December 31, 2021, an increase of 5.2% from $4.8 billion (AUD 5.3 billion) at the end of the previous quarter and an increase of 21.3% from $4.2 billion (AUD 4.3 billion) at December 31, 2020. In addition, client assets(1) totalling $17.3 billion (AUD 18.9 billion) are also held on record in less active and transactional accounts through our Australian platform

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(1) See Non-IFRS Measures on page 6

Canaccord Genuity Capital Markets

Globally, Canaccord Genuity Capital Markets earned revenue of $361.9 million for the third fiscal quarter and $991.0 million for the first nine months of fiscal 2022, year-over-year increases of 3.7% and 20.1% respectively. Despite the reduction in new issue activity, third quarter revenue contributions from higher-margin advisory activities increased 114.9% year-over-year to $152.0 million. Net income before taxes excluding significant items(1) for this segment was $93.8…

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