It’s not going to improve too much. But eventually, I think as rates stabilize and eventually when rates start declining, it could happen late in the calendar year or into 2024, we don’t know for sure. we will see the benefits starting to accumulate in the other segment as well. So that’s how I see it evolving and then eventually getting back to some sort of normal range, right, whatever that might be, and we can talk about it towards the end of the year. But for the rest of this year, you should assume that the other segment loss will be somewhere in this range. Also remember that prior, I’m talking about 3, 4 years back, we used to have a lot of the investment gains that went through this sector as well. The loss relating to net interest income in 2019 was a little over $900 million for the whole year.
So it’s not unusual for us. I think the quantum is a bit unusual because of the velocity and magnitude of rate changes that have happened in a very short period of time.
Doug Young: So just to summarize, like this is all interest rate related. It probably continues through this year, so others going to kind of see kind of outside normal. It’s all more related to Canadian P&C banking. And there’s nothing else unusual in here excited of that interest rate impact. Is that a fair kind of characterization of this?
Raj Viswanathan: Yes, I think it’s a fair characterization. The only thing I’d probably add to the Canadian P&C business comment you made, there’s probably 3 different components when you think about where was this investor, if that’s where you’re going. The Canadian bank definitely is a component. Our Global Banking and Markets is a component, and likewise, our investment securities. We hold high-quality liquid assets, which tend to be lower margin. So as much as the term funding goes to fund the growth in those assets as we improve our liquidity ratio, that will also be a component that impacts the outcome in this segment.
Operator: The next question is from Gabriel Dechaine, National Bank Financial.
Gabriel Dechaine: I’d like to just explore the comments about the IB segment there with regards to returns not being commensurate to the risk. And I think that’s open and honest statement. I just want to know what — what are you looking at in particular? I know the past couple of years, there have been some businesses like some unsecured consumer that you’ve been downsizing or deemphasizing. Wondering, I guess, geographically, what are the product lines you might be looking at? And what the expected impact is from a sustainable lower PCL level to a lower capital required, stuff like that.
Nacho Deschamps: This is Nacho. Let me start. I think it’s important to what you are saying. We are disclosing ROEs for international banking in more granular level both for the Pacific Alliance countries and for the Caribbean and Central America. What I would say is, overall, we are pleased to see that International Banking ROE this quarter is 13.6% and increased compared to 12% or 12.4% last year. And in some — the way I summarize the situation we are, we have 3 geographies with high return on equity, above IB and all bank ROE, which are the English Caribbean, Mexico and Peru, and we have seen consistent improvement in these countries, driven by organic growth. And we also have 2 countries, which are relatively small within International Banking, where we acknowledge that we need to improve performance and profitability, which are Colombia and Central America.
And in these countries, we have developed specific business plans that we expect will gradually improve their performance and close the gap in profitability.
