This conference is being recorded.
Please stand by. Your meeting is about to begin. Good afternoon, everyone. Welcome to the TD Bank Group Q1 2023 earnings conference call. I would now like to turn the meeting over to Ms. Brooke Hales. Please go ahead, Ms. Hales. Thank you, operator. Good afternoon, and welcome to TD Bank Group's first quarter 2023 investor presentation. Many of us are joining today's meeting from lands across North America. North America is known as Turtle Island by many indigenous communities. I am currently situated in Toronto. As such, I would like to begin today's meeting by acknowledging that I am on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Métis, and Inuit peoples.
We also acknowledge that Toronto is covered by Treaty 13, signed with the Mississaugas of the Credit, and the Williams Treaties, signed with multiple Mississaugas and Chippewa bands. We will begin today's presentation with remarks from Bharat Masrani, the bank's CEO, after which Kelvin Tran, the bank's CFO, will present our first quarter operating results. Ajai Bambawale, Chief Risk Officer, will then offer comments on credit quality. After which we will invite questions from pre-qualified analysts and investors on the phone. Also present today to answer your questions are Michael Rhodes, Group Head, Canadian Personal Banking; Paul Douglas, Group Head, Canadian Business Banking; Raymond Chun, Group Head, Wealth Management and Insurance; Leo Salom, President and CEO, TD Bank, America's Most Convenient Bank; and Riaz Ahmed, Group Head, Wholesale Banking. Please turn to slide two.
At this time, I would like to caution our listeners that this presentation contains forward-looking statements, that there are risks that actual results could differ materially from what is discussed, and that certain material factors or assumptions were applied in making these forward-looking statements. Any forward-looking statements contained in this presentation represent the views of management and are presented for the purpose of assisting the bank's shareholders and analysts in understanding the bank's financial position, objectives and priorities, and anticipated financial performance. Forward-looking statements may not be appropriate for other purposes. I would also like to remind listeners that the bank uses non-GAAP financial measures, such as adjusted results, to assess each of its businesses and to measure overall bank performance. The bank believes that adjusted results provide readers with a better understanding of how management views the bank's performance. Barrett will be referring to adjusted results in his remarks.
Additional information on items of note, the bank's use of non-GAAP and other financial measures, the bank's reported results, and factors and assumptions related to forward-looking information are all available in our Q1 2023 report to shareholders. With that, let me turn the presentation over to Bharat.
Thank you, Brooke, and thank you everyone for joining us today. To start, I want to express that our thoughts are with all those impacted by the devastating earthquakes in Turkey and Syria, including our colleagues, customers, and communities with deep ties to these two countries. TD has contributed directly to the relief efforts and enabled customers to do so as well through branches and online. Together, our collective efforts can make a difference and provide some comfort during these terrible hardships. It's been a busy week, and before I review our strong quarter and start to the fiscal year, I'd like to provide a few strategic updates. As you know, on February 9th, we mutually agreed with First Horizon to extend the close date to May 27th, as provisioned in our contract.
We've come to believe that the deal is not expected to receive regulatory approval in time to close the transaction by that date. Regulatory approval is not within the bank's control. We are doing what is prudent and appropriate. We've opened discussions with First Horizon about a potential additional extension. I cannot speculate on when we will receive approval. I can tell you that we are fully committed to the transaction. We have a robust community benefits plan in place with broad community support across our combined footprint, and our teams have made progress on integration plans. This is a great transaction that offers scale and new capabilities to our U.S. franchise. We made another unrelated announcement earlier in the week regarding the Stanford matter.
The settlement we announced allows us to avoid the distraction and uncertainty of a long legal proceeding and is in the best interest of shareholders and the bank. Of course, yesterday, we closed the Cowen transaction. TD Securities and Cowen are a powerful combination, accelerating our U.S. growth strategy and helping to create an integrated North American dealer with global reach. The acquisition of Cowen adds key capabilities to our growing global markets platform in U.S. equity sales and trading and in U.S. equity research. It also adds scale and industry expertise across U.S. capital markets and M&A advisory. Congratulations to everyone on this important milestone and a very warm welcome to our over 1,500 new colleagues. I know I speak for Riaz and all of TD Securities when I say we are very excited for what we will accomplish together.
Let me now turn to our first quarter performance. TD delivered a strong Q1. Earnings increased 8% to CAD 4.2 billion, and EPS rose 7% to CAD 2.23. Revenue grew 16% year-over-year, reflecting margin expansion, strong volume growth, and our diversified business mix. We took advantage of this environment to continue to invest in our business to drive future growth while delivering robust operating leverage. As expected, we saw some credit normalization this quarter, but credit performance remained strong overall, supported by consistent and disciplined underwriting practices. TD CET1 ratio ended the quarter at 15.5% or 15% pro forma for the closing of the Cowen acquisition.
With TD's strong internal capital generation capabilities and the various capital levers available to the bank, we continue to expect TD's CET1 ratio to be comfortably above 11% post-closing of the First Horizon transaction. These strong results are matched by a brand that is second to none. TD was recently named one of the 2023 global top 500 most valuable brands by Brand Finance, earning the highest ranking in Canada. Across our distribution channels, the bank delivers personalized, connected, legendary experiences. For the ninth consecutive year, the TD Mobile app had the highest number of monthly active mobile users among Canadian banks, according to mobile analytics firm data.ai. Let me now turn to each of our businesses and review some highlights from Q1.
Our Canadian personal and commercial banking segment delivered record earnings of $1.7 billion, reflecting revenue growth of 17% and significant positive operating leverage. The personal bank continued to demonstrate momentum with sales of our everyday banking products up over 20% year-over-year and industry-leading market share gains in non-term deposits again this quarter, driven by strength in branch banking. We saw a record Q1 acquisition in the new to Canada customer segment and announced an exclusive strategic relationship with Canada Visa, one of the leading online sources of Canadian immigration information with over 2 million monthly visits. Through this relationship, TD will help support newcomers as they navigate financial services while settling into their lives in Canada.
We also had record Q1 credit card spend and organic loan growth driven by a rebound in travel and our compelling TD Aeroplan offering, coupled with our best-ever quarter for digital acquisition for TD cards. In our real estate-secured lending business, our teams delivered robust retention rates and enhancements in mobile mortgage specialist productivity despite a softening housing market. The business bank achieved double-digit loan growth for the sixth consecutive quarter. We were proud to collaborate with the Federation of African Canadian Economics to help Black business owners in their entrepreneurial journeys, enabling them to access capital and scale their businesses. Turning to the U.S., our U.S. retail bank delivered record earnings of $1 billion, reflecting revenue growth of 27% and significant positive operating leverage.
With the contribution from our investment in Schwab of $222 million, segment earnings were $1.2 billion. This quarter, enabled by our investments in event streaming technology, TD launched deposit balance thresholds alerts, the first of several self-service alerts that will further enhance customer convenience and experience. We delivered strong loan growth year-over-year, led by 18% growth in mortgages and 9% growth in cards. Personal loans were up 11%. TD demonstrated continued momentum in the middle market and C&I space with business loans up 9%, excluding PPP loan forgiveness. Finally, this quarter, we were proud to announce a 20-year extension of our agreement with Delaware North, keeping Boston's beloved landmark arena named as TD Garden through 2045. Our wealth management and insurance segment earned CAD 550 million this quarter.
Revenue was up 4% as higher insurance volumes and the benefit of higher interest rates helped offset a challenging market environment. In TD Direct Investing, we took the number one spot in The Globe and Mail's annual ranking of digital brokers and increased market share of new account acquisition quarter-over-quarter. In TD Asset Management, TD regained its position as the number one money manager for Canadian pension assets and widened its lead versus competitors as the number one Canadian institutional asset manager. Highlighting the breadth of our capabilities, several TD Asset Management ETFs and mutual funds across equities, fixed income, and balanced funds were recognized this quarter with FundGrade A+ awards. On the insurance side, our expansion into small business insurance will launch in the coming months.
As the number one direct-to-consumer insurer in Canada, this is a natural extension for us to leverage our expertise to deliver exceptional insurance experiences for small business owners. In our wholesale banking business, we delivered net income of CAD 347 million, with revenues roughly flat year-over-year. The impact of lower underwriting and trading revenues was offset by higher global transaction banking and lending revenues as we continue to support our clients through market cycles. This quarter, TD Securities acted as financial advisor to GIC and Dream Industrial REIT on their acquisition of Summit Industrial Income REIT. Our wholesale banking team also acted as joint book runner on the government of Canada's CAD 500 million Ukraine sovereignty bond to assist the government of Ukraine in providing essential service to Ukrainians and restoring energy infrastructure. As I mentioned earlier, Cowen is now part of TD Securities.
With robust integration plans in place, work is already underway to tap the combined strengths of the business and extend our competitive advantage in the market. Guided by our purpose, TD is committed to creating value for all our stakeholders. I'm proud that the bank was listed in the DJSI World Index for the 9th consecutive year. TD is one of six banks listed in the DJSI North American Index and the only North American bank included in the World Index. The bank was also recently recognized with a top 10% S&P Global ESG score, again, standing out from its peers as the only North American bank to be listed in the top 10%. TD Bank, America's Most Convenient Bank, was recognized as one of America's best employers for veterans by Forbes for the third consecutive year.
This recognition is a reflection of our commitment to the communities we serve. Earlier this week, as part of the TD Ready Challenge, we were pleased to announce a total of CAD 10 million in grants to 10 nonprofit and charitable organizations that are working on solutions to help those who may be disproportionately affected by climate change and the transition to a low-carbon economy. Later this month, TD will release its 2022 ESG reporting suite, including our climate action plan. We're excited to share the outcomes of a year of effort and accomplishments by thousands of dedicated TD colleagues who transformed our aspirations into action. Our TD bankers continue to deliver for all of our stakeholders. It is a privilege to work alongside them every day. I would like to thank them for all they do to make TD the better bank.
I will end by noting that this is Paul Douglas' last earnings call as Group Head, Canadian Business Banking. Barbara Hooper will assume leadership of this segment. Paul's almost 47-year TD career is filled with remarkable achievements and success. He and his team have built one of Canada's premier business banks, known across the market for their dedication to their customers. Paul has also built the best team of business bankers in the country and leaves behind a tremendous bench of talent that will continue to drive growth. I've known Paul throughout my entire time at TD and want to thank him for his partnership, support, and significant contributions to the bank's success over many decades. Paul will assume a newly created position as Chair, Canadian Business Banking, will also serve as a special advisor to me.
Congratulations to Paul, and I look forward to continuing to benefit from his wise counsel as we build for the future. With that, I'll turn things over to Kelvin.
Thank you, Bharat. Good afternoon, everyone. Please turn to slide 11. For Q1, the bank reported earnings of CAD 1.6 billion and EPS of CAD 0.82, down 58% and 59% respectively. Reported earnings include the Stanford litigation settlement, a net loss from mitigation of impact from interest rate volatility to closing capital on the First Horizon acquisition, and the recognition of a provision for income taxes in connection with the Canada Recovery Dividend and increase in the Canadian federal tax rate for fiscal 2022. Adjusted earnings were CAD 4.2 billion, and adjusted EPS was CAD 2.23, up 8% and 7% respectively. Reported revenue increased 8% and includes a net loss from mitigation of impact from interest rate volatility to closing capital on the First Horizon acquisition.
Adjusted revenue increased 16%, reflecting margin and volume growth in the personal and commercial banking businesses and the impact of FX translation. Provision for credit losses was CAD 690 million, compared with CAD 72 million in the first quarter last year. Reported expenses increased 39%, primarily reflecting the Stanford litigation settlement and higher acquisition and integration-related charges. Adjusted expenses increased 11%, driven by higher employee-related expenses, the impact of FX translation, and higher spend supporting business growth. On our Q4 call, I noted that we expected adjusted expense growth, excluding FX, to moderate in fiscal 2023 on a quarter-over-quarter basis. We saw that this quarter with adjusted expense growth moderating sequentially as we continue to prioritize our investments. Our goal of delivering positive operating leverage over the medium term remains unchanged.
Absent the retailer partners' net share of the profits from the U.S. strategic card portfolio, adjusted expenses increased 10.4% ex-FX. Reported total bank PTPP was down 26% year-over-year, primarily reflecting the Stanford litigation settlement. Consistent with prior quarters, slide 26 shows how we calculate adjusted total bank PTPP and operating leverage, removing the impact of the U.S. strategic car portfolio, along with the impact of foreign currency translation and the insurance fair value charge. Adjusted total bank PTPP was up 14% after these modifications. Please turn to slide 12. Canadian Personal & Commercial Banking net income for the quarter was CAD 1.7 billion, up 7% year-over-year. Revenue increased 17%, reflecting higher margins and volume growth. Average loan volumes rose 8%, reflecting 6% growth in personal volumes and 14% growth in business volumes.
Average deposits rose 3%, reflecting 8% growth in personal deposits and a 5% decrease in business deposits. Net interest margin was 2.8%, up 10 basis points compared to the prior quarter, primarily due to higher deposit margins reflecting rising interest rates, partially offset by lower loan margins. While many factors can impact margins, including the path of short-term rates, trackers on and off rates, customer activity and competitive market dynamics and margins may bounce around quarter to quarter, we currently expect net interest margin expansion to moderate for the remainder of fiscal 2023. Total PCL of CAD 327 million increased CAD 98 million sequentially. Total PCL as an annualized percentage of credit volume was 0.25%, up eight basis points sequentially.
Non-interest expenses increased 10% year-over-year, reflecting higher spends supporting business growth, including technology and employee related expenses. Please turn to slide 13. US Retail segment reported net income for the quarter was $1.2 billion, up 17% year-over-year. Adjusted net income was $1.2 billion, up 23% year-over-year. US Retail Bank reported net income was $955 million, up 18%, primarily reflecting higher revenue, partially offset by higher non-interest expenses, including acquisition and integration-related charges for the First Horizon acquisition and higher PCL. US Retail Bank adjusted net income was $1 billion, up 26%, $1 billion.
Revenue increased 27% year-over-year, reflecting higher deposit margins and loan volumes, partially offset by lower loan margins and deposit volumes, lower overdraft fees, and lower income from PPP loan forgiveness. Average loan volumes increased 9% year-over-year. Personal loans increased 11%, reflecting strong originations, lower prepayments and higher credit card sales volumes. Business loans increased 6%, reflecting strong originations, new customer growth, higher commercial line utilization, and increased customer activity, partially offset by PPP loan forgiveness. Excluding PPP loans, business loans increased 9%. Average deposit volumes, excluding sweep deposits, were down 2% year-over-year. Personal deposits were flat, business deposits declined 4%, and sweep deposits decreased 15%.
Net interest margin was 3.29%, up 16 basis points sequentially, as higher deposit margins reflecting the rising interest rate environment were partially offset by lower loan margins and negative balance sheet mix. While many factors can impact margins, including the path of short-term rates, trackers on and off rates, customer activity and competitive market dynamics, margins may bounce around quarter to quarter. We currently expect net interest margin expansion to moderate for the remainder of fiscal 2023. Total PCL was $149 million, a decrease of $20 million sequentially. The US retail net PCL ratio, including only the bank's share of PCL for the US strategic cards portfolio, as an annualized percentage of credit volume was 0.34%, lower by six basis points sequentially. Reported expenses increased 22% and include acquisition and integration-related charges for their First Horizon acquisition.
Adjusted expenses were up 16%, reflecting high employee-related expenses, credit card growth-related expenses and other business investments. The contribution from TD's investment in Schwab was $222 million USD, up 11% from a year ago, reflecting higher net interest income, partially offset by higher expenses, lower asset management fees and lower trading revenue. Please turn to slide 14. Wealth management and insurance net income for the quarter was $550 million, down 14% year-over-year. Revenue increased 4%, reflecting higher margins, an increase in fair value of investments supporting claims liabilities and higher insurance volumes, partially offset by lower volumes and lower transaction and fee-based revenue in wealth.
Insurance claims increased 29% year-over-year, reflecting the impact of changes in the discount rate, which resulted in a similar increase in the fair value of investments supporting claims liabilities reported in non-interest income, increased driving activity and inflationary costs, partially offset by fewer severe weather-related events. Non-interest expenses were flat year-over-year, reflecting higher spend supporting business growth, including higher employee-related expenses and technology costs, partially offset by lower variable compensation. Assets under management decreased 3% year-over-year, reflecting market depreciation. Assets under administration decreased 3% year-over-year, reflecting market depreciation, partially offset by net asset growth. Please turn to slide 15. Wholesale Banking reported net income for the quarter was CAD 331 million, a decrease of 24% year-over-year, reflecting higher non-interest expenses and PCL.
Adjusted net income was CAD $347 million, down 20% year-over-year. Revenue was CAD $1.3 billion, largely unchanged year-over-year, reflecting lower trading-related revenue and underwriting fees, offset by higher global transaction banking and lending revenue. PCL for the quarter was CAD $32 million, an increase of CAD $6 million from the prior quarter. Reported expenses increased 16% and include acquisition and integration-related charges, primarily for the Cowen acquisition. Adjusted expenses increased 13%, reflecting continued investments in Wholesale Banking's US dollar strategy, including the hiring of banking, sales and trading and technology professionals, higher severance and the impact of foreign exchange translation. Please turn to slide 16.
The Corporate segment reported net loss of CAD 2.6 billion in the quarter, compared with a reported net loss of CAD 227 million in the first quarter last year. The year-over-year increase primarily reflects the Stanford litigation settlement, a net loss from mitigation of impact from interest rate volatility to closing capital on the First Horizon acquisition, the recognition of a provision for income taxes in connection with the Canada Recovery Dividend, an increase in the Canadian federal tax rate for fiscal 2022, and higher net corporate expenses. Adjusted net loss for the quarter was CAD 140 million, compared with an adjusted net loss of CAD 127 million in the first quarter last year. Please turn to slide 17.
The Common Equity Tier 1 ratio ended the quarter at 15.5%, down 69 basis points sequentially. We had strong internal capital generation this quarter, which added 42 basis points to CET1. This was more than offset by an increase in RWA net of FX, which decreased CET1 by 62 basis points. We saw a 14 basis point increase in CET1 related to the issuance of common shares under our dividend reinvestment plan. Relating to the First Horizon acquisition, a net loss from the mitigation of impact from interest rate volatility to closing capital decreased CET1 by 13 basis points, and an FX hedge decreased CET1 by six basis points. Previously announced regulatory changes also impacted our CET1 this quarter.
We saw a 16 basis point decrease in CET1 related to the Canada Recovery Dividend and an eight basis point decrease related to the elimination of the transitional arrangement for expected credit losses. The previously announced Stanford litigation settlement decreased CET1 by 23 basis points this quarter. RWA, including FX, increased 2.8% quarter-over-quarter, reflecting higher credit risk RWA. Credit risk RWA increased CAD 16.8 billion or 4%, mainly reflecting higher volumes, asset quality reflecting further credit normalization and parameter updates and methodology changes in preparation for Basel III reforms. Market risk RWA decreased CAD 3.4 billion or 15%, reflecting lower exposures and tightening credit spreads. The leverage ratio was 4.8% this quarter, and the LCR ratio was 141%, both well above published regulatory minimums.
I will now turn the call over to Ajai.
Thank you, Kelvin, and good afternoon, everyone. Please turn to slide 18. Gross impaired loan formations increased by two basis points to 16 basis points quarter over quarter, driven by Canadian Commercial Banking, primarily related to a new formation in the health and social services sector, and some further normalization of credit performance, largely reflected in the Canadian and US consumer lending portfolios. Please turn to slide 19. Gross impaired loans were stable quarter over quarter and remained at cyclically low levels. Please turn to slide 20. Recall that our presentation reports PCL ratios, both gross and net, of the partner share of the US Strategic Card PCLs. We remind you that US card PCLs recorded in the corporate segment are fully absorbed by our partners and do not impact the bank's net income.
The bank's provisions for credit losses increased three basis points quarter-over-quarter to 32 basis points. The increase was largely recorded in the Canadian Personal & Commercial Banking segment. Please turn to slide 21. The bank's impaired PCL was CAD 553 million, an increase of CAD 99 million quarter-over-quarter, and primarily related to some further normalization of credit performance, largely reflected in the consumer lending portfolios. The bank's current quarter impaired PCL rate remained well below 2019 levels. Performing PCL of CAD 137 million this quarter was largely recorded in the Canadian Personal & Commercial Banking and Wholesale Banking segments. Please turn to slide 22. The allowance for credit losses increased by CAD 113 million quarter-over-quarter, reflecting volume growth and credit conditions, including some deterioration in the economic outlook, partially offset by the impact of foreign exchange.
The bank's allowance coverage remains elevated to account for ongoing uncertainty relating to the economic trajectory and credit performance. In summary, the bank's credit performance was strong again this quarter. However, as anticipated, key credit metrics continued to rise from cyclically low levels experienced last year, with this trend most evident in the consumer lending portfolios. Looking forward, while results may vary by quarter, I continue to expect total PCLs to be in the range of 35-45 basis points in 2023 as credit performance continues to normalize and we progress along the economic path. TD remains well-positioned given we are adequately provisioned, we have a strong capital position, and we have a business that is broadly diversified across products and geographies. With that, operator, we are now ready to begin the Q&A session.
Thank you. We will now take questions from the telephone lines. If you have a question and you're using a speakerphone, please lift your handset before making your selection. If you have a question, please press star one on your device's keypad. To cancel that question, please press star two. Please press star one at this time if you have a question. There will be a brief pause as participants register. Thank you for your patience. The first question is from Meny Grauman from Scotiabank. Please go ahead.
Hi, good afternoon. A few questions on First Horizon. Bharat, you addressed it in your opening comments in terms of renegotiating of the contract, and I'm just wondering what extension date are you looking for for that new contract?
Manny, we've just started those conversations. I think it's premature for me to give you any specific dates. You know, we are thinking through as to what might be appropriate and when the timing is right, you know, we will certainly let you know.
Just, as a follow-up to that, as a result of these negotiations, could the purchase price change? Is that something that is potential?
Well, we've just initiated the negotiations and, you know, once the negotiations are finalized, you know, we will be sure to give you further details.
Okay. Just a final one on the same topic. Just wondering about the nature of the delay, given that the fact that, you know, the commentary that we're hearing comes so soon after the contract was extended to the end of May. I'm wondering, is the issue a procedural issue or is it something more substantive? How would you sort of describe the delay as you see it?
Well, first, let me, you know, as we've discussed previously, you know, we are really excited about this transaction. You know, we worked very hard to date and continue to work very, very hard, and our planning for integration continues. You know, we set up an integration management office. You know, I was thrilled that we announced our community benefit plan, you know, very recently, which was very important for the communities in which we operate. You know, really excited about, you know, what this transaction does for our U.S. franchise. You know, as far as timing goes, you know, I unfortunately can't tell you any more than what I've said in my remarks, you know. We, you know, yes, we did extend the deal till May 27th.
Since then, you know, we believe that we will not be able to close this transaction by that date, and therefore, you know, started, as you'd expect us to talk about an extension, with First Horizon.
Okay. Thank you very much, Bharat.
Thank you. The next question is from Doug Young, from Desjardins Capital Markets. Please go ahead.
Hi, good afternoon. Just a few CET1 related questions. I mean, TD had negative organic capital generation this quarter, about negative 20 basis points. Just a few items that I just wanna get some clarity on. Hoping you can dig into the asset quality drag of 21 basis points. Is that just normal migration, or can you kind of elaborate?
Yeah, it's Ajai. Let me take asset quality. You would have noticed the increase there is CAD 6.8 billion, there are really two drivers of that. One is normal course non-retail parameter updates that were made, we make these annually, we actually put it through in Q1. The second driver is credit normalization. As I said in my prepared remarks, that credit normalization is occurring largely in the consumer portfolios, both Canada and the U.S. Hopefully that helps.
It is. Can you kind of split the two in terms of what, which one was more impactful?
I would say, well, I would say about 40% is the parameter updates. The balance is credit migration.
Okay. Okay, second, I mean, the CET1 impact from the Basel III changes coming in Q2. Looks like you had parameter updates because of Basel III that came through in Q1. Can you talk about, is there additional hit or benefit that you're gonna have in Q2 from the upcoming Basel III changes?
Hi, it's Kelvin. I'll take that one. Correct. Like in Q2, we expect the impact of Basel III to be small either way.
Okay. I know, Bharat, you said this, and Kelvin, you said this, with First Horizon CET1 comfortably above 11%, I guess the question I've got is, would that be the case even if the deal closed right now? Does that factor in any other actions? Does that factor in selling additional stakes in Schwab? Does that factor in with loan sales? Just curious if you can give some context to what that means because I think that's one area that I'm getting a lot of questions on.
Well, Doug, you know, let's look at, and I heard, you know, some of the noise around capital. Let's look at, you know, what TD's record has been on this. I mean, look at the last couple of years. You know, our internal capital generation, you know, earnings less dividends is a simple way to do it. It's about 40 basis points per quarter. You know, the DRIP contributes about 13 basis points per quarter. That, you know, allows us to support our customers, activity through RWA growth, which over the last five quarters is about 15-20 basis points. You know, the first quarter was unusual because I think Ajai provided some of the explanations to you.
The bank's, you know, capital flexibility is immense, and that's why I was quite happy to say that, you know, at the closing of First Horizon, we'll be comfortably over 11. As you can see, you know, there's a pathway to a much higher capital level, and that will depend on, you know, what the requirements are that will be announced from time to time. Feel very comfortable with where the bank's position is on capital. We have a lot of capital levers as well. I think, you know, the noise around this, you know, I'm not sure that I really understand.
Well, I guess maybe just ask it another way. Like, is that comfortably above 11% organic?
That's my view. Yes. You know, I've said this, that, you know, we think we're gonna be over 11%, you know, comfortably over 11%. Then I gave you know, some of the calculations as to why it even goes higher, you know, over time. So that's, you know, we feel very comfortable with our capital position.
Okay. Thank you.
I know, you know, Doug, you didn't ask, but you know, many ask me, you know, what negotiations would be. You know, I'm not gonna talk about any specific issues, those negotiations, you know, with First Horizon. We've just started a discussion. We have a fantastic relationship. It's a great franchise. You know, we'll see where we get to.
Thank you. The next question is from Gabriel Dechaine, National Bank Financial. Please go ahead.
Well, actually, Doug asked pretty much all the questions I asked. Just to put a fine point on that, there's no contemplating, you know, doing what you did ahead of the Cowen transaction and selling down any Schwab. I mean, you might be confused by the feedback on capital, I guess. It has to do with where you ended up this quarter versus where people expected you to end up, and then applying the pro forma impact of Cowen and First Horizon, and you get to a number closer to 11%.
I just want to know what you have in the back of your mind, or we'd like to know, just to kind of get more comfortable with that comfortably above 11% figure.
I'm not sure, you know, how you calculate your numbers, Gabe. at some point, you know-
Right.
I'll get a chance to look at your numbers. You know, the numbers I gave you, there is a pathway here for TD to be in excess of 12%, you know, by next year.
Yeah.
This is even after closing, you know, First Horizon and Cowen. When you look at the first fiscal half of next year, we think we have, you know, a clear pathway to be over 12%. If the timing were to change, we've got other capital levers. I don't know what else I can tell you to clarify it further. I mean, that's the way we're thinking about it and feel very comfortable.
Okay. Well, how about this then?
You know, some recent events in the Canadian banking space have led some banks to target a minimum capital level of 11.5%. Are you suggesting that, you know, temporarily anyway, you would be 11 or just slightly above that, you're fine being at that level and working your way to 12 organically post-transaction closing? Is that correct?
Well, you know, there are a lot of assumptions you're making there. I'm giving you even after closing First Horizon and Cowen.
Mm-hmm
you know, we would exceed 12% in the first fiscal half of next year. If the timing were to change, we got other capital levers, as you know.
Okay
you know, I thought I'm being very clear, Gabe.
Okay. I appreciate that. Thanks.
Thank you. The next question is from Ebrahim Poonawala from Bank of America. Please go ahead.
Hey, good morning. Good afternoon. I guess, Bharat, just wanted to follow up on the deal. Two questions. One, should we be concerned that maybe there is supervisory issue in the U.S. that could have an impact on your organic business in the United States as we think about TD Bank USA, your ability to grow or any of that? Like, can you answer that question?
You know, Ebrahim, I can't comment on our confidential discussions with our regulators. You know, that is an area that no bank, you know, ventures into, But with respect to First Horizon, you know, we continue to work with our regulators as part of our application process, and we continue to do that. I can't comment any further. I think the other questions you're asking me are, you know, hypothetical in nature and, you know, we are, you know, we continue to grow our bank. You know, Leo does a great job. I don't know how many stores did we open last quarter, Leo?
Six.
Six stores were new, stores were open, and you can, you know, I'm sure Leo would be happy to answer the loan growth we're having, you know, the tremendous momentum we have in the U.S.
Right. No, I think, again, Bharat, I'm sure you'll appreciate we are in uncharted waters here. The only proxy, parallel that comes to mind is M&T Hudson City, which took three years between announcement and close. I think that's what some investors are trying to handicap. Maybe, I guess the second question for you as someone putting up $13 billion to buy First Horizon, just talk to us, how do you get comfort around franchise attrition, right? Like you, I heard about that from investors. It is an extremely competitive market. If I'm an employee at First Horizon getting calls from 15 other banks, like, how do you retain that and make sure there's not meaningful attrition in the franchise if, let's say, the deal timing gets pushed out by 12 months?
Again, I can't comment on timing. You know, we looked at, you know, when we announced the deal, the structure we had put in place, you know, to make sure that we've got more than adequate retention and, you know, feel happy about that. First Horizon as a franchise, you know, continues to perform in line with the expectations as shared during the acquisition announcement in February of 2022. We are very happy with the transaction and continue to work hard to get it over the closing over the finish line.
Got it. Thank you. Yeah, thank you.
Thank you. The next question is from Scott Chan from Canaccord Genuity. Please go ahead.
Hi, good afternoon. I'll stay away from First Horizon and maybe ask about Cowen that just closed. Riaz, on Cowen, what are you kinda seeing on the ground there in terms of now and when you announced the transaction? I know it's been difficult capital markets, but is Cowen gonna be operated separately still, or do you still have collaboration or some collaboration or integration plans between the two?
Thank you for that, Scott. Look, first, on the closing yesterday, I cannot say enough.
Say enough.
demonstrate to you the amount of exuberance that both the TD Securities leadership and folks and Cowen leadership and folks were feeling yesterday. There was just an amazing amount of energy in the room as we announced the closing. We've done a lot of pre-integration work and coming into the closing, there'll be some short period of time, let's say a few weeks, during which we need to continue to operate separately and in order to just finish all our regulatory and functional and business model organization structures as we bring the broker-dealers together. Then we'll lead towards a full integration soon after that. I'd say people are very excited to go.
We've got a early operating model in place, a go-to-market strategy in place, and, there's just a tremendous amount of, excitement, I'd say even more yesterday than we had at the, date of the announcement seven months ago. It's really, really exciting, and we're feeling very positive about it. Jeffrey Solomon and his team, as well as the TD Securities leadership, just, very excited to get together and get on with, growing our business.
Have you passed out any cost or revenue synergies over the medium term? I assume it's most of the latter potential, and I don't know if there's examples that you see right now on it.
Yeah, I'd say we're basically at the same place we were at the time when we announced the transaction, Scott, when we talked about having $300 million-$350 million of revenue synergies, and we said that we would add about $100 million US in net income by year three. As you know, we did not announce any expense synergies at the time of the transaction.
Okay. Thank you very much.
Thank you. The next question is from Paul Holden from CIBC. Please go ahead.
Thank you. Good afternoon. I'll limit myself to one question on First Horizon, but I wanna try something very specific 'cause I understand you're not gonna, you're not gonna comment on more general type questions. The OCC released its schedule of Community Reinvestment Act evaluations on Feb twenty-eighth. That date's obviously interesting between when you provided the last update and the more current update. That schedule shows that TD will be reviewed in September this year. Are the results of that evaluation something that's required for this merger approval? Is that one of the potential reasons for the delay?
Again, you know, let's not talk about, you know, the delay in First Horizon because I think I've said enough on that. Regarding CRA, you know, our current rating is outstanding.
That's correct.
When you say that the exams will be done in September, I don't know, Leo, I think this is the longest, you know, exam period that goes on before you get any reports back.
Yep. Paul, just to be clear, there's on an annual basis, the OCC will review an institution on a number of different risk ratings, including their CRA ratings. That is the standard operating procedure that's not tied to any transaction. It's part of the normal regulatory review process.
Understand. That's helpful. Thank you. A question on deposits then. We saw a drawdown in average deposit balances in the U.S., both retail and business. I was wondering if you can give us sort of any characterization on how you'd view current deposits between, let's say, excess savings and core deposits. I guess what I'm really trying to get at is where do we think the deposits stabilize, maybe in terms of a when and at what level? Any insight you could provide there would be, I think helpful.
I'll take that one. Thanks for the question. I think what we're seeing as a result of the increase in rates is just building rate sensitivity. I think earlier, over the past two quarters, we were seeing a little bit of the excess savings from the pandemic relief efforts being drawn down or consumed. I think what you're seeing now is just the natural rate sensitivity in terms of where rates are and your more rate sensitive clients. So think in the consumer side, your mass affluent, high net worth clients, and on the commercial side, your more institutional clients, looking for either more attractive, higher priced deposit solutions or in some cases, off balance sheet, investment alternatives. You're seeing that play out.
I would expect as long as rates continue to be where they are and/or continue to increase, I think you'll see some degree of rate sensitivity. I will point you though to just the composition of the U.S. that we are a very liquid institution. Our excess deposit position is quite strong. In the composition, having a very strong core checking account base in our retail and commercial businesses should make us more resilient over the, you know, over the cycle. From my standpoint, I think we've got a very strong franchise, and we continue to acquire clients at a very healthy clip. Just to give you one final stat this quarter, just on a year-over-year basis, core checking account volumes were up 13%.
You know, we're continuing to see strong momentum there, and I would expect us to be able to continue to grow the franchise.
Okay, that's helpful. Follow up to that, Leo, this will be my last question. Just in terms of that movement out of deposits and into wealth products, or as you call the off balance sheet, is this an opportunity to grow that wealth franchise in the U.S.? I think was one of your strategic priorities when you moved down there. Are you seeing increasing opportunity?
I'll start. I'll certainly ask Ray to chime in. Growing the wealth franchise in the U.S. is absolutely one of the key priorities. I would describe that on a number of different fronts. We've got the mass affluent opportunity in the stores themselves, and Ray can talk a little bit more about the fact that we're growing our financial advisors in the stores. There's the continued growth of the high net worth franchise aligned with our retail business. Increasingly, we're seeing some really nice success in terms of the collaboration that's taken place between our wealth and our commercial banking teams. In fact, we did see some outflows in the commercial banking deposit front.
What I didn't mention to you is that CAD 1.3 billion over the last two quarters, of that outflow ended up in our wealth franchise. We're systematically trying to retain that client wallet inside the franchise, and that'll be a big area of focus for us going forward. Ray, I don't know if there's anything you'd like to add.
The only thing I'd add, Paul, is, you know, in Canada, we have figured out a model that generates significant partnership between our branch banking and wealth management, and we're taking that model into the United States. As Leo said, targeting really the mass affluent clients. We have a significant customer base within the TD AMCB that are mass market clients. We've seen a dramatic increase now in referrals from our stores to our wealth advisors, we're continuing to scale our advisors in the U.S., and we've now at 300 advisors moving to 400 advisors by the end of this year.
What I would tell you is on a monthly basis, we're continuing to see momentum, and we suspect we'll continue to drive growth in our US wealth franchise as we move forward.
All right. Again, that's it for me. Have a great afternoon. Thank you.
Thank you, Paul.
Thank you. The next question is from Sohrab Movahedi from BMO. Please go ahead.
Maybe just, if we can go to Michael Rhodes and talk a little bit about the deposit trends in Canada and what you expect to happen there first, please.
Sure. Absolutely. You know, I'll start, you know, just as Leo mentioned, you know, clearly rate sensitivity in a higher rate environment is picking up. That being the case, our strategy has been and continues to be gathering core franchise accounts and think of the checking account as really the anchor of that. We've seen very strong account acquisition over the past quarter, actually, you know, recently. It's actually being driven by a record number of new to Canada checking accounts for Q1. We're seeing very strong flows coming in. The result of that is we're actually seeing that our non-term share of deposits is actually our share across the industry is actually increasing at a very nice pace, actually on a year-over-year basis.
Think about 90 points or so of share gain for non-term deposits. We're seeing that. Now the overall industry though you're seeing some mix shifts. I mean, if you were to look at industry data, I think what you would actually see is that our mix shift has been much more moderate, and we've been using very disciplined pricing across our depository products, we've actually been pleased with how this has performed. When you look at the NIM for the CAD P&C, I think that provides some good evidence that this is being well managed.
Mike, Michael, do you expect that competitive dynamics to still allow you to exercise the discipline, or do you think that eventually you will have to give in to it?
You know, the competitive dynamic ebbs and flows as you can imagine, you know, week to week, month to month. You know, I'd say right now we've been pretty disciplined. I believe we've been very disciplined in terms of our pricing and it's performed well for us, and I don't see any real change to that coming in the near term.
Okay. Calvin, just very quickly, just, you know, given the dynamic kind of potential closing timing of the First Horizon, does your hedging, whether it's capital or interest rates or the like, does that kind of dynamically roll forward? Is there gonna be any incremental cost associated with that? Or how should we be thinking about that?
Yeah. We will continue to dynamically roll that forward. As we've talked about earlier on the, you know, the biggest hedge on the interest rate is something that we already have on the books, and we'll continue to roll that forward and the cost is minimal. We also have the FX hedge as well, and we'll roll that forward too.
No material incremental or marginal risk or, cost.
Correct.
associated with it?
Correct.
Just lastly, I mean, Bharat, last quarter I think, when you finished off the year, you had kind of in your remarks you commented that it could even be that in 2023 the bank can deliver EPS within its medium-term growth targets. Do you still expect that to be the case?
I think last quarter when I said that, we said, you know, given the rate momentum and the anticipated closing of the announced acquisitions, you know, that's certainly a tailwinds for us and as well as the volume growth that we've just delivered. There are headwinds of course you know. There are geopolitical tensions. It's a complex operating environment and potential economic slowdown. On balance I said at that time, you know, unless things change, you know, we should meet that and then there was a chance we would exceed it. We'll see. We're very happy with our first quarter. You know, organically the bank delivered 8% earnings growth, you know, so very pleased with that.
You saw some of the numbers. I think folks have talked about, you know, some of the loan numbers we are seeing and our ability to attract, you know, non-interest rate sensitive deposits, you know, which is a core strength of the bank and continued momentum on the wealth and insurance side. Very happy with, you know, how things have started off in the year. Let's see how the next three quarters go. You know, and then we can sort of look back and say, all right, what out of the headwinds, you know, which ones came to pass and of the tailwinds, you know, which one came to pass. And then we can certainly talk about it then, you know, if we have exceeded it even more as to why that happened.
If you haven't met it, then we will explain what caused that.
Thank you very much for taking my questions.
Thank you. The next question is from Mike Rizvanovic from KBW. Please go ahead.
Good afternoon. I wanted to ask Michael Rhodes, just what's your outlook on the resi book in Canada? What kind of growth do you think is in the cards for 2023?
Yeah. A great question. Thanks for the question. You know, clearly you know that the number of sales and purchases of homes in Canada has gone down and recent data supports that. As we look across 2023, you know, we'd expect that the resi growth to be in the low to mid single-digits range for the year.
Okay. I guess that's consistent with what we've heard from some of the other banks. Just looking at your portfolio, it looks like it was down a little bit sequentially, or let's just call it flat quarter-over-quarter. As I look at some of the large cities that have reported the Fed data for sales, it's still down, you know, +40% year-over-year. I'm wondering where would you see that growth coming from? What sort of like, what's baked into that assessment when you say low to mid single digit? It seems quite optimistic given the state of the market right now.
A couple of things that come into play there. You're right for the quarter sequentially, we were, you know, basically flat. As you look going forward, there are a couple of things. One is the first quarter, of course, is seasonally a relatively low quarter. The second is I just look into our pipelines on a go-forward basis. I'm feeling more optimistic about things on a go-forward basis. We see our advisors are being quite productive and we're making some operational enhancements to our processes and so the data I look at gives me some optimism on a go-forward basis, recognizing the market is soft. You know, if the market softens up a whole bunch more, then I might change my tune.
Just, given what I see today, I think that's achievable.
Okay. Thanks for the call. Bharat, I just had a really quick follow-up for you on your earlier comment about the 12% CET1 level. I think what you said was the midpoint of 2024. I'm not gonna ask you about the FHN timing or anything like that, when you say 12% by middle of next year, is that based on the assumption of TD's normal course, the typical environment where you get that 15-20 basis points quarter-over-quarter sequential organic generation?
Yes, Mike.
Okay. Thanks for the call.
Thank you. The next question is from Lemar Persaud from Cormark Securities. Please go ahead.
Thanks. It seems like the bank isn't gonna be able to answer most of my questions on First Horizon right now, but maybe I'll try one of them. In the outside chance the deal doesn't get regulatory approval or an agreement to extend isn't achieved, would it be fair to suggest the $435 million termination fee would not apply in this case?
I think, you know, the deal terms are in the, in the document that we've filed. Lamar, best for you to check that as to what the technicalities are, you know, are there in that, all the details around it.
Okay. Then, maybe turning to Canadian P&C Banking. Can you talk to what's driving the weaker business deposit growth? It looks like it's been dropping for two consecutive quarters. Would it be fair to suggest this is just the deployment of some excess, COVID deposits?
Yeah, it's Paul. Thanks, Lemar. If you look back to the early part of the pandemic, you would see that TD outgrew most of the banks.
Mm-hmm.
For quite a while in the early part of the pandemic. Some of that is just the reversal of that now that we've ended, and that has to do just with the makeup of our book compared to others. In addition, as Leo spoke about, there is a seek for yield here going on. We're not losing any accounts. The core business is quite strong. Some of the excess deposits that our commercial bank customers hold are chasing yield, and our policy's always been to be very disciplined around margins. We have lost some deposits.
Thank you.
Thank you. The next question is from Joo Ho Kim from Credit Suisse. Please go ahead.
Hi. Thanks, and good afternoon. Just wanted to go back to your net interest margin comment. You had mentioned that it may moderate in terms of improvements from here. When I look at the results this quarter, you're up two basis points sequentially at the all bank level. I'm curious, is that sort of the improvement that we should think about as we go forward, that maybe one to two basis points of the low single digit kind of improvements? Curious if you could quantify what you see for the remainder of the year. Thanks.
Hi. It's Calvin. I'll take that. The two basis points quarter-over-quarter that you mentioned, it's the all-inclusive NIM. We typically look at non-trading NIM. When you adjust for that, the quarter-over-quarter expansion is positive six basis points. Last quarter in Q4, the margin expansion was 12 basis points, and then this quarter six basis points, and you expect that to moderate. We expect that the margin expansion continue to be positive for the remainder of 2023, but the trend is gonna be similar, that it's gonna be moderating.
What I would like to note, though, is that a lot of people focus only on short-term rates, and as you know, we had a significant increase in short-term rates over the last few quarters. Forwards would indicate that there's still some to come, but less than before. I would like to note that the long-term rates also matter. If you look at page 27, in Canada, the relevant rate is five year, in US it's seven year. These trackers do reprice over time, and the on rate is higher than the off rate. What that means is that even if short-term rates doesn't go up, everything else being equal, the repricing of the trackers will continue to support margin expansion.
Thank you. Appreciate the comment.
Thank you. The next question is from Nigel D'Souza from Veritas Investment Research. Please go ahead.
Good afternoon. Thank you for taking my questions. The first one I had for you was on your performing credit loss provisions this quarter. I noticed that there was a build in the Canadian P&C Banking segment. A reversal in U.S. Retail. Just wondering what drove that. Typically, we don't see a divergence in performing PCLs across those segments.
Yeah, Nigel, it's Ajai. Let me respond to that. What I would say is you've got to look at these trends over a longer period. If you actually go and look at the year-over-year numbers, you'll find impaired and performing are up both in Canada and the US. You're right in pointing out that this quarter, US performing actually came down. There are really two reasons for that. One is we had repayments of some high-risk loans, so the associated allowance got released. The second reason is we made a methodology update relating to consumer loans, where we found we were over-predicting the move from stage ons to stage two. We put that correction in, which led to a reversal. If you exclude these two, you would have actually seen a small performing build in the US as well.
Hopefully that's helpful to you.
That's helpful. The last question I had, just quickly was on variable rate mortgages. Any update on the portfolio, how it's tracking? Just in question of the monthly mortgage payment, just trying to understand if the higher rates leads to an immediate passthrough of, you know, an increase in the monthly mortgage payment or proportion if it is capitalized and then passed through later on or a trigger point. Just trying to understand the dynamics of how the monthly payments are tracking relative to mortgage rates were variable?
Well, I can start generally with credit quality, and then I'll pass it on to Michael Rhodes. What I would tell you is generally across the resi book, our credit quality is strong. If I look at delinquencies and I see the quarter-over-quarter change, it's nominal. It's basically one bp, and that too in HELOC. Formations, resi is flat. Charge-offs, I would say near zero. If I look at quality in many different ways, the quality is strong. The books we are watching, we're definitely watching the variable interest rate mortgages, in particular the trigger point population. We're watching rate renewal risk across both the variable and fixed books as well. Overall, we're seeing strong quality. We're actually seeing customers come forward when they hit the trigger rate.
Keep in mind, when they hit the trigger rate, there's no requirement to repay us, but we are very encouraged by what we're seeing, where they are voluntarily coming forward and making principal payments. I'll pass it to Michael for a few minutes.
Well, Ajai, I think you touched a bit about the dynamic of how our variable mortgages work in that, as rates go up, that the amount you amortize basically is going down until you could reach a point where you do end up negative amming and there's actually your loan basically has some capital added to it each period. Either at a trigger point or at renewal, things get reset.
Just to clarify, I assume that trigger point is 105% of some sort of loan balance amount. Is that how it works?
It depends if it's a HELOC or if it's a mortgage. For mortgages, it's linked to your loan-to-value at, I think it's 80%.
80%, yeah.
80% uninsured, and I think it's 105% for insured, or is it the same for both?
It's 105 for the other ones.
Okay, got it. Thanks. That's it for me. Thank you.
Thank you. The next question is from Darko Mihelic from RBC Capital Markets. Please go ahead.
Hi. Thank you. Just a quick numbers question for Leo. I'm looking at the U.S. retail segment and the non-interest income. I realize overdraft fees are significantly lower. When I look at this quarter's number, is it fair to say, Leo, that this is about the bottom, or is there still some more downside to this to this line item?
Darko, thanks for the question. We have fully implemented all the overdraft measures that we identified last year. This quarter, you're right to say that you're seeing the full impact of all those changes. Just to You know, that includes the limit, the daily limit of overdraft charges. That includes the change in the threshold at which a client begins to incur an overdraft, the 24-hour grace period, the NSF elimination fee, all those, you've got a full quarter worth of impact. This is the bottom I would expect to your point as we continue to grow our core checking and cards base, that we would see additions to our fee income line.
Okay, great. That's very helpful. Thank you. Question for Bharat. You've given us a rough roadmap to 12% common equity tier one. There is, of course, a small possibility that the regulator increases the DSB this summer, in June. With 50 basis point, let's say, pretend increase, do you have the capability of overcoming a 50 basis point increase in the minimum ratio, or would you need to raise equity for that?
No, we have capability to meet that if that turns out to be the case. These are hypothetical questions, but you ask me a straight question, I give you a straight answer.
Okay. Thanks very much for that. Appreciate it.
Thank you. The next question is from Ebrahim Poonawala from Bank of America. Please go ahead.
Hey, thanks for taking my question again. Just two quick follow-ups. One, Leo, or just sticking with the U.S. non-interest income, any sense of the impact if there are changes instituted to credit card late charge fees, what that would mean for TD?
Yes. Thank you very much, Ebrahim. Obviously, the CFPB has come out with some proposed rulings. It's still early. I expect there to be some evolution in terms of what that final proposal is gonna look like. I'd prefer not to speculate at this point in time in terms of the total impact. What I would say is credit card late fees as a % of our total U.S. retail revenues is a relatively small percentage. In any event, it would be manageable.
That's helpful. Just one quick one, Riaz, for you. We've seen a significant growth in the loan book in Wholesale Banking. one, do you expect that to be sustainable? What's the driver of that?
Well, Ebrahim, as you know, over the course of the last four or five quarters, there's been a lot of loan demand, and we're in a fortunate position of being able to be particularly selective.
Yep.
Our clients, client base, particularly in the United States, in accordance, consistently with our strategy. We're earning very good returns on those new originations. It's really about taking market share at a time when we're able to.
Just on market share, Riaz, it's a difficult period for a bunch of investment banks right now. Is there a strategy to grow Cowen beyond their existing verticals and selectively hire bankers and capabilities and be maybe aggressive on that over the next 12 months or so?
I think we have to pace that appropriately with the integration work and bringing the two firms together. Look, I think there is there are opportunities. We're always open for them right now. We're in a good position to do that. I think that for the next let's say a quarter or two, the focus will be on getting the integration correct and finished.
Noted. Thank you.
Thank you. There are no further questions registered at this time. I'd like to turn the call back over to Bharat Masrani.
Thanks much. Thanks very much, operator, and thank you everyone for joining us this afternoon. Again, a great quarter from TD. You know, terrific 8% earnings growth, CAD 4.2 billion in earnings. Very happy with the start to the year. Once again, want to take this opportunity to thank our TD bankers around the world for once again delivering for all of our stakeholders. Paul, congratulations again, 47 great years at the bank, and it's a good thing you're not going away far. We look forward to working with you in your other capacities at the bank. Barb, congratulations on your new position with the Canadian Business Banking. Thank you, and we'll see you in 90 days.
Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.