Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the CWB's Fourth Quarter and Fiscal 2022 Financial Results Conference Call and Webcast. All lines are being placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star, then the one on your telephone keypad. If you would like to withdraw your question, please press the star two. Thank you. Mr. Patrick Gallagher, you may begin your conference. Thank you, Michelle. Good morning, welcome to our fourth quarter financial results conference call. My name is Patrick Gallagher. I'm the vice president leading our strategy and investor relations team. I would like to remind listeners and webcast participants that statements about future events made in this call are forward-looking in nature and based on certain assumptions and analysis made by management. Actual results could differ materially from expectations due to various risks and uncertainties associated with CWB's business. Please refer to our forward-looking statement advisory on Slide two. The agenda for today's call is on the 3rd slide. Presenting to you today are Chris Fowler, our President and Chief Executive Officer, and Matt Rudd, our Chief Financial Officer. Following their presentations, we'll open the lines for a question and answer session. I'll now turn the call over to Chris, who will begin his discussion on Slide four. Thank you, Patrick, and good morning. We have a lot to discuss with you over the next week. Our remarks on this call focus on our strategic progress in the fourth quarter, our financial results, and our 2023 outlook. At our Investor Day in Toronto on December 7th, we'll provide further detail on how our strategic execution has positioned our talented teams to drive an unrivaled experience for more full-service clients, deliver strong core operating performance, and increase value for our investors. Our full executive leadership team will be present at our Investor Day. I'll be joined by Matt Rudd, Kelly Blackett, Stephen Murphy, and our new additions over the past year of Carolina Parra, Jeff Wright, John Steeves, and Azfar Karimuddin. The change to our executive team marks the successful completion of our planned succession. I'm confident that we have the right management team to continue delivering a differentiated client experience and award-winning workplace culture. This year, we successfully launched our personal and small business digital platforms. We look forward to the opportunities our digital investments will provide across our established commercial business and to open an entirely new and scalable growth channel for small business owners. We successfully combined our wealth management brands with the launch of CWB Wealth. The launch further integrates our acquired wealth management operations under one brand and strategically positions us to provide a differentiated client experience in Canadian private wealth advisory services and strengthen full service relationships with successful business families, business executives, and employees of the businesses CWB serves. We continue to increase our brand awareness, familiarity, and physical presence in Ontario and are leveraging these improvements to drive market share gains. Very strong annual growth of 11% in the province was augmented by our existing full-service banking center in Mississauga and our new banking center in Markham that opened this summer. Our accelerated market share growth in Ontario will be further supported with the opening of a new banking center in Toronto's financial district next year. We're also well-positioned to capitalize on opportunities available sorry. For full service client growth in Western Canada and will leverage our new modern flagship banking center on West Georgia Street in Vancouver to support market share growth in British Columbia. General commercial loans represent a broad section of the Canadian economy that we believe is underserved by the other banks and is a core strategic target for growth. This category is our largest full-service client opportunity. We delivered 14% loan growth last year. We have also continued to diversify our sources of funding through the strategic growth of full service relationships with branch-raised deposits up by 8% this year. Rising commodity prices, supply chain pressures, labor shortages, and strong global and domestic demand drove persistent levels of inflation. In response, the rapid and significant increase in market interest rates began to cool economic growth and fuel the potential for recessionary conditions to emerge in Canada. The rapid movement upwards in interest rates increased deposit costs faster than asset yields this year and put downward pressure on our net interest margin. Matt will speak to this in his section. We expect this pressure to reverse as interest rates stabilize and see net interest margin begin to expand next year. Our disciplined approach to growth remains within our prudent risk appetite. We continue to deliver very strong credit performance and are in a position of strength to face the potential economic volatility on the horizon. We expect to maintain credit losses within our normal historic range. We're confident we will succeed in our transition to AIRB, don't expect that to occur in the next two fiscal years. This quarter, we materially completed the redevelopment of our AIRB tools, incorporating targeted enhancements in the final CAR 2023 guidelines. As expected, with material completion of the redevelopment, we recognized accelerated amortization of our previous models. As a point of reference, following our unsuccessful AIRB submission, we commenced a parallel run of our AIRB tools to evaluate their operation through a period of economic volatility in 2021. Our goal was to determine if they would meet OSFI's use test requirements prior to resubmission of our application. As the parallel run progressed this year, we gained significant insights into the performance of our AIRB tools and processes. We learned that our original approach to AIRB required a level of manual processing that did not support the operational efficiency needed to deliver a seamless and scalable operating model to our teams. We also identified areas within our AIRB models that required further refinement. We identified enhancements to improve the efficiency of the tools for our teams and our effectiveness as a model-enabled bank. We also made the decision to incorporate the new CAR 2023 AIRB Capital Adequacy Requirement guidelines that will be effective February 1st, 2023. The implementation of these enhancements and regulatory update was supported by third-party advisors to ensure our approach reflected industry best practices. The redevelopment of our AIRB tools now better reflect our underlying credit risk with a more efficient link to our underlying data and business processes. We learned a lot through this process and are confident we will begin to benefit from our comprehensive redevelopment of our AIRB tools. We will now implement the tools into our underlying business processes to create the sustainable and scalable operating platform that will support our long-term growth aspirations. Following implementation, we'll operate the revised tools and processes for a sufficient period of time to support successful resubmission of our application. Our strategic execution in fiscal 2022 enhanced our digital capabilities, increased our physical presence in key markets, and further improved our client offering to provide a foundation to accelerate full service client growth. Our new financial scorecard lays out the key performance metrics we expect our teams to deliver over the next two years as a standardized bank to increase value for shareholders. I will now turn the call over to Matt, who will provide greater detail on our fourth quarter performance and outlook. Thanks, Chris. Good morning, everyone. If we start on Slide seven, our branch raised deposits were up 8% from last year. That reflects 34% growth in fixed term deposits. That's partially driven by a shift from existing demand and notice deposits, which were roughly flat on a net basis this year. Branch raised deposits represent 57% of our total funding. That's relatively consistent with last year. On a sequential basis, our branch raised deposits increased 2%. That was a 12% increase in fixed term deposits, partially offset by 2% decline in demand and notice deposits. The change in branch raised demand and notice primarily reflected a shift to term deposits. We also saw a reduction in our existing deposit balances as clients put excess funds to use and that more than offset the solid growth we saw from net new full service client additions in the quarter. Sequentially, our capital market deposits increased 10%, reflected an opportunistic capital market deposit issuance in the quarter at favorable pricing, and our broker deposit balance decreased by 3% in the quarter. If we flip to Slide eight, our total loans were up 9% in the past year. On a sequential basis, total loans were up 2%. The general commercial represented nearly 2/3 of the net loan growth in the quarter. We're also pleased to see equipment financing loan growth strengthen as the year progressed, and we delivered 2% growth in the fourth quarter. Ontario loans grew 2% within the quarter and now represent 24% of our total loans. We delivered very strong 4% growth in Alberta this quarter, and BC loans remained relatively consistent. Common shareholders' net income decreased 16% sequentially, and diluted EPS decreased CAD 0.16. That was primarily due to the impact of accelerated amortization of our previously capitalized AIRB assets, as Chris mentioned in his opening. Adjusted EPS decreased CAD 0.02, and pre-tax, pre-provision income remained relatively unchanged. The provision for credit losses increased EPS by CAD 0.01. That was due to a lower impaired loan provision, partially offset by higher performing loan provision due to a further deterioration in the forward-looking macroeconomic outlook. Non-interest income contributed CAD 0.07, primarily driven by foreign exchange revenue. Higher adjusted non-interest expenses reduced EPS by $0.07, primarily due to the continued investments in our strategic priorities. That included the redevelopment of our AIRB tools and processes, the harmonization of our wealth management brands with the launch of CWB Wealth in the quarter, and the customary seasonal increases we typically see in advertising, community investment, and training costs, along with higher people costs in the quarter. Additional costs related to the accelerated AIRB amortization reduced EPS by $0.13, which is reflected in adjusting items. The other items that reduced EPS in the quarter included a $0.01 impact from a higher effective tax rate, higher LRCN distributions that decreased EPS by about $0.01, and a $0.01 isolated impact of the incremental shares issued under our ATM program. Common equity raised under the ATM supported incremental loan growth in the quarter and with an income contribution that exceeded the dilutive impact of the incremental shares. Our performance compared to the same quarter last year is on Slide 10. Our common shareholders' net income decreased 25%. Diluted EPS was down CAD 0.29. That was primarily due to an increase in the provision for credit losses on performing loans and the impact of the accelerated amortization of our previously capitalized AIRB assets. Adjusted EPS decreased CAD 0.15 while Pre-tax, pre-provision income increased 8%. Increased net interest income contributed CAD 0.09 and higher non-interest income increased EPS by CAD 0.07 compared to last year. Higher non-interest ex-expenses reduced EPS by CAD 0.08 and reflected targeted investments in our three strategic priorities. This includes our ARB tools and processes, digital capabilities, investments in our client offering, and our new banking centers in Markham and downtown Vancouver as we optimize our business, deliver an unrivaled experience to our clients, and position ourselves for an acceleration of full service client growth. The accelerated ARB amortization reduced EPS by $0.14. Provision for credit losses reduced EPS by $0.19 due to the increase in the performing loan provision that I previously referenced. Other items reduced EPS by $0.04 and primarily reflected the isolated impact of the incremental shares issued under our ATM. As shown on Slide 11, the 3% sequential increase in total revenue reflects consistent net interest income and a 27% increase in non-interest income. That was driven by higher foreign exchange revenue and higher credit-related fees, partially offset by lower wealth management fees. Net interest income was 4% higher than the same quarter last year, as 9% loan growth was partially offset by a 14 basis point decline in NIM. Non-interest income increased 29%, primarily due to higher FX revenue and higher credit-related fees, partially offset by lower wealth management fees. That was due to the market value declines that reduced average assets under management. Our 10 basis point decline in net interest margin is shown on Slide 12 and reflects that the growth in asset yields has not caught up yet to the growth in funding costs in the rising interest rate environment. Two Bank of Canada policy rate increases totaling 125 basis points occurred during the quarter, and that contributed 9 basis points to our net interest margin, isolated to the impact of the increase on our floating rate loans, net of the impact on our floating rate branch rates deposits. Higher asset yield contributed 20 basis points, and that includes the impact of higher interest rates churning through our fixed rate loan and securities portfolios, and was partially offset by lower loan-related fees. Higher funding costs had a negative impact of 37 basis points. This primarily reflected increases in market GIC rates on new fixed term deposits and pricing adjustments that were made to certain administered rate deposit products to main competitiveness on pricing. Our asset mix reduced NIM by 2 basis points, primarily driven by a reduced proportion of higher yielding equipment finance and real estate project loans from the prior quarter. On Slide 13, we highlight our continued very strong credit performance. That's supported by the secured nature of our lending portfolio, our targeted borrower selection, disciplined underwriting practices, and proactive loan management. Our fourth quarter provision for credit losses on total loans was 14 basis points compared to 16 basis points last quarter. Our performing loan provision for credit losses was 14 basis points compared to 4 basis points last quarter. That reflected a softening in forward-looking macroeconomic assumptions, primarily due to the forecast impact of the rising interest rate environment generating lower GDP growth, a decline in housing prices, and higher unemployment rates, which also moved a larger proportion of performing loans into Stage 2 this quarter. Gross impaired loans of CAD 167 million compares to CAD 187 million in the prior quarter and now represent 46 basis points of gross loans. On a quarterly basis, write-offs as a percentage of average loans of 12 basis points remained well below our historical average, and we recognized a nil impaired loan provision for credit losses. The sequential change in our CET1 ratio is shown on Slide 14. Calculated using the standardized approach, our CET1 ratio was 8.8% compared to 8.9% last quarter. While our organic capital generation and common shares issued under our ATM program more than offset growth of risk-weighted assets, our capital ratios were negatively impacted by an unrealized loss on our debt securities portfolio held for liquidity management purposes. With that impact recognized and accumulated other comprehensive income and due to the rising rate environment. To support strong loan growth as we navigate current and future economic volatility while prudently managing our capital, we issued common shares for net proceeds of $29 million under our ATM program. Despite the recent downward pressure on our share price, the net earnings contributed by the incremental loan growth supported by the ATM issuances this quarter more than offsets the dilutive impact of the incremental common shares issued, which drives an ongoing increase in EPS and ROE. Yesterday, our board declared a common share dividend of $0.32 per share, which is up $0.01 or 3% from the dividend declared last quarter and up $0.02 or 7% from one year ago. Looking forward on Slide 15, current economic forecasts anticipate lower GDP growth through 2023, including a moderate to sharp decline in housing prices and a steady increase in unemployment rates. In this environment, our growth will continue to be focused on portfolios that support further full service client opportunities and remain within our strict underwriting and pricing criteria. We expect to deliver high single digit annual% loan growth with stronger loan growth in the strategically targeted general commercial portfolio and in Ontario. Additionally, we expect to deliver double digit annual% growth of branch rates deposits supported by our enhanced digital capabilities and continued focus of our teams to drive full service client growth. Based on the assumption that policy interest rate increases taper off in fiscal 2023, our net interest margin is expected to increase over the next year to reflect the combined benefit of normalized lending spreads and the impact of fixed term loans continuing to reprice at the current market interest rates. We'll manage to an annual efficiency ratio below 50% and deliver positive operating leverage next year. We expect lower growth of non-interest expenses next year. Our ex-approach to expense management will focus on execution of our most important strategic priorities with prudent management of our discretionary expenses. Supported by our disciplined approach and leveraging our enhanced credit risk management tools and processes, we expect that our provision for credit losses will remain within our strong historical range of 18 to 23 basis points next year, likely on the higher end of that range, given the potential economic volatility. With all other assumptions constant, a provision for credit losses in the high end of our normal historical range drives annual adjusted EPS percentage growth in the low single digits and adjusted ROE somewhere in the midpoint of a 10%-11% range. On the same basis, a provision for credit losses in the low end of our historical range drives annual adjusted EPS growth in the mid-single digits and our adjusted ROE that approaches 11%. On Slide 16, you'll see we've introduced a multiyear financial scorecard. Our financial objectives are reflected by three key performance metrics that we expect to drive over the next 2 years: pre-tax, pre-provision income growth greater than 10%; an efficiency ratio below 50%; and achieving adjusted ROE of 12% by 2024. These targets have been developed on the assumption of a relatively stable economic environment and under the standardized approach for capital management. We look forward to spending time bringing you through the value of our strategy and what it will deliver against these financial performance scorecard metrics in detail at our Investor Day in Toronto on December 7th. With that, Michelle, we're ready to open the lines for Q&A. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch tone phone. You will hear a 3-tone prompt acknowledging your request, and your questions will be polled in the order they are received. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Doug Young of Desjardins Capital Markets. Please go ahead. Hi. good morning. Maybe I'll start with the AIRB conversion. Chris, did I hear you correctly that you're not looking to reapply to OSFI until fiscal 25, so two additional fiscal years down the road? Did I hear that right? You did. Yes. We have done the redevelopment of the models. We are doing the implementation. We will run them in a internal use test, and then we'll move forward with the application. Okay. Is the intention then, for the next two years, to continue to run an ATM equity issue? Is that, is that to support the loan growth? It sounds like the loan growth you're anticipating you will continue to need to have an ATM in place, or are you considering other solutions? Well, Doug, we'll get help from a couple of factors. I'd say under the current standardized CAR guidelines, we do have a bit of a speed limit in the high single digits in terms of our loan growth and just what it consumes under that approach. We adopt new standardized CAR guidelines on February 1st, That does introduce a bit more sensitivity and the ability for us to target our lending to lower RWA densities, particularly for commercial growth. That's quite important for us. There are pockets within there where, you know, today, our commercial loan growth is at 100% RWA density. Under CAR guidelines next year, going forward, we'll be able to target growth in areas that will be below 100%. For instance, SME lending and general commercial, that attracts 85% instead of 100%. Lower loan-to-value on commercial mortgages, which is the sandbox we play in, that attracts lower risk weights under the new CAR guidelines. Not quite the benefit of AIRB, which gives you credit for strong borrower selection, but at least there is some risk sensitivity introduced in those new guidelines. You'll hear me give a little more detail on that at our Investor Day and maybe with a couple examples. The second piece that's been putting a bit of downward pressure on our CET1, it's our core liquidity portfolio. This isn't a trading book. These are not losses that we would realize. This is a book we're required to measure at fair value each quarter. Those, in this case, unrealized losses are recognized in AOCI and reduce our CET1. That's something that as interest rates stabilize, we'll see reverse, basically as that bond portfolio either approaches maturity or eventually matures because these bonds mature at face value, obviously. We'll have some wind in our sails, and Doug, there's a path to turning off the ATM that is not dependent on AIRB. When you see for next year, within your expectations, have you modeled out that you will have to continue to use the ATM through next year, or is that something that you think you can turn off based upon your projections? It's a case where we'll likely continue to use it, in the first part of the year until we adopt the new CAR framework. Once we've adopted that, and we can be very targeted and see that new lending come on at the lower risk density, our intention would be to structure our growth and target our growth, in such a way that would allow us to turn off the ATM. That would be our priority. Of course, there are other things that can consume capital, and we'll continue to prudently manage it, but that would be our focus. Then just that the third, and I promise I'll stop. At the, on the NIMs, obviously, it's a huge focus this quarter for all the banks, and given what we saw with Big Six, I guess I'm not too surprised by what we saw with yourself. I guess my question is, can you describe a scenario where, you know, NIMs start to expand? Like, can you kind of give an example? And, like, should we be looking at prime versus CDOR or prime versus BA to kind of gauge where NIMs are gonna go? I guess ultimately what I'm asking is, like, on Slide 12. I guess this is a follow-on second part to this. If I look at Slide 12, you have, you know, an asset yield benefit this quarter of 20 basis points as the lag impact starts to come through. I guess my question is, like, if interest rates don't move from here, like, how much more of a lag of that, something similar to that 20 basis points is left to flow through the books? Again, assuming that no more rate increases. I don't know if you can give some perspective on that? Well, there's a couple ways you can tackle it. I mean, looking backwards, if you just look at our NIM performance this year, you'll see Q2 and Q4, where we had pretty significant increases in the yield, bond yields. I think Q2, we would've been up more than 100 basis points within that one quarter on yields. Then if you look in Q4, we would've been very close to 100 up. In both those two quarters, we saw downward pressure on our NIM, where it's just a case where the deposits reprice a lot quicker than the assets, given the difference in duration of those books. We had one quarter this year in third quarter where we had only, and I just put air quotes around only, 40 basis point increase in the yield curve through the quarter, and that's the quarter where you saw us expand our NIM a little bit. On the basis of, you know, stability in market interest rates, which is really what we need, it allows our assets to catch up and continue to reprice, where deposits have been pretty quick to react already. Just to give you a sense of a bit of the torque here, if we look at just the change in Bank of Canada rates through the year, our deposit costs, I mean, they reflect about, call it, half of the Bank of Canada rate increases. On our asset side, it's about a third. If we just saw, no further shifts upwards or no significant shifts upwards, that delta, nearly closes over the next year in terms of, assets catching up and passing through about the same amount of that, Bank of Canada increase. That's why we're feeling pretty constructive on NIM next year and seeing just a mechanical path, to NIM expansion just from our asset book catching up to our liability book, frankly. Appreciate the color. Thank you. Thanks, Doug. Thank you. The next question comes from Gabriel Dechaine of National Bank Financial. Please go ahead. Hi. Good morning. Just Chris, on the in your opening remarks, you said don't expect AIRB transition over the next two years. I wanna make sure I understand those comments. I didn't expect anything at fiscal 2023. You're also saying you don't expect the transition to 2024. Yes. What we're doing is we redevelop the models and processes. We now in fiscal 2023, we'll put them into implementation, and then we will run a use test and then take it forward for approval. Gabe, this is a long-term win for the bank. You know, as we think about what the future has of us being able to manage capital much more proactively and really target our lending and really focus on portfolio management, it just provides all sorts of opportunity. We're just gonna make sure that all of the internal processes are such that we have a clear path, and we're absolutely convinced we have no issues. That's the. We just wanna give that sort of timeframe that just sets the stage for what we're doing. We're confident in the work we've done, and we're confident in the process we have going forward. We just wanna say that don't expect to see it for two years. I appreciate it's a long-term process, but the investors obviously wanna know. Yes. You talked about, you know, stuff like, more manual, inputs and, I think, fixes or refinements to some of your existing models. Were those some of the items that you learned over the course of this year or prior years? Yes, that was the outcome of our parallel run. We found. Okay. The ability to replicate did not was not as strong as it could be. We are putting in more automated processes that allow us then to have a structure that just eliminates the challenge of replication so that we have a really strong process in place. Okay. I'm gonna ask Doug's question differently. Just if you can I was not fully paying attention there, but can you really dumb it down as far as, you know, in the last few quarters, you've talked about margin expansion, and it's gone the other direction. You're seeing margin expansion, critical factors. You know, is it just that, you know, the rate hikes kinda flatten out at some point, and that has less of an inflationary impact on your funding costs, and then the assets just reprice gradually and, I mean, and catch up? Is that the gist of it? Pretty much it, Gabe. Like, we need a quarter where yields don't go up 100 basis points in a single quarter. I mean, that's highly unusual in a historical context, and it happened in two quarters this year. You know, the interesting thing, you know, our deposit costs, they've actually behaved quite well, and we're pretty pleased. I mean, we've made a lot of investments over the years to start building a funding profile that a bit more consistent with what you'd see at the larger banks. You know, when you look backwards at the last year, and I look at the change in our deposit costs relative to the large banks, and including some that are being celebrated for their, you know, their strength on that regard, our deposit cost increase is kind of in the top quartile. There's, I think, maybe only one other bank that had a lower increase in their deposit costs over the last year. We're about the same as one other one, and then the four others actually had more of an increase in deposit costs. Wanted to highlight that because some might find that surprising. Really the difference we've seen has been on the asset yield side. You know, for us, this has been a mechanical repricing of our book at the higher interest rates. I can't speak for others, but there are other ways to find yield in this environment. For us, we have not adjusted our credit risk appetite. That has remained very consistent. We don't take on market risk or trading risk, outside the management of the interest rate risk in our banking book. For us, it's just a timing factor and we expect that to resolve next year. Really all we need is, you know, have a quarter where even if you see increases, they're just not at the pace and speed that we saw through the last fiscal year. Okay. Just to, you know, confirm your statement there, well, I guess I won't refer to it as statement, but on the CAR update, is it, those are prospective changes, so it only affects new originations? 'Cause the way I'm reading it in your annual report and the CAR guidelines is it sounds more prospective. It wouldn't affect your, you know, your existing balance sheet? Yeah, it does. It does? Okay. Yeah, you're absolutely right, Gabe. You do a remeasurement on adoption of the existing book. Now, the existing book is based on what we've originated over the last couple of years. You know, while there are areas within the new CAR guidelines that allow you to target lower risk weight densities, there are other areas that go the other way, where you can end up holding a higher risk weight than what we would have had under the current standardized approach. On day one, you're adopting the portfolio you have. On a go-forward basis, you can absolutely be targeted and reduce the risk weight density if you are prudent and smart lenders, which that's how we categorize ourselves. Historically, you weren't optimizing for rules that didn't exist yet, now that are in their proposed form, but in the future, you will. That's basically- Precisely. Yeah. Last one, expenses. I know I've been harping on this for a while now, I don't wanna, you know, begrudge you for 7% expense growth. That's a great outcome compared to what we've seen in the last little while, and you're looking at a sub-50% mix ratio next year. Just wanna, you know, on the quarter, the salaries and expenses were pretty flat year-over-year. Is that anything unusual in there? That's your biggest expense component. Was there anything unusual there, or is that a sustainable kind of figure? We're all, you know, living in the world of wage inflation and well, not me anyway, but others. Yeah, I mean, we've taken a pretty measured approach in dealing with wage inflation. I mean, we did make some targeted adjustments through the year where we felt we needed to, but it was just that. It was targeted. I think what we've seen in the last quarter is it's proven to be the right approach because that a lot of the heat has come out of the labor market, at least from our perspective, and what we've seen kind of emerging here over the last quarter. You know, when we look to bring in new talent, you know, our proposition isn't come here for a financial windfall. The people are coming here because they believe in the strategy, they like the upside, they like the culture, but they're not coming here to make a higher wage necessarily. We're competitive, but we don't need to be, you know, top of the table, and that's consistent with like loan pricing, deposit pricing. You know, our proposition is service, value, and culture, and not necessarily price. It's similar on wages. I think that's allowed us to weather this storm, pretty effectively actually. Okay. Well, enjoy the weekend. Thanks, Gabriel. Thank you. Thank you. The next question comes from Meny Grauman of Scotiabank. Please go ahead. Hi. Good morning. Just a question on the delay of AIRB. I'm wondering if there's any expense implications that we need to think about, specifically for next year. No, Meny. Even though, you know, we have some implementation work to do, and, you know, we're building some automated portions of that implementation, gives us a much better sustainable operating model for sure. You know, maybe pushes out the timeline a bit. When we think about expenses for next year or would this cause me to think there's a higher run rate or puts our ability to lower our efficiency ratio in jeopardy, no. You know, we're executing the work that we need to execute, but it's not one that we think will cause any pressure on NIEs next year. You know, it's a case where as we progress with the AIRB, now that we're through this big chunk of development work, that was the big push in terms of effort from our teams and our third parties to get that up and running. It was a very expensive piece of that process. From here, things start to get less expensive. Understood. You know, when we look at, the credit picture, for CWB specifically and broader, I mean, it definitely doesn't look like there's any, you know, big credit issue, out there, just more of a normalization. I'm wondering You know, more on a, you know, from your perspective speaking to customers, are there certain areas or geographies where you are hearing about more stress? I'm thinking, you know, in particular maybe the franchise finance business in particular. Are there any areas that you would highlight that are dealing with more challenges across your customer base? We've not seen any particular portfolio have kind of systemic increase in risk, which is great. The franchise finance, of course, came through the COVID structures with actually very good outcomes. We've talked before about very defined lending process within franchise finance. You know, we're focused on suburban hotels that have, you know, lots of flexibility with operating leverage that can cut their costs quite dramatically, which they did. The borrower profile that we focus on there is to make sure that, you know, they're typically multiple hotel owners, you know, on flagged hotels, so they come into it with a very strong loan-to-value. What we've seen is really, you know, great resilience in that whole portfolio through the entire COVID period that we're coming out of it now. We're not seeing that as one that is providing extra risk. But again, we are following all of the segments of the portfolio as we monitor the future and see what will occur as the impact of higher interest rates come on the economy. Thanks for that, Chris, and see you next week. Thank you. Thank you. The next question comes from Sohrab Movahedi, BMO Capital Markets. Please go ahead. Hey, thanks. I just wanted to get a perspective. Do you anticipate any benefit to your franchise from the HSBC Canada acquisition here? Our largest portfolio is in British Columbia, so we have a big footprint of branches there. That's the largest portion of HSBC from what I understand. We have lots of clients that we share. We have lots of opportunity to, you know, be very focused on how we approach that market. You know, we have, you know, grown up in BC and Alberta, so, you know, we've got a good familiarity there, good brand awareness, and, you know, we'll be very focused on making sure that we can, you know, look and speak to clients. Just by pure coincidence, Sohrab, we just opened a flagship banking center and regional office, like, right down the street from them. That wasn't obviously intentional. This was planned a while ago, but just kind of further highlights how well-positioned we are relative to that opportunity. Just I guess that's both in terms of client and talent acquisition on your part, maybe attrition on their part. Is that fair to say, Chris and Matt? I think that I you know, I think we're focused on the same markets. You know, our general commercial focus is definitely one that HSBC has always been very active in. As I say, we do share clients, so we've got a, you know, a very similar underwriting structure as they would. The opportunity, I think, both for clients and as we look at supporting our growth with excellent staff, that would be an opportunity. Just to stay with it for two more kind of quick follow-up questions. The type of outlook or guidance, Matt, that you provided both in terms of loan growth and NIM, I guess, that did not factor in any, you know, did it factor in any kind of windfall gains, whether it's business or otherwise, from this HSBC disruption, or did it assume status quo as far as the competition kind of landscape is concerned? Saurabh, I think it's fair to characterize it as it was more status quo. I mean, when we were developing our outlook and budget for next year, frankly, we did not have this necessarily top of mind. This is something I would look at as putting a bit of wind in our sails relative to the hand we thought we might have been dealt next year. Obviously other things can happen, but we look at this one, and it gives us a pretty high degree of confidence in the outlook, put it that way. Okay. Matt, just one final one then just on that same topic. I mean, obviously HSBC is both active on the retail and the commercial side. I think you run more into them on the, you know, as, you know, you respect them as competitors, I think is the way ultimately Chris characterized it as competitors on the commercial side. Is there any From what you would have seen in deals that you would have been with them, is there any indication that the removal of them as a competitor will be net beneficial to margins, I don't know, you know, either on asset yields or funding side? That may be more of an impact on the, on the consumer books, less so on the commercial where you run? Yeah. I'm not racking my brain to think about when we've been up, you know, we're up against the big banks. We often see them, you know, pretty significant pricing pressure, and we find ourselves, you know, priced a little bit wider at the large banks. Then people take it because they're, you know, frankly, we're charging for a premium service and then delivering it. Against HSBC, though, I, you know, at times they're we've seen them get aggressive, but overall they're fairly well-behaved, I think. Chris, unless you've seen something different. You know, I think on the commercial side, I think it's not a dissimilar approach to the client base, not a dissimilar pricing structure. I think they'd be much more aggressive on the personal side. Okay. Thank you very much. Thank you, sir. Thank you. The next question comes from Darko Mihelic of RBC Capital Markets. Please go ahead. Hi there. I just wanted to ask about the dividend increase. It was CAD 0.01. Annual earnings per share down, adjusted down. What's the thought process there? Why bother for just CAD 0.01? You know, this is a bank that's using an ATM. I just wonder if you can just talk to the decision to suggest to the board to raise the dividend. Yeah. We think about it, Darko, from a payout ratio first. I think if you look back historically and you look back to the last time we had medium-term targets, and we wanted to be in that 40% range. You know, if we're going year-over-year comp, I think last year, a tougher comp from an earnings perspective because we had very benign PCL, we had performing loan releases, et cetera, and a fairly low payout ratio. Even with this increase, we'd be still in the mid-thirties, which we'd still characterize as fairly low. When we think dividend, when we think payout ratio, it's about the ratio of earnings, very confident in the earnings outlook and the ability to grow and expand from here. That was the logic behind the increase. I mean, it's something we look at as more structural, whereas use of an ATM, a bit more reactionary, a bit more in the moment based on, you know, immediate, more near-term capital needs relative to near-term, capital demand from loan growth. Whereas the dividend, a bit more structural and not the tool I'd necessarily look to as a capital management tool. Okay. Just switching to the AIRB tools that are sort of in your toolkit. I just wanted to understand a little bit, like my understanding was you were already using parts of it, to help you to gather insights into the lending book and the behaviors and so on of certain products. What is it now that requires a full year and plus of using this tool that you would not have already garnered from using it up until now? Am I just missing something? Am I missing this the full extent of what you're capable of using? Maybe you can just provide some sort of insight into how much of it you were using this past year versus what the full use would be next year. So the difference, Darko, is that when we do loan underwriting, we use a scorecard. The scorecard that we're using today, which does utilize the AIRB categorization on risk for the different portfolios we're in, it's a pretty manual scorecard. What we will be replacing that with, the model that drives that is the one that we've replaced. What we'll be replacing that is a more automated process for the manner under which we calculate the risk rating per client. Essentially, it gives you that granular look on loan by loan, and that's where that implementation time is taking over the next year. Okay. With respect to the AIRB tech, the technology stack and so on. Well, maybe this is a better question for Investor Day. Okay. I'm not gonna pin you guys here. I'll save this one for next week. Thanks for that, and I'll see you guys next week. Okay. Thanks, Darko. Cheers. Thank you. The next question comes from Lemar Persaud of Cormark. Please go ahead. Thanks. Before I start the question, I'm just gonna be really blunt with this one, so I gotta apologize in advance for that, but I really want to understand it. I think you guys agree that the guidance has been a bit of a moving target throughout 2022 and in Q4 again, with a sharp decline in margins. I'm wondering if you could really talk to us about what the real surprise was from the last quarter's conference call, as you kind of moved through the quarter. Not to put too fine of a point on it, but you guys offered, like, let's say, the NIM guidance at the end of August. I guess what moved so sharply against your expectations in September and October to drive margins down so much, sharper than expected? Maybe you could comment relative to the waterfall you provided on Slide 12, which is very helpful. I guess the reason I'm asking this is because, I guess, how confident are you more broadly in the guidance for the year ahead? Like, is there a margin of safety built into your 2023 outlook, or is that kind of a best case scenario where, you know, it could be walked down throughout the year? Thanks. Yeah. Yeah, no problem, Lamar. The outlook we provided, and if we looked at where just simply pull up the 2-year yield curve as an example. You know, our expectation when we got through the quarter and had our call was that, and this was not a CWB position, this is frankly what the curve reflected. At that point, the expectation was is that yields had captured about all the upcoming Bank of Canada rate increases that they were going to capture, and we thought we would level off from there. Rather than leveling off from there, we saw continued sharp increases in the yield curve, and that's something that you see right away reflected in GIC rates. You look at the sort of funding we generated in the quarter, no different from the other banks, I would think if you ask them. You know, a lot of the deposit growth in the quarter was GICs, which is just natural in the sort of rising rate environment and the sort of rates you can get on a GIC these days. That was the biggest factor, Lemar, is interest rates we thought were done, sharply increasing, and they just kept going for the rest of the quarter. Felt that immediately in deposit costs. It's something where asset yields will catch up. When we look through to next year, if we continue seeing, you know, each quarter 100 plus basis point movements in yield curve, that would be a very challenging environment for us to expand NIM in just because our deposit book is shorter dated than our lending book. That would be a very challenging dynamic for us to work through. I don't think that's different from the other banks, but I wonder if other tools were used to help find yield in this sort of an environment. Okay. That's helpful. Can you talk about, you know, kind of a margin of safety you guys build in in that 2023 outlook on your Slide 15? Is that exactly what you guys are thinking in your internal models? Yeah. For us, you know, obviously, we would need stability in interest rates to think about, you know, robust expansion of net interest margin. If rates continue to tick up a bit next year, we'd be thinking about a less robust expansion of net interest margin. Yeah, running through different scenarios, we're comfortable with the outlook of an increase to put a fine point on it. Okay. Thanks for the time, guys. Thank you. Thank you. The next question comes from Mike Rizvanovic of KBW. Please go ahead. Hey, good morning. Sorry if I missed this in your prepared remarks, can you talk about that FX benefit? More importantly, is this something that... Well, first off, how was that manufactured? Is this something that you could potentially manufacture going forward? Could we see the non-interest income line elevated because of FX and maybe even these credit-related fees? FX, more specifically, it looks like that was the really big one. Can you manufacture that going forward, or does this sort of go back to that normal level, which is, looks like something around CAD 7 million-CAD 8 million lower than it came in this quarter? Yeah. Look, we saw very unusual things in the interest rate curve and beyond what we expected. I mean, somewhat related on the USD-CAD exchange rate, that was a pretty sharp and significant movement in the quarter and not something that we expected either. You know, we have a small U.S. dollar balance sheet, a little bit of a net asset as a position it usually fluctuates in. The sharp strengthening of the U.S. dollar in the quarter is what drove that gain, not something we necessarily manufactured or engineered. It's frankly just what happened. You know, looking forward, I'd say from the start of the quarter, the USD was weaker than usual and finished the quarter stronger than usual. If you got back to neutral, if you call a $0.75 Canadian dollar neutral-ish, if you got back to there, we'd be giving back about half of the gain next year. If you're thinking about the non-interest income line, that's one that I'd circle and say likely going downwards. The one I'd circle as going and more than offsetting that decline would be in wealth. I mean, we've just done a harmonization, a rebrand, and really the full integration of the acquisition, and that business is ready to rock and roll and really leverage cross-sell to and from the rest of the business. We've circled that as something giving an offset there. You know, will you see really large non-interest income growth next year? I don't think so, given that FX potential headwind. Will we continue to grow, and will it be, you know, pretty solid growth? Yeah, and wealth will be the big help there. Okay. Just on that wealth, can you give us a ballpark? Like, is this a revenue line that could grow double-digit range? We hope so. You need a bit of help from the market there, that's what put a headwind on the growth rate this year. From the new client generation and harvesting a lot of the cross-sell, that would be the growth target of this business in an environment where, call it, market wasn't helping or hurting. It sounds like realistically only a partial offset. If I normalize that other non-interest income line, the $8.5 million, it looks like it's got. Like, if you're suggesting that comes down by half, $4 million, I'm guessing you're not looking at wealth hitting that $18 million level anytime soon. It, just based on your commentary. Is that fair? Yeah, that'd be fair. Yeah. I think through next year you'll see the normal growth in credit related and retail fees. Those typically just grow with the loan and deposit book. Okay. Okay. Thanks for your time. Thank you. The next question comes from Stephen Boland of Raymond James. Please go ahead. Morning. Sorry. There was two pieces of guidance given in Q3. You addressed the NIM and what the reason was for that decline. The other piece of guidance was the 20 basis points of provisions that you expected to put up in Q4. It's nice to see 14, but you also mentioned that, you know, things maybe have deteriorated, the outlook has deteriorated, and sequentially that provision is down. Quarter-over-quarter. Maybe what changed from the Q3 guidance that you provided for this quarter and what the decision was for that 14 basis points? Yeah. I'll tee it up, and Chris will finish, so he can brag about credit quality. For us, like, if I gave you the guidance of zero basis point impaired loan PCL in the quarter, you guys might have thought, I hadn't had my coffee that morning. It's highly unusual for us to put up no impaired loan provision. I think, Chris, here's your chance to talk about the way we manage credit here. Yeah. Well, you know, Steven, we've talked about many times, you know, we really are very focused on that core client, very strict underwriting, secured loan portfolio, you know, strict follow-up, monitoring. Got a strong management team should we have clients that move into our watch or impaired. You know, credit is in our DNA, and we make sure that it's something that supports our ability to grow. Growth is our focus, but prudent growth is really the number one outcome that we've been able to deliver, and that's our intention going forward. That said, obviously, you know, it's not sustainable for us to think we're gonna. No. ... e-zero or even single-digit, impaired loan PCL. Just structurally, that's not a consistent or supportable assumption, we think. At times, we can have quarters where it's just very, very benign. This quarter was very, very benign. When you think about impaired loan PCL, you think about write-offs being much lower than usual. You think about our impaired loans going down $20 million-ish, quarter-over-quarter. These are all strong indicators, but also things I'd circle and say are fairly unusual, but in a good way, I suppose. Our teams have done a great job so far. Okay. Thanks. Maybe just my second question. For the guidance for loan growth, when we look at the different buckets of the segments that you lend in, should we expect similar growth in those segments? Is that what's building your guidance for next year, like general commercial, real estate, things of those, which were the highest year-over-year? Yeah. We're obviously most bullish about general commercial. That's a book we've had a lot of success in. That's our target client. That's one that we expect continued very strong growth in next year. Portfolios that we've circled perhaps for lower growth, which is relatively consistent with the themes you've seen this year, our real estate portfolios and commercial mortgages, we've obviously been very targeted there. We will continue to do so. In real estate project lending, we've been very specific about the sort of project and borrower we're targeting in that book, and that's one I'd say would grow at less than the portfolio average next year, just maintaining that same discipline and prudency. Equipment is one, you know, it likely rebounds and grows pretty similar to the overall loan book, which would be a nice rebound year-over-year, frankly. The personal lending is probably one that grows at about the same level as the overall book would be kind of our feel right now, and obviously, this can shift and change as the year goes. Saurabh, in his question, highlighted another interesting opportunity. Based on how we see it right now, that's kind of a high level estimate. Okay. Appreciate that. Thanks, guys. See you next week. Thank you. Thank you. The next question comes from Paul Holden of CIBC. Please go ahead. Thank you. Good morning. I wanna challenge you a little bit on the branch-based deposit growth outlook. I guess that comes from two perspective. First off, you put 8% growth up this year, which is still a good rate, but you're forecasting double-digit growth next year. I think in what's gonna become a more challenging environment, right, for economic conditions, because of liquidity across the broader system, and then also competitive intensity for deposits is ramping up as well. Just wondering what is it in your plans that gives you confidence that you can grow at a faster rate in 2023 than 2022? Well, it is our target, Paul. You know, we've talked about this ability for us to take many of our single product and multi-product. We continue to work on improving that product suite that attracts the clients to the bank. That continues to be a way that we are winning more clients, and that is an addition to our deposit opportunities as well. The launch in this past year of our personal and small business digital. Small business is a growth area for us. It hasn't been a historic market for us that we look to gain traction in with our ability to hit that with a product that we think is gonna have some good market appeal. You know, it is a key focus, right? As we think about the core client that we're on and having that, both sides of the balance sheet for us and for the client, as what we're really looking to drive for. Again, the 14% growth of general commercial last year is indicative of that targeted focus, and that's continuing, and that's how our teams are kind of looking at the market, and that's where we're looking to really help drive that branch-raised deposit growth as well. Okay. Sort of follow on question. How important is that branch-raised deposit growth in terms of your expectation for NIM expansion next year? I mean, I don't know if you can quantify it at all, but let's say deposit growth was, you know, 2% different than expected, whether higher or lower. Is that enough to actually impact your PTPP guidance or is it sort of a non-material impact? Just trying to get a sense, you know, if you can help with that. Yeah. Paul, I wouldn't highlight it as a material impact, especially on the PTPP. I wouldn't look at that as a big headwind. You know, a lot of the growth in branch raised deposits has been in GICs, which are quite expensive. For us, we're thinking that that, you know, just in the high rate environment, that continues to be a big proportion of our branch raised deposit growth, and we'll continue to see a migration from our cheaper notice and demand into term as a continuing impact next year already. Our opportunity would be to get more of the, call it, notice and demand, cash management, less expensive deposits. You know, we've assumed we have a fairly solid batting average on that next year. If we did not deliver that same batting average and didn't see, you know, solid growth in notice and demand, yeah, I mean, it puts a headwind on NIM, but not something I'd look at and say that would be the reason we wouldn't deliver NIM expansion. I don't think it'd be a big enough factor. You know, the biggest headwind against delivering NIM expansion next year would be similar to what we saw in the fourth quarter this year, second quarter this year of just, you know, the yield curve massively expanding like it just did. Okay. That's very helpful. Thank you for that. Last question for me is just going back to that NIM headwind. Matt, you've articulated it well in terms of what happened in Q2 and Q4 in terms of the move of the yield curve. What I want to understand just a little bit better is, does it matter what part of the yield curve? Obviously, I ask that question because we know Bank of Canada rates are going up in Q1, and perhaps the long end of the curve or medium end of the curve, if you will, might not move that much or might actually come down. Like, what does that shift or twist in the curve mean for your funding costs? Yeah. On the funding side, our bellwether would be the kind of more nearer term end, like that one between kind of 1 and 2 years. Then on the lending portfolio, that kind of like a 2 or 3-year type tenor would be, more important. Thank you. Thanks for that. That's it from me. Thank you. Thank you. The next question comes from Joo Ho Kim from Credit Suisse. Please go ahead. Hi. Thanks. Thanks for taking my question. Just wanted to go back to non-interest expenses, and I apologize if this was already asked. It just seemed higher than usual for some of the line items like professional fees, and others. Just wondering if there was anything sort of one time in nature there, and specifically for that professional fees line. That's moved around quite a bit, so wondering where you see that going, just given some of the projects like AIRB that's going on at the bank. Thanks. Professional fees, kind of the big, big pieces that fell under that bucket this quarter, AIRB obviously, some expenses fell into there. The other piece was in our wealth harmonization, the costs we incurred to complete that. Some of those costs ended up in that bucket. Those are the two items that would have pushed it up, sequentially. Thinking through to next year, I mean, that's a bucket if we just thought on an annual basis. It's one that I wouldn't see potential for a large increase. That's one that I think finds a bit of stability and perhaps starts coming down a bit. You know, and that's really our AIRB project, kind of getting through this initial build phase and now moving into an implementation phase. Just our overall kind of volume of strategic project work coming down. That's one I'd circle and say there's opportunity for stability in that bucket rather than. You know, you would have seen a pretty big build up of that bucket over the last couple of years. I think we've plateaued there, and you'll likely see that start working down. Thank you. Just wanted to go back to margins and that guidance for modest improvement for margins next year. How much of that will be tied to improvements in loan yields or loans repricing into higher rates? I'm just trying to get a sense of how quickly your book turns over and whether you see potential or any potential competitive pressure, potentially limiting that ability to reprice. Thank you. You want to take it, Matt? Yeah, the competitive story, you know, it's certainly reflective in the commercial mortgage book, which you saw slower, lower growth in this past year as we really kind of picked our spots in growing that. You know, we're gonna be zeroed in on our core client, that general commercial, and we had very strong growth in 2023. We see that and really maintenance of our yields too in that category. We wanna make sure that we're deploying capital in a very effective and efficient and accretive way. We will be targeted and ensuring that we have, you know, we think it through. Yeah. Just to give you a sense of speed of the churn, I think you heard me say that so far, you know, our asset yields and really our loan yields, if I isolated them, would be behaving the same way. I mean, they've reflected about a third of the, call it, market rate increases. You fast forward a year, nothing else happened in terms of the curve or shape of the curve, and you just allowed that book to reprice and you made same assumptions on today's spreads, you might move from one-third to somewhere between, you know, half to two-thirds of the market rate increases being churned through. Hopefully that gives you a better sense. It does. Thank you. Thank you. There are no further questions at this time. I'll turn the call back to Chris Fowler for the closing remarks. Thank you, Michelle. Our performance this year reflected solid growth and continued investment in our strategically targeted full service growth initiatives in a volatile economic environment. With a focus to grow full service relationships with business owners and their families, we delivered very strong general commercial loan growth, double-digit loan growth in Ontario, and supported our strong diversified funding profile. Our disciplined approach to driving growth within our prudent risk appetite delivered very strong credit performance, and we're in a position of strength to face the potential economic volatility on the horizon. Our strategic execution has delivered enhancements to our digital capabilities, increased our physical presence in key markets, and further improved our client offering to provide a foundation to accelerate full service client growth. We're focused to deliver strong core operating performance next year and achieve the financial performance targets we have set for 2024. I look forward to talking to you next week at our Investor Day in Toronto. If you haven't pre-registered, please see our website for further details. With that, we wish you all a good day. Thank you. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.