Q3 2025 Laurentian Bank of Canada Earnings Call
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Good morning, and thank you for joining us today's opening remarks will be delivered by Eric <unk>, President and CEO and their review of the third quarter financial results will be presented by <unk> Executive Vice President and CFO after which we will invite questions from the phone.
Joining us for the question period is <unk> executive Vice President and CFO.
All documents pertaining to the quarter can be found on our website in the Investor Relations section I would like to remind that I would like to remind you that during this conference call forward looking statements may be made and it is possible that actual results may differ materially from those projected in such statements for the complete cautionary note regarding forward looking statements. Please refer.
To our press release or to slide two of the presentation.
I'd also like to remind listeners that the bank assesses its performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance Hakan event, we will be referring to adjusted results in their remarks, unless otherwise noted as reported I will now turn the call over to Eric.
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Today, we're pleased to report a strong quarter, reflecting our continued focus and disciplined execution.
These efforts have enabled us to effectively manage the challenges of a volatile economic landscape. Our performance this quarter reaffirms the strength of our market positioning and the value of our commercial specialization all supported by a solid foundation of liquidity and capital.
Our strategic priority remains clear to simplify strengthen and future proof. Our operations, we are taking deliberate steps to reduce complexity across the organization enhance system redundancy and improve overall resilience.
A key part of this involves streamlining our distribution channels and simplifying our technology stack efforts that will continue into 2026.
I'm proud to share that our teams remain highly engaged and committed to executing our strategy.
This was clearly reflected in the results of our most recent engagement survey transpiring to our culture and the support that.
Team is dedicated.
Dedicating to transform our organization.
Such a high level of engagement is especially important in today's economy environments. We are actively monitoring a range of factors, including market trends policy developments and broader macroeconomic conditions that may impact our customers.
As always we remain ready to adapt as needed.
Looking at loan performance commercial loans remained stable this quarter supported by growth in our commercial real estate portfolio, which offset the usual seasonal decline in our inventory financing segment.
Mainly as a result of this shift in business mix, our net interest margin was slightly down to 182%.
And inventory financing utilization declined to 41% at the end of July fully aligned with our expectations and continues to reflect steady LTE demand for the products offered by our dealers our dealer base is also.
Continued to expand at a steady pace this quarter, bringing the year to date growth to 4%.
This momentum was primarily driven by agriculture and power sports segments, both of which are part of our diversification strategy and inventory financing.
Looking ahead, we remain encouraged by the sustained demand our dealer network is experiencing this season.
Should interest rates begin to ease in the U S. In the upcoming quarters. We believe this could act as a lever for renewed restocking activity, particularly as dealers prepare for the summer 2026th season.
In our commercial real estate portfolio loan volumes increased by 5% during the quarter, reflecting the strength of our market positioning and deep expertise of our teams.
Their ability to identify and seize opportunities has been instrumental in driving this growth.
At the same time, we maintained a stable unfunded pipeline with potential to convert in the coming quarters that said, we remain cautious in our outlook for Q4, given the current market environment.
On the personal banking side are sustained engagement with our customers enabled us to maintain a stable deposit base within our retail segment, while also continuing to build positive momentum and broker sourced deposits.
As emphasized during our Investor day, we remain actively focus on pursuing strategic partnerships to accelerate our specialization strategy.
Speaker #1: And increased by 5% during the quarter, reflecting the strength of our market positioning and the deep expertise of our teams. Their ability to identify and seize opportunities has been instrumental in driving this growth.
Eric Provost: Sales increased by 5% during the quarter, reflecting the strength of our market positioning and deep expertise of our teams. Their ability to identify and seize opportunities has been instrumental in driving this growth. At the same time, we maintain a stable unfunded pipeline with potential to convert in the coming quarters. That said, we remain cautious in our outlook for Q4 given the current market environment. On the personal banking side, our sustained engagement with our customers enabled us to maintain a stable deposit base within our retail segment while also continuing to build positive momentum in broker-sourced deposits. As emphasized during our Investor Day, we remain actively focused on pursuing strategic partnerships to accelerate our specialization strategy. We believe that forging the right partnerships will be a key driver in unlocking future growth and further elevating our market position.
We believe that forging the right partnerships will be a key driver in all of the unlocking future growth and further elevating our market position.
Speaker #1: At the same time, we maintain a stable unfunded pipeline with potential to convert in the coming quarters. That said, we remain cautious in our outlook for Q4 given the current market environment.
During the quarter. We also maintained focus on investing in our key strategic priorities, resulting in an adjusted efficiency ratio of 75, 7%.
Speaker #1: On the personal banking side, our sustained engagement with our customers enabled us to maintain a stable deposit base within our retail segment while also continuing to build positive momentum in broker-sourced deposits.
While we expect these elevated expense levels to persist over the coming months. These investments, particularly in technology are critical to executing our strategic plan.
Speaker #1: As emphasized during our Investor Day, we remain actively focused on pursuing strategic partnerships to accelerate our specialization strategy. We believe that forging the right partnerships will be a key driver in unlocking future growth and further elevating our market position.
I'd also like to highlight that our provision for credit losses, So that 12 basis point this quarter, reflecting the strength of our specialized underwriting consistent education and robust portfolio management.
We remain confident that our current level of provisions is prudent and align with the quality of our portfolio.
Speaker #1: During the quarter, we also maintained focus on investing in our key strategic priorities, resulting in an adjusted efficiency ratio of 75.7%. While we expect these elevated expense levels to persist over the coming months, these investments, particularly in technology, are critical to executing our strategic plan.
Eric Provost: During the quarter, we also maintained focus on investing in our key strategic priorities, resulting in an adjusted efficiency ratio of 75.7%. While we expect these elevated expense levels to persist over the coming months, these investments, particularly in technology, are critical to executing our strategic plan. I'd also like to highlight that our provision for credit losses stood at 12 basis points this quarter, reflecting the strength of our specialized underwriting, consistent education, and robust portfolio management. We remain confident that our current level of provisions is prudent and aligned with the quality of our portfolio. While the economy has shown resilience so far, we remain vigilant and prepared to adjust. Finally, we continue to maintain a solid position in both liquidity and capital, providing us with the financial stability to manage the current macroeconomic environment while remaining focused on executing our strategic priorities.
The economy has shown resilience so far we remain vigilant and prepared to adjust.
Finally, we continue to maintain a solid position in both liquidity and capital providing us with the financial stability to manage the current macroeconomic environment, while remaining focused on executing our strategic priorities with that ill turn it over to Eva.
Speaker #1: I’d also like to highlight that our provision for credit losses stood at 12 basis points this quarter, reflecting the strength of our specialized underwriting, consistent education, and robust portfolio management.
Okay.
I would like to begin by turning to slide six which highlights the bank's financial performance for the third quarter of 2025.
Total revenue for the quarter was $246 8 million down.
Speaker #1: We remain confident that our current level of provisions is prudent and aligned with the quality of our portfolio. While the economy has shown resilience so far, we remain vigilant and prepared to adjust.
Down 4% compared to last year.
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On a reported basis net income and diluted EPS were $37 $5 million and 73, respectively.
Speaker #1: Finally, we continue to maintain a solid position in both liquidity and capital, providing us with the financial stability to manage the current macroeconomic environment while remaining focused on executing our strategic priorities.
We've recorded adjusting items for the quarter, which totaled $2 $1 million after tax or <unk> <unk> per share.
From restructuring and other impairment charges of $2 9 million.
Additional details are available on slide 21, and in the third quarter report to shareholders.
Speaker #1: With that, I'll turn it over to Ivan.
Eric Provost: With that, I'll turn it over to Yvan.
Speaker #2: Merci, Eric, et bonjour à tous. I would like to begin by turning to slide six, which highlights the bank's financial performance for the third quarter of 2025.
Yvan Deschamps: Merci Eric et bonjour à tous. I would like to begin by turning to slide 6, which highlights the bank's financial performance for the third quarter of 2025. Total revenue for the quarter was $246.8 million, down 4% compared to last year and up 2% quarter over quarter. On a reported basis, net income and diluted EPS were $37.5 million and $0.73 respectively. We've recorded adjusting items for the quarter, which totaled $2.1 million after tax, or $0.05 per share, from restructuring and other impairment charges of $2.9 million. Additional details are available on slide 21 and in the third quarter report to shareholders. The remainder of my comments will be on an adjusted basis. The diluted EPS of $0.78 decreased by 11% year-over-year and increased by 7% quarter over quarter.
The remainder of my comments will be on an adjusted basis.
The diluted EPS of <unk> 78 decreased by 11% year over year and increased by 7%.
Speaker #2: Total revenue for the quarter was $246.8 million, down 4% compared to last year and up 2% quarter over quarter. On a reported basis, net income and diluted EPS were $37.5 million and 73 cents, respectively.
Per quarter.
Net income of $39 $6 million was down by 8% compared to last year and up 17% compared to last quarter.
The bank's efficiency ratio increased by 240 basis points compared to last year and by 50 basis points sequentially.
Speaker #2: We've recorded adjusting items for the quarter, which totaled $2.1 million after tax, or $0.05 per share, from restructuring and other impairment charges of $2.9 million.
The increase is mainly driven by the elevated level of expenses related to investments in our strategic priorities.
Speaker #2: Additional details are available on slide 21 and in the third quarter report to shareholders. The remainder of my comments will be on an adjusted basis.
For the quarter stood at five 4% down 80 basis points year over year, and up 20 basis points quarter over quarter.
Speaker #2: The diluted EPS of $78.00 decreased by 11% year-over-year and increased by 7% quarter-over-quarter. Net income of $39.6 million was down by 8% compared to last year and up 17% compared to last quarter.
Slide seven shows the net interest income by $5 1 million or 3% year over year from the growth of average, earning assets and the higher commercial loan concentration.
Yvan Deschamps: Net income of $39.6 million was down by 8% compared to last year and up 17% compared to last quarter. The bank's efficiency ratio increased by 240 basis points compared to last year and by 50 basis points sequentially. The increase is mainly driven by the elevated level of expenses related to investments in our strategic priorities. Our ROE for the quarter stood at 5.4%, down 80 basis points year-over-year and up 20 basis points quarter over quarter. Slide 7 shows net interest income up by $5.1 million, or 3% year-over-year from the growth of average earning assets and a higher commercial loan concentration. On a sequential basis, net interest income was up by $3.7 million, or 2%, mainly due to the longer quarter. Our net interest margin at 1.82% was up 3 basis points year-over-year and down 3 basis points sequentially due to changes in the loan mix.
On a sequential basis. The net interest income was up by $3 $7 million or 2%, mainly due to the longer quarter.
Speaker #2: The bank's efficiency ratio increased by 240 basis points compared to last year and by 50 basis points sequentially. The increase is mainly driven by the elevated level of expenses related to investments in our strategic priorities.
Our net interest margin at 182% was up three basis points year over year and down three basis points sequentially due to changes in the loan mix.
Slide eight highlights the banks funding position.
Speaker #2: Our ROE for the quarter stood at 5.4%, down 80 basis points year-over-year and up 20 basis points quarter-over-quarter. Slide 7 shows net interest income up by $5.1 million, or 3% year-over-year, from the growth of average earning assets and higher commercial loan concentration.
On a sequential basis total funding was up by $500 million, which mainly came from an increase in deposits from advisers and brokers.
The bank to maintain that healthy liquidity coverage ratio during the quarter, which remained at the end of.
The industry.
Slide nine presents other income of $69 million, which was lower by 20% compared to last year and higher by 1% sequentially.
Speaker #2: On a sequential basis, net interest income was up by $3.7 million, or 2%, mainly due to the longer quarter. Our net interest margin at 1.82% was up 3 basis points year-over-year and down 3 basis points sequentially, due to changes in the loan mix.
Year over year decrease mostly came from lower fees on securities brokerage commissions. Following the divestiture of the retail brokerage divisions as well as lower income from financial instruments and lower lending fees.
Speaker #2: Slide 8 highlights the bank's funding position. On a sequential basis, total funding was up by $500 million, which mainly came from an increase in deposits from advisors and brokers.
Yvan Deschamps: Slide 8 highlights the bank's funding position. On a sequential basis, total funding was up by $500 million, which mainly came from an increase in deposits from advisors and brokers. The bank maintained a healthy liquidity coverage ratio through the quarter, which remained at the high end of the industry. Slide 9 presents other income of $60.9 million, which was lower by 20% compared to last year and higher by 1% sequentially. The year-over-year decrease mostly came from lower fees and securities brokerage commissions following the divestiture of the retail brokerage divisions, as well as lower income from financial instruments and lower lending fees. Slide 10 shows non-interest expenses of $186.9 million, down 1% year-over-year and up 2% sequentially from the number of days and the higher performance-based compensation.
Slide 10 shows non interest expenses of $186 $9 million down 1% year over year and up 2% sequentially from the number of days and the higher performance based compensation.
Speaker #2: The Bank maintained a healthy liquidity coverage ratio through the quarter, which remained at the high end of the industry. Slide 9 presents other income of $60.9 million, which was lowered by 20% compared to last year and higher by 1% sequentially.
On slide 11, you'll see that our CET one ratio increased by 30 basis points to 11, 3% sequentially due to changes in the asset mix and then Dean internal capital generation.
Speaker #2: The year-over-year decrease mostly came from lower fees and securities brokerage commissions, following the divestiture of the retail brokerage divisions, as well as lower income from financial instruments and lower lending fees.
We are in a solid position and are well prepared to redeploy capital.
Slide 12 highlights our commercial loan portfolio, which grew by about $1 $1 billion year over year and by about $100 million sequentially.
Speaker #2: Slide 10 shows non-interest expenses of $186.9 million, down 1% year-over-year and up 2% sequentially, due to the number of days and the higher performance base compensation.
Expected seasonal decline in inventory financing was offset by growth in our commercial real estate portfolio, which also maintained a stable pipeline through the quarter.
Slide 13 provides details of our inventory financing portfolio.
Speaker #2: On slide 11, you'll see that our CT1 ratio increased by 30 basis points to 11.3% sequentially, due to changes in the asset mix and in the internal capital generation.
Yvan Deschamps: On slide 11, you'll see that our CET1 ratio increased by 30 basis points to 11.3% sequentially due to changes in the asset mix and in the internal capital generation. We are in a solid position and well prepared to redeploy capital. Slide 12 highlights our commercial loan portfolio, which grew by about $1.1 billion year-over-year and by about $100 million sequentially. The expected seasonal decline in inventory finance was offset by growth in our commercial real estate portfolio, which also maintained a stable pipeline through the quarter. Slide 13 provides details of our inventory finance portfolio. This quarter, utilization rates were 41%, remaining below historical averages, normally in the high 40s. Slide 14 illustrates that two-thirds of our commercial real estate portfolio is residential, with most of it in multi-residential housing. We have limited exposure to the office segment, which accounts for just 3% of our commercial loan portfolio.
This quarter utilization rates were 41% remaining below historical averages normally in the high 40 percents.
Slide 14 illustrates that two thirds of our commercial real estate portfolio is residential with most of it in multi residential housing.
Speaker #2: We are in a solid position and well prepared to redeploy capital. Slide 12 highlights our commercial loan portfolio, which grew by about $1.1 billion year-over-year and by about $100 million sequentially.
We have limited exposure to the office segment, which accounts for just 3% of our commercial loan portfolio.
The LTV on the uninsured and multi residential portfolio stood prudently at 59%.
Speaker #2: The expected seasonal decline in inventory financing was offset by growth in our commercial real estate portfolio, which also maintained a stable pipeline throughout the quarter.
Slide 15 presents the bank's residential mortgage portfolio residential mortgage loans were down 1% year over year and up 1% on a sequential basis.
Speaker #2: Slide 13 provides details of our inventory financing portfolio. This quarter, utilization rates were 41%, remaining below historical averages, which are normally in the high 40s. Slide 14 illustrates that two-thirds of our commercial real estate portfolio is residential, with most of it in multi-residential housing.
We adhere to cautious underwriting standards and are confident in the quality of our portfolio.
This is reflected in our 62% proportion of insured mortgages and a low loan to value ratio of 50% on the uninsured portion.
Speaker #2: We have limited exposure to the office segment, which accounts for just 3% of our commercial loan portfolio. The LTV on the uninsured multi-residential portfolio stood prudently at 59%.
Allowances for credit losses on slide 16 totaled $189 $9 million down $14 $4 million compared to last quarter, mostly from lower allowances on impaired commercial loans.
Yvan Deschamps: The LTV on the uninsured multi-residential portfolio stood prudently at 59%. Slide 15 presents the bank's residential mortgage portfolio. Residential mortgage loans were down 1% year-over-year and up 1% on a sequential basis. We adhere to cautious underwriting standards and are confident in the quality of our portfolio. This is reflected in our 62% proportion of insured mortgages and a low loan-to-value ratio of 50% on the uninsured portion. Allowances for credit losses on slide 16 totaled $189.9 million, down $14.4 million compared to last quarter, mostly from lower allowances on impaired commercial loans. Turning to slide 17, our level of allowances for credit losses has remained elevated since the pandemic period. In the bottom left corner, you'll find the evolution of our coverage ratio, expressed as the previous year's allowances for credit losses over the net write-offs incurred over the following 12 months.
Turning to slide 17, our level of allowances for credit losses as remain elevated since the pandemic period.
Speaker #2: Slide 15 presents the bank's residential mortgage portfolio. Residential mortgage loans were down 1% year-over-year and up 1% on a sequential basis. We adhere to cautious underwriting standards, and our confidence in the quality of our portfolio is reflected in our 62% proportion of insured mortgages and a low loan-to-value ratio of 50% on the uninsured portion.
In the bottom left corner Youll find the evolution of our coverage ratio expressed as the previous years allowances for credit losses over the net write offs incurred over the following 12 months.
On a relative basis, we remain well positioned in terms of coverage to face ongoing uncertainties.
Turning to slide 18, the provisions for credit losses was $11 1 million a decrease of $5 2 million from a year ago from lower provisions on impaired loans.
Speaker #2: Allowances for credit losses on slide 16 totaled $189.9 million, down $14.4 million compared to last quarter, mostly from lower allowances on impaired commercial loans.
Sequentially <unk> were down $5 $6 million for permit from provision reversals in performing loans.
Speaker #2: Turning to slide 17, our level of allowances for credit losses has remained elevated since the pandemic period. In the bottom left corner, you'll find the evolution of our coverage ratio, expressed as the previous year's allowances for credit losses over the net write-offs incurred over the following 12 months.
As a percentage of average loans PCL decreased by six basis points year over year and by seven basis points quarter over quarter to 12 basis points.
Slide 19 provides an overview of impaired loans.
On a year over year basis, gross impaired loans increased by $41 $9 million due to credit migration in commercial loans and by 11 $3 million sequentially.
Speaker #2: On a relative basis, we remain well positioned in terms of coverage to face ongoing uncertainties. Turning to slide 18, the provision for credit losses was $11.1 million, a decrease of $5.2 million from a year ago, due to lower provisions on impaired loans.
Yvan Deschamps: On a relative basis, we remain well positioned in terms of coverage to face ongoing uncertainties. Turning to slide 18, the provision for credit losses was $11.1 million, a decrease of $5.2 million from a year ago from lower provisions on impaired loans. Sequentially, PCLs were down $5.6 million from provision reversals in performing loans. As a percentage of average loans, PCLs decreased by 6 basis points year-over-year and by 7 basis points quarter over quarter to 12 basis points. Slide 19 provides an overview of impaired loans. On a year-over-year basis, gross impaired loans increased by $41.9 million due to credit migration in commercial loans and by $11.3 million sequentially. Thanks to our prudent underwriting standards and the strong credit quality of our loan portfolio, about 95% of which is collateralized, we're able to manage credit migration effectively with minimal impact on ACL and PCL outcomes.
Thanks to our prudent underwriting standards and the strong credit quality of our loan portfolio about 95% of which is called I realized we're able to manage credit migration effectively with minimal impact on ECL in PCL outcomes.
Speaker #2: Sequentially, PCLs were down $5.6 million for provision reversals in performing loans. As a percentage of average loans, PCLs decreased by 6 basis points year-over-year and by 7 basis points quarter-over-quarter to 12 basis points.
As we look ahead to the fourth quarter of 2025, I would like to provide some remarks.
We expect muted growth for average, earning assets for Q4 NIM.
The name is expected to be consistent with Q3.
Speaker #2: Slide 19 provides an overview of impaired loans. On a year-over-year basis, growth in impaired loans increased by $41.9 million due to credit migration in commercial loans, and by $11.3 million sequentially.
<unk> the efficiency ratio Q4 should be relatively aligned with Q3, leading to a full year or around 75% as previously guided.
Considering the uncertain environment it is difficult to predict the potential outcome on pcl's, but we currently expect to be in the high teens.
Speaker #2: Thanks to our prudent underwriting standards and the strong credit quality of our loan portfolio, about 95% of which is credit realized, we're able to manage credit migration effectively with minimal impact on ACL and PCL outcomes.
Our tax rate is expected to be in the 19% 20% range.
Capital and liquidity levels are solid and are expected to remain strong for Q4.
Speaker #2: As we look ahead to the fourth quarter of 2025, I would like to provide some remarks. We expect muted growth for average earning assets for Q4.
I will now turn the call back to the operator.
Yvan Deschamps: As we look ahead to the fourth quarter of 2025, I would like to provide some remarks. We expect muted growth for average earning assets for Q4. NIM is expected to be consistent with Q3. Regarding the efficiency ratio, Q4 should be relatively aligned with Q3, leading to a full year around 75% as previously guided. Considering the uncertain environment, it is difficult to predict the potential outcome on PCLs, but we currently expect to be in the high teens. Our tax rate is expected to be in the 19-20% range. Capital and liquidity levels are solid and are expected to remain strong for Q4. I will now turn the call back to the operator.
Thank you Sir.
Ladies and gentlemen, if you do have any questions. Please press star followed by one on your Touchtone phone you will then hear prompt that Johan has been lately and should you wish to withdraw from the polling process. Please press star followed by two and if you even with speakerphone, you will need to lift the handset before.
Speaker #2: NIM is expected to be consistent with Q3. Regarding the efficiency ratio, Q4 should be relatively aligned with Q3, leading to a full year around 75% as previously guided.
Before pressing any keys. Please go ahead and press Star one now if you do have any questions.
Speaker #2: Considering the uncertain environment, it is difficult to predict the potential outcome of PCLs, but we currently expect to be in the high teens. Our tax rate is expected to be in the 19-20% range.
First we will hear from Paul Holden CIBC. Please go ahead Paul.
Thank you good morning.
First question I guess is on.
Credit trends so.
Speaker #2: Capital and liquidity levels are solid and are expected to remain strong for Q4. I will now turn the call back to the operator.
Performing provision release, but then the increase in gross impaired loans and increase in impaired PCL and then I guess.
Speaker #3: Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised.
I recognize that.
Operator: Thank you, sir. Ladies and gentlemen, if you do have any questions, please press star followed by one on your touch-tone phone. You will then hear a prompt that your hand has been raised. Should you wish to withdraw from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you do have any questions. First, we will hear from Paul Holden at CIBC. Please go ahead, Paul.
Arent always correlated but maybe you can walk us through that.
What's driving the increase in gills and impaired and then why do you feel comfortable for leasing against those trends.
Speaker #3: And should you wish to withdraw from the polling process, please press star followed by two. If you're using a speakerphone, you will need to lift the handset first before pressing any keys.
Hi, Paul Christian Thank you for the question so.
The increasing gills is really a function of our commercial book.
Speaker #3: Please go ahead and press star one now if you do have any questions. First, we will hear from Paul Holden at CIBC. Please go ahead, Paul.
And then these tend to be lumpy so when they come in they come in in big chunks and Thats what were seeing.
Speaker #4: Thank you. Good morning. First question, I guess, is on what's called credit trends. So, performing provision release, but then the increase in growth impaired loans and increase in impaired PCLs. I guess, you know, I recognize the two are always correlated.
Paul Holden: Thank you. Good morning. First question, I guess, is on, let's call it credit trends. Performing provision release, but then the increase in gross impaired loans and increase in impaired PCLs. I guess, you know, I recognize the two aren't always correlated, but maybe you can walk us through that. What's driving the increase in GILs and impaired, and then why do you feel comfortable releasing against those trends?
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It also takes a little bit more time today to work out out of these accounts, but what youre seeing there is a lot of activity in our girls are gills.
The new formations was $140 million this quarter and yet we've only increase by $11 million quarter.
Speaker #4: But maybe you can walk us through that. Like, what's driving the increase in gills and impairments, and then why do you feel comfortable releasing against those trends?
Quarter over quarter, and our gills, that's because we have.
<unk> very high levels have returned to performing net repayments with while managing our net write offs. So overall, it's just a reflection of the economic cycle.
Speaker #2: Hi, Paul. Christian, thank you for the question. So, you know, the increase in gills is really a function of our commercial book, and then these tend to be lumpy. So when they come in, they come in big chunks, and that's what we're seeing.
Eric Provost: Hi, Paul. Christian, thank you for the question. The increase in GILs is really a function of our commercial book. These tend to be lumpy. When they come in, they come in in big chunks, and that's what we're seeing. It also takes a little bit more time today to work out of these accounts. What you're seeing is a lot of activity in our GILs. Our GILs, the new formations, was $140 million this quarter, and yet we've only increased by $11 million quarter over quarter in our GILs. That's because we have very high levels of return to performing net repayments while managing our net write-offs. Overall, it's just a reflection of the economic cycle, and we're performing well. Why do I feel that despite this increase, we are well provisioned? There is a better impaired mix in our portfolio right now.
And we're performing well and wide awake feel that despite this increase that we are well provisioned.
Sure.
Speaker #2: It also takes a little bit more time today to work out of these accounts. But what you're seeing is a lot of activity in our gills.
There is a better impaired mix in our portfolio.
Right now so.
As we have built our portfolio are in.
Speaker #2: Our gills, you know, the new formations were $140 million this quarter, and yet we've only increased by $11 million quarter over quarter in our gills.
Has evolved over time.
Same is said about our guests. So we have a lot more of inventory financing equipment financing and commercial real estate and our impaired mix and that is more collateralized than what we've had in prior years.
Speaker #2: That's because we have, you know, very high levels of return to performing net repayments, while managing our net write-offs. So, overall, it's just a reflection of the economic cycle.
And impaired commercial account comes in it goes through a process of a third party appraisal to peg the values. So we're very comfortable with the level of of allowances.
Speaker #2: And we're performing well. And why do I feel that despite this increase, we are well provisioned? There is a better impaired mix in our portfolio.
I want to ask a couple of questions on potential recovery and inventory.
Speaker #2: Right now, as we have built our portfolio, our, and it has evolved over time, the same is said about our goals.
Eric Provost: As we have built our portfolio and it has evolved over time, the same is said about our GILs. We have a lot more of inventory financing, equipment financing, and commercial real estate in our impaired mix, and that is more collateralized than what we've had in prior years. Remember as well, every time an impaired commercial account comes in, it goes through a process of a third-party appraisal to peg the value. We're very comfortable with the level of allowances.
Inventory finance I think you gave us some numbers roughly a low 40% utilization rate in I think $10 billion of lines outstanding.
Speaker #2: So, we have a lot more inventory financing, equipment financing, and commercial real estate in our impaired mix. And that is more collateralized than what we've had in prior years.
Maybe you can give us a sense remind us on how.
How much CET, one that might consume.
Inventory finance recovers and also maybe the NII potential associated with that.
Speaker #2: And remember as well, every time an impaired commercial account comes in, it goes through a process of a third-party appraisal to peg the value, so we're very comfortable with the level of allowances.
Yes, I'll take a portion of that in the event, we will complement Paul it's Eric good morning.
Okay.
We feel very well positioned for an uptick in our inventory finance business.
Growing our dealer base as I mentioned in the opening remark in terms of diversification as well.
Speaker #4: Got it. Okay. I want to ask a couple of questions on potential recovery and inventory financing. I think you gave us some numbers: roughly, you know, a low 40% utilization rate, and I think $10 billion of lines outstanding.
Paul Holden: Okay. I want to ask a couple of questions on potential recovery and inventory finance. I think you gave us some numbers, roughly a low 40% utilization rate, and I think $10 billion of lines outstanding. Maybe you can give us a sense, remind us on how much CET1 that might consume if inventory finance recovers, and also maybe the NII potential associated with that.
But a lot relies on the overall macro and if we are to see some easing in the interest rate levels in the U S.
We believe that.
The consumer confidence as well as the.
Speaker #4: Maybe you can give us a sense and remind us on how much CAT1 that might consume if inventory finance recovers, and also maybe the NIOI potential associated with that.
The dealer based confidence could actually get us closer or back to historical levels and as you mentioned like this could represent uptick of 8% to 10% and utilization rates. So so clearly could be a consumption of 40 to 50 bps bps.
Speaker #2: Yeah, I'll take a portion of that, and Ivan will complement Paul. It's Eric. Good morning. We feel very well positioned for an uptick in our inventory finance business.
Eric Provost: Yeah, I'll take a portion of that, and Yvan will complement, Paul. It's Éric. Good morning. We feel very well positioned for an uptick in our inventory finance business, just growing our dealer base, as I mentioned in the opening remark, in terms of diversification as well. A lot relies on the overall macro. If we are to see some ease in the interest rate levels in the U.S., we believe that both the consumer confidence as well as the dealer-based confidence could actually get us closer or back to historical levels. As you mentioned, this could represent an uptick of 8 to 10% in utilization rates. Clearly, it could be a consumption of 40 to 50 bps of capital.
Of capital, but again.
<unk> needs to be aligned and we are comfortable that position. We have right now in terms of capital because we will be ready to deploy against those profitable markets in terms of NII I don't know, even if you want to the only thing I would add on NII, we don't disclose specifically, but what I can tell you is <unk>.
Speaker #2: just growing our dealer base as I, I mentioned in the opening remark in terms of diversification as well. but a lot relies on, on the overall macro and, and if we are to see some ease in the interest rate levels in the US, we believe that, both the consumer confidence as well as the, the dealer, base confidence could actually get us closer or back to historical levels.
<unk> rates reductions in the U S would that have a positive impact on the inventory financing previously explained the impact so just to quantify it about a 25 basis points decrease.
Speaker #2: And as you mentioned, like, this could represent an uptick of 8 to 10% in, in utilization rate. So, so clearly, could be a, a consumption of, of 40 to 50 bips of, of capital but again, everything needs to be aligned and, and, and we are comfortable the position we have right now in terms of capital because we'll be ready to deploy against those highly profitable markets.
Inside the rates would equate to about the nonrecurring $1 $5 million for the quarter.
Okay. Okay.
And then.
Eric Provost: Again, everything needs to be aligned, and we are comfortable with the position we have right now in terms of capital because we'll be ready to deploy against those highly profitable markets. In terms of NII, I don't know if, Yvan, you want to.
Last question for me like how should we think about your liquidity.
Level, so youre willing to disclose your LCR ratio, which is set at the top end of the range. How should we think about that versus the liquidity you might need to draw for recovery and inventory finance would you need to.
Speaker #2: In terms of NIOI, I don't know if Ivan, if you want to.
Speaker #1: The only thing I would add on NIOI, we don't disclose it specifically, but what I can tell you is that interest rate reductions in the U.S. would have a positive impact on inventory financing.
Yvan Deschamps: The only thing I would add on NII, we don't disclose specifically, but what I can tell you is interest rate reductions in the U.S. would have a positive impact on inventory finance. Previously explained the impact. Just to quantify it, about a 25 basis points decrease in Fed rates would equate to about a non-recurring $1.5 million for the quarter.
Increase broker deposits to fund it.
Or do you have excess liquidity that you could find it.
Speaker #1: Previously explained the impact, so just to quantify it: about a 25 basis point decrease in Fed rates would equate to approximately a non-recurring $1.5 million for the quarter.
Yes, there is many ways of attacking it but I would say overall, we are in excess liquidity, we've been managing very prudently the liquidity where.
Above the industry in terms of LCR. So we have good liquidity tsi that would help us support an increase in inventory financing and the way that the way, we manage and that also regulatory wise banks or manage for uncommitted amounts for some types of.
Speaker #4: Okay. Okay. and then, last, last question for me. Like, how sh how, how should we think about your liquidity, levels? So, if only you didn't disclose your LCR ratio, but you said it's at the top end of the range.
Paul Holden: Okay. Last question for me, how should we think about your liquidity levels? You've only disclosed your LCR ratio, but you said it's the top end of the range. How should we think about that versus the liquidity you might need to draw for recovery in inventory finance? Would you need to increase broker deposits to fund it, or do you have excess liquidity that you could pull on to fund it?
Speaker #4: How should we think about that versus the liquidity you might need to draw for recovery and inventory finance? Would you need to increase broker deposits to fund it, or do you have excess liquidity that you could pull on to fund it?
<unk> portfolio as we always have to keep some liquidity side. So we can definitely use some of that for a recovery of volume in inventory financing or otherwise.
Okay.
I'll leave it there thanks for your time thank.
Thank you Paul Thank you Paul.
Once again, ladies and gentlemen, and a reminder to press star one should you have any questions.
Speaker #2: Yeah, there are many ways of attacking it, but I would say overall, we are in excess liquidity. We've been managing very prudently the liquidities. We're, you know, above the industry in terms of LCR, so we have good liquidity aside that would help us support an increase in inventory financing.
Yvan Deschamps: Yeah, there are many ways of attacking it, but I would say overall we are in excess liquidity. We've been managing very prudently the liquidities. We're above the industry in terms of LCR. We have good liquidity aside that would help us support and increase inventory financing. The way we manage, and that also regulatory-wise banks are managed for uncommitted amounts for some types of portfolios, we always have to keep some liquidities aside. We can definitely use some of that for recovery of volume in inventory financing or otherwise.
Next we will hear from Stephen Boland of Raymond James. Please go ahead Steven.
Hi.
Holdup through a lot of it just one question what part of putting in a forward flow agreement or alternative funding in the U S. I'm just wondering if there's been any progress on that on diversifying diversifying your funding base in the U S. Yes.
Speaker #2: And the way it's that, the way we manage, and that also regulatory-wise, banks are managed for uncommitted amounts for some types of portfolios, we always have to keep some liquidities aside.
Yes, Thank you Stephen for that question.
We're actively working on it in terms of that's why I open up.
Speaker #2: So we can definitely use some of that for recovery of volume in inventory, financing, or otherwise.
Talking about partnerships indefinitely.
This is one of the Angola.
<unk> partnerships, we are considering.
Speaker #4: Okay. Okay. I'll leave it there. Thanks for the time.
Paul Holden: Okay. I'll leave it there. Thanks for the time.
But we will make sure that we line up the right agreement and right now as you see in our capital position and as I mentioned in terms of of our liquidity position like we feel very good where we are so we're we're in no rush. So we're going to learn the best agreement possible for the organization going forward, but it's still in our.
Speaker #2: Thank you, Paul.
Yvan Deschamps: Thank you, Paul.
Speaker #1: Thank you, Paul.
Eric Provost: Thank you, Paul.
Speaker #3: Once again, ladies and gentlemen, a reminder to press star one should you have any questions. Next, we will hear from Steven Bolen at Raymond James.
Operator: Once again, ladies and gentlemen, a reminder to press star one should you have any questions. Next, we will hear from Stephen Bolen at Raymond James. Please go ahead, Stephen.
Speaker #3: Please go ahead, Steven.
Speaker #5: Hi. Paul got through a lot of it. I just have one question: there was talk of putting in a forward flow agreement or alternative funding in the U.S.
Stephen Bolen: Hi. Paul, got through a lot of it. I just want one question. There was talk of putting in a forward flow agreement or alternative funding in the U.S. I'm just wondering if there's been any progress on that, on diversifying your funding base in the U.S.
Our plans so more to come on that Stephen.
Okay, and then just on your sub one it does grow.
Speaker #5: I'm just wondering if there's been any progress on diversifying your funding base in the U.S.
Can you remind me what the goal is for your <unk> ratio is it to get to.
Speaker #2: Yeah, thank you, Steven, for that question. We're actively working on it in terms of— that’s why I opened up talking about partnerships. Definitely, this is one of the angles of partnerships we are considering.
Eric Provost: Thank you, Stephen, for that question. We're actively working on it in terms of that's why I open up talking about partnerships. Definitely, this is one of the angles of partnerships we are considering. We'll make sure that we line up the right agreement. Right now, as you see in our capital position, and as Yvan mentioned, in terms of our liquidity position, we feel very good where we are. We're in no rush. We're going to land the best agreement possible for the organization going forward. It's still in our plans. More to come on that, Stephen.
High Elevens 12, something like that.
In fact, thank you for the question. This is Giovanni so what we mentioned the passes we wanted to manage in the 10% plus margin. So to stay above 10, and then that margin. We're currently at 11, three but that goes to a few points are then partially Eric discussed that's right.
Speaker #2: but, but we'll make sure that we, line up the right agreement. And right now, as you see in our capital position and as Ivan mentioned, in terms of, of our li-liquidity, position, like, we, we feel very good where we are, so we're, we're in no rush, so we're going to lend the best agreement possible for the organization going forward.
<unk> is still uncertain.
We are heavily investing right now in the platform to build efficiencies going forward, but the key point that I wanted to pass on capital Link just mentioned that there is a <unk>.
Speaker #2: But it's still in our plans, so more to come on that, Steven.
Lower utilization and inventory financing.
Speaker #5: Okay. And then just on your set one, it does grow. I mean, what's, can you remind me what the goal is for your set one ratio?
Stephen Bolen: Okay. On your CET1, it does grow. Can you remind me what the goal is for your CET1 ratio? Is it to get to high 11s, 12s, something like that?
Change in the rates in the U S could trigger some demand up to potentially $1 billion, which is 40 to 50 basis points commercial real estate. We also will have an increase of more than 20% in our unfunded pipeline since last year. So that's also additional capital that we want to keep a side too.
Speaker #5: Is it to get to high elevens, twelve, something like that?
Speaker #2: If I may, thank you for the question. This is Ivan. So, what we mentioned in the past is we wanted to manage in the 10% margin plus, you know?
Yvan Deschamps: Yvan, thank you for the question. This is Yvan. What we mentioned in the past is we wanted to manage in the 10% plus, you know, a margin, to stay above 10% and that margin. We're currently at 11.3%, but that goes to a few points there. Partly, Éric discussed that, right? The environment is still uncertain. We are heavily investing right now in the platform to build efficiencies going forward. The key point that I want to pass on capital, Éric just mentioned that there's a low utilization in inventory finance. You know, a change in the rates in the U.S. could trigger some demand up to potentially $1 billion, which is 40, 50 basis points. Commercial real estate, we also have an increase of more than 20% in our unfunded pipeline since last year. That's also additional capital that we want to keep aside to answer that.
Answered that so we're not in the mode from this certainly growing Stephen we're in the mode of having enough for an impact in the market. If there is less uncertainty.
Speaker #2: So to stay above 10 and then that margin, we're currently at 11.3, but that goes to a few points then. Partly, Eric discussed that, right?
Speaker #2: The environment's still uncertain. We are heavily investing right now in the platform to build efficiencies going forward. But the key point that I want to pass on is capital. Eric just mentioned that there's low, low utilization in inventory financing.
The us rates reduction and even Canada Canadian rates reduction that could have on the real estate side.
Okay, then I'll sneak one more just in your opening remarks, you mentioned.
Expanding distribution.
Speaker #2: You know, a change in the rates in the U.S. could trigger some demand up to potentially $1 billion, which is 40 to 50 basis points.
No.
Simplifying your distribution and technology costs can you give us like a concrete example of maybe some milestones you've hit during the quarter or.
Speaker #2: In commercial real estate, we also have an increase of more than 20% in our unfunded pipelines since last year. So that's also additional capital that we want to keep aside to address that.
A product that you discontinued I'm, just wondering like maybe a little bit.
Something specific.
Thank you Steven actually it's Eric.
On many fronts, we made progress towards the foundation.
Speaker #2: So, we're not in a mode of necessarily growing, Steven. We're in a mode of having enough for an impact in the market if there's less uncertainty and a U.S. rate reduction.
Yvan Deschamps: We're not in a mode of necessarily growing, Stephen. We're in a mode of having enough for an impact in the market if there's less uncertainty, U.S. rate reduction, and even Canadian rate reduction that could have on the real estate side.
Doug.
We're going to see system details, but definitely efforts, where we're putting forward in terms of some of the upgrades. We're considering are.
Speaker #2: And even Canada, the Canadian rate reduction could have an impact on the real estate side.
Moving from on premise type technology to cloud technology in this as we indicated in the strategic plan puts more pressure from an opex point of view so heavily.
Speaker #5: Okay. And I'll, I'll speak one more and just in your opening remarks, you, you mentioned, you know, expanding distribution. you know, or simplifying your distribution, and technology costs.
Stephen Bolen: Okay. I'll sneak one more in. In your opening remarks, you mentioned expanding distribution, you know, or simplifying your distribution and technology costs. Can you give a concrete example of maybe some milestone you hit during the quarter or a product that you've discontinued? I'm just wondering, maybe a little bit like something specific.
On our expense side and again for for about the first two year of the plan also remember that we we started simplification last year by divesting some of our platforms, but also.
Speaker #5: Can you give a concrete example of maybe some milestone you hit during the quarter or, you know, a product that you discontinued?
Speaker #5: I'm just wondering, like, maybe a little bit like something specific.
Speaker #2: Yeah, thank you, Steven. actually, it's Eric, on, on, on many fronts, we, we made progress. Towards the foundation, like, I, I, I won't go into system details, but, but definitely, efforts were, were putting forward in terms of, some of the upgrades we're considering are, moving from on-premise type technology to cloud technology and, and this as we indicated in the strategic plan puts more pressure from an OPEX, point of view.
Eric Provost: Thank you, Stephen. Actually, it's very on many fronts we made progress towards the foundation. I won't go into system details, but definitely efforts we're putting forward in terms of some of the upgrades we're considering are moving from on-premise type technology to cloud platforms. This, as we indicated in the strategic plan, puts more pressure from an OpEx point of view, so heavily on our expense side for about the first two years of the plan. Also, remember that we started simplification last year by divesting some of our platforms, but also joining our equipment finance group into our inventory finance platform, Northpoint. That combination also will fuel and create some future opportunities. We're working on all aspects to really reduce complexity and create those efficiencies going forward.
Joining our equipment finance group into our inventory finance platform North point, so that combination also.
We will fuel and create some some future opportunities. So we're working on all aspect to really.
To reduce complexity and create those efficiencies going forward.
Okay I appreciate that thanks have a great weekend.
Yes.
Next question comes from Rob, Nevada at the BMO capital markets. Please go ahead.
Speaker #2: So, so heavily on, on our expense side and again for, for about the, the first two year of, of, of the plan. Also, remember that we, we, we started simplification last year, by divesting some of our platforms, but also joining our equipment finance group into our inventory finance, platform, Northpoint.
Okay. Yeah. Thank you Eric I just wanted to maybe follow up on that I mean, you obviously had a strategic plan you shared some of that with us at your.
Investor Day, we're about a year or so into it like how are we tracking.
To that plan.
<unk> way through.
Speaker #2: So that combination will also fuel and create some future opportunities. We're working on all aspects to really reduce complexity and create those efficiencies going forward.
Thank you I would I would come back on <unk>, because we are just over a year and the plan actually have.
Of what has been released.
And then the financial targets, we set we're for mid term so.
I feel very good just like we said last quarter.
Speaker #5: Okay. I appreciate that. Thanks. Have a great weekend.
Stephen Bolen: Okay. I appreciate that. Thanks. Have a great weekend.
We're tracking towards plan.
Speaker #2: Yeah, you too. Thank you.
Eric Provost: Yeah, you too. Thank you.
Speaker #3: Next question will be from Saurabh Mavedhi at BMO Capital Markets. Please, go ahead.
Operator: Next question will be from Surab Navedi at BMO Capital Markets. Please go ahead.
And again working on the fundamentals.
The foundation of future state.
Speaker #6: Okay. Yeah, thank you. Eric, I just wanted to maybe follow up on that. I mean, you obviously had a strategic plan. You shared some of that with us at your Investor Day.
Surab Navedi: Okay. Yeah, thank you. Éric, I just wanted to maybe follow up on that. I mean, you obviously had a strategic plan. You shared some of that with us at your Investor Day. We're about a year or so into it. How are we tracking to that plan, you know, halfway through?
Our required investment Blitz from the beginning to make sure we're ready to transition either to cloud.
Allowing us afterwards.
Speaker #6: We're about a year or so into it. Like, how are we tracking to that plan, you know, halfway through?
Emission key expensive systems in our platform and in our technology stack. So again, we are working on multi fronts.
Speaker #2: Thank you. I would, I would come back on the halfway through, Saurabh, because we're just over a year in the plan, actually, of what has been released.
Eric Provost: Thank you. I would come back on the halfway through, Surab, because we're just over a year in the plan, actually, of what has been released. The financial targets we set were for midterm. I feel very good. Just like we said last quarter, we're tracking towards plan. Again, working on the foundation of future state required that investment blitz from the beginning to make sure we're ready to transition either to cloud, allowing us afterwards to decommission key expensive systems in our platform and in our technology stack. We are working on multi-front. It is heavy lifting, but the teams are strongly engaged, and we're making the progress as planned. It's a big undertaking, as we laid out last year.
It is heavy lifting but the teams are strongly engaged and we're making the progress.
As planned but it's.
Speaker #2: And the financial targets we set were for midterm. So I feel very good. Just like we said last quarter, we're tracking towards plan.
It's a big undertaking as we laid out.
Last year.
Okay. So just just to kind of belabor the point I mean things are going according to plan I guess or ash planned youre, saying.
Speaker #2: And, and again, working on the fundamental foundation of future state required that investment blitz from the beginning to make sure we're ready to transition either to cloud, allowing us afterwards to decommission key expensive systems in our platform and in our technology stack.
I assume under investing in the spending and the heavy lifting of the technology side.
The revenue backdrop has softened so is there any plan to adjust to the prevailing kind of macro environment or is it more of an.
I'll call it.
Pedals to the metal and we're doing the spending going on regardless of what the revenue environment looks like.
Speaker #2: So again, we are working on multiple fronts. It is heavy lifting, but the teams are strongly engaged, and we are making the progress as planned.
We will stay committed to our investment level side, because it's it's required if needed. If we wanted to transform and change. This bank, we absolutely need to make the right steps to move to better stronger more resilient type technology and this is this is a commitment we've.
Speaker #2: But it's a big undertaking, as we laid out last year.
Speaker #6: O-okay. So just, just to kind of belabor the point, I mean, things are going according to plan, I guess, or as planned, you're saying. But I assume on the investing and the spending and the heavy lifting of the technology side, but the revenue backdrop has softened.
Surab Navedi: Okay. Just to kind of belabor the point, I mean, things are going according to plan, I guess, or as planned, you're saying. I assume on the investing and the spending and the heavy lifting of the technology side, the revenue backdrop has softened. Is there any plan to adjust to the prevailing kind of macro environment, or is it more of a, you know, I'll call it a battle to the metal, and we're doing the spending, we're going on regardless of what the revenue environment looks like?
So so.
We will continue towards the program and as you mentioned Unfortunately, we do have that macroeconomic volatility and uncertainty.
But on that front like I feel very good of where we are in terms of positioning and to our specialized markets and our goal is to accelerate that specialization.
Speaker #6: So, is there any plan to adjust to the prevailing kind of macro environment, or is it more of a, you know, I'll call it a pedal to the metal, and we're doing the spending; we're going on regardless of what the revenue environment looks like?
This is where it's going to bear fruit in the overall plan over the quarters I guess when you look at a couple of examples like we grew year over year, 19% in our equipment group.
Speaker #2: We, we, we'll stay committed to our investment level, Saurabh, because it's required. It's needed. If we want to transform and change this bank, we absolutely need to make the right steps to move to better, stronger, more resilient types of technology.
Eric Provost: We'll stay committed to our investment level, Sarah, because it's required. It's needed. If we want to transform and change this bank, we absolutely need to make the right steps to move to better, stronger, more resilient type technology. This is a commitment we've made. We will continue towards the program. As you mentioned, unfortunately, we do have that macroeconomic volatility and uncertainty. On that front, I feel very good of where we are in terms of positioning into our specialized markets. Our goal is to accelerate that specialization, Sarah. I think this is where it's going to bear its fruit in the overall plan over the quarters. If you look at a couple of examples, we grew year over year 19% in our equipment group. Our multi-res CRI business increased by 22%. Overall, we are changing the mix of the bank's portfolio towards a more commercial focus.
Our multi res Cree business increased by 22% overall, we are changing the mix of the bank's portfolio towards a more commercial focus and this was going to improve our NII and our margins towards the time and.
Speaker #2: And, and, and this is, this is a commitment we've made. So, so, we're, we will continue towards the program. And, and as you mentioned, unfortunately, we do have that macroeconomic volatility and uncertainty, but on that front, like, I, I feel very good of, of where we are in terms of positioning in the into our specialized markets.
Should make us more profitable organization and achieve our midterm targets.
Okay, and just one last one for me here.
Speaker #2: And our goal is to accelerate that specialization, Saurabh, and I think this is where it's going to bear its fruit in the overall plan over the quarters.
You too.
To create the capacity to invest you have done some restructuring.
Do you think you'll have to do unless the revenue environment improves do you have to do more restructuring to fund the continued investments.
Speaker #2: If you look at a couple of examples, we grew year-over-year by 19% in our equipment group, and our multi-res Cree business increased by 22%.
Well.
I think that we're well positioned as Ivan said from a capital perspective to sustain our investment in terms of technology, but I'd like to go from 75, 7% efficiency towards our goal of 60%.
Speaker #2: Like, overall, we are changing the mix of, of the banks' portfolio towards a more commercial focus. And this is what's going to improve our, our NIOI and, and our, our margins, towards the time.
Eric Provost: This is what's going to improve our NII and our margins towards the time and should make us a more profitable organization and achieve our midterm targets.
And below.
We'll need to to sustain a mix between revenue growth improve profitability towards the mix of our portfolio, but also continue and make progress towards being a more efficient organization. So we'll have to work with bolt on the revenue upside, but also keep keep.
Speaker #2: And should make us a more profitable organization and achieve our midterm targets.
Speaker #6: Okay. I just one last one for me here. I mean, you, you know, to, to, to, to, to create the capacity to invest, you have done some restructurings, like, do you think you'll have to do unless the revenue environment improves, do you have to do more restructurings to fund the continued investments?
Surab Navedi: Okay. Just one last one for me here. I mean, you know to create the capacity to invest, you have done some restructurings. Do you think you'll have to do, unless the revenue environment improves, do you have to do more restructurings to fund the continued investments?
Keep the expenses.
In line with with our future efficiency state.
Thank you for taking my questions I have a nice long weekend.
Speaker #2: Well, Saurabh, I think that we're well positioned, as Ivan said, from a capital perspective, to sustain our investment in technology.
Eric Provost: I think that we're well positioned, as Yvan said, from a capital perspective to sustain our investment in terms of technology. To go from a 75.7% efficiency towards our goal of 60% and below, we'll need to sustain a mix between revenue growth, improve profitability towards the mix of our portfolio, but also continue and make progress towards being a more efficient organization. We'll have to work both on the revenue upside, but also keep the expenses aligned with our future efficiency state.
So on beauty.
Once again, ladies and gentlemen, if you do have any questions. Please press star one on your telephone keypad.
Speaker #2: But like, to go from a 75.7% efficiency towards our goal of 60% and below, we'll need to sustain a mix between revenue growth, improve profitability towards the mix of our portfolio, but also continue and make progress towards being a more efficient organization.
And at this time gentlemen, it appears we have no other questions. Please proceed.
Okay. Thank you for this morning's call overall, we remain focused on executing our strategy growing our commercial banking business that leverages, our core strengths and expanding into targeted areas of opportunity and doing so with a continued focus on delivering on.
Speaker #2: So we'll have to work both on the revenue upside, but also keep the expenses aligned with our future efficiency state.
The value added I quality client experience I'd like to take a moment to sincerely. Thank our dedicated employees and loyal customers shareholders and all stakeholders for your ongoing support as we transform and grow Laurentian Bank. We look forward to continuing this journey together and reaching new milestones.
Speaker #6: Thank you for taking my questions. Have a nice long weekend.
Surab Navedi: Thank you for taking my questions. Have a nice long weekend.
Speaker #2: Thank you, Saurabh. You too.
Eric Provost: Thank you, Sarah. You too.
Speaker #3: Once again, ladies and gentlemen, if you do have any questions, please press *1 now on your telephone keypad. At this time, gentlemen, it appears we have no other questions.
Operator: Once again, ladies and gentlemen, if you do have any questions, please press star one now on your telephone keypad. At this time, gentlemen, it appears we have no other questions. Please proceed.
Thank you again and I wish you all a great rest of your day. Thank you.
Speaker #3: Please proceed.
Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again. Thank you for attending at this time, we ask that you. Please disconnect your lines have a good weekend.
Speaker #2: Okay. Thank you for this morning's call. Overall, we remain focused on executing our strategy, growing our commercial banking business that leverages our core strengths, expanding into targeted areas of opportunity, and doing so with a continued focus on delivering a value-added, high-quality client experience.
Eric Provost: Okay. Thank you for this morning's call. Overall, we remain focused on executing our strategy, growing a commercial banking business that leverages our core strengths, expanding into targeted areas of opportunity, and doing so with a continued focus on delivering on a value-added, high-quality client experience. I'd like to take a moment to sincerely thank our dedicated employees, loyal customers, shareholders, and all stakeholders for your ongoing support as we transform and grow Laurentian Bank of Canada. We look forward to continuing this journey together and reaching new milestones. Thank you again, and I wish you all a great rest of your day. Thank you.
Yeah.
Speaker #2: I would like to take a moment to sincerely thank our dedicated employees, loyal customers, shareholders, and all stakeholders for your ongoing support as we transform and grow Laurentian Bank.
Speaker #2: We look forward to continuing this journey together and reaching new milestones. Thank you again, and I wish you all a great rest of your day.
Speaker #2: Thank you.
Speaker #3: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines.
Operator: Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask you to please disconnect your lines. Have a good weekend.