RBC Capital Markets Canadian Bank CEO Conference

Jan 10, 2022

Thank you, and thanks for tuning in again, everyone. Before we begin our next session, I would just like to remind you that Dave McKay's comments today may include forward-looking statements. Actual results could differ materially from forecast projections or conclusions in these statements. Listeners can find additional details in the public filings of the Royal Bank of Canada. With that, Dave McKay is with us, the CEO of RBC. Dave, welcome to the conference. Morning, Darko. Good morning. Nice to be here. We just had Peter from the regulator up. We spoke a little bit about a lot of things actually. Sounds like, to me, we should be preparing ourselves for potentially higher capital requirements down the road. Not imminent. In the case of Royal, I think you ended the year with a record high capital ratio. I think it was around 13.6%. So you're coming from a position of strength. But I also seem to remember that in the distant past, I think I remember, correct me if I'm wrong, that you maybe thought about running the bank around an optimal level of around 11% common equity Tier 1 ratio. In light of what we just heard, do you still think that that's an appropriate level to run the bank, at least in the shorter term? I guess more to the point, can you even get there, in the shorter term with that much capital that you have? It's nice to have capital, that's for sure. It's an incredible strategic asset. How do you get to 11%? Maybe that's the important way to start. The 11% reflects basically an operational cushion above the regulatory construct. The regulatory construct is well developed, well thought through, a 4.5% plus 2.5% plus DSIB, DSB buffers that get you to a 10.5% regulatory minimum. Therefore, because that's well-constructed, because we test against that, we stress test in different scenarios, severe scenarios, moderate scenarios, we're always looking against that. It is a well-developed construct and entity. Therefore, we think that's prudent capital for the system, and that's how the regulators set it. Therefore, maintaining an operational cushion above that is how we think about setting the overall capital targets and resiliency for the organization. Therefore, that's how in the current construct, we get to roughly 11%, a 50 basis point cushion above the 10.5% regulatory minimum. I think from that perspective, I think that's how we think about it. That's how we think about excess capital. Doesn't mean we'll run the bank there permanently, but means as we think about deploying capital, what's excess, what is required. So that's how we think about it. If there is a change to the regulatory construct, as you heard this morning, that there is additional buffers coming in, then we would maintain an operational cushion above that buffer. Specifically to climate risks going forward and stressing against climate risks, as the superintendent referenced, this is a journey. We're just learning how to measure climate and greenhouse gas emissions in our portfolio. We're just learning things, trying to understand inherent risks and volatility. This is an evolution. We do not even have a clear strategy in our country for how we are going to make the transition to net zero. Therefore, what we do know is we need a significant amount of capital in this country to make that transition. Therefore, as we think about prudential regulations, we think about policies in this country to enact this journey on the supply and demand side of energy and GHG emissions. We need to think about global competitiveness, and we will have some tracking upwards of CAD 2 trillion of capital into this country. So we are on a journey. The journey has uncertainty. We are learning. As the superintendent referenced, it is going to take some time to learn. We are going to apply those learnings to enhance risk management capabilities, enhance measurement capabilities. How that produces a future buffer will be determined, and we will maintain a regulatory or an operational cushion above that. But I do want to stress that maintaining competitive policies, competitive capital structures, competitive tax structures in this country is essential to maintaining a prosperous Canada and a competitive Canada into the future. Thank you for that. Just to think about how RBC might get their ratio lower, one, obviously, you have got a normal course issuer bid, and that is all fine. I do not think that takes a massive bite in this year. Strong capital ratio. Can you just remind us about what you look for inorganically? If an opportunity presented itself, would you draw it down aggressively to pursue some sort of an acquisition? Yeah. As we think about where growth is going to come from and how we are going to use capital, we have a significant opportunity to grow organically. We talked about that. We talked about it in Q4 call. As we look at more capital-intensive businesses like commercial, like credit cards, corporate banking, growing organically, that is our primary growth mechanism. We also have a number of very successful ventures that I am sure we will talk about that require scaling capital. We are going to invest in those. So there are a number of areas for us to deploy organic capital to grow. Having said that, in the last quarter, we generated over 40 basis points of organic capital to fund that. So we do have a significant amount of excess capital by any definition. We started returning that capital, as you've seen, to shareholders through our share buyback program, and we're going to continue to do that. As far as the strategies remain on course, and we're going to continue to do that, notwithstanding the discussions today, and we'll adjust to whatever changes come at us. As far as inorganic capital deployment, we continue to look for opportunities that provide accretive growth to our shareholders that are in the space of wealth distribution versus more manufacturing. Wealth distribution in the U.S., we continue to look at wealth distribution in Europe to enhance our European and global wealth franchise commercial in the U.S. All of those are areas that we would like to scale growth. We're not missing any capabilities. This is about scaling into new geographies, in the U.S. it's about scaling capability. Therefore, we're very selective. The opportunities are significant in those target areas. Therefore, our real focus in using inorganic capital to grow is really in industry verticals, whether it's healthcare vertical, whether it's the entertainment vertical, whether it's the technology vertical. Acquiring technology companies like we've done in Canada, like we do in the U.S., particularly in entertainment. FilmTrack, Zach, were examples of accelerating client growth through platforms that come into your organization and are able to provide ancillary services to your financial services that bring customer base in and accelerate growth. For us, that is a really exciting way to grow, particularly in the healthcare vertical in Canada, in the U.S., where as an example, Dr.Bill is a billing service for doctors. We have over 3,000 doctors on that platform right now. We expect to scale that to 8,000 doctors, and we're cross-selling them into private banking customers as we go at a very strong rate. I think from that perspective, that's how you should think about us deploying organic and inorganic capital. We don't need it to meet our growth targets and to meet our performance objectives. Therefore, we're very selective, and the properties that we're after are high-quality properties, and they're expensive right now, and therefore the financials are challenging. I keep reminding all our shareholders out there that there is no half-life to capital. You can only misspend it. You can't lose it, and therefore you have to be very careful in deploying it there. I see a pathway through our organic capability, through returning capital to shareholders, through some very selective, probably smaller acquisitions to continue to meet our medium-term objectives and outperform on TSR in the marketplace. You touched on in your discussion there on the wealth potentially being an inorganic sort of way to deploy capital. In 2021, you had very strong client asset growth in Canada and in the U.S. Wealth Management, actually, frankly. Maybe you can speak a bit more about what drove that growth and can you touch on that, the overall wealth segment and the coreness to your strategy of wealth, please? Because when we hear that you may want to add to it, we want to just know a little more, I guess, on the wealth business and how a CEO thinks about it, particularly from your point of view. I think our wealth franchise in Canada and the U.S. is one of the crown jewels of RBC. It's a high ROE business that we've been able to grow at an accelerated rate and outperform in both marketplaces in Canada and the U.S. In Canada, it's a 50-plus % ROE business when you combine distribution and our fantastic asset management business. Again, in the U.S. because rates are low and deposits drive a bigger part of the income stream in the U.S. that ROEs are at 20%, at cyclical lows, but they will certainly go back up when rates increase. But still 20% is well above our targeted medium-term range of 16-plus %. Therefore, you look at a high ROE business with an attractive low volatile client. You have certainly market risk volatility in your earnings stream, but you've got low credit risk when you do cross-sell mortgage product, credit card product, operating lines to secured operating lines to your client base. From that perspective, high ROE business, very attractive low credit risk, low volatile customer with an ability, particularly we've demonstrated in Canada, to have accelerated above-market growth. When you look at our Canadian asset management and Canadian broker-based business, fantastic volume performance. When we look at retail flow, which is the higher margin flow compared to institutional flow, we've achieved anywhere upwards of 30% of the industry's retail flow among our competitors. I think from that perspective, the deep distribution capability combined with best-in-class manufacturing and Lipper Award-winning family of funds, I think 85-plus % of our AUM beats its benchmark. We have outstanding manufacturing combined with end-to-end leading distribution, the number one broker capability under RBC DS. You've got a fantastic discretionary asset management capability in PH&N. You've got the number one branch-based commission sales force and branch-based financial planning sales force enabled by the number one tool in the market in MyAdvisor. You look at the depth of distribution with manufacturing, that produces an incredible cross-sell and client experience, and that's where your 50% ROEs come from. In the United States, we're the number seven broker, and at number seven we have over CAD 700 billion equivalent in AUA. That's greater than the number one position in Canada. You can see how large the U.S. market is, the number seven position and growing significantly 14% compounded AUA growth over the last five years at the 20% cyclical low ROE increasing, generating close to $25 billion of sweep deposits for us, much of which goes on to City National to fund the greater organic credit growth there, acquiring new product capability and acquiring teams from our competitors. So you can see why I am so excited about our Canadian and U.S. wealth franchise to grow disproportionately, to drive higher ROEs, and to outperform in the marketplace. A very important part of our investment thesis. I could spend more time on that. I wish I could. Very interesting statistics there. Thank you for that. Maybe moving on to some other parts of the fundamentals of the business. One of the things that we saw in the last quarter was a bit of margin compression, in your net interest margin, all bank and in the P&C business. Maybe you could touch a little bit on how you are going to manage the interest rate sensitivity here going forward. Really what I get from clients a lot, what I get from investors a lot is, we are not looking at a one-and-done kind of scenario. We are looking at one interest rate increase, probably followed by another, and then maybe even another. How do you manage the how do you think about net interest margin or interest rate sensitivity? How do you think on managing and what should shareholders be expecting in an environment of rising rates throughout 2022? I mean, the core capability you need to really drive interest rate sensitivity is a core operating deposit base, a low-cost deposit base. When you look at our Canadian business and a very significant core operating base on both the consumer and business side, and you look at the United States, you look at City National, where 50% of their deposit base is non-interest bearing. That is the foundation. We invest those deposits into interest-bearing consumer and business loans. Those are two assets. That focus over the last two decades in growing core operating accounts to core operating customers, when many of our competitors weren't, is the asset. Therefore, that asset is undervalued today. How does that asset react to a change in rate environment? I will give you a couple of scenarios. Under a flattening curve scenario where the short end of the curve moves 25 basis points, you have roughly, in Canada, CAD 85 million of interest rate income, pre-tax. In the U.S., roughly USD 75 million for each 25 basis point increase at the short term. That is probably what you are going to see first over the coming year. We think there is at least six rate increases, both in Canada and the United States, roughly 130 to 150 basis points. The market is saying 130. Our forecast is 150. Therefore, if you think about it coming all at the short end and we flatten the curve, that is how you should think about the combined roughly CAD 85 million plus USD 75 million of sensitivity. That is U.S. dollars. USD 75 million plus CAD 85 million in Canada. A lot of banks choose to disclose what a parallel shift looks like. Therefore, you do not see parallel shifts that often, but you do see a parallel shift across the curve of 100 basis points. To quantify our interest rate sensitivity, that would be combined Canada and the U.S., roughly CAD 570 million in Canada with 100 basis point shift across the curve and another USD 350 million in the U.S. You are looking at over CAD 930 million, CAD 940 million of interest rate sensitivity for RBC with 100 basis point parallel shift in 12 months. So that is a very significant interest rate sensitivity driven by the core assets that we have invested in and the structure of those operating businesses. So that is a real strong earnings driver for us. I think it is underappreciated in the market how interest rate sensitive our balance sheet is, particularly in the United States in US Wealth and City National. Now, one of the things with interest rate increases and higher net interest income is— I think you kind of alluded to this, that when we think about your expense base, so you want to let this flow to the bottom line more or less, right? But we are also in an area very high inflation. You had guided to, I think, low single-digit growth in expenses for 2022. Are you rethinking that? Or how should we think about expenses now in a rising rate environment with very high inflation? Are you suggesting you can keep it so low because you have ripped out some costs somewhere, you have digitized, or is initiative spending being drawn down? Can you give us some thoughts on expenses in 2022? We've been on an expense management program internally. We call it zero-based budgeting. It's not something new. We're in our third year of really going from the bottom up and looking at all our expenses and making sure that we are allocating. We've reinvested a number of the savings, and I think that's part of the success factor that's allowed us to outperform on the volume and customer experience side, is to continue to invest those savings in new customer capabilities and making sure that our customer experience. We're number 1 in J.D. Power in Canada because we've invested in the customer experience. Having said that, we see our investments have accelerated past many of our competitors. We feel good about the value propositions we have. Our customer satisfaction numbers are really, really strong, and therefore, there is an ability to slow down some of the investment. There is an ability to continue to take out costs as we focus on that zero-based budgeting and reallocate them. So notwithstanding that we are in an inflation environment across all the markets that we operate in, we do feel strongly given that we're continuing to take out cost, we've continued our investments, we can slow some investments. We really think it's important that we drive out performance in the bottom line over the coming year and years. Therefore, we feel very good about maintaining a lower single digit NIE growth with strong operating leverage. I know it sort of dovetails into scale. I know you've been a big proponent of scale. If there's one area of your business that you could point out where we should see the benefits of scale continue to flow through, would it be the Canada P&C? Am I safe in saying that? Shouldn't we see more and more of it as we go forward? So I'm thinking beyond 2022. The more you grow, I don't know if we're targeting certain efficiency ratios or what have you, but can you give us an idea of where and how much evidence of scale we'll see from RBC as the years progress? First and foremost, I think you've seen a lot of benefit of scale. While it hasn't translated into the bottom line, the benefit of scale to date has allowed us to build out number 1 or number 2 franchises in just about every business we compete in. So we're investing across the spectrum in capabilities that allow us to cross-sell, allow us to drive, outperform on customer volumes, that allow us to maintain a premium customer experience, that allow us to drive market share. And have a number 1 or 2 franchise in that capability, which is really important to the overall investment thesis. We've been able to do that sequentially. We haven't had to make trade-off decisions. At the same time, we're the only bank in the Canadian set that's really invested in the next generation of the competitive set, which is a ventures capability, which is creating those ancillary services, those deeper market experience, broadening the value chain. All that has not come at the expense of growth or customer experience. All that is additive. I look at it almost, the scale benefit is the free option you get on this very exciting ventures journey. You probably saw Mydoh on television over the weekend. OJO, which is our home search engine is already referring a significant number of mortgages. Ownr, our small business engine is being scaled across the country. I referenced Dr.Bill earlier. We're up to 8,000 doctors and cross-selling there are relationships. Our launch of Vantage and all the value that we're giving through and the reciprocity value we're giving to customers through Vantage. All that is the benefit of scale is and, and, not or. Therefore, you're getting incredibly competitive models. We just talked about involved in Capital Markets and the retail bank today that's outperforming, and you're getting this option, this very exciting option on ventures that's starting to scale. We pulled ventures back for two years through the pandemic. Now you're starting to see the advertising budget kick in. Mydoh is a very exciting venture for those who've experimented with it. We have thousands and thousands of families now that are on the Mydoh app, and we're only in our third or fourth month. That's the benefit of scale. Incredibly competitive model in the current construct. Model for the future that's evolving quickly. You get it all. All right. Thank you very much. We'll be remiss if we didn't have a part of this conversation on credit quality. Look, credit quality has been very good for all Canadian banks, frankly, all banks actually in North America. One of the things is you didn't provide a PCL target for this past quarter. I mean, you didn't do that. Maybe you could talk a little bit about how you view credit going forward and how you view even the excess reserves that you have on the balance sheet. Yeah, we're certainly in a benign credit environment right now. Surprisingly benign. I do not think we thought that we would be this long with such low credit losses. We are at 7 basis points of combined loss in I think stage 3 loss in Q4, and that has been a sequential decline. We are seeing some of the government programs start to roll off at the end of the day. But we continue to be in this benign credit period, and we struggle to forecast, I think, how long it is going to remain benign. We do feel, I think, that it is going to be kind of a slower walk back to a more normalized credit environment. It is hard to predict that path. Therefore, I think we have just been conservative in our view. That is all, is how fast the walk back is going to be towards a more normalized credit environment. We just do not know. But we are starting from an incredibly benign and continuing benign place. So us not providing a PCL forecast is just the uncertainty of trying to give you something. We feel that we have a lower risk franchise that we just talked about, given the wealth franchise, given the significant customer base that we have, how we manage the portfolio, where we take risks. We feel very good about the volatility we have seen in our Capital Markets business. It is at the low end of the industry volatility levels. We are managing this franchise in the long term to have a lower volatility risk profile and a premium, more stable return through a cycle. We know investors want that investment thesis. Therefore, that is how we manage the organization. So not giving a forecast is no signal that we are concerned at all. We are just having trouble forecasting. We have released 53% of the reserves that stage 1 and 2 reserves that we took in 2020. Just because of Omicron and the uncertainty of the impact on the economy, we do not think it is going to be a prolonged impact. I think it is going to reduce growth probably from 4.5% to 1.5% in Q1 in Canada, but then growth should start to return in Q2. Therefore, we still see a 4-plus GDP growth year in Canada. So this could be a slower walk back to a more normalized credit environment. We are just being conservative. Again, there is no half-life to those reserves as well, and they do not disappear. From that perspective, when we feel we are confident of the future, we will hopefully release those or put them to use in offsetting any stage 2 that comes at us. So it is hard to predict. There is no science or insight beyond just uncertainty. Fair enough. Maybe this is a good chance to dovetail into questions from the audience because the very first question that's been upvoted from the audience is on credit, and it is as follows: "Where by sector or region do you see the highest potential credit risk related to climate change?" I do not know if you have spent a lot of time on that, but credit risk as it relates to climate change. We have to go on a journey here, and therefore, some of that risk is linked to the strategy Canada has to make in the transition. How are we going to fund this transition? Where is capital going to come from? What policies and incentives do we have, for example, for the energy industry to invest in carbon capture to reposition their future? As we think about where the large emissions come in the markets we do, obviously energy production is a significant emitter in the country, but also so is agriculture at the end of day. So are commercial buildings and commercial operations. As we think about and we measure where emissions come from, measuring risk is partly trying to understand where the policy, where the capital, where the technology is to make that evolution. I think from that perspective, it is really hard honestly to say where the risks are. We know where the emissions are. We are measuring emissions. Now we are trying to understand how fast the policy is, where the technology is. But some of the higher emitters could have the best strategies to offset that, and therefore we are working with those industries and helping them understand the capital requirements and meet their capital requirements. I think we are just in a period of uncertainty right now. We are trying to measure. We have a lot of small businesses that cannot measure that we are rolling out tools, we are rolling out capabilities. A lot of this journey depends on what demand-side policies come into play. If we just expect the supply side to adjust GHG emissions, it is going to cost us CAD 2 trillion plus to make the transition. But what does the government do to incent Canadians to change their behavior, could reduce that cost, could reduce the risks in certain sectors. I think honestly, Darko, all that is up in the air until we figure out a path for this country and how to make the transition, and I think that is the frustrating part. It is hard to answer that question until you understand some of those dimensions. Okay, great. Thank you. I'm going to sneak in one more from the audience before I turn it over to you for some final messages. A question from the audience that's been upvoted here is, "If you had to sum it up, what is RBC's Capital Markets strategy for this year, and why would that be?" Whatever your answer, why is that your focus? Yeah, we're very much focused on outperforming in the marketplace and kind of regaining our top 10 position. I think we're number 11 or 12 finishing the year. Very strong momentum that we're seeing in our advisory businesses and our origination businesses. Again, clients are very active, and we see that continuing through the end of the year. You'll see that, I'm sure, reflected in U.S. Bank results over the coming week. We're looking for better performance from our trading businesses, and I think we've seen that early on, and therefore, we feel very good about where we're coming out. We absorbed a lot of revenue impact in our secured lending businesses, the repo businesses. Margins are down by a half, given the excess liquidity in the market and lack of demand. We've absorbed all of that into our run rate, and therefore, we're seeing an evolution and a better performance out of our better margins out of our secured lending and repo businesses. We're looking to put more balance sheet to work, particularly in our corporate loan book. We saw the big run up in drawdowns in 2020. They paid down again that liquidity draw in 2021. Then we're back to kind of a mid-single digit growth perspective, putting some more RWA to work. The team's done a very good job over the past five years in repurposing capital. We didn't grow RWAs for three or four years after a strong growth spurt that you saw from kind of 2016, 2015 through to 2018. We kind of held the capital levels, and we recycled capital into relationships that were providing cross-sell and deeper opportunities. The team did a fantastic job. Now, I think we've got a portfolio that's performing at a much higher ROE. When you look at the 16% ROE, I believe, Capital Markets earned in Q4, some of that comes from parameter changes that we talked about and work there on the risk side, but also on just refining the portfolio and focusing on customers that are rewarding us our balance sheet deployment with more cross-sell and more advisory-based business. We're bringing in new teams. We have a new team on the FIG side. We're building another team on the, sorry, on the technology side, not the FIG side. We're building out our healthcare team. We're adding MDs. All this is focused on putting more balance sheet out there, cross-selling into advisory-based businesses, looking for a rebound in our repo business. Therefore, we feel very good about the momentum exiting the year and the investments we have made. This is a really important franchise. You see the countercyclical benefits that we saw in 2020, the Capital Markets. You have seen this franchise grow at an improving ROE with low volatility, and therefore is a very important part of the investment thesis as well. How are you tracking so far against those expectations into 2022? We ended the year with significant momentum. We saw a very strong pipeline of advisory and origination business, and that continues into the new year. We are executing against that very well. I think the market share numbers, if you look at Dealogic in the last couple of months, have us as high as ninth in the world in fees. Okay, great. Thank you. One of the things that I am going to be doing today with everyone is I am going to turn the floor over to you for some key messages that you would like to leave with investors today. Dave, by all means, the floor is yours. What would you want shareholders to take away from today, and what is your key messages? Just reinforcing some of the messages, Darko, that you were able to bring out through your questions. We've been investing in growth. We didn't slow down that deployment of capital and deployment of NIE into creating a very strong growth profile by investing in every single one of our businesses. We walked through of the investments we've made in the wealth franchise. We continue to invest in our Canadian banking franchise by adding people, commercial bankers, adding mortgage specialists, adding investment advisors, adding value through RBC Vantage, deploying tools like MyAdvisor. We're building out our channels. We're building out our employee capability. We're building out our value and our service for customers across the board. Therefore, you've seen the outperformance, and we continue to invest in further outperformance on the customer volume and customer activity side. We're very excited about the investments made to continue this growth premium that you've seen. All the while maintaining a lower risk profile. I think you've seen the customer franchises, the markets we choose, how we choose to compete is producing a lower risk. In this benign world, it's very difficult to see that. But our strategy indicates in how we think about the customers and how we grow outside of Canada really indicates our appetite for a lower risk profile. That's how we're executing why wealth management and commercial banking in those verticals, those B2B2C verticals are so important. Very excited about the U.S. growth opportunities. We walked through our U.S. wealth franchise, its ability to generate deposits and those deposits flowing through sweeps into City National, acquiring teams. We've just approved another growth profile on adding more Midwestern offices, and those offices are largely full already. As we continue to roll out, we're bringing teams in from our competitors. We're opening new offices to do that. So the growth profile is one of acquiring teams, new product, particularly secured lending product, new advisory capability, and a very strong growth. A 14% compounded AUA growth coming in the last five years from our U.S. wealth franchise. Then City National continues to be a premium growth franchise. It always was. I don't think you can buy a franchise that's not growing and just turn it into a growth franchise. The magic of City National, it was a strong growth franchise, and we've accelerated that growth franchise. We've tripled that institution over the last six years since we acquired it in 2016. Therefore, that continued growth that you're seeing both in deposits, commercial lending, and now jumbo mortgage and consumer lending is a strong tailwind to it, and we continue to invest in that long-term experience. Part of the NIE growth in City National, I should probably talk to, we didn't get that, is continue to build out a B2C platform. This was a bank, through its history, has been B2B then to C, that we have an entrepreneurial business relationship, and then we cross-sell that commercial customer in entertainment or technology or food and beverage, and in medical healthcare. We cross-sell them into a consumer personal relationship, private bank, after we acquire them as commercial. That's been the history of City National. Now we've added this B2C dimension that they've never had before, directly acquiring a customer on the consumer side. It's important for the long-term growth and the long-term lower risk growth of City National, and it's been an expensive re-platforming, building out a mortgage platform, building out a mobile and better online banking capability, going from one star in mobile banking, City National, now to four stars in the App Store. That was really important to the overall long-term journey. We're re-platforming the commercial franchise now, putting a new lending system, and that will help us take out costs. There's been a significant amount of lift to make sure that we have the right platform to continue to accelerate growth, and that's been expensive, and that's the NIE deployment. I think from that perspective, very excited about our growth opportunities in Capital Markets. In Canadian wealth, U.S. Wealth, City National, Canadian Personal and Commercial banking, you can see the investments we're making under multiple horizons, short, medium, and long-term to continue to produce high ROE, lower risk, organic growth that's accretive to shareholders and drives our investment thesis of superior growth, high ROE, and lower volatility through a cycle. The entire strategy is built around delivering that investment thesis. Had a bit of a disappointing Q4. We feel that we're back on track and feeling very good about 2022. Okay. Thank you very much for that, Dave. Excellent wrap up. With that, we'll end this session. Thank you very much. To the audience, we'll be back very shortly for our next session. Thank you.