Good morning, ladies and gentlemen, and welcome to National Bank of Canada's second quarter results conference call. I would now like to turn the meeting over to Ms. Linda Boulanger, Senior Vice President of Investor Relations. Please go ahead, Ms. Boulanger. Thank you, operator. Good morning, everyone, and welcome to our second quarter presentation. Presenting this morning are Louis Vachon, President and CEO, Bill Bonnell, Chief Risk Officer, and Ghislain Parent, Chief Financial Officer. Also joining us for the Q&A session are Laurent Ferreira, Chief Operating Officer, Stéphane Achard and Lucie Blanchet, Co-Heads of P&C Banking, Martin Gagnon, Head of Wealth Management, Denis Girouard, Head of Financial Markets, and Jean Dagenais, Senior VP, Finance. Before we begin, I refer you to slide two of our presentation, providing National Bank's caution regarding forward-looking statements. With that, let me now turn the call over to Louis Vachon. Merci, Linda, and welcome everyone to our call today. This morning, the bank reported another quarter of strong results. The trends we saw in Q1 carried over into Q2. We are operating in an improving economic environment conducive to business growth. Q2 2021 pre-tax, pre-provision earnings were up 9% from last year, driven by continued momentum in all our businesses. We continued to generate strong organic growth and an industry-leading ROE while maintaining high capital levels and prudent reserves. Our performance once again speaks to the strategic choices we have made over the years, the sound diversification of our earnings streams, and the resilience of our franchise. The economic recovery is well underway and occurring at an accelerated pace. From the macro level, consumer confidence is high with substantial savings in advanced economies fueling global economic growth. Domestically, we have a resilient economy, coupled with strong growth in the rest of the world, driving up commodity prices, resulting in a stronger rebound to earnings than anticipated. In our home province of Quebec, the full-time employment rate is almost back to pre-pandemic levels. Construction is very strong. Manufacturing is doing well. Vaccination is progressing very well. The economy is reopening faster than expected. We expect to see a good rebound in the discretionary economy later in 2021 and in 2022. While the pandemic may still bring some negative surprises, we are constructive on the recovery and the economy. Our credit quality remains very strong. Given the improving economic and market indicators, our PCLs this quarter were almost zero, reflecting a small release of performing allowances and low impaired loan losses. Given the uncertainty with respect to the path of the economic recovery, we are maintaining a prudent approach. On our capital deployment strategy, our priorities are, first and foremost, to maintain strong capital ratios. Second, to invest in our business to fuel organic growth. Finally, returning capital to shareholders remains a priority for the bank. Once we get the green light from the regulators, our intent is to increase our dividend to bring it back within our midterm payout range of 40%-50%. Turning now to the performance of our segments in the second quarter. In P&C Banking, pre-tax, pre-provision earnings were up 12% from last year, driven by strong volume growth on both sides of the balance sheet, partly offset by lower margins. The real estate market continues to be strong, which gives us good momentum in mortgage growth, with volumes up 9% year-over-year. More than half of our originations are still in Quebec, where fundamentals continue to be very strong. Housing remains affordable relative to other geographies. Families' finances are more resilient with a high percentage of dual income households, and Quebecers continue to have less debt and more savings than the Canadian average. Furthermore, the Canadian government's reopening plan is now underway. We also growing our commercial loan book. We are capturing opportunities across Canada in targeted sectors. This includes multi-residential rental development, the majority of which is insured. With low interest rates, high savings rates, limited supply, and an anticipated return to higher immigration level, the residential property market, both on the personal and commercial side, should remain strong for the years to come. Wealth Management delivered another strong quarter, with pre-tax, pre-provision earnings up 16% from last year. This was driven by favorable markets, strong inflows, and elevated transaction levels. Client satisfaction scores are an all-time high, supporting strong volume growth, particularly in full-service brokerage services and private banking. National Bank Direct Brokerage ranked first in the JD Power 2021 Canada Self-Directed Investor Satisfaction Survey. Assuming current market conditions persist, we are well-positioned to deliver double-digit earnings growth through the second half of the year. Financial Markets reported revenues of CAD 567 million, our third-best quarter on record. Revenues were up 48% in corporate and investment banking, fueled by strong client activity across the franchise. Having invested steadily in our corporate and investment banking platform over the last several years, we now have the capacity to fully capitalize on elevated M&A and IPO volumes. Global markets also delivered a solid quarter against a record performance last year. In recent months, we have observed a normalization of market volatility across most asset classes. Our results in Financial Markets speak to the resilience and diversification of our earnings stream. Assuming the current environment persists, we are well-positioned as we enter the second half of the year. Our international segment delivered another solid performance this quarter. Credigy results reflected a strong underlying performance of existing portfolios and favorable impacts of an improving economic environment on provisions. ABA Bank continues to perform well with loans and deposits up 26% and 35%, respectively, from last year. We are very pleased with our international strategy, which remains well-positioned to deliver double-digit earnings growth again this year. To wrap up, I am very pleased by the bank's performance through the first half of the year, and we see the same macro trends carrying over into the second half. As the economy recovers at an accelerated pace, we are well-positioned to continue capturing growth opportunities. We will remain disciplined, and we will continue to be guided by our consistent and prudent risk management approach. Given our strong performance so far this year and the favorable environment, we are in a very good position to achieve mid to high single-digit pre-tax, pre-provision growth over fiscal 2021. Based on what we are seeing today, and should current trends continue, we would be at the top end of that range. Today, we move forward with cautious optimism, focused on leveraging the strength of our franchise. As we gradually exit the pandemic, we are confident that we have the right team, strategies to continue generating solid revenue growth and delivering strong returns to our shareholders. I would like to recognize and sincerely thank all of our colleagues and customers who have shown incredible resilience in the last 15 months. I wish all of them and everyone on the call a safe and restful summer. On that, I will now turn the call over to Bill. Go ahead, Bill. Merci, Louis. Good morning, everyone. I'll begin my remarks on slide seven. Credit performance continued to improve in Q2, reflecting the positive trends we've seen since the beginning of the year. Provisions on impaired loans were CAD 67 million, or 16 basis points in the second quarter, a one basis point improvement quarter-over-quarter, and 13 basis points better than the same period last year. We saw strong performance across all sectors. Retail provisions remained at cyclical lows. Financial Markets had one new provision in the utility sector this quarter. Absent this idiosyncratic provision, impaired PCLs would have been below 10 basis points. Performing loan provisions were CAD -62 million in the quarter, driven by the update to our macroeconomic scenarios, as well as improvements in credit quality. We maintained the same weights for the scenarios, however, improvements in both market and economic indicators were reflected. Each of our business sectors benefited from negative provisions, and the non-retail portfolios had the largest release, CAD 35 million, due to both scenario updates and positive credit migration. Total provisions for credit losses were CAD 5 million, or one basis point. Given the strong performance we've seen in our loan portfolios year to date and the improved economic outlook, we've adjusted our fiscal year 2021 target range to 15 to 25 basis points of provisions on impaired loans. I would note that this range is in line with our pre-pandemic run rate and impaired provisions, and we would expect to finish in the bottom part of that range. Turning to slide eight. We continue to maintain prudent allowances for credit losses, which at CAD 1.3 billion, are 70% above our pre-pandemic level. Total allowances declined by 3% on a quarter-over-quarter basis, but remained higher than the same period last year. Allowances on performing loans declined by CAD 74 million this quarter to CAD 977 million. I'll point out that this is about the same level that we had at Q2 last year after our significant reserve build in the early stage of the pandemic. This level of performing allowance provides ample coverage of our portfolio's risks and reflects our desire to remain prudent at this stage of the recovery. Looking forward, the level of performing allowance will be driven by the path of economic recovery, credit migration, and volume growth. Allowances on impaired loans increased by CAD 25 million - CAD 382 million, representing a healthy 52% coverage of gross impaired loans. To help investors assess the adequacy of our allowances, on slide nine, we provide several relevant metrics. Performing allowance coverage of our impaired provisions increased to 3.3x. Total allowances now cover 6.4x our net charge-offs and represent 83 basis points of total loans. These strong metrics reinforce our belief that we are very well-provisioned. Turning to slide 10. Our gross impaired loans declined to CAD 731 million, or 42 basis points in the quarter. Formations remained low as the one new formation in corporate banking was offset by net repayments in the P&C sector. Details of our retail mortgage and HELOC portfolio are presented on slide 11. The geographic and product mix remains stable, with borrowers in Quebec representing 55% of the portfolio and insured mortgages accounting for 35% of the total. Additional details of our credit portfolios and market risk are presented in the appendices. In summary, we're pleased with the performance last quarter. The positive trends we've seen since the start of the year have continued, supported by good progress in vaccinations and improved expectations for economic recovery. We are cautiously optimistic that these trends will continue through the second half and believe the resilience of our portfolios position us well going forward. I'll now turn the call over to Ghislain. Thank you, Bill. Good morning, everyone. Turning to page 13. The bank delivered another strong performance in the second quarter, supported by our diversified business model and the differentiated positioning of our segments. With revenues up 8% year-over-year and a positive operating leverage of 1%, the bank delivered strong pre-tax, pre-provision growth of 9%. Higher expenses year-over-year were mostly driven by higher comp as a result of our strong performance. Excluding variable compensation, expenses were up 1% year-over-year and reflect continued investments in our business. Looking forward through the second half of the year, the year-over-year comparison of expenses will be impacted by the combined effect of higher variable compensation this year and the lower variable comp expense recorded in the second half of last year. As mentioned previously, we continue to work towards achieving positive operating leverage for fiscal 2021. As always, the team maintains a balanced approach between growth, investments, and rigorous cost management. Now turning to capital on page 14. We ended the second quarter with a strong CET1 ratio of 12.2%, up 25 basis points from last quarter. We achieved strong net income generation of 54 basis points, reflecting the robust performance of our businesses and a very low provision for credit losses. Strong organic growth in commercial and corporate banking led to risk-weighted assets expansion representing 30 basis points of CET1. Favorable migration in retail up 4 basis points of CET1 this quarter. For the third quarter, we estimate that the unwinding of the regulatory market risk relief will subtract 15 basis points from our CET1 ratio. Now turning to page 15. Our liquidity ratios are strong, with an LCR ratio of 150% and a net stable funding ratio of 125%. Our total capital ratio increased to 16.4%. In conclusion, the bank delivered another strong quarter with solid organic growth, industry-leading ROE, and high capital levels. With a strong balance sheet, significant reserves, and diversified revenue levers, our franchise is well-positioned to continue generating attractive growth through fiscal 2021. With that, I'll turn the call back to the operator for the Q&A. Thank you. We will now take questions from the telephone line. If you have a question and you are using a speakerphone, please mute your handset before making your selection. If you have a question, please press star one on your device's keypad. You may cancel your question at any time by pressing star two. Please press star one at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Our first question is from Gabriel Dechaine from National Bank Financial. Please go ahead. Hi. Good morning. I wasn't prepared to be first, but here we go. Just want to ask about the trading commentary there on slide 20. It says securities financing and volatility was low. I'm just wondering, is that an in-quarter Q2 specific comment, or is it part of a trend? Not the volatility part, but the securities financing in particular, because it has been a pretty important driver in the past. Yeah. Denis, you want to take that one? Hi, Gabriel. This is Denis. Yeah. If you remember, securities finance is really driven by, right now, the amount of liquidity that is in the system. All the central bank and government are providing a lot of liquidity since the beginning of the pandemic, and it's still there. As long as those two will persist and they'll be active in providing a lot of liquidity, we'll see securities finance having a lower number than what we used to have. As soon as those two active things in the market will disappear, we'll see the activity moving up. It's very tough right now to put the balance sheet to work at levels that we saw pre-pandemic. Despite of that, we have really good results. Somewhere else we're not that unpleased by the situation. We're still doing quite well, but we expect that maybe in 2022, we'll see things going back to where they were pre-pandemic, and you'll see better numbers for that sectors. Okay. Thank you. My next question is on inflation, macro question here, Louis or Bill, I would like to hear your thoughts on what you're thinking about in terms of opportunities that higher inflation creates for the bank, and in risks. I've heard about the I mean, it makes sense, the back book, LTVs go down, which is great. A bit more careful on new origination specific to the mortgage book, I wouldn't mind a bit more broader commentary on the lending activities and in elsewhere, really. Thanks, Gabriel Dechaine. That's a big picture question. We're, I believe, I'm the last dinosaur around the table that did work in an inflationary environment. We're having that discussion at the risk committees and even at the BDP of how we would adjust, and we should adjust our risk policies in terms of market risks, liquidity risks, ALM, and ultimately, credit risk in a more inflationary environment. By and large, it would require a bit of a change in mindset, particularly with traders and risk managers that have seen rates drop continuously for the last 25 years. That would be an adjustment. Off the top of my head, when we're looking to this, and again, if we have a moderate increase in inflation, I think that's quite good for the Canadian economy. I think that would be quite good for the banking industry generally. That's how we would approach it. A large increase in inflation, which would bring a large increase in interest rates, would bring probably a different outcome. Right now, I think we still perceive that as a low probability event or scenario. A bit more inflation in the system, as a lender, is not a bad thing. Slightly higher nominal interest rates is not a bad thing. Higher inflationary expectations, at least initially, would bring a steeper yield curve. Again, as we say all the time, don't confuse genius and a steep yield curve. It's always easier to make money in a steep yield curve environment for a bank. That would bring probably a bit more volatility, and I think we're well equipped as an organization to deal with that volatility. We could debate and discuss that for many long minutes, but I would stop my comments there today, yeah. Okay. Anything to add, Bill, on the underwriting side? I think Louis covered it well. On the underwriting side, certainly a tool that we use is stressing the resilience of balance sheets to higher rates. Certainly as we're gaining inflationary scenarios, we increase the size of the interest rates that could happen to stress the resilience a little bit further. I think that's all I'd comment on now, Gabriel. Thank you. Have a good weekend. Thank you. Our following question is from Scott Chan from Canaccord Genuity. Please go ahead. Good morning. I don't know if I missed this, but looking at your trading and on the equity pocket, I noticed it was your lowest revenue quarter since Q2 2019, and a bit contrary to kind of other peers this quarter. Was there anything specific to National to point out this quarter? Thanks, Scott. When you compare Q2 2021 versus, let's say, Q1 2021 and Q2 2020, there's two things that those two quarters are in common. First, a lot of volatility, and second, a lot of volume for different reasons. Those two quarters were really upending compared to Q2 2021. In spite of that, we're kind of pleased with what we're seeing in terms of activities in the trading side. You're right, when you compare to Q2 2019, then we still produce CAD 53 million more than Q2 2019 and Q2 2021. Yes, there's a kind of a normalization because Q1 2021 and Q2 2020 were upending and not really the norm that you can see over years. We're not that concerned about Q2 2021 right now. Okay. Just on the international side, kind of seeing results on Credigy and ABA Bank. When I look at the financial metrics, it's very similar in terms of revenue expenses going down to the bottom line, and I know you target double-digit earnings growth in fiscal 2021, but is there a view in-house of which of those international segments is expected to grow faster, let's say, over the next year? Maybe I'll start, and then Ghislain, you can add. I think we're quite optimistic on both of them. ABA has a steadier growth profile than Credigy. Credigy can have quarter-to-quarter volatility over a very positive long-term trend. I think, Scott, we remain both positive on both business lines on an equal basis. I don't think we're more optimistic on one versus the other. Okay. That's helpful for Credigy. Thank you very much. Thank you. Our following question is from Meny Grauman from Scotiabank. Please go ahead. Yeah, hi. Good morning. When I look at your published rate sensitivity, definitely looks like it's understating the actual upside. Looks like it's not comparable to other banks. I'm just wondering how would you help us think about the upside to rising rates for National Bank to supplement the published sensitivity that you provide? I'll start, Meny. Thank you for that. It only shows some of the treasury position. We are working, and I think by Q3 we'll have a more complete picture of our interest rate sensitivity, which I think your assumptions are right, are higher than what is shown there. My friend Jean Dagenais has a teaser for you. What's the teaser, Mr. Dagenais? Sorry for it. As you know, the increase in interest rate will be positive for net interest income, and we are reviewing the assumption underlying this disclosure. We do expect that at least doubling the 60 basis points that is currently disclosed in the. CAD 60 million or CAD 60 billion? CAD 60 billion, sorry. Yeah, CAD 60 billion, which is disclosed in Q2 disclosure for when we have more precise number on all the assets and liabilities that are impacted. Okay. Yeah, the teaser has me interested, I'll wait for the main event. Thank you. Thank you. Thank you. Our following question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead. Okay, thank you very much. Louis, I did notice that you were very pleased with the results this quarter. That, I think is a net difference from previous quarters. That got me distracted. I think when you were talking about pre-tax, pre-provision outlook into 2021 at the total bank level, I thought you said you expect to be around the high single-digit growth. Did I hear you correctly? What I said verbally was, so we reiterated our range of mid to high single digit, and then I mentioned that we would expect to be at the very top end of that range. That was specific to pre-tax, pre-provision, just for this proprietary? That is correct, yes. Thanks for asking. Yes. No, that's okay. Thank you. If I hear some of the commentary around Financial Markets, securities financing transactions, maybe equities normalizing. This would suggest that you have a more favorable, I guess, bias to the non-Financial Markets mixes of the bank. Is that fair when you think about this pre-tax, pre-provision kind of outlook? Not necessarily, because, as you know, Sohrab, we don't know in this current environment where we have frankly somewhat experimental monetary policy, somewhat experimental fiscal policies, a lot of new technologies and a lot of things moving on the geopolitical front, and on the climate front, I would not underestimate the potential of volatility of coming back very quickly. It's just difficult to predict. I think as a whole, as a general statement, I think volatility is going to be a present factor likely to be in the foreseeable future. That's one thing. The second one is, if you look at our results, I think Denis did explain it well, but I think it was a landmark result for us in Financial Markets in the sense that we had very strong results in M&A and also in equity capital markets origination. The type of results that this franchise would not have had three or five years ago. I think it was important for us to show that now I think our Financial Markets division is much more balanced than it would've been five years ago, for instance, Sohrab. That's why I'm not giving a pass or a break to Denis and his team in terms of the results for the second half of the year, because we don't know. It could easily change very quickly. Okay, that's perfect. If you think about that pre-tax, pre-provision, you think about your mix of businesses, do you think that outlook and maybe even being closer to the top end of the curve, is that more of a revenue-driven kind of optimism, or is that going to be more because you're focused on expense? I would think it's always a bit of both. I think we've been pretty good at managing both. In the current environment, I think as we've seen it, at least for the first two quarters around, I think I look around and I think most people are everybody's nodding. I think the revenue patterns, the major trends that have been driving revenue growth still appear to be very present in Q3. I think that's going to be the key factor, and frankly, I'm kind of old-fashioned. I think the way you measure the strength of a franchise is on its capacity to grow revenue line. I think that's what we've demonstrated, and I think we're still in a good position to demonstrate that. Okay, that's perfect, Louis. If I can just get one last question. You as an organization, certainly you as representative of this organization over the last number of quarters had said that you're being cautious. This is pre-pandemic. We're being careful. We are going to ensure that we've learned from the past mistakes and what have you, and we're ready to essentially be very front-footed once the cycle turns, and obviously COVID did what it did. Has the stimulus programs, has the ability for all the other banks to get a free pass, if you will, to, I don't know, put up reserves and what have you. Has that in any way eroded what you would've assumed to be a comparative advantage that you were preparing for when you were being careful pre-pandemic? Are you seeing the same business opportunities for your franchise, or do you think competition is now stiffer because by hook or by crook, they were given a bit of a free pass over the last, let's say, 12 months? I think we are benefiting from our position. Our positioning is hopefully our risk management culture is what's behind that more than just a balance sheet positioning. You recall that I think we had a pretty conservative positioning in terms of commercial real estate. We have seen some of our peers become much more conservative in the last 12 months, and we've seen more opportunities. We did pivot. One area we did pivot from being a bit more conservative than our peers to being very present in the market is commercial real estate. Again, very specifically in areas that we feel make a lot of sense. Again, I think what we want to avoid generally is a boom to bust credit allocation culture where you go from having both feet on the accelerator to both feet on the brake pedal. I think by being prudent throughout cycles, it allows us to avoid placing both feet on one of the two pedals, which brings about, I think, confusion in the business lines and confusion with customers. I think we did benefit from that. Frankly, when you look at our commercial loan growth volumes in Canada, I think that reflects a little bit of that. Quite a bit of that, actually. Excellent. Thank you. Thank you. The following question is from Lemar Persaud, from Cormark Securities. Please go ahead. Thanks. My first question is for Bill. When I look at your slide nine in the deck, coverage ratios are moving materially out there here, and given your outlook for impaired PCLs over the next couple of quarters, it suggests that you were setting up for attractive releases in performing going forward. First, is that the message you're trying to convey here? Thanks, Lemar, for the question. I think the message that you can take away from that chart is we're very, very comfortable with the level of provisions. We think that we're very well reserved. I think the mindset that we have is we would like to remain prudent at this stage of the recovery, like we were prudent in the early stages of the pandemic. I think that that slide demonstrates those points. Does that answer your question? Yeah. I'm really trying to get a bit of a sense of, is there something that I'm missing that would preclude the bank from taking its performing ACLs down to something that we saw pre-pandemic? That's really the underlying question that I'm asking. Yeah. Okay. Thanks, Lemar. I don't think so. The drivers of the ACLs are really going to be, as I said in my script, it's three main drivers. One is the macro outlook, and we've seen positive trends, and we expect that those could continue, but there could be surprises, and we'll review that every quarter. The credit quality, we've seen the beginning of the positive credit migration, and it looks like that could continue, but we'll see each quarter. Volume growth will be a factor as we continue to see good opportunities for growing the franchise. The message is that we have good allowances, and those drivers will lead to releases in the smaller allowance in the future, but it's difficult to predict the timing of that. I think over time, if we go back to the same position as we were pre-pandemic with the same portfolio, the same macroeconomic outlook, you can expect that those ratios would resemble what they were before the pandemic. The timing of that is hard to predict. Okay, thanks. My second question is just really on the commercial loan growth. Very strong this quarter. Can you talk about some of the drivers of the strength this quarter, and what are the chances we could see that level of growth moving forward? Yeah, Lemar. It's Stéphane here. I would expect that growth to maintain over the third quarter and probably resume towards historical levels in Q4 and ongoing into 2022. The drivers behind, as well addressed, we built a real estate platform capable of addressing the needs in the market for affordable housing. We've been capturing good market share, largely insured across the country, well-diversified. That's the first element. The second element as well is the real estate market Louis mentioned is really affordable, remains affordable in Quebec here, and we're taking advantage as well as the second and third belts around Montreal are building, and constructors are active. We're supporting these clients that eventually move on to residential mortgages for us. Okay, great. Thank you. Thank you. The following question is from Nigel D'Souza from Veritas Investment Research. Please go ahead. Thank you. Good morning. Fairly strong quarter overall, but I wanted to touch on the increased provisions at ABA. ABA has performed fairly well throughout the pandemic. I was wondering if there's any stresses or anything specific at ABA that you could point to for high provisions this quarter, anything specifically or any color that you're seeing in regards to ABA. Bill, you want to start? Yeah, I can start off. Yeah, so those provisions were performing provisions, I'll point out. Just as the remaining prudence we saw the third wave of the pandemic hit Cambodia a little more than it had in the first two waves. I thought we wanted to be prudent in terms of building more performing. The situation, maybe you can comment, Ghislain, on the situation currently and handling the third wave in Cambodia. Yeah. Well, this is Ghislain. We had a confinement of two provinces, including the capital earlier, well, during the month of April and May, but it's now over. The commercial activities has resumed. We think that it could be an impact eventually on losses, but we don't think that it's going to be high. In terms of impact on growth, we saw some impact, but once again, it's very small, and we think that for the rest of the year in 2022, it would remain very solid. Okay. That's helpful. If I could pivot to your deposit side, and apologies if you already touched on this, but do you have any commentary on the outlook for retaining or runoff of those excess deposits? With liquidity elevated across the system at the moment, do you expect those deposits to remain on balance sheet for, let's say, the next three to six months, or do you see that draining fairly at an accelerated rate as the reopenings go underway? It actually really depends on which business lines and on the retail, I think we were discussing that earlier. I think we expect pretty elevated levels of deposits on the retail front and Wealth Management going forward, right? Lucie? Yeah. The way we look at it is we expect our deposit level to remain high. We don't expect a drastic runoff of the deposits. Obviously, the growth rate will slow down. On the consumer side, we think the consumer will remain prudent and slowly ramp down the deposits over time, much longer than we thought it would at the beginning. Stéphane, on the commercial side? Same thing on the commercial. I think deposits are stickier than what we expected at the beginning of the pandemic, businesses have strong liquidity, I don't think they're spending all that cash. Businesses are operating at a profit, that's the reality. I think it'll take more time than we expected originally for the deposits to run off. Right. Could you perhaps touch on, because of that excess liquidity, do you expect loan growth to lag reopening a bit? Is that fair to say? How do you see interplay of deposits and loan growth or loan demand playing out? Certainly on the commercial side, and I won't talk about our peers, but the reality is drawings on operating lines across the country are historical lows. I would expect those to remain low and gradually creep up over time, which is not to say there's not, as you've seen, opportunities for asset growth in segments, specific segments like we've done in real estate insurance, as I mentioned, and in our specialties, the tech market, the ag market are somewhat more active. Other elements of private equities have not fled the market, so there's still opportunities on that side as well. Anything on the retail side? Yeah, go ahead. Yeah. On the retail side, I think that the level of deposits and liquidity that we have is a contributing factor to keeping the demand in real estate high. It's a positive on that front. From a credit perspective, it's also a positive because we still continue to see decreases in any consumer unsecured loans, including credit cards. Okay. Appreciate the color. Thank you. Thank you. Our following question is from Darko Mihelic at RBC. Please go ahead. Hi there. Good morning. Hopefully, that's not my phone making all that commotion. My question is with respect to the Personal and Commercial. What I'm looking at is the strength in the non-interest revenue. You guys point to the strength in sort of wealth revenues being generated there. Can you kind of remind me, is that purely from sales activity in the quarter, or is there some sort of linkage to AUM, or I hate to use the word trailer, you know, commission, but is it all purely based on how well sales are going at the branch of wealth product, or is there something else driving that strength? No, actually the first element, Darko, we've had for a couple of quarters now a good growth in mutual fund volumes coming also from the liquidity we see. Consumers are saving more, investing more, and we've seen that over the past four quarters. We have good increase in mutual fund volumes that is driving also up mutual funds fees. Okay. I guess the secondary sort of follow-up to that is, as you sell those funds, I should see a higher expense out of the wealth for paying commissions to the Bank. Is that the way I should think of that? No, it's netted from revenues. So netted from. It's inter-sector transfers. Okay. It's netted from revenues in Wealth Management. Okay, perfect. That's great. Thank you very much for that clarification. Thank you. Our following question is from Paul Holden from CIBC. Please go ahead. Thank you. Good morning. Just want to ask another big picture type question. We heard you lay out a very positive outlook on the business this morning. We've heard similar from other banks. Loan growth starting to improve, the prospect of higher interest rates, Financial Markets revenue still remaining elevated, excess capital, almost like a Goldilocks type scenario. I'm there with you. I agree with that outlook. It kind of begs the question, are there any kind of risks maybe we're downplaying, we're not thinking enough about? Ex pandemic, as you're having those risk committee discussions, are there any big picture risks you could see to disrupt that positive outlook? Well, the scenarios we look at is, one is a new complication with the pandemics, namely another variant, another mutation, which yet again delays a quote-unquote return to normal. None of us have the expertise to really put a probability around that. I think it's not a zero. It's a lower probability, and as a higher percentage of the population gets vaccinated, I think the probability around that particular scenario would probably goes down significantly, but I don't think it goes down to zero. That's one. The other one, I think, which is a more likely scenario that we need to monitor very carefully, is the fact that Goldilocks gets overheated. That inflationary pressures start developing more in the economy and that asset valuation, asset prices across the different segments get to extreme levels. You may argue that we've seen some phenomena in some asset classes already. If it's localized in things like cryptos that don't have clear link to the banking system, it's not a huge concern to us. If it gets to a much wider spectrum of asset classes, some of which are connected to the banking, our banking, or more specifically our balance sheet, I think we would be a lot more careful. That would be a scenario that would be a greater concern. I think Goldilocks is with us for a period of time. I think even if, and I don't know at what stage, and what the probabilities would be around the overheating scenario. I think Goldilocks is probably with us for a period of time. We'll see how the economy and markets evolve over time, that's for sure. Okay. A more specific question for you with respect to that capital build. I know your preference has pretty consistently been to hold onto it for organic growth opportunities. As it continues to build, is there any more thought towards maybe returning some of it to shareholders through buybacks? I think we've been pretty specific on our priorities. Organic growth, as I said, and then dividend, I think we are quite clear that dividend, I don't want to get into the theoretical debate about dividends versus buybacks, but dividends are more, I think, a signal our long-term resilient level of earnings. That's what you should be basing your dividend on, your capacity to pay them and to stay comfortably, in my view, in the low 40s in terms of payouts, and have a nice cushion if there's a recession. That's the dividend discussion. I think we should be in a good position to increase dividends, probably even quite substantially on a recurring basis once we get the green light from the regulators. On the buybacks, it will depend. I think we're agnostic on this. It's not a theological debate for us. If we have excess capital on top of what we need to grow the balance sheet organically, it will depend on what acquisitions, effective acquisitions we have versus buybacks. Having that flexibility, and that choice, I think usually brings Hopefully a better set of decisions in terms of capital allocation. Does that answer your question? It does. It does. Very clearly. Thank you. Thank you. Once again, please press star one at this time for any questions or comments. The following question is from Mike Rizvanovic from Credit Suisse. Please go ahead. Thank you. Good afternoon. A quick question for Bill. Wondering if you could touch on the write-offs or charge-offs just being so low, and I'm wondering how much of a factor do you think there is with respect to the lockdowns? Probably more so on the consumer side, but I can imagine that getting somebody through an insolvency process, whether a bankruptcy or a proposal, would be probably very challenging when things are locked down. Do you feel like there's this maybe a bit of a backlog being created on insolvencies just because of that, and then it's just inevitable and just a matter of time before we see some normalization there? Thanks, Mike, for the question. I think early in the pandemic, the lockdowns certainly had an impact on things, the court processes and such being stopped. I think the low write-offs or charge-offs that you're seeing, though, is really a reflection of excess liquidity in the retail segments. We're at historical cyclical lows in impaired provisions and write-offs for the retail. At the beginning of the year, the end of last year, we would have predicted that those would have started increasing in the second half of this year. The metrics that we're seeing in the portfolio continue to be very strong. I think that we would expect some normalization from these very low levels, but it may take longer than we would have thought at the beginning. In fact, last quarter, I think I talked about seeing the delinquencies in credit cards increased off the bottom. This quarter, they went back down again. How long it'll take to normalize on the retail, I think will be a longer period of time. On the wholesale, the stress has been very much in specific sectors impacted by the virus, the COVID situation, and the support programs have worked. We're seeing positive credit migration across the wholesale portfolio, particularly I think the highest migration is in some of those hard hit sectors in retail distribution and wholesale distribution. Looking forward to what will happen in the rest of the year and 2022, it looks like a continuation. I think that's why on the impaired, on the guidance for provisions, the range that we provided, the 15-25, is bang on where our historical pre-pandemic provisions have been for I think as many years as I've been in this chair. I think that should give you an idea of what we see in the portfolio. At some point, normalization on the retail. Wholesale, still specific in those sectors, and certainly its performance has been better than we would have expected at the end of last year. Does that help you, Mike? Yeah, no, that's very helpful in terms of color. Just would you have confidence that normalization maybe means, and again, particularly on the consumer side, that perhaps insolvencies don't settle back to pre-pandemic levels, and would you be of the view that maybe they settle at lower than pre-pandemic levels? What we saw in 2018 and 2019 as a baseline. It's hard to say, Mike. Very hard to say. My comment would be we watch very closely the employment levels and what we've seen have been, particularly in the higher wage sectors, employment levels are higher than they were pre-pandemic. We're certainly seeing some of the other segments waiting for the reopening, and we'll have to wait and see how that goes in the coming months and quarters across the country. It's very difficult to try to predict whether we'll end up back at or below or a little bit above. Okay. Thanks for the color. Thank you. We have no further questions registered at this time. I would now like to turn the meeting back over to you, Mr. Vachon. Thank you. I'd just like to make just a little adjustment. I self-proclaimed myself the only dinosaur who traded in inflationary environment around the table, but actually my friend Denis Girouard joined the bond desk at the Caisse de dépôt in 1982. He's got experience with trading inflation also. On that, on setting the record straight, thank you again very much for your time, and we'll talk to you in August for the results of the third quarter. Thank you very much. Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.