And so that’s going to start stabilizing. But on the flip side, you had the loan portfolio really contribute through higher margins. And then in terms of the balance sheet mix, the balance sheet mix is simply because we did have deposit growth, and that’s one of the areas our business has done an excellent job. Deposit growth is growing more, providing NII on the numerator and assets have been more muted on the denominator side, that ends up helping NIM as more deposit NII comes in. So that’s really that balance sheet mix, 4 basis points that you see. But I’ll pass it on to Shawn to give you more color.
Shawn Beber: Thanks, Hratch. And Doug, thanks for the question. So to Hratch’s point, I think it’s both sides of the balance sheet that are being reflected here. We’ve had pricing discipline. We’ve invested in tools, including ones that are based on AI to help with pricing and make sure that we are being competitive but intelligent about how we price on the loan side. There’s also been some mix shift. We’ve talked about the fact that we’ve been deemphasizing elements of the commercial real estate book. Some of that was lower yielding, and we’ve replaced that with commercial loan growth that’s helped on the asset side. And on the deposit side, we’re really pleased with our performance this quarter. We — it’s a combination of – it’s a strategic focus.
Our relationship managers speak to clients all the time about their deposit needs, our treasury management capabilities and how we can serve them. We also have launched a number of different initiatives, including doing some testing and learning in our digital space that has shown, we’re pleased with the early results around that. And we’ve done all of that with an eye towards our margin management. So all of that, coupled with our hedging strategies that Hratch just talked about, have all contributed to that NIM performance. And so from an overall strategy perspective, I mean this is all aligned with our very high-touch relationship focused business that we’re building in the US, and there’s really three elements to that. There’s the highly connected commercial banking and wealth management franchise, working with clients who really value this fulsome relationship.
We’re building out our private wealth business, which does provide — it’s got terrific attributes in and of itself. It also contributes significantly from a capital generation perspective, a funding perspective, and feeds in through our NIMs and a referral opportunity, all of which supports our commercial banking business. And we’re investing in our infrastructure. As I said, some of that is through pricing tools et cetera, but making us sharper on the front side, and as well building up our infrastructure to support that growth ambition in line with regulatory expectations. All of that, we expect over time to that we expect over time to deliver on our Investor Day targets.
Doug Young: Appreciate the color. Thank you.
Operator: Thank you. And the next question is from Sohrab Movahedi from BMO Capital Markets. Please go ahead.
Sohrab Movahedi: Okay. Thank you. Get rewarded for following directions here. Harry, everyone’s had a chance to talk, you haven’t. I just wanted to get a feel from you. Obviously the quarter was strong for capital markets, but I just wanted to get a sense of how you see the year playing out off of this strong start?
Harry Culham: Hi, good morning, Sohrab, and thank you for that question. As you know we’re — and you’ve heard it today, we’re really focused on the execution of our strategy, which as Victor said in the earlier remarks, it’s working well. I’d say it’s working very well in capital markets. Well we’re really focused on delivering on our Investor Day targets and you’re seeing that. Excluding the impact of the tab, we’re anticipating year-over-year growth in revenue in 2024 in the mid to high single digits and we’re focused on bringing our expense growth in 2024 down to the low to mid single digits area. So that should give you an idea on how we’re thinking about the year. As Victor pointed out it is a really well-diversified business.
And you heard Shawn talk about our platform working together, the connected franchise. 30% of our revenue does come from service and commercial wealth and retail clients. We’ve got 40% from corporate origination, another 30% from our institutional and trading businesses. So I think that diversification is going to play out very well as we go forward in 2024. Clearly there is some seasonality to this business. Our clients were very active this quarter. This is a client-driven franchise that really is aligned to longer term macro trends. So it’s working well. You saw that in the results in quarter one. So we’re optimistic that we’ve had a solid start to the year. It does give us confidence that we’re going to achieve our full year targets that we set out at Investor Day.
Sohrab Movahedi: Okay. Thank you.
Operator: Thank you. There are no further questions registered at this time. I’d like to turn the call back over to Victor.
