Well, I'd like to welcome our next speaker, Andrew Moor, Chief Executive Officer of EQ Bank. Thanks for joining the conference. First time for you and I to chat in this context. Well, we discussed that it would make sense for you to, you know, give a little presentation- Right. and highlight some of the, well, the things you wanna highlight about your business, and then we'll jump into Q&A after that. Yeah, great. Thanks, Gabe. And it is sort of... Hopefully, there are some new faces in the audience, given Gabe's coverage. And thanks to Jaeme for covering us for many years. We are kind of transitioning to bank analyst, so I thought just to give you a high level view of kind of the EQB story for those of you that may be general bank analysts, investors, but kind of think about the Big Six as being your universe of investors. I did kind of want to bring up a few thoughts. You know, we position ourselves as Canada's challenger bank. We're the, obviously, the largest branchless bank in Canada. Over CAD 100 billion of assets under management. And we really have, we believe, kind of Canada's leading digital platform at this point, so EQ Bank is really a marquee deposit gathering platform. And we're. You know, that's continued to grow. A few years ago, people were concerned about our kind of lack of funding options. We were relying a lot on broker deposits. Today, we have a wide swath of funding opportunities, EQ Bank being our direct consumer range, but we also have covered bonds that we issue in Europe, deposit notes, so we access other kinds of securitization ways of accessing liquidity, and access, importantly, to the Bank of Canada's STLF in the event of a downturn. So, you know, we feel that liquidity is always there. We manage it well. In general, our business is about funding the growth of Canada's major cities, so we tend to focus most on Montreal, Toronto, Edmonton, Calgary, Vancouver, and feel that lending on real estate in those cities is a great place to be, given kind of the imbalance between population and demand for housing structures effectively. We've become the seventh largest bank in Canada, so you know, it could be a good dinner party conversation. "What's Canada's seventh largest bank?" Not many of your friends probably know that. Certainly, you know, it was a mystery to my mother until recently. So you know, we are spending more time building our brand. So you'll see here, the Levys are being used in English-speaking Canada, and the... What the theme we're trying to pull apart here is in many categories of life, we've changed providers over the time, right? So we've moved from going to Blockbuster to going to, down to streaming videos on Netflix. Many of the people that were our traditional providers 30 years ago are no longer. In banking, many of us are still banking with the same bank as our parents led into us, into as a teenager, and so we're trying to kind of tease that apart. Why is that? There are other options, and try EQ Bank for that option. And actually, Diane Lavallée and Laurence Leboeuf in here in Quebec are actually resonating more strongly than the Levys. For those of you not kind of that didn't watch Quebec TV in the nineties, Ms. Lavallée seems to be somewhat iconic and attracting a lot of interest. We're actually finding traction there. So, again, this all goes to sort of building our franchise. And this is the way we build value. So we're at the slowest, also one of the lowest dividend-paying stocks in Canada from a bank perspective. We pay about 2% of our capital a year, or roughly sort of 10% of earnings. Generates from 15%-17% ROE year in, year out. That means we grow EPS and book value per share at a compound rate of 15% also. And that leads to this nice little table. I was apologizing to Laurent since I was invited here, that you'd think you'd have National Bank represented above us, but either way, to be in the company of J.P. Morgan and National Bank for the total shareholder return over the last decade is a nice place to be. I think we can maybe chat about why that might be the case, but in any event, it's kind of a good spot to be. And yet we're still cheap, so this is kind of the classic ROE to price to book kind of table, and you can see that we're, you know, a couple of standard deviations off, or, like, CAD 50 per share, possibly cheap if just to get back onto that curve. So you haven't missed anything if you didn't buy the shares 10 years ago, and there's still opportunity, we believe, to continue to create value. And, you know, I think part of the value here, I won't necessarily get into this slide too much, but part of the trick is that we're able to reinvest these retained earnings rather than paying it out as dividend, and able to accrue 15%-17% on that retained equity. So it creates this growth in earnings that's somewhat unique in the Canadian banking landscape, where, yes, these banks produce great ROEs, but effectively, they're distributing most of the ROE generated in Canada back out as dividends. And we're very well capitalized. I think it's kind of a bit of a logic around kind of Basel III Endgame you're talking about, but you can see here that, you know, roughly speaking, if you just measured us on an IRB basis, we'd have about 4.5%, well, there's about a 4.5% gap between us and the big banks, and, you know, roughly speaking, there'd be CAD 900 million of excess if you were considering a kind of like for like capital risk weighting on, if we're an IRB bank, which we're not. So I think it's, you know, it's a good time to think about Equitable. We've just changed our year-end, so now we're gonna be reporting on the same cycle as the big banks. We've got some big bank analysts kind of covering us, so hopefully it's giving us a bit more visibility in the market. Many people sort of said: Well, we can't really invest in you, less than CAD 3 billion in market cap, where you're too small. We're now over that CAD 3 billion range. And Chadwick and his team in Investor Relations spend a lot of time, trying to kind of make us, you know, deal with any objections investors might have to investing in us. So kind of trying to help with liquidity by executing a stock split, for example, and just trying to be thoughtful about, making sure we're as convenient as we can be to—for a place for you to invest. So that was hopefully a kind of helpful five-minute intro Gabe- Of course. Just give you some- Well, my question, and I hear the challenger bank term, you know, used a lot from your management team, and I'm just wondering, you know, what that means and what it doesn't mean, and more, maybe more important on what it doesn't mean. So five years from now, you're not talking about a bank with, you know, 15%-20% of its earnings coming from wealth management and capital markets activity, you're still looking at underserved segments of the market, correct? Yeah. I mean, underserved may not be the word I use, but areas where we can be differentiating competitive. Okay. Where we can be, you know, have to be ashamed of nobody to sort of compete. So, for example, we're the largest securitizer of multi-family mortgages in Canada, and we've got a great digital platform for deposits. We're one of two players in reverse mortgages, so it's kind of looking for distinctive niches in the market where we can go in and say something distinctive, add unique value, and then kind of succeed, as opposed to the ambition we might have if we were a more traditional bank, with kind of trying to serve every need of every customer's life cycle. So that's why you see us talking very positively about things like open banking. We accept that many of our customers will be dealing not just with us, but with other institutions for other services. But we really want to stand out for the services that we provide, and you know, so maybe we've only got half of your financial life, but the other half, you're going to deal with other specialists. That doesn't seem necessarily like a bad place to be, in much as... You know, let's go back to my analogy. 30 years ago, we used to go into department stores, and now we deal with specialists. Maybe banking, hopefully from our perspective, is moving more in that direction. Where are you in the term, like the what EQ or Equitable Bank back in the day was and where it is today, and in terms of the trajectory you see for your where you ultimately want to be, how far are we into that process? Yeah, I always worry with North American sports analogies, but I think we're kind of in the second or third inning, maybe. Trying- Have a baseball game. Yeah. Rugby and football were the round ball, more my games. But you know, we're just getting going. It took a lot to actually stand up a digital platform, and we made that decision in 2014. We opened our doors in 2016, very much borrowing on best digital bank practices around the world. So the banks we look at are the banks like Monzo, Starling, Nubank in Brazil, DBS in Singapore, to look and see what we can borrow from those markets and adapt to a Canadian environment to provide unique value, and we're getting more and more competent every day. Like, we made some mistakes on the way through. The good news is we've learned from those mistakes. We've embedded them in our systems and processes, so it's hard for others to now catch up with us, frankly, because we're that far. And then you touched upon a few building blocks and financial performance metrics, I guess, if you're, you know, paying out 10% of your earnings and then generating 15% ROE, 15% earnings per share growth, you know, could you give a bit more of a sense of, you know, the building blocks to get to that 15% ROE, where, you know, when we take into consideration what kind of asset growth and revenue growth and expense growth, and that may be a bit more emphasis on expense growth. I'm boring that way, I focus on expenses. But being a, you know, relatively smaller institution, the investments required in systems, brand awareness, those are... They can be pretty substantial, and for- Yeah ... for a number of years. For sure. I mean, so first of all, ROE is kind of the, the number we're always looking to, so things like expenses are part of building that broader story. You know, think about NIM, think about expenses, think about the capital being absorbed in every activity. You know, we do have some benefits that, that more traditional banks don't have. There's no COBOL in the room. Mm-hmm. We're operating largely on cloud. I think 87% of the bank is now cloud-enabled, so the kind of cost of transferring servers and so on and maintaining all the infrastructures is behind us, really. But we still, there's always technical debt growing, but we try to be pretty rigorous around managing that. So we feel like we're pretty well set to continue that story. And when you think about the portfolio of businesses we've now built, we've got, you know, quite a range from reverse mortgages we lend to other lenders, sort of smaller mortgage investment corps and others, big commercial lending operation, which is really the traditional heart of the business. You know, we think we've got a lot of leverage, so, you know, some things may be a bit soft for a while, but probably the demographics of a graying society are gonna be something that's gonna be with us and talking about for the next 20 or 30 years. So that feels like a pretty good kind of growth business. You know, mortgage business generally is gonna fluctuate a little bit with the activity in the real estate market, but again, this imbalance between supply and demand of a very open economy, open to immigration, and that creates a lot of activity in real estate for sure. On sticking to that topic, I had a speaker up here earlier, Scotiabank, and he was saying how it's starting—their mortgage book had been deliberately downsized, and now they're maybe seeing the growth come back sooner than expected. What are you seeing as far as, you know, the stabilization and potential acceleration of the mortgage business this year? Yeah, I mean, spring's coming, which is- Yeah. You know, I mean, spring's coming- Upon us. Literally and figuratively in terms of the mortgage markets, we are seeing sort of slightly elevated transaction volumes. I'd still say that we're really waiting. I think the market, I mean, the house buying market is really waiting to see the Bank of Canada start to drop rates, and then we'll see more liquidity return. But clearly, we're getting to a point now where sort of pent-up demand, you've got home buyers thinking, "Should I buy now before the house prices start to run on me because interest rates have dropped? Or should I- Mm-hmm ... should I wait until interest rates are clearly dropping?" So I think that's kind of the dynamic we're into. So, I, you know, I'm reasonably optimistic that as we work through the next couple of months, we're going to see more transactions coming through, but it's still somewhat muted. Let's not forget that we're coming off a year, that, you know, last year, 2023, was the lowest year for housing market transactions in Toronto in 23 years or something. So, I mean, that's, you know, a spectacular number given how much bigger the city is today. So- Yeah ... clearly, any kind of relief on the mortgage rates is gonna trigger some activity. So the last quarter, one of the big, you know, takeaways, I guess, is that impaired loans in the commercial book were up, and that was, you know, flagged, I guess. You identified it as this particular industry, like trucking, and but you also said that post-quarter the impaired balances had been declining because of resolutions. Is that still—like, a month, we're almost a month since then? Is that still the message? I think this is super clear here. We have a relatively modest-sized leasing business in the equipment portfolio called Bennington Financial. Within that, there's a CAD 200 million portfolio of long-haul trucking leases that were originated in 2022 that certainly showing elevated credit losses. We expect that to continue for the next couple of quarters. You know, I guess we were lending in the height of COVID, when demand for transportation services were very high, and it's turned out that that's been much more volatility in that industry. On the commercial business, generally, like lending against apartment buildings primarily, you know, we've seen some of our borrowers get stressed by interest rates going up. Effectively, a mismatch between fixed rental income and interest, variable rate interest borrowings. I am pretty confident that by the end of this quarter, the level of impairments in that book will be down a little bit modestly, quarter-over-quarter, and we really seem to be on a good track for many of the other loans to get resolved. You know, we've got one fairly large loan in there, for example, where we've got a bid to buy the building from us. Actually, it's not gonna actually happen until next quarter, but I'm very confident it'll get resolved, so it's still classified as impaired from an accounting perspective. On the single-family side, we're definitely seeing some people struggling to pay their mortgages. These are relatively low loan-to-values. We don't expect losses, but it does take time for those situations to get resolved. Mm-hmm. The house needs to get sold, the mortgage needs to get repaid, and, you know, people need to move in different kinds of accommodation. But again, the single-family housing, just the prices are holding up well. Loan-to-values are in kind of 60s to sort of 70s% type ranges, so not expecting much in the way of any kind of losses in them. Just so I'm clear, on the commercial side, flat to down, or? Yeah, on the commercial real estate side, flat to down, and then in trucking, continuing to show some losses. Okay. Then, you know, single-family real estate, probably going to take a couple more quarters before it really starts to move in any meaningful direction. The important distinction there is that, and you've been clear about that as well, the commercial side is where you'll have losses, but on the single family, the impairments could go up, but you're underwriting that with no expectation of loss, so. Yeah. Even on the commercial real estate, frankly, the losses- Okay ... are very modest. But, you know, there is one or two construction projects that ran into a bit of a cost overruns, combined with high interest rates, not completing on time, modest losses against the capital we've got out. Just to be clear, we're always first lien. Mm-hmm. So it puts us in a pretty good spot to kind of drive the process. Often we've got second mortgagees behind who are kind of institutional, of institutional quality, who help support that loan. So, you know, we feel pretty comfortable we can work our way through the situation. You know, we've talked about the growth outlook, the credit aspect of the single-family mortgage. I don't know if you have any early impressions on the stories kind of coming out, not directly from OSFI, but in the media as far as loan-to-income ratios. At our lunch discussion, it sounds like they'll be tailoring the rules, in such a way that if you have a certain business model that might naturally gravitate towards higher LTI mortgages, there'll be leniency, I suppose? Well, I think that's, that's what I heard from Peter, and I mean, I think what he was talking about was quite consistent with our understanding. Yeah. What they don't want to happen is if interest rates go sort of back close to zero again to stimulate the economy, and then another downturn, that we don't get too much leverage building in the system. So that, that's the purpose of this. You know, as he said, it's not likely to be a bounding constraint anytime soon. Right. It's kind of a bit of a circuit breaker against the general stress test approach, frankly. So as far as, you know, rate cuts, if and when they do happen, let's talk about, you know, what would you like to see this year? Forget the projections, but what would you like to see in terms of, you know, the amount of rate cuts just to, you know, stimulate demand? And then, you know, other side of that coin is, you know, you might have higher loan growth, but then the spreads might tighten a little bit. Correct me if I'm wrong there, but, yeah, let's talk about that. I think spreads don't really change, frankly. We're competing against other people with a similar kind of cost structure to us, so... We're all generally looking for the kind of similar types of return. You know, Home Capital being one of our bigger competitors, which, you know, now no longer a public company, but owned by one individual who's looking for very similar types of returns against a similar cost structure. So I don't think any of that changes NIM. You know, frankly, what I, what I'd like to see is, is the Bank of Canada having success slaying inflation and being able to, to reduce interest rates. I mean, it's good to have confidence in the economy, to have inflation under control, and, you know, what the path is there. I think there is a bit of natural caution that if we move too fast on interest rates, that the housing market might take off too fast- Too fast ... and then stimulate inflation again, which then puts us into a cycle of having to tighten. I think what I'd like to see is kind of a—it feels to me like we could start moving already, frankly, in terms of moving rates down slowly, without too much danger. Clearly, kind of core inflation seems to be under control, but that's for monetary policy economists to think about. But certainly you'd like to see it, kind of make sure that the CPI stays under control for the longer term. What's the biggest challenge now from the demand side, or is it sellers just waiting for a better market, and that's- ... or, or is it both? Yeah, I mean, I think, I think buyers are waiting for lower interest rates. Yeah, I think there was—6 months ago, they were thinking that the prices would drop in the face of higher interest rates, they should wait. My impression is that, at the margin, most people now think that the prices are probably likely to go up from here. Whether they'll go up faster or, or slower, it's kind of... I mean, that's the sort of general context, and so, you know, there's a big ask, bit of a standoff right now. People, people think the house is worth something, and they're not kind of prepared to drop the price. But, you know, we're really tight on inventories. There aren't even that many houses for sale, frankly. So people need to feel that if they bring their house to the market, they're gonna be able to meet their price expectations, and so you need to see more activity in the market to make that happen. So... Okay. And then, one topic that comes up a lot with, well, the Big Six, and then, Canadian Western Bank, from time to time, is AIRB risk-weighted asset models. I'm wondering what the, the situation, is it Equitable? Is there any appetite to convert? I don't think so, but I just wanted to, you know, hear what you have to say about it. Yeah, we've been working on it for a few years, and, you know, as I mentioned, if we were being treated on AIRB, roughly speaking, we'd have sort of CAD 900 million of excess equity on the balance sheet, which is roughly 23 bucks a share. So it's, it's a big number. But it's not really for that reason that you would do it. I think it would allow us to compete across a broader range of asset classes using standardized. It's a bit of a blunt instrument, where any commercial mortgage, for example, is risk-weighted 100%. If we put cash into one of the D-SIBs, that's risk-weighted at 20%. So in fact, if we have cash sitting on D-SIB's balance sheet, it's actually risk-weighted higher than they would risk-weight a residential mortgage in many cases. So it's sort of a somewhat strange kind of approach. So we would like to become a more sophisticated bank and level the playing field with the D-SIBs, and we're doing a lot of work in those areas. In the meantime, as we build those models, it's giving us a much more sophisticated risk management approach. So it's not sort of thrown away or underinvested money in the meantime, but, you know, we're still talking a few years away before we'll actually be able to make that transition, so that's kind of how that's working. But theoretically, the conversion would be, I don't know, easy... is ever applicable as a, as a term in this situation, but, 80% of your loan book is somewhat homogeneous, so that, that should help, no? Yeah, absolutely. I mean, it's, you know, the big one is sort of CAD 20 billion worth of single-family mortgages, for example, you know, kind of cracked, you know, a, a good chunk of the 40% of the assets on balance sheet, for example. Cash- Yeah ... that should be pretty easy to deal with, you know. Provincial bonds, I mean, we should be able to handle this. So yes, it's an easier problem than it would be for a large D-SIB, commercial lending assets, different kinds of asset classes, theoretically. And as far as the capital management strategy goes, you know, you're running comfortably, you know, with a very comfortable capital position, and if I look at it on the, AIRB basis, even better, not that we really should, but like, theoretically, it makes sense. Buybacks are not anywhere, like, they wouldn't rank highly in your, your priorities? Not, not highly, but I do think that it's, you know, if we can't grow the assets of this to meet our 15% aspiration, and if the stock was, was trading a bit, was cheap, you know, we take a sort of Buffett view on stock buybacks. We only buy back stock when it's fundamentally cheap. But, you know, it could be a way of deploying capital that would benefit our shareholders, and I think that would be the lens we're looking at it through. But our broader capital value creation model is to grow at this sort of 15% kind of cadence and redeploy the capital back in the business. Okay. We've got a couple minutes left, and I'd like to wrap up on your financial targets for the year. So the low end of your guidance range for this year is CAD 11.75, and I know you pushed back probably on... If I just multiply Q1 by four, we're... Yep ... a fair bit shy of that. So how do we get from, you know, the Q1 pace to a higher pace to hit the low end of that guidance range? Yeah, it's a good question. Of course, you know, the bank is growing at 15%. You know, you would generally expect, you know, every quarter is gonna be- Progressively better. There's a progressive kind of slope anyway, so that deals with some of it. We also look at some of the kind of idiosyncratic things around, say, our securitization revenues that, you know, we know we've gathered an inventory of loans to be securitized. You know, that helps, that will help in this quarter compared to last quarter, for example. And also, you know, last quarter, as we spoke about, we had some elevated credit losses associated with the trucking business and so on. They might still be there next quarter, but probably not to the same degree. So when we add all that up together, we did reinforce our targets for the year. So, you know, the financial team's been through that, looking at all kind of variables. And we always thought, frankly, it was. So we're running some advertising the first part of this year. Right ... that we spoke about. So that, again, you know, our costs could be a little bit better in the H2 of the year. So we always thought it was gonna be a story of a better H2 than the H1 even coming into the year, and I think that's- that story is gonna play out. So seasonality of expenses would, well, higher in Q1, that'll taper off, and your guidance on loan losses is for, you know, similar Q1, Q2, and then lower losses in- Right ... the H2, and book growth, presumably, so you're back on track that way, and you, and you're comfortable with that guidance still? I mean, you know, the future's always gonna be- It seems like a reasonable thing. There's obviously always risks to any forecast, but, you know, we look at these things prudently and, you know, generally, we try to surprise the Street slightly to the upside- Mm-hmm ... there's a little bit of margin in there, but, so we're feeling, you know, we wouldn't be saying these things if we hadn't been through it carefully and thought about it. Okay. Well, that's a wrap. Is anybody in the audience wanting to ask a question before we call it? Nope. Well, thank you. Andrew, thank you.