RBC Capital Markets Canadian Bank CEO Conference

Jan 7, 2020

Open up the conference. My name is Darko Mihelic. I am the bank analyst here at RBC Capital Markets. I would like to formally welcome you all to the RBC Canadian Bank CEO Conference 2020. Thank you all for joining. It should be a very exciting day. We have all the bank CEOs here to talk about the outlook for 2020, a little bit of a backtrack on 2019 and all the interesting things that we saw there. You will notice that it is a fireside chat format, and my intention is to not do big flowery introductions for all the CEOs. I would prefer to have as much time as possible to ask questions and as much time as possible for you here in the audience to ask a question. If you are interested in reading up on their bios, we have them available for you, but I would prefer that we just get right into the Q&A portion of the fireside chats. Once again, thank you all for attending today, and I think what I would like to do is right away jump right into it with our first bank CEO, Dave McKay. Good morning, Dave. Good morning. Happy New Year, everyone. Happy New Year. We are seeing better weather this year for the first time. Yeah. Usually get some bad weather. It is an ominous start. Well, hopefully the day is not going to be ominous. We always start this with bad weather and have a good year. Before we begin, I have been asked to tell you that Dave McKay's comments today may include forward-looking statements. Actual results could differ materially from forecasts, projections, or conclusions in these statements. Listeners can find additional details in the public filings of the Royal Bank of Canada. To open, in 2019, RBC grew adjusted EPS about 4%, generated a 17.1% adjusted ROE. The bank targets medium-term EPS growth of 7-plus and 16% ROE. By way of introduction, let us just generally discuss what might be the biggest challenges to attaining those medium-term objectives in 2020, and what might help RBC this upcoming year. What might be a positive surprise, given how much gloom there is out there? I thought maybe we can try and put a positive spin if there is one on the road. Absolutely. Maybe I will flip that and start with the positives. I think to generate your EPS growth and your targets, you have got to have customer activity, customer franchise activity. You look at our retail bank, our Canadian retail bank, and the momentum we have there across all the businesses, and customers are buying homes. You are seeing strong housing markets. Customers are starting businesses. They are investing in businesses. You are seeing customers investing across the spectrum. I think the activity levels are strong, and I think that is one of the big starting points. The second thing you have to do to drive ROEs is to really cross-sell well off of your origination. Our success and our ability to drive 17%-18% ROEs is to cross-sell strongly off of our credit card franchise, off our core deposit franchise, off of our mortgage franchise. I think when you look at the Ipsos Reid survey, which is the only pan-competitor survey that you can look at, our cross-sell ratios are at 18%, have the three core products, deposit product, core lending product, and core investment product at 18%, and our peer average would be 12. That cross-sell ratio drives your economies of scale, drives your higher ROEs, because you are not constantly reacquiring a customer. What you have to start with is what momentum do you see? What customer activity do you see? Can you cross-sell off that franchise to drive premium ROEs? That applies that cross-sell ratio from the smallest consumer to largest corporate. We run our Capital Markets franchise in very much the same way, where we're putting out our balance sheet, we're building lending relationships with the client, but it's really that fee-based activity, that M&A activity, that DCM, ECM, FX activity that gets you to your target ROE. You look at the health of your client, you look at your health of your client franchises, and despite all the gloom, to your point, clients are transacting. We exited the quarter, Q4, with strong momentum across our core businesses, as I said. We're feeling good about how we entered the year. We ended a bit softly, as you saw, in our Capital Markets operation, our investment banking in particular. Our trading was quite strong. But we saw a deferral of activity and a deferral, as we commented in the analyst call, into the early part of November and December. We generally felt pretty good about the pipeline in Capital Markets and the activity levels going into the beginning of the year. I think starting on a positive side, the client franchise activity across all our franchises is strong. What are the headwinds that are going to make it challenging to get to a 7%+ when we grew retail volumes at almost 8%, double-digit volume growth in the mid-teens in City National deposits and lending, and very strong AUM growth and market share gains across our wealth franchise in Canada? What's going to make it a little more challenging, obviously, first is the rate environment. The rate environment manifests itself most acutely in the U.S., given the structure of your balance sheet and your assets, which tend to be short-term nature versus Canada where we put a lot of our deposits, our asset structure on our mortgage business, the rate reset duration is 4-5 years. The rate reset duration in the U.S. is largely short-term. Therefore, as you can see in the U.S. bank income statements and NIMs and our own City National franchise in the U.S., that the NIM compression happens much quicker and therefore makes it more challenging year-over-year. Even though you're growing at double digit to offset that, the NIM compression in the U.S. makes a fairly significant headwind for us. There is NIM compression you've seen in Canada, much slower because it takes longer to bleed into your balance sheet than into your income statement. Therefore, you'll see slower NIM compression, and you've seen that given the nature of our balance sheet. The interest rate environment, the uncertainty of that environment and planning around that environment, even in the last 2 weeks, where we saw a fairly nice expansion of the 10-year, 2-year spread in the U.S. only to compress with the recent disruption in the Middle East and Iran. You're seeing those types of things make it tough. That global uncertainty around business intention, particularly in certain markets, M&A activity, investment in businesses' ability to raise capital to grow. All those activities creates a higher level of uncertainty. I think those are some of the headwinds that make it harder to plan. The core franchise and the core activity levels, we feel generally pretty good about. Okay, so picking up on the core franchise in Canada, what we saw last year at Royal, depending on how you want to cut the numbers, number one or number two in many consumer categories for financial services. Well, in all categories. Let's say all. Most. And you got a lot of market share Yeah, we did. last year. You grew well ahead of the industry Yeah in a lot of things. The question I get from a lot of people is, you do it on price? You do it on terms? How do we look at that growth? Is it sustainable going forward? Maybe just speak to that first, and I'll dive into a little bit of that. Yeah, no. We've been talking about our growth strategy for a while, and we've executed against it, and I'm really proud of the team for executing it. It comes down to we're not using price, and we're not using risk for the most part. The one area where we are using risk, I'll talk about. But certainly, where it's coming from is investment in what we call sales power across our divisions. Sales power is a simple function of capacity of your sales force times capability of your sales force. It's an exponential function. We look at that function, and we have for over a decade now. We've invested in the capacity of our sales force from the mortgage business, the investment business, right through to our RBC Capital Markets investment banking business. We're adding capacity to our core markets because we see client activity, which I just talked about, and an ability to grow our business with good clients, sustainable client business within our risk appetite. So we've invested in capacity. We've added mortgage specialists, investment specialists, commercial bankers, investment bankers, private bankers in the United States, commercial bankers in the United States, and we're growing because there's good business out there. But really where the magic happens is we've invested in technology around the capability of our sales force, whether that's the MyAdvisor tool, the InvestEase capability that you saw last night. The tools that you bring to enhance the productivity, to enhance the effectiveness of your sales force, so you're not competing on price, is where the real magic has happened. We have over 1.3 million financial plans already in MyAdvisor and growing rapidly. It's not just launching a tool into a sales force's hands because lots of companies and banks launch tools. It's how do you get your sales force to actually use it and use it well? It takes time, and sometimes it fails. Sometimes sales forces reject technology. So the magic happens when you have capacity times capability, and you bring it together, and that's what you're seeing. You're seeing us really create value for our shareholders. We track price very carefully, and we look at are we discounting more heavily. I have marks inside the organization, and I have external benchmarks with third-party suppliers, particularly in the mortgage industry, where you can see whether you're using price. And I can tell you we're not. In fact, our competitors, we think, are. But it's the ability of our sales force to create value. So we feel quite strongly that it's not a price play in the marketplace. From the retail consumer perspective, it's not a credit play. We're still originating super prime business. We've seen, if anything, an improvement in the FICO scores across our core consumer business, roughly stable in our cards market, but still a super prime cards customer, and our portfolios are stable. So it's certainly not a credit perspective. And you're seeing a little bit of risk into the commercial portfolio, but still well within a risk appetite that we believe commercial. When we look at our average default probability and expected credit loss in our commercial business, it's tweaked up a little bit, some of it migration, some of it origination, but not material in any way, and it's well within our historic risk appetite, which is a through-the-cycle risk appetite. We don't change it in good times and then cut back in bad times. We think through a cycle, and we take on risk because we want our customers to manage their debt appropriately, whether it's a consumer, commercial, corporate customer through a cycle, and therefore take the long view on the lending side. I think that explains kind of where the market share. We had significant gains across consumer lending, consumer deposits, business lending, business deposits, AUM, and on the retail investment side, City National. So we're very conscious of a risk side. We're late cycle or risk appetite, and our limits are strongly adhered to. We feel good about the investments we've made, and we've talked about those investments, and our NAU run rates have been a bit high. But those investments are paying off in customer flow at good margin and good ROEs. I think that we're feeling generally pretty good about the mix. Sustainability, how do we think about that? I mean, competitors often respond. Yeah. Last night we had a tech night here. many of you were here to see it, but we saw some pretty cool technologies coming out. They're all good. By the way, every bank says they have the best app. Do you think that there's going to be a competitive threat this year? Do you think somebody competes on price? Is there anything that could challenge RBC's growth, specifically in- Yeah Canada is what I'm honing in on. Our strategy is to create more value for customers and invest in that value. We create value through data and insights. We create value through our scale and our ability to attract partners and create value. Look at the value creation of Petro-Canada and the linked loyalty that we have with Petro-Canada, and we're looking at other partners to do a similar thing. That type of value you can't replicate, and it's driving traffic, it's driving client acquisition, it's driving satisfaction. We look at our record high customer satisfaction levels. We look at our record high employee engagement levels are all our signals of how we're running the business and for our customers. We're always prepared for someone to take a different vector. But it doesn't deviate from our core strategy, which is to create more value for a customer, use our scale, use our brand, use our innovative technology capability, and use partnerships to do that. I think we've talked about that strategy from the investor day forward, and we're executing against that. I think we've got a lot more in the pipeline coming, a lot more. New product launches, new partnership launches. I think from that perspective, we're not standing still either, and we're ready. I think our strategy is to create margin and grow margin if we can, through value creation. So one of the things that may have benefited the banks is the mortgage stress test that was introduced a while back on the B-20. There's been some talk about relaxing it. Do you have a view on the mortgage stress test? I think it's generally been good policy. In the absence of monetary tightening to slow down demand, some stress tests certainly delayed purchases, caused consumers in Canada to look at less expensive homes and to adjust their desire for the cost of the home they're purchasing or delay. I think that generally was good policy, and I think we have to be a little bit careful how we adjust it. But if done in the right way and with the right objectives can be achieved. I think our bigger challenge is not on demand management, it's more on supply management. We're still attracting an increased number of immigrants into our society. We're having still strong household formation and therefore the demand for housing is going to continue to go up, whether you manage it by a stress test or not. It's the supply management side, which is really at the municipal provincial level in many ways. We need to create more supply. I think that's where the acuteness, where we've moved into a strong seller's market again from a balanced marketplace, and we haven't been in a buyer's market for quite some time because of those supply-demand dynamics. So I would say those are characteristics for a healthy price market and a stable to growing price market in Canada. So we can shift gears maybe to credit quality. When I look back on 2019, it was the year of what I call the one-offs. There was a lot of idiosyncratic commercial corporate losses. When you look back at that and you see these sort of one-offs, I think we haven't seen that for quite some time, and we've got a bunch in 2019. Is there anything that caught your eye on the credit quality side? Is there anything that you guys are really honing in on as we go into 2020? No, I think if anything caught my eye, there was a little more fraud in the system. Some of the one-offs we call credit loss, but they're fraudulent representations of receivables or inventory. Then you look at and reevaluate all your control and evaluation processes. You'll challenge sometimes the external auditors who are auditing your customers' balance sheets and income statements. I think that was a bit of a trend, I think last year that we don't talk about. If anything, nothing really in Canada, I think there was, as you said, a couple one-offs. The energy industry had a little bit of weakness last year. Some of the price strengthening hope in oil alleviates a bit of that, but these were persistently weak energy players in the U.S., particularly in a little bit in Canada, and therefore were not able to strengthen their cash flow and got into trouble. I think that we saw coming for a long time and didn't come at us quickly, but had been working with a number of those firms for a little while, so there wasn't a big surprise there. A little bit of surprise on the quick service restaurant industry in the United States, where that's been an important vertical within the City National franchise. You look at quick service restaurants, which tend to be countercyclical in some ways are getting caught up with change in tastes in the United States, but also the cost of labor going up and margins getting hit, and some of the weaker franchise got into trouble a little quicker than we expected. We've been through that portfolio, and we've looked at it quite strongly, but we had a couple one-offs there that we think are one-offs that if you asked me two years ago, I probably wouldn't have predicted that. I think those are the types of things that caught us in the one-off. But in general, when you look at gross impaired loans, you look at the strength of all kind of the macro factors around credit loss. We're predicting largely kind of an in-sync year with 2021. A normalization of credit, as we call it, from being well below the 10-year average to coming back slowly towards the 10-year average. There's been a little bit of media splash on insolvencies recently here. There has on the consumer side in Canada. Quebec also with the change of the payment terms around credit cards might have accelerated even though there seems to be a little bit of backlash against that policy in Quebec. We'll see where it goes. But certainly that created a little bit of in-year volatility that might have moved some customer activity forward on the delinquency side, and there's certainly been an activity around insolvencies and a little higher than you'd think given the strength of employment in Canada. There's been aggressive marketing by the industry around insolvency management to consumers, and some have responded to that, and I think we're watching that carefully. But net, you look at originations, strength of FICO scores, the quality of the portfolio, gross impaired loans. We don't think we're going to come back to those absolute low years that we had over the last three. There is a normalization there, but still overall, in the context of historically a 10-year average, we're still in a pretty good place. We are in a good place, but I think earlier in one of your remarks, you said you used the term late cycle. It feels like it is late cycle. I get the question all the time, which is how do we assess the reserves and how do we know that Royal has got an adequate amount of reserves on its balance sheet? Is there anything else you can do to prepare for an economic shock? I mean, is there anything you can tell the shareholders here today that suggests that we are on Yeah if not better footing than we were last year or something to that effect? I think you look at the stage 1 and stage 2 reserves that we took over the last couple of years. I think we are at the more conservative end of shifting some of the weights in our scenarios, as we have disclosed. We have taken roughly CAD 200 million in stage 1 and 2 in 2019, a mix between origination driven stage 1 and also some migration in that portfolio. Not migration, but more migration in risk weights within the cycle and the model. I think from that perspective, there is a conservatism. How do you benchmark that? You look at your ACL ratios largely to gross impaired loans, and you look at your ACL ratios to stage 3 PCL the previous year. From all the benchmarks that I can see, we are more conservative, a little bit better than the average of our peers. We've got 115% coverage of GIL, which seems to be appropriate going into a later stage cycle. You have about 160%-180%, depending on the ratio coverage of stage 3 in your ACL, which is just below 2 times. So that seems to be well provided for and consistent with how you've entered other cycles. I think those are the benchmarks that we look at as a team, and we're not cutting corners there in any shape or form. I think we've been quite conservative in shifting weights and building that reserve. Okay. Nothing seems off to me as far as the ratios, and we're a little bit better than peer averages. Okay, fair. Shifting gears a little bit, in 2019, when we look at the business of the investor and treasury services, there was Yeah some ongoing investments, some repositioning, some severance in Q4, tough market conditions. Is this business now where you want it to be? Is it running optimally? If 2020 is supportive, what level of earnings growth do you think we can get from that business? Yeah, I think no, we're not happy where we are in that business. It came at us quite quickly, and we struggled with some systemic changes within the market. Lower rates certainly affected our activity there as we have a significant, roughly $50 billion of funding comes out of that business to the rest of the organization. So it's a provider of funding, strong provider of funding. But certainly, market changes as the active to passive, and your customer health is part of the challenge systemically across all providers. As their margins are getting squeezed, as you know, on the asset management side, you're looking to your custody and your fund administration providers to tighten the belt. Therefore, kind of your roll-off, roll-on renegotiation spreads are tighter across the industry, and you have to deal with that. The rate environment changed more quickly than we had planned. We pride ourselves on getting ahead of secular change, and I think it's our characteristic of our organization. We don't take large restructuring charges. Therefore, for us to take a restructuring charge means we kind of miss things, and we had to pivot quickly within that business and look at cost takeout much more aggressively. So we're doing that. We're moving employment from Europe to Asia, where, as you saw, we're exiting with the sale of the Australian marketplace and stopped doing an expensive technology project and moving that business over to a new provider, and that transition's going well. So this was all kind of a pivot given our performance wasn't where we're at. Our messaging to the market stands kind of in the first 2 months of this quarter that we think we've stabilized the business and the run rate from Q4 forward is sustainable, and we look to improve upon that. It's going to take us 4 to 6 quarters to get the cost structure down. But we see that happening, and we're executing against that. So you'll start to see those benefits and that improvement in performance towards the end of 2020 into 2021. But we certainly think we stabilized the business and look to improve upon it in the coming 8 quarters and get it back to kind of a better performing business. It's three businesses, right? It's investor services, treasury services, which is liquidity management for the bank and our customers, and correspondent banking. So those comments I just made pertain to the investor services business. But we did not have a good year, excuse me, in the investor and treasury services business either, given the structure of interest rates and the yield curve, and it was tough for us to earn the historic yields we had on our liquidity management plan on our balance sheet. I think we will look to a better year in investor and treasury services, and correspondent banking should have a stable year. Those are the three businesses, but the one that is more strategically challenged, obviously, is the investor services business. We have a new management team, and we are taking a different path, and we have reacted aggressively and appropriately to the change. You mentioned new management team. That business was taken out of Capital Markets. We now have a new leader of Capital Markets. Yes. Derek Neldner has taken over, got a new boss. The question is, last year was a tough year, you mentioned it in your opening remarks. What is your outlook for 2020 for this business? Given the year, has anything changed for you? You have spoken in the past of the earnings contribution from Capital Markets, the amount of capital that is there. Is there anything that has changed for you, or what are you challenging Derek with in 2020 and beyond? Nothing new that we did not challenge Derek and Doug with in the last 12-24 months, and that is to lever the balance sheet that they have and to cross-sell off that balance sheet and to generate the target ROEs that we have for that business. I think, we were a little disappointed, obviously, with Q4, but we had a very strong start to the year. It tailed off towards the end of the year, and we carried a lot of, I think, pipeline and momentum into. Some of the business we thought was going to close, as we've mentioned it in Q4, didn't. That's customer activity, that's regulatory approvals, whatever it is, just didn't close. We carried some of that momentum into Q1. But the core strategy hasn't changed. We put our balance sheet out there. We're cross-selling off of that. We're upgrading our teams. We're growing our teams in the U.S. We're adding bankers and sector coverage. We're trying to compete with the top players for that advisory business and that M&A business. You're seeing examples of that success, whether it's the BB&T SunTrust merger, or in others, Raytheon, Disney. You're seeing us achieve some of those premium advisory roles, and you're seeing the success of that business. It took us 15 years to get to where we are in the top 10, and it's going to take us another decade plus to continue to build this business. But really, it's about leveraging the balance sheet more. You saw our RWAs start to slow. I think that's part of the strategy, right? We took advantage of the secular opportunity over the last decade, particularly when our competitors in the U.S. were more challenged in putting their balance sheet to work. We put our balance sheet to work. We acquired a number of relationships. We're cross-selling those relationships. We're really more focused on if we cannot achieve the cross-sell with a customer, we're going to reposition that RWA into a customer relationship where we can. I think that's really important, and that discipline is something that Derek and the team have been working on for a couple of years, and Patti Shugart, and we're going to continue with that discipline. So no change in strategy. Really to focus on the U.S. marketplace, Canadian marketplace, and the European marketplaces, our core markets for capital markets, and to continue to cross-sell and compete, but using, I would say, less balance sheet growth than we have in the past. To continue the balance sheet growth, I would think, in the lower single digits to mid-single digits, not in the higher single digits to double digits we saw in the past. So I think we've got enough balance sheet out there. We're looking for cross-sell success. That's how you get to the ROEs that we've targeted and keep our premium ROE in. We feel good about where we are, and we're going to continue to compete. Revenue environment, tough last year. Getting tough into, let's say, for 2020, given the rate environment. There's a lot of work going on with many banks on the cost side, on the efficiency side. What we've seen from some is a movement towards restructuring charges. Maybe we can just touch briefly on a few things. First, would you consider a restructuring charge? Secondarily, can you talk to your expense growth expectations, your efficiency expectations, for 2020? Yeah. I think if we were going to take a restructuring charge, we probably would've taken it in Q4. The fact that we didn't, and we don't have a plan to take one right now. When we took one, sorry, I'm referring to the broader organization, we took one, as we talked about, for investor services, a small one. But for as a broader one, no. We are challenging ourselves to go at it a different way. I think the challenge with just doing restructuring charges is, unless you take out the work, you don't really take out the cost. If you just take out employees without taking out the work, the employees creep back into the system to do the work. It's very hard to make it permanent. You really have to go after the work and take out the work and help your team find that work that's not creating value anymore. Then you can manage your activity levels and your cost structure down from there. We've taken that approach, and we've taken a completely different tack. We've gone to zero-based budgeting. We're going through and helping our teams really go through the entire CAD 23.9 billion cost base and to really look at where activity levels are creating value and not. We're bringing different tools and different insights to that, and that takes the work out, which allows you to take the cost out, and I think we're going after that. We've taken a different paradigm. It's not just the same old, same old, going after the same cost structure. It's a different approach for us, and we're getting ahead of that. We're using that mechanism to really go after our cost structure. I think you saw a slower growth by 50% from kind of the 6% level, where we're investing heavily down to 3%. Given the more challenging revenue environment, we plan to create, at the retail bank level, op lev into 1%-2%, and certainly operating leverage, we feel confident at the top of the house this year in that range at least. I think you're seeing us bring the cost structure down, I think in a more sustainable long-term way by getting after the work, recognizing that this is a multi-year journey, and that if we are at the end of a cycle, we have to prepare for revenue maybe to step down yet again. Therefore, it's not just a one-time activity that gets you through 2020. It is more of a DNA change within your organization to get after that cost structure. Very aware of it. We have done a lot of great work in building capabilities and creating value for our customers and in building technology. The challenge for a CEO and a challenge for any banker is this dilemma of this is not a normal world as far as it has been for the last 20 years. You are not just thinking about your traditional competitors. You are thinking about your non-traditional competitors who are well-funded with lots of cash in their balance sheet, who continue to build competitive products in the financial fintech space. Therefore, you have to continue this evolution because your customer is on an evolution of how they use your services and how you build your capabilities for the mobile channel, how you build value, how you stay connected in a digital world to your customer. All this is changing, so banks have to adapt to this in a world where we had the benefit of tailwinds from rates, and now we do not have that benefit. You have to get more creative, and this is where scale plays a huge role in continuing to adapt your organization to long-term secular change and how customers are going to use your product. You cannot stop because the platforms are not stopping, and your customers are not stopping, and it is not just creating a new channel. You have to reinvent your processes and your products and your value propositions for this new digital world. This is a change that will, I think, really benefit customers and shareholders over the long term, and you cannot deviate too far from this journey in managing a given quarter or year. Having said that is why we are going back after the entire CAD 23 billion cost base to say, how do you create room to continue to invest and reward shareholders and take everybody on this change journey over time? I think that is what we spend a lot of time talking about in balance, and I think we found good balance, and we are going to deliver positive operating leverage through this declining rate environment. I am going to switch over to the questions that we have coming in online. The number one upvoted question, on credit, consumer insolvencies are trending higher 14th straight month, with 135,000 insolvencies in the last 12 months and 13 million households in Canada, one individual in 100 household had filed for bankruptcies. What are your thoughts? We've certainly seen that trend happening, and you're seeing kind of that migration. You've seen some of the, certainly the stage 3 PCL, a little bit elevated across those. But we're coming off, I think, historic lows. I think as you think about lending through a cycle and the overall quality and how those types of customers perform through a cycle, we still feel really confident in the credit strategy and our credit risk appetite. Our mortgage portfolio is a super prime portfolio with very high FICO scores. Our credit card portfolio is very strong portfolio. As you look at these, you're going to have a migration through time. Some of that weakness is certainly manifesting itself out west. With the real challenges that we're seeing in Alberta, some of the anger you're seeing coming out of particularly Alberta is they've hung on for so long. Without the investment in drilling and service, without the creation of new jobs, it's getting tougher and tougher to hang on. I think part of the anger is manifesting itself where you're starting to see defaults. I think some of that is manifesting itself out west. But what we're seeing is kind of, you're coming off historic lows back to longer term averages and employment's strong. Employment's really strong. We are seeing a little bit higher elevated debt service ratios, obviously, as you see, I think 175 in Canada. So they're creeping up. It's something to watch for sure. As I said, we lend through a cycle, and we think about the cycle effects when we lend. It's not that we have to time this and shut down riskier lending activity because you can't time it. We lend through a cycle. We know these cycles happen, and we've seen the volatility cycles over time, and we have experience in managing through them. Okay. Like I will do with every speaker, I'm going to hold back the last minute or two for your final thoughts, some key messages that you'd like to send to the shareholders in this room today. What would you like to share? I think, just back to the opening. To grow your franchise, you have got to have client activity, and we are seeing good client activity, where we have got good momentum in our core businesses, which we are really happy about. We are seeing market share gain across our consumer commercial franchises. You are seeing strong performance in our City National franchise. They are obviously going to have to deal with a lower rate environment that has hit them more quickly than we thought. But the expansion of our network, the capacity expansion, we think will continue to drive sustainable long-term customer growth. That sales power formula really works. We are adding capacity, and we have added capability, meaningful capability, and that has an exponential curve to it. I think you are seeing the result of that investment and the execution against that across all our businesses. City National has improved their treasury management, launching a new treasury management product, launching a new mobile product, acquired FilmTrack, Exactuals. We just upgraded Datafaction. So the technology that is coming into the City National franchise, we are quite excited about over the coming year, notwithstanding everything we have done in retail banking, the strength we have in Canadian wealth. The other capital markets operations, we had a soft finish. It does not mean it is going to be a soft year next year. We have got, as we said at the end of Q4, a good pipeline and good activity, and we have invested in capacity there. That sometimes takes a while to ramp up. We have got some good bankers that have joined the platform across a number of verticals, and we are expecting a better year there. I think overall, the client activity level is there, and we will deal with the macroeconomic factors in the way we talked about. We are going to watch our cost structure. We have got a new approach to that cost structure as far as coming in with a longer-term zero-based cost budgeting. We are finding opportunity that we did not see before, and therefore, it allows us to get ahead of the problems, and therefore, I will never say we will never take a restructuring charge, but we do not have a plan to take one, and we did not take one in Q4. And I think that has been the strength of the value creation and shareholder value and returns that we have done in getting ahead of these things. And the management team is on it. Okay. All right. With that, Dave, thank you very much for participating this year.