Okay. We'll just dive right into the next session here. I have Darryl White, the CEO of Bank of Montreal. Before we begin, just wanna remind you all that Darryl's comments today may include forward-looking statements. I know I could have recited it from memory, but...
It's all right.
Actual results could differ materially from forecasts, projections, or conclusions in these statements, and listeners can find additional details in the public filings with BMO Financial Group. Sorry, I had to throw my glasses on there. Age is catching up to me. Darryl, the discussion we've had all day today, there's a lot of discussion around capital. The change to the DSB widened, increased, and in your particular instance, you raised capital as a result. The question that's on everybody's mind is, did you raise enough if the DSB is increased later on this summer to the full 4%?
Thanks for having us. The short answer is, yes, we raised enough. The long answer goes like this. If you go back, Darko.
I think we're having a trouble with the mic.
Am I loud enough?
Is it working now? Can you say a few words?
Is it working now?
Doesn't sound like it's working now. Is it working now?
You want me to shout?
Oh, there we go. It's just as I was louder. I tend to be loud as a person generally, so maybe that's what it was. Sorry.
You drowning me out? Not really. Okay. I think what I said before was the short answer is, yes, it's enough. The long answer goes something like this. If you go back, Darko, to when we announced our proposed acquisition of the Bank of the West, which happened to be on December 20th of 2021, we said at the time what we would always do when we model acquisitions, which is the pro forma capital ratio that we solved for was above the then regulatory minimum. Inside of the 50 basis points of buffer that you would build as an internal target. For us at the time, that was between 10.5% and 11%.
Interestingly, as you go through the fullness of 2022, with all of the puts and takes, you know, the things that we didn't see coming, the things that we did see coming. We didn't have the Canada Recovery Dividend. We didn't have the priced in, the capital provision we took for a lawsuit in November. We, on the other hand, had better business performance, better internal capital generation than we thought. We had really effective risk transfer. We had really effective hedging on our transaction itself. When an all-round trip to the end of the year, we were tracking to almost exactly where we said we were gonna be, i.e., in that range of 10.5%-11%, should the transaction close in the first quarter.
That's kinda my way of saying I was very happy with the team's performance on capital management. Now, what changed? OSFI on December 8th announced that they're gonna move, and you've heard all about that, I presume, today. OSFI moved 50 basis points. We responded. We responded, I think, decisively and quickly. I'm glad we did. The alternative might have been, "Well, let's just wait and see," and wait and see is not a very good strategy 'cause who knows what was gonna happen over the holidays, over the month. You know, nobody saw Ukraine coming at this time last year. We made that decision. We've locked it in and pro forma that capital raise. To come all the way back to your question, where does it take us?
We have said we will be above 11.5% in the second quarter of this year, assuming the transaction is closed. Above an 11.5% in the second quarter of this year, and I emphasize above. Then we'll be traveling to 12% through the back end of the year. I'm pretty comfortable with that trajectory, and I think it's the right plan for us, regardless of what comes next from a regulatory perspective.
Does this change? I mean, OSFI's decision to make these changes, does it change anything else for you, like the size of your buffer, future acquisitions, how you manage capital return, the dividend payout ratio? Anything else that is altered here now in the wake of that?
Nothing other than the obvious, Darko. I mean, I don't think, you know. I was just listening to you and your list of alternatives there on size of the buffer, I don't think you would be responsible stewards for shareholders if you said, "I'm gonna pre-fund some other potential change." I don't think that's the right way to manage a business. You do need to have the buffer, so that you can sort of manage and be agile within whatever might change, whether it's from the regulator or anything else for that matter. No, I don't think it changes size of the buffer. The obvious would be, you know, if there was a next acquisition on the doorstep, and there's not.
If there were, well, then, of course, you have to model to the new conclusion, not the old conclusion.
Mm-hmm.
That might make it more difficult to fetch or it might make it more difficult to fetch at the same return, so you have to adjust for that. That's really the only thing I can think of.
Okay. In your answer, you mentioned that one of the things or one of the tools you have to get towards 12% is significant risk transfers. Your bank seems to be using it a bit more than others. Can you maybe talk about the rationale for using them, your use of them? Are there limits, and what are the other impacts of doing these SRTs?
Yeah. First of all, I don't know if we use them more than others. That's, that's hard to know. I think everybody's in the business to some extent. I can tell you about our track record, though. It's not new. We've been in the business of doing risk transfers for four or five or six years now. It's a technique that we think is valuable, within limits, and I'll go to that in a minute. If you think about it, there's different ways you can do these things. You can do outright loan sales. That's obvious. You can do an outright loan sale from your portfolio. Or you could do a synthetic securitization.
There you might be selling the loss, sale on the loss if there's to be a loss on the loan, so it's insurance as it were. The benefit of that is you maintain the customer, you get relief on the RWA, and you also get relief on the PCL in the event of loss, right? Including in your calculation of performing PCL. There's a lot of benefits there, but it does come at a cost, and the cost is some foregone spread revenue. When we've looked at the transfers we've done over the last couple of years on synthetic securitizations, the net of those two has been very positive in terms of the ROE because you release a little bit of capital, you give it a little bit of spread, ROE accretive to our overall agenda. Far so good.
That's worked pretty well for us, and I'm quite proud of the way our team performs when they need to on that. Remember, we have an advantage in the, in the size and the scope and the quality of the mix of our commercial and our capital markets loan book. When you start with that book, which I think I've talked about on this stage many times, so I'll skip it. You actually have a lot of opportunities. Investors like the quality of the portfolio that they can get from us. It's worked well for them and for us. Going forward, are there limits? I mean, naturally, our appetite to do these types of transactions is not unlimited, neither is the market's appetite to do them.
We'll look at it as the case may be, as the need may be, I should say, as we go forward. As I look at 2023, for example, I don't think it should be much different from 2022. Like, we don't, for example, we don't see any need in our capital plan right now to say we gotta really crank this up and do more and more and more in order to meet those targets that I talked to you about before. No, it's more business as usual now for us.
Okay, great. We touched on Bank of the West. Maybe, is there any kind of update you can provide us on, I don't know, whether it be timing or any other thought processes or anything else that may have changed as a result of the equity issue? I'll just leave it open-ended and let you respond.
Yeah. it's pretty much status quo in terms of what we have said, what we've been saying over the last several, I guess, quarters now. If you go back to December of 2021, when we were in the first quarter of 2022 fiscal, we said we thought it was gonna take something like a year. Here we are in the first quarter of 2023 fiscal, and we're saying we're confident that we'll see a closing in the first calendar quarter of the year. Could that be in the fiscal quarter? Time's kinda running out on that, but it's getting close.
It does feel like we're getting pretty close to the finish line, is what I would say. We stand by those comments that we've made before in terms of our expectations of approvals and approvals and closing. There's a gap between approval and closing based on the way the M&A contract works, but it's not that wide. You get your approvals, and then not too long later, you're able to close the transaction. We'll go ahead and do that as soon as we have approvals. The discussions with our regulators are all very positive, and there's nothing I'm aware of that suggests that there should be a problem. I can say that. That's different from guaranteeing an approval because, of course, somebody could make one up tomorrow.
As I look at it today, all is well. If all of that plays out the way I expect it to, as I've just described now, that will move us in a position to do a conversion. Our conversion date will be in September, and we'll be able to do the full technology conversion and customer conversion then. Make no mistake, on legal day one, which should be sooner than later, we own the franchise, we have the people, we have the customers, and we're running the business, and we're beginning to execute the integration plan, which we're absolutely ready to do anytime.
It seems like the environment's changed quite a bit. You know, just amazing what happens in one year. Is there any view or? You know, one of the things that I've picked up on has been very subtle, is revenue synergies were discussed early last year and sort of faded in the discussion towards the end of the year. I don't have too much concern over expense synergies. Those are a little more straightforward. What could you tell us on possible revenue synergies and has anything changed?
Yeah. What I'll tell you on, well, revenue synergies and just about anything else is what we're going to do is once we own the asset for a little period of time, we will come back to you, to the market, to give you an update on everything. Do we stand by all of the assumptions that we put into the model when we told you what we told you on synergies, on accretion, on revenue or cost synergies? I'd like to do that in a very fulsome way, having lived with it for not a long period of time, a couple, few months, and then we'll give a very fulsome update to investors. As I sit here today, if I'm a betting man, I think we're gonna round trip pretty closely to where we've been.
We did say when we announced the transaction that we thought it was in the range of 10% earnings accretive. That was based only on the cost synergies, by the way. Reminder, that was cost synergies, revenue synergies not in. We did come out a few weeks, couple months later, and we did declare our view of revenue synergies. That wasn't a number that was based on some average of precedents or anything like that. That was absolutely bottoms up as we went through all of the business opportunities. We'll rescrub that when we do the assessment of the business when we own it. I don't have any reason to believe. Well, it might have faded in the background, Darko. That's probably just because we haven't been talking about it very much.
It's not because we have any less confidence in it. It's we'll look at it again. We think those opportunities are gonna be real. They take a little longer to get to. You know, cost synergies come quickly. Revenue synergies take three to five years until you can fully mature them. If anything, I might have a hunch today that they'll be even better than we thought. Hold that thought, and we'll come back to everybody once we own the asset for a couple months.
Okay, great. We've had some discussion up here about the vulnerabilities in Canada with respect to mortgages. We know we're a little more commercial-oriented, but you still have a mortgage book. Happy to dive into just asking your view on the vulnerabilities in Canada and specifically how you see it through your mortgage book. Can you provide us some statistics to give us comfort that these higher mortgage payments that people are making are, A, not excessively higher, and B, not going to impact and create a impaired scenario defaults or losses in the mortgage book?
Thank you for recognizing that we do have a mortgage book. Our folks who are running our retail business in Canada would be quite excited to hear me say what I am gonna say right now, which is that by our math over the last seven quarters consecutively, we have actually had the highest revenue growth. I didn't say mortgage, all products, all products together in Canadian retail banking. BMO, highest revenue growth seven quarters running in Canadian retail banking. I'm very proud of our team on that. Let me come to your question. On mortgage growth. Pardon me, on mortgage risk and vulnerabilities. I don't know what everybody else has said when they've come on the stage.
I suspect, it's been well answered, and here I might not say something that's particularly different. When you look at the layers of protection that are available, as you know, Darko, they're pretty substantial. You know, everything from not only the savings that are still, we think, about 30% higher than they were pre-COVID, the structure of the market, the structure of the books, the loan-to-value, the insured component. You start to get down to exposure levels that are, we think, for a period of time here, like a year, pretty small. You know, we look at triggers as well. I'm happy to talk about that if you want. When we go through that assessment, you know, sometimes people ask me, "All right.
Well, you get through all those layers of protection, there's always a tail." Of course, yes, there's always a tail, and the way we define the tail, just to sort of drive home the point here, is when we say, you know, where are the people who are most vulnerable? Well, if you're uninsured, if you have a FICO score of 680 or less, and if you have a loan-to-value of 70 or higher, well, you're obviously most exposed. That is about 1% of the book. When you layer on another criteria and say how many of those are actually maturing in the next year, it's so de minimis it's laughable. Like, I had to check the number. It's like CAD 20 million or CAD 20 million in mortgages. You know, you...
Once you get there, the world is in a very bad place, admittedly. You have to think about what would be going on in the world to get into the pain that's happening. You know, for the rest of the book, it takes a lot to get through those layers of protection. I'm not suggesting at all, I don't want you to get me wrong, that we're not going to see any delinquencies, we're not gonna see any insolvencies. What I can say is we don't see them today. We're stable today as we were last quarter. As I look through most of 2023, I think we'll be pretty stable, and you might see a little bit of creep up as we go into the late part of 2023 and 2024.
Based on that Pareto that I just took you through, I don't think it's that significant.
Do you think there's any substantial changes coming? I mean, we're suspecting that house prices could fall a little further. Resale activity is declining. Is there anything that you see in the horizon in the next year or so that would, you know, create or could possibly create a problem for the overall economy that really stems from these high payments and the consumer, basically, a big chunk of their payments going to paying your mortgage and not discretionary spending. I'm dovetailing this into a discussion on credit reserves, because one of the things that we see is in your forward-looking indicators, we don't see a big jump in unemployment. There's no expectation there, and you actually have an expectation of pretty decent GDP growth, actually.
The question then is, these risks exist. Your bank doesn't seem to have a negative outlook. Can you maybe square that for me? I mean, from your point of view as the CEO, do you kind of push people to adopt a more conservative view and build reserves from here? Do you think the economy is fine, and we don't need to build reserves from where we already have them?
Yeah. Let me just clarify. We're not out here saying we have a super rose-colored glasses view of the world and we have a positive outlook. I think our house view, by the way, on economic growth in North America this year is zero. It's neither positive nor negative. It's sort of right on the fence. That might mean you have a couple of quarters of slight negative GDP growth, and you might have a couple of quarters of positive GDP growth, for example. When we price into our reserve builds, you know how the process works. We've been talking about it for three years now.
It's a very rigorous process. The fundamental linchpin in the decision-making as you go through relative to where you were before is relative to when you made your last formal audited governed decision, has your view on the outlook fundamentally changed? What was it then? What was it now? When you look at the weightings, when you look how we increased through the course of 2022, our weightings on probability of recessions, up they went. We actually have a pretty conservative outlook, I think, already in our, in our forecasting. You started this question asking about the consumer and the risk of exacerbating, I think, or procyclically getting at economic downturn, should they be having trouble making their mortgage payments.
We don't think that they actually start having trouble making their mortgage payments until you might get unemployment up to, you know, considerably higher than where it is today. I mean, it is the trigger. We put 7% in one of our scenarios. Personally, I think it might even have to be higher than that. In the meantime, they make their mortgage payments, but if you look at the Bank of Canada data and you look at the higher cost for a lot of borrowers, let's say a borrower is paying, CAD 5,000 more a year in mortgage payments than they were paying before. Remember, that hasn't clicked in for most people yet because most of the book is fixed.
Right.
For those that are affected and the variable, if the average Canadian household is paying CAD 5,000 more than they were before, that's 5% of household net income, I think that's significant. It's not gonna tip over the mortgage payment. It's not gonna tip over the losses in any bank, but it is money that's not being spent on something else.
Do I hear from you then that there's a potential that you may push for? I mean, we've received your PCL guidance for the year, but I think it was more around impaired losses. Do you adopt a view going forward that you build reserves from here a bit more because there is a concern of the volume-
No, I'm not gonna say that. I'm actually, you know, and it's conveniently we're having this conversation where we're not pregnant with the decision-making process that happens in a few weeks from now. The linchpin, as I said in that, is do we have a fundamental view that the outlook is either on the weighting or the severity of the scenarios chosen is materially worse than it was the last time we made that decision, which was only two months ago. We had a pretty conservative view on the outlook at that point in time. If I were the only vote, and I'm not the only vote by the way, it's a very, very interesting process.
If I were the only vote and that decision were being made today, I would say I don't have a very different view on the outlook than I did two months ago, and therefore why would I have a very different view on whether or not we're gonna build until that changes. It can change quick, right? We all know that.
Yep.
We sat here a year ago and we didn't see Ukraine coming. You know, that could change quick, but that would be my view as of this minute today.
Given that PCLs are rising, there's a lot of moving parts for BMO, especially since you're gonna be adding a bank here, hopefully in the first calendar quarter of this year. Consensus estimates have you at about 3.3% EPS growth, well below your medium-term target. How do you think about that, and what's the message that you wanna tell shareholders with respect to kind of EPS growth expectations, and what could swing that materially higher or lower apart from credit?
Yeah. I think if you go through the decomposition of the P&L, the first thing I would point out is that you heard us on our fourth quarter call after five years running of having positive operating leverage and having 7% PPPT growth last year, which we think is a track record that is unique. We don't mind talking about that. We asked ourselves the question, are we gonna recommit to positive operating leverage in 2023 going for six years in a row, given the environment has changed? We came to the conclusion that we will, and that it might be a tougher putt, but we're gonna commit to positive operating leverage.
That won't be the case in Q1, by the way, because if you look at Q1, we've got our seasonal effects on our employee, and we've also got last year's Q1 was an all world capital markets quarter for everyone, but it was particularly strong in our case. Growing over that, it's not gonna happen mathematically in the first quarter. Notwithstanding that, we still believe, Darko, that we'll get to the positive operating leverage for the full year. If you put that in your model and then you go down to the PCLs, look, we said in our fourth quarter call that we expected normalization on PCLs at some point in time. You could almost just replay the tape, right? Like everybody said it for the last eight quarters.
I would tell you that, you know, we're not there yet. You know, on the I talked earlier about the performing, but on the impaired it's still very benign. It's still very benign on the impaired, we'll just have to see as the year rolls on. Then for us it'll get a little bit noisy admittedly, because at some point in the year, hopefully by the end of the calendar first quarter, we're gonna be adding the earnings from the Bank of the West. When you put all that together, I think it actually adds up to a, to a very good outcome for us and probably a differentiated outcome because we're able to get the benefit of the acquisition when we do.
Fair enough. Maybe just diving a little bit, you talked about net interest income there for a moment, or you know, the revenue environment. You know, we've seen spectacular NIM [expansion] let's say we've seen good NIM expansion, spectacular net interest income growth. Would you caution against us thinking about net interest income growth in double-digit for this year? Excluding Bank of the West.
Yep. Yep. This is a really good question. I'm glad you focused on net interest income growth because at the end of the day, I've said before, NIM is an output. You know, we run the business to try to produce the NII growth. If you look at us in 2022, our NII growth was 27%. Pretty good. We had the benefit of both, as you know well, really good... Did you say spectacular NIM expansion? We had really good NIM expansion, and we had really good loan growth, and we got 27% NII as a result of it. What's that gonna look like this year? Well, let's break it down into the component parts.
I think we will still see positive NIM expansion, not to the rate that we saw last year, but it'll probably be flattish as we begin the year and it'll pick up as we go on through the year. Probably rounds to something in the high single digits on NIM expansion, so not as good as last year, but pretty good. We will probably see a similar high single digits loan growth for our bank as we go through the year. When I put those two factors together, come back to NII, I'm probably mid-teens.
Yeah. Okay. Great. Thank you for that. Before I turn to questions from the audience, hopefully I can go ahead and change it here. Do a little bit of touch button here. Go. Okay. Before we hit that, just one last question. I mean, from my perspective, one of the things that's differentiated your bank over the years is you've expanded your footprint in the U.S., you've made it bigger. The question now is, will it evolve now that you've got Bank of the West coming? What's your intention there, and what are your U.S. capital markets aspirations, in a world where your U.S. business is just much bigger because of Bank of the West?
Do you want me to talk about U.S. businesses broadly or capital markets specifically?
Capital markets, I think...
Okay.
In particular is what I'm more interested in.
Okay. Yeah, so I Before I do, I just wanna very quickly though remind that if you look at the composition of our U.S. Business today, I remember being here a few years ago and saying, "Here's the challenge for us. We've got a faster growing business in the U.S. than we do in Canada, but it's lower return. It has lower ROE, and it has higher efficiency. My challenge is to get it to match the Canadian's efficiency and ROE, and therefore, when we're growing it faster, it's just pure accretion." We've done that. Like, we proved that through the course of 2020, 2021. What does that mean as I come around to your question?
The composition of that U.S. business that we have today, which is sort of mid-30s, 35%, 36% of our PPPT, is about 17%, 18%, 19% capital markets. Let's keep in mind that the strength of the franchise is, yes, capital markets, but we've got really good performance in our commercial and our personal business banking businesses as well, and they're the largest share of the pie. Capital markets has been growing quite a bit as well, both organically and through some tuck-in acquisitions. We did the Clearpool acquisition. We did the KGS acquisition a few years ago. Those have really worked out well. When we put it together, Darko, I would say I love the position.
I like the positioning a lot of our U.S. capital markets business today because really if you look at the share gains that have been made, you know, when I look at it's quite remarkable. In some U.S. rates trading, for example, where we began to invest a few years ago, we've gone from about 4%-8% of the market. If you look at top 10 bookrunners status in agency CMBS, if you look at inflation trading, we're the number one in-inflation trader in the market in the United States.
The business is very well-rounded and very diversified, and we've made investments in some of the acquisitions I've talked about in sponsor, in tech, in healthcare, and it's a business that now, you know, is clearly showing the result because it's 50% of our revenues. 50% of our capital markets revenues come from the U.S. 40% of our NIAT comes from the U.S. Over 50% of our people are in the U.S. I think as you look at it, you know, it's got a lot of room to grow because now it's not outsized relative to the size of our U.S. business at all.
In fact, one of the things I think we're excited about is if you look at the Bank of the West sort of core footprint through California, the Pacific Northwest and Denver, those aren't places where we've significantly trafficked in capital markets in the past. We've had some, but arguably not enough. I think that just gives us more opportunity as we look at that franchise. This goes to the revenue synergy point that we talked about earlier. I put it all together, and I think what you should expect from our capital markets business is more of the same. Why? Because it's working.
Not necessarily a more... I mean, I guess where I was going with it was with B of W coming in, there's sort of two things simultaneously occurring. There's a bigger amount of earnings from commercial lending and retail in the U.S. At the same time, regulatory capital change creates tension. My immediate thought process was, well, with a bigger footprint, you can make your cap markets business bigger.
Yeah, I don't need to necessarily.
Is there a capital constraint? Yeah. Okay.
I understand the math you're solving for. It gives more space to grow capital markets faster if you're in the camp of, you know, there's a limit to how much capital markets should represent of the whole. For sure, mathematically that's true. It doesn't mean you wanna go in and do things that you wouldn't otherwise do. If we see smart opportunities to grow it, we'll do it as we always have.
Okay. Let's turn to some of these questions we've got coming up here. First question, oh, interesting. How much higher would your provisions be without synthetic risk transfers? Is it material?
Provisions?
Yeah. PCLs.
No, I can't give you a number, but it's not material.
Sounds fair.
It's had a, I would say, a marginal helpful benefit.
Okay. Next question is how much of your NIM expansion is attributable to deposit mix, deposit betas and rising interest rates, and how would these forces change if interest rates fall?
Well, I think the team has done a very good job managing deposit base betas, particularly in the U.S. We've stuck a little bit longer than we thought we would. I think there's a good story going on there. By the way, when the deposits tend to run off, what we're seeing is another good story, which is they don't all leave the bank. A lot of them get put into term product, and you may find them in our wealth business or somewhere else. That's a pretty good story. The question, I think, had a tag on to say where does it go going forward. You know, look, we're all subject to the same trend in the industry, we're gonna see run-off in deposits.
We'll all try to maintain as many of them as we can in the house. In our case, I think what's a little bit different as you look at the Canadian franchise, it'll be similar to others. In the U.S. franchise, you know, remember, we compete against 5,000 banks in the U.S., and we have capabilities given that we're one of the larger ones that others don't. When you look at PNC Bank in the U.S., we talk often about commercial when we're on this theme, but the reality is if you go to the deposit side of retail, we have a digital retail bank that we built just before the pandemic, completely built, and we didn't need it because you didn't need to go and chase transactions or deposits. Now it's quite interesting.
We've turned that on in the last couple of months, and we're already seeing fifties state capability on deposit gathering. You know, that will get interesting as the chase for deposits increases, I think, through the course of 2023, 2024, and it's an advantage we have that frankly You know, the large G-SIBs, of course, they have this. Some of the regionals don't, but most of the smaller players don't. It's an opportunity for us to take share, price the beta, and probably in some cases, build relationships. When I think of the Bank of the West franchise, they've got, you know, 500-ish branches, but they don't have this capability in the way we do, so we can bring that to them as well and put the whole machine together. It gets interesting. Most themes are similar for everybody.
This one is particularly interesting competitively for us.
I guess the other little tag on there was if interest rates fall, was the tag on part of that question. You know, does anything... I mean, we could sit here and speculate on anything, but, I mean, let's just pretend that rates fall aggressively in the back half of this year.
Yeah. Well, I don't think that's gonna happen. Let's say, let's imagine it was in the next year, I think we're, you know, I would say we have all of the same tools on the way down that we have on the way up.
Sure.
-as we've disclosed our sensitivity in all of our, all of our disclosures.
I do wanna dive into that at some point a little bit more about the deposit machine that you've sort of turned on in the U.S. Sounds to me like it's just a high interest savings account, but maybe you can expand a little on that.
Well, I think it starts there because the aggregators will all try to figure out every day where they can get the best rate. You're not really going on for a relationship in the first instance. You're going in for the best rate. You've got a technology, you've got some marketing dollars, you can get yourself to the top of the list, and we can turn it on. Just being able to turn it on, even if it was just a price tool, is a competitive advantage in an environment like this, and I argue will continue to be a competitive advantage. Just in the last couple of months since we turned it on, we got couple hundred million in deposits, just like that. We know it works.
The question is, can you then transition it in to become part of your full offering, particularly out of branch footprint? For us, that gets really interesting now that our footprint is most of the United States, including the Bank of the West. More to come on this. I wouldn't go and, you know, change your thesis on us just because of this. I do argue, and I think in the course of the next year or two, it's gonna be a differentiating factor more than at the margin.
Okay, great. That's an interesting insight. Okay, we're coming up to the end of our time together where I turn it over to you and I say, Darryl, what are the key messages you want shareholders and investors to take away today?
Yeah, look, I think, Darko, our story is pretty simple. We've got a lot of keep doing what we're doing going on. I mentioned before, we've got five years running of positive operating leverage, which we think is differentiated. We did 7% PPPT growth last year off of 2019 the year before. It wasn't easy off of a pretty high growth rate to continue growing. We did it. I told you what our commitments are on our BAU for this particular year. When I unpack that into our businesses, it looks good all the way through. Now, there may be some softening for the economy in some of the businesses. Everybody will have that. We've got a powerhouse commercial franchise that's one of the largest commercial banks in North America. Our capital markets business, we've talked about it today, I won't repeat it.
I told you about our P&BB franchise having the highest revenue growth in Canada. Our wealth franchise, which we haven't had time to talk about, is fundamentally repositioned because we've sold businesses that we didn't think were getting it done. We've repositioned the franchise for growth, and we've got really good management driving a really good agenda in there. When I wrap it all together, I say we've got great BAU through those four franchises that we ask them to continue to do a lot of the great things that we've done over the last four or five years. Then we add the Bank of the West to all that, and we're ready to go.
To me, what really gets interesting for us is 2024, because we're gonna go through this transition of Bank of the West in 2023, then we're gonna be run rating in 2024. Who knows? We could spend all day speculating on what the environment will be like in 2024. To me, then it really starts to get interesting for us, and that's what we're building for.
Okay, that's an excellent wrap-up for us. Thank you. We'll end the session here. Darryl, thank you for attending. Oh, watch out. That fell.