Q2 2024 The Toronto-Dominion Bank Earnings Call

Speaker Change: [music].

This conference is being recorded.

The homes that don't have as you say.

Speaker Change: All participants please standby your conference is ready to begin.

Operator: Good morning, everyone. Welcome to the TD Bank Group Q2 2024 Earnings Conference Call. I would now like to turn the meeting over to Ms. Brooke Hales, Head of Investor Relations. Please go ahead, Ms. Hales.

Speaker Change: Good morning, everyone and welcome to the TD Bank Group Q2, 2024 earnings Conference call.

Speaker Change: I would now like to turn your meeting over to MS Brook Hills head of Investor Relations.

Speaker Change: Please go ahead Michelle.

Brooke Hales: Thank you, operator. Good morning, and welcome to TD Bank Group's second quarter 2024 investor presentation. Many of us are joining today's meeting from lands across North America. North America is known as Turtle Island by many Indigenous communities.

Speaker Change: Thank you operator.

Speaker Change: Morning, and welcome to TD Bank group's second quarter 2024 investor presentation.

Speaker Change: All of US are joining today's meeting from lands across North America, North America is known as Turtle Island by many indigenous communities I am currently situated in Toronto.

Brooke Hales: I am currently situated in Toronto. As such, I would like to begin today's meeting by acknowledging that I am on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples, and that Toronto is now home to many diverse First Nations, Métis, and Inuit peoples. We also acknowledge that Toronto is covered by Treaty 13 signed with the Mississaugas of the Credit and the Williams Treaties signed with multiple Mississaugas and Chippewa bands.

Speaker Change: I would like to begin today's meeting by acknowledging that I am on the traditional territory of many nations, including the niches. So I think that the credit.

Speaker Change: The Chippewa the hardiness Shoney and the wind at peoples and is now home to many diverse first nations.

Speaker Change: And you're right people. We also acknowledge that Toronto is covered by Treaty 13 signed with the niches. So I think that the credit and the Williams Treaty signed with multiple Mississauga and ship a weapons. We will begin today's presentation with remarks from Barrett Ms Ronni The bank CEO.

Brooke Hales: We will begin today's presentation with remarks from Bharat Masrani, the bank's CEO, after which Kelvin Tran, the bank's CFO, will present our second quarter operating results. Ajai Bambawale, the bank's Chief Risk Officer, will then offer comments on credit quality, after which we will invite questions from pre-qualified analysts and investors on the phone. Also present today to answer your questions are Raymond Chun, Group Head, Canadian Personal Banking, Barbara Hooper, Group Head, Canadian Business Banking, Tim Wiggan, Group Head, Wealth Management and Insurance, Leo Salom, President and CEO, TD Bank, America's Most Convenient Bank, and Riaz Ahmed, Group Head, Wholesale Banking. We will be ending promptly at 9 a.m. Accordingly, please limit yourself to one or two questions and then re-queue.

After which Calvin Tran the bank's CFO will present, our second quarter operating results.

Speaker Change: Hey, Bob Walsh <unk>, Chief Risk Officer will then offer comments on credit quality after which we will invite questions from prequalified analysts and investors on the phone.

Speaker Change: Also present today to answer your questions are Raymond Chen Group head Canadian personal banking, Barbara Hooper Group head Canadian business banking, Tim Wiggins Group head wealth management and insurance, we use along president and CEO TD Bank America's most convenient bank and react on a group had wholesale banking we will.

Speaker Change: Be ending promptly at nine a M. Accordingly, please limit yourself to one or two questions and then requeue. Please turn to slide two.

Brooke Hales: Please turn to slide 2. As noted on slide 2, our comments during this call may contain forward-looking statements that involve assumptions and have inherent risks and uncertainties. However, actual results could differ materially. I would also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results. The bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance. Bharat and Kelvin will both be referring to adjusted results in their remarks.

Brooke Hales: Additional information about non-GAAP measures and material factors and assumptions is available in our Q2-24 report to shareholders. With that, let me turn the presentation over to Bharat. Thank you, Brooke, and thank you, everyone, for joining us today.

Speaker Change: As noted on slide two our comments during this call may contain forward looking statements, which involve assumptions and have inherent risks and uncertainties actual results could differ materially.

Speaker Change: I'd also remind listeners that the bank uses non-GAAP financial measures to arrive at adjusted results.

Speaker Change: Bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance.

Speaker Change: Barrett and Calvin will both be referring to adjusted results in their remarks additional information about non-GAAP measures and material factors and assumptions is available in our Q2 'twenty four report to shareholders with that let me turn the presentation over to Barrett.

Barrett: Thank you Brook and thanks, everyone for joining us today.

Bharat Masrani: Q2 was a strong quarter for TD, with earnings of $3.8 billion and EPS of $2.04, reflecting the strength of a diversified business model. Before I get into the details, I want to spend a minute on our U.S. AML program. As you read in the news release we issued on May 3rd, there were serious instances where the bank did not effectively monitor, detect, report, and respond to suspicious activity. Criminals are regularly targeting financial institutions. In these cases, TD did not effectively thwart their activity. This is unacceptable.

Barrett: Q2 was a strong quarter with Didi with earnings of $3 8 billion and EPS of $2.04.

Barrett: Reflecting the strength of our diversified business model.

Before I get into the details I want to spend a minute on our U S AML program.

Barrett: As you read in the news release, we issued on May two there were serious instances, where the bank did not effectively monitor detect report and respond to suspicious activity.

Barrett: Criminals are regularly targeting financial institutions in these cases.

Speaker Change: You did not effectively toward their activity.

Speaker Change: Is unacceptable.

Bharat Masrani: CD has been cooperating closely with the authorities to help them prosecute this criminal. We have freely shared all information we have with the Department of Justice and other U.S. regulators, even when it demonstrated our weakness. As we advanced our own internal investigation, we took action against responsible employees, including termination where appropriate. Throughout, we strive to do what is right. We have also launched a comprehensive effort to overhaul our U.S. AML program. This is a major undertaking.

<unk> has been cooperating closely with the authorities to help them prosecute these criminals.

Speaker Change: Freely shared all the information we have with the department of Justice and other U S regulators, even when it demonstrated our weaknesses as.

Speaker Change: As we advance our own internal investigation, we took action against responsible employees, including termination with a brokerage throughout we strive to do what is right.

Speaker Change: We've also launched a comprehensive effort to overhaul our U S. AML program. This is a major undertaking this is a priority for me and our senior leaders and we have mobilized that mobilize the required resources to deliver.

Bharat Masrani: This is a priority for me and our senior leaders, and we have mobilized the required resources to deliver. We have already invested $500 million in AML remediation efforts, which will also enhance our AML program globally. We've made tangible progress, but there's more work ahead. We're committed to getting the job done as we build an AML program commensurate with the growing risks from bad actors around the world. We know investors and other stakeholders are eager for more information on the aggregate cost and timelines and want a fuller view of the monetary and non-monetary penalties.

Speaker Change: We also we have already invested $500 million in AML remediation efforts, which will also help lift our AML program globally, we've made tangible progress, but there's more work ahead, we are committed to getting the job done as we build an AML program commensurate with the growing risks from bad actor.

Around the world.

Speaker Change: We know investors and other stakeholders are eager for more information on the aggregate cost and timelines and want a fuller view of the monetary and nonmonetary penalties, we've been cooperating with our U S regulators and the Doj in good faith for many months now working hard to bring these investigations to a resolution as soon.

Bharat Masrani: We've been cooperating with our U.S. regulators and the DOJ in good faith for many months and are working hard to bring these investigations to a resolution as soon as possible so that our investors can have more clarity. Now, let's turn to our second quarter results. We have a proven business model with diversification and scale, underpinned by a strong risk culture that is designed to deliver consistent and predictable earnings growth. We remain focused on executing on our strategy, growing our franchises, and delivering returns to our shareholders.

Speaker Change: As possible so that investors can have more clarity.

Speaker Change: Let's now turn to our second quarter results, we have a proven business model with diversification and scale underpinned by a strong risk culture that is designed to deliver consistent and predictable earnings growth.

Speaker Change: We remain focused on executing on our strategy growing our franchises and delivering returns to our shareholders.

Bharat Masrani: As I said, it was a strong quarter for TD, with all of our businesses outperforming expectations. Revenue grew by 10% year over year driven by momentum across our platform and particularly in our markets-driven business. Fundamentals were strong across the bank, resulting in loans and assets under management growing by 7% and 6%, respectively. With rates expected to be higher for longer, TD derives the benefits of higher net interest income, and, as Ajai will discuss, we are well positioned for a slower economy. PCLs were higher quarter over quarter in line with our prior guidance as the performing bill reflecting some credit migration and volume growth was partially offset by lower impaired provision.

As I said it was a strong quarter of with D. D with all of our businesses outperforming expectations revenue grew by 10% year over year, driven by momentum across our platform and particularly in our markets driven businesses.

Speaker Change: On the metals were strong across the bank, resulting in loans and assets under management growing by 7% and 6% respectively with rates expected to be higher for longer did it derives the benefits and net interest income and as Ajay will discuss we are well positioned for a slower economy.

Speaker Change: <unk> were higher quarter over quarter in line with our prior guidance is performing build reflecting some grade migration and volume growth was partially offset by lower impaired provisions, we delivered significant positive operating leverage while continuing to execute on our restructuring program and prioritizing investments in our it.

Bharat Masrani: We delivered significant positive operating leverage while continuing to execute on our restructuring program and prioritizing investments in our risk and control infrastructure. The Bank's CET1 ratio was 13.4%, reflecting organic capital generation offset by an increase in RWA due to volume growth and risk migration, as expected, and the impact of shares bought back during the quarter. TD has sufficient capital to address uncertain market conditions and various scenarios that may play out. This quarter, the bank announced a multi-year strategic relationship with Google Cloud, in addition to TD's existing relationship with Microsoft Azure.

Speaker Change: Our risk and control infrastructure.

Speaker Change: The bank CET, one ratio was 13, 4%, reflecting organic capital generation offset by an increase in RW. It due to volume growth and risk migration is expected and the impact of the shares bought back during the quarter.

Speaker Change: D D has sufficient capital to address uncertain market conditions at various scenarios that may play out.

Speaker Change: This quarter, the bank announced a multiyear strategic relationship with Google Cloud in addition to Td's existing relationship with Microsoft Azure. These.

Bharat Masrani: These partnerships and the bank's technology strategy more broadly help support TD's delivery of personalized and connected experiences for our customers and accelerate innovation. And at last week's TD Tech Day, the bank shared details of two of its generative AI pilots developed through TD Invent, our enterprise approach to innovation. The first pilot, powered by Layer 6, our in-house AI team tests a generative AI virtual assistant designed to deliver more streamlined customer experiences in the bank's contact center. As a second pilot, TD is testing GitHub Copilot, a generative AI programming assistant developed by Microsoft that analyzes and suggests code, accelerating the pace of software development and empowering TD engineers to focus on more complex work.

Speaker Change: These partnerships and the bank's technology strategy more broadly help support dd's delivery, a personalized connected experiences for our customers and accelerate innovation.

Speaker Change: And at last week's detected the bankshares details of two of its generally pilots developed through DD invent our enterprise approach to innovation. The first pilot powered by layer six are in house AI team. That's the generative AI virtual assistant designed to deliver more streamlined.

Speaker Change: Customer experience is in the bank's contact centers.

Speaker Change: And the second pilot did he is testing Github copilot of generative AI programming a system developed by Microsoft that Ed.

Speaker Change: Analyzers and suggests gold accelerating the pace of software development and empowering DD engineers to focus on more complex work.

Bharat Masrani: Let me now turn to each of our businesses and review some highlights from Q2. The Canadian personal and commercial banking segment is firing on all cylinders. Delivering strong loan and deposit volume growth year-over-year and substantial positive operating leverage, and Real Estate Secured Lending, TD continued to drive growth in a highly competitive market. The bank recorded its twelfth consecutive month of market share gains, driven in part by TD Mortgage Direct.

Speaker Change: Let me now turn to each of our businesses and review some highlights from Q2.

Speaker Change: Our Canadian personal and commercial banking segment is firing on all cylinders delivering strong loan and deposit volume growth year over year and substantial positive operating leverage.

Speaker Change: In real estate secured lending did he continued to drive growth in a highly competitive market.

Speaker Change: The bank recorded its 12 consecutive months of market share gains driven in part by Didi mortgage direct launched a year ago. This new distribution channel is resonating with our customers and modernizing the process for receiving personalized advice.

Bharat Masrani: Launched a year ago, this new distribution channel is responding to our customers and modernizing the process for receiving personalized advice. In credit cards, we grew loans 11% year-over-year, and as part of TD's ongoing sponsorship of the Blue Jays, eligible credit card holders can now enjoy exclusive perks at home games as the bank adds value for our customers. Its leading deposit franchise continues to build momentum, winning in the new critical new-to-Canada market with another strong quarter for account opening.

Speaker Change: In credit cards, we grew loans, 11% year over year and as part of a deep part of Dd's ongoing sponsorship of the Blue Jays eligible credit cardholders can now enjoy exclusive perks at home games.

<unk> adds value for our customers.

Speaker Change: It is leading deposit franchise continued to build momentum winning in the new critical new to Canada market with another strong quarter for account openings and as part of an expanded agreement announced this quarter H D. S. C Bank, India's leading private sector bank will refers to students landing.

Bharat Masrani: And as part of an expanded agreement announced this quarter, HDFC Bank, India's leading private sector bank, will refer students planning to study in Canada to TD's International Student GIC program, simplifying the banking experience for Indian students in Canada.

Speaker Change: In Canada, two Dd's International student GIC program, simplifying the banking experience for Indian students in Canada.

Bharat Masrani: In business banking, we grew loans by 7% year-over-year. Together with the Business Development Bank of Canada, TD launched the Business Accelerator Loan Program to help enhance access to capital for small and medium-sized enterprises. I am also proud that TD Auto Finance ranked highest in dealer satisfaction for non-prime and prime credit among non-captive auto finance lenders according to the JD Power 2024 Canada Dealer Financing Satisfaction Study. Turning to the U.S., the U.S. Retail Bank continues to deliver strong operating momentum with sequential earnings growth of 7% and peer-leading loan growth in a challenging environment. We launched TD Complete Checking, a new product designed to help simplify and modernize the checking experience, and TD Early Pay, a new feature that lets customers receive direct deposits up to two business days early.

Speaker Change: And business banking, we grew loans by 7% year over year together with the business development Bank of Canada, DD launched the business accelerator loan program to help enhance access to capital for small and medium size enterprises.

Speaker Change: I'm also proud that TD auto finance ranked highest in dealer satisfaction for non prime and prime credit among non captive auto finance lenders. According to the J D power 2020 for Canada dealer financing satisfaction study.

Speaker Change: Turning to the U S. The U S retail bank continued to deliver strong operating momentum with sequential earnings growth of 7% and peer leading loan growth in a challenging environment.

Speaker Change: We launched <unk> complete checking our new product design to help simplify and modernize the checking experience and TD early pay a new feature that lets customers receive direct deposits up to two business days early.

Bharat Masrani: Our proprietary bank card book continues to deliver, with balances up 16% year-over-year, new account growth of 25% year-over-year, and record digital account openings this quarter. And we continue to have strong momentum in our commercial banking business. Middle market loan balances grew 20%, and lending fees were up 58% year-over-year. TD Bank, America's most convenient bank, hit a digital milestone in Q2.

Speaker Change: Our proprietary bank card book continues to deliver with balances up 16% year over year, new account growth of 25% year over year and record digital account openings this quarter.

Speaker Change: And we continue to have strong momentum in our commercial banking business middle market loan balances grew 20% and lending fees were up 58% year over year.

Speaker Change: TD Bank America's most convenient bank either digital milestone in Q2, we already serve over 10 million customers in the U S. We now have over 5 million active mobile customers delivering new features and capabilities that enhance the customer experience.

Bharat Masrani: We already serve over 10 million customers in the U.S., and we now have over 5 million active mobile customers, delivering new features and capabilities that enhance the customer experience. The bank continues to receive recognition for its unique and inclusive culture. In April, TD was once again named one of America's Best Employers for Diversity by Forbes, ranking highest among financial institutions. The wealth management and insurance segment saw strong performance across its diversified businesses, with revenues up 11% year-over-year, reflecting higher insurance premiums, asset growth, and increased rates per day in the direct investing business.

Speaker Change: The bank continues to receive recognition for its unique and inclusive culture.

Speaker Change: April D. D was once again named one of America's best employers for diversity by Forbes ranking highest among financial institutions.

Speaker Change: The wealth management and insurance segments saw strong performance across its diversified businesses with revenues up 11% year over year, reflecting higher insurance premiums asset growth and increased rates per day in the direct investing business.

Bharat Masrani: In TD Asset Management, we grew market share in ETFs, recently adding 7 fixed income ETFs to our products. TD Asset Management also built momentum in the defined contribution space, as our target date funds were recently rated the top recommendation to clients across Canada by a trusted benefit solutions provider. In our advice business, our family office, which provides bespoke investment management and customized tax and legacy planning for our ultra-high net worth clients, just surpassed $1 billion in managed assets.

Speaker Change: TD asset management, we grew market share in Etfs recently, adding seven fixed income Etfs to our product suite.

Asset management also builds momentum in the defined contribution space as our target date funds were recently rated the top recommendation to clients across Canada by a trusted benefits benefit solutions provider.

Speaker Change: And our advice business, our family office, which provides bespoke investment management and customized stacks and legacy planning for.

Speaker Change: For our ultra high net worth clients, just surpassed $1 billion in managed assets.

Bharat Masrani: Wholesale banking delivered record revenues for the second consecutive quarter, reflecting broad-based growth across the business, including in U.S. underwriting, sales, and trading. With the TD Cowen acquisition, we are delivering a full suite of capabilities to our clients and building a top 10 integrated North American investment bank with global reach. The integration of T.D.

Speaker Change: Wholesale banking delivered record revenues for the second consecutive quarter, reflecting broad based growth across the business, including in U S underwriting sales and trading.

Speaker Change: With the <unk> acquisition, we are delivering a full suite of capabilities to our clients and building adopt an integrated North American investment bank with global reach.

Speaker Change: The integration of DD Cowen is tracking ahead of schedule on April 1st we achieved an important milestone with the implementation of our unified investment banking capital markets and research platform integrating coverage models.

Bharat Masrani: Cowan is tracking ahead of schedule. On April 1st, we achieved an important milestone with the implementation of a unified investment banking, capital markets, and research platform integrating the coverage model. D.D.

Bharat Masrani: Cowan's renowned global research franchise continues to receive recognition. In March, the team was awarded Best Specialist ESG Research in the 2024 ESG Investing Awards, highlighting their thought, leadership, and commitment to action-oriented, investible research. The bank has momentum and strong market share, and we will execute on our growth strategy. At Investor Day almost a year ago, we highlighted medium-term targets for our Canadian retail business. One year in, we're on track to deliver on those aspirations.

Speaker Change: P D cowards renowned global research franchise continues to receive recognition in March the team was awarded best specialist ESG research in the 'twenty 'twenty four ESG investing awards, highlighting their pod leadership and commitment to action oriented invest our investable research.

Speaker Change: The bank has momentum and strong market share and will execute on our growth strategies at our Investor day, almost a year ago, we highlighted medium term targets for our Canadian retail businesses. One year in we are on track to deliver on those aspirations.

Bharat Masrani: In Canadian Personal Banking, we described our ambition to outgrow Canada's population, and the most recent data shows TD's net customer growth outpacing Canadian population growth by 30%. Similarly, in insurance, we described our ambition to be Canada's fastest-growing personal lines insurer. And, over the past year, TD has gained market share in personal lines in every province. TD is delivering on the bold ambitions we outlined a year ago, and the bank remains committed to the communities we serve.

Speaker Change: Canadian personal banking, we described our ambition to outgrow Canada's population.

Speaker Change: And the most recent data shows Dd's net customer growth outpacing Canadian population grows by 30 basis points.

Speaker Change: Similarly in insurance, we described our ambition to be Canada's fastest growing personal lines insurer and over the past year did he has gained market share in personal lines in every province D. D is delivering on the bold ambitions, we outlined a year ago.

Speaker Change: The bank remains committed to the communities we serve through the TD ready challenge. The bank awarded 10 1 million Grands 1 billion dollar brands to organizations in Canada, and the U S that are focused on finding innovative solutions that address systemic barriers to affordable housing and help increase access with <unk>.

Bharat Masrani: Through the TD Ready Challenge, the bank awarded 10 $1 million grants to organizations in Canada and the U.S. that are focused on finding innovative solutions that address systemic barriers to affordable housing and help increase access to stable housing for those who need it most. And we brought together community groups, academics, and business leaders to help find innovative solutions through TD's inaugural Housing Summit at Howard University, a historically black college and university in Washington, D.C., in April.

Speaker Change: Stable housing for those who need it most and.

Speaker Change: And we brought together our community groups academic and business leaders to help find innovative solutions to Td's inaugural housing summit at Howard University, Historically, Black colleges and University in Washington D. C. In April.

Bharat Masrani: I want to end by thanking our TD bankers across the globe. TD colleagues are the bank's greatest assets. I am confident that together we will continue to rise to challenges and deliver for all our stakeholders. With that, I'll turn things over to Kelvin. Thank you, Bharat. Good morning, everyone.

Speaker Change: I will do and by taking out TD bankers across the globe.

Speaker Change: Colleagues at the bank's greatest asset I'm confident that together, we will continue to rise to the challenges and deliver for all our stakeholders with that I'll turn things over to Kelvin.

Eric: Thank you Eric Good morning, everyone. Please turn to slide 10.

Kelvin Vi Tran: Please turn to slide 10. This quarter, revenue increased 10% year-over-year, driven by momentum in our markets-driven businesses and higher volumes and margins, and personal and commercial banking. Expenses also increased year-over-year, reflecting higher employee-related expenses, including variable compensation commensurate with higher revenues. Investments in our Risk and Control Infrastructure held in the Corporate, The bank delivers significant positive operating leverage while continuing to prioritize investments in our risk and control infrastructure. ECLs were higher quarter-over-quarter as performing bills, reflecting some credit migration and volume growth, were partially offset by lower impaired provision. As a result, earnings were $3.8 billion, up 2% year-over-year. The APS was $2.04, up 7% year-over-year, reflecting our share buyback and earnings growth. Please turn to slide 11.

Kelvin: This quarter revenue increased 10% year over year, driven by momentum in our markets driven businesses and higher volumes and margins in Canadian personal and commercial banking.

Kelvin: Expenses also increased year over year, reflecting higher employee related expenses, including variable compensation commensurate with higher revenues and investments in our risk and control infrastructure held in the corporate segment.

Kelvin: The bank delivered significant positive operating leverage while can change a prioritized investments in our risk and control infrastructure.

<unk> were higher quarter over quarter as performing belt, reflecting some credit migration and volume growth was partially offset by lower impaired provisions.

Kelvin: As a result earnings were $3 $8 billion up 2% year over year.

Kelvin: EPS was $2.04 up 7% year over year, reflecting our share buyback at earnings growth. Please turn to slide 11.

Kelvin Vi Tran: There is no change to our expense guidance for fiscal 2024. We expect run rate expenses inclusive of the savings generated by the restructuring program. Investments to Accelerate Future Growth to Increase by Approximately 2% Year-over-Year. For fiscal 2024, we expect adjusted expense growth in the mid-single digits, reflecting investments in our risk and control infrastructure and the impact of TD Calendars. This quarter, we incurred a restructuring charge of $165 million pre-tax. Next quarter, we expect to incur additional restructuring charges of approximately $50 million and to conclude our restructuring program.

Kelvin: There is no change to our expense guidance for fiscal 2024, we expect run rate expenses inclusive of the savings generated by the restructuring program and investments to accelerate future growth to increase by approximately 2% year over year.

Kelvin: For fiscal 2024, we expect adjusted expense growth in the mid single digits, reflecting investments in our risk and control infrastructure and the impact of TD colleagues.

Kelvin: This quarter, we incurred a restructuring charge of $165 million pretax next.

Kelvin: Next quarter, we expect to incur additional restructuring charges of approximately $50 million and to conclude our restructuring program.

Kelvin Vi Tran: The total restructuring charges are higher than we initially anticipated as the bank identified additional opportunities to drive productivity this quarter. As a result, the expected run rate savings are also higher. The restructuring program is expected to generate savings of approximately $400 million pre-tax in fiscal 2024 and annual run rate savings of approximately $725 million. Cost savings will be driven by a 3% FTE reduction, real estate optimization, and asset impairment as we accelerate transitions to new platforms. This will create capacity to re-enact. The bank has already delivered an FTE reduction of approximately 3%, excluding reinvestment into hires related to our risk and control infrastructure.

Kelvin: The total restructuring charges are higher than we initially anticipated as the bank identified additional opportunities to drive productivity this quarter.

Kelvin: As a result, the expected run rate savings are also higher.

Kelvin: The restructuring program is expected to generate savings of approximately $400 million pre taxes fiscal 2024.

Kelvin: And annual run rate savings of approximately $725 million pre tax.

Kelvin: Cost savings will be driven by a 3% FTE reduction real estate optimization and asset impairments as we accelerate transitions to new platforms.

Kelvin: This will create capacity to reinvest.

Kelvin: The bank has already delivered and FTE reduction of approximately 3%.

Excluding reinvestment into hires related to our risk and control infrastructure.

Kelvin Vi Tran: We continue to be disciplined on expense management. The bank is on track to deliver targeted fiscal 24 and annualized, Please turn to slide 12. Canadian personal and commercial banking delivers a strong quarter reflecting loan and deposit volume growth and substantial positive operating leverage. Average loan volumes rose 7% year-over-year. 7% growth in personal volumes driven by real estate secured lending up 7% and cards up 11% 7% growth in business funds. Average deposits rose 4% year-over-year, reflecting 6% growth in personal deposits, off-site buyer, and 1% decline in business deposits.

Kelvin: We continue to be disciplined on expense management.

The bank is on track to deliver our targeted fiscal 'twenty for an annualized savings.

Speaker Change: Please turn to slide 12.

Speaker Change: Canadian personal and commercial banking delivered a strong quarter, reflecting loan and deposit volume growth and substantial positive operating leverage.

Speaker Change: Average loan volumes rose, 7% year over year with 7% growth in personal volumes driven by real estate secured lending up 7% and cards up 11% and 7% growth in business volumes.

Speaker Change: Average deposits rose, 4% year over year, reflecting 6% growth in personal deposits offset by a 1% decline in business deposits.

Kelvin Vi Tran: Deposit growth reflects market share gains in term deposits, joined by strong gains in new-to-bank term deposits, while TD maintained Canada's number one position for deposits. Their interest margin was 2.84%, flat quarter over quarter as higher margins on loans and deposits were offset by changes in balance sheets. As we look forward to Q3, while many factors can impact margins, we expect lower NIM due to downward pressure due to competitive market dynamics and further migration of BAs to CORA-based loans.

Deposit growth reflects market share gains in term deposits driven by strong gains in new to bank term deposits, while TD maintained Canada's number one core deposit franchise.

Speaker Change: Net interest margin was 284% flat.

Speaker Change: Flat quarter over quarter as higher margins on loans and deposits were offset by changes in balance sheet mix.

Speaker Change: As we look forward to Q3, while many factors can impact margins, we expect lower NIM from downward pressure due to competitive market dynamics and further migration of Bas to Colorado based loans.

Kelvin Vi Tran: We expect this to be partially offset by the benefit of tractor on and off. While the migration of BAs to CORA-based loans is marginally dilutive to Canadian TNC NIM, it is neutral for the segment from a P&L perspective. We are also not expecting a significant impact on total bank names from this. Expenses increased, reflecting higher spend supporting business growth, including employee-related expenses and technology. Please turn to slide 13. U.S. Retail Bank continues to deliver operating momentum with sequential earnings and loan growth in a challenging environment. Average loan volumes increased 7% year-over-year.

Speaker Change: We expect this to be partially offset by the benefit of tractor on and off rate.

Speaker Change: While the migration of Ba's to car based loans is marginally dilutive to Canadian P&C NIM.

Speaker Change: It is neutral for the segment from a P&L perspective.

Speaker Change: We are also not expecting a significant impact to total bank NIM from this transition.

Expenses increased reflecting higher spend supporting business growth, including employee related expenses and technology costs. Please turn to slide 13.

Speaker Change: U S retail bank continued to deliver operating momentum with sequential earnings and loan growth in a challenging environment.

Speaker Change: Average loan volumes increased 7% year over year.

Kelvin Vi Tran: We saw strong auto originations with loan volumes up 12% year-over-year and double-digit growth in TD's proprietary bank card book and Consumer Mortgage Portfolio. And in commercial loans, we continue to deliver growth in mid-market lending with volumes up 20%, a business that is also driving average deposit volumes, excluding sweep deposits, were relatively flat year-over-year and quarter-over-quarter, as the U.S. retail bank demonstrated deposit resilience in a competitive environment. On a spot basis, deposits were up 1% quarter-over-quarter.

Speaker Change: We saw strong auto originations with loan volumes up 12% year over year and double digit growth in Tds proprietary bank card book and consumer mortgage portfolio.

Speaker Change: And in commercial loans, we continue to deliver growth in middle market lending with volumes up 20% of business that is also driving fee income.

Speaker Change: Average deposit volumes, excluding sweep deposits were relatively flat year over year and quarter over quarter as the U S retail bank demonstrated deposit resilience in a competitive environment.

On a spot basis deposits were up 1% quarter over quarter.

Kelvin Vi Tran: Net interest margin was 2.99%, down 4 basis points quarter over quarter, driven by balance sheet mix and higher funding. While many factors can impact margins, including competitive deposit market dynamics in the U.S., the level of rates, and balance sheet mix, we expect modest NIM expansion in the second half of the year. Expenses were relatively flat year-over-year and declined 6% quarter-over-quarter due to seasonality of expenses.

Speaker Change: Net interest margin was 299% down four basis point quarter over quarter, driven by balance sheet mix and higher funding costs.

Speaker Change: While many factors can impact margins, including competitive deposit market dynamics in the U S. The level of rates and balance sheet mix, we expect more.

Speaker Change: The modest NIM expansion in the second half of the year.

Speaker Change: Expenses were relatively flat year over year and declined 6% quarter over quarter due to seasonality of expenses and impact of productivity initiatives.

Kelvin Vi Tran: Impact Productivity Initiative. We continue to make additional investments in risk and control areas, which are mainly recorded in the Corporation. Please turn to slide 14. Wealth management and insurance delivered strong business momentum this quarter. Revenue grew 11% year-over-year, reflecting high insurance premiums.

Speaker Change: We continue to make additional investments in risk and control areas, which are mainly recorded in the corporate center.

Speaker Change: Please turn to slide 14.

Speaker Change: Wealth management and insurance delivered strong business momentum this quarter.

Revenue grew 11% year over year, reflecting higher insurance premiums fee based revenue commensurate with market growth in transaction revenue.

Kelvin Vi Tran: Fee-based revenue commensurate with market growth and transaction volumes. While expenses were up 7% year-over-year, reflecting higher variable compensation commensurate with higher revenues, the segment reduced FTE by 8% year-over-year. As the insurance business continues its digital transformation, and more customers complete sales online from end-to-end, we have achieved greater efficiencies in our contact center. This creates capacity that can be reinvested in advisors and Assets under management increase year-over-year, reflecting market appreciation, and assets under administration increase year-over-year, reflecting market appreciation and net asset growth. Please turn to slide 15. Wholesale Banking delivered record revenue for the second consecutive quarter.

Speaker Change: While expenses were up 7% year over year, reflecting higher variable compensation commensurate with higher revenues.

Speaker Change: <unk> reduced FTE by 8% year over year.

Speaker Change: As the insurance business continues as this digital transformation and more customers complete sales online from end to end, we have achieve greater efficiencies in our contact centers.

Speaker Change: This creates capacity that can be reinvested in advisors and financial climate is to drive growth in our wealth business.

Speaker Change: Assets under management increased year over year, reflecting market appreciation and assets under administration increased year over year, reflecting market appreciation and net asset growth.

Speaker Change: Please turn to slide 15.

Speaker Change: Wholesale banking delivered record revenue for the second consecutive quarter.

Kelvin Vi Tran: Revenue of $1.9 billion reflected broad-based growth across the investment bank, especially in global markets. As we enhance this earnings power and realize the synergies from TD Cowell, expenses increased 19% year-over-year, primarily reflecting higher variable compensation, a commence rate with higher revenues, and the inclusion of TD Cowen, which closed March 1st last year. Please turn to slides. The corporate net loss for the quarter was $284 million.

Speaker Change: Revenue of $1 $9 billion reflected broad based growth across the investment bank, especially in global markets as we enhance its earnings power and realize the synergies from TD Cowen.

Expenses increased 19% year over year, primarily reflecting higher variable compensation commensurate with higher revenues and the inclusion of TD Cowen which closed March one last year.

Speaker Change: Please turn to slide 16.

Speaker Change: So corporate net loss for the quarter was $284 million.

Kelvin Vi Tran: Net corporate expenses increased $220 million compared to the prior year, mainly reflecting investments in our risk and control infrastructure. This was partially offset by an increase of $113 million compared to the prior year in other, primarily reflecting treasury-related items. Please turn to slide 7. The Common Equity Tier 1 Ratio ended the quarter at 13.4%, down 51 basis points sequentially.

Speaker Change: Net corporate expenses increased $220 million compared to the prior year, mainly reflecting investments in our risk and control infrastructure.

Speaker Change: This was partially offset by an increase of $113 million compared to the prior year and other primarily reflecting travelers treasury related items.

Speaker Change: Please turn to slide 17.

Speaker Change: The common equity tier one ratio ended the quarter at 13, 4% down 51 basis points sequentially.

Kelvin Vi Tran: Internal capital generation was offset by an increase in RWA, excluding the impact of FX, reflecting volume growth and risk migration. We continued our NCIB this quarter and have now completed almost two-thirds of our 90 million share buyback program. Together, the AML Investigation Provision and Civil Matter Provision decreased CEP1 by 15 basis points this quarter.

Speaker Change: Internal capital generation was offset by an increase in <unk>, excluding the impact of FX, reflecting volume growth and risk migration as expected.

Speaker Change: We continued our NCI beat this quarter and have now completed almost two thirds of our 90 million 90 million share buyback program.

Speaker Change: Together, the AML investigation provision and civil matter provision decrease CET, one by 15 basis points this quarter.

Kelvin Vi Tran: As a reminder, the operational risk capital and RWA impacts of these items are on a one quarter lag and will be reflected. Bharat, Ajai, Thank you, Kelvin, and good morning, everyone. Please turn to slide 18. Gross Impaired Loan Formations was stable at 21 basis points for the bank and for the segments. Formations were stable in Canadian PNCs, lower in U.S. retail, and there were no new formations in the wholesale sector.

Speaker Change: As a reminder, at the operational risk capital.

Speaker Change: RW impacts of these items are on a one quarter lag and will be reflected in Q3.

RJ: With that RJ over to you. Thank you Kelvin and good morning, everyone.

Ajai Bambawale: Please turn to slide nine. Gross impaired loans were stable at 41 basis points quarter over quarter as increases in the Canadian PNC and U.S. retail segments were partially offset by a decrease in the wholesale sector. Please turn to slide 20. Recall that our presentation reports PCL ratios, both gross and net, of the partner share of the U.S. Strategic Card PCL. We remind you that U.S. card PCLs recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income.

Speaker Change: Please turn to slide 18.

RJ: Gross impaired loan formations was stable at 21 basis points for the bank.

Speaker Change: For the segments formations was stable in Canadian P&C.

Speaker Change: Lower in U S retail.

Speaker Change: There were no new formations in the wholesale segment.

Please turn to slide 19.

Speaker Change: Gross impaired loans were stable at 41 basis points quarter over quarter as increases in the Canadian P&C and U S retail segments.

Speaker Change: Partially offset by a decrease.

Speaker Change: The wholesale segment.

Speaker Change: Please turn to slide 20.

Speaker Change: We call that our presentation reports PCL ratios, both gross and net of the partner's share of the U S. Strategic card PCL loss, we remind you that U S card PCL recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income.

Ajai Bambawale: The bank's gross provision for credit losses increased three basis points, quarter over quarter, to 47 basis points. The increase is largely recorded in the Wholesale and Canadian Commercial Lending Portfolio and is primarily related to Volume Growth. Please turn to slide 21. The bank's impaired PCL was $870 million, a decrease of $64 million quarter-over-quarter, driven by lower provisions in the U.S. commercial lending portfolio and Seasonal Trends in the U.

Speaker Change: The bank's gross provision for credit losses increased three basis points.

Speaker Change: Over quarter to 47 basis points.

Speaker Change: Kris is largely recorded in the wholesale and Canadian commercial lending portfolios.

Speaker Change: And is primarily related to.

Speaker Change: Credit migration across various industries.

Speaker Change: And volume growth.

Speaker Change: Please turn to slide 21.

Speaker Change: The bank's impaired PCL was $870 million, a decrease of $64 million quarter over quarter, driven by lower provisions in the U S commercial lending portfolio.

Speaker Change: And seasonal trends in the U S card and auto portfolios.

Ajai Bambawale: Car and Auto Portfolio, partially offset by credit migration in the Canadian commercial lending portfolios across various industries. Performing PCL increased $134 million quarter over quarter to $201 million. Current quarter performing provisions were largely reflected in Canadian personal and commercial, and U.S. retail and wholesale sectors. Please turn to slide 22. The allowance for credit losses increased by $282 million quarter over quarter.

Partially offset by credit migration in the Canadian commercial lending portfolios across various industries.

Speaker Change: Performing PCL increased $134 million quarter over quarter to $201 million.

Speaker Change: Current quarter performing provisions were largely reflected in the Canadian personal and commercial U S retail and wholesale segments.

Please turn to slide 22.

Speaker Change: The allowance for credit losses increased by 282 million quarter over quarter to eight 6 billion due to a 129 million impact from foreign exchange.

Ajai Bambawale: 8.6 billion, due to a $129 million impact from foreign exchange, and current credit conditions, including some credit migration across segments, and Volume Growth. Bank's allowance coverage remains elevated to account for ongoing uncertainty relating to the economic trajectory and credit performance. Bank exhibited good credit performance this quarter as results remain within expectation and reflective of the current economic and credit environment. I continue to expect PCLs for fiscal 24 to be in a range of 40 to 50 basis points.

Speaker Change: Current credit conditions, including some credit migration across segments and volume growth.

Speaker Change: The banks allowance coverage remains elevated to account for ongoing uncertainty relating to the economic trajectory and credit performance.

Speaker Change: In summary.

Speaker Change: The bank exhibited good credit performance this quarter as results remain within expectations and reflective of the current economic and credit environment.

Speaker Change: I continue to expect <unk> for fiscal 'twenty four to be in a range of 40 to 50 basis points. Although results may vary by quarter and are subject to changes in economic conditions.

Ajai Bambawale: Although results may vary by quarter and are subject to changes in economic conditions. With that operator, we are now ready to begin. Q&A session. Thank you. We will now take questions from the telephone lines. If you have a question, please press Star 1 on your device's keypad. You may cancel your question at any time by pressing Star 2.

Speaker Change: With that operator, we are now ready to begin the <unk>.

Speaker Change: Q&A session.

Speaker Change: Thank you.

Speaker Change: We will now take questions from the telephone lines. If you have a question. Please press star one on your devices keypad, you make and so on your question at any time by pressing star two.

Operator: Please press star 1 at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Our first question is from Doug Young from Desjardins Capital Markets. Go ahead. Thank you. Good morning.

Speaker Change: Please press star one at this time, if you have any questions.

Speaker Change: There will be a brief pause small participants register for questions. We thank you for your patience.

Speaker Change: Our first question is from Doug Young from Desjardins Capital markets. Please go ahead.

Doug Young: Just starting with the set one ratio, you know, down 50 basis points quarter over quarter. Looks like there was a 20 basis point hit on asset quality, but I assume that's just the migration. So, yeah, I guess the question is, where are you seeing the credit migration? Can you give a little bit more detail on that?

Doug Young: Thank you good morning, just starting with the set one ratio down 50 basis points quarter over quarter. It looks like there I think there was a 20 basis point hit from asset quality I assume that's just the migration. So yeah. I guess the question is where are you seeing.

Speaker Change: The credit migration can you give a little bit more detail on that and then Calvin I think he talked about the op risk impact on the set one ratio from legal items coming through next quarter can you can you kind of just quantify that.

Ajai Bambawale: And then, Kelvin, I think you talked about the higher risk impact on the set one ratio from legal items coming through next quarter. Can you kind of just quantify that? Ajay, so let me start with the credit migration, and you would have noticed that credit migration or asset quality accounts for $7.1 billion. Please see the complete disclaimer at https://sites.google.com, segments or industries, but Cree is a factor there.

RJ: Yeah, It's RJ. So let me start with the credit migration and you would have noticed.

RJ: The credit migration of asset quality accounts was $70 1 billion increase in <unk>.

Speaker Change: U S retail is a big component of that we're seeing credit migration in commercial across various segments or industries with Greece is a factor that we're also seeing higher P DS and lgs DS in U S auto.

Ajai Bambawale: We're also seeing higher PDs and LGDs in U.S. orders. On the Canadian side and the Canadian consumer, we are seeing migration on the auto book, largely PD, very little right now on LGD. And then we're seeing a bit on commercial as well.

Speaker Change: On the Canadian side in Canadian consumer we are seeing migration on the auto book largely P. D very little right now on LGD and then we're seeing a bit on commercial as well.

Kelvin Vi Tran: In wholesale, the migration we're seeing is in PD and LGD again, and it's not one industry; it's across a number of industries. Kelvin here to answer your question. So the capital impact of these items for Q2 was about 15 basis points, 1.5, and the lag in operational risk impact in Q3 is expected to be around 12. And if I just do a follow-up, Ajai, just in terms of, you know, the performing loan PCL and you know, the credit migration that you're seeing run through the capital side.

Speaker Change: Wholesale the migration, we're seeing is it.

Speaker Change: In PD and LGD again, and it's not one industry, it's across a number of industries.

Kelvin: It's Kelvin here.

Speaker Change: Question. So the capital impact of these items for Q2 was about 15 basis 0.15, and the lack of an operational risk impact in Q3 is expected to be around 12 basis points.

Kelvin Vi Tran: Can you talk a bit about the conservatism or your approach and, maybe, on the performing loan side, you know, how much of that performing loan bill this quarter or what's in your allowance on the performing loan side relates to expert credit judgment? Yeah, so the expert judgment component is quite small.

Speaker Change: Okay, and then if I could just do a follow up RJ just in terms of.

Speaker Change: The performing loan PCL and the credit migration that you're seeing run through the capital side can you talk a bit about the conservatism or your approach in and maybe on the performing loan side, how much of that performing loan build this quarter or what's in your allowance on the performing loan side relates to.

Speaker Change: Expert credit judgment.

Speaker Change: Yeah. So the expert judgment component is quite small.

Ajai Bambawale: I'd say it's under 5%, so a lot of the the allowance is really based on the macro factors, but we do do a lot of bottom-up work. And you'll recall right from the time of the pandemic, we do look at portfolios, we do look at higher rates for longer, you know, we factor that into our analysis as well. And good examples of that are commercial real estate.

Speaker Change: It's under 5% so a lot of the lot of the Oh.

Speaker Change: The allowance is really based on the macro factors, but we do do a lot of bottom up work and you recollect right from the time of the pandemic. We do look at portfolios, we do look at higher rates for longer.

Speaker Change: Fact of that into our analysis as well and good examples of that are commercial real estate.

Ajai Bambawale: You know, we do bottom-up work; we'd actually go borrower by borrower and see, you know, what the potential reserves are, you know, are they captured in the macro scenario or not. Like Resil would be another good example in Canada, where we'd be constantly looking at the higher risk segments; we'd look at higher rates for longer, what the impact is, and build it into our allowance. And we've been doing this for a while. So yes, you're right, there are some judgmental overlays, but that's not the big driver of our allowances.

Speaker Change: We do bottom up work would actually go borrower by borrower and see.

Speaker Change: What the potential.

Speaker Change: <unk> are you know how they captured in the macro scenario a lot like resin would be another. Good example, in Canada, where we'd be constantly looking at the higher risk segments, we'd look at higher rates for longer what's the impact.

Speaker Change: Build it into our allowance and we've been doing this for a for a while so yes youre right.

Speaker Change: There are some judgmental overlays, but that's not the big driver of our allowances and then the last comment I'd make is that I actually feel pretty good about where we are in terms of our allowance at 91 bps, we have a downside.

Ajai Bambawale: And then the last comment I'd make is that I actually feel pretty good about where we are in terms of our allowance at 91 beeps. We have a downside case, which is a restationary case. We've got a fair bit of waiting on it. And as I said, we have been factoring in higher rates for longer into our, into our allowance. Appreciate the color.

<unk> is a recessionary case, we've got a fair bit of waiting on it and as I said, we have been factoring in higher rates for longer into our into our allowance. So.

Speaker Change: I appreciate the color. Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you.

Doug Young: Thank you, Thank you. Our next question is from Meny Grauman from Scotiabank; please go ahead. Hi, good morning.

Speaker Change: Following question is from many Grumman from Scotiabank. Please go ahead.

Meny Grauman: Just wanted to revisit the U.S. growth plan, something you talked about a year ago, Q2'23. If I look at the guidance on store openings, you talked about 150 stores by 2027. You did 17 new stores in 23, but down 10-year to date. So just wondering, that 150 stores by 2027, that guidance, is that still guidance that you would stand behind? Or does it need to be adjusted?

Speaker Change: Hi, Good morning, just wanted to revisit a U.

Many Grumman: The U S growth plan, something you talked about a.

Speaker Change: A year ago Q2, 'twenty three if I look at our guidance and store openings, you talked about 150 stores by 2027.

Speaker Change: You did 17, new stores in 23 was down 10 year to date. So just wondering that 150 store by 2020 setting that guidance is that still.

Speaker Change: The guidance that you would stand behind or does it need to be adjusted.

Leo Salom: Thank you very much for the question, Meny. Just to take a quick step back, obviously, you know, we, the store, the store network has been a critical part of our growth strategy over the past, Essentially, the two decades that we've been in the U.S., and it certainly is an important part of our acquisition engine. We are, as we look to the future, doing a couple things. One, our first priority is making sure that we address fully and completely the AML and governance and control issues that we're facing in the U.S., and that is drawing a significant amount of our investment dollars as we address that with the seriousness and the importance that that requires.

Speaker Change: Thank you very much for the question many just to take a quick step back obviously.

Speaker Change: The the store the store.

Speaker Change: Our network has been a critical part of our growth strategy over the past essentially the two decades that we've been in the U S and and it certainly is an important part of our acquisition engine.

We are we are as we look to the future. We're doing a couple of things. One are our first priority is making sure that we address fully and completely yeah, my own governance and control issues that we're facing the U S and that is drawing a significant amount of our investment dollars as we addressed that with the the seriousness and the.

Speaker Change: And the importance that that requires secondly, where we're looking at store expansion and we are deliberately pacing that expansion, you'll see us focus more around our digital and mobile strategies in order to be able to position our franchise collectively for a more balanced omni channel growth strategy going forward. It does.

Leo Salom: Secondly, we're looking at store expansion, and we are deliberately pacing that expansion. You'll see us focus more on our digital and mobile strategies in order to be able to position our franchise collectively for a more balanced omni-channel growth strategy going forward. It doesn't mean that in the medium-long term, the stores won't be important. But I do think that in the immediate short term, the focus is going to be on those two fundamental areas. I will say that there is a significant amount of retooling in the stores itself.

Speaker Change: <unk> mean that medium long term the stores won't be important but.

Speaker Change: But I do think that in the immediate short term the focus is going to be in those two fundamental areas I will say that there was a significant amount of retooling in the stores itself and I just want to spend a moment on that because within the numbers we have already over the past.

Leo Salom: And I just want to spend a moment on that because within the numbers, we have already, over the past few quarters, retooled about 66 stores to our next generation store design. What that does is it changes the configuration inside the store so we can deliver a broader, deeper relationship with our clients with greater advice capabilities. And that is really responding with clients, and we're quite pleased with that. We're also changing a lot of the interior capabilities in the stores.

Speaker Change: Few quarters.

Speaker Change: Retooled about 66 stores to our next generation store design, what that does is it changes the configuration inside the store. So we can deliver a broader a deeper relationship with our clients with greater advice capabilities and that is that is really resonating with clients and we're quite pleased with that we're also changing a lot of the interior.

Your capabilities in the stores, where we're about a little bit over 50% complete and the and the revamping of our ATM network that provides much more point of sale marketing capabilities that we're leveraging and finally, where we're adding more digital merchandising across the network in order to be able to provide our advertising.

Leo Salom: We're about a little bit over 50% complete in the revamping of our ATM network that provides much more point of sale marketing capabilities that we're leveraging. And finally, we're adding more digital merchandising across the network in order to be able to provide our advertising capabilities dynamically throughout the network. These are all areas that we're trying to do to just make what is today, arguably, one of the best retail acquisition networks in the country even more productive, even more effective, and more future-proof in terms of overall capability. Thanks, Leo. That's it for me.

Speaker Change: <unk> dynamically throughout the network. These are all areas that we're trying to do to just make what is today arguably one of the best retail acquisition networks in the country, even more productive even more effective and more future proof in terms of our overall capabilities.

Speaker Change: Yeah, that's it for me.

Speaker Change: Thanks Benny.

Thank you. Our following question is from Matthew Li from Canaccord Genuity.

Meny Grauman: Thank you. Our next question is from Matthew Lee from Canaccord Genuity. Please go ahead. Hey, good morning.

Speaker Change: Go ahead.

Matthew Lee: Thanks for taking my question. Maybe we can start by talking about the Cowen acquisition now, about a year in. It feels to me that several of your US bank peers are talking about the sponsor business as an area that could be a tailwind in the second half of the year. Can you maybe talk about how combining Cowen's expertise and TD's balance sheet could help you benefit from an acceleration in that segment? Thank you, Matthew. It's Riaz.

Matthew Li: Hey, good morning. Thanks for taking my question, maybe you can start by talking about account acquisition now about a year and.

Speaker Change: It feels to me that several of your U S Bank peers are talking about the sponsor business is an area that could be a tailwind in the second half of the year. How can you maybe talk about how combining <unk> expertise in td's balance sheet can help you benefit from an acceleration in that segment.

Riaz Ahmed: Look, I think it's, to your point, just as a reminder, we have, you know, traditional areas of strength in the sponsor business in Canada and the U.S., more on the large cap side in legacy TD Securities, and then Cowen brought together a tremendous mid-market investment banking and sponsor finance capability. So while they had the relationships and the placement capabilities, what Legacy Cowen did not have was the balance sheet to be able to drive that business.

Matthew Li: Thank you Matthew sorry <expletive>.

Speaker Change: I think it's a to your point just as a reminder, we have a.

Speaker Change: Traditional areas of strength in the.

Speaker Change: Sponsor business.

Canada and the U S more on the large cap side and our legacy TD Securities and then Cowen brought together a.

Speaker Change: Tremendous a mid market.

Speaker Change: Our investment banking and sponsor finance.

Speaker Change: Capability, so while they have the relationships and the placement capabilities. So our what our legacy Cowen did not have was.

Speaker Change: The balance sheet to be able to drive that business, so bringing back together and particularly for the TD Cowen side in the U S.

Riaz Ahmed: So bringing that together and, particularly for the TD Cowen side in the U.S., marrying that up with Leo's business is a tremendous opportunity for us, and we're looking to continue to just build out both sides of the sponsor business on the larger cap side as well as the middle market side, and I think we're well underway and already are seeing some good momentum. We have actually transferred three Calenbankers to add to Leo's capabilities during the course of the integration.

Speaker Change: <unk> got up with Leos, a business are in the AR is a tremendous opportunity for us and and and we're looking to continue to just build out both sides of the the sponsor business on the larger cap side is always the middle market side, and I think we're well underway in order.

Speaker Change: We are seeing some good momentum.

Speaker Change: We are over the course of pretty integration have are actually transferred debt three cowen bankers, there to add to our capabilities. So.

Riaz Ahmed: So being able to do that to bring the benefits of both sides of distribution as well as product capabilities is showing some very early but good momentum for both Leo's and my side of the business. Okay, great.

Speaker Change: Being able to do that to bring the benefits of both sides of distribution is always product capabilities that is showing some very early but a good momentum for both.

Speaker Change: Leo is on my side of the business.

Matthew Lee: And then, I think you've said in the past, the sale of Ameritrade opens the door for you to develop your own proprietary wealth management business in the US. You should probably give some parameters around what you think that business could look like in five years. And does the development of that business perhaps incentivize you to sell the Schwab stake at all? I won't comment about the sort of motivations around the sale of...

Speaker Change: Okay, Great and then I think you said in the past the sale of Ameritrade opens the door for you to develop your own proprietary wealth manager in the U S.

Speaker Change: Can you just probably give some parameters around what you think that business could look like in five years and does that development of that business, perhaps incentivize you to sell that schwab stake at all.

Speaker Change: Well I won't I won't comment about the sort of motivations around the sale of it.

Leo Salom: I do think this does present us with an opportunity to build out our wealth franchise. In the last decade, we were very deliberate in building both a mass affluent distribution network that is linked to the retail franchise, as well as a high net worth execution capability. We're following a similar playbook, albeit the market might be different in terms of its competitive landscape. I think some of the dynamics are the same.

Speaker Change: Stake in TD, Ameritrade, but I do think it does present us an opportunity to build build out our wealth franchise I just think of the work that was done in Canada over the past decade, we were very deliberate in building both the mass affluent distribution network that is linked to the retail franchise.

Speaker Change: As well as a high net worth execution capability. We're following a similar playbook, albeit the market might be different in terms of its competitive landscape I think some of the dynamics are the same we bank 10 million retail consumers in the U S. A little bit over $3 million of those would be deemed mass affluent building out a mass affluent.

Leo Salom: We bank 10 million retail consumers in the U.S. A little bit over 3 million of those would be deemed mass affluent. Building out a mass affluent Execution, Salesforce is a significant priority, and we're well underway in terms of doing that. I would want to try to replicate much of the same financial planning dynamic that we built in the Canadian segment and tie that really neatly into our retail franchise. Likewise, if you look at our performance in the high net worth space, we've had a very good year in terms of the growth of our high net worth business.

Speaker Change: Execution Salesforce is a it is a significant priority and we're well underway in terms of doing that I would want to try to replicate much of the same financial planning dynamic that we built in the Canadian segment in and tie that really neatly into into our retail franchise. Likewise, if you look at our.

Speaker Change: Our performance in the high net worth space, we've had a very good year in terms of the growth of our high net worth business.

Leo Salom: Today, it's a much more significant contributor to our overall franchise, and we would hope over the next five, seven years, wealth becomes a key contributor both to fee income, but also to our overall improvement in our overall return on equity. So it is one of our strategic aspirations, and strategic priorities going forward, and we'll continue to build it out. Alright, I appreciate the call. Thank you. Are you there, operator? This is Ebra

Speaker Change: It's a much more significant contributor to our overall franchise and we would hope over the next five to seven years wealth becomes a key contributor both to fee income, but also to our overall improvement of our overall return on equity. So it is one of our strategic aspirations strategic priorities going forward and we'll continue to build it out.

Speaker Change: Alright, I appreciate the color. Thanks.

Speaker Change: Are you there operator.

Yeah.

Speaker Change: Hey, Brad.

Operator: Shabar, can you hear me? Yeah, I think we lost the operator, but I can see your name on the screen, so go ahead, Ebrahim. All right, so good morning. Tied to the email issue, I think, in the response Leo gave around store opening, what I heard was, Seems you're not opening stores. You may not be able to open stores.

Speaker Change: Hello can you hear me.

Speaker Change: The operator, but I can see your name on the screen. So go ahead, Hey, Brian Okay.

Speaker Change: So good morning, I guess, maybe just wanted to follow up.

Speaker Change: Tied to the email issue I think.

This is <unk>.

Speaker Change: Store opening what I heard was it seems youre not opening stores you may not be able to open stores.

Ebrahim Poonawala: And the risk that we hear from in conversation with investors, and I share this concern, is the stagnation of the US franchise. So maybe Leo, could you help us sort of better understand why we should not worry about the TD franchise stagnating depending on what the penalties levied are? When we think about, like, JPMorgan, tons of regional banks opening branches all around the Southeast, and talent attrition, et cetera, just help us kind of think through why some of that is not a big risk as we think about the next two to three years as you deal with the AML issues. Thank you very much for the question, everybody. I'd ask you to start by just looking at the quarter. If you look at the quarter performance, we posted 7% sequential growth. Times, and NIAID.

Speaker Change: And the risk that we hear from.

Speaker Change: Conversations with investors and I shared this is concerned is the stagnation of the U S franchise, so maybe help.

Speaker Change: Help us better understand why we should not worry about the U K defense stagnating, depending on what the penalties levied or.

Speaker Change: When we think about like JP Morgan tons of regional banks opening these branches all around southeast.

Speaker Change: That integration et cetera, just help us kind of thing true why some of that is not a big risk as we think about the next two to three years as you deal with team malicious.

Speaker Change: Thank you very much for the question.

Speaker Change: I'd ask you to just start by just looking at the quarter.

Speaker Change: I mean, if you look at the quarter performance.

Speaker Change: We posted a 7% sequential growth in terms of not yet.

Leo Salom: We did that on both strong operating momentum and peer-leading loan growth in both the commercial and retail loan business. We also delivered a 6% sequential reduction in expenses as the productivity programs that we announced in the third quarter of last year began to take root. We managed to maintain a stable deposit platform. We saw spot growth, but on a quarter-on-quarter basis, on an average basis, we were relatively flat. And we improved our return on equity overall contribution.

Speaker Change: We did that on on both.

Speaker Change: Strong operating momentum peer leading loan growth in both the commercial and retail loan businesses.

Speaker Change: We also delivered a 6% sequential reduction in expenses as the productivity programs that we announced in the third quarter of last year begin to take root.

Speaker Change: We managed to maintain a stable deposit platform, we saw spot growth, but on a on a quarter on quarter basis on an average basis, we were relatively flat.

Speaker Change: And we improved return on equity.

Speaker Change: Overall contribution so and we did that while making significant investments in our governance and control environment, specifically around our AML agenda. So I'd start by saying I think you're seeing the power of the franchise and the organic capacity of our ability to bring solutions, whether they be consumer lending so.

Leo Salom: And we did that while making significant investments in our governance and control environment, specifically around our AML agenda. So I'd start by saying, I think you're seeing the power of the franchise and the organic capacity of our ability to bring solutions, whether they be consumer lending solutions, wealth solutions, other mid-market transactional banking capabilities to the existing client base that we have, and that is certainly bearing fruit. The reason why I want to be really direct about the point with regard to stores. I'm not making the claim that we cannot grow stores, but I also want to be very clear that we're in the midst of discussions with regulators, and I don't want to prejudice any of those conversations at this point.

Speaker Change: <unk> wealth solutions other mid market transactional banking capabilities to the existing client base that we have and that is certainly bearing fruit.

Speaker Change: The reason why I'm I'm being I want to be really direct on the point with regards to the stores.

Speaker Change: I'm not making the claim that we cannot grow the stores, but I also want to be very clear that we are in the midst of discussing with regulators and I don't want to prejudice any of those are those conversations at this point I know that theres a lot of questions about what we can and cannot do and the one thing that I will commit to this group as soon as we're in a position to provide greater clarity.

Leo Salom: I know that there are a lot of questions about what we can and cannot do, and the one thing that I will commit to this group is that as soon as we're in a position to provide greater clarity on those, we will certainly do that. But in the interim, I would say we've got a strong franchise. We're making investments in that franchise. We'll continue to grow cards, and wealth. Our mid-market business will continue to invest in digital and our mobile capabilities, and we'll look for opportunistic opportunities to continue to grow the franchise, and I think you're seeing the result of that activity, and I think it's clearly bearing fruit.

<unk> on those we will certainly do that but in the interim I would say we've got a strong franchise, we're making investments in that franchise will continue to grow cards wealth.

Speaker Change: Our mid market business will continue to invest in digital and our mobile capabilities and we will look for opportunistic opportunities to continue to grow the franchise and I think youre seeing the result of that activity and I think it's it's clearly bearing fruit.

Ebrahim Poonawala: And I guess just as a separate follow-up, maybe Bharat, in your opening remarks, you mentioned TD did not effectively thwart threats and activities from bad actors. I'm just trying to think through, like, my sense for TD is that it's really strong in risk management. That doesn't seem to be the case here. First, what went wrong?

Speaker Change: Got it and I guess, just as a separate follow up maybe Brett.

Speaker Change: Our planned remarks, we mentioned TD did not effectively towards an.

Speaker Change: And activities from bad actors.

Speaker Change: I'm just trying to think through like my sense for TD is really strong and risk management that doesn't seem to be the case here. One what went wrong and then when I think about the article that came out last night and the globe about the RCM.

Speaker Change: Can you at least give us assurance that this is a very specific use AML issue or could it be that in a few weeks from now we start getting headlines around other risk.

Speaker Change: The gaps at TD, just give us a sense of one what went wrong and beyond USA AML, how have you revisited the risk framework to make sure. This doesn't like this is I guess handicapped.

Bharat Masrani: And then when I think about the article that came out last night in the Globe about the RCM, can you at least give us assurance that this is a very specific US ML issue? Or could it be that in a few weeks from now, we start getting headlines around other risk gaps at TD? Just give us a sense of one, what went wrong, and beyond US ML, how have you revisited the risk framework to make sure this doesn't, like, this is, I guess, handicapped? Hey everyone, this is Bharat.

Barry: Hey, Brian This is Barry.

Bharat Masrani: Look, you know, we've said so much about the AML program in the U.S. We know the role we play, the importance financial institutions play in the fight against, you know, money laundering. And we are committed to doing our part, and the reports you hear, what you read, do not reflect who we are, our values, or what the bank stands for. You made it very clear. I mean, we get targeted all the time, and unfortunately, in these instances, our program fell short. And we know what those shortcomings are, we are on it, and we are fixing them.

Speaker Change: I mean look we've said so much about the AML program in the U S.

Barry: We know the role we play the importance of financial institutions play in the fight against money laundering.

Barry: And we are committed to doing our part in the.

Speaker Change: The reports you hear what you read and it does not reflect who we are our values of what the bank stands for and we made it very clear I mean, we get targeted all the time and and unfortunately.

Speaker Change: In these instances our program fell short and we know what those are.

Speaker Change: What the shortcomings are we are on it.

Speaker Change: And we are fixing them and that you saw in our press release that came out.

Bharat Masrani: And you saw in our press release that came out a couple of weeks ago, we've already invested $500 million in the program remediation and enhancements. We hired AML executives who are some of the best in the world, on-boarded hundreds of AML experts and professionals, and deployed new enterprise-wide training on-boarding programs to improve the program performance and consistency. And, of course, new technologies.

Speaker Change: A weeks ago, we've already invested $500 million.

Speaker Change: And the program remediation and enhancements.

Speaker Change: At AML executives.

Speaker Change: One of the best in the World you on boarded hundreds of AML exports as well in professionals and deployed a new enterprise wide training onboarding programs to improve the program.

Speaker Change: Yeah.

Speaker Change: Performance and consistency and of course, new technologies, we're moving to a brand new platform.

Bharat Masrani: We're moving to a brand new platform towards the end of the year. So we are doing what you'd expect TD to do. And unfortunately, because of our ongoing discussions, we are not able to give you more color on this. But I'm hoping at some point, we will.

Speaker Change: Towards the end of the year so.

Speaker Change: So we are doing what you'd expect it to do.

Speaker Change: And unfortunately, because of our ongoing discussions we are now.

Speaker Change: Not able to give you more.

More color on this but I'm, hoping at some point, we will be and I'm looking forward to those days with respect to the article you're talking about it is unfortunate that the report contains inaccuracies and misrepresent, our normal course business as usual interactions with Canadian regulators.

Bharat Masrani: And I'm looking forward to those days. With respect to the article you're talking about, it is unfortunate that the report contains inaccuracies and misrepresents our normal course, business-as-usual interactions with Canadian regulators. You know, we are a large global player, and we have lots of discussions with many regulators that are just the normal course, business as usual, and like I said, it is unfortunate that the report contains inaccuracies. We strive to be a well-run bank. Our risk management reputation goes back many decades. It's unfortunate that in this one instance, we've held short.

Speaker Change: We are we are a large global player we have lots of discussions with many regulators that are normal course business as usual and like I said. It is unfortunate that the report contains inaccuracy, we strive to be a.

Speaker Change: A well run bank of our risk management.

Speaker Change: Reputation it goes back many decades and it's unfortunate that this one instance, we fell short and as I said earlier, we are in the process of fixing it and we will fix it and then we are making all the right investments in hiring the right professionals to get us there.

Bharat Masrani: As I said earlier, we are in the process of fixing it, and we will fix it. We are making all the right investments and hiring the right professionals to get us there. So with that, you know, I hope I've covered off everything you're asking. Maybe I can add a few points. It's Ajai.

RJ: So with that I hope I have covered up everything you're asking maybe I can add if you believe your blood. So it's RJ so from my perspective.

Ajai Bambawale: So just from my perspective, the main issue we're dealing with is the U.S. AML program. The lessons learned from the USAML program and the investments being made, all those are going to benefit the global program. But, as Bharat said, there is a comprehensive effort underway. We're taking it very seriously. The other comment I wanted to make, just relating to the article... From my standpoint, it is normal for a bank to be investing in risk programs.

Speaker Change: The main issue we're dealing with is the U S. Emerald program. The lessons learned from the USA program and the investments being made all of those are going to benefit the global program, but as Barry said.

Speaker Change: Is a comprehensive effort underway, we're taking it very seriously.

The comment I wanted to make just relating to the article for.

Ajai Bambawale: You can ask any other CRO anywhere in the world, do they invest in risk programs, whether it's cyber, whether it's third-party, whether it's fraud, and other programs; the list goes on and on. Compliance, that is a normal cost for any bank to be investing in their risk programs, and also the dialogue, which is referenced in the article, the dialogue with regulators actually happens every day. So I'll pause. No, I think that's helpful.

Speaker Change: From my standpoint, it is normal course for a bank to be investing in risk programs.

Speaker Change: Can I ask any other CRO anywhere in the world do they invest in risk programs, whether it's cyber or whether it's third party, whether it's fraud.

Speaker Change: And other programs. The list goes on and on compliance that is normal costs for any bank to be investing.

Speaker Change: In their risk programs and also the dialogue, which is referenced in the article the dialog with regulators actually happens everyday.

Speaker Change: So I'll pause there.

Ajai Bambawale: I mean, I guess it sounds like it is still primarily a primarily U.S. AML issue. And I guess the other question, Ajai, as a follow-up. Why did you not catch that? Going back to what Bharat said, decades of reputational risk management, I would have thought TD was leading the charge on best-in-class AML. Why did that not happen?

Speaker Change: No I think that's helpful I guess sounds like.

Speaker Change: It is still the Marines are primarily U S. AML issue and I guess, the other question Ajay as a follow up.

Speaker Change: Why did you not catch that going back to what Mark said decades of like reputation of risk management I would have thought.

Speaker Change: He is leading the charge on best in class AML why did that not happen is this isolated or is that the systemic issue at the bank.

Ebrahim Poonawala: Is this isolated, or is that a systemic issue at the bank? Good question. And what I would say is that we always strive to be best in class in every risk area. But, yes, from time to time, we find we've fallen behind in a particular area. And we're out there owning the issue that we fell behind in our program, and our program did not pick up things it should have picked up.

Ajai Bambawale: But really, if I go right to the root cause of what happened, there were some procedural weaknesses in the US that caused bad actors to exploit us. And we were also disappointed that some of our colleagues didn't follow our code of ethics. Those would be the two things I'd call out, and that's specific to the US. You know, this is not a problem here at the enterprise level. But I want to emphasize that anything we learn in the US from this event and even otherwise, we bring it back to the enterprise, and we make the appropriate enhancements.

Speaker Change: Good question, what I would say is we always endeavor to be best in class in every risk area, but yes from time to time, we find we've fallen behind in a particular area.

Speaker Change: And we're out there owning the issue that we fell behind in our program and our program did not pick up things that Europe should have picked up but really if I go right to the root cause of what happened there were some procedural weaknesses in the U S that cause bad actors to exploit us and we were also.

Speaker Change: So disappointed that some of our colleagues didn't follow a code of ethics like those would be the two things I'd call out in that specific to the U S.

Speaker Change: This is not a problem here at the enterprise level, but I wanted to emphasize.

Anything we learned in the U S from this event and even otherwise we bring it back to the enterprise and we make the appropriate enhancements and that's what we're doing in this case as well so again to summarize our endeavor is to be the best at everything, but yes, we do fall behind.

Ajai Bambawale: And that's what we're doing in this case as well. So again, to summarize, our goal is to be the best at everything. But yes, we do fall behind in certain areas occasionally, and this happens to be one of them. And we're not denying it; we're owning it. That's key, Ebrahim, you know. It would be easy to say, well, it's a one-off thing, you know; we'll just move on. No, this is the TD style; this is the TD transparency.

Speaker Change: Areas occasionally and this happens to be one of them and we're not denying it well owning it.

Speaker Change: <unk>.

Speaker Change: It would be easy to say well, it's a one.

Speaker Change: One off thing, we'll just move one note. This is the TD style. This is the DD transparency, we want to make sure we tell you.

Bharat Masrani: We want to make sure we tell you, you know, what went wrong and what we're doing about it and to make sure it never happens again. And that, I think, in itself, tells you the culture of the bank and the risk culture that is inherent at TD. You know, this is good color.

Speaker Change: What went wrong and what we're doing about it and to make sure. It never happens again and that I think in itself tells you the culture of the bank and the risk culture that is inherent at TD.

Ebrahim Poonawala: Thank you, all of you. Thank you. Thank you. Our next question is from Gabriel Dechaine from National Bank Financial. Please go ahead. Good morning.

Speaker Change: No. This is good color. Thank you.

Speaker Change: Thanks.

Speaker Change: Thank you.

Speaker Change: Our following question is from Gabriel <unk> from National Bank Financial. Please go ahead.

Gabriel Dechaine: I'll ask my questions all at once here. Number one, in your other income, the hedge gain line item turned pretty positive there sequentially and relative to the trend, if you can just explain that. Then, for Bharat and or Kelvin, the cost guidance is not changing for this year.

Gabriel Dechaine: I'll ask my questions all at once here.

Speaker Change: Numbers one.

And your other income the hedge gain line item turned a pretty positive there sequentially and relative to the trend. If you can just explain that.

Speaker Change #101: Uh huh.

Speaker Change #102: Then for Barrett and or Kelvin.

Bharat Masrani: You were very clear on that. Thanks. I'm just wondering what you think about the costs and, specifically, related to this AML program beyond 2024. You did take, you know, you're taking more restructuring charges to find more cost savings. I'm wondering if that's an indication that maybe they need to find more cost savings to, you know, subsidize those buybacks. The pace has come down, and unless I'm mistaken, I don't know if you bought back any stock in April. Maybe there was a technical restriction there. I'm wondering what your outlook is for buybacks or if that's changed at all relative to what you were telling us a few months ago. Thanks. The hedge gains were a 200 million dollar positive; usually, it's negative.

Speaker Change #103: The cost guidance is not changing for this year you were very clear on that thanks, I'm just wondering what you're thinking about costs, specifically related to the AML program beyond 2024.

Speaker Change #106: You did take a you know you're taking more restructuring charges to find more cost savings I'm wondering if that's an indication that maybe needed to find more cost savings too.

Speaker Change #104: Subsidize those.

Speaker Change #105: I am all program.

Speaker Change #107: And lastly on the buybacks.

Speaker Change #108: The pace has come down and unless I'm mistaken I don't know if you bought back any stock in April maybe there was a technical restriction there I'm wondering what your outlook is for buybacks or if that's changed at all relative to what you were telling us a few months ago. Thanks.

Speaker Change #109: What was the first one.

Speaker Change #109: Yeah.

Speaker Change #110: Everything going.

Speaker Change #111: So hedge gains there was a $200 million positive it's usually a negative it is kelvin address that it's a similar.

Kelvin Vi Tran: Kelvin, I would address that. It's a similar item that we talked about in the past. When you look at these specific items, it's not reflecting the whole portfolio of trading-related income, so I would ask that you look at our disclosure and our supplementary disclosure on trading-related income, if that's what you want to. Looking at a specific line does not provide better insight.

Speaker Change #111: Item that we talked about in the past when you look at the specific item.

Speaker Change #111: It is not reflecting the whole portfolio of trading related income.

Speaker Change #111: So I'd ask that you look at our disclosure.

Speaker Change #111: Supplementary disclosure on trading related income and Thats, what you want to want to do.

Speaker Change #111: Specific line is.

<unk> does not provide better insights maybe it will take I will take that one offline, maybe only one or more important.

Gabriel Dechaine: Maybe we'll take that one offline. I think the other ones are more important. Yeah, on the cost of remediation and all that, Gabe. Our intention is to fix all our issues as soon as we can. And we're working hard. As I said earlier, we've already invested $500 million in program remediation, you know, hired a lot of professionals, you know, and built new technologies. And we're trying to get this done as quickly as we can. But can it go into 25?

Speaker Change #111: Yes.

Speaker Change #112: On the cost of remediation and I'll, let Gabe.

Speaker Change #113: The engine is to fix all our issues as soon as we can and we're working hard as I said earlier, we've already invested $500 million in program remediation hired lot of professionals building new technologies and we're trying to get this done as quickly as we can but can it go into 25, yet perhaps it.

Bharat Masrani: Yeah, perhaps it might. But it's hard to say because, you know, there are these investments and the bill sometimes takes longer, sometimes it's shorter. So we'll see how that works out. With respect to your question about whether we are looking for efficiencies just to, I think, use the word subsidize? Absolutely not.

Speaker Change #113: But it's hard to say because there's investments in the bill sometimes takes longer sometimes it's shorter so we'll see how that works out with respect to your question that you know are we looking for efficiencies just to I think you used the word subsidize absolutely not we are a bank that always looks at efficiencies, if there's a better way to delay.

Bharat Masrani: We are a bank that always looks at efficiencies. If there is a better way to deliver for our nearly 28 million customers worldwide, we will obviously do it. We need to make sure that we achieve that. So, of course, it's important that we run a bank. And I think the banking business continues at TD, where we continue to deliver for our customers. And part of delivering for all our stakeholders is to run a very efficient bank. And you're seeing that in our numbers. We have been on the buyback.

Speaker Change #113: River for a nearly 28 million customers worldwide, we will obviously.

Speaker Change #113: Make sure that we achieve that so I.

Speaker Change #114: Yeah of course, it's important that we run our bank and I think the business of banking continues that D D.

Speaker Change #114: Where we continue to deliver for our customers and part of delivering for all our stakeholders is to run a very efficient bank and youre seeing that in our numbers.

Speaker Change #114: Then on buybacks.

Bharat Masrani: And buyback. Yeah, so, you know, our intentions are the same as what we said last time. We have a program, and our intention is to complete the program, subject to market conditions, and that's how we look at this program. Well, I guess your messaging was you want to do the full $90 million or whatever it is. It is $90 million. So I, you know, we, like I said, with market conditions, we have an auto, you know, program as well. This is, that puts the algorithm against that.

Speaker Change #114: Buyback, yes. So you know our intentions are the same as what we had said last time you know we have a program and an orange.

Speaker Change #114: Intention is to complete the program subject to market conditions and that's how we look at this program.

Speaker Change #115: I guess youre messaging, whether you want to do the full whatever $98 million or whatever it is.

Speaker Change #116: But I'm wondering is the $90 million.

Speaker Change #117: Operational risk <unk>.

Speaker Change #118: Other civil settlement.

Speaker Change #118: Just taking a little middle of the range of your capital ratio I'm wondering if that changes the the.

Speaker Change #118: Momentum a bit.

Speaker Change #118: No.

Speaker Change #118: Like I said the market conditions, we have.

Speaker Change #118: No.

Speaker Change #118: Program as well as the puts in the algorithm against that and when appropriate when we think there are market opportunities with buyback as an as is interest of the bank and our shareholders, we will partake in that as well.

Gabriel Dechaine: And when appropriate, when we think there are market opportunities where a buyback is in the interest of the bank and our shareholders, we will partake in that as well. So that's how we think about it, and subject to market conditions, our intention is to complete the program. Thank you. The following question is from Paul Holden from CIBC. Please go ahead. Thank you. Good morning.

Speaker Change #118: That's how we think about it.

Speaker Change #118: Subject to market conditions, our intention is to complete the program.

Speaker Change #118: Okay.

Speaker Change #119: Thank you.

Speaker Change #120: Our following question is from Paul Holden from CIBC. Please go ahead. Thank.

Paul Holden: I'll just keep it to one for the interest of time. So, I'm going to go back to the AML issue because I think you made some very important statements there. While the AML shortfalls may be US-specific, you are making enterprise-wide investments in risk and control. And the reason I bring that up is I think there's some concern that if there's, I don't know if you want to call it regulatory spread to Canada, that the cost of remediating might increase, but that does not sound like that's a risk given the way you've talked about, again, enterprise-wide investments So, maybe you can just provide some clarification there?

Paul Holden: Thank you good morning, I will just keep it to one for the interest of time, so I'm going to go back to the AML issue because I think you made some very important statements there while the AML.

Paul Holden: Short falls, maybe in the U S specific you are making enterprise wide investments in risk and control and the reason I bring that up because I think there's some concern that if there's a phone call it regulatory spread to Canada, but the cost of Remediated might increase but that does not sound like that's a risk.

Paul Holden: Even the way you've talked about again enterprise wide.

Speaker Change #122: So maybe you can just provide some clarity there.

Bharat Masrani: Well, our guidance, you know. I think Kelvin said at the end of Q4 that our core expense growth was expected to be 2%. But given all the additional investments we are making in risk and control, that number will likely be mid-single digits. So that has not changed. Okay, so that won't change even if you have to make some additional investments in Canada. And then I will ask, since that was a quick one, one more.

Speaker Change #123: Well the our guidance I think tailwind that said then at the end of Q4. There are core expense growth is expected to be 2% with given all the additional investments we are making in risk and control that number will likely be mid single digits. So that has not changed.

Okay. So that doesn't change even if Jeff to make some additional investments in Canada.

Speaker Change #124: And then I will ask if that was a quick one I will ask one more maybe you can provide some NIM guidance at the all bank level, given you expect Canada to be down a little bit.

Paul Holden: Maybe you can provide some NIM guidance at the all-bank level, given you expect Canada to be down a little bit but the U.S. positive. Does that mean sort of neutral at the all-bank level? Thank you. Hi, it's Kelvin here.

Speaker Change #125: Positive does that mean sort of neutral at the all bank level. Thank you.

Kelvin Vi Tran: We don't generally provide non-trading NIM guidance at the total bank level, but, you know, what you suggested is not unreasonable. Okay, thank you. Thank you. The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead.

Kelvin: Hi, it's Kelvin here, we don't generally provide.

Kelvin: Non trading NIM guidance at the total bank level, but.

Speaker Change #126: What you suggested is not unreasonable okay. Thank you.

Speaker Change #126: Yeah.

Speaker Change #127: Thank you.

Speaker Change #128: Following question is from Sohrab <unk> from BMO capital markets. Please go ahead.

Sohrab Movahedi: Okay, thank you. I just wanted to clarify, Kelvin, the restructuring program. It's a little bit larger, and it's intended to generate more savings, but none of that is falling to the bottom line. Is that correct?

Sohrab Movahedi: Okay. Thank you I just wanted to clarify.

Kelvin: Kelvin the restructuring program.

Speaker Change #130: <unk> became a little bit larger it's intended to generate more savings, but none of that is falling to the bottom line is that correct.

Kelvin Vi Tran: Additional savings is a higher run rate in 2025, and so we haven't provided guidance for 2025. Okay, and then um, Leo, just to come back to U.S. retail a little bit, obviously you highlighted the important role of lower expenses, quarter over quarter, for example, year over year. Do you think the U.S. is going to be more about expense management as you look ahead over the next, I don't know, call it two to four quarters?

Speaker Change #131: The additional savings is.

Speaker Change #132: It's more run rate in 2025.

Speaker Change #133: And so we haven't provided guidance for 25 expenses.

Speaker Change #134: Okay. So.

Speaker Change #134: And then.

Leo just to.

Speaker Change #135: Just to come back to the U S retail a little bit I mean, obviously you highlighted.

Speaker Change #135: The important role of lower expenses quarter over quarter for example year over year.

Speaker Change #135: Do you think the U S is going to be more about expense management as you look ahead over the next step.

Kelvin Vi Tran: And, you know, maybe a cynical question: is this really reflective of your expenses if some of it is actually booked in the corporate segment? Thank you. So, on the first point, I think clearly this quarter we benefited from the expense exercise. And I just thought I'd provide a little bit of texture around that.

Speaker Change #135: I'll call it two to four quarters or.

Speaker Change #135: And maybe a cynical question is this.

Speaker Change #136: Is this really reflective of your expenses if some of it is actually booked in the corporate segment. Thank you.

Speaker Change #137: On the first point I think.

Speaker Change #138: Clearly this quarter, we benefited from the expense exercise and I, just thought I'd provide a little bit of texture around that back in third and fourth quarter of last year, we did announce a productivity program.

Leo Salom: You know, back in the third or fourth quarter of last year, we did announce a productivity program that focused on a number of drivers, organizational health, corporate real estate, rationalization, looking at our store network tactically, leaning in on certain vendor relationships, and then looking at our, you know, technical architecture and finding opportunities to rationalize. All those activities are well underway, and so I wouldn't discount them. That does give us the capacity to make important investments in the franchise, both, as I've mentioned, from a governance and control and foundational perspective, as well as those things required to be able to sustain the organic growth that we have underway.

Speaker Change #138: That focused on a number of drivers organizational health corporate real estate rationalization looking at our store network tactically.

Speaker Change #138: Leaning in on certain vendor relationships and then looking at our technical architecture and finding opportunities to rationalize all those activities are well underway and so I wouldn't discount the activities because that does give us the capacity to make important investments in the franchise, both as I've mentioned from a governance.

Speaker Change #138: And control and foundational perspective, as well as those things required to be able to sustain the organic growth that we have underway. So I'd say I'd say the expense discipline that we're driving the business is critically important.

Leo Salom: So I'd say the expense discipline that we're driving to the business is critically important. On your broader question, I think what you'll see over the next couple of quarters is that we do expect that some of our track drawn rates will give us a bit of a tailwind from a margin perspective. We see expansion over the second half to be modest and should give us a bit of a tailwind.

Speaker Change #138: On your broader question I think what you'll see over the subsequent quarters as we do expect that some of our tractor on rates will give us a bit of a tailwind from a margin perspective, we see expansion over the second half to be modest and should give us a bit of a tailwind that coupled with the operating momentum we already have.

Leo Salom: That, coupled with the operating momentum we already have, should generate some revenue and year-on-year revenue growth with sustained expense discipline and a relatively stable outlook from a credit perspective. We do believe that you'll see improved profitability in the second half of the year and clear momentum as we go into 2025. So maybe a long-winded way of saying, I feel quite comfortable with our ability to drive organic growth, not just in terms of balance sheet growth but bottom line growth as well.

Speaker Change #138: <unk>.

Speaker Change #138: Should generate some revenue year on year revenue growth with.

Speaker Change #138: With sustained expense discipline with a relatively stable outlook from a credit perspective, we do believe that youll.

Speaker Change #138: You will see improved profitability in the second half of the year and clear momentum as we go into into 2025.

Speaker Change #138: Long winded way of saying I feel quite comfortable with our ability to drive organic growth not just in terms of balance sheet growth, but bottom line growth as well I'd say I'd say with regards to investments in the overall program. There's no question that we very deliberately decided that some of the transformational.

Leo Salom: I'd say with regard to investments in the overall program. There's no question that we very deliberately decided that some of the transformational investments around the ML program were going to be housed at the Corporate Center. But just to be clear, it's not lost on me that, ultimately, the run rate operating expenses are going to be held at the segment level. And so all of our forecasts take into account that expected spend. And I do expect us to be able to deliver positive operating leverage through the cycle. I appreciate the color.

Speaker Change #138: Investments around the AML program, we're gonna be housed at the corporate center, but just to be clear. It's not lost on me that ultimately the run rate operating expenses are going to be held at the segment level and so all of our forecasts take into account that that expected spend and I and I do expect us to be able to deliver a pause.

Speaker Change #138: Operating leverage through the cycle.

Speaker Change #139: I appreciate the color. Thank you very much.

Speaker Change #139: Operator.

Sohrab Movahedi: Thank you very much. Mark, can you hear us? Yeah, can you guys hear me?

Speaker Change #140: Tomorrow and you hear us.

Speaker Change #141: Yes can you guys hear me.

Speaker Change #141: So.

Operator: [inaudible] Okay, I know you can't provide further details on the magnitude of the charges, but given that you did take this initial provision, can you even give us some broader strokes on at what stage the discussions are with the other regulators and DOJ? Like, does it feel like we could get closure on this issue in 2024? Or could it be pushed well into 2025 and beyond? Any any color you can you can provide would be helpful.

Speaker Change #142: Okay. I know you can't provides further details on the magnitude of the charges, but given that you did take this.

Speaker Change #143: Initial provision can you even give us can you give us some broader strokes on on what stage of discussions are with the other regulators and Doj like does it feel like we could get closure on this issue in 2024 could it be question well into 2025 and beyond any any color. You can you can provide would be helpful.

Bharat Masrani: Tomorrow, unfortunately, you know, we can't, as I've said many times, we are in active discussions with our regulators and the Department of Justice. And, you know, we are hoping that we can bring closure to this as soon as we can, but it's hard for us to give you any specific timing in that respect. Okay, thanks. I just had to try that one.

Lamar: Lamar Unfortunately, we cant as I've said it many times.

Speaker Change #145: In active discussions with the regulators and the department of Justice.

Speaker Change #145: And we are hoping that we can bring closure to this as soon as we can but it's hard for us to give you any specific timing in that respect.

Speaker Change #146: Okay. Thanks, I just had to add some.

Speaker Change #147: Try that one.

Lemar Persaud: Can you talk to us about the strength in wealth management? So that 418 million in earnings, you know, it's been relatively stable in the 330 to 360 range since the start of 2023. Should we think about this as a one-off strong result, or is there something that's fundamentally shifted in that business? So the earnings power of the wealth management business has now moved up somewhat. Thanks. Lemar, thanks very much for the question.

Speaker Change #148: Can you talk to us on what the strength in wealth management, so that $418 million in earnings.

Speaker Change #149: It's been relatively stable in the 330 to $3 60 range since the start of 2023 should we think about this as a one off strong result, or is there something that's fundamentally shifted in that business saw the earnings power of the wealth management business has now moved up somewhat.

Thanks very much for the question. So I would say if there's a theme today youre seeing the strength of a diversified business model across the bank.

Tim Wiggan: So I would say, you know, if there's a theme today, you're seeing the strength of a diversified business model across the bank, and that absolutely applies to wealth and insurance for that matter. I would answer your question by basically bifurcating our business drivers into factors we control and those that we don't. So from a macro perspective, obviously, markets are critical when you have AUM and AUA over a trillion dollars. Interest rates are a major driver of NII and sometimes dictate flow within the bank.

And that absolutely applies in wealth and wealth and insurance for that matter I would answer your question by by basically bifurcated.

Speaker Change #149: Our business drivers into factors, we control in and those that we do so from a macro perspective, obviously markets are critical when you have AUM in AOA over a trillion dollars.

Speaker Change #149: Interest rates are a major driver to NII and sometimes dictate flow within the bank in terms of what we do control. The client is at the center of everything we do.

Tim Wiggan: In terms of what we do control, the client is at the center of everything we do. And so we're constantly looking at our client needs and making sure that our strategies line up against what they are trying to accomplish and that we're delivering it on the product side in a form that they appreciate. And secondly, we control expenses. And if you look at our expense number and our operating leverage, our FPs overall down 8%, I would suggest to you that we are putting ourselves in a position to benefit across wealth and insurance. And that's really what you saw in the 418 million, up 25%.

Speaker Change #149: So we're constantly looking at our client needs and making sure that our strategies lineup against what they are trying to accomplish.

Speaker Change #149: And that we're delivering it on the product side in a form that they.

Speaker Change #149: I appreciate and secondly, we control expenses and if you look at our expense.

Speaker Change #149: Number and our operating leverage our rfps overall down down 8%.

Speaker Change #149: I would suggest to you that we are putting ourselves in a position.

Speaker Change #149: To benefit across across wealth and insurance and that's really what you saw in the $418 million up 25%. So long winded way of saying if you have over a trillion dollars obviously with the appreciation.

Tim Wiggan: So, long-winded way of saying, if you have over a trillion dollars, obviously with the appreciation in the equity markets, if you are maintaining expense discipline, that's gonna continue to drive results. And you'll also see continued results from growth in market share across advice, insurance, and asset growth itself. With Tim here, there might be a good opportunity to talk about the integrated model we run for the rest of the bank because that was the main topic at our investor day about a year ago. And as you recall from Investor Day, one of our big themes on where we thought we had the greatest opportunity for growth is our 1TD initiatives. And that's what you're seeing actually play out.

Speaker Change #149: In the equity markets.

Speaker Change #149: You are maintaining expense discipline, that's going to continue to drive results and Youll also see continued results from growth in market share across advice insurance.

Speaker Change #149: And asset growth itself.

Tim: And then Tim here, there might be a good opportunity to talk about the integrated model, we run for the rest of the <unk> because that was the main topic at our Investor day about a year ago.

Speaker Change #151: Between new and Red bar in the Canadian business is how that plays out so maybe take a minute on that.

Speaker Change #152: Ren maybe Lamar its ray.

Speaker Change #152: And as you recall back from Investor Day, one of our big themes on where we thought we had the greatest opportunity for growth is on our one TD initiatives and.

Tim Wiggan: In 2024, what we're seeing in the relationship between Canadian personal banking and wealth management is we're on pace to have our best year on record for referrals from branch banking to wealth. But if I translate that into volumes, the actual closed volumes from Canadian personal banking to wealth are up 23% year on year for financial planning. It's up over 10% for all of our advice businesses and up 6% for direct investing.

Speaker Change #152: And Thats, what Youre seeing actually play out in 2024, what we're seeing in the relationship between Canadian personal banking and wealth management is where orange. We're on pace to have our best year on record from a referrals from branch banking to wealth is up 12% year on year, but if I translate that into volumes.

Speaker Change #152: The actual closed volumes from Canadian personal banking to wealth is up 23% year on year for financial planning, it's up over 10% to all of our advice businesses and up 6% to direct investing so significant business that we said that in our house when your bank one out of every three Canadians across.

Tim Wiggan: So, significant business that we said that's in our house, when you bank one out of every three Canadians across the country, significant organic growth opportunities just by the partnering that we have between our two businesses. As people know, our strategy in the Canadian Business Bank is really centered around our better business bankers. For a long time, part of that strategy has been to bring the whole bank to our customers to make it easier for them to have all of their financial needs satisfied. One recent initiative that we talked about on Investor Day was co-locating senior private bankers in our commercial banking centers. That initiative has been working extremely well.

Speaker Change #152: The country, a significant organic growth opportunities just by the partnering that we have between our two businesses.

Speaker Change #153: <unk> sure.

Speaker Change #154: Sure. So as people know our strategy in the Canadian business Bank Israeli centered around our better business bankers.

Speaker Change #154: For a long time part of that strategy has been to bring the whole bank.

To our customers to make it easier for them to have all of their financial needs satisfied one recent investment that initiative that we talked about in Investor day was a co locating our senior private bankers in our commercial banking centers that initiative has been working extremely well.

Tim Wiggan: We now have those bankers in about three-quarters of our centers, and we're seeing an acceleration in the amount of wealth business that's being generated through commercial banking clients. Lemar, hopefully that gives you a sense of the power of TD and how we actually... provide an integrated way of dealing with the whole bank here and not just every sector. That's helpful. I'll leave it there in the interest of time. Thanks.

Speaker Change #154: We now have those bankers and about three quarters of our centers and we're seeing an acceleration in the amount of wealth business thats being generated through commercial banking clients.

Speaker Change #155: Lamar hopefully that gives you a sense with the power of TV and how we actually.

Speaker Change #155: Provided integrated.

Speaker Change #155: We are.

Speaker Change #155: Dealing with the whole bank here in not just every segment.

Speaker Change #156: No that's helpful I'll leave it there in the interest of time thanks.

Lemar Persaud: Thank you. And the final question will be from Nigel D'Souza from Veritas Investment Research. Please go ahead. Good morning.

Speaker Change #157: Thank you and our final question will be from Nigel D'souza from Veritas investment Research. Please go ahead.

Nigel D'Souza: Thank you for taking my question. I wanted to follow up on your US commercial real estate portfolio. When I look at impaired provisions relative to impaired loans, I calculate a loss rate somewhere between 10-15%.

Nigel D'Souza: Good morning, Thank you for taking my question.

Nigel D'Souza: I wanted to follow up on your U S commercial real estate portfolio, when I look at impaired provisions relative to.

Speaker Change #159: Parents bonds.

Nigel D'Souza: Fully a loss rate somewhere between 10% to 50%.

Ajai Bambawale: Your peers have a loss rate that's a bit higher, closer to 30%, and I'm wondering if there are factors that are mitigating losses in that portfolio or if it's a function of a higher level of performing allowances built into your US3 book. And if so, could you provide some color on The Performing Reserves you've built for U.S. screening? I'll start, and I don't know if Leo has any comments.

Speaker Change #161: Your peers have a loss rate, that's a bit higher closer to 30%.

Speaker Change #161: Wondering if there are factors that are mitigating losses in that portfolio or if it's a function of.

Speaker Change #160: Higher level of performing allowances built in your U S. <unk> book and so could you provide some color on.

Speaker Change #160: The performing reserve she felt for U S screen.

Speaker Change #162: Yes, I can.

Speaker Change #163: Can start in <unk> and <unk>.

Speaker Change #160: Comments.

Ajai Bambawale: The U.S. CRE portfolio, and particularly the office portfolio, has been a focus for us now for a number of years and for an extended period. You know, we are seeing migration, we're seeing performing migration, we're seeing defaults on that.

Speaker Change #160: The U S <unk> portfolio, and particularly the office portfolio is peanuts.

Speaker Change #160: Focus for us now for <unk> and an extended period.

Speaker Change #160: We are seeing migration, we are seeing performing migration, we are seeing defaults on debt portfolio as well.

Speaker Change #160: We've been building reserves for an extended period, we actually build the reserves during the pandemic.

Ajai Bambawale: And when we saw that things would take some time to play out, we held on to most of those reserves. So today we sit on reserves in commercial real estate, in general, over two and a half times pre-pandemic levels, and a lot of that is in office.

Speaker Change #160: When we saw that things would take some time to play out we held onto most of those reserves. So today, we sit on reserves in commercial real estate in general over two five times pre pandemic levels a lot of that is.

Speaker Change #160: As an office now I can comment on the peers, but I can comment on our book because what we do and I mentioned this in a previous question every single quarter. Our team was borrower by borrower does a bottom up analysis stresses the book for higher rates stresses the book for lease.

Ajai Bambawale: Now, I can't comment on the peers' book, but I can comment on our book because, and I mentioned this in a previous question, every single quarter, our team goes borrower by borrower, does a bottom-up analysis, stresses the book for higher rates, stresses the book for lease renewals, stresses the book for valuations, and we keep bolstering reserves based on where we are. And this is gonna continue. You know, this story is not over, Nigel. It's gonna play out.

Renewables stresses the book for valuations and we keep bolstering reserves and so we feel pretty good between performing and even what's in stage III for commercial real estate.

Speaker Change #160: On <unk> on where we are and this is going to continue.

Speaker Change #160: This story is not over Nigel it's going to play out but feel good about where we're reserved that doesn't mean, there won't be any more reserves, it's quite dynamic, but all I'm, telling you is we follow a very thorough process at the bank and how we come up.

Ajai Bambawale: I feel good about where we're at. That doesn't mean there won't be any more reserves. It's quite dynamic.

Ajai Bambawale: But all I'm telling you is we follow a very thorough process at the bank and how we come up with our reserves. So I'll stop there. And Leo, you may wanna add some comments. And Nigel, the only thing that I would add is that discipline.

Speaker Change #160: With our reserves.

Speaker Change #164: Stop there.

Speaker Change #165: And Nigel the only thing that I would add is it is that discipline. If you look back at the beginning of Covid back in the first quarter of 2020.

Leo Salom: If you look back at the beginning of COVID, back in the first quarter of 2020, our real estate, and our office Cree books sat at about $5.1 billion. It sits today at $4.2 billion.

Speaker Change #165: Our real estate, our office Cree books sat at about $5 $1 billion. It sits today at $4 2 billion. So we have been.

Nigel D'Souza: So we have been strategically culling exposures for well over three years now. We feel very comfortable with the portfolio we have, both from a quality standpoint as well as in terms of, The expiration structure of that portfolio should give us the ability to be able to support our clients through the cycle. Okay, that's helpful. And if I could clarify on the civil matter at this border, is it my right to assume that it's related to US non-sufficient fund fees? Or is it another matter entirely?

Speaker Change #165: Strategically culling exposures for well over three years now and we feel very comfortable with the portfolio. We have both from a quality standpoint, as well as in terms of the exploration structure of that portfolio.

Speaker Change #165: Should give us the ability to be able to support our clients through the cycle.

Speaker Change #166: Okay. That's helpful.

Speaker Change #167: Clarify on the civil matter at this point or is that am I right to assume that is related to U S. Non sufficient fund fees or is that another matter.

Kelvin Vi Tran: So we don't, for confidentiality reasons, we don't discuss the specifics. Okay, so the reason why I brought that up is that we have the civil panel, the civil matter, against Charles this quarter. Previously, you had.

Speaker Change #168: So we don't for confidentiality reasons, we don't we don't discuss specific because manner.

Speaker Change #169: Okay. So the reason why I brought that up as we have the civil panel for civil matter.

Speaker Change #170: I guess charge this quarter previously you had.

Nigel D'Souza: Stanford litigation issue, and you know that was in the US franchise, so there are some non-AML issues that have popped up infrequently over the past, and I think it would be beneficial if, given that you have time to review, you could point out which areas you think drove kind of shortfalls that you've seen, is it technology investment, risk reporting, review at the committee level, or just training of your frontline staff. Any highlights there or I can confirm that this matter is in the U.S., and then when we can provide more details, we will do that.

Speaker Change #171: Saffer litigation issue and.

Speaker Change #172: Yes that was in the U S franchise so.

Speaker Change #172: There are some non AML issues that have popped up.

Speaker Change #172: And frequently over the past then.

Speaker Change #172: I think it would be beneficial if you will.

Speaker Change #173: Thanks for your time to review, if you could point out which areas do you think.

Speaker Change #172: No.

Speaker Change #172: The shortfalls that you've seen as the technology investments Misreporting with you at the community level.

Speaker Change #172: Just training of Europe.

Speaker Change #172: The frontline staff any any highlights there are insights there would be really helpful.

Speaker Change #174: To do so I can confirm that ladder is is in the U S. And then when we can provide more details we will do so.

Nigel D'Souza: Okay, that's it for me. Thank you. Thank you. There are no further questions at this time. I will turn the call back over to you, Mr. Masrani. Thanks very much, operator, and another strong quarter from TD. It's great to see our people around the world focus on the business of banking, and I want to take this opportunity to thank them because they continue to deliver for all our stakeholders, including our shareholders, and I look forward to seeing many of you. The End. Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.

Speaker Change #175: Okay. That's it for me thank you.

Speaker Change #176: Thank you.

Speaker Change #177: There are no further questions at this time I will turn the call back over to you Mr. Mr. Ronnie.

Mr. Ronnie: Thanks, very much operator, and another strong quarter from D. D. Yeah, it's great to see our people around the world.

Mr. Ronnie: Because on the business of banking and I want to take this opportunity to thank them because they continue to deliver for all our stakeholders, including our shareholders and I look forward to seeing many of you over the next 90 days or at a quarter end earnings call. Thank you.

Mr. Ronnie: Thank you.

Speaker Change #179: Conference has now ended please disconnect your lines at this time and we thank you for your participation.