Good morning, everyone. We've now got Graeme Hepworth, Royal Bank's Chief Risk Officer. Graeme, thank you for doing this. This is-
Yeah, good morning, Mario. Good morning, everyone on the call.
Yeah, and thank you to everyone who's joining us for this session as well. This is an important time for our banks. You know, there have, there have been plenty of quarters, Graeme, where you, you haven't even got a question or very, you know, you didn't get a lot of airtime. I think you, you now know you are among the most popular people on these calls. Maybe let me just start with a broad, just a broad question first. What are the big risks that are top of mind to you today? And does the reduction in rates, the 25 basis point cut, does that mean anything in the early going?
Yeah, I mean, just to start off your, the big picture question there, Mario, you know, I've always kind of, for me, certainly over the last year, kind of bucket the big risks in three big categories. You know, certainly front and center is the macroeconomic environment and the kind of implications that can have on our credit profile and our credit losses. You know, it's been some time since we've really faced a proper kind of credit cycle in Canada. And so that is certainly kind of right at the top of the stacks and kind of, you know, what we're focusing on. I would say the second big bucket for us over the last year and but really kind of starting to now shift has been the kind of integration and execution risk.
You know, we've obviously been very involved in M&A over the last couple of years. Certainly, you know, HSBC Canada is kind of the headline there, but, you know, we've also had Brewin Dolphin that we acquired in the UK. We divested of I.S. Bank in Europe. And that's been a lot on our plate, and so there's been a lot of kind of execution risk, integration risk that we've been very focused on as an institution. And so that's been very front and center, but really now starting to abate, and kind of be, I would say, less of a concern going into 2024 and 2025 than it was over the last 12 months.
And then that third bucket that, that's kind of, you know, I think, harder to frame, but certainly is front and center, is what we would characterize as the non-financial risks, right? It is a more challenging environment. You know, cyber risk and IT risks are certainly front and center, but along with that, we would characterize third-party risks, so the dependencies we have on suppliers and the kind of cyber and IT risk they're facing. Financial crime is certainly front and center in this environment. And so, you know, that'd be the third big bucket that certainly kind of fills my day and fills my focus in this environment.
You know, to kind of then push into that first topic, that, you know, was really what your second question was about, is kind of the interest rate environment. You know, certainly, interest rates and interest rate risk, you know, is very front and center, but it is, to me, one part of the story, if you will, or one part of the, you know, factor set that goes into kind of our thinking around credit losses. It gets a lot of focus, and I get a lot of questions around, "Okay, now we've had a big, you know, rate cuts, and how immediate will the impact of that be?" Rates by themselves are critically important, but kind of go hand in hand with unemployment. They go hand in hand with kind of house prices and commercial real estate prices.
They go hand in hand with, you know, overall GDP, and it's really the confluence of all those that come together to kind of help form what we think is going to happen in terms of kind of the credit profile of our balance sheet. And so, you know, I think this is, you know, really an interesting part of the cycle we're in now, is we're toggling from kind of a rising rate to potentially kind of a, you know, at least a capping out on rates and potentially coming down on rates now. But by itself, it's, it doesn't change the story instantaneously overnight.
Let's talk about the mortgage market. It's everybody's favorite topic if you're a Canadian, particularly you're a Canadian in the financial services sector. I've held the view that mortgages won't be the problem, but mortgages certainly are causing a problem because we're, we're seeing some of this pressure in, say, personal loans, credit cards. But let's focus on mortgages first. Let's talk about how Royal's mortgage, mortgages or the variable rate mortgages, how they're different from your peers, and what, what have the trends been like? What's some of the experience in the variable rate side? Acknowledging that we haven't seen the big reset yet, we haven't seen the big renewals, but you've got some experience because interest rates have been high for some time now. So let's talk about the mortgage market with an emphasis on the variable rate mortgages.
Yeah, I mean, I think your starting supposition is a correct one, in my view. You know, when you look at our... First of all, variable rate mortgages, there's quite a wide range of how the different products work at different banks, and I would say we're kind of in the middle of how that works. You've got some banks out there that have a product that passes through interest rates as and when they rise or as and when they decline. You've got some banks that keep that payment fixed and, you know, don't really reflect the rate situation until they come up for renewal. And then we're kind of in that middle. Our payment situation is a payment stays fixed as long as it's covering interest.
If it gets to the spot where it can't cover interest anymore, payments instantly increase, if you will. And, and so you're absolutely right. So we, we've kind of had that rising rate cycle through kind of 2022 and into 2023. You know, the rate hiking ended kind of almost a year ago. And so now we've kind of got a, a year's experience behind us, and that's helping, you know, inform what we're expecting as we get into kind of the next wave of impact here, which is really on the renewal, the refinancing cycle. That is happening now, but we really expect kind of a, kind of more peak load there, the, the bigger risk there to kind of play out over 2025 and, and 2026.
You know, we have obviously rich information on our clients, rich data, rich analytics that we really collect on them. And that really kind of helped us as we went into this rate hiking cycle, really better understand kind of who we thought was most at risk for the rising rate situation. And you know, we have some tools, we you know, here internally, we references called payment-based capacity, which really helped us inform kind of under different rate scenarios, who would be most challenged in facing those payments. You know, obviously, there's simple stats like FICO and LTV that help inform it, but we obviously have some richer insights on top of that.
You know, that was what we really used going into that rate hike, hiking cycle to kind of really focus kind of where we thought the portfolio would be most at risk. And now over the last year, we're really getting the evidence to prove out whether our insights were right, if you will. And I would say that is absolutely proving to be the case. And so when you look at kind of the rising delinquencies that we've had in the mortgage business, it is really centered on kind of those mortgages we would call triggered mortgages, those clients that have had their variable rate payment reset.
But even within that, there's a subset of clients that we kind of label as our most sensitive clients, are the ones that we had identified that we're gonna struggle most with kind of these higher payment shocks or the level of payment shocks that they were facing. And so those are the ones that we're seeing flow through in the delinquency trends, you know, that are playing out right now in our mortgage profiles, increasing impairments there. And that's really, again, helping inform what we expect kinda as we come into the refinancing cycles. So we use that information for a lot of different purposes.
You know, we use that information to help inform our, our loan loss provisioning, not, not just our delinquent accounts, but that's, you know, part of the tool set that helps inform the kind of Stage 1 and Stage 2 losses as or pre PCLs we take in advance of kind of the, the future loan losses. But that likewise helps inform right down to the account level, kind of what we call the triage. Like that really helps identify who are those clients we want to get to early, so we can kind of engage in that kind of advice conversation with them and help, help them ensure that they're on the journey and they're preparing as necessary for, for that that increased payment that could be coming in a year or two years from now.
And, and so it's, it's a really important and valuable tool we've used, and I would say the things overall there are playing out, you know, very consistent with our expectations based on kind of the data and analysis, we're facing. I, I would just, again, to kinda highlight your earlier comment, though, like why we see this as very manageable in the mortgage book, but more, you know, really as a transmission mechanism into broader kind of economic implications. When you take that mortgage book and you kind of parse it down a little bit, like when I look at the stats of like... Let's look at the median client. You know, 50% of our mortgage clients are gonna face payments that are kind of in the CAD 300 or less category.
You know, this represents, I think our stats are about 3%-4% of the origination income. You know, the LTV on that side of the book is less than 50%. Like, that broad swath of clients has a lot of options at their disposal, has a lot of capacity at their disposal when it comes to that renewal point. And so it's really more of that kind of fifth percentile, if you will, that, that kind of those set of clients that are facing those biggest payment shocks, which were typically done kinda at that point in the cycle where house prices were at their highest, interest rates were at their lowest, and so those are the ones that are facing the biggest payment shocks.
You know, but to give you context, that kind of cohort, we see those payment shocks that are still in the kinda 8%-10% of origination income, and so it's still, you know, not outsized against a dynamic where you've seen incomes rising in the roughly 20% over that period, right? And so there again is a lot of resiliency in the book. Even that cohort, you know, you'd still have an LTV that's in the 70s. And so there's a lot of, again, a lot of resiliency there that I think will support that clients and their ability to kind of manage through this kind of increased payment environment.
But nonetheless, that's gonna come at a cost as they're gonna redirect more of their cash flow, more of their household, you know, disposable income to, to service their mortgages, and that has got knock-on consequences of the broader economy. And so that's why we worry more, or not say more, but we worry equally about the consequence that'll have into unemployment and GDP, you know, and then, and that's the pieces that you see accruing more into your unsecured lending products, into your commercial lending business, etcetera.
And so that's why, you know, on the call, and I think pretty consistently for the last kind of 6-9 months, we've been certainly highlighting to everyone that we really see the unsecured products being more the drivers of our loan loss provisions, certainly through 2024 and early 2025, more so than a mortgage product. We'd certainly have to get into a much more acute environment to really see more of the losses in the mortgage portfolio.
So I've always argued that mortgages are such a big part, an important part of the Canadian bank balance sheet, that we have to get that right. The banks have to get it right. They can't sit on their hands, the regulator can't sit on their hands. Borrowers, mortgage borrowers can't sit on their hands. So again, it's not that I'm dismissive of the risks on the mortgage market, it's just that the consequences of getting it wrong are so bad that we, that everybody's very proactive when it comes to getting the mortgage market right. But now let's switch gears into the part you were getting into a little there, which is the unsecured market, and, and maybe not purely unsecured. Let's talk about that category that we call personal loans. I'm thinking auto loans, lines of credit, installment loans, credit cards.
I think for Royal, that might be 10 or 12% of your Canadian balance sheet. Would that be right?
I'd have to do the math.
Yeah.
It sounds roughly right. I'll check the numbers on that.
Yeah, it's about 10%-12%. I can sort of endorse that. I've done the work myself to make sure that I've got that number right. And the reason why I bring that number up, 10%-12%, is because it's not 50%, but that category of loan loss is really starting to move. We've seen that go for... This is industry stats, from 70 basis points or so a year ago, to 125 basis points today. So help me think through, what's your best feeling on this? Could this continue to ramp up materially over the next few quarters, maybe the next year? That's what a lot of us are grappling with on the sell side and for investors.
How much longer will this continue to move higher before the benefit of rate cuts sort of calms things down? Can you help me think through that?
Yeah, certainly agree there. The trajectory, and I think we've been kind of communicating and forecasting that, you know, what's gonna drive overall PCL at RBC is really, you know, on the retail side, you're gonna see those unsecured products and exactly the products you mentioned driving those losses. We have seen those already accrue and kind of normalize, if you will. But there's still more room to run on that. And, you know, well, the mortgage side, the conversation there tends to center more around rates and kind of how rates will influence kind of outcomes there. Certainly, on the unsecured products, you know, more directly, it's really comes back to a lot to the unemployment story.
I see.
You know, while unemployment is still at very healthy levels in Canada, when we talk about, I think 6.1% or 6.2% was the last print in Canada. And so those aren't high levels per se. That's kind of getting back into more normal ranges in Canada. What is more, maybe critically important that's driving loan losses is the fact it's a change in unemployment that we really center our attention more on. And when you think about where we've come over the last year, we've moved from what was kind of all-time exceedingly low levels of unemployment when we were kind of near 5%, 5.1%. You know, so we've seen a big tick-up in unemployment in Canada over the last year.
I would say it's come in slower than we originally had anticipated, but it has come in. And when you look at our kind of go-forward forecast there, we are still projecting that unemployment is gonna get to that kind of 6.5% level. I think we're, you know, I think we're forecasting that'll kind of hit that peak around Q3 of this year, and then maybe kind of abate back to kind of where we are now, is kind of more the steady state norm, assuming we can kind of find that kind of soft landing kind of space right now.
You know, and so until we kind of peak out on unemployment, you will still continue to see those kind of consequences flow through into your unsecured products, as kind of the driver there, more so than interest rates. Obviously, as interest rates kind of pull back, or if they do pull back, that will have those indirect benefits that may, you know, abate or even further slow down some of those unemployment consequences as businesses feel more confident and they're taking different actions, in terms of their employee bases. But that is the metric, you know, the piece that kind of we track through. 'Cause when we look at kind of those unsecured products, we're seeing kind of those, what we'd call the flow delinquencies and the flow losses have more normalized.
But what's really kind of been stronger than we had anticipated is kind of those insolvencies, type situations that usually are more tied to those big life events. "I've lost my job," type of life event, right?
Yeah.
So that's kind of helped slow that rise there. Obviously, it is increasing, but that's the part that we still see, you know, will play out further and will have implications into the unsecured products, more so than the secured products.
Mm-hmm. Let's flip over for a moment. So another bank. We just been through reporting season, another bank sort of surprised the street with uncomfortably high losses in their corporate and commercial book. The gross impaired loan formations across a number of loan segments or sectors were elevated, and it served as a reminder that these things are hard to predict on the corporate commercial. It's very different from retail. So what I, what I'd like to get from you now is, how do you feel about the big sectors, the big segments of your corporate loan book? Commercial real estate, wholesale trade, financial services. Are there any segments that are meaningful to Royal, that you would draw our attention to over the next little while?
Yeah, I mean, if you go through that, I think there's a few effects there. There's sectors, and I would also put regions in the mix there, Mario-
Okay.
'Cause we're certainly seeing some different dynamics play out in the U.S. versus what we're seeing in Canada. But we start there with commercial real estate. That is certainly the sector that is front and center. You know, it's obviously one of the biggest sectoral concentrations on our balance sheet. That would be true for every bank. It's, you know, it's a critically important part of the portfolio, critically important part of the economy. And there's a lot of different dynamics at play there. You know, certainly, the higher rate environment is a common headwind across all the sectors within commercial real estate. But I think as I've said before in kind of any discussions, rates by themselves aren't typically what's gonna cause big harm in that sector. Again, we've underwritten those portfolios.
I think standards there have been very good, mindful of kind of a through-the-cycle approach. It's where you start to see kind of multiple headwinds hitting at the same time that I think start to present more acute challenges. And that's why office really comes front and center, 'cause yes, office is facing the same kind of higher rate environment that every sector is, but it's obviously facing this, you know, this quite significant behavioral dynamic where, you know, people are working from home more. There's a lot of vacancy and availability there, and, you know, a lot of uncertainty as to kind of how that'll continue to play out over time. So, you know, within commercial real estate, I would say office is still continues to be front and center.
That's not a kind of a new issue or a surprising issue, but I think as we said, going back to kind of the as we emerged from the pandemic, it's not an issue that plays out overnight, right? It's gonna be an issue that plays out over time. You know, a lot of the leases that support those borrowers are 5, 7, 10-year leases, right? And so until those come up for renewal, the owners of those properties have to address the situation through because of a refinancing, those are gonna take time to play out. And you know, we're seeing our portfolio impacted. Certainly, the impact has really played out more acutely for us south of the border than it has north of the border.
Let's say there's a lot of different factors that kind of say why that's the case. It's not to say that Canada is immune for some reason to kind of the offices in the commercial real estate sector. You know, but you do have an environment in the U.S. where, you know, it is a higher rate environment than what we're facing in Canada. Kind of the, the structure of the market is a little different there. We have far more guarantees in place in Canada, some more mitigants at the kind of borrower level that, that you'd see in the U.S. Obviously, you have a loan supply challenge in the U.S. that you don't see quite the same in Canada, with all the regional banks who are a big source of, of, financing that sector, having pulled back in a significant way.
Then I would just also say, not in the banking side, but just in the development side, it's a less regulated sector, so you tend to just generally see more boom and bust. You have more risk capital available to support that in the U.S. So there's a lot of different factors that come into play, and that's why, you know, we're seeing more of it play out in our portfolio, at this point in time. In fact, you know, I think, when I look at it, I don't think we've had any meaningful defaults in our portfolio in Canada, and it's all kind of meaningfully played out south of the border. But it will come in chunks, as you say.
Like, the wholesale book, the corporate book, doesn't have that kind of granularity you have in retail that kind of, you know, creates trends in the same way. And so it'll come, you know, a borrower will default one quarter, then you might not have something for another quarter, and it kind of will come and go in that sense. You know, when I look at the office sector and kind of defaults we've had there, I think over... Since the rate hiking cycle began, I think we've only had four meaningful defaults in that, right? And you know, so it's not like it kind of comes and there's 10 and 20 in each quarter, and they kind of all add up and become very predictable in that way. You know, so that's commercial real estate continues to be front and center.
Office within that continues to be front and center. You know, but it isn't just office, and we've provided some disclosure on that. We've had some challenges in the multifamily sector in the U.S. I would say that's a little bit more pocketed. I don't think the headwinds there are as broad-based as maybe what the office sector is facing. You know, where we've kind of have faced challenges in our multifamily portfolio are really, I'd say, tied to some socioeconomic challenges in certain cities in the U.S., and that's kind of trickling into kind of all asset classes in those regions. And so for us, that's really been around San Francisco area, as kind of the decline in the tech sector.
Investment in the tech sector kind of caused a lot of pullback in San Francisco. Some of the social issues in the city there have really kind of affected all valuations in the city. And then on top of that, you've got the, you know, remote work and interest rates all coming together to create some of those challenges. We think that's played out more for us, more so. But the rest of the sector will continue to see that play out. If I extrapolate beyond office, because I'm sure we could spend talk about commercial real estate for a long time.
When I look at the Canadian portfolio and what's happening in Canada more so, we're not really seeing commercial real estate play out as kind of a real meaningful contributor to kind of loan losses at this point in time or, or new impairments. Really, I would say in Canada, it's, it's more broad-based. It's, it's more, I would say, tied to supply chain kind of consumer service sectors. You're seeing those kind of sectors that are driving kind of delinquencies and impairments more so. That tends to be more smaller, like we're seeing that, you know, play out in our kind of smaller commercial, small business type of portfolios, more so than kind of the larger commercial and the corporate side of it. You know, and so that's more manageable, a little bit more predictable.
Doesn't kind of contribute to some of the same lumpiness that you might see in the corporate side or our U.S. portfolio, which tends to be more slanted towards the large, large corporate. But those are the sectors that are suffering more, and those are kind of a tale from the pandemic in some sense. Some of these businesses, you know, struggled through the pandemic. They've been pulling kind of every lever they can, and eventually, you know, higher rates and other factors have just kind of had them kind of run out of steam, if you will. But likewise, some of the more recent, you know, challenges, higher labor costs, higher interest rates, slowdown in demand are what's trickling through into the book there.
You know, so a couple of different factors at play, depending on, I think, on the kind of, you know, which region or portfolio we're looking at.
I'm gonna move away from credit risk in a moment, but I want to make sure I think I understand what you're suggesting here. On the retail side, mortgages, these loan to values are great. We're probably not gonna see a lot of losses there. Unsecured personal losses will continue to move higher. Whether they peak in Q4 or Q1 or Q2 or later will depend on the direction of interest rates and unemployment. And the issue on the corporate commercial side, you would have us focus more on the US than Canada, and I think the answer there is, unless there's a hard landing, you're suggesting that what we'll see is idiosyncratic, episodic losses, but not a hard cycle.
Unless, of course, there is a hard landing in the economy, in which case those losses could move higher. But for now, you'd point us more to episodic, idiosyncratic losses. Is that a good summary of the credit story?
Yeah. I don't love using the word idiosyncratic. I think overall, yes, on that last little bit, I don't love using the word idiosyncratic. I mean, there are core drivers that are causing kind of these-
I see
... borrowers to default, but I don't think they're happening en masse. You know, on the large corporate side, we have been experiencing, I would say, more elevated loan losses there over the last, you know, 18 months, if you will. And that has been-
Yeah
... more around that commercial real estate supply chain type of stories. And in Canada, yes, we are seeing, you know, I would say some growing losses there, not supply chain, but much more on the smaller of the book, which, you know, is a bit closer to some of the features of retail, a little bit more predictable, a little bit more-
I see
... kind of trending, if you will. Mm-hmm.
Okay, so let's focus on something a little different. Every time a bank does a big US deal, I always sort of brace myself for something to go wrong because it's different down there and it's not our home market. But the last deal Royal's done is this HSBC Bank Canada, and from the outside looking in, that integration looks like it was quick and effective, and it certainly showed up that way in Q2. Now, it's just one quarter, but from your seat as the Chief Risk Officer, were there any interesting or unique risks that you had to cope with in this acquisition of HSBC Bank Canada?
Yeah, I mean, I would look at two things here. Like, whenever you're doing something like that, kind of right front and center, obviously, is asset quality, client quality. What are we buying? How confident in what we're buying? You know, I go back to the due diligence we did back, whatever that is, in fall of 2022. Like, the diligence we did there was very deep, right? I mean, we had large swaths of our credit teams and other teams that were brought in to bear. And, you know, not only do very, I would say, traditional due diligence of going in and sampling files and re-underwriting credit files and making sure we understood exactly kind of what was going on there.
But we were able to gather enough data off the loan tapes there to. We actually ran it through our stress testing engines to understand how this was gonna affect our overall risk profile. You know, and so those kind of things were quite extraordinary to undertake in a diligence. But, you know, just a great reflection on kind of the great tools we have now and how kind of proficient we've become with those tools. You know, so when you roll forward then into the actual acquisition, I would say at that point there was, again, you know, confirming that that asset quality was really what we understood it to be in due diligence. But given the level of diligence we did, I would've been surprised to be surprised, if you will.
But the other big thing that was very unique here, certainly from a risk perspective, was this, you know, close and convert, right?
Right.
I mean, typically, when you buy something, you know, you pin the financial close, and then you spend 6, 12, 18, 24 months-
Right
... you know, integrating all your systems and processes and policies and entities and all the rest of it. You know, this whole idea that we were going to close, you know, HSBC wanted to, and we agreed to close on 1 weekend, you know, and integrate everything on 1 weekend, was quite an undertaking and quite unique. And so that really moved to the top of the stacks in terms of risk concerns. It's just that integration risk, that execution risk. Now, having gone through it, and this is where, I guess, size and scale matters, you know, we were literally able to throw thousands of people at this. And we're working on this constantly through the, you know, whatever it was, 18 months leading into that close weekend.
And just some tremendous, you know, efforts across the piece. The whole structure was set up during that 18 months. You know, we went through a series of what we call dress rehearsals and business runs on that, kind of real live readiness events on that conversion weekend. And so when it came to that actual weekend, I think, it was an incredible outcome that was achieved, that we were able to bring all that over onto our systems, our policies, our processes in one fell swoop. And so getting through that kind of integration weekend, that execution risk, and doing that as successfully as we did, certainly was, in my view, the biggest risk we were facing and, you know, we're able to execute on very well.
You know, so since then it's actually facilitated then on the back end, a lot of great outcomes because now, you know, for example, we just went through the quarter end there, and we had to set, you know, IFRS 9 provisions on day one. We weren't doing that, you know, dependent on their models, their ratings, their policies. That was now all inside of our systems with our ratings, our data, our methodologies, our approach. And so, you know, certainly one of the big numbers that we put out there in Q2 was to have, you know, we had to establish this IFRS 9 allowance. You know, it's an acquisition of loans, and so we have to put a Stage 1 allowance on everything. That was entirely based on our infrastructure doing that, right?
That's the benefits from the risk perspective, on the back end of that, is now it's a much different kind of control situation than that. I mean, I think from an asset perspective, as I commented on the call, now that we've been able to go through the portfolios and understand things like we just did, look, you know, now we've kind of got them mapped into our products and our systems, understanding kind of their refinancing risks and their mortgage portfolios and their client profiles and their wholesale portfolio, et cetera, it is very much as advertised. It was very much what, you know, we understood that we were buying and what we had looked at in due diligence, and so I wouldn't say there's surprises on that front.
You know, there's some new capabilities that, you know, that we built as part of this to, to ready for this, that kind of... We're in areas that were new to us, but were areas that, you know, they did more or maybe their product breadth was a little deeper than ours. I think about things like trade finance, as an example, or on the consumer side, obviously deeper into the international client base. And so, you know, we've been enhancing some of our capabilities to, to take a hold of some of what they had built out on that front. But I think we're in a very good spot, having kind of taken that on and where we sit now, you know, versus I think what you would normally be looking at, at this point, following an acquisition.
Okay, we've got a minute left, but I do want to just touch on one quick topic. Can you give us any indication as to Royal meeting the requirements of the consent order? Are there any issues outstanding? Are you essentially done? Does it feel good?
Well, we can never comment directly on the consent order, Mario. I mean, that's just anything from a regulatory perspective is considered private information with the regulator. But listen, at the end of the day, what we're trying to accomplish around that is really about just enhancing the risk and controls and governance capabilities around City National. And you know, what our regulators want, what we want as stewards of this organization, is to have a really strong, well-risk-managed organization. And you know, we're. So this is really about kind of leveraging and integrating much more so with the rest of RBC, leaning into, you know, the tools and capabilities we have. We originally stood up that program, starting a couple of years ago, and so we're certainly well progressed in that.
You know, we'll continue in the months and years to come on that. And so this... It, there's been a lot of great execution on there. There's still more to come, and I think we feel pretty good about the path we're on.
Thank you, Graeme. We're gonna end it there. Thank you to Graeme and everyone who joined us. Appreciate you taking time today.
All right. Thank you. Thank you, Mario.
Thank you.