Graeme Hepworth: Hi, Paul, thanks for the question. And we’re going to break those down. I would say on the retail side, I would show say retail has been trending consistent with our expectations overall. I would say this quarter that the — some of the trends we were seeing there started to decelerate and we saw some improvements, obviously, in the delinquencies I quoted. Having said that, we do expect retail to continue to increase as we go throughout the year because we’re going to see a second leg of an effect here in terms of the employment environment, right? And so in our kind of baseline forecast, we do expect unemployment to tick up from the exceeding levels we’re at right now. We’re in that kind of 5.1 range. We expect that to kind of get into the kind of mid-six range as we trend through the end of the year and into 2024.
And so, we had very strong performance there and so the recent trends have been good. We do expect that will continue to increase as we progress through 2023. The wholesale side, certainly, we saw a tick up this quarter. Wholesale is never quite as linear and quite as predictable. It will kind of move up and down from quarter-to-quarter as we see certain files come in and impaired. We had a period through 2021 and 2022, where wholesale was exceedingly low, right? We were at kind of near zero levels for a very extended period. And so last quarter, this quarter, we are starting to see the implications flow through corporate a little more, but I would say that’s not unexpected. Although it just won’t be quite as consistent in linear as we’re seeing on the retail side.
So again, on wholesale, similarly, we will continue to expect it to kind of trend back to more kind of longer-term averages as we progress through the year. So, the same economic factors will continue to play out in that space as we’re seeing in retail, but it just won’t be quite as kind of consistent path to get there.
Paul Holden: And then anything worrying some on the commercial side at all?
Graeme Hepworth: Commercial in Canada, you’re saying specifically?
Paul Holden: Commercial either side of the border are really, I guess, both, right? Like obviously, there’s been a lot of discussion on CRE, and you provided some additional details there. Are there other pockets of concern on the commercial side?
Graeme Hepworth: I mean I think you called out the biggest pocket of concern is certainly around commercial real estate. That’s been an area of intense focus. We’ve been doing a lot of analysis and work there to make sure we — we’re taking all of the rate actions that I indicated in my comments, that has been — that was one of the reasons we did increase our loan loss allowances or performing allowances this quarter is in anticipation of kind of more challenges and more headwinds in that sector. It will take time to play out, and you will see kind of different markets and different spaces, play out in different ways. But to give you just a little context on kind of how we’ve kind of changed our perspective on as a whole and maybe put the magnitude around that.
