Good morning and welcome to Scotiabank’s 2016 First Quarter Results Presentation. My name is Jake Lawrence; I’m the Senior Vice President of Investor Relations for the Bank. Presenting to you this morning is Brian Porter, Scotiabank’s President and Chief Executive Officer; Sean McGuckin, our Chief Financial Officer; and Stephen Hart, the Bank’s Chief Risk Officer. Following our comments, we’ll be glad to take your questions. Also in the room with us to take questions this morning are Scotiabank’s Business Line Group heads: James O’Sullivan from Canadian Banking; Dieter Jentsch from International Banking; and Mike Durland from Global Banking and Markets. Before we start the call and on behalf of those speaking today, I would like to refer you to slide number two of our presentation, which contains Scotiabank’s caution regarding forward-looking statements. And with that, I will now turn the call over to Brian Porter.

Thank you, Jake and good morning. I’ll start on slide four. We are pleased to report a strong first quarter to our shareholders. This quarter’s earnings growth was again driven by good performances in our personal and commercial banking businesses, both here in Canada, and internationally. Our P&C businesses generated approximately 80% of our earnings. The Bank earned $1.8 billion in the first quarter, delivering diluted earnings per share of $1.43, up 6% year-over-year. Our return on equity was 13.8%. Looking at our capital position, the Bank remains well-capitalized with a Common Equity Tier 1 ratio of 10.1%. We are well-positioned to continue to invest in, and grow the Bank organically, and we have the balance sheet strength to selectively pursue acquisitions. We are also well-positioned to return capital to our shareholders. We have raised the quarterly dividend per share to $0.72, a 6% increase from a year ago. We are proud of our track record of delivering sustainable earnings, which allows us to consistently increase dividends for our shareholders. Before I turn it over to Sean to discuss this quarter’s results in more detail, I wanted to update our shareholders on the important steps we are taking to build an even better bank. As we have said consistently, we are focused on creating value for our shareholders, which by definition, requires we take a longer term view. To that end, in my letter to our shareholders this year, I laid out Scotiabank’s forward-looking strategic agenda. We made good progress advancing all of our priorities. But today, I want to update you on the progress we’re making in two of those areas. The first is our digital transformation. At Scotiabank, we have made great progress towards digitizing the Bank and building digital solutions to give our customers the best experience…

Thanks, Brian and good morning. I will begin on slide seven which shows our key financial performance metrics for the current quarter and comparative periods. As Brian mentioned, Q1 diluted earnings per share were $1.43, up 6% year-over-year. Revenue growth was very good, up 9% Q1 ‘15 with solid asset growth in Canadian Banking and International Banking. Revenues are positively impacted by foreign currency translation, higher fee income and trading revenues, as well as higher wealth management and insurance revenues as well as contributions from acquisitions. Partially offsetting this growth was lower net gains on investment securities, and lower underwriting and advisory fees. Our core banking margin was 2.38%, down 3 basis points year-over-year, driven by the low interest rate environment and asset mix changes with higher levels of liquid assets, partly offset by higher margins in Canadian banking. Expenses are up 12% year-over-year. Excluding the impact of acquisitions and negative impact of foreign currency translation, expenses were up 5%. The increase was primarily due to higher technology related expenses as the Bank continues to invest in its business. As well, business taxes were higher. Moving to capital on slide eight. As Brian mentioned, the Bank continues to have a strong sales position, the Common Equity Tier 1 ratio of 10.1%. During the quarter, the Bank generated net internal capital of $900 million. The Bank increased its quarterly dividend by 6% from year ago levels to $0.72 per share. The Bank’s Common Equity Tier 1 ratio declined from 10.3% to 10.1%, primarily due to higher capital charge for pension and the impact of acquisitions. Net capital generation was consumed by organic risk weighted asset growth and other capital deductions. Common Equity Tier 1 risk weighted assets increased $16 billion to $374 billion from Q4 ‘15. Adjusting for the impact of…

Thanks, John. The underlying fundamentals of the Bank’s risk portfolios remained stable this quarter. Our all bank loss ratio was 45 basis points, up 3 basis points quarter-over-quarter on an adjusted basis and up 3 basis points year-over-year. These levels remain well within our expectations. Before discussing the current credit metrics, I’d like to give you an update of our retail, corporate and commercial credit portfolios. In Canada, our retail delinquency rates and overall retail credit quality remained stable albeit we are seeing some regional weakness in Alberta. For context, Alberta represents 15% of our total Canadian loan book with the bulk of our exposure being well secured and 59% of those mortgages are insured. Our unsecured retail loans in the province are approximately $2.5 billion less than 1% of our total Canadian retail portfolio. In terms of customer activity in the region, we have not seen any unusual or unexpected growth in either secured or unsecured revolving credit. Turning to International, the retail credit performance leading indicators also remained stable. We operate a diverse number of portfolios across different geographies and some books are performing better than others but overall in excellent shape. We’ve made investments in our retail collection capabilities, which have strengthened our overall lending business and the credit performance in both Canada and International. Looking at our corporate and commercial loan books, the overall credit quality continues to be solid. This is evidenced by the size of the all bank watch list, which is basically unchanged from last quarter, as weakness in energy has been offset by improvements in other areas of the portfolio. The higher formations in the quarter reflected the classification of a small number of energy related accounts, specifically in the E&P and oilfield services sector, which we took provisions against as well…

Thanks Stephen. Before we open the call for questions, I’d like to comment briefly on each business line’s performance over the quarter and make some brief remarks on the outlook. As we noted earlier, Canadian Banking had a strong quarter. Our continued focus on deepening customer relationships and improving our business mix is hitting the bottom line with earnings up 7% year-over-year. These efforts resulted in strong volume growth in targeted areas, notably retail and commercial loans and deposits, and a more profitable business mix. Together with a recent credit card portfolio acquisition, these factors help to drive continued improvement in the net interest margin again this quarter. Over the course of 2016, we expect the continued shift in business mix to benefit asset yields and improve risk-adjusted margin. Our Canadian wealth management businesses also performed well with results up 4% year-over-year, notwithstanding a challenging market backdrop. After several strong quarters of double-digit growth, we are likely to experience more moderate growth for the balance of 2016. Commercial banking results were solid with double-digit asset growth supported by strong growth in deposits. And while the expense level in Q1 was elevated, as we continued to invest in improving our customer experience and drive operational efficiencies, our higher than peer revenue growth in this segment affords us the ability to make the necessary strategic internal investments while still delivering good bottom line results. Looking ahead, despite imbalances in regional performances across Canada, we continue to see good opportunities to grow Canadian Banking over the course of 2016. Turning to International Banking, as Sean noted, we delivered another quarter of earnings and we’re off to a good start in 2016. The strong results were delivered in large part by robust loan, deposit and fee growth from the Pacific Alliance countries of Mexico,…

Thanks, Brian. That concludes our prepared remarks. We’ll now be pleased to take your questions. Please limit yourself to one question and then rejoin the queue to allow everyone the opportunity to participate in the call. Operator, can we have the first question on the phone, please?

Your first question comes from the line of Robert Sedran with CIBC. Please go ahead.

Hi, good morning. I just wanted to ask James about some of the personal loan growth that we’ve been seeing. It is -- continues to outpace the industry. I wonder if you can just give us a sense of the sort of geographic breakdown. I mean, is it basically market weighs [ph] the country or is there a specific region in which you’re surging? And then, if you could also contrast that with the mortgage growth, even ex-Tangerine it seems like it’s a little bit below where the market is and wondering if that’s conscious decisions or if it’s a competitive response? James O’Sullivan: Sure. Thanks, Rob. I would say in terms of asset growth, we’re very much executing our plan. Our plan, as you know, includes delivering an improved customer experience, changing our business mix to deliver a higher margin including a higher risk adjusted margin, and finally, driving operational improvements which should result -- will result in an improved productivity ratio over time. So, we have been very much focused in terms of business mix and in terms of the asset side of the balance sheet. We’ve been determined to grow cards as part of our payment strategy, auto, as well as commercial. And if you look at those three asset classes in particular, Rob, cards are up 41% year-over-year that would be 15% ex Chase; auto is up 15%; commercial is up 11%. In terms of to give you sort of a regional perspective on it, I would say, and I think commercial is very good example of this, the business is very much being driven by B.C. and Ontario. And we’re fortunate of course that B.C. and Ontario represent in excess of 50% of this country’s GDP. So strength in those two regions, I think continues to bode well in terms of growing that business. Otherwise, I would say in terms of cards and auto, I wouldn’t point to any regional variances in particular other than in respect of cards and auto, we are increasingly focused on quality; it’s not just about quantity. And so, we have tightened up our credit in certain markets including those regions that are impacted by low oil prices, so perhaps a bit of a bias away from Alberta and a couple of other areas. Let me speak briefly to mortgages. What I would say on mortgages is that we’re very satisfied with our position in the market. We’re number three in the market. We have low single-digit growth in balances and we have modest margin expansion year-over-year. And I would say that’s not just an outcome; it’s very much a choice. We’ve been thoughtful and we’ve been deliberate about which asset classes we want to grow and at what pace. And we’re satisfied with our position in mortgages. Currently, as you know, it’s an intensely competitive business. And I would say on the variable rate side of the business, margins in particular are very, very compressed.

So, these trends in mortgages you’d expect to continue then? James O’Sullivan: Absolutely, low single-digit growth in mortgages is very much our plan.

Your next question will come from the line of Meny Grauman with Cormark Securities. Please go ahead.

Just to follow up on Rob, wondering if you could give us some numbers in terms of what kind of asset growth you’re seeing in Alberta specifically, specifically in the autos and the credit cards? Is that something you can share? James O’Sullivan: I think our auto book in Alberta would be declining, it’s not increasing. Again that’s a choice, it’s not just an outcome. I don’t have the numbers for cards. Stephen, do you have a perspective on that?

I don’t have a trend line. As I indicated, the unsecured lines which include cards is about $2.5 billion. That number really hasn’t moved over the last quarter.

And then, specifically in the auto book in the oil affected regions, there was another bank that talked about some of the credit issues emerging in that book specifically. Wondering if you could talk to that, in terms of what you’re seeing specifically in that portfolio? James O’Sullivan: Yes, I’d be happy to. Let me make a few comments on auto. First, I want to reiterate that we very much like this business, overall. It’s important to our customers; it’s a major item that they purchase frequently; and we’ve been doing this for a very long time and believe we’re good at it. So, we have contracts currently with nine of the OEMs, six of them are exclusive. I think it’s important to point out that our primary focus -- our primary focus is on new cards and sometimes on arrangements. And we view that as actually quite risk mitigating over a cycle compared to other types of lending you might do here. So, the business has performed well. If we look at it currently, I would say it’s performing within our expectations. But clearly, it’s impacted by both, intense competition and indirect energy impacts. And as a result, we are seeing margins compressing and we’re seeing PCLs increasing. So, we’re focusing -- refocusing this business really on two things. So, the first is risk adjusted margins, and the second is cross-sell. So, the team, as we speak, they’re busy on pricing; they’re busy on the quality of bookings; and they’re actually launching pilots, which I think are quite important to really test our ability to cross-sell and deepen the client relationship.

And then just if I can ask another question on the international business, you talked about the shift in business mix impacting the margin. I am wondering, if you see any need to mitigate some of that or do you have the need or do you have the ability to mitigate some of that change in business mix, in Latin America?

Meny, it’s Stephen here. The modest decline is something that’s well within our range of expectations. And we see the margin strengthening over the next couple of quarter as central bank rate increases and re-price to the asset and liabilities. So, we certainly believe this is manageable. And as you can see, we’ve earned through the margin with significant volumes and our expense growth to more than offset.

Your next question comes from the line of Gabriel Dechaine with Canaccord Genuity. Please go ahead.

Couple of questions for Steve or James. You talked about the in-quarter impact of credit downgrades on your core Tier 1 ratio. Could you tie in the stressed scenario, what that would mean to our CET1 from all the downgrade that you anticipate? Then, you talked also about the unsecured lending exposure in Alberta of 2.5, what about the auto portfolio? I might have missed that?

Thanks Gabriel. As it relates to our stress test, we expect over the two-year period that the movement could be up to a maximum of 30 basis points to the day one ratio, as I said that would spread out over the two years, as the losses came in and as we continue to downgrade. It’s not really the losses; it’s the downgrade of the portfolio that affects it more than anything else. As it relates to the credit cards, actually in Alberta, as I said between cards and unsecured lines, it’s 2.5; in the auto side, it’s running about a little over 4, 4.2 billion and as we indicated before that kind of flat lining at the moment. And as noted, you didn’t note it earlier but I have in previous calls, we set up about six to nine months ago and enhanced collections teams specifically on the autos as well as one for the cards. So, we’ve been on top of this for some time and that’s really helping to improve our returns at the end.

In that stressed scenario, what are you looking at loss rates, are you baking into those portfolios, and the corporate… James O’Sullivan: The individual energy portfolio, if you take a look at our current five-quarter run rate for energy, we’re probably around 78% basis points now that we’ve experienced cumulatively and we expect that to go up. But historically, if you look back the maximum, it’s been about 200 basis points in 2000 and 2001; we’re expecting something a little higher than that in that particular industry. But, as we mentioned on the call, the 45 basis points, all-bank could go up 5 to 10 basis points.

Yes, on all revenue basis.

I understand that. And, how about the consumer stuff?

The consumer stuff? That’s part of 550. [Multiple Speakers]

No. But like the numbers you gave on the energy, are the 78 going up to 200 kind of thing. Maybe, I’ll follow offline. I just want to think anyone -- one more though. Spring is around the corner, it felt like at this week and anyway, the redetermination process. Can you give us some sense of what your -- what’s in the cards there? The credit line is being cut by x percent kind of thing and what other adjustments you might be contemplating with your borrowers?

Sure. Well, we’re having, obviously from the last credit redetermination, as we indicted, about 50% of our lines decrease, 50% held. The lines that decrease last fall were probably down about 20%. We’ve recast obviously the price decks, based upon the current scenarios. And they’ll come into effect in the next month and a half, two months sort of thing. So, we would expect at least a like reduction in lines.

Probably, not a 50-50 split though?

It will vary; really depends -- and what we found is quite frankly a lot of our clients have been resilient in continuing production, while their CapEx may be slowing. The production actually of the North American fields is almost up from what it was last year.

Your next question comes from line of Steve Theriault with Bank of America Merrill Lynch. Please go ahead.

Thanks very much. Just, first a couple of follow-ups for Stephen. First, on capital, looking at the regulatory capital supplement; there is about a $3 billion decline in RWA from methodology and policy changes. Can you just outline that a bit for us?

I’ll take that. There is just -- we have ongoing refinements or models, and this is just one model that’s on the corporate lending side that’s reduced some of the risk rates.

Corporate lending, across a broad variety of factors.

Yes, across the whole corporate lending book. Yes.

Okay. And then, just going back to oil and gas for a second. Stephen, in your prepared remarks, I think it was you talked about 5% of the portfolio being on the watch list. Wondering in your stress test, what percent does that go up to in terms of percent of the oil book on the watch list?

We didn’t actually key on the percentage to be honest, because you’re working on the aggregate down. We basically took most of the watch list in the stress test and moved everything down at least three grades.

Okay.

So, I don’t have that number right on hand, I can get it for you.

Okay. I may follow-up. And then just lastly, turning to the JP Morgan deal; just a little detail there. I saw in the notes there is $230 million credit mark, used about $40 million in the quarter. I think it was $39 million. Is that how we should think about the normalized credit losses on the book? It seems a bit high at 9% if I take that $39 million annualized over the whole portfolio. So, maybe just a little detail around what you expect on the credit side there. And in a couple of years, does that grow or is part of that going to run off, maybe just give us a sense for how that -- how you project that over the next little while?

I’ll speak to the credit mark. We expect that remaining credit mark over $230 million to be run off about 50% this year and about 20% in ‘17 and to continue as into ‘18 and ‘19 at a similar 15% to 20% rate. In terms of the actual card portfolio, James, do you want to give any color on that? James O’Sullivan: Yes, maybe just a couple of thoughts. We’re very pleased to welcome to Jake cards team aboard. We’ve got customers; we’ve got card balances; we’ve got a great platform and we’ve got some good technology. So, we’ve got in excess of 2 million active customers there, about $1.7 billion of receivables and 600 employees, importantly with expertise and fraud, collections, recovery and customer service. So, so far, we’ve received over 500,000 new Scotiabank momentum MasterCard have been activated today; we’re very, very please with that. The portfolio, as you pointed out, is runoff in nature. So, in Q1, we earned $15 million. It will stabilize at a lower level. My expectation is that stabilization will occur late 2017, maybe early 2018 and for a number, maybe it’ll stabilize in the $10 million a quarter kind of range. But so far, we’re very pleased with the acquisition and happy to welcome that new team and those customers aboard.

Your next question will come from the line of Peter Routledge with National Bank Financial. Please go ahead.

Thanks. Questions for Steve. Thanks for your comments on being subordinate -- or having debt subordinate to your position in your oil and gas loans. But, how does that subordination impact your assessment of loss given default and probability of default?

Well, obviously the probability of default is based on the total debt.

So, it goes up presumably…

The probability of default will be -- it will be based on total leverage, our actual loss given default will be based on our senior leverage, which, as I indicated is significantly less in those cases. So that’s why you can’t expect that we will be having formations and restructurings going forward over this next quarter, as this plays out. However, we think these restructurings will end up with most of the banks as the senior level coming through.

So, the worst senior loan recovery rate over the last 25 years according to Moody’s is about 50%. What are your expectations relative to that admittedly stressed given default?

And that 50% is based on default -- secured and unsecured?

Yes.

That’s not the -- and I would agree that historically our unsecured lines probably run average in that 40% to 50% range. However that’s not what we’ve experienced when we’ve been in a secured reserve based environment; it’s been substantially lower than that. However to be honest, to be open on the stress test, we do assume a higher loss rate than we have historically.

And then on your undrawn commitments on page 16 of $14.1 billion, what are your assumptions on how much of that gets drawn in advance of default; so, what are your -- exposure at default assumptions, in other words?

Exposure default, we usually take for the non-investment grade portion of it. We assume at least 75% gets drawn -- sorry, 50% gets drawn and for the investment grade, we assume 75% gets drawn.

And then one other just question on the whole oil and gas portfolio. Every now and again, we see a going concern oil and gas company issue a press release and say we got covenant relief. And sometimes your peers are involved in that press release, sometimes it’s Scotiabank. Some folks will argue that is the sign that the banking question is extending and pretending and there’re big losses coming down the pike. What would be your response to that argument?

I think that’s why I opened it up in remarks right at the beginning. So, I am happy we can discuss it offline but I think we all know that whatever we do, we do for the benefit of the Bank and our shareholders.

And so that -- those actions you’re taking with a mind to limiting losses?

I am taking the mind to strengthen my position, yes.

And then how common is there is a deal, in press release from last January where you did have covenant release but you also lowered the commitment by 25%. Is that basically the quid pro quo with these clients who are maybe struggling through difficult period, covenant relief or dropping your commitment?

As I indicated in my remarks, we’ll use it to reduce the amount, to shorten the term, to improve the security. In a rare case -- pricing isn’t where I am looking forward at that point; I’ll take it if I get it. So, I am looking to improve my secured position.

Your next question comes from the line of Mario Mendonca with TD Securities. Please go ahead.

First, a question for Mike Durland. The growth of the corporate book has been very strong. And I think Sean, you gave us an idea that it was about 10% growth year-over-year excluding FX. You also said that it was Canada, U.S. and Europe. What I am trying to understand is why is it that for Scotia and frankly all of the Canadian banks, the corporate loan growth has been so good? Are there particular sectors you can point to, of course excluding FX, any particular sectors or why has it suddenly been so strong given the de-emphasis on corporate lending, say only just a few years ago?

Yes. So, I would say a couple of things: One, I would say for Scotia, our loan growth is a little bit of a catch up. I think that we had slower loan growth for a period of time in that business. So, we’ve been focused on reengaging with relationships that we’ve had for a long-long time, uptiering ourselves with those relationships. And that has reduced a very strong growth trajectory which we’re very pleased about. In terms of the sectors, it’s very broad based. One of the sectors that we’re doing very well in is the infrastructure sector. We have a very strong platform in that business across the banks, domestic and international platforms. So that’s something that we’re quite pleased with. But, it’s been very broad. And I would articulate it as delivering the bank to a customer and very rich focused on relationships that have long-long time and really working hard to uptier ourselves with those relationships.

And Mike, why do you figure that Bank is sort of reengaging itself with these old relationships?

Why do I think we are?

Yes, because you had it for a while and now you are again. So, something’s changed that’s made you want to reengage with these relationships?

Well, I think we looked at our strategy couple of years ago, Brian and I sat down and looked at it. We thought that we had leveled out in terms of our relevance to some of our important relationships. We have a big bank, a strong bank, a great reputation, great brand in the market. And we have a strong cross-sell capability and we thought that that part of the business lagged the growth of our cross-sell capability and presented an opportunity for us. So, we have been very focused on engaging in conversations, presenting to our customers the strength of our platform. And that conversation has been extremely positively received. It will take time, it’s taking time. We started this a couple of years ago; really the results are just starting to appear now. But, there is good momentum but it’s high quality momentum. And we’re not talking about going from the eighth bank to the first bank. We’re just talking about slowly deepening those relationships, demonstrating our capability, earning the trust. And I think it’s very important strategic imperative. And I know that Dieter and others will continue to focus on it.

Could we go to Stephen again? On the -- all your comments around subordination and where Scotia and the banks are in the capital structure and especially your comments on the covenant relief were important to me and admittedly somewhat eye-opening as well. Like I thought, I was learning something from this. Let me ask one other relation question about the covenant relief. We all know that it happens, what would be helpful to understand is how pervasive. You called in frequent. Is that -- would it be fair to say that it’s a less than 5% of the portfolio at this time or perhaps less than 10% of the portfolio?

So, I would say on the aggregate, all bank portfolio that’s probably the right number. Obviously as we’re growing through with the energy sector and they are having difficulties, you would expect in this current environment, it would be a higher percentage. And you’ve got to understand, I mean we’re looking at a number of different financial ratios, which are set up under different circumstances. So, financial covenants are set to trip well before the company defaults. That’s the whole point of the early warning system. So just because someone trips the covenant doesn’t necessarily mean they’re seconds away from default; it means obviously their business model isn’t quite doing what they thought it was going to do when we originally went into the loan. And so we have to sit down and readdress to see what their business model creates out now.

So, it would be infrequent as it relates to the entire book of loans, Scotia’s entire book, but it would be frequent as it relates to the oil and gas sector. Is that fair?

I would say that obviously at this point in the cycle, we’re spending more time negotiating with all our clients in your energy sector. Yes.

Your next question will come from the line of Doug Young with Desjardins Capital Markets. Please go ahead.

Just a few -- just want to kind of go back to a few things; I guess Dieter, on the International side on the NIM, you say you anticipated to increase as you move through fiscal ‘16. Is the 455 to 475, kind of range that you’ve given before, is that still relevant or is that range changed in your view?

That’s a medium-term target. We’re going to see the next few quarters, see our [indiscernible] re-priced to the central bank rate increases that we saw in Mexico and Peru. That’s going to take some time. And so we’ll anticipate, we’ll move the margin up over the next foreseeable quarters.

So, when you say medium-term, are you thinking it’s going to move back towards that range, but probably not in...

Yes, Q3, Q4.

Q3, Q4?

I would add on this and I emphasize as the teams have continued to earn through the margin, I mean good volume watching their costs, they’re running very good banks and we’re returning good value to shareholders in terms of net income increases. So, we’re running through what I would say a very modest margin compression, which is less than 2% of the overall number.

Yes. And I just, Dieter, I think you mentioned credit migration had an impact on CET1 ratio and on the PCL ratio, and I apologize I missed those. Can you repeat what those were?

That’s 5 basis points on the Common Equity Tier 1 ratio this quarter. And in terms of -- sorry, was that just on provision for credit loss?

Yes. Was there an impact on migration there?

No, not really. We’ve got some higher specific provisions, but that’s not really so much migration. We had accounts for ultimately from watch list into impaired loans, but that’s how to think that from a provision standpoint.

Okay. And then just lastly Brian, your credit remarks, you said you’ve got strong balance sheet to selectively pursue acquisitions. You’re sitting at 10.1% CET1 ratio. Just trying to kind of think about those two points and where you want a run from a CET1 perspective? Thank you.

Yes. I’ve been asked that question a number of times and I’d answer it the same way as, we could dip a little bit below 10 for something that’s on strategy that looks attractive. But, we’re doing a lot of work around here in terms of RWA and describing our RWA that’s a continuous process. We had 15 basis points against our capital this quarter on the pension plan. We would expect this market to normalize to normalize a bit here, which expect them to do their own add back. So, in terms of acquisitions, we continue to monitor the marketplace. And if we do anything, it would be likely done purchasing the Citibank assets in Peru, Costa Rica, Panama; I would view them as tuck-ins, incremental acquisitions, nothing transformational.

Your next question will come from the line of Sohrab Movahedi with BMO Capital Markets. Please go ahead.

Actually two parts of the last question. One, Brian, you were very clear about the transformation the Bank has been going through. You’ve talked about the investments you’re making from an investment -- from a technology perspective. I wonder if you could comment as to whether or not the current quarter expenses for example would be reflective of the type of run rate expenses you would be willing to run at balance of here, as we make that transformation.

In terms of just expenses, what you’ve seen this quarter would be a little higher than what we’d expect, in the norm you will see -- we’ve had a lot of expenses with some technology initiatives from a regulatory standpoint. We would expect those to start to burn off in the balance of 2016. And candidly, as I said in my comments, there is a couple technology initiatives that were customer focused that we wanted to move ahead in 2016, regardless of economic condition. And we’ve gone ahead done those. And as I’ve said in my comments, we’re running through them with strong asset growth in the Canadian bank. So, expense levels will tend to moderate a bit from here.

And any updates on the Thanachart file?

Nothing that I can comment on.

Thank you. I’ll just turn over to Brian for some very brief closing remarks.

Thank you all for your participation today. Before we close, I’d like to take the opportunity to recognize Mike Durland for joining us on his last call this morning. Mike has been with the Bank for 20 years and has been a key member of our team here at Scotiabank. And Mike has lots to be proud of in terms of his contribution to the capital markets business and the Bank overall. And I think that on behalf of the team, Mike, you represent the best of Scotiabank’s culture in terms of being a community leader and philanthropist, you’ve served the Bank exceedingly well. And on behalf of the team here and we want to wish you and Katherine continued success and good fortune.

Thank you very much for participating. We look forward to talking to you next quarter.

Ladies and gentlemen, this concludes today’s call. Thank you for your participation. You may now disconnect.