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: David Feaster - Raymond James Finanial, Inc. - Analyst
: Hey, good morning, everybody.
Question: David Feaster - Raymond James Finanial, Inc. - Analyst
: I just wanted to start out on the organic growth side. You talked about the softness in Canada, some of the risks to achieving that CAD5 billion
asset level this year, but you're also pretty bullish on partner additions in Canada, expansion in the US, and the pipeline is healthy. I'm just curious,
how do you think about the organic growth trajectory within that point of sale business, the pipeline of partner additions in both Canada and the
US? And then are you looking to expand products?
I know HVAC has been a key driver, but is there opportunity to expand the product set to potentially help accelerate growth? Just curious your
thoughts on that side.
Question: David Feaster - Raymond James Finanial, Inc. - Analyst
: Okay, that's great. And then, you did touch on some of the softness in the labor market in Canada and some of the softness there. I'm curious,
obviously, your credit is phenomenal, but I'm curious about how is credit of the underlying receivables for your partner been? Has there been any
change there?
And how are the retailers your partners doing just given some of the softness that you talked about? Are you having any issues from the health of
their balance sheets just as the consumer may be weakening a little bit?
Question: David Feaster - Raymond James Finanial, Inc. - Analyst
: Okay, all right, that's helpful. And then, maybe last one, just could you touch on the funding side? I'm curious what you're seeing there. You talked
about some of the tailwinds on the trustee side which is great, but funding costs are continuing to rise. I'm curious where do you think we are
there?
Are you seeing things starting to stabilize just curious how you think about funding your growth trajectory looking forward and ultimately the
impact on the margin?
Question: David Feaster - Raymond James Finanial, Inc. - Analyst
: Makes sense. Thanks, everybody.
Question: Mike Rizvanovic - Keefe, Bruyette & Woods, Inc. - Analyst
: Good morning, David. I wanted to ask you a quick question about the mortgage renewal cycle, not in terms of the direct impact, obviously, but
just the indirect impact. If we do have higher rates for longer or just maybe call the rates settling at a higher level, even if the Bank of Canada starts
a cutting cycle there's no necessary guarantee that mortgage renewals won't be painful for a lot of borrowers. So in the context of a deleveraging
cycle potentially in Canada on the consumer side, what are your thoughts on how that could impact the demand for POS for you? Obviously, it's
been a very resilient book.
Your growth has been phenomenal there. A little bit of a slowdown this quarter, but if we do get this dynamic where Canadians are just not
borrowing as much, what's the downside on your view with respect to how much you could grow POS?
Question: Mike Rizvanovic - Keefe, Bruyette & Woods, Inc. - Analyst
: That's helpful. And then, maybe just a quick one, a numbers question on the margin. A bit of compression, I think, five straight quarters now, you've
seen it come down quite a bit here. And I apologize if I missed it in your prepared remarks, but any color you can provide on margin trajectory, just
in light of what you're seeing on the deposit side the gross yields?
Are you looking at some level of stability in the coming quarters? Or is there upside and more downside? What are your thoughts on then?
Question: Mike Rizvanovic - Keefe, Bruyette & Woods, Inc. - Analyst
: Yeah, that's very helpful. Thanks for your insights.
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