Q2 2025 EQB Inc Earnings Call
Welcome to <unk> earnings call for the second quarter of 2020 Fives. This call is being recorded on Thursday May 29 2025.
At this time you are in a listen only mode. Later, we will conduct a question and answer session for analysts.
Instructions will be provided at that time. It is now my pleasure to turn the call over to Maggie.
Maggie: Director of public Relations and communications. Please go ahead.
Maggie: Thank you Jenny and good morning, everyone. Your hosts today are Andrew Moore, President and Chief Executive Officer, Marlene letter D C Chief risk Officer, and David Wilkes, Vice President and head of finance.
Maggie: For those on the phone lines only we encourage you to also log on to our webcast and view our presentation, which may be referenced during the prepared remarks.
Maggie: On slide two of our presentation, you'll find EQ vs caution regarding forward looking statements as well as the use of non ifr's measures.
Maggie: Yours referenced today are on an adjusted basis, where applicable unless otherwise noted.
Andrew Moore: With that I will turn it over to Andrew.
Andrew Moore: Good morning, everyone and thank you Maggie before diving, it's coffee numbers some initial observations.
Andrew Moore: While the fundamentals of the basketball business to grow profitably is unchanged I would be remiss not to acknowledge that this was a period of unusual volatility.
Andrew Moore: The confidence altering threat of cross border tariffs dominate to the narrative and dictated many customer decisions in Q2.
Andrew Moore: This situation will be remedied, but it may take time.
Andrew Moore: We trust that the resolution brings with it some benefits accruing to Canada for more diversified trade and the creation of a very necessary pro growth economic agenda in Ottawa.
Andrew Moore: In the meantime, while being mindful of near term risks, we remain confident incubator prospects and for good reason.
Andrew Moore: We have market, leading franchises in digital banking single family residential and <unk> seen it show a multilevel unit lending with great business isn't the accumulation lending and across our portfolio of commercial businesses.
Andrew Moore: Supported by a really strong capital position with excellent liquidity.
Andrew Moore: And the more muted market. These positions will serve us well and in Q2 helped us deliver one of the stronger periods for loan originations with market share gains.
Andrew Moore: At a high level our approach in record renewal rates helped us single family uninsured portfolio.
Andrew Moore: 2% quarter over quarter, while 379 million.
Andrew Moore: Our long time leadership in southern Canada as apartment sector was again demonstrated in Q2 with the insured construction portfolio, increasing 10% quarter over quarter and term loans under management, increasing 6% over the same time period, and nearly 29% year over year.
Andrew Moore: We did see a decline in gains on securitization from CMA Sea insured multifamily, but we expect high writings in Q3 and Q4 from this business.
Andrew Moore: More detail on EQ back later, but it continue to grow meaningfully such that over 560000 customers now enjoy a differentiated challenge your bank offerings and deposits grew to $9 4 billion.
Andrew Moore: Objectively there is much to celebrate.
Andrew Moore: In a business like ours, we do not expect too much quarter to quarter volatility in earnings given predictive predictability and most elements of net interest income and noninterest revenue, which tend to grow at a stable pace.
Andrew Moore: Variances earnings when they occurred tend not to be terribly material considered individually, but they cannot add up when they coalesce employees in the same direction in a single quarter.
Andrew Moore: That's what occurred in Q2 as our securitization business produced la writings that in Q1, our common equity was above target weighing down our OE and we incurred higher levels of other variable spending such as marketing and other expenditures to drive EQ Bank account acquisition.
Andrew Moore: When combined with elevated credit losses were the first to acknowledge our financial results were out of character.
Andrew Moore: We certainly expect Q3 M b all of them to show better performance, even as economic uncertainty may continue to drive credit provisions.
Andrew Moore: The bottom line is that we are well positioned for the future I would expect over the medium term, we will generate over 15% ROE is consistent with our historical record.
Andrew Moore: Now to the numbers.
Andrew Moore: Against our financial priority of generating over 15% Roe.
Andrew Moore: We fell short 11.9% of the car down 13, 6% for the first half of the fiscal year with EPS of $2 31, and 529, respectively.
Andrew Moore: Julien.
Julien: So anomalous demands us.
Andrew Moore: And the broader economy face.
Andrew Moore: Naturally variable factors I mentioned.
Andrew Moore: No conversation about the banking sector through this demanding period of uncertainty can be made without acknowledging the credit environment, which Martin will walk us through in a moment.
Andrew Moore: PCL straw lending businesses in the quarter were up but $29 million.
Andrew Moore: This figure is split nearly evenly across each of our business lines and broadly reflect the demands of Q2s unique macroeconomic landscape stress on the vintage of assets all borrowers are pressure the commercial portfolio.
Andrew Moore: Collectively shadowing otherwise strong core performance.
Andrew Moore: Consistent with our expectations as our single family residential originations increased 28% compared to last year.
Andrew Moore: We won market share and picked up business in line with our risk appetite.
Andrew Moore: This was achieved even as we dialed in our credit policies to manage risk and a less certain economic environment.
Andrew Moore: We did not stretch our standards to achieve growth because we never do if.
Andrew Moore: By maintaining a broad presence across Canada while.
Andrew Moore: Prudently managing risk associated with house prices, we continue to build a strong portfolio with good risk manage earnings potential.
Andrew Moore: Actually I saw portfolio growth was also supported by one of the stronger periods for low retention for the bank.
Andrew Moore: A function of good customer service as well as economic factors.
Andrew Moore: We naturally observed the housing market very closely.
Andrew Moore: In line with market forecast many of you will be familiar with our outlook now reflects lower housing sales than when we last reported.
Andrew Moore: While the future still hold some degree of uncertainty and we have adjusted our tone to be slightly more cautious as a result, let me be clear that we remain confident that the demand for housing is there and that we will continue to gain share in the buckets are important to us.
Andrew Moore: As an encouraging point of example, uninsured single family loan application volumes in the first few weeks of May are up 17%.
Andrew Moore: From last year at the same time.
Andrew Moore: Decumulation lending continue enjoy strength in demand as we advance our presence in a market that is serving the growing population of Canada's retirees.
Andrew Moore: Grocery CMA seeing show a multi unit residential was a highlight for our commercial banking business.
Andrew Moore: Castro and multi unit apartments are attractive to own them.
Andrew Moore: We're pleased to support this asset class that has yield strong returns through many economic cycles.
Speaker Change: Well have more to say about our outlook and innovation agenda, including <unk> got bank, but first I'd like to review credit performance and David to provide a quarterly summary.
David Wilkes: Thank you Andrew and good morning, everyone I'll start with an overview of the current macroeconomic environment as it pertains to <unk> portfolios before moving on to the credit performance in the quarter and then I'll provide a few words on the head.
Andrew Moore: As we navigate this uncertain environment.
Andrew Moore: Since our last call tariff uncertainties contribute to significant financial market volatility and has dampened activity in the economy, specifically in the real estate market.
Andrew Moore: As shown here on slide eight is the range of scenarios, we used to model the impact of sustained increases in tariffs on our portfolios.
Andrew Moore: This exercise coupled with recent investments we've made in risk management disciplines gave us the confidence that we are appropriately reserved and are prepared for different outcomes.
Andrew Moore: We're able to reiterate the conviction we have in our growth ambition.
Andrew Moore: The work we've done over the past year to enhance our risk infrastructure gives us a very granular view of our businesses and ensures we're able to adapt quickly as required.
Andrew Moore: Now turning to credit performance in the quarter.
Andrew Moore: Briefly on the subject of gross impaired loans the rate of new formations and gross impaired loans or gills slowed in Q2.
Andrew Moore: But economic headwinds means resolution activities are taking longer resulting in the gilly increase we saw this quarter.
Andrew Moore: It's 8% from January to 775 million.
Andrew Moore: Within our personal lending portfolios skills increased one 4% with $91 6 million in Paraguay essential mortgages discharge or resolved in the quarter.
Andrew Moore: Looking at commercial impaired loans increased 12% in Q2, driven by two new loans with no individual provisions as well as a slower pace of resolution.
Andrew Moore: Equipment financing and parents increased 23% to $10 3 million and as a result of the deteriorating macroeconomic conditions stemming from terrorists further impacting the transportation sector.
Andrew Moore: Now on to PCL.
Andrew Moore: D C. L. A is for our lending businesses totaled 29 million compared to $13 7 million in Q1.
Andrew Moore: Of the total $5 8 million was related to stage, one and stage two performing loans, reflecting growth in the uninsured lending portfolio and a more negative macroeconomic outlook impacting the forward looking indicators that are used to model expected credit losses.
Andrew Moore: Jane Street, Pcl's associated with impaired loans were $23 2 million and 45% of which was associated with equipment financing.
Andrew Moore: On the personal lending side Pcl's were $9 1 million up from $6 3 million last quarter, primarily driven by the 'twenty to 'twenty two origination vintage Andrew mentioned these loans continued to drive both skills and P. C. L tissue pressures from the previously rapid increases.
Speaker Change: And interest rates and declines in real estate values from their peak in 2022.
Speaker Change: Commercial PCL were $9 4 million with $2 6 million related to provisions on performing loans provisions on nonperforming loans are impaired loans are mostly related to noncore assets.
Speaker Change: Reported P C. Allison equipment financing were $10 1 million down from 13 million over last quarter and $14 million last year.
Speaker Change: As we've expressed on prior calls we have improved the credit quality of this portfolio over the past year, reducing exposure to long haul transportation and shifting originations towards prime now.
Speaker Change: Now over 50% of the originations are in prime segments.
Speaker Change: From 31% at the end of 2023.
Speaker Change: On to the outlook given the degree of economic uncertainty facing the global economy and here in Canada.
Speaker Change: Accurately forecasting the timing of resolution or a decline in new impaired formations is difficult.
Speaker Change: With this weaker economic outlook, we have increased our provisions this quarter.
Speaker Change: If market uncertainty were to subside, we may see improvement in the second half of the fiscal aided by today's lower interest rate environment and the investments we've made in risk management disciplines.
Speaker Change: In response, we continue to deliver high credit quality originations using our disciplined and dynamic risk management approach underpinned by prudent underwriting practices, such as conservative average loan to values and strong borrower credit worthiness.
Speaker Change: Tightening of our underwriting criteria in certain geographies and asset classes across all of our businesses.
Speaker Change: And active and ongoing management of the problem in impaired loans within our portfolios and finally continued strengthening of the Bennington leasing business.
David Wilkes: We are confident in the overall quality of our lending portfolios and the level of reserves, we have taken and expect our loan loss experience will return to more normal levels over time in keeping with our long standing position as the credit performance leader among all Canadian banks now over to David.
David Wilkes: Yeah.
David Wilkes: Thanks, Marlene and good morning, everyone.
David Wilkes: I'll start with return on equity and capital.
David Wilkes: As we share consistently our priority performance measure is generating Roe above 15%.
David Wilkes: As Andrew noted our ROE for the quarter was 11, 9% and impacted by several factors, including uncertainty in the macroeconomic environment and stage three allowances, primarily associated with loans that were already impaired.
David Wilkes: The elevated provision for credit losses led to over 250 basis points of the gap to our target ROE This quarter.
David Wilkes: In addition consistently strong organic capital generation each year has allowed the bank to grow capital faster than risk weighted assets, resulting in the banks, increasing capital ratios as well as each of these common shareholders' equity.
David Wilkes: As a rule of thumb 200 million in additional shareholders equity has a 100 basis point impact on our ROE.
David Wilkes: Given these two factors we are confident in the fundamentals of our business and its ability to deliver target performance of 15% to 17% ROE over the medium term.
David Wilkes: Okay.
David Wilkes: On capital total capital increased 10 basis points to 15, 6%, reflecting organic capital generation net of dividends and our semiannual $4 4 million dollar <unk> payment.
David Wilkes: In the quarter, Ecuador Bank completed a $200 million dividend to its parent ETB, Inc, leading to a decline in the CET one ratio to 13, 2%.
David Wilkes: As part of optimizing its ongoing capital structure, the bank completed a $200 million subordinated debenture issuance to each be allowing it to maintain strong overall capital levels above 15%.
David Wilkes: Okay.
David Wilkes: In terms of shareholder capital last year, you could be successfully executed on our guidance to grow the common share dividend, 20% to 25% annually over five years.
David Wilkes: Since then we are on track with our plan to grow dividends, 15% annually and continued this with our latest dividend increase.
David Wilkes: This quarter <unk> also repurchased and canceled 271000 shares for a total of $26 million through its NCI D. We will continue to use the NCI D. As part of our overall framework that ensures capitals first allocated to shareholder value enhancing organic and strategic and organic growth while <unk>.
David Wilkes: Turning excess capital to shareholders.
David Wilkes: Okay.
David Wilkes: Net interest income grew 3% sequentially and was 1% above last year. There were a number of factors here, namely the growth of our uninsured lending.
Speaker Change: Folios across single family its accumulation and commercial.
David Wilkes: And an increase in prepayment income quarter over quarter.
David Wilkes: Expansion of margin over the last year has been supported by our commercial lending portfolio and floor rates built into these agreements.
David Wilkes: Today. The bank holds several billion dollars of adjustable rate mortgages with contracted floors that protect from downward movements in rates. The majority of these loans are already at the floor rate, which means a further reduction in policy rates directly benefits NII.
David Wilkes: The margin in the remaining lending portfolio is expected to be relatively consistent as rates fall given the matched funding approach and the books one year duration of equity.
David Wilkes: For EQ bank deposits grew well, reaching a new record of $9 4 billion and up 4% quarter over quarter.
David Wilkes: Notably demand deposits, including our innovative noticed savings account.
David Wilkes: It grew 10% quarter over quarter, and 32% year over year. These demand deposits contribute more to the bank's NII than its term deposits EQ back deposit price I guess continually optimized to grow over the long term franchise, while contributing to earnings today.
David Wilkes: Overall NIM was two 2% driven in the quarter by the factors I've mentioned previously as well as derivative gains.
David Wilkes: Normalizing for these gains NIM would have been $2 13 compared to 207 in Q1 and 211 last year. This is consistent with our guidance for NIM above 2% through the year.
David Wilkes: Noninterest revenue contributed 14% of revenue in the quarter.
David Wilkes: Once again, we experienced consistency from Ethiopia is fee based businesses with $23 million in revenue, including ACM advisors and concentric trust.
David Wilkes: Continues to perform well with new institutional subscriptions as it prepares to launch its new social and climate science.
David Wilkes: Gains on securitization and income from retained interests decreased from a record Q1 as overall volume and the CMA to the insured market decline, particularly customers looking for 10 year mortgages.
David Wilkes: Our outlook for NAR is constructive for the second half of the year with securitization income expected to increase in Q3, and Q4, and we anticipate <unk> will contribute over 15% of revenue this year.
David Wilkes: Moving to expenses, we continue to take out through cycle approach to building capabilities investing in innovation and growing the bank and have leavers to pace our expense growth with strong lending performance driving revenue for the future. We have the means to continue investing to deliver our trademark customer service.
David Wilkes: Enhance our digital capabilities, while delivering our target Roe over the medium term.
David Wilkes: And Mei equitable banks challengers moved into our new Toronto headquarters, which is a purpose built facility equipped for our team.
David Wilkes: Following completion of the lease that are temporary facilities. This will reduce the adjustment to expenses expenses in future periods.
David Wilkes: Again, our focus is investing through the cycle to generate 15% plus ROE while building long term franchise value.
David Wilkes: We will remain firm in our commitment to cost effectiveness and expect operating leverage to improve as faster asset growth translates to higher revenue.
David Wilkes: On asset growth total loans under management reached $71 5 billion up 3% in the quarter and 9% year over year. The drivers of our growth in uninsured single family Decumulation lending, which is up 45% year over year insured commercial construction up 31%.
David Wilkes: And insured multi unit residential up 29%.
David Wilkes: On funding.
Speaker Change: Bank deposits grew at their quickest pace since 2022, and we are particularly enthusiastic about the growth of activity here as more customers are choosing the platform for everyday banking, including payroll and as I mentioned this is leading to faster growth of lower cost demand deposits.
Speaker Change: Overall, we remain confident in the fundamental and structure ability to generate consistent 15% to 17% ROE over the medium term as we invest in new capabilities in our core lending businesses continued to grow.
Andrew Moore: Andrew Thank.
Andrew Moore: Thank you Martina and thank you David.
Speaker Change: For final comments on our outlook I want to express my thanks to our finance team and David in particular to that hub.
Andrew Moore: This quarter.
Speaker Change: We also made two important changes to senior roles and responsibilities to align with our strategic priorities and sharpen our focus.
Speaker Change: Specifically damn broken was named to the newly created position of senior Vice President and head of EQ Bank.
Speaker Change: Janet lend to the position of Chief information officer of <unk>.
Speaker Change: Equitable bank.
Speaker Change: Dan is a founding member of the U K Bank team and Janet joined US in 2021, as VP lending and payment technology.
Speaker Change: If you use your expertise to help build scalable technology solutions.
Speaker Change: Our challenger Bank.
Speaker Change: In his new role Dan takes responsibility for EQ Bank marketing product development customer care and digital livery, while Janet will ensure we remain at the forefront of innovation in all areas of equitable alongside died at EQ Bank.
Speaker Change: Now some time for your bank, we are focused on adding more challenger bank services over time and building on recent momentum in customer growth and engagement.
Speaker Change: As I mentioned, not all EQ bank customers grew 23% year over year, such that over 560000 customers have chosen a bank to <unk>.
Speaker Change: Suit their everyday banking needs and now benefit from a competitive tension we provide to our secretary in Canada.
Speaker Change: Deposits grew at a rapid clip to $9 4 billion, driven notably by demand deposits as David mentioned, which were up 10% quarter over quarter and 32% year over year with our fastest expansion since 2022.
Speaker Change: We enjoy a deeper engagement with our payroll customers, who buy the extra this activity choose us as a destination bank and represent a growing ratio of our total customers and deposit book.
Speaker Change: Q2 also saw our business owner customers provide meaningful feedback for our business accounts. During this beta phase, which we look forward to rolling out fully this year.
Speaker Change: In short we are deepening customer relationships in line with our strategy as we build scale, we also see opportunity to drive down costs and improve efficiency.
Speaker Change: Turning back to our lending businesses uninsured single family loan application volumes in the first few weeks of May are encouraging up 17% from this time last year.
Speaker Change: Giving us a constructive outlook for Q3.
Speaker Change: With a good picture of SMH see construction and term loans and our commercial business.
Speaker Change: In closing this was a demanding quarter that saw an array of variable factors converge with the impact of tariffs on the global economy.
Speaker Change: We responded by tightening credit in certain geographies and taking appropriate provisions the rate of new formation has slowed and while there's some cases delayed we're working hard to resolve problem loans well, we can effect change using our proven approach.
Speaker Change: The quarter also have strong fundamental performance, which supports my confidence in the future.
Speaker Change: All things considered it was evident the disciplined execution of our strategy through this period of economic uncertainty.
Speaker Change: Now us to support our customers and translate recent asset growth and the positive earnings and generate medium term Roe about 15%.
Jenny: Now I'll turn it back to Jenny to begin the Q&A portion of the call.
Jenny: Thank you.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one I know touched on <unk>.
Jenny: Did you wish to cancel your request. Please press the star followed by the two.
Jenny: If you are using a speaker phone please lift the handset before pressing any case once again that is star one should you wish to ask a question.
Speaker Change: Your first question is from Gabriel to Shine from National Bank Financial Your line is now open.
Speaker Change: Hey, good morning.
Speaker Change: Can you.
Jenny: Refresh my memory, what your tip.
Jenny: Typical loan to value at origination for a.
Speaker Change: Single family residential mortgage in the.
Speaker Change: Commercial mortgages.
Speaker Change: Such a thing as typical exists.
Speaker Change: It does sort of up I'll give that modeling kind of deal with the quantitative that but in general sort of theme if people with a lot of credit scores and therefore, a higher propensity to default, we have a lower loan to value than from those of high credit quality, but I wonder if you can share.
Speaker Change: Sure the origination on average our loan to value on a.
Speaker Change: Single family bucket.
Speaker Change: But the 70%.
Speaker Change: On commercial yeah around that.
Speaker Change: A bit lower than that.
Speaker Change: Okay. So sorry.
Speaker Change: Part of my question is what and correct me if I'm wrong here.
Speaker Change: Provisions on impaired provisions on mortgages and on commercial mortgages, there related to previously impaired loans.
Speaker Change: So.
Speaker Change: And then I guess, if I just wanted to illustrate that a little bit if youre standards have been consistent over the years you're originating are on.
Speaker Change: Uninsured mortgages in 2020% to 70% and then whatever the commercial mortgage was I don't know what that was but.
Speaker Change: Today are.
Speaker Change: You realizing the recovery rates not as high as it is anticipated.
Speaker Change: There's extra cost because you're holding onto the property longer part I'm less concerned about that.
Speaker Change: Would that imply that your recovery.
Speaker Change: Some of these assets have gone down more than 30% in value.
Speaker Change: In pockets and so there. These are isolated some of these are isolated loans you look at them and say that the first off it's the drop the softening in the prices. So a 10% drop that you might've seen true H P is that's kind of.
Speaker Change: Let's say the average right. So you've got to look at in pockets, it's higher than that.
Speaker Change: And you're right, it's the incurred fees and accrued interest.
Speaker Change: Other costs that may be required to make sure the proper even when you recover property may have too.
Speaker Change: <unk>.
Speaker Change: That's a market into at decant for Sam.
Speaker Change: What's the.
Speaker Change: Just some more color there.
Speaker Change: What's the cost cut so the Costco to backstop.
Speaker Change: Coming out of Covid and with kind of this high stress in the system. So that meant we were unable to get hold of property I think you've talked about that internally before but that doesn't help.
Speaker Change: And generally speaking one of the one of the challenges when you do it directly.
Speaker Change: Power sales and property.
Speaker Change: It hasnt been as well maintained as the broader portfolio. So you do see some decay beyond the kind of.
Speaker Change: The values that you might've expected if as it otherwise had sort of proud of ownership through that period.
Speaker Change: Yeah, you got to pay somebody to more alon and paint the fence all that stuff, but what.
Speaker Change: What's the bigger driver of this is that the value or is it the duration of Oh.
Speaker Change: The duration of one.
David Wilkes: It's really both David it's both a value.
Speaker Change: Yeah, 70% average nation, obviously thats, an average we would wind up to 80% depending on the characteristics of the property and the borrower.
David Wilkes: Yeah.
David Wilkes: It is it really is both at the time as well as the softness in valuations.
David Wilkes: Is this a maybe another way of looking at it as are we talking about a handful of properties or you know 2022 that vintage we saw massive growth, but and then I see them permanent from year end 2023.
David Wilkes: <unk>.
David Wilkes: The mortgage loans was about 120 million Bucks an amount of 320, so somewhere within that Delta there would have been oh.
David Wilkes: A handful of loans that you have these.
David Wilkes: Big drops in valuation.
David Wilkes: I would say that as you know, there's definitely sort of more focused than we would've expected around a relatively few larger loans, but the drops in value.
David Wilkes: Okay and.
David Wilkes: And then in the same idea with the commercial markets.
David Wilkes: How many.
David Wilkes: How many loans were talking about there.
David Wilkes: Well on the commercial market.
David Wilkes: The gross impaired loan increase we saw was really related to them.
David Wilkes: Two new.
David Wilkes: That came into play last.
David Wilkes: Last quarter as I said does it but they don't we don't have provisions against those ones, who say they seem to be adequately covered.
David Wilkes: The other the other reason for the increase in gross impaired loans is really the fact that some of the.
David Wilkes: Resolutions are taking longer than deferred so that that's really what's driving that you see there.
David Wilkes: And we have and as I mentioned these are a couple there are a few there that we are very mindful for and we're managing that actively.
Speaker Change: Yes, I guess, it's you know we've heard the term.
Speaker Change: Then take a provision on it we don't expect a loss of a large loss if any in that where certain things are not big numbers I'm not trying to.
Speaker Change: Blow it out of proportion, but it's.
Speaker Change: It's an anomaly from.
Speaker Change: Yeah.
Speaker Change: From my perspective anyway, so how do we know or how do we get comfort that these are sort of retroactive adjustments to previous provisions are one and done.
Speaker Change: Yes, I think certainly in the commercial side is easiest for easy for us to get comfort I mean, because we can look at loan by loan basis.
Speaker Change: Well, there's a couple of keeping an eye on for this quarter, we think.
Speaker Change: We're feeling very confident about that book and on the single family side. We agree with you with you know, we think probably at a high watermark over all on.
Speaker Change: Provisions and then that's clearly coming into this call and call. It around we sort of did a lot of diligence to kind of get comfortable making that statement.
Speaker Change: But what one could see elevated N P sales in Q3 and full but not not at these levels.
Speaker Change: Okay, I guess I mean, new originations in today's American Idol, probably gets a lot more comfortable those ltvs because we know what the prices are likely to do so.
Speaker Change: Good morning.
Speaker Change: And in changing markets to be Super clear I mean.
Speaker Change: To be Super clear that we're actually dealing with where the market clearing rate. So when you change your market, we do things like shorten shorten the time that appraisals have to be valid for in that kind of thing to make sure. The way they really are lending against current values.
Speaker Change: Alright, well thank you.
Speaker Change: Thank you.
Speaker Change: Thank you. Our next question is from Paul Holden from CIBC. Your line is now open.
Speaker Change: Thanks, Alright.
Speaker Change: To continue on the same line of questioning.
Speaker Change: Just wondering you say, it's related to certain pockets, but maybe larger.
Speaker Change: Larger value homes that would tell me, it's probably not condo market I guess, that's really Mike. My question is how much of this is related to say GTA condos if any.
Speaker Change: Almost nothing is related to Q T I come to us.
Speaker Change: Okay.
Speaker Change: Yes, I think it does.
Speaker Change: The system.
Speaker Change: Okay and that book because it has been a bit just on that Paul I mean, there's been a bit more narrative around that so we've done a bit of a deeper dive than.
Speaker Change: Some modest size portfolio, and we feel pretty comfortable to smoke.
Speaker Change: To a much from them.
Speaker Change: Okay. So youre not youre not worried because I mean that is one pocket, where you're seeing greater.
Speaker Change: This weakness in the overall market I didn't think you had a ton of exposure there and he says it seems like that that's the case, we don't leave.
Speaker Change: Yeah, we've been attention to the risks and the condo portfolio in the Colorado market for some time and limit our exposure to that way.
Speaker Change: Okay. That's good.
Speaker Change: And then second question.
Speaker Change: And again it goes back to this.
Speaker Change:
Speaker Change: A number of number of.
Speaker Change: Number of impairments are sort of caught up in the court system.
Speaker Change: Assuming you have a pretty good visibility then on.
Speaker Change: Sort of that percentage here that has been impacted and what.
Phil: Thanks, Phil.
Speaker Change: And its way through the court system. So two questions on that I guess is there any way.
Phil: And you can quantify what's yet to be resolved through courts versus what's already been resolved through court sort of for that same sort of at risk vintage here.
Phil: And then choose your messaging that you believe you've now adequately provisioned for those <unk>.
Speaker Change: Chairman that have yet to be resolved through court.
Speaker Change: Well I'll leave my lead on most of the first part of that question I think on the second part I think as I said.
Speaker Change: That oh.
Gabe: To Gabe.
Gabe: The I do think that we'll still have a little bit of elevation in Q3, hopefully decaying in Q4.
Gabe: But I do think this is the high watermark overall for losses.
Gabe: Sales in the quarter.
Gabe: We're still expecting some more to come through them.
Gabe: As I look at that then change I see that a lot of it is coming up for renewal now owing to lower interest rates right. So that was the that dynamic.
Gabe: Originated in 2020, two where when asset values are high and interest rates were low renewed our duration tends to be one to two years. So they renewed at.
Gabe: A higher rate and then starting to get into a bit of trouble and there was a large part of that vintage which is now ready to renew at a lower rate and that gives us some optimism going forward. However, theres still you know.
Gabe: That was still a peak year from.
Gabe: From a valuation perspective, and we've gone through those in a fair bit of detail to make sure that we have the granularity that's needed to understand those valuations. So we may see another.
Gabe: Another quarter around the levels that we felt this year this quarter rather.
Gabe: But looking forward and projecting outwards, you can see improvements down the road.
Gabe: Okay. One more question for me on on a different topic.
Speaker Change: Andrew you did refer to strong application volumes and may 17% up year over year, obviously, a positive as you indicated I'm going to like I have to ask them out I'm curious because that's not the general indicators, we're seeing in the housing market right. We're hearing a lot about sort of soft soft volumes and consumers pause.
Speaker Change: Because of the tariff uncertainty so kind of curious if you could drill down on that and where you're seeing the strength come from thank you.
Speaker Change: Yes.
Gabe: The data isn't great, but I mean.
Gabe: We do get some proprietary data that seems to suggest we're winning share.
Gabe: Part of the space.
Gabe: Particularly against one of our most significant participant that one of the most significant participants in the market.
Gabe: So I think it's mostly about.
Gabe: Nothing idiosyncratic with one of our competitors, while our team has done a great job and being front of being in front of all mortgage broker customers.
Gabe: And helping them build that business and what's otherwise a tougher environment.
Gabe: Alright.
Gabe: With that thank you very much.
Gabe: Thank you.
Speaker Change: Thank you. Your next question is from Mark <unk> Com.
Speaker Change: Tom or Mark Securities. Your line is now open.
Speaker Change: Yeah, Thanks, Tom I'm going to go back to quite a while I apologize but.
Speaker Change: Just trying to tie together a lot of the commentary.
Speaker Change: About credit losses remain elevated in Q3 Q4.
Speaker Change: In the <unk> in the past the bank has mentioned.
Speaker Change: Sales of our 2025 of 12 basis points. This was well before any of this trade uncertainty. So obviously I'm not holding you guys to that but.
Speaker Change: You could tie it together between the elevated credit losses, we saw this quarter and your expectations for Q3 Q4.
Speaker Change: How do you think PCL as theyre going to end up in 2025.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Go and as I mentioned in my remarks, it's really difficult to predict in this market, but I wouldn't suggest that.
Speaker Change: We have some we have a few places where we see pockets of green shoots right. So we do see lower formations and problem loans in our commercial book.
Speaker Change: See improvements even in our leasing work.
Speaker Change: And so far we're working through we have real clarity on where we have.
Speaker Change: Areas that where that need that more attention and we'll work through that so that gives me some confidence along with the fact that I think the uncertainty that we experienced in this quarter with announcements seemingly to come out to every Dave are related to the tariff strife.
Speaker Change: It feels like that's coming down and so that gives us the.
Speaker Change: The outlook for the rest of the area.
Speaker Change: Recently more positive yeah.
Speaker Change: Thanks, a lot of parts to words, because if there is so much uncertainty here I'm not about to put to give you a number but I think that we have reason to believe that the second half like really strong evidence to support that the second half.
Speaker Change: Sheets show that slowing down in those that increased bosses and N T cells.
Speaker Change: Okay, Great response Mani <unk>.
Speaker Change: Team, if we've really amped up the analytics since modeling has arrived and tenants looking this is.
Speaker Change: If I can put it in the most sort of anecdotal way.
Speaker Change: Well the $5 million of the losses.
Speaker Change: We are putting <unk> sales. This quarter were result of the deterioration in the loss expectations about the macroeconomic environment. So the forward looking indicators, so assuming that our outlook.
Speaker Change: Three months from now is the same as it is today that that 5 million Shouldnt repeat.
Speaker Change: And then I think again, we sort of feel comfortable with our leasing book in our commercial book in particular.
Speaker Change: We can start to see some downward trends that are positive.
Speaker Change: So.
Speaker Change: So do you expect both Q3 Q3 to be lower than Q2, and Q4 becomes lower than Q3.
Speaker Change: Thanks, and then maybe Marlene just sticking with you on the credit here can you help me understand how much of this performing build was driven by model related changes. So forward looking indicators, how much scenario weighting and then how much you you you topped up if any by your expert credit judgment.
Speaker Change: Yeah. That's a good question I think when we look at the first half we use the Moody's to <unk>.
Speaker Change: With our macroeconomic outlook and can you provide us with the varying scenarios that I talked about.
Speaker Change: Scenario Moody's uses a scenario of weighted probability weighted approach to their scenarios and.
Speaker Change: And each month when they issue new scenarios, they're adjusting to current state until our last one's for based on a March month end and is that if you will or macroeconomic conditions, which already included the current state of the tariff situation. So I would compare it to.
Speaker Change: Q1, most of that build that you saw in the.
Speaker Change: Performing PCL was related to the deterioration in the outlook both in the base case and in the more severe cases.
Speaker Change: Thanks, and then.
Speaker Change: Maybe for Andrew just a different type of question here I think you'd mentioned these securitization gains picking up in the back half of the year and I know you have.
Speaker Change: Pretty good visibility into the pipeline like how should we be.
Speaker Change: Bottling that for Q3 Q4 should we look at.
Speaker Change: Q3, Q4 of last year is a good starting point any thoughts on that would be helpful.
Speaker Change: Yes, we do have pretty good visibility those mortgages now sitting on book basically and Bing Thank securitized as we speak.
Speaker Change: So.
David Wilkes: I had a few million for sure in terms of gain so David you want to give some more context.
David Wilkes: Lamar.
Speaker Change: Q1 was a was a record and there's some seasonality to Q2, but I would put the number between the two with improvements going forward closer to closer to Q1 Q2.
David Wilkes: And it goes into Q, plus for Q1 and that that line item in Q2.
David Wilkes: Q2 was.
Speaker Change: Couple of shape, we have to hit some very tight windows in terms of closing some loans perform up before month end. So that we can then securitize the following month.
Speaker Change: And we just ended up with a study of the Socratic problem, where some larger loans got pushed and that changed our securitization volumes, we're seeing the opposite impacting Q3, where.
Speaker Change: Some of those large deals that got pushed into Q2 and now can be securitized Q3, So we'll have a little bit about.
Speaker Change: It's a bit of an improvement would say that as the yield curve. Steepens then we've seen a preference amongst our customers from going 10 year to five year loans.
Speaker Change: That's slightly less profitable free securitization perspective, so that's a little bit of a headwind. Despite these very strong volumes I think it's likely that Q3 Q3, we will have our highest volumes ever in terms of securitization or close to it.
Speaker Change: Thanks, that's helpful.
Speaker Change: Thank you. Our next question is from Darko <unk> from RBC capital markets. Your line is now open.
Speaker Change: Great. Thank you a couple of questions for them early and then one for Andrew My first question.
Speaker Change: Is.
Speaker Change: That the what is what is the conditions in the marketplace don't seem like they've changed.
Speaker Change: With respect to you know.
Speaker Change: Speeding up the process.
Speaker Change: Uh huh.
Speaker Change: I think values are likely still going down.
Speaker Change: So the question again goes back to the one and done thing but.
Speaker Change: Maybe even a little bit beyond that.
Speaker Change: What is it that's giving you comfort.
Speaker Change: For example, two to have a couple of loans.
Speaker Change: The default this quarter and not take any provision.
Speaker Change: Yeah.
Speaker Change: Give it knowing that we just had interruption and it could be six to 12 months from now.
Speaker Change: They don't get resolved at all I mean, what is it what is it that's giving you that comfort.
Speaker Change: Now we look at our problem was we had been monitoring these two loans for a while now and we may ask.
Speaker Change: I mean every two weeks with our credit teams.
Speaker Change: And the commercial teams. So these and through that process, we assessed values and get refreshed values and that's what's driving the <unk>.
Speaker Change: The provision that we put out our lockup provision that we put on those too.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: With respect to the performing build.
Speaker Change: When I look at the Moody's information.
Speaker Change: Again, it's difficult to understand how much.
Speaker Change: Overlay in your previous answer expert credit judgment kind of.
Speaker Change: Because even if you weighted the scenarios I mean, one of the things that I look at it as the home price index.
Speaker Change: And you're actually expecting it to be up.
Speaker Change: In the next 12 months.
Speaker Change: And the downside scenarios just don't look that.
Speaker Change: We just went through a period where.
Speaker Change: And your answer to games question.
Speaker Change: Yeah, we've seen deterioration in some <unk>.
Speaker Change: With prices.
Speaker Change: Or asset values, let's say.
Speaker Change: Of 30%.
Speaker Change: Here, we are looking at downside scenarios, where the downside scenario is the worst one is only three 8%.
Speaker Change: So could you maybe help us a little bit stronger answer on how much overlay you've built into these reserves.
Speaker Change: Sure well first let me just talk about how the.
Speaker Change: Macro forward looking indicators have changed from a Moody's perspective looking at that so first off unemployment rate is increased higher than you were.
Speaker Change: Forecast and in the previous one.
Speaker Change: It's taking sooner and speaking a little bit higher than last time.
Speaker Change: Other one is the change in GDP is much more stark this quarter versus what we showed last quarter. So that's a big driver as well and then yeah Youre right <unk> It does drop out.
Speaker Change: A little bit deeper and I would say then.
Speaker Change: The the previous.
Speaker Change: Forecast Chad in terms of expert credit judgment on that Brian We look at the segments, we've always left out right. So.
Speaker Change: We have overlays related to <unk>.
Speaker Change: Areas that have I would say a bit higher vulnerability and we've had those types of overlays for the last few quarters things like long haul transportation.
Speaker Change: Certain segments within our commercial pocket like land and office as well.
Speaker Change: Well.
Speaker Change: Okay, It's just that the.
Speaker Change: <unk>.
Speaker Change: What are the primary things that always always made us feel better about your credit quality was the loan to value and the collateral behind the loans in Medicaid.
Speaker Change: And that seems to have shifted this quarter and that's why we are still struggling to understand if thats been accounted for in your performing reserves.
Speaker Change: Yes, I would say it was I think the.
Speaker Change: The softness we saw this quarter was a little softer than perhaps we thought it would be previously.
Speaker Change: Okay, and then last question for Andrew.
Speaker Change: As I go to the back of the deck and I see.
Speaker Change: The slide let me just get back to it because.
Speaker Change: Yes.
Speaker Change: So slide 20.
Speaker Change: There is some some good data on theirs.
Speaker Change: There is.
Speaker Change: 23% year over year growth.
Speaker Change: In customer you talked about the steady growth that youre seeing in payroll.
Speaker Change: You talked about the small business engagement and.
Speaker Change: Great feedback you can have something rollout.
Speaker Change: Why why did you need to make a leadership change.
Speaker Change: And what is it aimed at like what is it that you did that you did.
Speaker Change: And you decided that you needed a leadership change here.
Speaker Change: Yes, so what I see.
Speaker Change: We used to have a single leader since SYGMA executive overseeing both the personal banking as a division so we had.
Speaker Change: Both lending and.
Speaker Change: Single family lending some things, we're just talking about mortgages and so on as well as EQ bank and really what I'm trying to do here is divide the business into two so one being the digital delivery EQ bank somebody that comes in every day not confused about building a fantastic franchise in that area driving change in Canadian banking printer, bringing in it.
Speaker Change: <unk> somebody that's monitoring monzo installing and chase we're up to in the UK every day and trying to bring those innovations some of the good ideas from those banks to this market.
Speaker Change: Requires complete focus working with our with Ipods and then and then.
Speaker Change: Similarly on the lending side somebody completely focused on setting the brokers is managing the risk.
Speaker Change: And what's really a <unk> environment I mean, the brokers are our primary customers for driving the channel and we've been very successful over the years and gaining market share. We want an insignificant player back in 2010 in this business and now we are absolutely pardon me a franchise and old lending in Canada.
Speaker Change: I think we need to bring some more sophistication to some of the kind of ways of thinking about some of the even the risks we were talking about through this call.
Speaker Change: We got very comfortable that kind of like that focus and having executives are completely focused on those two sides of the business is better than thinking about just because we're dealing with individuals I shouldn't necessarily be bundled together in a personal bank.
Speaker Change: Okay. So it was a division it was sort of like breaking it up into pieces to get more focus I suppose but its still required a management change.
Speaker Change: That's right yeah. So so some of the conversations around making a split split.
Speaker Change: It didn't fit, particularly well with prior executive had both responsibilities and so that's why we've made this change.
Speaker Change: Understood Okay.
Speaker Change: Great. Thank you very much I appreciate that.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question is from Graham Ryding from TD. Your line is now open.
Speaker Change: It's not good.
Speaker Change: Can you just maybe.
Speaker Change:
Speaker Change: Simplify what you're actually trying to achieve on the capital front and you got a lower CET one ratio now going forward.
Speaker Change: More capital on the tier two study are you ultimately just trying to optimize ROE V here or how should we interpret that.
Speaker Change: The puts and takes with it.
Speaker Change: Yes, I think what you can make sure we've got inefficient capital model. So I think as we indicated in our previous cold again maintained a strong total capital ratio.
Speaker Change: 15%.
Speaker Change: About 15 office as we speak right now and then keeping set one above 13 for the rest of this year and we do believe recap, which is how we think about assessing capital.
Speaker Change: We continue to keep that strong level of total capital with having more sophisticated kind of mixture of the catheter stacked beneath that you.
Speaker Change: You might as well see more tier 281.
Speaker Change: As part of that mix to get to the total our total capital position.
Speaker Change: So just to be clear what would happen to them.
Speaker Change: We dividend up $200 million that we invested 200 million from EQ be the holdco into sub debt of.
Speaker Change: Tier two tier two instruments.
Speaker Change: And the bank and then we dividend up 200 million.
Speaker Change: Backup to the bank. So the bank holds that the tier two capital.
Speaker Change: Of course, there could be the potential some point to find out starting in the external market and that would mean, we've got a couple of hundred million dollars of excess equity sitting at the Holdco.
Speaker Change: Okay.
Speaker Change: Understood.
Speaker Change: And then your I'll take or buybacks.
Speaker Change: Hi.
Speaker Change: Maintain at the current level is that a reasonable assumption or how.
Speaker Change: How should we how should we think about your appetite on that front.
Speaker Change: I think so we think about very much you are sort of at least I think it's the interpretation how Warren Buffett thinks about buybacks, we buyback when it's a good base from <unk>.
Speaker Change: <unk> capital to be applied so that depends on kind of stock price our expected expectations about the future performance of the bank.
Speaker Change: So, which I think is different in some sort of think about it.
Speaker Change: I would say in the quarter we started.
Speaker Change: Execute a modest buyback.
Speaker Change: We paused a little bit instead of maximum tariffs.
Speaker Change: Tariff concerns just in a bit of a flight to safety approach was just to back out of the buybacks and I think.
Speaker Change: As we see the economic environment, it looks a little bit more stable now.
Speaker Change: It doesn't seem quite so wild as it seemed couple of months ago, we might well engage constructively in that process.
Speaker Change: Okay.
Speaker Change: Okay. That's it for me thank you.
Speaker Change: Thank you.
Speaker Change: Thank you ladies and gentleman, we ask you to kindly limit yourself to two questions only once again, we ask you to limit yourself to two questions only.
Speaker Change: Our next question is from Stephen <unk> Lynch from Raymond James Your line is now open.
Speaker Change: Alright, Thanks, Brian just talked about the pride exposure in Q1. The facility was 70 million you had already taken a 5 million provision there the facility now it was down at 63.
Speaker Change: I'm not sure of that transportation.
Speaker Change: PCL was was related to the pride if it isn't why would that.
Speaker Change: Doug I guess that facility change just trying to get a better a bit of a timeline on that.
Speaker Change: Sure I can take that so.
Speaker Change: On the T climb that provision for Teekay pie.
Speaker Change: Flat quarter over quarter, I would say that first off that is a run off portfolio right. So it strengthening and that reduction.
Speaker Change: And they tell us what you saw in the MD&A reflects the write off and the resolution.
Speaker Change: The outstanding balance.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay, maybe I'll follow up with that.
Speaker Change: Andrew This is probably more for you and are you now.
Speaker Change: And there's a lot of questions but.
Speaker Change: Although credit and things like that but.
Speaker Change: And maybe a bit more on the guidance.
Speaker Change: Its medium term guidance, but we're halfway through the year.
Speaker Change: It could be a struggle to hit some of your EPS guidance.
Speaker Change: Our <unk> guidance I'm just wondering.
Speaker Change: How should we think about the guidance being applied to 2025.
Speaker Change: Yes, I think certainly when.
Speaker Change: When I took a 15% plus ROE that's sort of.
Speaker Change: Medium term guidance and it's going to be certainly tougher to hit those kinds of numbers this year.
Speaker Change:
Speaker Change: Given what we can where we are already.
Speaker Change: But we do expect earnings EPS it needs to be stronger the next couple of quarters and it wasn't in the last reported quarter.
Speaker Change: Okay.
Speaker Change: I'll leave it there thanks very much.
Speaker Change: Thank you.
Speaker Change: Thank you once again, please press star one should you wish to ask a question.
Speaker Change: And your next question is from Tien Mcculloch from BMO capital markets. Your line is now open.
Tien Mcculloch: Thank you and good morning. My question is a longer term one on capital allocation.
Speaker Change: At QB as has built a track record over time for retaining a significant percentage of its earnings.
Speaker Change: For reinvestment and growing the loan portfolio now.
Speaker Change: Now in recent years that payout ratio has said has increased from from low levels.
Speaker Change: And you've started also repurchasing shares so.
Speaker Change: Does this indicate the.
Speaker Change: Opportunity set to grow.
Speaker Change: Mortgage book today is maybe not as strong as what it used to be in other words, how do you plan to balance.
Speaker Change: To balance organic growth and capital returns going forward.
Speaker Change: Yes, certainly I mean, we continue to focus first on finding.
Speaker Change: Organic growth within our risk appetite and we do believe we've got some very strong franchises in that area.
Speaker Change: Family mortgages with those mortgages.
Speaker Change: The places we play in commercial lending specialized finance group. So we do think that in a more normal the macroeconomic environment, we can grow our assets relatively fast.
Speaker Change: Having said that clearly awareness and a more subdued macroeconomic environment. So this year I wouldn't expect to hit us.
Speaker Change: Basically when you think about it if we're paying out any 10% of our earnings as dividends, then we would generate at generating a 15% to 17% aspiration, we need to be growing assets of 13% to 15% a year two a foot.
Speaker Change: To utilize our retained capital it's going to be a little bit tougher in this kind of economic environment. The uncertainty in many of our risk appetite in this kind of environment to grow at those levels. So we will see a fairly rapid growth.
Speaker Change: And Rick capital set while total capital ratios.
Speaker Change: And we will think about how to retain some of those to shareholders because it doesn't feel like we'll be able to supply them sufficiently over the next year or so took with growth but over the longer term I might I don't know that to be true. Clearly this is a pretty unusual period, but now entering a period, where the government is focused on building more houses, which generally turns out to be good.
Speaker Change: Can we get plenty of housing activity for us So I think.
Speaker Change: The World May look quite different this time next year or even before then.
Speaker Change: And the way that we can deploy capital into the market. So.
Speaker Change: Can you kind of like the position we're in we pay a relatively modest dividend that allow it gives us the opportunity to grow organically at a good clip within our risk parameters.
Speaker Change: The market is there for us and if not we.
Speaker Change: <unk> capital that we need to kind of think be more thoughtful about how we return the company shareholders whether it's.
Speaker Change: Special dividends are increasing dividends or buying.
Speaker Change: Buying back stock.
Speaker Change: Of course, you know one of the other things that we do see over the horizon.
Speaker Change: Is moving to a a b so that that becomes even.
Speaker Change: A more a bigger capital efficiency issue when we get there, but just as a reminder, we know we think that it for you Renee AIB Bank.
Speaker Change: Leasing a lot of companies.
Speaker Change: So Andrew if we if we look longer term to your point, maybe over a five to 10 year period given.
Speaker Change: Housing affordability.
Speaker Change: The ability challenges and maybe.
Speaker Change: Slowing population growth certainly over the next couple of years are these significant headwinds.
Speaker Change: To.
Speaker Change: In order to return to double digit loan growth over time.
Speaker Change: It certainly is helpful. When those things are good growth to them, but the reality is that we've got 1% of the kidney.
Speaker Change: The banking market with some very small number.
Speaker Change: So it's really about us.
Speaker Change: Thoughtful enough to find areas to lend into the market.
Speaker Change: And the risk is appropriate and where we can win share so.
Speaker Change: I think some of those some of those.
Speaker Change: If you look at our track record over 10 years.
Speaker Change: We've clearly managed to grow at those kinds of paces. So.
Speaker Change: I don't think anything structurally has changed in the market that would stop us from doing that one.
Speaker Change: One of the things that's really important to assist with super lined with the mortgage broker channel which is.
Speaker Change: Everybody is going to grow from.
Speaker Change: I just have a 10% market share back in 2000 and over 50%. We believe today, so being aligned without innovative channel.
Speaker Change: It's really helpful to us.
Speaker Change: So I think it was.
Speaker Change: I'm optimistic about being able to grow.
Speaker Change: A good double digit paces, but I do think that's going to be a challenge over the next six to 12 months.
Speaker Change: Thank you very much.
Speaker Change: Thank you.
Operator: There are no further questions at this time I will now turn the call back over to Mr. Andrew Moore for any closing remarks.
Speaker Change: Thanks, Jenny we look forward to reporting our third quarter results in late August and if you've got the chance. Please consider.
Speaker Change: Attending Canada's open banking Expo in Toronto on June 17th I will join our roster 80 speakers, who will draw attention to the urgent need for carrier to adopt open banking as a means of improving competitive intensity fostering fintech innovation and realizing the benefits that millions of people worldwide already enjoy from consumer directed finance and obviously.
Speaker Change: It'd be great to engage with many of you one on one.
Speaker Change: Thanks for listening and goodbye for now.
Speaker Change: Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect your lines.