Jake Lawrence: No, not at all.
Mario Mendonca: Okay. And then my final question, if I could go to deposits for a moment. The loan-to-deposit ratio has come down, it’s meaningful. I’ve certainly noticed it. But I’ve also noticed and you described it clearly in your presentation that it’s coming primarily from term. Can you talk a little bit about your confidence that, that — those term deposits that were gathered this quarter, maybe talk about where it’s coming from? Is it digital? Is it otherwise? And your confidence that this is going to be sticky, this is going to stay with you in the long — over the long term?
Raj Viswanathan: Yeah, I’ll start, Mario. It’s Raj. On the term deposits, you’re absolutely right. It’s customer preferences. When you see this kind of rate increases over the short period of time, that’s the right thing what we would advise customers, frankly, and what customers want. But a little bit of data. As far as the retail bank in Canada goes, we have seen it both in the retail bank as well as in Tangerine, we have seen the shift to term. The deposits grew $32 billion in the retail bank in Canada. And, obviously a lot of it was term, right? About two-thirds of it came from term, as well as some movement between what we would call day-to-day accounts to term that happened through the year, which has significantly slowed down in Q4; big, big increases in the beginning, little less right now.
But the core deposit mix, what we call non-term, if you want to use that phrase, is still meaningfully high, it’s over 42% in the Canadian bank. And likewise, business banking, too, within the Canadian bank, there’s a lot of shift to term as corporates and lower C — commercial accounts also want to benefit from the rate situation, and we’ve seen the term deposits in the commercial bank has become now about 26% of the book, which used to be about 15% prior to this. Tangerine, like I referred to, again, core deposits is down to 65%. So, Tangerine does have a lot of really good quality deposits, but it’s down from 72% the previous year. So, that tells you that there is same shift that we are seeing, value customers, right, who are our Tangerine customers.
We think that shift has likely slowed down quite significantly, perhaps even may have stopped now, as we look forward into 2024. But a lot of the term that we have been taking, Mario, has been at the shorter end. It’s between the two-year and three-year points, as we sell more GICs and so on in that space rather than perhaps in the five-year term, pretty much to match what we’re doing specifically on the fixed rate mortgage book, which happens to be between two years and three years fixed rates. So, we’re trying to balance it out as best as we can, but we believe that the shift to term is likely slowed down, perhaps it’ll stop in ’24.
Scott Thomson: Yeah. The only thing I’d add Mario is, what you don’t see is the internal work to focus on client profitability and both sides of the balance sheet. And that kind of focus around incentives, how we’re allocating our time, how we’re allocating our resources, how we’re enabling the teams is significant. And so, this shift to deposits is not a one year thing, it’s a ten-year journey. And you’re starting to see the impact of that. I said in my opening comments, new day-to-day account acquisition up 6% year-over-year, seeing some massive engine for that. You’re seeing the mortgage product. Mortgage profitability up in the quarter significantly as we actually bundle away from just a monoline mortgage opportunity, real focus on auto in terms of-cross selling. And so, this last year has been foundation building in terms of getting that client for profitability focus across the organization, and that’s going to pay dividend long term for us.
Mario Mendonca: Thank you again.
Raj Viswanathan: Thanks, Mario.
Operator: Thank you. The following question is from Paul Holden from CIBC. Please go ahead.
Paul Holden: Thank you. Good morning. So, I actually want to continue with that discussion point on deposit growth, because I hear the message that it remains important for the Bank and totally understand why and it should, but at the same time, you provided 2024 guidance that deposit growth will slow relative to 2023. So, I guess I just want to understand that message on slowing growth, is just because in ’23 you had outsized growth and just simply won’t repeat at the same pace, or is it related to pricing dynamics maybe in the deposit market? Just help us maybe understand that 2024 guidance again relative to the long-term importance of growing deposits?
Raj Viswanathan: Completely. I’ll start, Paul. It’s Raj. I think the deposit growth, what we — you should expect from us is to grow in-line with loans, which is why we talk a lot about loan-to-deposit growth in this Bank, both in the Canadian Bank and in International Banking. So that will continue. The reason I quoted the deposit growth to be muted is we’re coming off a year where we grew deposits 10%, okay? That’s a lot. I talked about the $32 billion in the retail bank and so on in Canada. We know that savings levels have started coming down in Canada. You know inflation is a factor. So, it’s also about availability of cash with our consumers and so on. And if we expect to grow in the low-single-digit range, which is what I think it will be in Canada specifically next year from the profit plan numbers that we have, we think that’s still a strong growth considering that the loan growth is expected to be muted.
So, it’s all about balancing both sides of the consumer balance sheet and likewise we’re doing with commercial customers. It’s about managing capital on the other side and likewise managing our liquidity ratios to ensure that we have stable deposits, funding our loan growth as we look forward. So, I wouldn’t read it as significantly lower than 2023. I would talk about it as 2023 was a lot of growth, very targeted and deliberate, and we want to manage it appropriately in-line with our loan growth, that’s what you should see going forward.
Paul Holden: Understood. Okay. So, this isn’t due to competitive pricing dynamics?
Raj Viswanathan: No, I think we’ve been very, very thoughtful on pricing, Paul. I referred to the earlier call — earlier person’s question clearly about managing both term as well as how we price both sides of the balance sheet, and that discipline that we expect to maintain.