The Canadian Investor - Mixed Results for Canada’s Big Banks

Episode Date: June 6, 2024

In this episode of The Canadian Investor Podcast, we go over the recent earnings of 4 of Canada’s big 6 banks. The results from the big banks have been uneven with some performing better than others. We talk about CIBC, ScotiaBank, TD Bank and Bank of Montreal. We also take touch on the news that Park Lawn Corporation will be taken private and more troubles for the owner of Ticketmaster, Live Nation Ticker of stocks: BMO.TO, PLC.TO, BNS.TO, TD.TO, CM.TO Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Sign up for Finchat.io for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

Welcome back into the show. This is the Canadian Investor Podcast, made possible by our friends and show sponsor, EQ Bank, which helps Canadians make bank with high interest and no fees on everyday banking. We also love their savings and investment products like GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs, which offer some of the best rates on the market. I personally, and I know Simone as well, is using the GICs on a regular basis to set money aside for personal income taxes in April of every year. Their GICs are perfect because the interest rate is guaranteed, and I know I won't be able to touch that money until I need it for tax time. Whether you're looking to set some money aside for a rainy day or a big purchase is

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two hours if we did all six. So Dan, how's it going? Are you excited to get started on that? Oh yeah, absolutely. Pretty pumped right now. Stanley Cup finals. Yeah, yeah. I was trying to avoid that discussion, but you had to bring it up. I had to bring it up. All other fans are jealous of the Edmonton Oilers right now but uh no all that to say I mean I do hope they win it because we're due for uh Sanlika back in Canada I do understand if the Calgary Flame fans do not want the Oilers to win it when you have rivals I'm pretty sure uh Maple Leafs fan didn't want the Habs to win it when they were back there, I think in 2021. So I totally get that.

Yeah, I've talked to a lot of Flames fans who are in a tough position because now they got a cheer for Kachuk and Bennett, who were former Flames that they cast away. But yeah, it'll be interesting. I have my cup final tickets booked. We're heading up there for not missing a game this round, that's for sure. Well, well i mean best of luck to the oilers and i guess uh you know all of kenny canada in terms of getting back the cup over here but enough about that before we get started we had a couple news items i know you've been inundated with requests people asking you about what is going on with park lawn corporation you want to go over

what happened and just maybe a little refresher of what the business is for those who are not familiar with the business? Yeah. So Park Lawn is, it's a small cap funeral stock, pretty much. They were acquired by a private equity firm for $26.50 a share. So Parkland had been hit pretty hard by rising interest rates and lower mortality rates post-pandemic. The company's earnings had been pretty much continually declining, but the bulk of it had been from the higher costs on debt. 75% of the decline in net income on some quarters was just strictly interest costs just because the company, they utilize floating rate facilities for a lot of their acquisitions. So they just got hammered down because of rates. This is a stock that I've owned for over eight

years now. It might be going on nine years, but I really added aggressively in late 2023, 2024, because I just felt that it was way too undervalued. And the acquisition works out today to be about a 62% premium to market price. I personally think it's a low ball just considering the long-term growth potential of the business. But I mean, small caps right now, valuation-wise, they're not really doing all that well. And, you know, for a while this morning, I was a bit hesitant to sell just because of the potential for somebody else to kind of step up and make a better offer. But I really don't think it's unlike, I really don't think it's all that likely. There's a few, you know, large scale players in the business, but

it's just so fragmented. Like lot of the funeral homes are privately owned, individually owned, things like that. So the only big player would be Service Corporation, which is a US-based funeral home company. But even then, they're only worth around $10 billion and Park Lawn sold for around 1.2. So in my opinion, I don't really see a higher offer coming in. So I did end up selling it. I sold it at a 2.7% discount to the offer price, but I just don't... For me personally, I wasn't going to hold out for 2.7% when I'm sitting on a 60% bump because on the outside chance the deal falls through or something, it's probably heading back to 60% down pretty quickly.

But it kind of sucks. I've owned it for a long time. I would have rather them just kind of turn it around and continue going. But private equity, they kind of jump in and grab a pretty solid Canadian company at a pretty good price. But that's pretty much it for this. It's an all cash offer. Pretty simple. I don't know when it's going to close. I didn't get to reading that. But yeah, $26.50 a share. Yeah, exactly. And I mean, you know this business better than I do. I used to own it about five years ago. So I mean, I know it decently well, but I haven't looked at it all that much ever since. And I think we were talking about this, and I think this is good. It's a good explainer as to why

they're probably being bought out. I mean, that's what I would do if I was a private equity firm is I would tell them, look, you have a lot of revolving debt, which is just variable interest debt, which is clearly pretty high right now. I think the big premise for them was that rates would eventually be coming down. I'm sure they will eventually. But most people, I think the big premise for them was that rates would eventually be coming down. I'm sure they will eventually, but most people, I think you and I included, were thinking that the rates would actually probably have started coming down at this point. Clearly they haven't. So it probably was a leverage play on their end. Clearly, like private equity is leveraged to be kinvoid, but they levered that fact to probably get a slightly

better deal from Parkland Corporation. And from their standpoint, they're probably thinking, well, you know, it's not a bad deal considering that at this point, we don't know when interest rates will be coming down. And there could be some pressures because of that on the business. Yeah, exactly. And if you look at the interest expenses on the screen there, it's like $1.8 million in interest expenses in 2018, and you jump up to $18 million at the end of 2023. Some of that is going to obviously be new debt accumulation, but a lot of it is going to be attributed just to the fact that, for the most part, they did run on revolving

credit facilities, which obviously are going to fluctuate depending on where rates go. And that's why this company got hit so hard, so fast. And I think even in the event, they do operate quite a bit in the United States. So that's kind of another added element if Canada were to cut, but the United States would kind of remain higher. It might not see that benefit immediately. I mean, I was thinking, you know, when I was buying in late 2023, it was going to be, you know, I expected this 60% gain to, you know, happen over multiple years. So to get it in six months, I'm happy with that. I'll move on. Yeah. Take the win and move on. But no, that's a great overview. And, you you know there's worse things than getting a quick 60 gain yes i'll just say that

so now before we get on to the bangs the one last thing the quick news item i wanted to talk about and we'll probably get to the old gme thing with uh worrying kitties and his other name uh some posting that he's done but we'll probably get to that next week we won't have time today, however I did wanted to chat about Live Nation Live Nation is I guess things got

went from bad to worse for Live Nation so people will remember last week we talked about the Department of Justice suing them to try and breaking up the business and then last, news came out that a hacker group called Shiny Hunters said it had stolen over 500 million user data from Ticketmaster's customer. Live Nation said that it was working to mitigate risks to their users and corporation with law enforcement currently. But obviously, there's a risk that this information be released on the dark web, whatever that means.

I always hear the term dark web and I like, I don't know. I know it's there. I know it's like I just yeah, I don't know exactly what to make of it myself. A rabbit hole you don't want to go down. Yeah, probably not people that uh anyways not to go uh yeah not to go too deep into that but having said that they said the breach is unlikely to have any uh financial impact uh on them on the company however i would say you know that's probably not the best thing uh that's a quote they gave to rooters and uh it's probably not the best thing. That's a quote they gave to Reuters. And it's probably not the best thing to say right now in the midst of a DOJ lawsuit that it may not impact their financial.

It's just not a good look when they're actually, you know, going to court and potentially facing a breakup if they lose. Just not, yeah, not going great with Live Nation. Just not, yeah, not going great with Live Nation. And for me, I know Braden talked about the business last Monday and, you know, something he was keeping an eye on. You know, there's two sides to this story. I know Live Nation refutes a lot of the claims by the Department of Justice. But for me, I would not touch this company with a 10-foot pole right now. There's just so much uncertainty. And, yeah, this last thing may just put some more weight onto the Department of Justice.

Maybe they'll use it and say, look, this is why we want more competition, because if these kind of breaches happen, if there's more competition, then there's less potential users that are affected at once. So I can see them coming up with a bunch of arguments saying that see exhibit a is another reason why they shouldn't be this powerful yeah the only other thing like for me like i would i have a ticketmaster account so i could have been impacted by this and i don't know if i like maybe it hit my junk mail or wasn't simple like i got no alert on this from ticketmaster themselves they said they've been notifying people impacted but so maybe i haven't

been impacted that's why but i mean the one interesting thing about these is they always have these hackers always have like the the ransoms or whatever and they force well they try to get these companies to pay there was another one well i think it was london drugs that was recently hit yeah yeah i saw that one too and like there's no what do these companies even do it's like they could pay this ransom and the information what's stopping these people from just taking their money and releasing the information or just being like oh we want more we want more we want more it's like never ending yeah well i guess what could happen if they do that is if they do another hack in the future then whoever they hack will be like well

we're not paying we saw we saw what you did we'll just yeah that's true yeah yeah we'll just try to make sure that law enforcement catches you so it's not a a good business model for the hackers you gotta keep your hacker reputation up yeah But no, that's it on that. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now. Questrade is Canada's number one rated online broker by MoneySense. And with them, you can buy all North American ETFs, not just a few select ones, all commission-free so that you can choose the ETFs that you want. And they charge no annual RRSP or TFSA account fees. They have an award-winning customer service team with real people that are ready to help if you have questions along the way. As a customer myself, I've been impressed with Questrade's

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description of today's episode for full disclaimers and more information. So now we'll move on to the big Canadian bank. So we chose four, like I said, just because this would probably go on for two hours. I mean, mainstream media, you'll probably see sometimes they'll talk about banks or you'll see articles. But I think we go way more in depth than they would. So that's why it takes a bit more time for us to do. Do you want to start us off with CIBC? I didn't look through the results all that much, so I'll be listening closely.

All I know is I think they had a pretty good quarter. So it's definitely been a mixed bag depending on the bank. Yes, CIBC, they have had a huge turnaround over the last bit. Many investors have been worried about the company just overexposure to Canadian real estate. I think it's like 62% of their portfolio is Canadian real estate focused, or at least it's around there. I know they have at minimum 55 plus percent. I mean, although the risk certainly exists, the company is scaling back on provisions, which is a pretty big contrast to another company we'll talk about, which would be Bank of Montreal, who's pretty much doing the exact opposite.

Revenue of 6.16 billion, topped expectations. Earnings per share came in well ahead of estimates. They were $1.79 versus $1.61 expected. Because of the scaled back provisions, CIBC is posting earnings increases across the board in pretty much all of the segments of the business. Revenue is up 8% year over year, earnings per share 3%. And the company CET1 ratio has improved from 11.9%, which is barely over the 11.5% buffer to 13.1%. And CET1 is pretty much just the simplest terms possible. It's just the ability for the company to withstand some sort of financial shock. And they kind of measure their tier one capital, which would be just high quality

capital in the event something disastrous like, say, 2008, something were to occur. It's a bit of a buffer. So its Canadian personal banking segment saw revenue dip by 1% on the quarter, quarter over quarter basis. Net income was effectively flat quarter over quarter. The most notable thing was provisions for credit losses actually declined by 59 million on a quarter overquarter basis. Year-over-year, they still remain elevated, but you're going to see this pretty much with every single bank. It's not unique to CIBC. But the one thing that is unique is I'm pretty positive that CIBC was the only bank that reported a quarter-over-quarter decline in

provisions. So the company's US commercial and wealth segments saw revenue dip by 4% on a quarter over quarter basis and net income grew 69%. Its US segment saw a decline in overall PCLs on a quarter over quarter and year over year basis. So the company's loan PCL ratio, which would effectively be its provisions against its loan book. And its impaired PCL ratio now sits at 0.34%. PCLs remain relatively steady now after undergoing some pretty big increases over, I believe it was 2023, maybe 2022 and 2023, which caused it to get hit pretty hard. On a quarter over quarter basis, the bank's total PCL ratio dipped from 0.43% to 0.39%. And its impaired loan PCL ratio went from 0.36% to 0.34%. Again, I'll speak on BMO and how big

of a contrast this is going to be in relation to BMO's provisions, which is why you saw CIBC gain 7% post earnings and BMO lost, I think it was 9% or 10%. Companies gross, total gross impaired loans saw a reduction on a quarter over quarter basis. Previously, they were just under 3 billion. They're now at 2.84%. And net write-offs for the company on its Canadian residential mortgages remain very low. The bulk of the write-offs right now are coming from credit cards and personal lending. And just overall, I mean, it's been one of the best performing bank stocks over the last year. I think it is the best performing bank stock out of the big six, just because of how well it's operated here. And it's primarily just due to scale back provisions. I still don't know if I would ever own it's primarily just due to scale back provisions. I still don't

know if I would ever own it just because of that Canadian real estate exposure. But I mean, you can't knock how well it's done over the last bit. Yeah, I mean, I think it's buyer beware for me. It has done well, but it still has a lot of risk in my view, just because about half of their portfolio and I'm going on Memorevo trying to find, they usually, I'm sure they have a nerve investor presentation. They do a pretty good job. They usually have like a pie chart that shows their loan. And it's typically like right around 50%, a bit more than 50% that is specific to mortgages or home equity line of credits. That's a big risk in my book. People may say, oh, like real estate has been relatively stable in Canada. And I wouldn't disagree. But I think a lot of

people right now are just hanging on to dear life. Right. For those who have variable mortgages, we're still seeing a lot of people that will see those kind of, you know mortgages that don't pay any uh interest on it so uh these kind of fixed payment variable mortgages so a lot of banks have them i can't remember cibc has one of those do you know do you remember uh do you mean like the one like where you're just paying pure interest on the loan. Is that what you mean? Not even. Yeah, I think some of them... Yeah, you're like negative where they add it back in. Exactly. Negative amortization. And what happens, and we've talked about this before, is when the term of the loan, so your five-year term, right? So you have a fixed payment,

variable interest, so your payment doesn't change. But at some point, the interest rate has gone up so much that you're not paying anything else. You're not paying anything on the actual loan. So that loan gets bigger. And then at the end of your five year term, when you have to renew, then the amortization resets. And that's when the payment shock actually happens for these people. So you have this, you have, you know, a slew of people that have fixed mortgages at very low rates that are starting to renew now. It's going to continue into 2025 and 2026. There's going to be a big portion of those mortgages that will be renewing at significantly higher rates. So the risks for the Canadian

housing market is still quite high, in my opinion. I think a lot of people that know more about the space than I do would agree with that. Yeah. So the CIBC, I'm almost positive they do have negative amortization loans. Whereas a lot of banks will do arm loans, they call them, like adjustable rate mortgages where your payment will fluctuate based on interest rates. Whereas a set fixed rate payment, typically it'll stay the same. You'll pay less principal until you hit your trigger rate. But I think there's a lot of times where a bank like CIBC hasn't even been increasing the payments. So again, yeah, it just gets added back into the mortgage and it's a pretty ugly situation. And I think we're seeing a lot of

these banks too, like when mortgages are coming up for renewal, they're pretty much telling people to go elsewhere. Yeah. Because it's just the quality of the loan has deteriorated to the point where they just don't even want it anymore. So, I mean, it's, yeah, it's interesting. scotia bank which i'll be touching on a bit later on what i've heard is that that's what they do or they'll basically offer people a new rate when their term comes up but it's like not competitive at all yeah knowing that the you know people will likely go somewhere else because they've been actively trying to get their mortgage loan portfolio down and they have gotten it down in their latest result but it's always interesting to look at

that kind of stuff. But now we'll go on with TD Bank. So TD, who's, you know, to say was the first big bank to report, first of all, and we know TD has had has been in the news a lot recently. So one of the things I wanted to check for TD was what they had to say regarding the U.S. anti-money laundering program from the call and their issues that they're having say regarding the U.S. anti-money laundering program from the call and their issues that they're having right now with regulators. So I'll refer to that as AML, anti-money laundering. So if you hear me say that, it's just easier. And like Dan did, I'll go quarter over quarter because I honestly don't really know why banks

post or I wish banks would actually most of them post their results quarter over quarter, because what happened a year ago, it's not very like a lot of time has passed and things can change quite a bit for a bank in a year, especially when it comes to loan loss provisions or provision for credit losses. So I think that's why I like to look at the quarter over quarter as well. Now, in terms of what they said on the call, so they are working with U.S. regulators and the Department of Justice for their investigation. They're fully cooperating. They are overhauling their U.S. AML program. They're hoping to have clarity as soon as possible for their shareholders on this investigation.

My perception of how management responded there is that they were extremely defensive when answering some of the questions they received in their AML programs. They were a bit elusive, I found as well. They said like, you know, all the stuff like, oh, we're trying our best, we're working with them, we're going to be improving and so on. Definitely feels that there's a bit of a lack of accountability for leadership there. At the end of the day, I mean, if you're the CEO, you may say that you weren't aware of things like that, but clearly, you know, there's something that was coming from the top. I'm not saying they were, you know, asking employees to circumvent AML rules or anything like that. But like we've seen, you know, during that CBC investigation in terms of them upselling financial products that are not great for clients, when you have

incentives that come from the top, that you need to increase profitability revenues, then, you know, the behavior from your employees will reflect that. And sometimes it will not be the kind of behavior that you want to see. And, you know, I'm not saying this was the case, but it's probably part of the reason. Yeah, they got it. Weren't they? I'm pretty sure they were like bringing people in and like they had credit card debt

and they were telling them like not to pay down the debt instead to like buy funds. Stuff like that. And they just had, it just never ends for td right now like even i think it was just yesterday i'm actually just reading the article now because i couldn't find a non-paywalled one yesterday but there is some accusations in florida i think where they had some bankers that falsified documents to open up accounts to provide like cash flows internationally, like across borders.

So that's a new accusation. Yeah. Yeah. I've seen. So, I mean, it's like, who knows what hasn't even been mentioned yet?

Like I'm sure much of the, much more of this is going to come to the surface, which is why when you talk about earnings in terms of relative to adjustments made from AML fees, I don't think those are one-time costs. I think there's probably going to be more, but yeah, who knows when this is going to end. That's a good point that you made because we were talking about that in terms of adjusted earnings for banks. And I think that's where, you know, your judgment is important when looking at earnings and looking at what adjustments are made.

Because sometimes, you know, adjustment and adjusted earnings are very useful, especially if they make an acquisition. There's costs related to that. They're really one-time things. So the adjusted earning will give you a better idea of what the actual performance of the business was. But in instances like TD, where there are costs associated with this AML investigation, fines from the US, there could very well be some ongoing costs, additional costs, additional fines if they find more things. So I think it's really important to me to have a look at those adjustments and just understand what they are. And sometimes you have to almost like do your

own adjusted earnings because TD, for example, you could like kind of say, OK, well, you know what the AML charge that you got, you know, I'm reducing that from your earnings because that will probably keep happening on a regular basis in the next few years. So I think it's just important for people to remember, like there can be a lot of value in adjusted earnings, sometimes not as much, but I think it's something you should definitely look and they will let you know what the adjustments are. So you just need to look at it. Yeah. You just, they'll footnote them or they'll, you know, most companies who are pretty transparent with adjusted earnings, they'll just say like right in that area'll you know most companies who are pretty transparent with the

adjusted earnings will just say like right in that area you know we've adjusted this out this out but you got to watch like one-off expenses like this that you know they might not be one-off expenses like i could see this investigation continuing to cost td money i mean i don't think it just ends here but it'll be interesting to see i 100% agree i mean the u.s does not mess around no aml so i'll just say that but and i mean the one thing i'll say is wasn't wasn't wells fargo they were caught opening false accounts were they not yeah yeah and that was opening accounts i think it was opening credit cards like all this kind of stuff without consumers knowing and it plagued wells fargo for years i think it was like something like six or seven years if not more yeah yeah and i mean you got like an accusation just yesterday that says i

mean it says that he opened up it was a single guy opening up dozens of accounts but like it's it doesn't look good no exactly so i'll stick here with the non-adjusted figures for that reason so net income was down 9.2 percent to 2.6 billion eps was down 13 to 1.35 and of course you can make your own adjustments here but the main reason is one of the big charges in the adjustment was the AML investigation like we just talked by segment net income was down three percent to 1.7 billion for Canadian banking it was down 36 percent to 580 million for U.S. retail banking it was net income was 12 percent I think it was also down 12 percent to $621 million for their wealth management banking.

And then income was up 76% for their wholesale banking. So the total deposits were up 2% to $1.2 trillion. That's always something I like to look, especially ever since last year with Silicon Valley Bank. I think we tend to forget, but the deposits the i would say life like backbone lifeblood or whatever like it's basically um you know if the bank starts losing deposits at a rapid race rate that's when things start getting bad so i always like looking at that the ct1 ratio was down 50 basis point to 13.4 percent and you explained to you know what that was earlier. Net interest margin was up one basis point to 1.73% so pretty much flat there.

PCL's provisions for credit losses were up 7% to slightly over 1 billion and they now have 7.5 billion in allowance for loan loss provisions on their balance sheet. And I wanted to know that because what you see in the headlines is what the bank is adding to their loan loss provision to their balance sheet. But it doesn't include what was previously there and what has been written off and has been recovered. So just to keep an eye. And when you look at the balance sheet, if you look at several quarters or years, you'll see that amount kind of fluctuate. And clearly right now, most of the Canadian banks, the amount on the balance sheet is actually trending up, even when you factor in what's being recovered and what's being written off. And it's now 0.81% of their total loans. Pre-pandemic, it was 0.64%. Peaked at 1.14% in 2020 and then went down to 0.76% in 2022.

And has been slowly ticking back up since. So that's one thing I'll keep an eye on because if that starts approaching 1% plus, you know that the banks are starting to see definitely something that's going on and they're starting to pile on more and more money on their on their books on their balance sheet for that anything you wanted to add before i continue there i guess the only thing i would say is the ct1 like td it's going down but it's not necessarily bad like you don't want the ratio to be too high either because then they just like it's too much capital. And the first horizon.

Yeah, it was first horizon acquisition when it fell through. They had a ton of cash. So I think most of this is going to to share buybacks. Yeah. And see, that's a great point, right? Because banks don't like having too much liquidity on the balance sheet. Because in a fractional reserve system, the least you can have in theory, the more you can actually use to loan out, right? So that's why banks, the more they have on their balance sheet in terms of liquidity, ready to absorb a financial shock or a financial crisis, well, that's money they can't use and loan out and get income from that so i

think it's just important that's why banks tend to not love higher requirements like that because it impacts their ability to generate more profits yeah exactly like if you had a bank that was at a c like a cet like right near the regulations and it's dipping, like it might be an indicator of some issues. And like, I'd be at this happened to BMO and they had to issue shares to kind of shore that up. But I mean, it's not necessarily bad when it goes down. Like for example, you don't want a bank with a 20% CET ratio. Like it's just too high. You know what I mean? Like there's, there's kind of a buffer there that they kind of, and most of them will hover slightly above the buffer. They're not going to sit too high. They're not going to get too tight. No, definitely. And one thing I'll add about, you know, these credit

losses. So banks will typically have three stages for allowances for credit losses. So without going into each stage, bank will assign certain amount of, you know, loan loss provisions for each stage based on their outstanding loans. And stage three is where the loans are considered impaired. And as part of stage three, TD shows that the amount of write-offs that were performed during the quarter and basically loans that are unlikely to get their full money back. loans that are unlikely to get their full money back. Sometimes, you know, they'll be able to recover a little bit, but that's typically when they're in stage three, their recovery rate is much, much lower. And we see the write-off since Q1 of 2022 for our joint TCI listeners here. It has steadily been going up. Obviously, their loan portfolio has grown since, so you have to keep that in mind. But even as a percentage hit

has been going up. So that's a little graphic that I decided to do because I thought it was pretty, pretty interesting just to look at. And then I wanted to look at their real estate portfolio. So I looked at their investor presentation, which is really useful for people who invest in banks. I think that would be, you know, don't just look at the earnings release. Make sure you look at the investor presentation. There's a lot of good information there, but also the supplemental information data, because a lot of the data we talk about is in those two documents, not in the earnings release. And especially when you look at banks, their official financial statements on a gap or IFRS.

Well, it's useful, but it's really useful to look at the different ratios that they break down. And then for their maturity schedule, it's quite interesting. So they have a lot of mortgages, like I was saying earlier, coming to maturity in fiscal year 2025. So 23% are coming to maturity in fiscal year 2025. So 23% are coming to maturity then. 9% are coming to maturity in the second half of this year. And then you go forward to 2026, it's 32%. And forward to 2027, it's 25%. So you're looking at a lot of these loans, like we've talked before, that will be coming in renewed at significantly higher rates and it's something to keep in mind and especially with TD here and I'm assuming it's similar to the

other banks but 75% of their loan portfolio is between BC and Ontario and if you know a little bit about real estate you know that those were two of the hottest markets that we've seen since the pandemic started. So these are potentially two of the most problematic markets. So something to keep in mind, I think TD, obviously the AML issues is the kind of top of mind here. But the mortgage business as well, there's definitely some things to keep an eye on. And their total mortgage portfolio is $388 billion in terms of real estate secured lending. So I think that's pretty much all residential or there might be a little bit of commercial, but I think it's mostly residential. Yeah. Summed up. Well, the only thing I would say

is most all the banks are the same. I think National does have a bit more exposure to Quebec. So I'm pretty sure their residential mortgage exposure is going to be a little bit more skewed towards Quebec. But it's pretty much the same makeup for all of them. Just because it's more so a population thing as well. I mean, obviously these banks, there's like what percentage of the Canadian population is in Ontario? It's a huge chunk. So obviously their mortgage portfolios are going to be a huge chunk there too.

Yeah, I would say it's probably like I totally agree on the population, but it's probably a combination of population. Yeah, definitely a combo. prices being elevated in those two provinces because clearly, right, there's probably a higher quantity of mortgages there because of the population, but the value of these mortgages are likely to be higher as well. Yeah, I wonder how this moves forward with the prairie provinces because our real estate market is nuts, nuts right now. Well, we'll have to see. We'll probably know in the next year or two, but I think that's it for TD here. As do-it-yourself investors, we want to keep our fees low. That's why Simone and I have been using Questrade as our online broker for so many years now.

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common knowledge for Canadians, and we are better for it. When BMO ETFs reached out to work with the podcast, I honestly was not prepared for what I was about to see because the lineup of ETFs has everything I was looking for. Low fees, an incredibly robust suite, and truly something for every investor. And here we are with this iconic Canadian brand in the asset management world, while folks online are regularly discussing and buying ETF tickers from asset managers in the US. Let's just look at ZEQT, for example, the BMO All Equity ETF. One single ETF, you get globally diversified equities. So easy way for Canadians to get global stock exposure with one ticker. Keeps it simple yet incredibly low cost and effective. Very impressed with what BMO has built in their ETF business. And if you are an index investor and haven't checked out their listings,

I highly recommend it. I bet you'll be as pleasantly surprised as I was that BMO, the Canadian bank bank is delivering these amazing ETF products. Please check out the link in the description of today's episode for full disclaimers and more information. Do you want to move on to Bank of Montreal? Yeah. So I would say that BMO posted probably the worst quarter out of the big six. It was kind of a surprise, much higher than expected provisions and some pretty crazy increases in impaired provisions. So as I had mentioned, when we talked about CIBC, it dipped 9% post earnings, which like Canadian

banks are really not that volatile. They typically do not go up or down double digits post earnings report. And BMO did end up closing the day down more than 9%. They missed expectations like street expectations, top and bottom line. They missed earnings by about 279 was expected, and they reported 259. So the one thing we had mentioned in terms of adjusted earnings, so there's some large discrepancies between Bank of Montreal's reported earnings and adjusted earnings. And I think in this case, adjusted earnings are going to give you a much better picture on the results of BMO. So if you look on the surface, it looks like BMO's earnings have increased by around 180% through the first six months of this year compared to last, which they

did on a reported basis. There's no denying that they did. However, where many investors may get tripped up is the company's earnings were only as low as they were in the second quarter of 2023 because of the acquisition of Bank of the West, which is a US regional type bank that they acquired. The reasoning for this is the company booked over $1.1 billion. And I think it was actually, this doesn't include the legal costs and all that things. I think there was even more costs attributed to it, but the bulk of it is going to be 1.1 billion in one-off expenses. So these pretty much consisted of acquisition costs along with, I think they had

to take like $730 million in provisions when they first bought the bank. So this is why, especially when there is an acquisition involved, it's best to use adjusted earnings because when we adjust these one-off costs out, we can get a better picture of how the business is growing on an apples to apples basis. So when we adjust out the 1.1, probably closer to 1.3 billion, I just forgot to include a couple of things. BMO's earnings through the first six months of the year are actually about 13.5% lower than last year. So the company's Canadian segment put up mid single digit growth in terms of net income, but higher provisions are ultimately eroding earnings.

Its US segment witnessed a 24% decline in year over year net income, lower borrowing activity and lower margins. Capital markets saw a strong bounce-back quarter, but you're going to see this with most Canadian banks. They're seeing a pickup in investment banking activity and just overall trading activity. It has ramped up. Markets are at all-time highs or nearly all-time highs. Return on equity dipped from 12.6% to 10.9%. And where I think, in my opinion, where the real issue lies with BMO and why it took such a hit was their provisions. So the bank reported PCLs of $705

million. Expectations were for anywhere from $560 to $575 million. When we look at their PCL ratio, it now sits at 0.44%. So this is the second highest ratio among big six banks. And the one thing that's a bit alarming is just a year ago, the PCL ratio sat at 0.2%. So all of the banks have increased, but BMO over the course of the year has increased the most. So quick explanation, like again, on performing PCL loans versus impaired PCL loans, performing is a loan that is currently being paid, but the bank expects to go unpaid. Whereas an impaired loan is one where it's already impaired, like people are struggling to make payments. And the more concerning thing for BMO, and in my opinion, again, one of the reasons why it got hit so hard post earnings was just how fast its impaired loan

PCL ratio has increased. So typically over the last, like if we look sequentially, like over the last five quarters, BMO's impaired loan PCL ratio has typically increased by four to five basis points a quarter. I believe five quarters ago, they were at 0.16%. And then it would, you know, it would take up to 0.2, 0.25, 0.29. But just on in this quarter alone, it reported a 12 basis point increase. So it increased from 0.29 to 0.41%. So overall impaired loan PCLs, which again, are those loans that are already being struggled to being paid, it tripled nearly on a year over year basis. It's pretty difficult to figure out whether the company is being overly cautious, which is probably a case what CIBC was. They reported really high provisions over the previous years,

and now they're kind of settling down. So maybe they were being a bit too overzealous earlier, or BMO could just be playing catch up in terms of PCLs, a bit of an under-reporting issue, and now they're having to over-report. And I would probably be more inclined to believe it's a bit of a catch-up situation just because they're impaired loans and not performing. Again, performing loans are more of a precautionary situation, but impaired loans are clearly already at the point where buyers are having, borrowers, sorry, are having difficulty. And it just, it wasn't very pretty for BMO this quarter. Bad, again, in my opinion, one of the softest quarters out of the big six.

Yeah. And I don't know exactly how the bank assess the provisions that they put aside each quarter, but on those performing loans, I'm assuming they have a certain kind of percentage that they assign for the performing loans, and then they'll come up with an amount. But what I'm suspecting is that they've increased that percentage because they figure that there's going to be a higher percentage of these that will become non-performing loans and then potentially write-offs down the line. Yeah.

And I mean, as always, these provisions, like a lot of people might make the assumption that they're already lost. They're definitely not. Like you can see them, like more likely the banks are going to go over the top in terms of provisions and then recover them later on.

So it's not like it's not like this is already dead money. It's just money that they set aside just in case. Yeah, exactly. I mean, we saw it during the pandemic, right? So it was they and I'll show this for our joint TCI listeners. But we saw this during the pandemic where the banks actually reversed a lot of these provisions because they had set aside way too much at the start of the pandemic, thinking that there'd be some issues for a lot of borrowers. And then they end up reversing those. So it's something just to keep in mind. At this point, I think there's probably,

I think we still don't know. I think we're probably not going to see anything trend better for at least a year, if not more. And Scotiabank actually talked about that on their call. And that's what I'm going to do now is i'm gonna transition over to scotia bank because i think it's uh just very interesting what they had to say on the call so for scotia bank well actually before i go on anything else you wanted to add or you were good for bmo nope that's it move on okay perfect so again here i'll go on over quarter quarter and before i get to the results so i mentioned the call and it was a really interesting call. I do encourage people to listen to the call, especially if they own the banks.

I mean, there's too many people on Twitter that invest in Canadian banks that I can tell they've probably never listened to a call and they've never looked at the investor presentation, the supplemental data. They just invest in banks because they've been here forever. They've been paying a dividend for 100 years or whatever it is, and it's going to keep going for another 100 years in the future. I'm of the mind. I like to look at what the numbers say right now, what they say on the calls, what they provide in terms of information, and then make my own opinion because, you know, I'm not young, I'm not old, I'm, you know, getting close to 40. But what I've learned over time is nothing is forever. And I think it's just important to understand where things are going. I think there's, like you just said, there's some banks that are doing much

better. There's some banks that could see some trouble for years to come. So I think it's just important to not just blindly invest in them, understand what you're investing in. I know banks can be complicated, but there are certain things that you can look at without making it overly complex to get a better idea whether they're trending the right direction or not. No, yeah, I completely agree there. A lot of people, I don't know why why probably because they were very well performing like post-financial crisis a lot of people just like 100 you could have theoretically known absolutely nothing about the banks from you know what would it be 2010 maybe even 2009 up until 2022 and you would have been just fine, just buying them, sitting on them. But

I mean, ultimately it's, it's better off to just, you know, understand the business, understand how they work because on the surface, they look relatively simple because most people will look at the revenue, look at the earnings, see how they're growing, but these are insanely complex companies. So, I mean, and like you said with td like they do they lay it out very well in their what would you have to look for it's not like the report to shareholders but the investor presentation like they go in depth on like probably 10 12 different aspects of the businesses and they do make it relatively easy to understand yeah and then it's just looking for specific specific things right and the supplemental information then you get into

more the nitty-gritty of it but i still think it's very useful and i agree with you i think the biggest disservice and i it was good for canada don't get me wrong but was to the canadian banks to perform as well as they did during the financial, great financial crisis compared to their US counterparts. And I think, unfortunately, it gives people who invest in them a lot of feeling of being invincible almost, because they're Canadian banks and, you know, they handled the biggest financial crisis that we've seen in our lives. So, you know, they can handle anything. The reality is Canada was way less impacted than the U.S. was, obviously, with the subprime lending mortgage, subprime lending that happened over there.

But there is a lot of kind of financial risk. Don't believe me. Look at what OSFI, the regulator, is saying. Look at what the Bank of Canada is saying. There's a lot of risk around especially housing in Canada and all the lending around that. So I'm not just saying it. It's just people who are well in the know are saying it as well. The risk doesn't mean that it will necessarily happen, but there is a possibility.

Yeah, and a lot of the times i talk about this some people get upset with me or call me a bear or whatever i mean you can't there is it's not a zero probability that there could be issues i mean 2008 it was probably it was nowhere near the like weird borderline like disastrous housing situation we have here in canada it's just not really the same situation so it's just good to just be cautious i mean a lot of people if you speak badly of the banks just assume you're some sort of perma bear and you know it just it's there's nothing wrong with like objectively looking at these companies and seeing the situation that they're in and uh just i mean not kind of making a decision based on that risk instead of just blindly assuming they're going to be okay which they probably are going to be okay

they probably are going to be okay but they probably will the risk is not zero exactly but yeah they might be okay and they may end up being a terrible investment for you. So keep that in mind, right? These are not the same thing, right? The banks may be okay and pick your bank, whichever one doesn't matter. I'm just like, as a general kind of thought here,

the bank might be okay, may struggle for a few years and then be fine after that, but your returns may not be that great because of that. So you have to keep that in mind too. But having said that, during the call, Scotiabank, they mentioned some really interesting things. At least I thought so. So they mentioned, first of all, in certain macroeconomic conditions and higher rates have negatively impacted certain clients and their profitability. The impact of higher rates is

increasingly weighing on consumers and small and larger businesses. They believe that the rate hiking cycle is now over, but their view of multiple rate cuts in the back half of this year is now less certain than it was earlier this year. If we remember correctly, I think we had done a segment on that earlier in the year. I think most banks were saying between 75 basis point to 150 basis point terms of cuts by the end of this year. Clearly, obviously, you know, that's probably not going to happen. And I mean, I'm not picking on them there. I probably would have bet like 75 to 100 basis point. I mean, my bold prediction was higher than that just because I was being bold but nonetheless i think most people including ourselves have been wrong here yeah and i don't think i mean there was i was hearing while reading a bit of stuff that

there could be a half point decline in june from the bank of canada but i i'd say that also okay you you had to say that. I came prepared. So I came prepared for our Join TCI listeners, but obviously I'll share what I'm, I'll talk about what I'm sharing right now. So I discovered this recently. So the Montreal Exchange, which is owned by the TMX Group, so the Montreal Exchange, they do derivatives.

So I've talked a lot about the FedWatch tool from the CME in the U.S. So the Montreal Exchange, you can say it's like pretty much the equivalent of that, but for Canada. And the probability of a rate cut is at 32% for the meeting that's going to be happening tomorrow. We're recording on the 4th. Yet you look at headlines from the various mainstream media outlets in Canada and you think that it's actually a certainty that they're cutting rate cuts this is based on what the market is essentially betting in terms of derivatives and very similar to the CME watch a Fed watch tool although the CME FedWatch tool is way more comprehensive than

this. But for people who'll see it now, there's a 32% chance of a 25 basis point cut. Yet, if you look at headlines, it's almost a certainty that there's a rate cut tomorrow. So take headlines with a grain of salt. I think sometimes they may be motivated. They may have, you know, they might be using that as clickbait. It might be in their interest to get people to read or to think there's going to be a rate cut. But it doesn't look very likely. Obviously, one third of a chance. I've played enough poker to know that that can still happen. But I just wanted to provide a little bit of context there. You poked a bear down. Yeah, I saw it. Well, I don't know where I read it. I was trying to dig it up here, but I saw 80% chance of a cut. That was the headline. They figured there's going to be an 80% chance of a cut.

And then I read the other article that said a half point decline. So yeah. Was it written by a realtor? Is that it? Yeah. Yeah, real estate. Oh, man. I mean, yeah, I can't find anything. But I was trying to find the article to see who it written by a realtor? Is that it? Yeah. Yeah. Real estate. Oh, man. I mean, yeah, I can't find anything, but I was trying to find the article to see who is buying it.

No, but if you look, you'll probably find a few. I mean, I've seen several articles that are essentially implying that it's like a high, either a high probability or like borderline of certainty that there's a rate cut coming. I mean, it could still come. I'm just not saying it's just the markets are saying that it's not that likely. Yeah, 80%. I mean, 80% is far from certainty, but that's pretty confident. So, yeah, I mean, maybe they changed the headline now, but yeah, we'll see.

We'll see. But to get back to Scotiabank, so higher for longer interest rates will likely keep their provisions for credit losses higher for longer as well. They expect PCL to be at the high end of their 2024 guidance. They also said that they would not increase the dividend this year. So that made the rounds on dividend Twitter. A lot of people who are growth dividend investors were not too happy. I even saw some people selling because they said they would not be increasing it. I mean, personally, I give them props because what they said is, look, typically we do increase the dividend in Q2 of

each year when they answered a question regarding that. However, we are being prudent. We're letting it to the current level that it is. Let's say a pause. I think that's a word that they use. And we're hoping that we'll be able to continue raising in Q2 of 2025. Going forward, they want to raise it along with earnings growth. So what they're saying is that they'll raise it next year as long as earnings grow. So don't take it as a certainty that they will be raising. I think they're making that dependent on earnings. And I think to be honest, that is a very reasonable approach. You know, I'm, you know, the results were not great, but to me, that makes a whole lot of sense. Yeah. So these like banks, typically all

of the banks pay out anywhere from 40 to 50 percent of their earnings towards the dividend and scotia like they're sitting at like financial crisis payout ratios which are around 70 i believe 73 74 percent of earnings you won't find too many banks that are paying out that level of earnings towards the dividend. So like no dividend growth is like, it's really not all that surprising. Another bank like bit off the mark here for Scotia, but TD is approaching that point as well. I think they're at 70% of earnings and BMO is at 59%, but they still raised the dividend this quarter, but it was quite a bit lower than typical. But I mean, yeah, when you're paying out nearly 75% of your earnings, I don't think you should

be raising the dividend, especially when that's at a 50% premium to what you'd typically pay out. Yeah. And I guess the last thing here before I get to the results. So for Latin and Central America, which Scotiabank has a pretty big presence in, they said it's looking a bit different there, especially since most of the markets have started easing interest rates. So definitely different than what they're seeing here in Canada, where we're a bit more dependent on the U.S. Now on to the result, the adjusted earning. I'll use adjusted earnings here again, quarter over quarter, because I think it's more accurate. The adjusted earnings, though, were very close to the actual earnings. There wasn't that many adjustments. So adjusted earnings were down 5% to 2.1 billion. Adjusted EPS was down 6.5% to 1.58 per share. And by segment,

Canadian banking net income decreased 8% to $1 billion, their largest segment. International banking decreased 10% to $671 million. Global wealth management net income increased 3% to $380 million. And global banking and market net income decreased 3% to $428 million. The CET1 ratio was 13.2%, down 30 basis point from the previous quarter. PCL increased 4.5% to $1 billion. And that's the second highest amount for them that they've set aside since the beginning of 2022 for a single quarter. The largest was Q4 of 2023 when they set aside $1.25 billion. So definitely, you know, none, nothing. I remember when they came out, we were talking about it when they came out with that loan loss provision in last year.

And it was a big, big jump compared to, yeah, to the rest of the banks. So it was just kind of interested to see that uh they have another pretty big one and i'll just show this for our joint tci listeners and this is the amount that they've set aside per quarter again it's not the total amount that they have on the balance sheet and we see steadily that these amounts have been increasing for scotia bank even as their loan book is kind of starting to uh stagnate a little bit it's not growing as i'll mention a bit later yeah that i believe that october 2023 quarter is when they just they reported way way higher than anyone had expected and i mean it's kind of it's similar to

bmo this quarter like bmo kind of had that type of quarter this year, and it generally spooks the market. But I mean, Scotia's really struggled over the last while. It's rough, and they didn't post a good quarter now. I can't remember the last time Scotia had a good quarter. It's been a while. Yeah, I don't know. Maybe you had hair the last time. I might have had hair, and I haven't had hair for a very long time. For a while. Sorry, it was a little too easy. I know it's been a while.

That's why I said that. But no, I thought it was just interesting to show that because it has been increasing. And it's been a similar story for all of the banks, just to keep that in mind. And the PCLs were driven higher by auto loans and residential mortgages. They now have $6.5 billion set aside on their balance sheet, which is the most they've had over the last 10 years, aside from the pandemic. And as a percentage of gross loans, that's 0.86%, which is the highest it's been since 2020. 2020 was 1.25% and it bottomed in late 2022 when it reached 0.71%. So clearly it's trending up here. Scotiabank has been trying to reduce their mortgage exposure, like I mentioned

earlier, and they made progress on that. So mortgage loans declined 1% to $289 billion. However, credit card loans were up 18% to $9 billion. So it's not a big part of their portfolio, but I'm not quite sure why you'd want to be increasing the credit card loans by so much. That's clearly a segment that's going to be under pressure if consumers are under pressure. And I would say it's going to be even more so under pressure than mortgages, for example, because I would think most people would prioritize paying their mortgage over their credit card, right? So I think that's probably, yeah, that's definitely something there. And credit card loans, unfortunately, they're unsecured. So that money can be difficult to recover.

Yeah, I would imagine this is a joint effort by the bank and consumers but i mean i get like i get an insane amount of like mail uh boosting limits like reducing interest rate to transfer balances and stuff like that but uh are you with skull chef for that or uh no this would be with i'm with it well i don, I bank with Equitable pretty much exclusively now, but I do have just credit cards with RBC. And I'm talking like twice a month, at least. Yeah, I have one with Scotiabank. Constant.

Yeah, they keep telling me I'm richer than I think. Yeah, just boost your balance. Yeah, exactly. So, yeah, it's, I mean, it's just something to keep an eye on. And in terms of their mortgage portfolio, 25 percent is insured, 75 percent is uninsured. So insured would be insured by CMHC or one of the two private mortgage insurers. And uninsured is typically people will have like 20 percent or more. So these are uninsured mortgages and 68% of their portfolio is fixed versus 32% variable. And the mortgage portfolio, it is similar to what we saw

with TD. But I always like to show a little bit what's going on here with the banks and pretty much the same story here where you get a lot of their mortgages that are actually renewing in, you know, a decent amount of renewing this year, then it starts trending up in 2025. And 2026 is just a year, right? It's the year where most of these mortgages are renewing a big chunk of them. And that is that's a little scary, if you ask me, just because these are the mortgages that especially the fixed rate ones and 65 percent of the 2026 mortgages are actually fixed rate. It's these mortgages that people had extremely low rates that we'll be seeing, you know, potentially a jump from, you know, maybe like low two percent to something in the high 4s or even 5%, depending on what rates are down the line in 2026. So that is the one that will probably be worth keeping an eye on.

And like I said, it's not just Scotiabank here. I'm not trying to pick on them. I think most of the banks, it's exactly that. That was, lack of better words, peak FOMO and low interest rates. Yeah, I mean, the one situation with a lot of these renewals too is you're kind of, if you've maxed yourself out, you're kind of at the mercy of the bank you're with. Because if you go elsewhere, you have to qualify for the stress test again. Whereas. Which is so stupid.

Yeah. I mean, it's, it's so stupid because then the bank can take so like, they can take advantage of you big time. Yeah. So if you're at 2% and you could get, you know, say a four and a half percent mortgage somewhere else, but you won't qualify for that beat out the stress test. I mean, Scotia could be like, here's five and a half percent. What else can you do? You're not going to get qualified anywhere else. You know what I mean?

It's a bad system in that regard, I think. Yeah, it's a good system for the banks, but not so much for the consumer. And I think I posted something on X and it was interesting because I posted basically some of the rules that I have, because I think it's a good reminder, especially for those who don't have a home and are potentially wanting to buy them in a few years down the line. And it's okay to make your own rules that are more stringent than the stress test. Because the stress test, you know, even if you meet the stress test and you go to the max approval, you are stretching yourself. Oh, yeah.

Don't kid yourself. It doesn't mean that you're approved for a certain amount that you should go for it because if you factor in increase, your mortgage may be fixed for five years, but your maintenance expenses won't be. Your property taxes likely won't be. Your cost of living in general likely won't be. So you have to make sure you have some room to be able to absorb these higher costs down the line. And I think that's where a lot of people got into trouble is they wanted to get, you know, I know it's an emotional thing and they wanted to get into the housing market so badly and prices just kept going up and up and up. And then people probably

would set like an internal budget and then would throw out the window and essentially go to their max budget. And now they're seeing the consequences. And there's probably a lot of difficult discussion happening when their mortgages are coming up for a renewal with their bank or their mortgage broker. Yeah. yeah i mean the only difficulty about setting a less stringent budget is when housing prices have skyrocketed and wages really haven't moved all that much i mean you can't get into much at all without you know without stretching yourself really thin which is like it's a terrible dynamic here in canada with housing it's uh oh i yeah i definitely agree with that and that's why sometimes it's as much as it might be a dream of

your own home you know when i was in my early 20s i made a few bad financial decision and i was in a tough financial situation for a few years. And I'm actually very happy it happened then because it is not a fun feeling to feel like you have like little room to maneuver. And, you know, I'm just cautioning people. I understand, you know, buying a home for a lot of people is a dream of theirs, but sometimes maybe it's just best to wait, keep renting, of theirs but sometimes maybe it's just best to wait keep renting putting money aside if you buy a home and you're basically like barely making it trust me you will probably not be sleeping well at night because that will stressing be stressing you out yeah it's a huge it's a huge expense especially if you're stretching yourself thin on you know one of the basic necessities of life

which is shelter i mean it's it's like i said it's weird like the cost of ownership is skyrocketing but then again like rents are skyrocketing so like it's even difficult to afford a rental i feel i feel really bad for younger generation who like it's i don't even know how you get into home ownership just because they're they're so expensive. Yeah. Yeah. No, I mean, it's hopefully things do improve over time, right? I think I try to stay positive overall and that, you know, Canada, Canadians and humanity as a whole, things do improve. But, you know, we try to do our part, try to, you know, show people, you know, kind of the basics on how to invest and how they can actually grow those

savings. Probably the last thing is I even donated to a food bank recently because I've been seeing longer and longer lineups and we don't have that issue. So I felt like it's the least I can do, especially at this time of year, because I feel like they probably don't get that many donations in the middle or early June. No, I doubt it. Yeah, in Calgary, it's very bad too, apparently. Cost of living is just crazy right now. Well, on a more positive note, I think good luck to all Oilers fans.

Hopefully, they bring back the Cup to Canada. So I think that's a good episode. Ran a little bit longer, probably steered away a little bit from the topic towards the end, but that's okay. We do appreciate all the support from people. You can find us, Dan and I, on Twitter. We're pretty active there, both of us. I'm at fiat underscore iceberg. Dan is at, I know it, but I'm trying to get you. Stocktrades underscore CA. Perfect. So thanks a lot for listening and we'll see you again next week. The Canadian Investor Podcast should not be construed as investment or financial advice. The hosts and guests featured may own securities or assets discussed on this podcast. Always do your own due diligence or consult with a financial professional before making