Meny Grauman: Thank you.
Operator: Thank you. The next question is from Doug Young from Desjardin Capital Markets. Please go ahead.
Doug Young: Yes. Maybe if I can just €“ good morning. If I can just follow up on the CET1 ratio, Darryl or Tayfun. I know you’re saying at or above in Q2. But if the deal closes in Q1, I would assume at the end of Q1, you could be below 11%. Is that a fair assumption, like — and then building above 11%, just so there’s — I just want to clarify the message there.
Tayfun Tuzun: Yes. I mean, the comment that I made, we typically have referred to always the quarter following the closing quarter. We could fall below 11% at closing, if it closes earlier than the second quarter. But we will move above 11% in the second quarter.
Doug Young: And maybe just a follow-on. Is there stuff that you’re doing — I know you’re growing the loan book? Is there other things that you’re doing behind the scenes to kind of free up capital in terms of getting rid of blocks of business or securitization? Anything else to point to?
Tayfun Tuzun: Yes. And as you probably know, and we’ve talked about this a little bit over the past two or three quarters with our investors. For the past four, five years, we have been users of some of these risk transfer transactions. We’re pretty good at it. We’re pretty knowledgeable. And this year, it was not much different than past years in the way we have used these tools. And we continue to leverage these capabilities and the knowledge base that we have. Piyush, if you want to comment on that more?
Piyush Agrawal: Yes. I would just say that, as part of good risk discipline, any good bank, probably as a result of many of these risk dynamic practices, saw loan sales, syndication, synthetic transfers. All of these are just part of our toolkit. We’ve been actively using them. And as we get into the weaker economic cycle, it’s a good place to think about your portfolio and dynamically manage. The good part of this also is, on the other side, we have investors who are putting pools of capital to play. And so there’s a mutual dialogue always happening. And so, I think, this active risk management that continues and will continue through 2023.
Doug Young: Great. And then just a second question, just quickly on the NIMs. I think, you gave — and I apologize if I missed it, but some indication of directionally where you think it will go at the all-bank level. Can you talk a bit a bit more about how it would unfold at Canada — and Canada and the US and whether it be more so up front-end loaded or back-end loaded? Any further color would be helpful. Thank you.
Tayfun Tuzun: Sure. Absolutely. We feel very good about our NIM, not only this quarter, but probably more importantly, looking into next year. And I suspect that we will continue on a relative basis to outperform, just as we have done over the past two, two-and-a-half years. I have guided for a high single-digit year-over-year NIM expansion. And you have seen the numbers, I mean, in the US we have very strong NIM expansion. And the two countries are displaying a little bit of different dynamics. In Canada, there were three factors this quarter that sort of played a role. One of them was a very strong loan growth over deposit growth. So that by itself had almost like a 5 basis point type of impact. And mortgage prepayments had a couple of basis points, and then prime BA spread in a rising rate environment always in the quarter that it happened pressures.
But we expect our NIM in Canada to expand. I’ll actually turn it over to Ernie for comments on the business side. I suspect that over the next couple of quarters, we will probably see almost a double-digit expansion in our NIM in Canada. And for the broader NIM, now, looking at the dynamics, I suspect that as the rate cycle matures, the increase in the expansion in NIM will slowly — will be smaller in the second half of the year compared to the first half. But over to Ernie for comments from the business side.
