Thank you very much. Okay, so happy to have Robert Sedran here from CIBC, the CFO. Robert, welcome to the.
Thanks, Darko. Good to be here.
Without any preamble, let's just dive into these questions that I have lined up for you. As always, I think the question of the day is tariffs. Why don't we start with your view on the recent developments, and maybe you can walk us through how you're thinking about it as the CFO of CIBC.
Yeah, thanks, Darko. I think we start from the perspective of this is something that is not really happening to us. It's happening to our clients, by and large, right? And so when we think about what that impact is going to be on them and on their businesses, it really comes down to two main variables. One is the size of the tariffs, obviously, has gotten a lot of talking points. I think the duration, as well, and how long these things are gonna last is something else that we have to contemplate. And there's a lot of fluidity to this situation right now on both of those fronts. We're all kind of monitoring social media regularly to see what kind of updates we're getting.
So what we're doing is really, we've taken an opportunity to kind of stand behind our brand promise, which is we're a very relationship-focused bank. We have been getting closer to our clients through this period. We owe them, you know, the support. We owe them the advice, and we are working closely with them to see where things are gonna go. You know, they're similarly looking and wondering, you know, they've built businesses, they've made plans based on a certain environment, on a certain trade, you know, structure that may or may not persist, and so there's a lot of uncertainty for them as well. When we think about the impact more directly to us, it's kind of like the direct impact, which is, you know, what's gonna happen to these specific clients that are exposed.
And then there's the indirect impact, and that really relies more on how long it might last, is what happens to the broader Canadian economy, the broader U.S. economy, and the operating environment that we're in. So trying to understand all of this, we've been stress testing, we've been getting to know our, you know, our client situations better, really going down to a very granular level in our books to understand where our risks are.
How has that been, the discussions with clients so far? I mean, going back to the initial, when President Trump was first came into office, there was sort of tariffs and then a bit of a reprieve, and now we're right back at it. Has the mood changed and how are clients reacting?
Yeah, the on-again, off-again creates that uncertainty that people don't quite know how to plan. Nobody's making plans for, you know, two, three, four weeks. They're making long-term plans. It's a difficult environment in which they are trying to do that. And so when we think about the pipeline of opportunity that we saw in terms of loan growth and just the business that we saw, what they were gonna be doing, a lot of it has been slowed or being delayed a little bit just because it's the rational thing to do in this environment. You stop, you evaluate, and until you get a little bit better certainty, you know, you're probably not pulling the trigger on the big capital investments, on the big expansion plans, you know, M&A and everything else.
We think in a lot of cases this is just delayed, as opposed to, or, you know, as opposed to. That's why I say the duration of this matters. A lot of the pipeline that is there, we still think is going to be, you know, executed over time, but it does require a little bit more certainty than we have, we're operating with right now.
And so then that leads me to the next sort of logical question along this way is, well, let's think about operating in a world of tariffs for an extended period of time or some period of time. Maybe you can speak to CIBC sort of exposures or sensitive areas. If you can sort of give us an idea of how you view it and where do you see specifically some areas of concern. And actually, if there's any opportunities too, while we're at it, but let's at least first start with the sensitivities and areas of concern.
Maybe we'll start at the highest level with some of the disclosures we have just around industry-level exposures, right, and the ones that you're probably expecting to be most directly affected by some of these things are, you know, manufacturing and the agriculture, forest products, steel and aluminum, the ones that have been in the press, transportation, the ones that have been in the press a lot, and when we look at what our sort of natural market share would be is we feel we're below our natural market share in a lot of those industries. We feel a little bit less exposed than what otherwise might be the case, so that's sort of the top-down view. I'll give you a bit of color on the bottom up.
We went into our book and looked at, you know, some 2,000 credits, some 2,000 clients that we have and built it back up from, you know, so who's most directly exposed, who might have a little bit of exposure, you know, who's probably not that exposed. Because that oversimplification, if you go top-down, not everyone in these industries is exposed to exports. Not everyone in these industries is going to be affected. When we do that bottom- up, you know, we come to those, like the cohort of clients that are probably most directly affected. It's less than 1% of our overall loan book. So while it's not, you know, it's, it feels like a very manageable number, especially against the backdrop of a credit book that's performing very well for us right now.
You're speaking 1%, you're speaking specifically commercial clients here.
1% of the overall loan book.
Of the overall loan book. And so what about the, what's your view and read on the retail side?
Yeah, the retail side, I mean, it's early days on the retail side, right? And the expectation, it comes down to what kind of layoffs or what kind of assumptions are you making around economic growth generally, and then what kind of government support may or may not be there as well. There's a lot of, you know, at the moment, and it's difficult because it's so path dependent. It'd be harder for me to give you a, here's the impact on the retail side because it really is path dependent on, not just on what happens to the broader economy, but what the fiscal stimulus may or may not be and what the government, what the Bank of Canada does to interest rates as well in response.
So it's more of a guess on unemployment and sort of economic indicators. So 1% sounds, I think a lot of people here would probably say to themselves, it sounds like a surprisingly low number,
and I guess where that comes from is you, I guess you're just low on natural share and maybe there's an opportunity here. I don't know, but 1% does sound like an amazingly slow.
It's a conscious strategy. It's been a conscious strategy. You know, we've been quite purposeful in particular in the last few years. We've been quite purposeful about how we're building and where we're building our book, and you know, what new clients we're bringing on and how we're managing, you know, the inflow of clients, how we're managing our credit risk generally. And it's tied, again, very much to strategy, right? It's a deep customer-based strategy, client-based strategy in areas that we know well and areas in clients that we know well. You know, we're happy to go deeper in some of the other areas. We're being a little bit more careful.
And so then one might imagine that rather than it is turning into a credit risk for you, it's really gonna be one of growth. And so what's the early read on, and you know, we were coming in, we're coming out of 2024, 2023 with low growth in sort of mortgages, decent growth in commercial. What's the updated view on, on the, on the loan growth side of it?
Yeah, this is, feels like every answer I give you should start with the forward-looking indicator disclaimer before I give it to you because things are changing so rapidly right now. You know, when we came into the year, we were guiding to an improving outlook for loan growth generally on, on most products, not, not strong loan growth, certainly not, especially on the Canadian retail side, but better than what was a sluggish 2024. And that started to take place early in the year. It's kind of, it's slowed down a little bit since then. And the outlook for loan growth now and the outlook for balance sheet growth generally is a little bit more muted. What has been driving our, our performance over the last number of quarters and, and, on pre-provision earnings and, and on revenues has been a combination of three different things, right?
One has been the margin or net interest margin has been performing well. You know, we continued, and we can talk about it if you like, but we continue to think there's a tailwind behind us when it comes to net interest margin, a little bit dependent on the interest rate environment, but still looking for a positive on that front. The Capital Markets, we've, they've been a fairly constructive view. It's a business that we've been building and diversifying and growing in both Canada and the U.S., a little bit international as well, but certainly with a U.S. focus to our growth, and then the markets have been constructive generally. The markets being constructive have tied directly into our retail, the affluent and private banking strategy, private wealth strategy. We've had a good amount of flows.
So it's been market performance plus good flow performance. It's been a lot of fee income growth that we've seen on that front. So it's been those three have been the main catalysts while we've had a period of sluggish loan growth. You know, the market environment can be fickle. It's not been a great week so far. But on balance, it's still reasonably constructive for all three of those things.
And so maybe we can dive into these. I wouldn't mind zooming in a little bit on the net interest margin because we did see very good interest margin in Canada and in the U.S. So maybe we can talk a little bit first about Canada. And you mentioned tailwind. I believe you may be referring to the tranching, but is there any, maybe you can flesh that out first a little bit and then talk about how we can sort of position that for the rest of this year in this rate environment.
I mean, the hedging and positioning of our balance sheet, we take a bit of a longer-term view on how we manage for margin stability as best we can. And so when rates were really falling, the margin was hanging in reasonably well. It was coming down a little bit as rates really spiked in 2022 and into 2023. The benefit has been slow to arrive because again, that tranching strategy makes it a bit of a slower roll-on rate for some of these higher rates. We think that's gonna be a tailwind for us still. I mean, certainly based on the forward curve, it's got some room to run in terms of where things have been and where things are going.
The part that we don't talk as much about, I guess, or maybe we need to drill down a little bit on is a combination of business mix and pricing discipline. We're absolutely not pursuing a volume-based strategy when it comes to our retail banking business. It's a question of where is the right margin, where is the right volume for our core clients, where it's a relationship-based strategy, relationship-based pricing. We're happy to stand in and get squeezed a bit on a single product margin. But when it comes to some of the broader client acquisition strategies, it's just not something we're looking to lead with price. And that pricing discipline has been coming throughout our some of the more, you know, commodity-like products like mortgages. And then the business mix has been helpful.
So when we look at our strategy and the Money In side , the chequing account growth has been strong. You know, the credit card growth has been strong as well. A combination of our existing credit card book and our Costco partnership has been a great client acquisition engine for us, and so, you know, that's obviously a better margin product as well. And so it's been helping the net interest margin. So it's a combination of things that have been helping. The business mix can be a little fickle quarter to quarter. You know, you never know which product and what client's gonna do what. But the hedging and positioning is a tailwind that we expect to continue to have. So we're still constructive on margin for the balance of 2025 and into 2026.
And then we'll see where things go on, like I said, on mix and some of the other factors that are there. But we think it's still a constructive environment for net interest income.
Where are you seeing currently pressured margins where you're not willing to play?
Yeah. So, you know, the mortgage broker channel is one that we don't participate in in Canada. It's roughly half the market on mortgages, and that's just an area that we don't do a whole lot on. Mortgage margins have been better of late, but it's still not, you know, a very high margin product. As you can imagine, the credit risk embedded in these mortgages is not very high at all, and so the pricing is commensurate with that level of risk that you're taking. So it's the mortgage product continues to be one of those areas where we're not overly aggressive on price, and the GICs another one, right?
I mean, GICs, there's a couple that, you know, on the GIC and the mortgage, there's a certain part of the market where if you hang a rate on, on your window, you're gonna get some business coming in. The ability to, to deepen a relationship based on something that you attracted based on price, can be challenging though, so we try to avoid those as best we can.
For those of you in the room, Robert spent time in the Treasury Department of CIBC. I often go down this path quite frequently with them to discuss margins and outlooks and so on. And so on that topic, what are you seeing in the U.S.? We saw a pretty big bump in the net interest margin there quarter over quarter. What can you tell us about that?
The U.S. margin for us, it was 378 basis points in the most recent quarter. It's quite, you know, it's higher than what we would consider to be a normalized margin. And there's a couple of factors at play there. One is their deposit, our deposit growth has been quite strong. And part of that is seasonal, right? For companies with a calendar year end, we're expecting some of those deposits to find their way into whether it's bonus payments or taxes here in the next quarter, expecting some of that, those deposit volumes to come off a little bit. And the second is just the interest rate cuts that we saw in, from the Fed in, in the calendar fourth quarter had a benefit. There's a bit of a lag in repricing on some of the lending side.
A little bit of a stronger loan margin than we would otherwise expect. The margin's hanging in quite well. We would expect it to normalize, you know, kind of into that 360 range. The 350-360 range feels more reasonable for us. When you roll that all up together, the enterprise margin and the Canadian personal and commercial margin, we're still expecting that upward drift, notwithstanding the fact that the U.S. margin is probably normalizing a little bit for us here.
Do you see any instances in the U.S. similar to that of Canada where, you know what, it's not really a place where we wanna compete right now? The margins aren't really as wide as we'd like, or is that dynamic not really present in the U.S.?
Yeah, less so in the U.S. for us. I think the commercial business, and reminder, we don't really have any retail business of consequence in the United States, right? We're largely a commercial and private wealth business. The commercial banking business, I mean, it's always competitive. What you've found is as interest rates went up, some of those operational deposits got skinny down a little bit and became a little more interest rate sensitive. When rates were zero everywhere, there probably wasn't as much interest in moving out and locking in some of those rates. That's largely played out though, right? I mean, the growth in demand deposits has restarted for us on the commercial side as well.
So in the U.S., it's more just, you know, the focus on commercial and industrial more than CRE, the focus on, you know, adding good clients and deepening these relationships. The parallels between how we run this business in Canada and how we run this business in the United States, it's a very connected business and it's very much the same business model, deep relationship businesses where we can add, you know, the relationship component, add the advice, be the trusted advisor. And, you know, those tend to be a little bit less focused on the price as opposed to the advice they're getting. So the mix is more or less gonna stay sort of stable. And we're thinking that lag effect, maybe that normalizes the margin a little bit lower. And really, it doesn't seem like in the U.S.
There's as much uncertainty on the loan growth side, or would you think that there's also some level of uncertainty impacting your clients?
I don't think there's as much uncertainty. You can almost tell when you're, you know, when you're in the U.S., you have to look for news on tariffs. In Canada, you don't have to look very hard for news on tariffs. I, I don't think it's as much of an, an issue down here, but I, I wouldn't go so far as to say there's no impact on the economy in the United States, right? At some point, input costs are rising and some of the dislocation that this has the potential to create may become more significant. We're not seeing it in our footprint. We're not seeing it in our business. It's not as impactful.
I agree with you, but I wouldn't suggest that there's not gonna be any impact.
Moving away from the net interest margin, you did touch on the wealth flows and the affluent. Maybe you can just touch on what we're doing there and why this is an area of strength for CIBC. We've seen this now for the past few quarters in a row where you've had pretty good flows. Maybe you can touch on what you're doing there.
Yeah, we've, you know, our strategy really is to focus on that mass affluent and private wealth side. And that, it goes over a couple of our operating segments into our private banking and into our CIBC Wood Gundy, which is our full service brokerage as well. It's a part of the strategy that we've been leaning into from a technology perspective and from a people perspective. So we've been adding more advisors. Our Imperial Service channel, think of Imperial Service almost like private banking for a mass affluent client as opposed to a pure private bank, a bit of a differentiator in Canada. And it's essentially, you know, an affluent customer be able to pick up the phone and call a specific advisor that they have rather than just going into a banking centre and looking for advice.
And so those relationships and, you know, it's been a strong relationship building exercise for us. We've empowered those advisors with a better customer relationship management system. We've empowered them now with a CIBC GoalPlanner, which is a financial planning software. What you find when you do the financial plan, two things happen. One is customer service scores go up and we're quite proud of our Ipsos score. Second highest, I think our best quarter on record and our number two in customer service on Ipsos as of the most recent survey. The second thing that happens is to get an effective financial plan, they kind of have to tell you what they have. And so you get a better sense of what's outside the bank as well.
And so a combination, the combination of all of this has been leading to strong flows. We were number one in retail net mutual fund sales last year, on both a dollar and percentage basis. And so the leading indicators, like I said, the customer service scores are stronger. The leading indicators that the strategy is working are playing out. Now, you know, flows are always a little bit market dependent. It's been constructive markets as well. But as long as the markets are reasonably constructive, we think we can continue to outperform.
Can you just remind us the number of advisors you have in that channel and what your growth plans are?
Yeah, we've been adding, we've been adding gradually, right? The challenge with adding advisors too quickly on, on the, you know, they can be a little dilutive on year one until they get up to speed, right? So it's one of those things. There's a bit of a J- curve when you're adding advisors. To be honest, I've forgotten the exact, I don't wanna quote the exact number of advisors we have on, on that channel. I wanna say it's in the area of a thousand or so, but it might be a little bit on the high side. But we're, we're adding to the channel because it's just one that we see a big opportunity in.
This is a very slow structured ad as we go through.
Correct. Yeah, I mean, the, you know, our expense control, we try to keep an operating leverage, you know, an operating leverage construct onto expense control. So, all of these J curves, you wanna make the J curve investment so that then the next one you can make the J curve, there's, you know, revenue coming from the last one that you made. So we're trying to create that flywheel in a lot of different parts of the bank.
And so this leads me off into, it's 'cause we sort of walked down this whole sort of revenue opportunity for CIBC. We've talked about the margin, maybe lighter loan growth, strong flows. We've talked about cost control. It brings me to PTPP, right? Where we have seen very strong PTPP performance from CIBC. And so the question naturally arises is, you know, at what point can we see, or will we ever see PTPP growth slowing in the absence of really strong loan growth? Is it possible that we should think about PTPP growth as potentially slowing into 2026 unless we fire up the loan growth engine very aggressively? Or how would you sort of characterize that whole view?
Yeah, it's a fair question. Our pre-provision earnings growth has been, you know, above our target range for some time, right? Like we target seven to 10% EPS growth, which is largely based on seven to 10% pre-provision growth because you know, the cycle's gonna do what it does to loan losses. And so we've been above that range. So will it slow into the range? It's possible that it'll slow into the range. But the constructive markets, part of this is when we're relying on constructive Capital Markets, when we're seeing markets that are supportive on the wealth management side, you know, it's, that's one of those key ingredients. It can slow down. It's not gonna slow down for us. It may slow down for the industry. And so it's dependent partly on that, right?
The net interest margin, I think, under most scenarios, we see the continued tailwind behind us. Absent, you know, some collapse in interest rates, the pandemic era lows, we think that margin tailwind continues. The more market-sensitive ones, there is some, you know, some potential volatility that can come in those things. At some point, you know, and our view on volumes, it's not like we're completely sworn off of balance sheet growth. Our view on volumes, we wanna be in the mix on the core products. We'd like, there's some areas where we'd like to be gaining share faster, like the chequing account , the prime, you know, the primary acquisition, the primary chequing account growth, credit card growth, and a number of other areas that we think lend to that deeper client relationship, that better client affinity.
And so we're very focused on the balance sheet growth. And then the other areas where we're less focused, we just wanna be in the mix, right? We're not looking to be a material outlier. The strict, you know, when it comes to us and the execution of our strategy, it really comes down to balance. We're not looking to be first by a mile. We're not looking to be sixth by a mile. There's areas where we wanna win. There's areas where we don't wanna lose. And, you know, I think in most of those we're holding our own.
And before I get to talking about provisions for credit losses and all the fun stuff with IFRS 9, I just did wanna touch a little bit on Cap markets. So outstanding first quarter, really across the board for all banks, to be frank.
Yeah.
And what's the view now? I mean, we still got a lot of volatility, but is there a sense that this is slowing and should we think about Capital M arkets as being, I mean, Canadian banks always have a seasonally strong first quarter. So there's obvious expectation that, you know, it drifts a little bit into Q2. But what's the sense that is coming from Harry and his team?
Yeah, you know, Q, this, this quarter in particular, it was a record quarter for us in a number of fronts. And, you know, to Darko's point, Q1 is a seasonally strong quarter for us for a number of reasons. Then you have a constructive market environment on top of that. And I think the third ingredient that we had this time around was it was a bit of a slow October as people were waiting for that election. And that election turned into a bit of a clearing event. And a lot, a lot of, activity took place in November and December that was probably getting held back a little bit toward the, you know, the end of our fourth calendar of our fiscal fourth quarter. We think of this business, it's not just the market environment. We think of this business as a growth engine for us.
We're adding, you know, we're adding people, we're adding product capabilities into the United States. I mean, if you think about what we're growing here in the U.S., it's areas that we're strong and are comfortable with in Canada as well. Global Credit Finance , structured notes, you know, prime brokerage is a business that we do well in Canada and expanding in the U.S. as well. So it's a connected strategy north, south for us. So we continue to invest to grow in that business as well. We tend to target 7%-10% growth in Capital Markets, and that's, you know, what Harry would suggest, or, you know, the investor day, the last investor day we had, that was the number, and we continue to use that 7%-10% because we wanna grow it in line with the bank.
We're not looking to overweight or underweight the Capital Markets from here. The environment remains more constructive, I'd say, than normal, if you will. The idea that 7%-10%, as we look on a year-over-year basis from here, it's probably a little bit better than 7%-10% in the coming, you know, this year. And so if you look at, now I'm not sure I would run-rate a record quarter, and run-rating Capital Markets revenues and talking about the run- rate for Capital Markets revenues is always a challenging area. But if you think of that 7%-10% and maybe a little bit above on a year-over-year basis, that'd be more consistent with what we're looking to do. And then it does come down to the market environment.
In a more constructive environment, we'll be on the higher side and less so on the other side. Now, to the point on, you know, corporate activity generally, will there be some delay in some of the pipeline, some of the deal activity? I mean, it's possible, right? We haven't seen. It's tough to know for sure what's gonna happen where it feels as much as we've been talking about tariffs for four months. It still feels early days.
Great. And so let's talk a little bit about credit. So, you know, CIBC had higher losses, commercial real estate, those have passed us by. We're now sort of in your range, your PCL range, and, you know, things feel like they've quote unquote normalized, and yet we have all of this uncertainty. So maybe you can speak a little bit to the concept of, you know, should we be expecting a bit of a Stage 2 reserve build in the light of all this uncertainty? And how's your thinking now in terms of impaired, as you see the world evolving today and the actual impaired losses throughout 2025 and into 2026?
So maybe I'll start with the impaired story. We gave guidance on the Q4 call of something in the mid-thirties in terms of impaired losses. And that guidance had a number, that was not a blue sky guidance. That included some tariff uncertainty at the time, not maximal, you know, not maximal here is what's gonna happen, but the understanding that this could be a bit of a volatile year. We delivered 31 basis points in the first quarter and happy to say, you know, the lowest loss rate of the major Canadian banks in the first quarter. So we're quite happy with the manner in which, and you always, I don't, there's no wood for me to touch because when you talk about credit quality, you're always careful not to start chest thumping.
Things can change relatively quickly on you, but we're comfortable with the direction of travel on our loan book. We're comfortable with the credit quality that we have for sure. And I think for this year, again, having been the first quarter below the range, being somewhere in the range on impaired losses is still something that we're comfortable with. That guidance can always change as the environment evolves. But for what we can see today, we're still comfortable with our guidance. When it comes to the performing provision, you know, we took a bit of a performing provision in Q1. The idea was we're reflecting a bit more prospect that the downside scenario is a little bit more likely on January 31 than it was on October 31. That seems almost inarguable.
But I don't think to the extent, and this is where it comes down to duration and size and all the other things, we're hopeful that by the time we have to book our Q2 results, that we'll have a little bit more clarity. Either way, we're gonna have to do some work to figure out what the number will be. In a tariff environment, I think, again, it's, I don't think I'm saying much. I suggest there's gonna have to be some kind of a provision build to reflect that higher risk. You know, and at some point, you know, will it materialize or will the tariffs fall away? Like this is the challenge that we have in terms of the duration of how long this lasts.
But if this is the environment we're in, when it's time to report Q2 results, we'll have to reflect some of this in our numbers going forward. But the underlying credit quality of the book is something that we remain quite comfortable with.
So I have a couple questions left, but I forgot to ask. Is there anybody in the audience that has a question? If you do, please raise your hand. Happy to ask it. No? Great. All right. So given the environment, I mean, one of the things that we've seen with CIBC is we turned on a buyback and you're buying back aggressive. So how do we think about that now that the world's sort of turned on its head, got tariffs, strong buyback, strong capital, which is great?
Yeah.
Do you think we have to dial back some of the buybacks here? What's going on? What are you guys thinking?
Yeah. So, you know, coming into a period like this with a 13.5% CET1, 132% liquidity coverage ratio, a fairly low impaired loss rate and some good operating momentum, like we're not looking to just squander all of this and be oblivious to the environment. The buyback, you know, our approach to the buyback really is, again, I'm gonna come back to that word balance. We're not looking to aggressively buy back stock. It was at the idea, you know, we've got a 2% buyback on, we've purchased, we have repurchased 8.5 million of the 20 million shares we're authorized. What I suggested on our most recent conference call was we expect to deploy the full 20 million over time. We're not in a rush to do it.
The nice thing about a buyback is if the storm clouds arrive in a meaningful way, we can. It's a stroke of a pen to stop it and turn it off. Sitting here with excess common equity and the ability to support our clients through a pretty volatile period, that's job one, right? Organic growth is job two. To the extent we can deploy smartly into this environment, we're happy to do so. The buyback is just more to trim around the edges and manage, you know, manage our share count and manage the excess capital a little bit. We're expecting to use it, but you know, if we don't need to, we won't.
And then just lastly, so tying that all into the ROE and the ROE aspirations of CIBC, we did see a lower ROE target last year on account of the high capital requirement. What's the updated thinking on the ROE?
Yeah, we lowered the ROE target and promptly exceeded it. So, you know, I think it was a strong quarter in Q1. And, you know, we do think the ROE is in an upswing. We think the execution of our strategy, there's a lot of fee-based income, capital-like businesses, the operating leverage we anticipate continuing to deliver. We do think provisions will normalize at some point. As much as we're happy with a 31 basis point impaired loss rate for this point in the cycle, it was a 41 basis point total loss rate for the quarter. So we think there's opportunity for that to normalize and just being a little bit more thoughtful around optimizing our balance sheet as well. There's a number of levers that we think are at our disposal to continue the upslope on the ROE.
I don't think I would run- rate 15.3 the same way I wouldn't run rate the trading revenue this quarter, but we do think it's on an upward trajectory.
Okay. With that, we've got 20 seconds left, so we'll call it there. We could, we covered a lot of ground, so thank you very much, Robert.
Thanks, Darko. Enjoy the conference.