Q2 2020 Earnings Call
Please standby your meeting is about to begin.
Good afternoon, ladies and gentlemen, welcome to the TD Bank Group Q2, Twentytwenty earnings Conference call.
Ill turn the meeting overcoming Gillian Manning head of Investor Relations. Please go ahead midnight.
Thank you operator, good afternoon, and welcome to TD Bank groups second quarter 2020 investor presentation.
[noise].
We will begin today's presentation with remark terms are that's Ronnie the bank CEO.
After which we as I'm at the bank CFO will present, our second quarter operating result.
Well I Chief risk Officer will then offer comments on credit quality after which we will invite questions from prequalified analysts and investors on the phone.
Also present to answer your question sorry carry Curry group had Canadian personal banking, Greg Braca, President and CEO TD Bank America's most convenient bank and Bob Dorrance group had wholesale banking.
Please turn to slide two.
At this time I would like to caution our listeners that this presentation contains forward looking statements that their risks that actual results could differ materially from what is discussed at certain material factors or assumptions replied in making these forward looking statements.
Any forward looking statements contained in his presentation represented use of management and our presented for the purpose of assisting the banks shareholders and analysts an understanding of inc.'s financial position objectives, and priorities and anticipated financial performance.
Looking statements may not be appropriate for other purposes.
I would also like to remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results to assess each of its businesses. It to measure overall bank performance. The bank believes that adjusted results provide readers with a better understanding of how management views. The banks performance art will be referring to adjusted results in his remarks.
Additional information on items of note the banks reported results in factors and assumptions related to forward looking information are all available in our Q2 2020 report to shareholders.
With that let me turn the presentation over to bear it.
Thank you Jillian and thank everyone for joining us today.
Last few months had been an extraordinary done.
On April 2nd we conducted though first ever virtual annual meeting.
It's hard to believe that June 1st just around the corner, the sweeping restrictions and economic and social activity implemented to contain the cool good 19 been Danny.
Still largely in place.
It is encouraging to see reopening measures and beginning to take shape in some geographies.
Before I don't work you do results.
We'll talk about how we are meeting that goal that 19 challenge at TD.
The total exacted. This crisis in lives lost an activity disrupted would reveal Barry for years to come.
Commies around the world had been plunged into recession, and unemployment rates have risen to levels not seen in decades.
What was the scale of this graces still has the power to shock the response to that listen that.
Is inspiring.
Dedicated frontline workers in so many different industries, including financial services venturing out each day to keep critical services running.
From businesses that nonprofits fighting to maintain their operations and support their stuff.
From central banks, and regulators, who launched new liquidity facilities, but keep the national markets functioning and ease the supply of credit to the economy.
And from governments, we implemented by all measures and support the type households, and businesses through this unprecedented suspension of activity.
We we'd been Browder D to contribute to this collective effort.
We've been working hard to support our people. So they can keep them so safe well looking after our customers I want to thank them for their exceptional service. This includes the many colleagues were keeping up branches doors in contact centers open and performing services vital to our customers.
And the being score operations.
Adjusted their work environments to help but there will be judging schedules reconfiguring floors that.
And investing in protective equipment in enhanced gleaning.
You recognize the second place they and their families the made with additional compensation and vacation days.
We quickly and able to 60000 about colleagues to work from home equipping equipping them with the tools and technology work productively, while prioritizing security.
And for all our <unk> and for all of our colleagues we committed that there will be no job losses in Twentytwenty as the result of gold at 19.
We know this is the stressful time this assurances important colleagues as well as our customers or depending on that will support and financial advice in this difficult times.
That PD or people are our greatest asset that hard work and education has enabled us to deliver swift and comprehensive assistance for our customers.
D. Health program in Canada, and I did he cares program in the U.S., we've connected with thousands of customers.
Being there to serve them in their momentum rigorous need.
Across our Canadian and U.S. retail businesses, we provided financial support to over 800000 customers and it goes devoting payments on approximately $62 billion loan balances as of April thirtyth, extending other forms of really including premium productions and deferrals to more than 100.
25000, DD insurance declines and facilitating the flow billions of dollars in government funds to businesses through the programs like see by in Canada, and the BJ protection program in the U.S.
We're also helping the federal government deliver income support to Canadian households through the third program with 1.4 million direct deposit facilitate that during the quarter.
You know wholesale bank, we increased total gross lending exposure is my $23 billion blending of corporate institutional and government clients with critical funding and liquidity support during a period of severe market dislocation.
Did you asset management is contributing to stabilize in capital markets, having been selected by the bank of Canada to manage its commercial paper and corporate bond boards Burgess programs.
We've also taken decisive action to support our communities as part of the de de ready commitment we've announced the D community resilience initiative, which is allocating $25 million to strengthen our communities and support organizations involved in the Corbett 19 recovery effort.
I'm very proud the response, we mounted over the last few months our people have demonstrated their ability to adapt a new ways of working almost overnight and we just we reshaped the banks operations just as quickly supported by the investments. We've made Glenn has a technology infrastructure and network capacity.
City build new lending platforms and launch scalable end to end customer journeys.
These investments in our infrastructure than capabilities enabled us to meet a surge in digital traffic of more than 25% across our banking and insurance businesses managed record trading volumes in our direct investing business and stay connected to customers across our footprint from virtual trading desks video communicate.
As the new online and mobile dues living payment relief and advice, but more than 14 million active digital customers did he has remained strong active and fully operational from the first do you have this crisis and we are well positioned to continue supporting our customers and colleagues on the road to recovery.
These purposeful investments have been made possible by the strength of our model a diversified business mix backed by North American scale underpinned by strong risk culture, you does demonstrated its resilience over time and through a variety of challenging operating environments and it is proving is metal again.
No.
This quarter, we earn through tremendous headwinds earnings were $1.6 billion and yes was 85 cents as we absorb a substantial increase in provisions were performing loans as well as margin pressure from the steep drop in interest rates.
Our feed the one capital ratio was 11% down 70 basis points from the prior water on higher R.W., Ed, reflecting both the deterioration in the economic environment and the balance sheet growth as we continue to support our clients.
A tough quarter no question, but one that demonstrates the resilience of our model and our strategy.
Everything you know about de has been born out by Disgraces, we build long term relationships with customers and standby them in good times and bad risk appetite is our compass, we have the ability to execute with speed and purpose when the world ships around us and the earnings power in balance sheets Ren too.
Yeah rule in the recovery.
That recovery will come.
It's not clear how long it wouldn't be the revenue picture is likely to remain challenging given the lower for longer interest rate environment.
And provisions for credit losses May remain elevated the downturn is more prolonged but the hallmark of PD is our ability to adapt to any operating environment and see the opportunities present today. We are firmly focused on the way forward examining a workplaces in making plans to reopen it.
Locations with a focus on continuing to provide safe spaces, where our customers and colleagues as we begin the hard work rebuilding.
Banking is a critical service and then general economic growth in a pillar of the financial system.
For 165 years D has been revealing to play this rule given the power of our model the strength of our balance sheet distinctive culture I'm confident that we will emerge from this crisis stronger and better position to continue serving our customers colleagues and communities.
I would wrap up with two thoughts first I'm very proud of how we responded to this challenge as an industry, we have fierce competitors, but with a strong tradition of mutual respect for each other as well as I've counterparts in government and the supervisory agencies, drawing on our long experience and adult.
Active equities, we've been working to deliver the right outcomes for our customers and clients as well as the economy and society.
I also want to thing or 90000 people, we've been bringing the best those were each day under very trying circumstances, you embody our purpose will enrich the lives of our customers colleagues in communities and give meeting broadvision do either better being with that I've done a door to reassess.
Thank you Barbara and good afternoon, everyone. Please turn to slide nine.
This quarter the bank reported earnings of $1.5 billion and he has some 80 cents.
Adjusted earnings were $1.6 billion and adjusted EPS was 85 cents.
Revenue increased 3%, reflecting volume growth across our businesses and record wholesale revenues, partially offset by margin compression and lower fee income as a result or produce customer activity in the banking businesses.
Provisions for credit losses increased to $3.2 billion, largely reflecting higher performing PCL.
Expenses decreased 2% year over year, notwithstanding approximately $75 million indirect costs incurred this quarter related to Kogut 19.
Declining expenses, primarily reflects higher PCL for the U.S. strategic cards portfolio, which is offset in corporate non interest expenses.
As you know the partner share of to revenue and PCL for the U.S. strategic card portfolio program is held into corporate segment.
With an offsetting entry representing the partner share of fund net profits recorded in corporate noninterest expenses.
Resulting in no impact on corporate or total bank net income.
Higher PCL this quarter, including for the retail a program partners resulted in a smaller net profit share and therefore lower charge trick sensors.
We have included an illustrative example, on slide 27 to help clarify that gross and net accounting requirement for this portfolio.
Please turn to slide 10.
Canadian retail net income was $1.2 billion down 37% year over year, reflecting higher PCL and expenses, partially offset by revenue growth.
An adjusted basis net income decreased 36%.
Revenue was up 1%, reflecting volume growth in deposits and loans and higher insurance premiums and well fees, partially offset by margin compression.
Average loans rose, 5% and deposits rose, 10% year over year, reflecting growth in both personal and business volumes.
Well costs were down 2%, reflecting declining in market values.
Spot basis loans and deposits for Canadian PNC were up 4% and 13% respectively as at quarter end.
Margin was 2.83% a decrease of 11 basis points from the prior quarter, reflecting lower interest rates and competitive pricing in term deposits.
Total PCL increased by $762 million quarter over quarter, primarily reflecting higher performing PCL.
Total PCL as an annualized percentage of credit volumes was 107 basis points up 71 basis points quarter over quarter.
Expenses increased 4%, reflecting higher spend supporting business growth.
Looting investment in frontline staff and changes in pension costs and volume driven expenses adjusted expenses were up 5%.
Please turn to slide 11.
US retail net income was U.S. $261 million.
U.S. retail bank net income was U.S. $87 million down 666, U.S. dollar millions.
Down U.S. dollar 666 million, reflecting higher PCL lower revenue and higher expenses.
Average loan volumes increased 7% year over year, reflecting growth in the personal and business customer segments.
Deposit volumes, excluding that TD ameritrade sweep deposits were up 10%.
Including 8% growth into core consumer checking accounts.
TD Ameritrade sweep deposits were up 24%.
On a spot basis loans were up 12% and deposits, excluding TD ameritrade were up 19% as at quarter end.
Park TD Ameritrade deposits were up 37%.
Net interest margin was 2.93% down 14 basis points sequentially, primarily reflecting lower deposit margins.
Total PCL, including only the banks contractual portion of credit losses in the strategics card portfolio was U.S. $814 million up $571 million from the prior quarter.
The U.S. retail net PCL ratio was 2.03% up 144 basis points from last quarter.
Expenses increased 6% year over year, reflecting increases in legal provisions, partially offset by productivity savings.
We had a U.S. $82 million tax recovery this quarter, primarily reflecting lower pretax income.
Partially offset by higher provisions related to changes in tax law.
The contribution from Tt's investment in TD Ameritrade decreased to U.S. $174 million.
Early reflecting reduced trading commissions and higher operating expenses, partially offset by increased trading volumes.
Turning to slide 12.
Net income for wholesale banking was $209 million, a decrease of $12 million, reflecting higher PCL, partially offset by higher revenue.
Revenue was nearly $1.3 billion, reflecting higher trading related revenue from interest rate and foreign exchange trading.
And higher debt underwriting fees.
Partially offset by losses in equity trading and very volatile markets.
Yeah, It was $374 million, an increase of $357 million from the prior quarter.
PCL impaired was $194 million, reflecting credit migration largely in the oil and gas sector.
He outperforming was $180 million, primarily related to a significant deterioration in the economic outlook, including its impact of credit migration.
Expenses or $616 million up 3%, reflecting higher volume related expenses.
Please turn to slide 13.
Corporate segment reported a net loss of $202 million into quarter compared to a net loss of $161 million in the second quarter last year.
Reported net loss increased primarily reflecting a lower contribution from treasury items and higher net corporate expenses.
Partially offset by lower amortization of intangibles.
Adjusted net loss was $143 million compared with an adjusted net loss of $95 million in the second quarter last year.
Please turn to slide 14.
Our common equity tier one ratio ended the quarter at 11% down 69 basis points from Q1.
Organic capital generation added 20 basis points to capital this quarter, including 19 basis points from a reduction in our expected loss shortfall.
As you know when losses calculated for regulatory capital purposes exceed accounting provisions.
This excess is deducted from capital.
With this quarter is increasing allowances the gap has narrowed and be re group some of the capital previously deducted.
We also saw and 11 basis points benefit from off these transitional arrangements for expected credit loss provision.
We also saw losses on fair value through OCI Securities and we completed the repurchase of 7.8 million common shares in mid March.
The 80 basis points declining C.T. was attributable to risk weight growth was primarily a function of higher credit risk risk weighted assets, reflecting volume growth in our commercial and wholesale banking businesses as we supported our customers with new and increased credit facilities.
A decline in asset quality, reflecting negative credit migration in this challenging environment, which are Jay will discuss shortly.
And as you know we had been migrating our U.S. bank assets from standardized to add RV.
And this particular quarter, we transitioned a credit card portfolio, which cost us.
Nine basis points.
But this particular transition was negative.
We expect.
At the.
Sorry, well this particular portfolio transition was negative migration to yeah. Our be has generally been positive to the capital calculation.
And we expect it to continue to be positive with ongoing migration through the second half of this year.
We saw market risk risk weighted assets increased by $5 billion in our wholesale business, reflecting the volatility in interest rates and credit spreads this quarter.
Leverage ratio was 4.2% and not LCR ratio was 135%, both well above regulatory minimums.
Effective this quarter, we have reduced their rate or see tier one capital allocated to our business segments from 10.5% Tonight and 9.0%.
In addition for Prudence, we have also introduced a 2% discount on our dividend reinvestment plan for the dividend declared today.
With that I'll turn the call over to Roger.
Thank you.
Good afternoon, everyone.
Please turn to slide 15.
Crossing federal formations were 1.7 billion.
Dave.
Quarter 24 basis.
Please turn to slide 18.
Crossing Frank Holmes.
3.6.
47 basis points.
Up two basis points quarter over quarter.
On one basis point.
Yup.
The quarter over quarter.
Gross impaired loans was driven by Canadian retail segment as.
Well.
And commercial lending portfolios.
The wholesale segment.
Actually reflected in the oil and gas sector and impact of foreign exchange.
Please turn to slide 17.
Recall that our presentation reports ratios.
Both gross and net of the share of the U.S. strategic got credit losses.
We remind you that credit losses recorded in the corporate segment.
Fully absorbed by our partners and do not impact of banks net income.
Thanks.
In the quarter, what $3.2 billion or 176 basis points.
Pcls were up across all segments.
All major asset classes.
Well primarily related to the ongoing core with 97.
Please turn to slide 18.
Thanks Pat.
Increased 160 million quarter over quarter.
Mainly due to credit migration in the wholesale segment.
Actually in the oil and gas sector.
Forming pcls increased by 2.1 billion quarter over quarter, and I will address this momentarily.
Please turn to slide 19.
I would now like to take a few minutes to discuss the impact of coincide team.
Credit losses.
The allowance for credit losses increased by <unk> point 6 billion this quarter.
Raising the banks total allowance coverage across loans and acceptances.
From 74 basis points to 103 basis.
This increase is primarily due to higher performing allowances, including the impact of credit migration.
Reflecting a significant deterioration in the economic outlook related to the covert endemic.
Partially offset by a mitigating impact of a variety of differ.
Programs.
Well to our clients.
Change in the economic outlook incorporates any material increase in unemployment.
Substantial near term GDP contraction.
Assumes a gradual recovery.
I'll make activity does not returned to pre crisis levels for an extended period.
The allowance increase was across the Canadian and us geographies.
By asset class due to a billion dollar increase for our business and government portfolios.
Afflicted across multiple industries.
Including oil and gas.
And 1.6 billion increase.
Cross consumer lending portfolios.
I'm not only for the auto other pause.
Credit card portfolios.
438 million off the increase in the credit card portfolios.
Attributable to the U.S. strategic our share.
I'm satisfied with the facts current allows coverage considering the provisions added this quarter.
Our portfolio and geographic mix.
The potential for further provisions will largely depend on the magnitude and duration of the ongoing over 19 pandemic.
Please turn to slide 20.
Given the expectation of sustained lower oil and gas prices I will now take a moment to discuss the banks exposure to this sector.
The bags pipeline oil and gas loans.
Point 2 billion.
And our nearly evenly split.
Across the Canadian and us geographies at 28% are investment grade.
Our concentration to the oil and gas for do you said services segments, which have generally most exposed to low energy prices.
Relatively small.
Represent less than 1% of the banks across loans and acceptance.
Furthermore, in response to lower commodity prices.
Oil and gas producers have taken a number of risk mitigating measures such as reduced Capex pekarek production curtailments.
Uh-huh liquidity bolstering activities.
Excluding real estate secured lending consumer lending small business banking exposures, Alberta, Saskatchewan, and new founder Labrador represents 2% off total gross loans and acceptances.
And have remained stable at that level in recent years.
Thank you much delinquency and impairment levels. These provinces are elevated.
We expect they may be more impacted moving forward given combined impacts a corporate banking pandemic and lower oil and gas prices at we have incorporated this you know allowance for credit losses this quarter.
Overall oil and gas exposure does represent a small portion of the bank lending portfolios. We will continue to regularly performed detailed assess ones or oil and gas exposure as the challenges facing this sector payout.
And further losses are expected to remain manageable.
Now moving back to talking back for South.
Summarize we are operating through challenging conditions, given the unprecedented back on the call. It 90 pandemic.
While the duration of the pandemic guarantee of economic impact remain uncertain, we got wells per pad to manage through these difficult times.
With that operator, we're now ready to begin.
Culinary session.
Thank you.
We will now take questions from the telephone lines. If you have a question and using speakerphone. Please.
People are making your selection if you have a question. Please press star one on your telephone keypad.
To cancel the question please press the pound sign.
Patrick Star one at this time, if you have a question there'll be a brief pause.
Thank you for your patience.
And your first question is from John Aiken from Barclays. Please go ahead.
Good afternoon so.
So there's a bit of the detailed question for if you wouldn't mind Tom on the balance sheet, we saw a significant increase in the job on interest bearing deposits with banks is this see a transitory impact that happened right at quarter end or is this is going to be a sustained balance that's going to be fairly hard even if that's the case can you give us some sense.
What that would need to work overall net interest margins.
Yes, John Thank you as you know throughout the period of stuff pandemic and a as you mentioned closer to quarter end.
I've been level of deposits that had been a accumulated their rose quite significantly, which obviously has a starting point goes into a net cash balances and then we're able to invest someone fit in a shorter or longer term securities.
So you're quite right in pointing out that it a wave it may well be temporary as Ah Ah clients and customers, who have access to customer our relief programs as well as government relief programs and that have a accumulated some cash and their accounts may see that a as as.
As they utilize that cash to meet their needs and their obligations. We may see some of that come back.
How much are fit that we're able to.
Extend a into longer term yield bearing investments will just depend on and be a customer behavior that we're able to observe in a in in the into utilization of that cash I'd say, one other significant contributor to those cash balances wasn't as I mentioned earlier, the a rise in deposits.
Coming out of sweep deposits coming out of TD ameritrade.
That number of clients took money out of the market and we're holding cash for some period of time, so I think that fit the impact on a aggregate margins or would be and really not forecastable into short trends here until we see a little bit of stability returning to a how our clients.
Our managing their finances.
Yes, you're putting the ball back in my quick thanks for us over Q.
Thank you.
Your next question, if some Gabriel Duchaine from National Bank Financial Please go ahead.
Good afternoon first question on a on earnings I mean, we're hearing that so this quarter earnings.
Better, but eventually people hear about.
Earnings of pays a dividend and a contributor capital generation.
I wanted to kind of tuck in the earnings outlook to your stress scenarios your internal stress tests, but I'm sure you've done it like other banks and their own whatever scenario you're course, your one doesn't fall below ex whatever that is.
One of the components of that type of production would be earnings I'm, just wondering what kind of burning the.
You know levels are generation or gross do hub and those types of a scenario and scenarios.
Okay front, we are as you would expect a so first of all I'd answer by saying that earnings always matter I think just.
It this quarter, they don't but that's not how we see it that earnings always matter.
And Ah Ah what's important though is that you should know that oh.
We run a variety of stress tests.
And using a different scenarios that are applicable.
And clearly this particular pandemic has been a probably come come come about more rapidly and risk duration and severity that are I think we can all easily agree is unprecedented.
But look I think we continue to stress tests are our liquidity and capital positions and you know you can always come up with very severe adverse.
Scenarios and richer earnings may be pressured even more.
On the other hand that as the reopenings become a bit more Uh huh.
Ill start kicking holds more might read through its more confidence then we should also started seeing out the banks. A result sat reactor that so are clearly it is a function of the on touched in economic environment where in.
I gave this is beds of I'll add to that I.
I mean, there's that unprecedented times. Another reason earnings at the breadth is because of the alone.
The level of allowances. The bank is taken and that is based on you know our current view of you know what the future looks like.
And it's hard to predict it perfectly, but we will be.
Checking in a very very regularly to see how that plays out.
The other thing I would add is that in a one of the hallmarks of TD and one of the strength of TD is it real adapted environment, we find ourselves and and I know we will then I know we will thrive in whatever operating environment do you know turns out to be a the reality. So so yes, you know earnings as we had said matter even this quarter's earnings matter, but eggs.
But the bank to adapt to the environment, we find ourselves in over the next it away.
I guess, what am I off too though is.
As I said.
You've got an extended period for when you expect a.
Economic activity the returned to normal levels or what does that.
And what are your what are your earnings projections like him up sort of scenario is that no but too.
Oh, 2019 sort of profitability by 2020 to 23 or or or something other than that it's hard to give out a specific you gave room.
Interest rates Oh, you mean, you told me when interest rates will start to move you told me, where you know where the economy opens up a completely so it's hard to pin no. No particular factor here I mean, we had an unprecedented times, but as I've said.
Notwithstanding the time that we're going through.
Tds business mix, you know given our scale or north American scale would've been able to do have you managed to this graces today and I expect us to adapt going forward and I see the being strength Oh like I said in my remarks, we I expect us to be coming out of this stronger than we entered it.
And my other question or maybe a quick on credit.
Some banks have talked about no Q3, Q4 expect performing provisions to decline from from this quarter's level.
Performing doing the operative word.
What about the impaired provisions are going to be picking up.
Is there going to.
You'll hub movements out in stage two into stage, three or they're going to offset each other or could you know there but pick up in stage three provisions keep doing what we're seeing today you know what that produced at that level for for a number of quarters.
Yeah, Hi, Jamie I think that's a good question. So as you know weve built a material amount.
And I'll allowance this quarter.
[music].
So.
Warners.
We do expect to see high level of impairments I think the fact that.
Only allowances is going to help.
It could be some incremental allows for particular goes from performing.
Hello.
A material amount this quarter I think there's going to help.
Orders.
Maybe I'll follow up on though.
Thanks, Kevin.
Thank you. Your next question incident Ebrahim Poonawala from Bank of America. Please go ahead.
Hi, if I go so just still very quickly follow up on that and said he got eight.
Yes.
It didn't you can just help me or help us walks through this is it's fair to assume that the reserve levels are unlikely to decline anytime soon so you're going to maintain that reserves loss as things might today than you see credit migration you can all those well some pcls tied to those loans as we move.
So what is the only thing in a period of elevated pcls is that because I talk process, even if the macro backdrop your assumptions on the unemployment don't change we should see elevated pcls just by the migration laws on the loan book.
Okay.
Hi, good question.
To answer that as you know we haven't felt.
Tear it apart.
This quarter.
Hey.
Certainty with respect to innovation sit here just crisis the shape.
What I would say yes.
Outlook remains.
Age they get just wanted me to high water Mark.
How about what is one caveat.
It's changed from performing <unk> pad that you could see some increase because.
However.
Improves.
Option already.
Oh lessons I couldn't be it so I think last keep in mind that the whole environment where dealing here.
Very uncertain.
Yes. It is like we have pets substantial amount of.
This.
Based on our forward looking.
Would it change only about forward looking change.
Got it so does that sounds a lot more like.
You know pcls reflect your license loss expectations for this.
Yes, that's the IRS nine principle. So we are following our founding status.
Got it and it gives us sympathies yards.
In terms of capital. So you can just talk about in terms of your capital outlook well.
What our balance sheet growth might do.
So what can you mentioned.
Continued transition to be should be positive. If you could have just those two when he was a central to the C.D. when goes from here.
It for him as you know a we entered into this crisis carrying a tremendous balance sheet and strength in capital and liquidity and this is a hallmark of TD that you're well familiar with that we.
I do carry plenty of capital and liquidity, sometimes we have ER remark in a folks the way that we make a every one to be able to make a loans during bad times as well and so as you can see from the growth in our balance sheet. We are clearly doing knocked out we're standing by our clients a when they need us at.
And we intend to continue to do so and as the economy reopens and demand materialize. This for a additional credit a we will be.
Extending that credit that we didn't their risk appetite of T.D. that you are well familiar with so I I think carrying a strong amounts of capital in this.
Environment to take advantage of opportunities is a prudent thing to do.
Got it so should we expect less need not be surprised if the cap initial eat.
In two depends on what next quarter or too as you extend credit.
Oh, the nation I took that it is that reasonable assumption going forward.
Well in ordinary course times, there you know that a we continue to generate a capital and then reinvested in the business to create growth a as Jay just indicated that we are in a period of or no uncertainty and a if the economy recovers well away.
We'll be continuing to ER to extend credit a to our clients and if it turns out that things are go. The other way then you will remain well see additional allowances and more migration. So you're really not into a period right. Now that is there put our forecastable with any degree of a high degree of confidence.
[music].
Well thank you.
Thank you.
Your next question is from Steve Cherry Hill from each capital. Please go ahead.
Thanks, very much first I just wanted to circle with reality is really you talked about some positives on a or b migration in the second half a year for the U.S. banks can you just give a bit as you tell her on what portfolios in the level of materiality either.
Oh, well the one that you know the biggest portfolio that remains to be a migrated is our U.S. non retail portfolio and you know that it is a large and immaterial portfolio, which we were working hard to.
True to complete the the work to habit a implemented hopefully by the end of this year.
And do you have a ballpark of materiality to it or.
It was a two and that's something that are not a really are prepared to disclose right now Steve as you know with that number of I'm moving parts between Ah.
Shortfall calculations and.
The implementation of fit or will be a <unk>, we'll we'll need to be quite careful and a I'd be low to really quantify that for you right now.
And then thanks for that and Barry you mentioned in your opening remarks coming out better positioned a this pandemic could open up some opportunities to expand inorganically in the U.S., mostly she's been on pause. The last few years in terms of deal flow in the United States do you think what are your thoughts.
Sort of early innings do you think this has the potential to turn into a meaningful opportunity to scale up or fill in your footprint.
Well just firstly, let me add to your first question do we as you know I'm sure you. If you if you look at our history at TD in a strong capital levels and the need to maintain strong capital levels. A it's just part of organic though so that's what we do we think.
It's important to manage capital you know very closely and that's what do you would expect out of TD. So as we as is cautious and telling you. What do you did we and rightly so given the environment, but I can tell you that you know.
You should expect D D or to do have a cautious view in a prudent view on how we manage capital regarding your second question.
You know d., we oughta through the cycle type of lenders you know we have a particular this discipline in the bank.
Very proud of you know the bank performs in different environments. The business mix we have.
It is something that you know we worked hard to have in and we have no great scale in both sides of the border.
And the good news here is that the D is not required to do the to do a an M&A type of transaction because we have strategically challenge, we're not but having said that the environment. We're in you know is an interesting one it is unprecedented and I am sure you know given the type of situation.
We are facing that there maybe opportunities out there and if there are a then of course you would expect us.
Due to look at them, but seriously, but we will only do that if a you know to do have we would have to make sure that we have a better understanding of what does environment may turn out you know how bad it might get a we have no interest in everything anybody else's problems and we love to look at whether it makes strategic.
Since makes financial sense, and timings and so it all those things don't know to be well aligned and of course will look at it seriously.
[noise] thanks for that.
[noise]. Thank you.
Next question is from Meny Grauman from Cormark Securities. Please go ahead.
Hi, Good afternoon, a question on your cards business.
With your cards business in kind of focused on troubled rewards and then the U.S.
The exposure to all of your big retailers is there need to rethink the bank card strategy right now.
So this is bad it again.
Why don't I pass on firstly, the Canadian part a two Terry current Terry.
Absolutely. Thank you.
So I would say, we're very comfortable with the lineup as credit cards that we have available to Canadian we'd like to say we have a card for every to meet every Canadian needs. Then obviously those are the travel card.
Decided but also cashback cards.
That's a variety of category.
Early in this quarter odd given the circumstance Oh, yeah, we probably had.
5 billion or more in spends that didn't materialize.
But you know we still feel if you look forward that we're well positioned across categories.
And looking forward to the Air Canada partnership and loyalty program launching <unk> upcoming later this calendar here.
Thanks, Terry and Greg did you want to pick up the U.S. side of it.
So thanks for the question I'd, just add that as we've been talking about for the last several years. We spent a lot of time and energy building our card platforms in the U.S. from scratch and as includes not only the partnership programs that you talk about with a large retailers and certainly if one comes up that makes sense and its the right partner.
And we understand the dynamics and the economics makes sense, we're interested in expanding those.
But also our Denovo bank card business or you know our own branded bank card for our own customers. We spent time building that and obviously, we will continue to continue to leverage that with our own customer base going forward.
Yeah, Thanks, Greg and many just to add this is better to again I.
I think we've talked about this in previous calls they think about a year ago two years ago, Terry talked about the investments we've made or we were making it the time to expand the card offerings in Canada.
You know with the cashback card and the entry level card and all that and the timing done though to be excellent for that in order to diversify our card portfolio and as you know.
Or approach a full four four unsecured lending is to go with you know the prime side of the.
The FICO scores and all that so I wanted to add that and then the U.S.
This has been a.
Lots of questions around it'll wise to be more interested in partnership deals in a Greg did say that did provide us a phone vision to build a card portfolio, but I think now they've been nemacur showing that those partnership deals have done though to be terrific.
As you know Lions share of these losses, if that happened to do to materialize well before the account or the partner.
So these things worked out in different ways in different circumstances, but given where we are we're very happy that the big portion of a U.S. portfolio is in our partnership deals.
Thanks for that and just a follow up on the.
Partnership with it but they're kinda do you have the ability to change any turns up that agreements and I think it's more importantly, do you foresee having any of those kinds of discussion.
Hi, it's only right sorry, good to go ahead, sorry, sorry about that there and you know as.
You would expect we would have a contract with air Canada that we would honor and have more excited over the long term, but the prospect in this partnership.
Thank you.
Thank you next question is from Sumit Malhotra from Scotiabank. Please go ahead.
Thanks, Good afternoon start with areas on the capital slides. Please so.
You are you show us here that the.
Market risk component of the portfolio had an 11 basis point impact on.
See T one and we can see.
In some of your capital disclosure the.
Var was up quite significantly this quarter and that's reflected in the movement in risk levels. The offset that you haven't methodology was this the implementation of distressed.
ER stress var, or sorry relaxation of the stress for.
Relief or was there other components at plan I ask because most of your competitors actually had market or WH decline this quarter and obviously the impact is different for you. Just wondering if this is something specific to this quarter that may reverse going forward.
No I think you've got it right that a with the promotion of the data which includes a volatile periods you see the rising the risk weights and then that line item you're referring to include the a relief and the modification that that came from Aussie during December period of time.
And with the with the relief in place and the data updated so is this for lack of a better term a run run rate level for the for the bank now or as market conditions of east how quickly does that get reflected in how.
The the risk, but moving their risk levels is captured here no I think as a as you see market share starting to stabilize in the volatility coming in and spreads coming in you. We would expect to see market triska and numbers start migrating back down.
And just talk just to add to that.
I have has paid as part of here he has it so.
I think the water and as far will come down and that helps when it's going to remain elevated from what it used to be before right.
Some people to 200 and on days by Us.
Yeah.
So all right. So there's this movement this quarter as far as credits can or credit is concerned I think we all know that there was a heavy level of.
I have drawn on activity and road, maybe off with this one do I'm a bit surprised with the bank sitting at 11% and perhaps at least on the on the draws perspective, there should be some relief on that going forward.
Putting the discount on the on the drip here at least the way I look at it effectively a equates to 25 million shares going going out the door over the next year if it remains in place.
Where are you concerned that without this this capital uptick that the bank may move below or some of the the thresholds.
That that regulators look out or the market looks at a in terms of capital adequacy. Why did you think this this was the time to put this in place.
So maybe the best way to describe this is really has used the term you know that and then traditionally this is what the bank has been you you've known us where many years.
Do you know prudent capital management is the right phrase TV I mean, these are unprecedented times and and you know you you do want to just make sure.
They're doing the prudent thing here and if it turns out that you know our expectation of where Oh.
Well, there's economy might be and this is a might be a short term issue. Then we can always a switch it off.
Okay and the other question somebody had asked me you know.
Who knows I know there might be other opportunities available in the market.
We might want to take advantage of that you know given our scale given our.
You know ability to do to integrate and convert do you know acquisition. So so we're looking at it and it's not only by the way on it on an M&A front, but traditionally de de through through any downturn has also been able to take market share and at least my urging to <unk> dollar door business leaders is that wish.
Not lose that muscle as we go through this Ah Ah. This particular event because it will throw up opportunities in the marketplace to organically grow our franchise as well. So we'll have all that flexibility I think it's important love you know very prudent capital management in place.
And I'll finish with one for Terry if it's okay.
As this week is going on I think most of US we're ready for the uptick in provisions were ready for the pressure on them.
I think one that probably we are at least from I see you should have been more more prepared for is just the pressure we're seeing on some of the fee income lines that we normally take for granted in Europe and the PNC segments. So from for both you and Greg obviously weighing on the revenue lines, we've talked a lot about some of the changes that might happen in terms of real estate and how.
As always work when the bank considers some of the waivers that have been put in place whether it's you know service charges in some cases creditor insurance, we're obviously seeing weaker card revenues.
You feel there are aspects in either of your businesses from from these reductions that could have a longer lasting impact on how.
Customers expect their banks to behave when it comes to the fee income lines within PNC.
So there's a lot in that question, let me start with.
Just the other income growth and then and then move to perhaps there's a change and so you know.
Sorry, the pandemic, we would have seen kinda low to mid single digit range <unk> growth in other income so.
Again, it's been said earlier in the call it very uncertain the size and shape.
Oh, what happens going forward I am so yeah, we're gonna be very careful as we think through any decisions we might make about the business moving forward clearly the big impacts have been the spend.
That didnt materialize in the cards business as I mentioned, and then FX revenue for both Carson everyday banking you would've seen airlines spend in the quarter down over 90% as an example, but you know danley essentially held up well in that sort of speaks to that spot card offering and the breadth of our lineup.
If you sort of taking Oh, you know if they became sustaining that thinking the question you're asking then how do we think about you know our business moving forward.
I feel like.
We came into this situation incredibly well positioned strong market share.
Missions across many of our businesses you also saw the benefit of the diversification in the Canadian retail business with the strong welcome insurance performance.
Clearly right now our focus is on safely enabling business.
Be done a and continuing to carefully manage our distribution Bob.
But we had been up through our future ready strategy.
Working towards the you know sort of inevitability of more migration of simple transactions to digital.
Got need for customers on the more complex pieces of their financial life.
To be able to meet with advisors and to get it bitumen omni channel away and you can see that that you know investments we've made in our business in omni channel has paid off with industry, leading digital results I hadn't seen our digital adoption and engagement continue to grow almost 8 million active.
Digital users, 72% good feel my mobile active and digital adoption up 323 basis points quarter.
So I would say a you know it's possible as we work forward and we consider a the flexibility that work from home has allowed in particular for our contact center and the opportunity that that might give us in terms of talent.
You know joining the bank full time way across branch in phone channel as an example versus part time in one part of the business.
The ability for folks to be redeployed, we've been temporarily redeploying them to collections work to helps work at the customer cares work.
The fraud work and so that the ability for our people to work more seamlessly and our customers to engage with us more conveniently as we've made more automation available or things that I think we'll have lasting impacts to the business, but as we think about.
How many branches we wouldn't have what we will do in those four walls.
I'd be very carefully guided by how customer behavior evolves over time.
And I would just say Hey, you know this has been set by many of my colleagues, but you know what we found is just the power of the culture and the power of our people are working at TD, they have been dedicated and innovative compassionate and supportive.
Many of them still face to face with clients and very actively busy in Arlington branch.
[noise], so unless I think Terry answers, it's Greg I think Terry perfectly even from the.
Outside of the border and anything you want specifically on the on the U.S. I'm happy to go into but I would just leave you with.
Leased on the other income side to the story, Yeah, we're gonna be guided in the short run by do the markets open back up as the economy went back up again, and we certainly saw for the last half of a few to a dramatic decrease in the U.S. in terms of activity in volumes.
And the obviously, we're we're seeing state. So you know begin to reopen real time, and we're going to watch is very very closely but happy to pick up anything specifically on the U.S. you want to call.
I think a I didn't carry gave me a lot my interest was really fee income, but we got some some infill on the future of of how you plan to interact with your customers are also I think I'll take the two for one and a and leave it there. Thank you very much.
It's a it's Chilean we have about six questions left and so if I could just ask everybody can stick to one question. Please so we don't keep you freak too much interestingly afternoon.
Thank you. Your next question is from Merrill Mendonca from TD Securities. Please go ahead.
Good afternoon. This Ah Ah from probably Korea has not as this earning season has.
Played out how many to understand what I didnt understand at the very beginning of it.
So what would be helpful. For me too if you could take me through.
How you contemplated a risk migration essentially the moving EDI and.
Expected losses evolve all that stuff, how did that come into the calculation of your performing loan losses specifically.
Was it.
Overlay or did you.
These new supply the model right now, but then look at the individual corporate loans, how did you actually go about that.
Rick migration perspective.
I've had the effect.
Let me, let me describe the process.
[noise] substantial.
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Our.
Yes.
We started.
They are scenarios cost for him.
Yes.
And then run that through audience.
Well, that's the starting that was the starting point for us.
Actually I over there.
Hey overly.
Considering a few things first as we did a number of portfolio systems across the back some of them one borrowing.
Yes.
Oh and they reported second as you know we look at macro changes since that time, we selected our sundar. So we added over.
Over there for that.
As we have to reflect the benefits of the TDV. These programs we have.
The benefit.
On the government programs. So we consider all of that I didn't know what do they do the modern results.
Just on PD, specifically its stuff.
Basically the macro that drove the.
Changes in the case for retail I'd say in the case on non deal. It's a combination of the macros plus the various bottom up and portfolio reviews.
Yes, you're not suggesting you looked at every single commercial loan and corporate loan I don't think that's possible. So are you, saying you did more of like I, a sampling of it implies something from the sample.
I looked at it on a pretty broad basis, and we've been looking at it over an extended period of time surface pretty.
Yes.
[laughter].
Thank you.
Your next question, if some solar abnormally heavy from BMO capital markets. Please go ahead.
Hi mines are pretty quick one when I look at the oil and gas disclosure.
To me was surprising that proportion that was non investment grade would this have been broadly speaking reflection of that credit quality I'd I'd.
What did you nation as well or is this after you've taken.
Downgrade set up taking them into non investment grade territory.
Maybe first that allow us Bob to comment and then perhaps you can comment on on the migration part of it a budget.
Bob you want to comment on strategically you know on normal apparently are the would've been a combination of both from the the a non investment grade Ah portfolio is primarily a the.
Producer portfolio on both sides of the border books and count in the U.S.
And that's the a reserve based lending book that we have.
And show in Canada, We know as a result from the 2016.
Oh, well shock Oh, that's not books, then slowly working its way through a you know we've been in difficult times in Alberta for a period of time.
Whereas in the U.S. its Oh, the reserve based lending has been.
You know more challenge is too, but just more recently so.
Not that has a little less history.
Perhaps being more conservative and then we did have some migration as well from investment return on it.
Are you going up again, just just to add so recollect backing.
And we ran a number of stress test in the sector. So we actually did that exercise.
Well the corner I looked at WD Guy from 20 to $30 gradually increasing we made assumptions around the heavy oil differentials.
Rob.
Natural gas, starting with $1.20 $5 75 range gradually so.
Information.
Term or what kind of downgrade actions were appropriate, but the reason why you're seeing such little investment grade producers that via proactively gone downgraded.
Number of names, having said that as Bob said.
One of the Noninvestment grade produces a subject to borrowing base. So that helped also one of the logic.
And can be diversified.
They have liquidity, they still have access to capital something cabins.
Tenet that in my prepared remarks, I want to talk about the mitigating measures that produces themselves or taking.
The fact that oil prices that picked up as well you know helps but overall if you can look it up or do you say exposure like.
And 1% of gross loans.
Thanks.
Oh, Hi, Jay if I could just how bad quick follow up on that when you look at that portion that was downgraded.
You can you give me a sense of how much of those that were downgraded would have been originated in the last 12 to 18 months.
I wouldn't know that I can kind of looked at everything but I did I didn't I didn't I just want to know if there was a skew towards the more recent vintages.
Pretty good growth in box business I, just want to have a feel for how much of it has been.
Hey, maybe late into that late cycle group, so to speak I think.
That.
Very little of that in Canada.
And you know some part of that we would have originated in 17 and 18.
Some of the but somehow but the we've been in the business for a long period of time or Forbes said sure. There definitely are some new names or the vintage wouldn't be a 17 and 18, but there are a lot of pre existing names as well. Thank you.
Thank you.
Our next question is from that Doug Young from <unk> capital markets. Please go ahead.
Hi, Good afternoon, it's just going back to the strategic card book and I just noticed that targets.
Indicated that they're ramping you share from the profit sharing income from a credit card program actually increased year over year and just struck me is strange given the sizable P.C.L. you took that you ran through corporate net I see and I haven't had a chance to go look at to be examples that are at the back in I understand that I think the profit shares based more on on chart.
Jobs, then pcls, but just trying to understand a bit of the nuance there or just in case I'm missing something thank you.
Doug if the differences are exactly as you point out a number one that that retailers are not financial institutions or subject to a I as far as nine in the way that we are and their timing differences in the a in India termination payment I doubt cash flows under the waterfall agreements.
And so essentially that provision you've set up as it rolls through from a charge offs that would hit wouldn't it you, obviously, but it would hit them and that would come through the allowances that you've set up for that.
Well, that's a huge if you can think of it that didnt ER in into corporate segment, we carried that partners' share of their revenue at a partner shares of the.
The credit losses, and a crude payments to the partners over time gets charged or non interest expenses. So that's essentially how it works out is that that a somewhat that recoveries or payments may come at different points in time under the waterfalls.
Okay got it okay. Thank you.
Thank you.
Your next question is from Nigel dish and secondary time. Please go ahead.
Thank you good afternoon.
I wanted to touch on it slows you got into for old loans, and when I look at the balances.
Your levels of deferrals seem to be a better than some of your peers have reported so far especially on commercial lending side. I was just wondering if you could provide some color on how you administered a deferral programs where are you more selective on who you crunch deferrals to and is there any relation between you know.
Lowber lower levels of deferrals, we're seeing your book God and the higher performing PCL sort of been taken this quarter or those two items a completely unrelated.
Maybe first Terry you might want to take it as to how the deferrals worked out.
For sure. Thank you I'll start with a realistic secured lending and Ah indicate because that's the majority from my personal perspective, and the way that that occurred is that across our channels, we have advice and tool available to customers to help them understand not only the Bennett.
And then I was taking a deferral, but also the cost to them of doing so and so we don't know for every individual customer their circumstance, but what I would say is that our goal is to ensure they really understand that deferral when they take it.
Those applications for those to secured lending deferrals that came through and where decision the approval rates close to 100%.
I think we're meeting customers needs to get them the deferral, if it's appropriate they judge it to be appropriate for them and we and we still data.
I would say we had about 8000 account roll off a one month deferral in so far those that seems to be performing well.
I'm not commercial standpoint, it would be more Ah business by business decision and that it'd be a range across the consumer lending categories. Most of the other consumer lending <unk> auto finance.
Auto finance.
Because that's really help on the second part of that question about performing loans for these deferred loans.
Our the majority of them skilled stage, one I'd argue waiting so I guess people often difficult period before you decide on.
Well to migrate stage, two or three they wouldn't be class.
I take that.
I can take that Terry so we changed the problem or to your before all the four or risk rating wayfair.
Loans.
That was.
Just to show factor.
Right.
Our.
What I wouldn't say about different is that no difference at existing hadn't made any deferrals I would actually.
Like I view that differ programs.
Yeah.
You know risk, reducing I I assume that is completely I don't need risk, reducing we've given some benefit.
For the risk reduction what we have built reserves for these different programs.
Our view I'm back or <unk>, or something and then others may become impaired as well.
That's really helpful. Appreciate the comments thanks.
Thank you.
Your next question some Scott Chan from Canaccord Genuity. Please go ahead.
Hi, Good afternoon my questions on the on the NIM and maybe for the Greg and carries perspective.
You saw pretty I guess down a margin sequentially again now that rates are low or no. If they got much lower hopefully not on both sides of the border does that signal that maybe we should see more stabilization on the margin into these fine. Thanks.
Yeah sure generally on the overall NIM and then maybe you can go from there in great. Yeah, Scott as you know because the very rapid their rate reductions in the second quarter in response to central banks responds to Cove it.
You get the short term impact a almost a immediately and then the long term comes in as that tractors or roll out and depending on the longer term yield curves. So I'm really from a quarter to quarter perspective, or they those rate cuts came into middle of the quarter end.
So they'll they'll be a full quarterization impact going into the next quarter. So we would see further ah.
Further our margin compression into Q3, just from the short term rates.
So its Terry.
The only thing I would add to what we have said because he sag given that you know will have the full Q3 Ah that's starting to impact so that should further erode margins, probably things being equal the only thing I would I'd say the erosion in Canadian retail a big portion of that was that you had.
About half the quarter the difference between prime stevedore compressing.
Quickly, notably at it restored to more normal levels by the end of April but that my real secured funding perspective.
For all of my Prime based loan.
Create some compression so that isn't it.
So the only thing I'd add from the U.S. I think a there was covered well.
I would be the other things we talk about every quarter would be you know the factors such as mix of the business and and all of that.
That will play into it from quarter to quarter, but the other item is that if in the U.S. you would have known that we effectively had a six rate cuts in two sessions in early March and that wasn't completely or for a full quarter. So we'll see the before quarterization of that in Q3 as well as the fact because of.
Market disruption lie bore was a lot higher than fed funds. After the rate cuts a and now that LIBOR is returning to a more normalized levels a you'll see a further effect of that in the NIM in Q3 as well.
Thank you very much.
Thank you.
Next question, if some dark called me Leach from RBC capital markets. Please go ahead.
Hi, Thank you I just wanted to follow up on the deferral programs and Youve given pretty good disclosure on the difference between the U.S. one candidate in terms of a mountain it seemingly looks like it's a bit shorter in the U.S. in terms of different though the length of the deferral.
No longer in Canada.
And then just tying in Roger just said about the risk reduction.
So when I look at this from from the outside looking in in the U.S., you're gonna have a wall of people required to pay again.
Three months on average looks like.
But later in Canada.
Would you consider at that point in time differing again if.
You find circumstances warranted or from where you sit today you consider that this was enough.
And and we won't have to have deferrals again.
Greg Greg you ought to start off and then maybe I'll end up though I'm happy to and Ah. Thanks for the question I would just say that in the U.S. first of all our lenses around you know, what's the regulatory guidance and.
What are we seeing as far as the general market conditions. Obviously also guided you know our view about how we went out this ER and you're right for the most bought the deferral programs, whether was consumer programs across a wide range of products, including mortgage and home equity or unsecured lending or auto book as well as small business.
And those are the more standardized programs and the general tenure was a 90 day extension.
But each of those programs was meant to have a view about what the conditions are like what the environment is like and what may be needed 90 days out when you look at the mortgage book, specifically it gets a little bit more complicated because obviously mortgages that are sold into the secondary market. The G.S. Cesar involved in some guidance around that.
That allows for restructuring after the 90 days are the to the back into the loan or a complete restructuring of the of the alone small business has its own nuance in than the rest of the consumer categories. So I'd say, yes, we'll certainly look at conditions.
As well as what we can do from an accounting standpoint, and a regulatory standpoint as well.
The Darko. This is Barry just to add you know when when does differ programs, particularly in the U.S. you know what Greg just talked about some T.D. carriers that we introduce him and those who have done.
Immediately when the locked down started and since then you're seeing lots of other programs introduced in the U.S. market. The Triple B program does mainstreet lending program is just about to be introduced you saw this direct payments going to two to two to Americans as well from the U.S. Treasury. So I think the the.
View there is that.
This programs were meant to date people over until this other programs.
I will come into play and hopefully all of them work because the triple B program is geared towards folks getting their jobs back because that's how the program works.
So fully all those things work out a hard to predict precisely you know exactly what might happen 90 days from no.
And as Greg said that other nuances here in the U.S. that we'd love to take into consideration so hard to give you a definitive answer.
At this stage.
Okay. Thank you.
Thank you there no further questions at this time I'd like to turn the meeting back over to Mr. bear out my friend.
Thank you operator, and thank you all for joining us a tough border no doubt but.
But given the circumstances I thinking it was the right thing for us to do to two booked a the allowances that I just talked about.
And I do want to dig it up with did this opportunity would think or 90000, you know colleagues around the world I mean, we have changed the know how we operate this bank overnight folks have been working from home others are being you know looking out for customers that we'll see the location. So I could not be more pro as to what they continue to do.
And deliver for all of us stakeholders, including a shareholder so thank you for that and folks hopefully you know we will meet in different circumstances 90 days from no and I wish it all of you well and your families as well stay safe Bye bye.
Thank you. The conference has now ended Tees disconnect your lines at this time and thank you for your participation.
This conference is no longer being recorded no. He's put modest single family homes. It does that won't be.
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