Gabriel Dechaine: Two questions. One, I appreciate you don’t want to quantify anything on this potential fine related to the AML program. But you do give a potential loss range tied to various factors of zero to $1.26 billion. I’m wondering if that may be captured in there, is that range has been pretty static for the last little while, so maybe not. And then my second question, the buyback news, I think that does a lot to address the questions you’ve been facing with regards to deployment of your very large excess capital position. I guess, if I’m thinking from a modeling standpoint, I’m going to take — make an assumption about activity and take my share count down, and that will have a positive impact on EPS. But then the opportunity cost, what kind of interest rates should I assume on that capital deployed? A few years ago, it would be insignificant or close to it. Today, just parking in T-bills, that could be a lot of money.
Bharat Masrani: With respect to giving ranges out and all that, I don’t think that that’s appropriate, Gabe. I know you would — trying to put a number in your model. But I can’t help you with that one. We generally, as you know, historically don’t talk about provisioning in the manner that you were asking us. So, I think it’s — this is not — probably not a good time to start. With respect to the buyback, a lot of calculations go into that, as you said. And we felt comfortable with the levels that we’ve announced. I mean this is obviously — how much we can get done by what period will depend on market conditions, where markets are and where various other economic factors might be as well. But feel, given our capital level, given the strategies, the amount we require to further those strategies, this is an appropriate program to pursue. And that’s how we’ve thought about it. And as time goes by, we will update you as to where we are on it.
Gabriel Dechaine: I’m not suggesting otherwise. I’m just trying to fine-tune the impact, if you will. Sometimes I try to model precisely, but — and maybe we could take it offline.
Bharat Masrani: Well, the Bank’s medium-term earnings growth target remains the same. So, I think from a modeling perspective, that might be a good place to start, but I’m sure your models require fine-tuning on an ongoing basis. But that’s all I can provide you on that.
Gabriel Dechaine: All right. Enjoy the rest of your summer.
Bharat Masrani: Thanks very much, Gabe.
Operator: The next question is from Paul Holden with CIBC. Please go ahead.
Paul Holden: First question is for Kelvin. And Kelvin, when you’re referring to the Canadian P&C banking business, you mentioned that NIMs might bounce around a little bit from here and be impacted by the same factors as fiscal Q3. I’m surprised if not a little bit more of a positive message on Canadian NIMs, given rates are starting to stabilize and then you should have the benefit of sort of the tractor on and off based on the back book. So, I’m wondering why there’s just not more of a positive message on NIM. And maybe it’s related to the growth in mortgages, but an expansion on thoughts there would be helpful.
Kelvin Tran: Sure, sure. It’s Kelvin. I’ll take that. Yes, you’re right. From a deposit margin perspective, the on and off rates would be helpful, and we talked about that at the last quarter. But we do see significant loan growth. And just from a balance sheet perspective, when you have high loan growth, you would see — even though you would see higher net interest income, which would be helpful to earnings, it just shows margin compression. And so, Q4 really depends on the puts and takes of these factors, which one grows faster than the other. And that’s why in our outlook, we talked about the NIM bouncing around.
Paul Holden: Okay. That explains it. That makes sense. Thank you. Thank you for that. And then just want to ask a couple of questions on noninterest expenses, and I’ll ask it sort of as one joint question. But first off, looking at the growth in average FTE, it was up roughly 1.5% Q-over-Q. Should we expect that will continue to grow sequentially from here, or will it sort of flat line? And then I guess the second part of the question is related to that litigation expense of $125 million, you highlighted, should we consider that more of a Q3-specific item, or do we need to factor that into our expense assumptions going forward?
Kelvin Tran: Sure. Why don’t I start with the second question? The litigation expense is a legacy matter that dates back to almost a decade ago. And so, we’ve reached a settlement that puts this matter behind us. So hopefully, that answers your question. And then on the FTE, no, I mean, there’s obviously a lot of factors in that. Like in summer, we tend to also have summer interns coming in. So, we’re — we’ve communicated that we are managing our expenses. We expect the growth to moderate, and FTE is only one part of it. There’s other costs as well. Then with the puts and takes, we will continue to manage expenses appropriately.
Paul Holden: Okay. Okay. One more if I can sneak in, if that’s okay. I’m just really curious on the 2024 sort of NII/NIM outlook given the probability of Central Bank rate cuts, but at the same time, maybe some anchoring in rates in the long end of the curve. Like, how should we think about that potential nonparallel shift scenario, short end going down and long end staying where it is? Like obviously, I think that would be a net negative, but is there any kind of characterization of how negative or not that might be for TD’s NII?
Kelvin Tran: Yes. So, that’s — there are a lot of assumptions there. Then you’re talking about two factors on short and long end. And then the other factor is how much, how fast. And so, I think it’s really hard to predict. But you’re right, like the sensitivity on the short end is impacting our NIM and NII on a faster rate basis. And then on the long end, if it stays high, that’s beneficial to the tractors since they reprice on and off, but that takes more time.
Operator: The next question is from Lemar Persaud with Cormark Securities. Please go ahead.
Lemar Persaud: I want to ask just a big picture question here. Would it be fair to suggest that the bank is more aggressively pursuing growth even at the expense of margin because of the inability to deploy some of that excess capital into accretive M&A in the U.S., kind of as a result of this AML investigation, not suggesting this growth isn’t positive to revenue and earnings, but it does seem like maybe the paddle was pushed a little bit harder down on growth when looking at some of the volume pickup and kind of softer than guidance.
