The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: My question is for Leo. During the quarter, you made some additional adjustments to the overdraft fee structure in your business. I'm wondering
if you can quantify the potential revenue impact and the timing thereof as you see it. I know there were some changes last August. And at the time,
you guys said it was about a $40 million to $50 million impact. Just wondering what the latest round would be.
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Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: That's U.S. dollars, I imagine?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: And is there a timing that you have in mind? It's not as if behaviors change because some of the changes you introduced were included launching
an overdraft fee product, so maybe some switching involved. I don't know if this stuff happens overnight or what. How do you see it?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Okay. And -- but does this phase in over time, something, kind of just so I can model it?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Okay. Now switching to the -- well, a quick one on rate sensitivity. Thanks for putting the slide in there, Kelvin and others, I imagine. Just I don't
think -- I think it does, but what we would have called surge deposits at one point, is that included in that sensitivity? Or did you back that out, the
benefit from rising rates?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Okay. And then the last one on the acquisition, the $494 million of prefs you're buying from First Horizon, 30% of that goes to an employee retention
mechanism. And the other 70% goes to what? I'm wondering if you can kind of help me understand where that money goes.
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: When I look at the filings here, and it shows that overdraft is actually becoming a smaller percentage of the fee income in the business, so you're
doing [nothing] else.
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Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: I just wanted maybe to do a couple of cleanup questions. I'll start off with Leo. You talked about the opportunity -- or maybe Ray, and you both
talked about the opportunities between TD Asset Management, Epoch and really leveraging the franchise in the U.S. What's unique about -- is it
just a new set of eyes looking at this? Or have these opportunities always been there and the focus wasn't there? Or is there a particular reason
why the next 12 months will be better than the last 12 months, so to speak?
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: And Leo, you mentioned the addition of advisers. When these advisers come on, how long before they are productive?
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Okay. And then, Ajai, for you, can you just talk a little bit about the efforts that you and your team would have put in around the due diligence for
the First Horizon acquisition, maybe the number of weeks you were involved, hours spent, percentage of the book reviewed, number of accounts,
that kind of stuff?
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Yes. Yes, I would like to know, like did you spend 1,000 hours, was it 200 hours from a risk perspective? Did you review 80% of the largest accounts?
Or did you review 50% of the industry groups? I would like a little -- yes, if you have it handy, I would like a lot more detail.
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