There’s institutional knowledge around this business. It’s performing well. Over the five years that we’ve had it, I think losses are under $10 million. It’s just we watch. We’re being careful. Inflows into the business, capital going into the sector has slowed down. So, we’re all over it. But so far, no signs of stress. Harry?
Harry Culham: I’ll just follow on from Jon there. Thank you for that question. As we discussed at Investor Day, our DFS, or Direct Financial Services business, is really a future differentiator for our bank, much like our innovation banking franchise. Just by reminder, it comprises Simply, which is our low-cost digital banking platform; our Investor’s Edge, which is our digital-driven low-cost direct investing platform; and our, what we call, alternate solutions, which is our innovative personal and B2B FX platform. And it was created in 2020 just by a reminder to really capture the accelerating to market demand for direct banking solutions, leveraging our technology and capital markets and expertise, which is really — has a proven operating model for agile delivery.
We have seen our investments in technology and data, really enabling these results that are in front of you today. We were a leader in FX payments. We’re onboarding new clients as we execute on our capabilities. And we’re using the data analytics to really make pricing decisions to expand on our margins as rates increase in Simply and Investors Edge. So, we’re pleased with these results, and we think we continue to drive that 15% growth as we laid out at Investor Day.
Scott Chan: Thank you, very much.
Operator: The next question is from Doug Young from Desjardin Capital Markets. Please go ahead.
Doug Young: Good morning. Just first question, I guess, Hratch, for you. I guess credit RWA was down sequentially. Counterparty RWA was down sequentially. Were you actively selling books? Or can you kind of dig into what drove this? And can you also talk a bit about the outlook for RWA as we move through fiscal ’23?
Hratch Panossian: Yes. Thanks for the question, Doug. So, the short answer is no. We haven’t been offloading any risk from our portfolio. We haven’t done anything unusual. It’s all a normal course. And it’s really the core earnings generation from our business that helped this quarter as well as the share issuance. And we had some help from market factors, particularly counterparty credit, as you described in AFS. But let me give you a little bit more on that. So, if you look at the quarter, and as we’ve highlighted in our slides, we did generate 30 basis points of capital in terms of our growth. And the way we look at organic RWA consumption, it really was the organic core part, which you can see in the Pillar 3 pack in the back.
You will see there was about $4.4 billion. If you strip out FX, you strip out counterparty, you strip out any changes in credit, et cetera, there was a little bit of negative migration this quarter. There’s $4.4 billion of total book growth in terms of core credit. And so net-net, you can sort of look at 14 basis points of capital generation net of the credit growth. The market movements were something in that 10 to 14 basis point range help as well. So, counterparty credit was down $2.7 billion, to your point. That’s just — yes, you’ll see the mark-to-market on the asset side of derivatives also down. So, mark-to-markets came down on derivative positions. That means we have a smaller receivable and we have less counterparty credit risk, plus, yes, that’s helped us a little bit.
