I'd like to present Aris Bogdaneris, Group Head, Canadian Banking of the Bank of Nova Scotia or Scotiabank, whichever you prefer. Thanks for joining us again. You know, excuse to come back to Montreal, I guess. Yep. Let's start off with the, you know, you've been in the seat for nearly two years now, I guess. 18 months. Eighteen months, yeah, nearly two years. What's the, you know, the biggest learning experience, you know, at Scotia itself and then Canadian banking, given your background outside of Canada? I mean, the first big learning in my previous life I oversaw banks in Russia, Moscow and in Manila, Philippines. The big learning for me that the gridlock in Toronto is equally as in those cities. That was one learning. The more important learning, I think that's interesting to share. Branches are very important in this country. The branch for me, what I've seen here, it's the sun and everything is revolved around that branch network. Your processes are involved, the journeys are involved, the people, the cost. It's very branch centric. Everyone said that about Canada. When you come into the bank after 18 months and start to work in it, you realize how integral the branch is to the business model. Having said that, what it also was a learning is that the digital opportunities are still very large in this country. That is one, I think. The other thing is more organizationally also, when you think about where I came from before, the way the banks are organized is also interesting in that they are very vertical. They are vertical by product, they are vertical by segment, and they are organized very vertically. They are not organized how a customer journey would go, for example, end to end, they are not organized horizontally. Part of the challenge and the opportunity is how do you rotate the bank to work more horizontally. That is something my colleagues in Scotia hear me speak about often. I think that opportunity to drive that horizontal end to end, people call it agile, I call it horizontal. I think there's a huge opportunity from a client perspective to improve the experience. There is an organizational aspect, there is a physical aspect, the channel aspect. Having said that, there are huge opportunities in Scotiabank and we've tried to seize them. Whether it's the opportunities I highlighted during investor day when I talked about the opportunity to build a savings business, an opportunity to build a better card business, an opportunity to do more digital, an opportunity to do more mutual funds and fee business, an opportunity to rejigger the cost base, all those opportunities are still there. In fact, I'm even more convinced these are opportunities that can be seized. In the foreseeable future, a banking market that has increased digitization and improve the, or I guess funding that via shrinking the physical network, that's not something that we can expect in Canada for the next five years or more. I don't know. I don't know about that. Everyone here who has children and you have to ask if your children are going to be the consumers who are going to walk into branch networks to do transactions or whatever they do in the branch, I have my doubts. I think Canada will follow the pattern you see all over the world. It's just lagging maybe. I do believe in branch networks and should be clear. I think what I'm trying to convey to folks is that branch network has to be transformed into what I call a high value, high touch interaction model where people will get in their car and willingly. I use the example that people willingly will go and make the trip to an Apple Store to get educated and buy things, the same, same thing in a branch. Will they go willingly because of the value that's created in there and the specialization you would see there in the network? That's where we need to get to and why people are queuing at the teller stations or in the service lines. That should go away. That shouldn't be the case in 2025 in banking. How do you pivot and organize that? You might have a smaller network perhaps, but you're going to have a highly specialized network where the sales per square feet are dramatically different than what you have today and the traffic patterns are dramatically different and you're using your other channels, particularly mobile, to do the day to day stuff. Right. I also see, you know, massive contact centers in Canada. I haven't seen that in a long time. Whenever you have a contact center, it's usually some failure along the way while people are making that call. You have to figure that one out too. The whole channel mix is something that I'm really focused on. The bank has embraced a few mantras over the past couple years, one of which is North American Corridor. I do not think it does apply to you, but not as much as the next one. Less volume, more value. I mean, how is that being applied in your business? If I am stacking Scotia up against its peers and I see loan growth trailing, that is fine because they are just going over after more value. I should see better margin performance or something along those lines, Yeah. This value for over volume, and you heard Scott Thomson, our CEO, talk about it often. I talk about it often. Let's think about one and a half years in, what does that mean for us and where is it going? First and foremost, I would reiterate over the last two years we've added $54 billion in deposits. The loan to deposit ratio has gone down 10 points. That's already valuable. To get deposits into the bank at scale, more than we've ever done before, is one dimension where we're not lending to the same extent as before. We're getting more balance. That's one. The second, and we might talk about it later, is what we call how do you get multi-product at the point of origination. We have a big broker network for mortgages, and today the mortgages we originate in our broker channel. 99% of those mortgages come with three plus products. That was never done before. This idea of getting more value at the mortgage origination point lessens the risk you have if you're unable to renew the mortgage after three years or five years or whatever the term is, puts less pressure on the renewals. We are renewing mortgages also tremendously. 90% of our mortgages are being renewed that we've originated. Where else do we see value over volume? You look at the commercial banking business. Over the last year and a half we haven't really grown lending, but the returns have increased substantially by deselecting, focusing on deposit gathering, focusing on primary, using the BA conversions as an opportunity to reprice, and now the commercial banking business, the returns are really strong. Again, that's another example. The focus on day to day and savings, which has not been historically a focus of the bank, that is also a focus where we continue to try and get quality deposits in the bank and not chasing promo rates and getting into that promo rate game but trying to get the quality deposit that will stay, stick with you whether rates go down or up. That is really where we see value over volume playing out. If I push, you did mention the broker channel and if I push back a little bit on the volume versus value discussion that I think was it 2023 the bank pulled out of the broker channel and then mid 2024 back in. To me that seems like, you know, contradiction. How is it, you know, what am I missing? I think to just slight correction. We never pulled out of the mortgage broker channel. We've always been in the channel. We have three channels. We have our brokers, we have our mobile salesforce, and then we have our branch channel, which largely does renewals. I think we were growing mortgages too fast and also at margins that probably were not, in retrospect, attractive. We pulled back again to focus on quality originations. Today our brokerage channel is number one in the country. Roughly generates 65% of our mortgage originations. As I said earlier, it's changed when people said, oh, the mortgage broker will not sell anything for you other than mortgage. Not true. Today, 99% of those volumes, as I mentioned, are coming with multi-product, and we built a very strong relationship with these brokers. We work with less of them now, but high quality volume coming through, and we will continue to manage these volumes in line with how we're gathering deposits and how we're ensuring that we have quality volumes coming through. Yeah, so we're really happy about that actually. Okay, before I switch over to commercial, I want to go back to I guess the, some previous comments you'd made or your previous experience. Anyhow, the Tangerine business at Scotia. What's the, you know, what kind of update do we have there? Is it still, you know, when it was acquired it was primarily a deposit gathering machine. Didn't really have, you know, on the asset side it was I guess suboptimal and you know, for a few years we kind of stopped paying attention to it, frankly. What's the, what's the situation today? Are you more hopeful about it than you were? Yeah. Tangerine is an interesting, interesting asset that we have. I think it's a unique asset in Canada, as you know, Scotiabank bought it from ING, my former employer, in 2011. Over the last 14 years, in different stages, it's actually added quite a significant amount of deposits. I think the opportunity is still to be had. When you think of you have the neo banks that come out, I think this was the first digital bank, again in a different iteration. In the year 2000, these banks were launched in the U.S., in Canada, in parts of Europe, Australia. The promise was always we offer you an attractive rate, come into the bank, experience how we do banking and over time you're going to bring more of your wallet, more of your business in. That was the playbook in Europe and it worked to a large extent. After that, playbook kind of played out its first part. What you also see in these digital banks like Tangerine, they have extremely high Net Promoter Scores, miles ahead of most of the incumbent branch based banks that you see around the world. The epiphany came. How do we monetize this high NPS? They start adding product. That is what ING did successfully in Spain, Germany and everywhere else. Let's start adding lending, let's start adding mutual funds. Let's drive this business further, let's deepen it because the clients love us, they want to buy more from us, but we have to give them that. What I think when I look at Tangerine, Tangerine did the first part of the playbook well, gathering close to $50 billion in deposits. It has to evolve in what I call Tangerine 2.0 by doing three things. Shoring up the foundation, meaning developing more product capability and mobile. First, that's the first. The second thing, and it shouldn't be underappreciated, you have to renew the tech stack to develop the next generational capabilities in technology to be a digital bank. That's where AI comes in and some of the latest technologies out there. This technology that Tangerine has is almost 20 years old, needs to be revamped and there's huge opportunity for that. The third is how do you take this business beyond that original core of customers and extend to small business wealth. There are other opportunities in Canada where you can get and restart the growth. That said, we have a new leader in Tangerine who was appointed in November. Terry- Lee Weeks, we are rebuilding the team, we've rebuilt the strategy, we've gone to the board and now we're ready for what I call Tangerine 2.0. It will take time. The idea here is we have to evolve the model because what got us where we are today won't get us where we need to go. That exactly is the playbook. In Europe, Germany, the equivalent has 11 million customers and makes over EUR 2 billion in profit. The Tangerine of Germany. In Spain, 45% of the customers at ING Direct Spain are primary customers. It is possible, but we need to create a more fulsome bank with the technology underpinning it, which we haven't done in the past. Actually, I lied and I do have one more consumer question for you, but on the mortgage book, because a year ago we were in a different situation, clearly more unique to Scotia that you had retrenched a little bit in the mortgage book and then got back in and you were talking about volumes approving better than you expected at this time last year. What are you seeing today? The data does not look great. Up till the first quarter. I was very, I will not say bullish, but optimistic that after two years where rates were high and there was pent up demand, this pent up demand would be released. We started to see it in the numbers, we started to see it in the origination volumes. Every quarter we are growing. Now with the tariff discussion and the uncertainty and people watching the news and not understanding what is going on, you are starting to see a little flatlining of the growth trajectory as people now wait a bit. What else are we seeing? We are seeing people moving much more into variable mortgages, which tells you how they are thinking about the future versus fixed. We see almost 30% of new origination now in variable. We are seeing the battle for renewals. There's almost $50 billion-plus in mortgage renewals in our bank that we're addressing and over 90% of those up for renewal at a certain period are being renewed. These are the most profitable mortgages if you renew them. It is a bit different now what we're seeing out there in terms of the appetite of consumers on mortgages and let's say wait and see in the next few weeks what happens. Our focus is to be disciplined and keep the discipline. We expect mid single digit mortgage growth this year assuming nothing goes cataclysmic wrong. It is again focused on the returns, focused on the multi product and focusing on renewals which will be the majority of the new business. I guess a similar discussion. Now we get to the commercial part, but businesses are probably in a standstill sort of position now given the uncertainty. What do you expect the commercial book to grow at this year? I don't know if you could put some perspective on utilization rates, how they compare to a normal environment, whatever a normal environment looks like. As you can expect in commercial, there's definitely a slowdown. You see it, we talk to our clients, what do they say? They're saying they're going to wait, investment decisions are going to get put on hold. We see it definitely in what we're seeing on the lending side, particularly in areas we had the auto and then we had. You think of steel, you think of agriculture, all these things. Every week it's rotating. We don't know what's going to happen or fall. There's definitely a slowdown and that will continue because capital doesn't like uncertainty and uncertainty doesn't like capital. We're just in a wait and see. Utilization rates are normal. We don't see that in utilization rates, people drawing down. Of course we're being vigilant like you would expect. We're trying to get ahead of the curve. Which of our clients are in industries that could be exposed? How are we trying to help them work through it? We're actually seeing, you might even see a surge in sales in the second quarter as people try and get in advance of the tariffs and getting their stuff to the U.S. and accelerate sales. That could be happening also. We are trying to stay close to our clients, of course, and manage through this. Every week it is changing. It is a difficult one to plan. Although we have our COVID pandemic playbooks that we can dust out and how we get ahead of this and that is what we are trying to do. Do the. You know, I asked the previous person in that chair about the deposit dynamics at play and I think it's a much more relevant question to Scotiabank given what took place two years ago with a big uptick in deposits and the big uptick in term deposits, specifically bank strategy. Also the 5% 2 year GIC kind of created a lot of demand. Those deposits are repricing today. Is that a big margin tailwind? Yeah, it is. As rates, I think in the first quarter they went down 75 basis points. You see the dynamic, I think, everywhere as people and these GICs are one year, they are up for renewal. What people are doing, of course, they are going into savings, mutual funds as the renewal period comes up. That dynamic, we see 90% of the GICs up for renewal. Those volumes have stayed within the bank. That is a big positive. What we also see is that there is a huge opportunity for us to again invest in our savings shelf because when rates were high, savings was not, you know, people were in the GIC season going after. Now we see the opportunity also in mutual funds to build that muscle, but also build the muscle in savings. We see this dynamic. It's going to be hard to grow savings in this environment. We're working hard. That shift into day to day savings and mutual funds. Now you see the mutual funds a bit now hesitating again with the tariffs and what you see in the volatility in the markets and, you know, as you start to see a bit of an interruption in that, in that trajectory we saw in the first quarter, it remains to be seen how that plays out. What I'm very particularly pleased about, as I said, is just we're keeping both, I mentioned the mortgage renewals and the success we're having, but also on the keeping the money in the house. Now for Scotiabank, that's great to keep 90% of the volumes in the house, but we have to grow the pie, we have to grow the savings piece. When you think of savings and historically how this bank was run when rates were almost at zero, this muscle has to be rebuilt. It's being rebuilt, it's being rebuilt first and foremost in how our frontline views our clients and how they work with them to drive more savings and getting more of the wallet. There's a lot of our clients, primary clients have money outside the bank. What we've learned is when you sit and do a financial plan with these clients, some of the money that's sitting outside the bank starts to come back in. That's one. You also need value propositions. You need to make savings renewals and getting a savings product easy. There's a digital aspect that I've talked about. There's the way we incent the front line, important. All these things, including how we make sure that we do what is right for the customer and getting them into longer term savings like mutual funds, is also important. We are working very closely with our wealth teams like never before, where we are locked in with wealth to make sure that that customer gets the best advice and gets the best products and services for them. This is, I would say, first and foremost, the biggest challenge that I face is how to rebuild the savings muscle in the bank. We have made progress, but it is very important that we continue to focus on it. Is this demand inflow, outflow dynamic a tailwind or? I think first of all it's definitely you see a tail, a headwind on the margins, right? As you reprice the GICs down, of course your margin is being squeezed, but the one way around that is to continue to build the day to day and the savings business. In the short term, yes, but rates will stabilize and then what you're hoping for is that you've built the muscle to be a strong savings bank. Not just strong mortgage lending bank. That's the idea behind it. A credit question, credit quality question. This has been a number of quarters. Now the bank talks about the unsecured portfolio has been the driver of formations and impairments and I get that. I do not typically associate Scotia with unsecured lending. Much more geared towards secured like what portfolios are we talking about? There is cards obviously, but do you consider auto as unsecured or secure? When we talk about the unsecured, we talk about the $30 billion we have in ULOC and credit cards. That's $30 billion. Of that $30 billion, $7 billion is roughly the credit card book, relatively small, and around $23 billion is the ULOC book. In terms of credit quality and what you see out in the market, what are we seeing again? The credit card 90+ quarter on quarter went up 24 basis points. It's probably now at around pre-Covid levels. The credit card's still rising. There's stress on the consumer still. Whether rates go down, it's short term, they need time. The ULOC has kind of stabilized, the unsecured lines of credit, and you see quarter on quarter, I think the 90+ delinquencies have gone up one basis point, so kind of stabilizing. There is pressure out there of course and it's difficult because credit cards is one product where we're relatively underweight versus our peers for all sorts of historical reasons. This is an area we want to grow. Again, the economic climate, you know, we were thinking in the second half of the year this would start to stabilize and then things would start to normalize on PCLs and whatever. Now there's a bit of a little bit of a drag and we're going to see how that plays out. Generally we manage this book like you would expect. You'd manage a book, you lower lines when you see the opportunity because of the client. Again, remember one thing, our credit card business, most of our credit card portfolio have multi product. What's interesting, the single product credit card holders in Scotiabank have a 60% higher delinquency rate than the multi product credit card holders. That's never been our strategy to be a single product. To grow our book we've leveraged Scene+, we leverage our current base to use cards as a cross sell. That's what we'll continue to do, particularly leveraging the Scene+ space. We have a few seconds. Auto is actually now we're starting to see that cohort from 2022 during post pandemic. It's kind of worked through the system but the early 30 plus the entry rates are starting to stabilize now. It is more the credit card book now is the more difficult one than the auto for us. All right, that's a wrap Aris. Always great to have you here. Maybe next year as well. Okay, thank you.