Lemar Persaud: I want to maybe start off with Frank. Just given the normalization of impaired PCLs this quarter, can you talk to your outlook for the year? I think the message is that we should still think about normalization to historical averages, but any thoughts would be helpful.
Frank Guse: Thank you for the question, Lemar. And as I said in my prepared remarks, we are very pleased with the performance and resilience of our credit books, performing well within our expectations. And then as you pointed out, we did previously communicate that we do not expect low levels that were experienced over the last one or two years to sustain in the more uncertain and challenging macroeconomic environment. And I would reiterate our outlook of normalization towards pre-COVID levels and expecting our impaired PCL ratios to trending towards that mid-20 to 30 basis point range that we previously communicated. I think for fiscal ’23, we can expect to be at the lower end of that range. But overall, that guidance and outlook still remains intact.
Lemar Persaud: Okay. I appreciate it. And then just flipping over to Hratch. You mentioned you’re building up toward the 12% CET1 ratio by the end of 2023. Is that similarly just continued normalization to historical averages? Or does it allow for something more? And specifically, just referring to the CET1 ratio impact of normalization?
Hratch Panossian: Yes. Thanks for the question, Lemar. And we’ve been pretty conservative in terms of our outlook to 12%. And so when I talked about that, adding 5 to 10 basis points roughly range on average on a quarterly basis, that assumes that there is some normalization of the environment, right? We did have some negative credit migration this quarter. We’re actually assuming more than what we had this quarter. We’re also assuming that counterparty credit risk amount that came in, that’s based on natural gas prices, FX prices, interest rates and so forth. And so we’re assuming some of that will revert back out, won’t stay at these levels. And so, the way I would think about it is, as of now, we have the ability to generate 7 to 10 basis points in terms of core earnings, net of organic RWA growth to support profitable growth in our clients.
And those negative items, they roughly add up in our forecast to what the issuances are through our DRIP program and other programs. And so, think of it as roughly in the order of 10 basis points of negative headwinds we’re expecting from the environment normalization or getting more pessimistic even. And then that gets offset by the DRIP, which still allows us to continue having 7 to 10 basis points. And so we’ll leave the DRIP on for now. And once the environment is more certain, once some of the negative outlook out there gets better, then at that point, we’ll revisit it. But I think it gives us the ability to absorb those headwinds for now.
Lemar Persaud: Appreciate the time. Thanks.
Operator: The next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead.
Sohrab Movahedi: Okay. Thank you. Most of the questions have been asked and answered. Just for — quickly Hratch for clarification. In your comments when you were talking about the expectation for expense growth balance of year, you’ve made lots of reference to prior period investments and reaping the benefits of that. I don’t think I heard you mention inflation at all. Can you just talk about what sort of inflation is factored into that sort of expense growth? And could that be a source of positive or negative surprise?
