Ajai Bambawale: I can start generally with credit quality and then I will pass it on to Michael Rhodes. So what I would tell you is, generally across the resi book, our credit quality is strong. So if I look at delinquencies and I see the quarter-over-quarter change, it’s nominal. It’s basically one beat to that in Halo. Formations, resi is flat. Charge-offs, I would say, near zero. So if I look at quality in many different ways, the quality is strong. The books we are watching, we are definitely watching the variable interest rate mortgages, in particular, the trigger point population. We are watching rate renewal risk across both the variable and fixed books as well. But overall, we are seeing strong quality. We are actually seeing customers come forward when they hit the trigger rate, and keep in mind when they had to trigger rate, there’s no requirement to repay us, but we are very encouraged by what we are seeing, where they are voluntarily coming forward and making principal payments.
But I will pass it to Michael for a few minutes.
Michael Rhodes: Ajai, I think, you touched a bit about the dynamic of how our variable mortgages work in that, as rates go up, that the amount you amortize basically is going down until you could reach a point where you do end up negative aiming and there’s actually — your loan base has some capital added to it each period and then either at a trigger point or a at renewal, things get reset.
Nigel D’Souza: And just to clarify, I assume that trigger point is 1% or 5% of some sort of loan balance amount, is that how it works?
Michael Rhodes: It depends if it’s a HELOC or if it’s a mortgage. For mortgages, it’s linked to your loan to value at, I think, it’s 80%.
Ajai Bambawale: 80%. Yeah.
Nigel D’Souza: 80% uninsured, I think, it’s 105 for insured or is it the same for both?
Bharat Masrani: It’s 105 for the other one.
Nigel D’Souza: Yeah. Got it. Thanks. That’s it for me. Thank you.
Operator: Thank you. The next question is from Darko Mihelic from RBC Capital Markets. Please go ahead.
Darko Mihelic: Hi. Thank you. Just a quick numbers question for Leo. I am looking at the U.S. Retail segment and the non-interest income. I realize overdraft fees are significantly lower. But when I look at this quarter’s number, is it fair to say, Leo, that this is about the bottom or is there still some more downside to this line item?
Leo Salom: Darko, thanks for the question. So we have fully implemented all the overdraft measures that we identified last year and so this quarter, you are right to say that we have — you are seeing the full impact of all those changes. And just to that includes the limit — the daily limit of overdraft charges that includes the change in the threshold, which a client begins to incur an overdraft, the 24-hour grace period, the elimination fee, all of those, you have got a full quarter worth of impact, so this is the bottom. I would expect, to your point, as we continue to grow our core checking and cards base that we would see additions to our fee income line.
Darko Mihelic: Okay. Great. That’s very helpful. Thank you. A question for Bharat. You have given us a rough roadmap to 12% common equity Tier 1. There is, of course, a small possibility that the regulator increases the DSP this summer in June, with 50 basis points, let’s say, pertained increase. Do you have the capability of overcoming a 50 basis point increase in the minimum ratio or would you need to raise equity for that?
Bharat Masrani: We have capability to meet that if that turns out to be the case. But these are hypothetical questions, but you asked me a straight question, I will give you a straight answer.
Darko Mihelic: Okay. Thanks very much for that. Appreciate it.
