Q1 2022 PNC Financial Services Group Inc Earnings Call
Today's call for the PNC financial services group.
Participating on this call are Pnc's, chairman, President and CEO , Bill Demchak, and Rob Reilly Executive Vice President and CFO .
Today's presentation contains forward looking information.
Mary statements about this information as well as reconciliations of non-GAAP measures are included in today's earnings release materials as.
Well as our SEC filings and other investor materials. These.
These materials are all available on our corporate website.
<unk> Dot com under Investor Relations. These.
Statements speak only as of April 14th 2022, and PNC undertakes no obligation to update them.
Now I'd like to turn the call over to Bill Thanks, Brian and good morning, everybody as you've seen we had a solid start to the year as we grew loans and securities controlled expenses.
And our credit quality reserves and capital levels remained very strong this.
As we've previously disclosed noninterest income was below our expectations for the quarter.
While we expect that piece to be down sequentially, reflecting typical first quarter seasonality the decline actually exceeded normalized interest rate volatility and probably the Russia, Ukraine conflict adversely impacted certain of our capital markets business among other areas.
Look forward, we're clearly in an environment of uncertainty here. We're also in an environment with rising interest rates, which benefit banks with increased loan demand, which benefit. Thanks, and then P&C space, a business or a bank that never changed its credit box from credit terms that really easy a business has.
A very or a bank that has a very solid mix of fee based businesses and importantly, a bank that has substantially expanded its geographic presence and a hit on that in a second just as it relates to our progress on BBVA I would tell you I just I couldnt be more proud of what we've been able to accomplish over the.
And about 15 months in total amount, but in particular over the last couple of quarters and we still have a lot of work to do but to put in perspective, our staffing is largely complete.
At our calling effort, particularly versus the fourth quarter has increased substantially and our sales and pipelines are robust just to give you an idea.
Activity behind us and the legacy BBVA USA geographies corporate commercial banking calls have doubled since the fourth quarter and sales have increased almost 50% as we expected across C&I be nearly half of these sales are actually not credit related legacy BBVA USA.
Graffiti.
We switched to the retail side, we're obviously focused on building customer relationships. Just give me an idea of our sales per branch were approximately 60% higher in March compared to what they were in December with improvements across mortgages cards and referrals to <unk> investments.
Our asset management group, we're making great progress and strategic investments to hire key people in business development and adviser roles and importantly, our client opportunity pipelines are really strong.
From a balance sheet perspective, we continue to deploy our excess liquidity as you've seen with solid loan growth and securities purchases spot loans grew 6 billion in the quarter driven by the commercial side, we saw a nice increase in utilization in <unk>.
In fact, if we exclude the impact of PPP loan forgiveness spot commercial loans grew 7 billion the fastest organic quarterly growth we've seen since the commercial.
Fence of draws that we saw at the start of the pandemic and by the way we've seen that growth carry into the early part of April . We also remain active on the security side with net purchases of almost 6 billion during the quarter from a balance sheet perspective.
<unk> were offset by unrealized losses due to rising interest rates, which rob's going to discuss in a few minutes. This doesn't impact our regulatory capital or earnings during the quarter. We moved approximately $20 billion of our securities available for sale to held to maturity the limit future valuation changes due to interest rate movements and importantly, we saw.
Solid rebound in the yield on our securities overall, we believe we are well positioned for the rising interest rate environment to deliver net interest income growth and NIM expansion throughout the year.
Finally during the quarter, we returned about $1 7 billion of capital to shareholders through share repurchases dividends and importantly, based on our performance our strong capital levels and the boards confidence in our execution of our strategic priorities, We recently announced a substantial increase to our quarterly dividend of 25 cents per share.
<unk> to $1 50, 420%.
I just want to close by thanking our employees for their hard work and dedication to our customers and communities moving forward as I said, we believe we are well positioned to continue to grow shareholder value as the economy normalizes interest rates move higher and we realize the full potential of the combined PNC and BBVA U S franchise and with that I'll turn it over to.
Rob for a closer look at our results and then we'll take your questions. Thanks, Bill and good morning, everyone. Our balance sheet is on slide three and is presented on an average basis during the quarter loans increased by $2 billion or 1% investment securities grew $6 million or 5% and federal reserve cash balances declined $13 billion for <unk>.
<unk>.
Reflecting higher securities and loan balances as well as lower borrowed funds.
Deposit balances averaged $453 billion and were relatively stable compared to the prior quarter.
<unk> book value was $79 68 per common share as of March 31.
15% decline linked quarter, which was entirely driven by mark to market adjustments in our securities and swap portfolios as a result of higher interest rates.
As a category three institution, we opted out of recognizing a OCI in regulatory capital and as of March 31, 2022, our CET one ratio was estimated to be nine 9%.
Given our strong capital ratios, we continue to be well positioned with significant capital flexibility.
As Bill just mentioned our board recently approved a 25% increase to our quarterly cash dividend on common stock raising the dividend to $1 50 per share. Additionally, during the first quarter, we completed share repurchases of $1 2 billion or $6 4 million shares.
Slide four shows our loans in more detail.
Average loans increased $2 billion linked quarter and on a spot basis loans grew $6 million or 2%.
PPP loan balances continued to decline and impacted first quarter growth by approximately $2 billion.
On both an average and spot basis.
Looking at loan growth, excluding the impact of PPP loans average loans increased $4 billion or 1% driven by $5 billion of growth in commercial and industrial loans, partially offset by a $1 billion decline in commercial real estate balances and average consumer loans were stable linked quarter.
On a spot basis loans grew $8 billion.
Commercial loans grew $7 billion, driven by higher utilization as well as new production within corporate banking and business credit business.
Notably in our C&I segment, the utilization rate increased to 85 basis points on our overall commitments for 2% higher compared to year end 2021 and.
And consumer loans increased $900 million.
With higher mortgage balances were partially offset by lower auto and credit card loans.
Moving to slide five.
Average deposits of $453 billion remained stable compared to the fourth quarter.
On the right you can see total deposits at period end were $450 billion.
Klein of $7 billion or 2% linked quarter all of the decline was on the commercial side, where deposits were $10 billion lower primarily driven by seasonal cash deployment.
Partially offsetting the commercial define consumer deposits increased $3 billion, reflecting seasonally higher balances related to tax refund payments overall, our rate paid on interest bearing deposits remained stable at four basis points and importantly, we remain core funded with a loan to deposit ratio of 65% at the end of the first quarter.
Slide six details the change in our average securities and Federal Reserve balances.
Maintained high levels of liquidity over the past year, while opportunistically purchasing securities. This trend continued into the first quarter as we added primarily U S treasuries and agency MBS.
As a result average security balances increased by 5% or $6 billion compared to the fourth quarter 2021 now.
<unk> now represent 27% of interest earning assets.
Slide seven highlights the composition of our high quality securities portfolio as well as the balance changes from year end March 31.
During the first quarter, we added to our portfolio with net purchases of approximately $6 billion. However.
However, the increase in rates during the first quarter resulted in higher net unrealized losses of approximately $6 billion.
And accordingly, our period end balances remained relatively stable.
So moderate the impact of rising rates and security values and correspondingly a OCI, we transferred approximately $20 billion of securities from our available for sale portfolio into held to maturity at quarter end importantly fluctuations in Aoc I do not have an impact on our earnings. However, we are mindful of the ALC impact on tangible.
Book value and we will continue to evaluate potential opportunities to further tranches.
Turning to the income statement on slide eight as.
As you can see first quarter 2022 reported EPS was $3.23, which included pre tax integration costs of $31 million.
Excluding integration costs adjusted EPS was $3 29.
During the first quarter integration costs reduced revenue by $16 million and increased expenses by $15 million.
First quarter revenue was down $435 million or 8% compared with the fourth quarter.
Expenses declined $619 million or 16% linked quarter and excluding the impact of integration expenses noninterest expense declined 7%.
The first quarter provision recapture was $208 million, primarily reflecting the impact of improved COVID-19 related economic conditions and our effective tax rate was 17%.
So in total net income was $1 $4 billion in the first quarter now, let's discuss the key drivers of this performance in more detail.
Slide nine details our revenue trends.
Total revenue for the first quarter of $4 7 billion declined $430 million linked quarter.
Net interest income of $2 8 billion was down $58 million or 2%.
Higher securities and loan balances as well as increased security yields were more than offset by a $74 million decline in PPP revenue due to loan forgiveness activity.
And the impact of two fewer days in the quarter.
Our net interest margin of 2.28% was up one basis points.
As we recently announced an effective for the first quarter, we re categorized the presentation of our noninterest income and provided an update to the related guidance.
Consistent with those revisions first quarter fee income was $1 7 billion.
The decline of $296 million or 15% linked quarter looking at the detail of each revenue category asset management, and brokerage fees decreased $8 million or 2%, reflecting lower average equity market cap.
Capital markets related fees declined $208 million or 45% driven by lower M&A advisory fees, mostly due to elevated fourth quarter transaction levels, but also some delay transaction activity in the first quarter.
Card and cash management revenue decreased $26 million or 4% driven by seasonally lower consumer spending activity.
Lending and deposit services was essentially stable linked quarter declining only $4 million.
Residential and commercial mortgage noninterest income was $50 million lower primarily due to decreased commercial mortgage activity.
And finally, other noninterest income declined $81 million, primarily due to lower private equity related revenue and once again comparison elevated fourth quarter levels.
Turning to slide 10, our first quarter expenses were down by $619 million or 16% linked quarter.
Excluding the impact of integration expenses noninterest expense declined $243 million or 7% the majority of.
The decline was in lower personnel expense, primarily reflecting lower incentive compensation, we remain deliberate around our expense management at year end 2021, we achieved our objective to reduce BBVA USA annual operating expense run rate by $900 million.
And as we've previously stated we have a goal to reduce cost by $300 million in 2022, So our continuous improvement program and we're confident we'll achieve our full year target as you know this program funds a significant portion of our ongoing business and technology investments.
Our credit metrics are presented on slide 11.
Nonperforming loans of $2 $3 billion decreased $182 million or 7% compared to December 31, and.
And continue to represent less than 1% of total loans.
Total delinquencies were $1 $7 billion on March 31.
$286 million declined from year end, reflecting lower consumer and commercial loan delinquencies. The majority of these decreases resulted from our progress in resolving BBVA USA conversion related administrative and operational delays.
Net charge offs for loans and leases were $137 million, an increase of $13 million linked quarter or.
Annualized net charge offs average loans continues to be historically low at 19 basis points.
During the first quarter, we reduced our allowance for credit losses by approximately $300 million.
And our reserves now total $5 2 billion.
One 8% of total loans.
In summary, PNC reported a solid first quarter and we're well positioned for the remainder of 2022 as we continue to realize the potential of our coast to coast franchise.
In regard to our view of the overall economy, we expect strong growth over the course of 2022, resulting in three 7% average GDP growth.
We also expect the fed to raise rates by an additional cumulative 175 basis points through the remainder of this year to a range of 2% to 2.25% by year end and all of this is consistent with the update on our recent 8-K filings.
At the second quarter of 2022 compared to the first quarter of 2022, we expect average loan balances to be up 2% to 3%, which includes a 1.3 billion decline in PPP loans, we expect net interest income to be up 10% to 12%, we expect noninterest income to be up 6% to 8%.
Which results in total revenue, increasing 9% to 11%.
We expect total noninterest expense to be up 3% to 5% and we expect second quarter net charge offs to be between 125 and $175 million.
Considering our reported first quarter operating results second quarter expectations and current economic forecast for the full year 2022 compared to the full year 2021, we.
We expect average loan growth of approximately 10% and spot loan growth of 5%.
We expect total revenue growth to be 9% to 11%.
We expect expenses, excluding integration expense to be up 4% to 6%.
And we now expect our effective tax rate to be approximately 19%.
And with that Bill and I are ready to take your questions.
Thank you and ladies and gentlemen at this time, if you would like to ask a question. Please press. The one followed by the four on your telephone keypad.
We'll hear about 300 home prompt to acknowledge your request.
Once again, if you would like to ask a question. Please press the one followed by the four on your keypad. Please hold while we compile the Q&A roster.
Okay.
Our first question is from the line of John <unk> with Evercore ISI. Please go ahead.
Good morning.
Hey, John .
What does he if you could give us a little bit more color on how youre thinking about the capital markets revenues from here, obviously, you saw a pretty good step down this quarter given the.
The activity.
The broader market saw clearly just wanted to get your thoughts on how we can expect.
Think about the.
The remaining quarters. If you think you continue to increase from here and if the capital markets outlook has impacted your full year revenue view, we've got baked in there as well. Thanks, Yes, yes, sure Hey, John It's Rod good morning.
So in regard to capital markets Youll recall at the beginning of the year, our expectations for capital markets was to be down.
<unk>, 20% or so from 'twenty one levels.
Just because of the 21 levels were so elevated.
The first quarter was slower than we expected even at those reduced levels, but for the full year guide I have most of that back in there. So.
So most of what we expected to occur in the first quarter that didn't occur is still.
Still in the.
Full year guidance.
So thats why were still 911% growth.
Okay got it alright, that's helpful and then and then.
And then secondly on the <unk>.
On the deposit side, just given the move in rates that we're looking at here clearly focus.
Focus on deposit flows for the spot balances you saw about a 2% decline in.
Your deposits there can you maybe give us a little bit of color on what youre seeing in terms of the positive behavior here near term does that more commercially oriented in terms of the deposits that you sold in terms of the decline and then.
Can you talk about your betas.
You'll see in the near term as rates rise and then further oil after the first hundred.
Fed hikes, thanks, yes, okay.
This is Rob again, John so on the deposits in the quarter.
We saw a spot decline and all of that was on the commercial side, which we see is largely seasonal.
Consumer deposits on a spot basis, we're actually up.
Selecting tax refunds and some seasonality there so.
That's the story on the deposits for the full year in regard to the betas.
Relative to what we expected at the beginning of the year. We have increased our beta is consistent with the increase in the fed rate hike forecast.
Along the lines of what we saw then lifestyle last cycle, maybe a little bit less just because were working off such high levels.
Very quiet as you pointed out very quiet on the first 100 basis points or so but showing up if our rate forecast is correct showing up in the <unk>.
Third and fourth quarter.
Got it thanks, if I could ask just one more thing on the loan side I know you mentioned the higher line utilization on the commercial side are you beginning to see Capex plans drive loan demand and then lastly are you seeing any of the volume coming back from the capital markets to the bank loan market yet on the commercial side.
I think that utilization is part of.
It reflects part of the slowdown on the capital market side in bonds.
Clients continue to be active.
So yes, a pick up in Capex build in inventory the other thing we're seeing.
It'll be out beyond the utilization change I think we saw a similar percentage increase just new dollars out or sorry, not percentage, but notional amount increase of new DHA commitments out.
So some of its utilization some of its winning clients utilization driven by capital markets being a bit of disarray.
Together with increased Capex.
And higher inventory levels for <unk>.
Got it okay, great. Thank you.
Sure.
Our next question is from the line of Scott Fevers with Piper Sandler. Please go ahead.
Good morning, guys. Thanks question.
Hey, Scott So Rob it was great to see you reiterate the full year 'twenty two revenue outlook I think you sort of addressed this in response to the <unk>.
Capital markets question previously, but was hoping broadly you could just kind of parse the guide between what comes from NII and what comes from fees I think 90 days or so ago, you guys had been thinking maybe mid single digit.
All in growth for 'twenty, two if I recall correctly, but just given sort of the agenda and reporting it sure yes.
Back others et cetera, just curious to hear your thoughts.
Sure sure. So so 911 total for the full year.
Compared to the beginning of the year net interest income is as high as a bigger component of that.
Because of the rate increases in the higher balances.
So we're looking at that to be inside of that 911, the NII in the high teens.
And then on the core fee piece.
Looking more towards flattish to maybe down low low single digits and most of the change there being on the mortgage outlook from the beginning of the year. So most of our most of our fee categories are tracking to what we expected for the full year, including capital markets as I just mentioned that mortgage were off from what we thought at the beginning.
Of the year because of rates so.
Residential and commercial mortgage we expect it to be down low single digits. We're now looking at maybe down 25% or 30% year over year. So that's that's where the fee change is largely largely resident.
Perfect and you just captured by a second question as well so thank you Brian I appreciate it sure yes sure.
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Our next question is from the line of Mike Mayo with Wells Fargo Securities. Please go ahead.
Oh hi.
Good morning.
So youre guiding for 9% to 11% revenue growth at 4% to 6% expense growth. So you're guiding now for 500 basis points of positive leverage.
Curious.
Art, you can't get to spend some of that and invest more of those that spread and I relate. This I'm not telling you to do or not do I'm, just there's always a trade off but I want to tie this back to your CEO letter Bill.
Bill where are your first goal was to <unk>.
<unk> share and especially your new markets and your second goal was to prove share with.
Are your customers so I guess.
The concrete question is give any metrics to say what kind of share you would like to improve by market.
<unk> corporate and consumer customer and to do that are you tempted to spend some of that excess of the revenue growth over expense growth. Thanks.
Thanks for the question Mike.
In short we don't have to.
You know, we've we've always been investing in our franchise. So if you think about we talk about our new markets as I said in my comments. They are largely staffed at this point.
So if I think about our people spend where kind of where we need to be if I think about our technology spend.
You know we've been going hard at that for a number of years and we're more in the place of what can we actually get done and the sequence timeline than we are about hey spend more money.
So youre not going to see increases against.
We expected in that space. So anyway short answer your question is no we don't need to spend the money.
Not spending the money in no way detracts for from the.
The growth that I think we're capable of.
Or another way are spending the money on investments and that's part of the guide.
Another way to put it.
So it's baked in there can you put some numbers around your CEO letter like I said, it's a neutral.
<unk> gained share by by your markets gained share by customers and technology at least for your first two goals were.
Whereas a share today, and where do you hope to get it to you.
We have not given that before but it'd be nice to know is it bigger than a bread or.
Or what.
It's a fair question.
I don't know that you were going to define share by share of C&I loans go to market I think what we have to do and we're working on Mike is presentation of just progress in Underpenetrated markets compared to what we execute in one of our mature markets and then tracking that for you I think that's the Bev.
Metrics. So we look at loan balances, we look at fees, we look at percent of fees as a percentage of total revenues, we look at calling volume we look at new clients.
All the things you'd expect us to and we need to figure out at.
And I'll commit to that we will we need to put out metrics you can track it through time, we do it internally.
And then lastly, as it relates to buybacks.
You have the book value regulatory capital.
Dichotomy here.
Which went out when you think about buyback.
Not sure I follow the question.
99, 9% CET one ratio.
Fine that's good but your book value went down that's not as good.
Buyback the same amount of stocking slow buyback to adopt nexstar.
The impact yeah, yeah, yeah. So if you simply asking the question do we view our available capital based on the 99 the answer to that is yes correct.
Okay, and then does that mean you continue the pace of buybacks or how do you think about what we're going to we're going to be in the market. It's obviously you know I think it's more attractive today to buy back shares then it was.
Towards the end of the year. So yeah, no we're going to be in the market and.
I don't know what we've publicly said that no no that's right.
The answer is it is the regular regulatory capital that we'd look at mic and the current pace that we've been on we expect to continue.
Average quarterly average quarterly average quarterly pace, we were a little bit more of this past quarter.
Got it thank you.
Sure.
Our next question is from the line of Bill Karachi with Wolfe Research. Please go ahead.
Yes.
Thank you good morning, Bill and Rob.
Hey, Bill good morning.
Following up on your deposit beta expectations being a bit lower this cycle given all the liquidity in the system.
On the last call that you would expect to see higher betas, if the fed shrinks its balance sheet dramatically, but that loan growth would be an offset to that.
Maybe could you help square those two points for us and I guess, just maybe discuss the risk that the piece that has communicated could lead to a higher deposit flight risk.
So I mean, there are two.
Opposing forces right. So when the fed shrinks its balance sheet, which it will.
Even if they let it run off Theyre, saying, you know whatever that number is $90 million.
So in a month or a quarter, if I remember right.
It will pull deposits from the system at the same time when there is loan growth it puts deposits back into the system and the reason for that if you think about just leverage on the capital assume everybody hold 7% on a loan they borrow from us the deposit somewhere else it collectively builds deposits into the system.
Collectively we think that's going to cause.
Will will cause deposit growth to slow, but we actually think deposit growth is still going to be positive for the system and for us.
So again fed balance sheet shrinks, but at the same time, we're going to see loan demand, we expect to see loan demand we have seen loan demand at a pace that would generate deposit so.
Right.
Particularly worried about that now what will happen of course is as the fed cuts rates substantially higher.
You know debate betas are going to have to do a big catch up move because all of a sudden it's going to matter.
Interest rates are going to get back to a place where people start paying attention again, though I don't know what that level is.
That we've ever come off of.
You know a base of zero and tried to play catch up the last time, when we thought about that the fed reversed course pretty quickly.
So we're going to have to see how that plays out but I think deposits in the system will still be there. We just want to see the same growth we have over the last couple of years.
Got it that makes sense I'm, taking that thought process going inside your outlook does that contemplate the possibility of maybe simply letting some of the liquidity that you're sitting on today outflow.
Got it.
If necessary rather than paying up to keep it to fund to fund loan growth.
Well, we haven't had to.
Hey, up I mean.
As you say I think our average cost of funds phase four.
Four basis points. So there's some percentage of that on the corporate side in particular that will be.
It looks for direct substitutes from competitors or money market funds on a given day and we assume in our forecast we assume that that will have very high if not betas of one.
And that's fine that's part of our funding model.
It's embedded in our forecast and we never we don't consider those necessarily.
Core deposits, even though their core clients, but that makes sense to you.
Yep.
And that's where your four basis points on core deposits.
Our borrowings a lawyer.
Okay. Thank you that's.
That's helpful. If I could ask on CRE.
It can be can you talk about the risk that tenants may remain good credits and continue to abide by their lease obligations through the end of their lease terms, but ultimately not renew because they just don't need as much space.
Yeah.
Look I think that's one of our fears.
As you know.
I think we're going to see that weakness in office properties.
Flow through over a longer period of time, but and I think by the way that's very market specific.
So I would tell you for example, I think in Pittsburgh here, we're going to struggle with that we don't have exposure.
Interestingly, we don't have a lot of exposure here, but practically I think there'll be less people in the buildings in Pittsburgh and I think that's going to be the case in many metro areas.
Around the country and yes, I think that's going to cause lease rates to drop over time, and yes, I think that's going to impact office properties.
Our reserve for that had been watching that.
We pick our clients carefully.
You know at this point, we think most.
Most if not all of them have the wherewithal to make their way through that.
That's helpful. Thank you if I could squeeze in one last one bill you shared in the past the vision of giving consumers the ability to use zelle at the point of sale for retail payments can you update us on whether that's something that you'd still support and how do you think about the risk of cannibalizing or that that could cannibalize your debit.
Credit volumes.
Look I'm not going to.
Speak on behalf of AWS the company.
Sure.
Simply because that's a collective decision from the the ownership group of AWS I think.
Everybody's interest is to make.
Payments easier to make payments.
Be more fraud resistant.
And look to be able to make some return on payments.
We collectively look through all of those things against the current rails.
Uh huh.
Payment landscape changes, we'll adapt with it we are going to start using zelle.
Uh huh.
In a few of the other ownership thanks to to allow purchase for services for small business. So it will get out there into the P to merchant space I'm just.
At this point not direct competitor to the card rails.
For a variety of reasons, but but.
Yes.
Understood. That's super helpful. Thank you for taking my questions.
Sure.
Okay.
Next question please.
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Our next question is from the line of Gerald Cassidy from RBC. Please go ahead.
Thank you Hi, Bill Hi, Rob.
Hey, Josh can you.
Can you guys I know you talked about the capital users.
<unk> rates going up.
Possibly customers with capital expenditure, but can you share with us where are they now and what would you consider to be a normal rate of capital utilization.
The organization.
Okay.
So, yes, and we've talked about this before it Gerard.
So right now we're in the low fifties up from the high Forty's, how we thought through the bulk of last year and normal just whatever normal is we might expect somewhere in the mid 50, So we're moving toward that not there yet.
And Robin is there any difference have you discovered yet with the BBVA customer that C&I customer versus legacy PNC customer.
Now it's interesting on the commercial side that we were talking about that this morning, it's very very similar in terms of the borrowing trade. So.
There really is no difference in terms of the utilization of the lines.
They're all up and sort of similar amounts.
Very good and then.
I know you mentioned in your remarks about transferring over some of the available for sale Securities I think it was 20 billion into the held to maturity.
Would they transferred over at a discount and then will that discount accrete into.
Your capital over time.
Yes, yes exactly.
And again and again governance plain again, it doesn't affect earnings.
Right right right.
It's all going to pull we we balanced between the flexibility benefit of available for sale versus the OCI component of or benefit of held to maturity. So you know we'll continue to look at that but it's it'll it'll run its course and again doesn't affect earnings.
Right, Okay, and just lastly.
No you guys. When you did the BBVA transaction you are quite excited about the.
The money transfer business is between I believe it was maybe in Mexico and the U S. Can you share with us any color on how how is that going is it going as well as you expected or have you been able to expand it.
Yeah.
We've actually been really happy with it has expanded and we're currently looking through several countries in Latin America today, we're actually looking at expanding that through relationships.
Into other countries, there and I think into Europe .
Although I'm not certain about that it's dependent on correspondent banking relationships.
In the receiving countries that are responsible for know your customer Gerard, but it's a big business, we actually white label it for others and we're excited by it we've been.
It is now mainstream on our consumer apps.
And importantly, we're looking at some of that functionality.
To be tied into some of the things that we're actually doing on the corporate side.
Great. Thank you Bill appreciate it yeah.
And there are no further questions I'll turn the presentation back to the speakers.
Okay, well. Thank you very much and if you have any follow up questions. Please feel free to reach out to the IR team.
Everybody. Thanks.
Thanks folks.
Thank you and that does conclude today's conference you may now disconnect.
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