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: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Just 2 quickies here. Leo, you obviously have spent a lot of time since announcing the First Horizon. Are you able to also talk about where some of
-- to quantify some revenue synergies that may be coming?
Leovigildo Salom - The Toronto-Dominion Bank - Group Head U.S. Retail and President & CEO of TD Bank, America's Most Convenient Bank
Sohrab, thanks again for the question. As I shared the last time we were together, we didn't, in our model, we didn't put revenue synergies in the
model. Now that said, I do believe there's some really compelling opportunities as we bring our 2 organizations together, which will undoubtedly
generate revenue synergies.
I think top of that list is bringing our 2 commercial banks together, playing a much bigger role in the mid-market space, when you combine some
of their capabilities, our balance sheet and the TD Securities product base. There's no question in my mind that, that will be a platform for us to be
able to grow and grow at an accelerated pace over time.
I mentioned, on the previous -- to the previous question, the opportunity in the retail space. I'm excited about what we might be able to do. If you
simply take the penetration rates that we enjoy today on some of our product sets and bring that to the First Horizon base, that would be another
source of significant synergy that we can build.
So we'll work through those. And certainly, we'll try to prioritize that as part of our overall integration efforts. Obviously, we provided a $610 million
expense guidance in terms of synergies, but we're equally going to be leaning in on these revenue synergies because I think it's exciting. It will
help us accelerate the, again, the growth of the franchise overall.
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Okay. And Kelvin, just for clarification, the sensitivity -- I think the capital sensitivity you provided of about $350 million for every 50 basis points, I
think, in rate hikes, was that in Canadian dollars, or is that in U.S. dollars?
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: So USD 350 million for every 50 basis points in Fed rate hikes. Is that the right way to think about it?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Just to clarify that one. The $350 million, that's not a -- that's an increase in goodwill or an increase in CET1 consumption?
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Okay. And when you talk about the timing where you make that up with asset accretion over time, what kind of time frame? Is that a 3-year time
frame, a 5-year time frame, that you would expect that? I'm trying to think maybe along the lines of asset duration.
Question: Gabriel Dechaine - National Bank Financial, Inc., Research Division - Analyst
: Got it. Expenses, you, along with other banks, you've announced some wage hikes for most of your employees. Just wondering how that plays out
in terms of your near-term and -- near-term outlook, yes, near-term outlook for positive operating leverage and yes, and efficiency ratio improvement.
Is it likely that we could see you have 0 operating leverage this -- in the second half or what?
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