Laurentian Bank of Canada (LB) Earnings Call Transcript & Summary

Hello, everyone. For those who don't know me, my name is Raphael Ambeault, Head of Investor Relations at Laurentian Bank. On behalf of the entire management team, we are delighted to have you today to present you the details of our revamped strategic plan. The presentation materials are available on our website in our Investor Relations section. Following our presentation, we'll hold the Q&A session. Given that today's presentation includes forward-looking statements, I would like to direct your attention to Slide 2 of our presentation regarding forward-looking statements. Without further ado, I will now introduce you our President and CEO, Eric Provost.

[Foreign Language] Thank you for taking the time for those of you here as well in terms of -- I know it's been a busy week for all of you. But I'm quite thrilled to be with you this afternoon to be able to talk to you about our path forward. As Raphael said, I'm Eric Provost, and I'm President and CEO of Laurentian Bank. And joining me on stage today will be Yvan Deschamps, our Chief Financial Officer, to walk you through the different midterm objectives we're going to give ourselves for this plan. Not solely an opportunity to talk to you about our path forward but also a great opportunity to take time to give you a perspective of who we are, also the businesses that we operate into and to give you a perspective of the opportunities we see in all of those businesses going forward. And we're not here today to tell you it's a straight line ahead. It's going to be definitely an ambitious plan for us to achieve. But our goal is to give you a realistic view of our current state, but most importantly, provide you the opportunity we believe we can execute on as a leadership team. So before we talk about the future, I just want to take some time to talk about our past because this is what we did as an exercise as a leadership team to make sure that we actually understand better our roots and define this plan towards what were we and what we want to become in the future. And for those who don't know here in the room, actually, Laurentian Bank was funded 178 years ago on the purpose of serving a portion of the population that at the time didn't find the banking services they needed to help them grow their savings for more difficult times. And throughout the years, Laurentian Bank has been able actually to serve those customers but not solely on the Personal Bank side but also on the business side. For sure, in terms of the businesses that we help grow, create jobs, build the economy were part of Laurentian Bank's journey. And let's remind ourselves, like through all these years, Laurentian Bank went through deep recessions, economic cycles, and lately, global pandemic. And through all of these, we've remained strong. And as of today, we are a strong financial institution, and we're going to demonstrate that. And then I see a lot of potential for us in the future ahead. And what are we today? Well, we're a world-class specialty lending platform. We have a Commercial Banking platform that specializes into niches service customers across Canada and the United States. We have a solid deposit base. And we believe there's a lot of headroom to grow for us in the future. And that deposit base, supported by our retail branch network position in Quebec but also with an advisory and broker network that operates across Canada. We also have a Capital Market group that supports corporate and government issuers that we rely upon to create revenue and efficiency for us in the future. And I believe that through this plan, we're going to be able to set the right levels in terms of us having our rightful place in the different markets we want to tackle. And I believe right now that these opportunities aligned with our strategies aren't accurately reflected in our valuation. I wouldn't be giving you a right perspective of who we are, if I don't talk to you about our team, an extraordinary team that I'm very proud to be able to work with on a daily basis, an engaged team that provides effort day after day servicing our customers. And that is actually what makes a huge difference for this organization. I think we've made very, very strong progress in the last few years. And I really want to take this opportunity early in the presentation to thank our employees. I want to thank you for your hard work, your resiliency throughout what I would qualify a challenged 2023 year. Like you've been the key of us remaining strong and being focused on our customers. So thank you for that. While we did make some great cultural progress, and there, you can see like we were able to reduce our turnover by over 50%, as the engagement survey says, increased our engagement levels from our employee base. But most importantly, and I think this is the big takeaway, Laurentian Bank was able to attract and retain top talent. And this, again, is the foundation for execution of this plan. While we did make some good progress, there's still some room to evolve and keep improving in terms of culture. Like we need to be proud of our path forward, need to be accountable for our outcomes, determined in our execution capabilities, proactive in our engagement and keep high conviction and focus because that's going to make the difference. Throughout the 175 years plus this bank has been around, ESG has been core of what we are and will continue to be in the future. Those 3 pillars in the last few years, I'm very proud to say that we've made great progress in our journey and that we will continue to build upon those throughout the plan because for our employees, for our customers and for our shareholders, this is important. And if it's important for them, it is important for us to continue and push further throughout the execution. Now our ambition for this plan, what we aspire to be. Well, we really want to foster prosperity for all customers through our specialized Commercial Banking and low-cost banking services to grow savings for middle-class Canadians. This is what we want to be in the future. How we're going to do that? Well, it all relates to our value proposition. And we believe that we offer a differentiated approach out there. And I did mention our specialized Commercial Banking. And you're going to hear me talk a lot about that group and our successes. And it's all related to the customer focus and the ease of doing business we provide. I'm going to be talking about having a digital-led Personal Banking with keeping that human experience, but again, tackling low-cost to no-cost day-to-day banking, efficient platform that would allow middle-class Canadians to actually lower their banking costs. And by doing that, we truly believe that we will create an alternative out there versus the big banks. And we intend, through this plan, to acquire net new customers in Personal Banking to strengthen our core deposit base, and by doing so, enhancing our funding mix and create more profitability for this organization. Through this value proposition, we believe we're going to build a stronger bank, a more reliable bank and a more profitable bank. It's all going to be about execution. And to execute well, we need to focus. And our key focus areas are going to be aimed towards where we can compete with an edge. And that relates to our specialized niches in Commercial Banking. We'll need to simplify and decomplexify this organization to make it more efficient because for too long right now, we've been all things to all people. And this is what this plan is all about. We're going to drive accountability to deliver on outcomes and not focus solely on activities. And we will make sure we'll harness the power of partnership throughout the plan in various ways. And to do so, I'm happy to have with me today a great leadership team, a team that is composed of senior leaders that have deep experience in specific field of expertise as well as transformational leaders that will be needed to walk us through this journey. Before we talk about the 2024 plan, because I anticipate we're going to have some questions maybe later on, on the difference or sequence versus the '21 plan, throughout this presentation, we're going to come back onto what we laid out in December 2021. And I think that it's important for us to acknowledge that we made good progress versus this plan, where we said that we would grow Commercial Banking, that we would reposition personal bank and that we would focus and align our Capital Market groups. And I can be very proud to say that all these teams made key progresses in each one of those areas. In Commercial Banking, we were able to grow our assets from $14 billion to $17 billion in those few years. We closed key pain points in our digital offering in Personal Banking. And we grew our syndicate position within our Capital Market groups with corporate and government issuers. So I can say that throughout this plan, in the first year when focus was very high, I can say that we can qualify that as success because in that first year, we almost met all of our financial KPIs. But after that, 2023 occurred, and we started facing strong macroeconomic headwinds. And this is why in summer 2023, Laurentian Bank decided to undergo a strategic review. And from that exercise as well as our own internal reflections, I have to say my observations after being 11 years in this institution, today, we really wanted to share with you key learnings from those activities. First of all, we need to manage better our Personal Banking and align it with our revenue stream. We need to make sure that we make the right fundamental investments into our technology. And why is that? It's because we're too complex, too manual organization still. And that doesn't allow us to scale key products that would be accretive to this bank, but unfortunately, we're not set up properly to do so. And this is with these key learnings that we came up with this revamped strategic plan. We will keep engaging in strategic partnerships to bolster technology and to improve our product offering. We'll invest in process simplification to improve our customer experience. We'll reduce complexity in our cost structure to improve profitability, and we'll make sure that the focus in Personal Banking will be about increasing the gathering capabilities to strengthen our core banking deposits. But we didn't wait today to actually start the journey. We started 6 months ago, executing on key things. And I think that you saw within those months that we made key executive appointments. We also revisited and started realigning our headcount towards a future that will make this bank leaner and simpler. Some examples of what we already undertook is the sale of our full retail brokerage sector to Industrial Alliance. And last week, where we announced some headcount reduction, we decided to exit equity research for capital markets. Also very proud to have hired a new technology leaders -- leader that is actually starting to hire additional talent in technology because you're going to hear me talk a lot about the need of our foundational technology. And through that -- and what we're putting in place right now is strong governance and oversight on our programs to make sure that these deliver the right outcomes, that these generate the right return on investment. And this is where it's going to make a huge difference for us in the future. So now let's go deeper. Let's talk about our different business activities, starting with Personal and Commercial Banking, starting with Commercial Banking. And you're going to hear me say how proud I am of the progress and what we actually built in the last 10 years. Very proud because when I joined Laurentian Bank 11 years ago, that group was mainly generalists with $6 billion assets that we grew throughout the years up to $17 billion where we are today. And as you can see in there, we grew that segment, leveraging expertise, specialization approach that helped us diversify the business mix, diversify our geographic footprint. And I think that this is why qualifying that we have at Laurentian Bank a world-class specialty lending platform is not an understatement. And this is what I'm going to explain to you when we deep dive in each one of these groups. I'm going to be able to walk you through the value-add that we bring to our customers and why we believe that Commercial Banking will be and will continue to be a great growth engine for us in the future. Various business sectors, I think, taking the opportunity today to actually walk you through each one of them and give you better perspective and details. So we'll talk about inventory financing, equipment financing, 2 wholly owned subsidiary, stand-alone businesses that operates under Laurentian Bank, our commercial real estate as well as our commercial SME group. Starting with inventory financing. So I think we should be very, very proud of that business, which we acquired in 2017 and operates under the name of Northpoint Commercial Finance. And through this business, we're able to actually service dealers. And the industries we operate right now are on the vast majority in terms of marine, RV, manufactured housing and trailers. But throughout the years, since the acquisition, we've been putting more and more emphasis into diversifying those industries, maximizing the capabilities of that platform. And I'm very proud to say that, and maybe it's not known enough, but Laurentian Bank actually service throughout North America 6,000 dealers through that platform. And throughout the years, we were able to establish strong relationships that starts at the original equipment manufacturers that I'll refer to as OEMs. And those relationships have definitely paid off and appreciated for sure the type of service that we can provide because you can see in there that we are rated world class in terms of our customer survey, telling us how great a business we have to deal with, the ease of doing business, the strength of our relationships, and this is what makes us so successful there. And to give you examples or reference points in terms of efficiency because we're going to be talking about efficiencies today, this platform went from $1 billion to now today $4.2 billion. So 4x growth. Through that period and as of today, we've increased headcount by 25%. So it means that this business provides strong and efficient way of doing business that where we believe in there, we have capability of keeping on growing and maximizing the potential scale in there because we believe that throughout the various industries that do address inventory financing, this platform can supply the right financing needs for those dealers. And in there, like we haven't competed on price. Like we've delivered that growth maintaining our high margins, which I think is a very, very important takeaway. Also, we haven't played on risk. Like we've stayed very stable and focused in terms of our risk underwriting and how we manage the portfolio. So very happy about this platform. Very happy about its performance. And most of all, very confident in our ability to keep on growing this further through the cycle or business model that we have, starting with the OEMs, delivering on the dealer base. And I'm going to be talking of equipment finance and point of sales after that. So please remember that model in there because it's quite important after that when I'm going to be talking about growing the ecosystem and maximizing the value chain into our different sectors. If I go into equipment finance, again, a business I don't think we talk enough about, a business where we service 18,000 customers, a business that is well diversified and that provides for those dealers that are selling actually to end users. At the end of the day, we do finance those commercial end users either through leases or through term loans. This business has been quite successful as well, keeping great efficiency profile because we don't play on price. We play on value-added proposal. And again, in that business segment, you can see the surveys we're getting from our customers, which rates ourselves year after year in the excellent bucket, which means that we're easy to do business with, means that our account managers, our front-line people make a difference in the day-to-day service they provide to those customers. And this is where I think it's important to go back to the model because there's even more we can do getting those 2 businesses closer because those 6,000 dealers do have opportunities at point of sales. And through our equipment finance arm that is focused on commercial, we could actually go from the manufacturers to the dealers and after that to service the end users, which provides opportunity in the overall economics at very different levels that we believe we can keep on maximizing. Our commercial real estate group. Again, very successful group for us, $9.2 billion in assets right now and a business model where we actually start from the land financing for most of the time because we concentrate our efforts into construction where, again, we don't play on price. We bring value to the chain and make sure that we focus our efforts where we're going to be able to make a difference for our customers. There are some takeout financings. If it makes sense for us, we do capture that opportunity. But again, we try to aim deployment of capital where it's going to deliver the best returns, where we've shown good success as well as in terms of repositioning some loans because the team has a deep expertise and is able to execute on some of those projects. These financing and that portfolio is 100% Canadian based, where our financing are all across Canada in the major cities. And we believe that through this group, we're very well positioned if we experience in the next few quarters an ease in interest rates in Canada because our top-tier developers that we have relationships with are just awaiting that moment so that they can relaunch projects and that we can actually start funding those. This is another group with an excellent survey from our customers. And this is where we are very proud of what we are in terms of how we provide to the market. And this is true value added, not playing on price, having a very well-structured risk approach, prudent in our underwriting, managing our credit risk the right way. And I think that has shown throughout the years in terms of our portfolio resiliency. Our commercial SME group. Well, we actually took the same approach. Smaller in terms of outstanding there. A big portion of that group is actually Quebec-based. But again, we took our people and we specialize them in various niches. Subsidized day care is an example of that where we are right now about 15% over in terms of market in Quebec. And why is because we are able to offer a differentiated offer. And our people provide, again, the right level of service that makes a difference in the customer experience. So I think it's important to remember that we strongly believe that through our specialized approach, we were able to deliver value for this organization. And this is why you're going to hear me out in terms of our ability to keep creating that value because this is what we've built in the last 10 years. And this is what we can continue and build to deliver value for our shareholders. Again, important to come back on what we said in 2021 because not too long ago. And for Commercial Banking, the objectives or the priorities were to continue and grow to our specialized focus, diversify by geography and industry and keep deepening our customer relationships. And I can tell you proudly that this is what we executed upon. This is what we've delivered. We grew $14 billion to $17 billion to that timeframe. And the team worked real hard to make sure that we executed and made this happen. Why we believe there's a lot of opportunity moving forward is because of the mega trends we see out there in terms of the macroeconomics. And for sure, if we just take our commercial real estate practice, as an example, well, we all know that there's housing shortage across the country. And our commercial real estate group is mostly focused on multi-residential. Out of the $9.2 billion I talked earlier about of portfolio, 55% of that is into multi-residential. 10% is in condos. So for us, as soon as we start seeing the ease in interest rate and that consumers come back with the right price tag and price value for our developers, we believe that our team is well positioned to benefit from that rebound. We also believe that the economy as a whole is maybe more complex these days and that our specialized approach will be able to service these customer needs in the way they want to be served and to provide that value added that we can deliver and that we've proven that we can deliver upon. This gives you perspective in terms of addressable markets, our market share, and you can see in there that there's plenty of room to grow, plenty of room to grow organically, plenty of room to grow with partners, which I'm going to talk a bit more about later on. So what are we going to do through this plan differently? Well, we're going to keep on growing organically because like we know we can. We've proven it, and we're going to keep deepening the relationship and make sure that, that repeat business and those opportunities we capture. We'll also do it through partnerships. We're going to maximize the value of the ecosystems around our specialization, and we'll diversify into adjacent sectors or specialties because we've demonstrated we can do it throughout the 10 years, and we believe there's a lot of those out there that we could tackle through time. First of all, grow organically. Like I think I touched on it. We're good with our customers, and we're getting more of their business and the proportion, and we have demonstrated the ability to compete against the big banks because this is what competition is about in those sectors. We compete on a daily basis against the big banks. Where we can make a difference even further is through partnerships. And what I mean by that is that if we take a specific industry we're in, I said we don't play on price. But some partners are there, might be interested in terms of those types of assets at a cheaper price point. And through our relationship and our ability to originate those deals, we can actually work on flow-through financing towards these partners and be able to capture a portion of the economics to, again, enhance other income for us. In there, you see white label. I think, again, this is an area that maybe it's not as known, but through our equipment finance group, we do provide white label services. And one of them, as an example, would be Lenovo, like the world's largest PC manufacturer out there where we do provide white labeling for all their Canadian business. And we've been doing so for more than 10 years now. So it proves the fact that our strength, we can push even further. And Lenovo is an example of multiple others that we deal with already. If we're able to scale, position ourselves better on a North American footprint, this is where I believe we can keep expanding and making sure that we deploy our capital efficiently, we keep the right risk profile for our portfolio, and we leverage those partners that have interest into expanding into these asset types. How do we maximize the ecosystem? Well, I think I made my point in terms of how customers appreciate how we do business with them. Well, customers are actually asking us, how can they do more business with us, because they know we deliver on expectation, because they know that we've demonstrated we have the right capability to service them. It's just a question of how do we invest and focus in the right areas and the right niches to actually take these industries or specialties and actually push it even further. And in there, you have examples. And now like I want to manage expectations in terms of like the products or the new things we're going to put out there. Like this is a midterm ambition. But like there's a lot of things that we can tackle. And I did mention one in terms of the 6,000 dealers we serve across North America. Like they sell to end customers. Are there partners out there that could be interested in these point of sales that we have strong relationships with? I believe so. Would some of them be interested in terms of our OEM footprint and try to maximize those relationships? And I can go on and on in terms of how we can actually bring value to the organization and not solely in terms of deploying capital, but what we need is to generate those other income opportunities. And we think that throughout our Commercial Banking, there's a lot out there that is untapped right now because we haven't been putting the efforts and the focus and the investments to actually target those. Diversified and adjacent sectors. Well, I think that you saw what we did in the current ones. There are others. And again, both the mix of the people we onboard, the specialties, but we need to take the right approach in terms of understanding the risk, how does it fit within Laurentian Bank, and after that, make sure that we execute the same recipe we've been using in other specialty to be successful. So what will success look like for Commercial Banking in this strategic plan? And how do we actually believe that we're going to be able to execute towards growth? Well, we're going to be aiming at a high single-digit growth. We'll maintain an industry-leading position in our specialization to our NPS and our customer surveys, and we will continue to operate as efficiently as we've done throughout the years. And Yvan's going to touch on this, but like I can tell you, Commercial Banking for this group has been operating very efficiently, and we intend to continue doing so. Now Personal Banking, another great group for the bank. But before I talk about the future, I really want to reaffirm like this group provides a solid core deposit base. And that deposit base is definitely essential for us to keep funding our Commercial Banking ambition. And we believe that throughout the years, there is tremendous headroom for growth for us. And why I'm saying that is if we just take what we are right now in terms of footprint, we're the third-largest Quebec-based bank in terms of branch footprint with over 50 branches, over 100 ATMs out there. And like I said earlier on, that network is actually supported by advisers and brokers to our B2B Bank that operates across Canada. Our retail network branches account for $8 billion of our core deposits out of $21 billion, if you do take into consideration our B2B Bank. And I think that as we demonstrated in Commercial Banking, the long tenure of our advisers, our approach towards the customer in terms of tailoring the needs is an advantage that we need to keep on maximizing in this plan. And also, don't forget, like I did come back to our roots, the fact that we've been around now for 178 years. Well, we have deep roots into those communities we are in. And I believe that there is headroom for growth if we provide the right tools and that we are able to take those best practices that we've realized throughout the years in Commercial Banking and actually extend them through Personal Banking. Again, for Personal Banking, I think it's highly important we come back to 2021 because there as well, we set ourselves some key priorities, which was to create a performance-oriented bank to focus our products and our services, to introduce a digital-led approach and also to unify our brand. And there as well, the team made great progress towards those priorities. Like we were able to deploy, implement a new operating model that provides for better sales management as well as introducing new training skills for our people that do interact with our customers. We were able, through that time, to actually reduce our approval day to get a mortgage from 8 to 2, which is a significant progress from where we were. We've enhanced or we launch a new VISA offering where we have enhanced features, and we also started digitalizing our account onboarding. In terms of digital-first approach, well, the team made great progress in a very short time period in terms of closing customer pain points that really we needed to focus on because it made us aside from competition. And simple things as online password reset or just tap on debit, I have to tell you, like prior to 2021, we didn't have. So we made progress, but at the end of the day, I think we did too little. We haven't done enough to actually improve our Personal Banking and mostly because we've been too focused in our internal processes to actually be solving for the customer issues on a day-to-day basis. I think that we've remained too complex in terms of our product shelf. And for most of those products, we don't have significant scale. And in terms of foundational technology, well, this is where we need to make the right investments because you can close some gaps, but if you close them on things that will not allow you to be more sustainable, and I'm not talking about next year or next 2 years, sustainable through time at the pace technology is moving, we need to make those investments so that we provide the right customer experience through the right tools. Why I'm confident about our Personal Banking is because of this. Because on a daily basis, we do receive those types of feedback, where our advisers, the people that interact directly with our customers day to day provide great advices, guidance, and they make sure that they deliver to their best of their ability to those customers. And I think this is why we can be so proud of our deposit base, so stable in terms of our customers throughout the 2023 challenges we faced. And this is why I believe that if we're able to reduce our manual processes to simplify this organization, but mostly being able to provide those people with the right tools, we'll be able to acquire net new customers. We will because there's a great market opportunity out there. Targeting the middle class, 17 million Canadian, to provide the low to no-cost type banking experience on a day-to-day basis is definitely for us headroom for growth. But to do so, we know what we need to provide. We need to provide a seamless digital experience that they can actually self-serve themselves towards those day-to-day banking products. We need to make sure that our customer experience remains or increase in terms of how we tailor that experience between our advisers and our customers. And strategic partners will be leveraged there to make sure that we deploy the right capabilities, and this will accelerate speed to market for things that we are considering moving forward. This is an important page. This is based on a survey that average Canadian pay about $250 a year on banking fees. And on top of that, the unearned interest of their balance in their bank accounts, that can account for about $50 to $100 a year. So when you take those costs and those unearned interest, well, tell you something, like this makes a difference into an annual budget for those middle-class people. In the current environment where we have high inflation, price of everything we consume has gone up and put pressure on everyone's budget. We think that if Laurentian Bank comes out with an offering that will help lower these costs or eliminate these costs, this is going to be a true value proposition that will make us acquire net new customers. If we offer that simple way, I think that we can become their bank of choice for the future. So our approach going forward is really going to be to simplify and make sure that we provide with the self-serve type products I just described. We will work on the complexity of the organization, make sure that we reduce the product shelf so that we tackle day-to-day simple product needs for the middle-class customers. And again, it's all going to be about accelerating that foundation technology need that we absolutely need to have for this plan. So in the near term, our goal is to be able to launch that day-to-day banking that will allow customer that access to a lower-cost type banking product. And after that, really into our reduced product shelf, to expand those digital capabilities so that our customers of the future, again, can self-serve and make sure that they benefit also from that human touch. And in the midterm, can we expand towards more accretive, and again, value-added type products? I believe we can. And it's all going to be about finding and implementing the right technology stack, which at the moment is way too complex. Simplify our bank, definitely optimizing our portfolio in the aligned target segments, so middle class, reimagine our physical footprint, our branches. And what I mean by that is it's not exiting our footprint, not at all. Like our goal is to optimize those footprint because right now, and as you might know or recall, since 2018, Laurentian Bank provide advice-only services in the branches. We are transaction-less, but we still have those branch footprint that have a vault, have a counter that are way too big for the needs of our customers and our advisers to provide the right level of service. So we believe that through this optimization, we'll be able to create cost savings that will help again improve profitability throughout this plan. We'll improve our operation and systems to make sure that the customer experience is enhanced, and this, as we demonstrated in Commercial Banking, will make the difference. Leverage our partnerships to deploy new capabilities. Speed to market is again at the core of the Personal Banking implementation. How are going to measure success? Well, again, for us, it's all about the customer and how they rate us because this is how we can create momentum. This is how we believe we can create net new customer growth, our day-to-day retail product availability through digitalized approach and making sure that we keep a strong focus on core deposit gathering. And this is what it's about, day-to-day banking product to increase core deposit gathering because it's going to help in terms of our funding mix. It's going to improve our cost of fund overall, and it's going to help us fuel our commercial business and create more profitability for the organization. Efficiency will be on top of mind for everything we do in Personal Banking to make sure that we create a more efficient personal bank. And now our Capital Markets, another important group of ours. And in terms of activities, for us, it is also a group that since 2021, has worked really, really hard in terms of the priorities we gave ourselves at the time, which was to act as an alternative in terms of the big banks to make sure that their capabilities were extended or aligned more towards our commercial customers and that we're able also to offer some ESG capability throughout that journey. And in there as well, the team has worked hard and delivered on those aspects. We've improved level of service and made sure that we grow our syndicate positions through corporate and government issuance. We've aligned products, just like foreign exchange, for example, aligning that service towards our commercial customers that actually do some cross-border activities. And we did launch some ESG products that had good ramp up into the Capital Market group. And we'll continue to do that in the future, but different ways in terms of focus. For us, Capital Market is going to be about enhancing and making sure that we play where we can win and where we can have scale and doing so efficiently. And we strongly believe our fixed income group has done so throughout the years and will continue to do so for us in the future years. FX, I did mention, and we believe that this provides value added to our commercial customers. Simplification is key here because we already started revisiting, as I explained at the beginning, by exiting our full brokerage service to Industrial Alliance and also exiting our equity research group last week. And throughout the bank, we'll continue to evaluate, make sure we position ourselves to take the right decision to make this bank simpler. The measure of success for Capital Market will be to grow in fixed income and our FX specialization, maintain connectivity and make sure that where we do believe we can win, we put some emphasis. Otherwise, we need to rethink how we do things or take courageous decision and actually exit the areas where we don't believe we can bring scale. And we will continue to focus on our ESG offering in that group. All right. Two key enablers for us to talk about, which is technology and operations. And I think I said technology enough that you will believe this is quite important for us. Two-pronged focus on technology, simplifying, which I did say in terms of the complexity of the technology stack we need to address. And we've started addressing that. We need to go faster. We need to go further and make sure that we go into the right programs to reduce those manual processes, but most importantly, to make sure that we transform, and again, related to increased capabilities, better capabilities and making sure that we execute on those programs, execute to bring outcome and the right return on investment. And we've already started in terms of, like I said, appointing a new CIO that is onboarding new talent. But the most important is the implementation of the new governance program, having oversight over the projects that are underway and that we are about to launch and make sure that we have the right assessment. And this is why we took time to come to market with this Investor Day because we wanted to take time to reflect on what will make a difference to the profitability profile of this institution. How do we spend the money in technology to make sure that we make the moves that will enhance that product offering? And the path ahead is definitely to modernize and to simplify, again, partnership for speed to market and capabilities and making sure that we rationalize our portfolio. Talking about operation will be all about how we work, where we work and actually how we organize that work around our customers. And this is, as an example, why we announced today that we'd be reducing our Toronto corporate footprint by 2/3. We realized that hybrid model for us works, that our facilities here weren't used at more than 20%, and those cost savings represent $5 million on a yearly basis. And doing that reduction doesn't change anything in terms of our employees' ability to actually come here downtown because we're maintaining a footprint, and it will allow them as well to leverage our Burlington offices where equipment financing and inventory financing group are already operating from. So just going to enhance or create even more flexibility for our Ontario employees, but at the same time, make sure that we take steps to reduce our cost structure. And now I'm very happy to invite Yvan Deschamps, our Chief Financial Officer, to walk us through the financial objectives for this plan. Yvan?

[Foreign Language] Thank you, everybody, to be here with us. Really proud to be here to present the financial path forward of the bank. As Eric mentioned, we made good progress over the last few years. We're going to continue making progress. And one thing that we will do is improve profitability of the bank. And how we're going to do that? We're going to start from a strong financial base. And the financial base of that bank is composed of 3 key elements. The first one is capital. Capital is really strong right now. If you look at that slide, if you look on the left side, you see that we have a strong buffer versus the regulatory minimum. So our CET1 stands at 10.4% versus a regulatory minimum of 7%, which is a great buffer in terms of being able to take on any economic turmoil. We're asked very often, how does your capital compared to the other banks? The other big banks usually disclose their capital under the advanced approach versus the smaller banks under the standardized approach. Since the end of 2023, the big banks also disclosed their capital under the standardized approach. So when you look at apples and apples on the right side of this, you see that if you look at the yellow bars, we do compare favorably in terms of capital versus the rest of the industry. So that will allow us to build in terms of growth from the strong base of capital that we have. The second element of the strong financial base we have is the diversified funding that we have in place. We have a good and strong liquidity position that we can start with, and we can also fund the growth of the bank using the strong liquidity that we have in place. You can see at the bottom of this chart the very solid liquid position that we have but also the diversification, the various things that we can do to fund the bank. So really strong and diversified and continue to diversify over the last few years. If you look at the LCR ratio at the top of that chart, you see that over the last 12 to 18 months, seeing the macroeconomic uncertainty coming and increasing. We've been building a liquidity war chest. And that liquidity war chest is going to help us again to fund the growth going forward at that bank and really is a great position to start with as well. We did complete, over the last few years, a few good things. We did stabilize the retail deposit erosion that we had in the past. We reduced by about 20% the wholesale funding of this bank, which is by itself a buffer because we can tap into that funding if need be going forward. And we did improve securitization funding at the bank. What we intend to do going forward is that, as Eric mentioned, we will strengthen our digital deposit capability at the bank. So that will strengthen our deposit gathering to fund the commercial growth that we envision. The second thing is that we discuss a lot about partnerships. So we want to have partners that will support the growth that we're going to have from a commercial perspective as well. And finally, talking about securitization, which is something we've been focusing a lot because it's long term, cost efficient and it pretty much fits the maturity of your loans as well. We intend to build and have a new securitization conduits for Alt-A, which is also a specialty of this bank. The third portion of the strong financial base is really the credit. This bank has, is and will sustain a great credit position, very strong in the past. If you look over the last 15 years, we ran at about half of the losses of the rest of the industry. And why is that? Because we have strong underwriting methods and criteria. But also if you look at the metrics, very impressive. 95% of the loan book is securitized and collateralized. About 60% of the residential portfolio is insured. And the remaining portion has an LTV of 50%. Very strong, very secure portfolio in the residential mortgages. Commercial real estate, 2/3 of it is in multi-residential, residential. So very good place to be, very limited office exposure with 3% of the commercial book. And the LTV of the uninsured portion of the commercial real estate stands at 62%. More than 25% of our commercial real estate book is insured as well. So very strong commercial real estate to weather the uncertainty that we have currently in the economy. And finally, we've been discussing many times that over the last few quarters, inventory financing, great asset, very strong from a credit perspective with a lot of levels of protection as well. So let me take a look here or let us take a look at the recent performance. As Eric mentioned, from a financial perspective, we started strong in 2022. Then macroeconomic and some various events during 2023 slowed down the financial results. So we intend to build from this point. And let's take a look at what we've done versus the rest of the industry in terms of the revenue growth of the expenses and efficiency ratio. Let's start by the middle graph. You can see that we've managed our expenses growth to be lower than the rest of the industry. But if you look at the revenue growth, unfortunately, we've been below the rest of the industry as well. So we need to invest further to manage the cost and be more efficient. That's something I'm going to discuss a lot. And you're going to see on the last graph at the bottom that we sustained, as of today, too high -- way too high in terms of efficiency ratio, which is definitely one key focus that we're going to have in this plan. But let me double down in terms of efficiency. It's the first time that we disclosed the efficiency of our different businesses. So if you look at Commercial Banking, we grew that business. And pretty much over the last 10 years, we tripled the business. And we did that while being extremely efficient from that growth. We maintain our efficiency ratio despite the fact that we've been growing it very rapidly. Personal Banking on the other side, unfortunately, we've been somewhat inefficient. We need to invest in technology and processes. We need to be better on the digital side. So those are key points. And as you can see, and you're going to hear me that in the next few slides, we need to continue growing Commercial Banking because it's highly efficient. And Personal Banking is not a question about growth or volume. It's a question about being more efficient. So if I recap, technically, we start from a 6% ROE. We have an objective to grow that in the double digit. And obviously, it comes from revenue increase mainly based out of the commercial growth. That's going to be the growth driver of the bank. We're going to do that with the new capabilities on the deposit. It's going to fund that growth that we're -- what we're going to do on the retail side, digital side. And from an expense perspective, as I just mentioned, the key focus is going to be really the efficiency. But to get to that efficiency, we need to start by investing. We need to stop playing the short game. We need to be able to invest and really transform the business to be able to generate the efficiency in a sustainable way going forward. Let me double down in a bit more detail, but that recaps pretty much what I've discussed at this point, right? So we have a strong base, strong liquidity, strong funding and strong capital position. We have enablers that we need, and technology Eric discussed about that is going to be something key. We will accelerate the investments in technology. We need to be more digital. We need to review our processes because we want to be way more efficient. We can do that partly, but we're going to have partners to this so that we can go faster and we can do better. If you go by activity, the key objective of Commercial Banking is growth. It's a highly efficient business. We have niches. We have specialties. We win and our customers love us. We need to continue growing the commercial bank. That's the growth factor of the bank. Personal Banking, it's all about efficiency. We need to be better. And by reviewing the efficient -- not the efficiency, but the processes and investing in technology, we intend to make that business more profitable. We're going to enhance, as I discussed before, the deposit capabilities, which is going to support the growth of the business. And finally, in the Capital Markets, we're going to have focused growth where we can win again. We don't want to be everything to everybody. We want to focus where we can win. So target metrics, along with that, on the Commercial Banking, loan growth, high single digit. This is pretty much what we've done over the last many years, very credible objective. We want to maintain the good efficiency ratio that we have through that growth. Personal Banking, retail deposits is going to be a key element of our strategy. We want to have high single-digit growth in the midterm for personal, for retail specifically. But the key factor is going to be the efficiency ratio. We want to have a double-digit reduction in terms of the expense level of that business. Capital markets, focused growth, but we also, through that, are going to improve the efficiency of that business. So all that leads to financial targets for the midterm: adjusted EPS, double-digit growth; ROE, we want to achieve the double-digit; efficiency ratio, we want to get to 60% or lower. We're too high right now. And obviously, all those metrics brings us to be positive from an operating leverage perspective. How are we going to do that? Through the growth drivers that are very credible, loan growth and deposit growth in the mid-single digit overall for the bank, grow the NIM that today is at 1.8% to 2% or above, and we're going to achieve that by changing and continuing to evolve the bank makes towards commercial being at 55% or higher. So thank you very much. I'll let Eric conclude and add some closing remarks.

All right. Thank you, Yvan. Before I conclude, I just want to make sure that I take this opportunity and this time to actually thank again our employees for their hard work and their commitment to this organization, thank our customers for their loyalty and their resiliency throughout the challenged time we went through. But I want to reassure you that definitely, this bank is strong. This bank is well positioned for the future, and we will continue to service you. And our goal is to service you to a higher level, more efficiently and on a sustainable basis going forward. I want to thank our shareholders for their patience. And hopefully, this plan provides some highlights of how we intend to position this bank stronger and more profitable for future. If I summarize what our midterm objectives are, it's definitely to continue and leverage Commercial Banking as a growth engine. I think we made the demonstration that through our efficiency and our approach toward customers, this is the right path forward. We want to make sure that our focus in Personal Banking is to strengthen our core deposit capabilities, and that's going to help our funding mix and improve profitability for the future. And Capital Market will keep acting as a key enabler for us for those corporate and government issuers we have out there and position themselves where they can win. We have a great plan ahead of us. The thing is and the key focus is going to be on execution. And to execute, this is what we're going to target in terms of making sure that we work through our existing ecosystem, enhance them and keep expanding in terms of business mix for everything that concerns Commercial Banking. The funding aspect of all this is very important. As Yvan mentioned, we will keep on focusing on gathering core deposits to fund and fuel our commercial growth. Technology, we mentioned in terms of getting the right capabilities out there but on a foundational basis to really position this bank for years and years to come and be able to actually offer self-service at low cost to no cost to middle-class customers for their day-to-day banking. And also in terms of profitability, what we need to focus on is profitable growth versus volume only. And I think that with this plan and this focus, my leadership team will be able to execute and deliver upon our key metrics. Everything out there is rooted in our belief that we can help middle-class family to actually thrive financially. And if we do so, we're going to be able to help them keep more money in their bank accounts. And I think that's going to be a differentiator, and that's going to help us acquire net new customers in retail. In terms of our employees, our customers and our shareholders out there, I know your expectations are high. And as a leader of this organization, I can tell you that my expectations are high as well. And it is my commitment to you that we will deliver on this plan. We will execute strongly on this plan. And I strongly believe that this plan is the right plan at the right time for Laurentian Bank. Again, my name is Eric Provost. Thank you for taking the time this afternoon. And now I think it's time to move for Q&A. Thank you.

Thank you, very much, Eric and Yvan. We're now -- we're going to hold the Q&A session. For the people in person, just please raise your hand. Someone can hand out a mic. I would kindly request that you state your name and your organization. And for those online, you can actually ask the question online, and I'll relay them to Eric and Yvan.

Okay. It's Sohrab Movahedi, BMO Capital Markets. I appreciate the details you've shared with us. Maybe 2 broad questions here, Eric. When you think about this plan that you've laid -- you and the team have laid in front of us, what's the most ambitious part of this, would you say? What's the -- where can you go wrong?

I think, Sohrab, that's a great question. For us -- and this is why at the beginning, I said this is not a straight line forward. It's definitely the technology stack complexity we have right now and make sure we put the right fundamental to actually deploy the capabilities we want to gather those core deposits. So that self-serve type is really the main focus for us in the near term to be able to deploy this.

Okay. And so when I think about the deposit plan and the importance of the personal bank as a deposit gathering, I suppose, engine for you. Is the plan for those branches and the footprint to be solely focused on deposit gathering? Or are you still trying to sell mortgages and credit cards and other financial products at those centers as well?

Yes, it's a great question, Sohrab. I think that, as Yvan described, like our goal is to move the mix of the bank towards a more 55% commercial, but 45% of it will still remain loan products that we have and that we will continue to offer to our customer base in the Personal Banking.

Okay. And one last question. I think several times you mentioned the aspiration of having a self-service at low cost to no cost. How do Laurentian Bank shareholders benefit from a low-cost to no-cost offering?

Well, Sohrab, I think that in terms of the funding mix of the bank, like this allows us to grow that core deposit base at an efficient cost for us and provide diversification of our mix that in our assumptions will improve overall profitability because of our ability to take that funding and deploy it in the right sectors that are going to bring the right margins.

Okay. I mean like just to play a bit of a devil's advocate, you could raise those deposits maybe cheaper somewhere else from an efficiency ratio perspective?

Well, again, yes, Sohrab, it's a great point. I think that it's all about the mix. And I think if I walk us through how diversified our funding mix is, like this plan does not solely rely on core deposit increase. Like it is about enhancing the overall mix, and that is one source out of many others that we believe will enhance the global cost of fund throughout the plan and will create and generate that profitability further.

And if I may add also, Sohrab, we want to improve the digital capabilities that we have from a deposit perspective. As we do that, it's also going to be way more efficient from a process perspective, and the back-office treatment of all that stuff is going to be also very more efficient. So maybe the revenue will get hit, but you're going to recover from a cost side in addition to what they have described being able to redeploy that in potentially accretive business.

Thank you, sir. Another question in the room.

Nigel D'Souza, Veritas Investment Research. So first, a question on capital. When I think about standardized versus AIRB, under standardized commercial component of it, that tends to be a bit more capital intensive. And you've paused your AIRB transition. I'm trying to reconcile the focus on growing commercial blending or loans with pausing AIRB given that there would be a substantial capital benefit of having your commercial credit exposures under the AIRB framework. So why not do that in parallel and get both the benefit of loan growth and less capital-intensive exposures?

Yes. Thank you, Nigel. And this is a great question. Actually, we talked a lot about the actions we took this morning. And pausing AIRB for us means pausing. Doesn't mean we will not pursue AIRB in the future. It means that right now, this bank needs to really focus our investment into what will create the foundation for future. And AIRB is all about data management. And for sure, technology will enhance our management towards being a better and stronger place to actually complete an AIRB journey. So you're right about deploying capital. But for sure -- I think I explained also the opportunity without deploying capital to work through our ecosystem to actually be able to generate other income out of our commercial activities.

If I could just put a finer point on that. AIRB is a multiyear process. I believe the regulators want to see a few years of a parallel run under AIRB before you could successfully transition. So with that in mind, should we just interpret it as the cost, the investments required to run that parallel system is just too intensive while you're investing in other areas to improve the bank?

I don't think it's about cost. I think it's about resources, expertise internally to be able to tackle the right projects to deliver on the outcome. And I think that this is where in terms of execution, sometimes in the past, we weren't able to deliver properly on some projects. And this is where we need to focus right now on delivering upon what we set ourselves to, which is improving capabilities for our Personal Banking customers, again, to strengthen deposit gathering. And after that might be a project that we will undergo. But running both in parallel right now, I don't think this bank is -- it's not to our benefit. It's going to be more beneficial to do it in the future.

And then on deposits, to your point, on the digital side, we already have other banks in the space that are entirely digitally focused. You have DSIBs that have brands that are more digitally focused like Simplii or Tangerine. So how do you differentiate yourself on the digital side to the younger demographic? And then on deposits, conceptually, I think depositors generally want safety and stability. And the larger banks are viewed as safer. So how do you win deposits without competing on price, which is what a lot of the smaller banks have to do? And then on stability, depositors probably don't want to see a bank being taken over by another bank or sold. So does that mean that any sale of Laurentian is completely off the table and Laurentian in here to stay for the long term and you have that stability you can offer for your clients?

Thank you for that, Nigel. My goal as a leader is to build a stronger and sustainable and more profitable bank. So this is what me and the leadership team will be working towards in that midterm horizon that we're setting ourselves for. In terms of the deposits, like I think the studies we show demonstrate that this group of middle-class customers are the ones that will be seeking out the most opportunities in terms of reducing their costs and that have the more openness in terms of considering changing banks. And we believe that by going after those with a low-cost to no-cost day-to-day offering will allow us to gain our fair share. And again, as Yvan liked it, like we're not talking about doubling our retail customers in that midterm plan. Like it's just to make sure that we have a sustained middle single-digit growth, and we believe that this is achievable, again, bringing the right product suite out there and simplifying the bank.

Thank you, Nigel. Another question in the room.

It's Meny Grauman from Scotiabank. If I had to distill your plan, it would be that you're basically signaling it's business as usual on the commercial side and really where the change that you're highlighting or signaling is really on the personal side. So first, I want to just check if I'm interpreting that correctly. Or would you push back on that simplified sort of characterization of the plan between those 2 business lines?

Definitely a mix there, Meny, because like we did say that Commercial Banking will continue to be the growth engine. I think that we're going to push that even further in terms of deployment. I think what's different in this plan is the focus we're going to provide in terms of managing and expanding how we exploit the ecosystems we deal with because we believe there's a lot of untapped opportunities within those ecosystems. And I have to say throughout the last plan, there weren't a lot of focus into maximizing those. So I think that this is a big differentiator versus the last plan in terms of Commercial Banking. In terms of the bank overall, the goal is to simplify. I think that like I said, closing digital pain points made us made progress or at least gave us a right to play in Personal Banking because like we were very behind. So the team did a great job there, but we're still too complex. Like we still have 2 origination channel for mortgages as an example. Like right now with our digital offering for deposits, like we have 3 channels for deposit gathering: through our B2B Bank, through our branch network and now digitally. So this plan will be to tackle and simplify. And we've already started. And I think that's the message in terms of we went through a full assessment of our product shelf. And this plan is about executing on simplifying but making sure that we come back with product shelf that will be meaningful, self-serve to our personal bank. So from that standpoint, this is, I believe, a differentiator.

Got it. And then on the personal side, when I hear you talking about it, it definitely sounds like what you're pitching is a digital bank. Now that business model, I think, is quite proven already now in Canada and then globally. But it is a branchless concept, I think, everywhere. What you're highlighting is a digital concept, but you're still holding on to your branches. And so the question is why not go branchless? Especially if the focus is on efficiency, wouldn't that be a clear way to drive down efficiency? And isn't the model really geared towards a branchless model effectively? So is it practical considerations that don't allow you to close your branches? Or I'm just curious why this hybrid model, why not just go all the way and just make a fully digital personal bank?

Yes, that's a great question. And really, the easy answer is because we believe it's a strength. We believe that our current footprint is a strength in terms of being able to provide for that human interaction. And I think we demonstrated that through how we approach Commercial Banking and the value it brings to the customers. And our retail customers are telling us the same, how they appreciate that opportunity to get guidance and get some advice from a human. I just think that optimizing, as we described, is going to be to make that footprint in terms of foot square smaller. Like I think it's not adapted to the type of service we're providing right now. These branches are still too big for the advice-only type we provide in those branches. But definitely within this plan, like our goal is to maintain that human touch, but you're totally right in terms of building that digital bank, maximizing the strength we have in the communities in our Quebec branches. But also after that, that opens the door to address other areas in the Canadian marketplace. And we believe that the middle class will be appealed by another alternative versus the big banks.

Before moving to the next question, I'll move to a question online, Yvan and Eric. Lemar Persaud from Cormark, his question. Just finding it a bit tough to really understand what was wrong with the old strategy. Should we think about this as the evolution of the old strategy? What was wrong with the previous one? Was it really the speed of execution? Is it more the advancement of technology?

Well, thank you, Lemar, for that and for spending time with us on the web. I think this is why we took the time to come back on 2021 plan. First of all, because it's not so long ago. And I think that it was necessary for us to acknowledge the fact that we delivered in some areas of that plan and that we believe that some things in the plan are actually very relevant for this revamped plan. So it's not that it was wrong. It's just that right now, there are some areas that we need to accelerate further and go, I'm going to say, faster into implementing those digital capabilities, but again, on a foundational base instead of just closing some customer pain points in the technology stack.

And if I can add one word that is very important from this presentation, is focus, right? So that's one thing that we see as different from an evolution of the last plan as well, is not trying to do everything for everyone, right? So we need to focus because the evolution of the profitability of the bank is going to be the first priority of the bank. And as I mentioned in my speech, it's not about volumes. What we want is to increase profitability, and you can do that by being focused on what you do, where you can make money and you can win.

Thank you. Next question in the room.

Steve Boland at Raymond James. Just following up on that theme. When you talk about too many products, too many complexity in the Personal Banking, was that something that just didn't get done quick enough under the old plan? Or were there actually products that were added under the old plan to become everything to everybody and that's being reversed? I'm just trying to see. Is this just legacy products and systems that never got addressed under the old plan?

Well, I wouldn't refer to the old plan. And thank you for the question. I would refer to the state we are in versus historical decisions. And I did say it during the presentation. I think that for too long, we tried to copy the big bank model that is offering everything to everyone. And I think that where it created some very high pressure is that for a bank of our size, like you need to take the resources and the people to align them into so many areas makes us average too many ways. And this is why we demonstrated the fact that when we are focused and we provide the right fundamental systems just like in inventory financing, in our equipment financing arm, and after that, we focus on the customer and what they really want as an outcome, we can be successful. So like I mentioned, like we still have too many distribution channels for the size of our bank, and this is what we need to execute and simplify.

Okay. And I'll just do one more. In terms of the -- I guess it was the equipment financing that you're moving into new verticals. So construction, I think power sports, things like that. I mean those are -- I wouldn't say saturated, but there's a lot of funders out there in some of those verticals, especially Yellow Iron in construction. But you still believe that you can get the same covenants from the OEM, from the dealer, the same guarantees. Like why would a dealer or an OEM that has maybe multiple channels or multiple funders want to give you that extra protection? I mean I'm just curious about that.

Yes, and it is a great question. And I think this is the value we bring forward. And again, in the current industry we compete on a day-to-day basis, the OEM we go after have that optionality. We haven't grown in the sector because competition didn't exist. We grow in that sector because we demonstrate to those dealer base that we bring the right value proposition to the table. And after that, throughout our networking, we're able to pitch to those OEMs that coming through us will service better their distribution network. And this is what is appealing to them because when those dealers want to order those assets to put them on the floor, the OEMs want them to move smoothly, and the platform actually allows us to do that. So we compete on a daily basis. We've grown that business by competing against big banks and OEMs that have access to funding, and we believe that we can just expand and continue to maximize that model.

Thank you, Eric. Moving to another question online from Gabriel Dechaine from National Bank Financial. Twofold. When do we start to see progress on your objectives? Will there be a step back before step forward? And second, to build out on the digital capabilities, expand the inventory finance business into new verticals, what sort of additional spending is required? And how will that show up in your cost inflation in coming years?

Yes. Thank you for that, Gabriel, and for attending as well on our webcast. Listen, I said from the beginning, like this is not a straight path forward. So some things to consider. We did mention that our commercial real estate business as well as inventory financing right now is still facing some headwinds in terms of the overall macroeconomic conditions. And these portfolios have been challenged in terms of growth just because of right now, the expectation of easing of interest rate is not coming as fast as we thought. And as soon as we start seeing that, we believe we're going to be able and we are well positioned to benefit from that rebound, and those assets will start growing back again and will contribute to profitability. In terms of our investment, well, in our specialized businesses, we have good technology in place. We have technology that can keep evolving, but like those businesses are stand-alone. So in terms of investment, they are required to keep the hedge to make sure that we keep evolving at the right pace. But I feel we're in a good position to continue and sustain the investment we've been making actually on a yearly basis. On the needs, we need to close some gaps. But from that standpoint, I think that we're well positioned to manage efficiently our commercial banking the way we've done in the last years. So the main investments are aimed towards fundamental needs into our Personal Banking.

Are there question in the room? Yes.

Paul Holden, CIBC. So first question is regarding the foundational investments you want to make in the technology stack. Sounds like that's very important and critical to your deposit growth strategy. So question is, how long will it take to make those investments? And can you start to accelerate growth in deposits before those investments are complete?

Yes. Great question, Paul. And again, like it relates to core deposits in terms of day-to-day banking because we demonstrated that we were able actually to maintain and grow deposits in different areas through the different channels that we have at the bank. So for us, in terms of addressing your question on technology, we have a new CIO that is designing the path forward. And I think it's going to take a couple of years in this midterm plan to actually achieve the goal where we want to get in terms of the right foundation and the right capabilities. In terms of the pace we're going to be able to accelerate deposits, like on a day-to-day basis, our teams are working with current capabilities to continue and attract customers. And we have campaigns that we run to gather deposits, and we will continue to do that even though we don't have right now those capabilities. Like the focus on Personal Banking is to definitely keep on gathering deposits and acquiring net new customers but with the capabilities we have at the moment.