The Bank of Nova Scotia (BNS) Earnings Call Transcript & Summary

Good afternoon, everyone. John Aiken with Barclays. Very happy to have Dan Rees here from The Bank of Nova Scotia, who's the Group Head of Canadian Banking. Dan, welcome. I believe this is your first time presenting at our conference.

Thanks for having me. Happy to be here, John.

Great. Now, Dan, before I start pummeling you with my Q&A, would you like to do an opening commentary?

Sure. Happy to do that. Thanks for having me. We're pleased to be here to kind of give perspective in our own words on the story that I think you've seen unfold now positively over the last couple of quarters. Canadian Banking segment is obviously a big part of the BNS franchise, and it's got attractive ROEs. And we've seen it grow now as we're emerging out of the pandemic. A couple of years ago when I took the chair, we made a couple of big strategic choices, and that strategy is still intact, COVID notwithstanding. And I think it's working. Certainly, through the financial lens, obviously, revenue has been terrific. Our top priority -- as we thought 6, 9 months ago, the pandemic would be sort of settling through the summer and the economy would be resuming. Our top priority was to grow the top line. So revenue was strong, PTPP was strong. And I think the main message is we are optimistic about what Q4 and the rest of next year brings, particularly if we keep our main priorities, what we've been focused on, and that is growing our business bank, continuing to grow the mortgage book. And as consumers become more willing to get back into those higher-yielding products, you'll see the fee income pick up. I think the biggest highlight for me, John, and then I'll pass it back to you is, since this year, our fee income story has been terrific, and that's been both credit card, purchase volumes come back. So that shows up our contribution from all of the mutual fund sales, it has been a terrific year, over $3 billion year-over-year in mutual fund sales. I think that puts us #2 in the industry in Canada. You might not have imagined that coming from Scotia 4, 5, 6 years ago. So that's great. Our pickup from Canadian Tire is positive. Pricing in commercial has been sharper and more disciplined. So all of the many contributors to the fee income line progressed nicely in the last couple of quarters. So we're happy about the strategy. It's showing up in the financials, and we're optimistic about the outlook for our segment given that we're optimistic about Canada from here.

Well, great, Dan, that's fantastic. And I'd like to pursue that optimism, if we can. And one of the issues that investors have been having, not specifically Scotia, but for the Canadian banks overall, is just trying to figure out where loan growth is going to come from, when is this going to start. And what's your view on this? And if you could just drill down into a couple of line items, both on within the retail side, but also on the commercial side, that would be great, please.

Sure. I think 2 big items popped in mind. 80% of our -- of the loan side of the balance sheet is driven by our mortgage book where we're the #3 provider and by our mainline commercial loan book where we're #5. So that gives you an indication of the upside on the commercial. Those 2 books have been growing now for at least or close to podium-level positions for the last 6 quarters. We expect that to continue. That's no accident. That's -- one of the choices we made a couple of years ago, was to get more serious. We've been growing into our natural market position in commercial lending. We got there in Q2 in deposits. We're #3 in deposits, and this is a self-funding book. So loans should pick up. We've been very public about our industry growing the sales capacity and capability in the business bank in commercial lending. And I think that you're going to continue to see us be a top participant there. We have a terrific quarter in mortgages, a terrific quarter. And we're very optimistic about the housing market. Obviously, there's lots of questions about housing affordability. We believe that consumer demand, particularly as immigration comes back, is going to continue to be strong, rates notwithstanding. And we've been very clear through our economics department and myself personally that the supply constraint is a problem. Not -- even if supply is tight and even if rates rise, you're going to see us continue to gain share in the mortgage market as we did in Q2 and Q3 of this year. The other loan book that sometimes we don't talk about as much or we're not asked about as much is the automotive book. We've got a market-leading market position. Clearly, that industry has been in transformation even before COVID. But while there's been lots of media coverage about chip shortages and inventory management and dealers, we saw quarter-over-quarter, year-over-year improvements in applications, in asset growth. And we're probably going to end this year in a record revenue position in automotive. And we think that COVID -- when the supply comes back online and given our terrific partnerships with the OEMs and otherwise, that's not going to be that far away, we think automotive could have its best year yet in 2022. So if those 3 portfolios are growing and even if credit cards takes a little bit of time, which is our view on the balance side of things, we think asset growth for our segment is very well positioned already, and we think that will continue for the next year.

Yes. Dan, I want to touch on the cards because you did mention on the fee side and, obviously, the balances just aren't coming true. But you have better visibility than we do based on what your customers are doing. And is part of this activity and presumably the growth that's coming through, is that what's fueling your optimism for the outlook? Are we actually starting to see I guess bigger green shoots coming from the consumer side and what's their confidence in terms of spending?

Yes. And I -- sometimes what happens when -- I remember, I was in risk management in 2007, 2008 during the last crisis and distinctly remember the decline in revolving balances in a few of our markets, Canada included, and then how they resumed. And the progression typically is spend before the lend. And so you're seeing purchase volumes through the summer held very nicely in all 4 of our credit card categories, cash back rewards, you name it. And then the balances tend to follow. I mean that is the consumer behavior as well, obviously. So to be near the top of the heat on a peer basis at purchase volume, particularly in the everyday day-to-day category, gives us lots of enthusiasm for imagining that balance growth will resume. The other key indicator we look at is applications by risk score. And so through the summer, we saw consumers begin to tap into new cards. And that takes just a little while for that to build as we head into, believe it or not, Christmas not -- and the holidays isn't that far away. And so I think from my perspective, looking to see where we sort of settle out in December, January spending and repayment will give us a pretty good indicator come February around whether those balances will stick around, pick up NII and sort of build yield probably towards the back half of next year. That's how we're thinking about the card book. And the other piece that's unique about Scotia and credit cards because we recognize that we're a small -- we are in a small market position even if we're pleased with our performance and the outlook is we do have a 20% share in Canadian Tire Financial Services. So that gives us earnings pickup but also good visibility into the nature of what's happening in that borrower type, and that's a good partnership for us. And so we certainly see top line pickup in the fee income from that relationship.

And, Dan, you mentioned that you're happy with the commercial loan portfolio growth, both absolute and relative basis, and you indicated that part of that was hiring on more players. How much more runway do you have? And is it as simple -- I know it's not, but is it as simple as just adding in more bodies, training them and the flows will come in? Or what is the challenges to continue to grow the commercial loan book from this stage?

Yes. Look, it is a bit more complex than you indicated, but you don't get to that opportunity without having feet on the street. And we hear that from consumers. Our -- my perspective is built on consumer feedback, consumer research and what our salespeople are telling us. Job 1 is to be in the location where the consumer is. And you need to have industry expertise and we do in a couple of key areas. And those are areas that matter to Canada, technology, agriculture, real estate, transportation, you name it, construction. Those are places where Scotia has terrific relationships, but has been under-indexed on the sales force side but also on sales capability. And so we're completing a front-to-back exercise to make it easier for our customers to do business with us and easier for our employees to spend more time with customers, both getting deeper with those relationships, think cash management, not just lending, and also generating more business from new customers in some of those industries I just mentioned. The other thing that I would say, John, is we've been clear that Canada is stitched together as a result of the provinces in which we all enjoy, right? Not all the provinces are the same. Clearly, our history starts in Nova Scotia. We've got a tremendous market position in the province of Ontario as well as a decent position here in Toronto. We over-indexed a bit in Alberta, but we're slightly smaller than we should be in British Columbia. And so truing up that market position is a revenue opportunity for us in commercial lending and retail. But I would just finish by saying, Quebec is the single largest geographic opportunity for Scotiabank. Here, we sit as the largest international bank of our peer group and yet, our market position is the smallest of the Toronto-based banks in the province of Quebec, commercial lending and retail. We're well placed in the capital markets and corporate banking side of things, getting bigger in wealth management with the purchase of Jarislowsky, MD Management over indexes in Quebec. But we need to fill in some of those obvious spots both on the island of Montreal and up along the St. Lawrence River. And we've been steadily doing that, and we're seeing new customer acquisition and better penetration within our existing base. So I'm optimistic about growth provincially as well as through the product lines.

Well, Dan, you make a very strong case, but it can't all be rosy. Are there any challenges or headwinds that you're facing in the near term that may not necessarily be impediments to growth, but issues that may actually slow some of this exuberance?

Look, I think the first thing is the Delta variant. Our view is -- you know our bank very well, John. We're a pretty conservative shop, and yet we're becoming more bold. And so I do think, though, that through the health care lens, we're very sensitive with regards to how active we are activating our business development lines. In respect of whether the Delta variant is going to slow down the reopening within some cities and provinces, clearly, Alberta comes to mind. So we're sensitive there. That would be, I would say, a watch point, not yet a worry bead, but a watch point. I think the biggest surprise, I would say, through the consumer lens, as a result of COVID, though, is we didn't see the credit issues that I think all of us had expected. And so I'm less anxious about reopening credit than I might have been. So that contributes to my optimism. And the third risk area is probably in the category of wage inflation. Until the government support sort of begins to subside and until immigration arrives, the war for talent has never been stronger in my career, I've been at the bank for 22 years. And so that is a worry, holding on to great people, attracting great people and giving them the technologies they need. I think we've got a checkmark on the technology side, but engaging and retaining our best people is probably my biggest worry bead. As a hands-on operator and someone who's been in the chair a couple of years, I'm pretty confident about how we're doing, but that's probably the one I worry about the most.

And, Dan, I want to lever off that. In terms of the pandemic, are there any lessons that you've learned from operating through this very challenging environment that will serve you well in the future when, hopefully, we get to a more normal operating environment?

Well, credit was one. I think we -- all the banks obviously had reserved importantly and some more substantially than others. So I think the conservatism of the Canadian consumer households, small business owner, commercial, CI, the conservatism of Canada played out better than we expected. You saw that substantially changed the business mix in retail. So that was a bit of a -- that's a big learning for us, the conservatism and the speed. I think the second is the relationship between the banker and the customer was never more important than during COVID. Lots of people found themselves in very complicated circumstances. And I think I'm really proud of our customer satisfaction during the period, John. J.D. Power, like we're #1 in branch, #1 in mobile, #1 in online, now #2 in advice. We won a lot of customer awards. And that I think was because we had all the channels open. We kept most of our branches open. That was different. Our contact centers were very, very adept at making changes and our mobile platform didn't have issues. So I think the channel integration I think was important before COVID, but the pandemic shone a big bright light on that. And then I think Canadians, whilst they're conservative, I think the growth appetite has resumed faster than I expected on -- in the private sector. So that's really encouraging. That's probably why you're hearing a bit of a kind of a bounce in my step, if you like, with regards to pipelines and outlook because consolidation in the auto dealer business has picked up because of COVID. Commercial developers have become more optimistic I think because of the housing [Audio Gap] and sometimes we get credit for. And so it's a [Audio Gap] there's more straight talk and there's lots of unfiltered feedback [Technical Difficulty] In Canadian Banking, the employee satisfaction hasn't been higher. And yet, people are worried about what does back-to-work mean for those who are at downtown Toronto, whereas coast-to-coast, we've been wide open from the beginning. So different populations have different concerns. Clearly, people are worried about inflation. And so what does that mean for salaries and bonuses and those kinds of things. But we've been wide open in our communication. We've been very supportive of mobile technologies, and our employees have responded with better satisfaction and better sales productivity. On the customer side of things, it splits into cohorts, as you can imagine. We've had some customers who were very challenged before COVID, and that kind of pushed them over the edge. So our relief programs were substantial. I think we had the highest penetration rate of mortgage deferrals of everybody. That was a very effective bridge for those with unsecured loans and the mortgage, getting them to the other side. So our credit performance has been good. And therefore, our customer satisfaction for that cohort also grew during the pandemic. Some of our better customers that have more products with us, frankly, gave us a lot of feedback that they wanted the branch open and the contact center. They wanted immediate responses. And so their expectations went up because, like me and you, they were working from home and calling during the day, whereas normally we would be scheduled for evening calls. And so there was quite a bit of adaptation required for our best customers. And I think our employee satisfaction for those is 2x the average. So I've been very pleased with how customers have been patient, how they've rewarded us with more consolidation of their business than before COVID. But I think the bar has risen. And so we got to keep investing in order to keep them happy. And great service is usually the introduction for a great sales conversation. So, so far, so good. And we'll be sharing some public results around our NPS score very shortly.

Fantastic. No, that's great. And, Dan, before I start drilling down into a little bit more of the news yet, I wanted to ask you or give you the opportunity. Are there any strategic initiatives that you're working on today for a couple of years out, not for next quarter or even next year, that you're really excited about, that's something that may not necessarily be on the radar screen for investors, but something that you think will help -- be beneficial to your operations?

I think I would reinforce the obvious, and then I'll introduce something that's coming shortly. First of all, growing the business bank to the #3 spot, reinforcing our household strategy by growing mortgages towards the top end of the peer group and better cross-selling of those and just generating more stable revenue so that we can reaffirm to the marketplace that our top priority, growing the top line, is going to happen consistently. That for me is job 1. In terms of things that are coming that get me excited over the next couple of years, we've been public about announcing what we described as the merger of our 2 loyalty programs. I'm not sure if you're a Scotia customer or not, John, but we have a Scotia Rewards loyalty program and we have SCENE. The rewards program is internal. SCENE is part of our partnership with Cineplex. It's a substantial program with close to 10 million active members. We're putting those 2 programs together for the consumer starting November 1. And so we're in the process of gearing up for the rollout of that, which we're very excited about. We've had lot of conversations with additional partners about fulfilling our mandate of giving our existing and new customers more value as part of asking for that business in exchange. And so the customer loyalty space, whether it's Aeroplan or Air Miles, is going to be active. And we're going to continue to be more active in that now that we're going to be in a position to have one brand for consumer loyalty and making it easier for customers to generate value and redeem value through that program, and that's just around the corner with more to come.

Now, Dan, I know that part of your strategy is to, as you mentioned, get more stable revenues from fee-based. But you are working off of a lending platform, and margin -- net interest margin discussions, you can't avoid as much as you may want to. And I understand you're beholden to a large degree, but to the market, not just the macro factors, but also competitive pressures. But one of the interesting things that at least with my discussions with investors has kind of fallen off the table is -- and you alluded to it before, was the funding. And we've got a lot of liquidity in the system. Going forward, how sticky do you think the deposits are going to be as we hit that inflection point where lending takes off? Do you think that funding may become more of an issue? Or is this -- or are we going to see a little bit more stickiness than we have in the past on the deposits you guys have managed to bring in?

That's a great question. And it's very difficult to predict what the consumers' choices are going to be, particularly as these economies have been reopening and the purchase volumes picking up on credit cards. We have not seen deposit levels in the consumer decline. They have stabilized. And we have seen the deposit levels continue to climb in the commercial book. I'm not sure I would have predicted that 3 months ago. And so staying close to customers and providing them advice on how to deploy that liquidity is very important. What you're seeing on the retail side is much of that liquidity. Even if it's in the GIC for a period of time, has been parked, until they get an advice conversation that leads to a plan, that leads to a signature, that leads to a mutual fund sale. That pattern I think is going to continue for some time. Canadians have clicked into the fact that they're under planned for an effective retirement. And so I think they're playing catch up, and I don't think that's going to change in the short run. On the business side of things, I think many of my peers have talked about the utilization of lines being under and expecting that to resume again. Clearly, if that happens, deposits might not drain down as fast, right? And so from a funding standpoint, at the top of the house, we're waiting to see what consumers do. And in the meantime, we position the entire bank for higher rates and we manage margin at the all bank level because what's important to understand here at Scotia is my top priority is, and you hear me saying this, I got to focus on the geographies, the customers and the products, and then I get help from finance and treasury to sort of put on product that produces the margin that the total bank needs. So I think you're going to see deposits stick around for a while. We just want them to stick around in a stickier manner, and that's usually on the investment sales. And as a final plug, we launched in Tangerine, our digital bank. We launched less than a year ago a slightly expanded suite of our investment products. And now that represents almost 1/3 of our total fee income through investment sales. And so there are a few things that make Scotia unique that allow us to pick up more fee income and move those deposits into things that are stickier than some of our peers, and we're really pleased with how even Q3 played out in that regard.

And, Dan, I want to circle back to the auto loan book that we discussed earlier. And you mentioned the supply or the supply issues and everything else like that. You seemed more optimistic than I would -- than I am in terms of that -- those pressures easing. In terms of your conversations with the OEMs, is there something that you actually are looking towards that disruption in lease? And then how much of a multiplying effect will that have? Obviously, that will be better for the auto book, but will that actually filter into the economy broader on the commercial book as well?

I think so. I mean the auto book -- just to position this fully, John, our auto business is primarily a retail as opposed to commercial, okay?

Yes.

And so as dealers and OEMs have become more adept and more precise, and this started well before COVID, at managing their working capital by adjusting up and down inventory, not just levels but mix, you've seen that commercial balances not yet resumed, but retail balances have. And so my expectation would have been at the beginning of this fiscal year that we might see retail units and retail dollars grow in and around Q4. So this coming quarter or this current -- that actually started in the summer. We certainly saw action -- more action on the used car side as opposed to new. We saw a lot more digital inquiries and purchases and delivery of new direct-to-consumers through the summer. OEMs have been crystal clear on what their time line, and it does vary by manufacturer for getting back to 70%, 80% inventory levels, and it's this fall, not this summer. And when that happens, they're as motivated as we are to provide consumer value. So I think you're going to see a lot of price action from the auto manufacturers in the fall. That's going to help regrow inventories. You'll see that on the commercial loan book side. It's going to show up in retail paper. And in Q3, to give you a number, we were up 30% quarter-over-quarter and year-over-year in retail auto. And we'll probably end this year with record revenues, and some of that is even on the back of higher NIM based on kind of how we've been managing the portfolio. So I'm more optimistic now, to your point, than I would have been a little while back and therefore, I'm encouraged for the full year next year. Ultimately, if consumers are working from home more often, on the one hand, people think they won't be driving to the office, but more people are buying vehicles because they're moving to Tier 2 cities and there's not that much public transport, right? So I think you're going to see cars per Canadian rise from here, particularly as more people come to Canada and we populate to 40 million plus. So that's how we're thinking about the medium-term prospects for the auto business.

And, Dan, in terms of -- we've talked a lot about the top line growth. But of course, you've got to be cognizant of expenses and inflation. And of course, the efficiency ratio has been solid. But I guess looking further afield with the pandemic and everything that's going on, what is Scotia's view of what a branch will look like down the road? Say, when we got past the hurdle of the current leases that you're trying to manage through that were signed prior to that, what -- are we going to see a major revolution in the branch? Or is it just more -- less geography, less square footage and -- but providing similar services?

Yes. This is -- you can imagine, John, I get asked this quite a bit. It's a hard one to summarize because we essentially have 3 desired -- sorry, 6 desired branch footprint types. We have skinny offices with no cash, no tellers and straight advisers opening accounts right across from Concordia and Montreal as new students come to Canada, hyperproductive at one end of the extreme. And at the other end, we'll have a 10,000 to 15,000 square foot multilevel commercial banking [indiscernible] wealth management, full service, safety deposit box, you name it, hyperproductive. And so the way we think about the store front now is, I want mobile sales people as much as possible, I want highly productive advisers. We are not investing substantially in things that fortify the cash side of things because cash is in a slow decline. It's not falling off the grid, but in a slow decline. It's still highly in demand by small business owners. And so you're going to see us, as you mentioned, as these leases roll off, we'll be refreshing. So investing in the footprint where regardless of the archetype where it's productive, we will continue to be consolidating branches where they're nearby and not as productive until we get them at scale. And we'll be entering into markets with some of these smaller footprint, cash light, lower upfront cost, lower running costs, more mobile advisers. And where we've done that, it's been really successful. You'll see us do a bit of that in Quebec, a bit of that in British Columbia, like I was mentioning. And even here in downtown Toronto at Yonge & Eglinton, there's a brand-new branch right next to the Farm Boy on the southeast corner of Yonge & Eglinton that opened during COVID. It's already towards its breakeven point. So if we pick the right location, we get productive people, then the advisers will make the branch work and the customer side is always higher in a branch than any other channel.

And then, Dan, in terms of expenses, of course, technology is a big line item for everybody. And Scotia has done a great job in terms of moving its technology to digitization forward. What -- on a go-forward basis, how much of your spend is going to be directed towards technology? And if you have an advantage, how sustainable is that advantage, particularly in retail banking where we're seeing a big push from all of your competitors as well?

Yes. The -- retail, as I've said to a few people over the last couple of -- retail is a dog fight, John. Like -- so sustainable, competitive agendas are hard to have. And if you overshare your secrets, they'll evaporate before you know it. So the technology piece is going to continue to be an outsized investment for us. More of our budgets in Canada are focused on revenue-generating activities instead of transaction-based activities. That's really important. And I think you're going to see it grow at a rate that's slightly higher inflation for quite some time. That's why if we do see wage inflation, back to your question around kind of worry beads, those advisers need to have the best technology and need to be generating revenues like we did this quarter, 10% quarter-on-quarter to pay for wages of 3% and technology investment in mid-single digit. So for me, in Canadian banking and retail and business banking in Tangerine, it's about making sure the investments are attached to revenue and that those assets are productive and that's a week in, week out activity. And that's why I'm excited about what we're seeing now because we had a great Q1 of '20, what I described as the template quarter, op level of 2%, revenue of 5%. And then COVID arrived. And now here we are back to even higher growth rates because we stuck to the program -- made some adjustments, of course, but stuck to the program. So the technology investment is ongoing, and I need to find the expense savings elsewhere. And as the guy who ran our structural cost transformation program, I've got a few ideas and [indiscernible] .

That's great. And, Dan, one of the -- you had mentioned it before, one of the advantages that Scotia has is the global footprint that definitely does differentiate you from the -- from your Canadian peers. What lessons can you pick up from the International Banking group? Can you use them almost -- or does the bank use them almost as a test case for things that may be brought into Canada? And can you -- do you have any examples that are top of mind that have been brought in from International Banking to benefit Canadian Banking?

Well, let's start -- absolutely. Absolutely. I spent some time in that business line. I meet with my good colleague, Nacho Deschamps, on a regular basis. We often talk about different factors in International Banking, what are they seeing in terms of how to make it simpler for customers to renew business for us to cross sell, for them to cross buy. So in the digital space, for sure, he's got a great network, and we leverage it in the U.S. as well. Even though we're not big in the retail business, we've got lots of great contacts with our big tech partners down there. And I think the biggest examples often are in the operational side of things. We're in the process now of improving our credit card platform as we think about getting better loyalty and using analytics to drive more leads. International is a little bit ahead of Canada there. We're learning from international. Canadian banks are typically strong product organizations. International is a bit nimbler, a bit more customer-focused. So we're in the process of accelerating that transition here. We price the product more often. We should be pricing the customer more often. And so there are things along those lines that have been underway for a little while. And now that it feels like -- I'll use a Jay's analogy. I don't know if we're in the seventh or eighth inning of COVID. But certainly, we're well past the halfway marker. We're now back on the front foot in some -- in terms of deploying some of these learnings from international using some of these technology partners. And you're going to see a bit more of that I think in F '22 from Scotia.

And then, Dan, talking about the -- integrating not just with International Banking, but also with wealth management, how do you go about -- or how does the bank go about trying to encourage the cross referrals and everything else like trying to get more share of wallet for a customer that may not necessarily fall into your segment?

Yes. Look, I think that's a great question, John, because Glen Gowland, who runs wealth management, I've known Glen for 20 years. We are immediate office neighbors. He's worked in retail banking. I worked in wealth management. We're both customer-type leaders. So together with leadership from John Doig, who runs our branch network, who used to run our private client group, we've been now steadily removing areas of friction, making it easier for customers to move their money between the divisions and less complicated for our employees to provide referrals backwards and forwards. And that includes between commercial and wealth management. So we've recently rolled out the Salesforce technology, CRM tool in commercial, so on the same platform as well. It's easier to exchange customer information. Our sales leaders are crystal clear that multiple products count regardless if it's in 2 separate divisions. I know the ROE power of wealth management. And I think the stronger our relationships are in retail with wealth, the more likely I retain the retail relationship, and we see that through our data and analytics. And so we're just trying to make it easier for people in the field to not see and experience interference between sometimes bank silos and rewarding the customer when they give us more of their business in both segments. So there's definitely more to be done, John, but the mutual fund sales growth is probably the biggest public example of us just working to get better together, even though we don't roll up into one segment anymore. I think, frankly, that partnership has accelerated in the last couple of years, notwithstanding that organizational change.

And, Dan, we're coming up to the end of our session, but I want to conclude on a question, which -- it actually stuck out for me in terms of the geographic within Canada, B.C. and Quebec. What strategies are you employing to gain additional customer share in those regions? And do you have different strategies for the 2 separate provinces?

B.C. is about sales leadership, branch footprint and recruiting. And so I don't know if it's the size of the Rockies, but we never oriented ourselves towards providing enough tension on kind of filling key sales roles in segments that tend to generate higher ROE like small business and commercial. So I would say that's mostly management attention and recognizing the fact that HSBC has a meaningful presence there and sort of the credit unions and attaching more specific data and analytics to retaining and sourcing new business from those customers that split between, call it, Scotia and the others. And we've seen above national average account and balance growth in B.C. as a result of those activities. Quebec is different. Quebec is a longer ride. We've got great sales leaders. We're organized a bit differently now. We've been spending more of our organic capital in Quebec in the last 2 years than in Ontario. I'm really pleased with the team there. There's more to be done. I'm spending more of my time in Montreal. We've got great relationships with corporate banking. So we're looking for referrals into commercial. It is the business in which we have the greatest share in automotive. And so we've got dealers that love us. We don't always have the wealth management business. So there's a little bit of blocking and tackling in Quebec and recognizing language included. But beyond language, you need to be present in those communities to be taken seriously as a brand. And we've had a few fits and starts. We're not going to be more public than this about our intentions, but we're going to focus on getting things done and celebrating the wins instead of making too many announcements and perhaps coming up a bit short. So maybe I'll leave it at that for now.

Well, Dan, that's great. Thank you for your insights. And honestly, I look forward to tracking your progress. So best of luck.

Thank you, John. Appreciate your interest.