Darko Mihelic: Thank you for taking my question. I know it’s getting a little late here on the call. My question is also for Jon Hountalas, but it refers to the mortgage business. I was hoping maybe you could help me understand some of the dynamics that are happening on the ground. And I’m specifically looking at your Slide 35. Now when I look at this slide, the first thing that comes to mind is, I think maybe in the past, you may not be showing us this information in the same way. I think this slide is purely originations. Correct me if I’m wrong. So just a few questions come to mind, and I’m hoping to better understand what I see here. First, with respect to origination at $9 billion, that’s down 47% year-over-year. Typically, we see this progress to higher originations in the next couple of quarters.
So I’m curious if you think that might actually happen this year? The second observation is when I look at the loan-to-value distribution at the bottom part of this graph, I think, correct me if I’m wrong, this pertains to the originations that happened in quarter. And if that’s the case, what I see is people that put down the smallest amount of down payment are growing variable rate mortgage despite the fact that the variable rate is higher than the fixed rate. So I’m curious if that is something that’s being advised to the customer? If that’s new, if that would be like relative to history, something that’s new that’s going on? And lastly, Jon, is that experience do you think based on what you see kind of market-wide? Or might this be a little CIBC specific?
Thanks.
Frank Guse: Okay. Darko. It’s Frank here. I’ll probably take the first few of your comments or questions. So you’re right, Page 35 shows at originations, and that number is down year-over-year. It’s probably reflective of a slower mortgage market right now compared to a very, very strong market that we saw last year. And that, of course, had an impact on our new originations. And similarly, as you pointed out, FICO score distributions and loan-to-values as well reflect current originations in the quarter. I think it’s Page 27, where we show the same statistics for our entire portfolio. So that’s how you could compare those two. And then there’s a slight higher percentage of people in those 75% buckets that take variable rate mortgages.
I don’t think it’s necessarily advised. It’s a client’s choice that we are working with clients. We’ve also seen, and Jon can add anything here, but we’ve also seen the share of variable rate mortgages dropping with the interest rate environment evolving. So that number would have come down from previous quarters quite a bit.
Jon Hountalas: Yes, 70% of — it’s Jon, 70% of clients today are taking fixed rate terms, 30% are taking variable. That’s a bit of a difference from last year. And again, as Frank said, advice depends client by client based on their individual circumstances.
Darko Mihelic: And do you think, Jon, is there any different than industry?
Jon Hountalas: What was the question? Is growth going to be different, that’s the question?
Darko Mihelic: No — well, yes. I am looking for an outlook as well on originations. But do you think that — when we think about variable rate versus fixed, do you think you’re any different than peers?
Jon Hountalas: No.
Darko Mihelic: No, okay.
Jon Hountalas: And in terms of — again, I think you’ll see mortgages, Darko in the low single-digit range throughout the year. It has slowed down.
Darko Mihelic: Okay. Thanks very much. That’s very helpful.
Operator: The next question is from Mario Mendonca from TD Securities. Please go ahead.
