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
: Daniel, thanks for all the commentary on the PCL outlook and some goalposts as well. Just wondering, like we've been kind of conditioned to
expect the first half to be the peak or similar to Q2, I guess, for impaired provisions. Now it sounds more like 2021, end of year, could it actually be
into 2022? Just want to get a sense of timing there.
And then I'll throw on the quick one on expenses. Do you expect a flattish expense growth next year?
Daniel Moore
Sure, Gabriel. Thank you. I'll start with the timing on the net write-off and I'll hand off to Raj on expenses, obviously. Yes, you're right. We would
see -- we've seen net write-offs start to increase. That will continue into Q1. But we anticipate it would grow into Q2 and peak in Q3 given the
government guarantee programs and other impacts coming through. But what's important here, I think, is that as we look at these deferral programs
coming off, our customers, as I indicated, are really performing very well and coming back to current very, very quickly. So we will be down at the
end of Q1 to really a very small number, about $1.1 billion of our retail customers in deferral. As I said, we're seeing 97% of those in Canada coming
back to current, 99% of the commercial, about 90% in international. And that's what we've used to drive some of our analysis on our allowances.
And perhaps also importantly, we don't see a high percentage dependency on serve in those deferral expires. So we don't think there's any cliff
effect leading in our deferral numbers either.
I'll hand it over to Raj now on our expenses.
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: Just wanted to go to Dan Rees. He's had it easy a little bit, so I thought I'd catch up with them. Dan, as Brian mentioned in his remarks that there's
going to be some good continued momentum in your business. Obviously, a good rebound quarter-over-quarter, but what does that mean? And
what are going to be the drivers of that momentum for you, if I think about it both from an earnings and maybe a volume growth perspective?
Question: Sohrab Movahedi - BMO Capital Markets Equity Research - Analyst
: And Dan, just on the margins, you think you should be able to maintain it given the mix that you have from here or do you foresee more margin
pressures?
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