Karen E. McCarthy - Director of Investor Relations Gordon M. Nixon - Chief Executive Officer, President and Not Independent Director Morten N. Friis - Member of Advisory Board Janice R. Fukakusa - Chief Administrative Officer and Chief Financial Officer David I. McKay - Group Head of Personal & Commercial Banking M. George Lewis - Group Head Mark A. Standish - Co-Group Head of Capital Markets and Investor & Treasury Services Doug Guzman - Managing Director and Head of Global Investment Banking

John Aiken - Barclays Capital, Research Division Robert Sedran - CIBC World Markets Inc., Research Division Peter D. Routledge - National Bank Financial, Inc., Research Division John Reucassel - BMO Capital Markets Canada Michael Goldberg - Desjardins Securities Inc., Research Division Stefan R. Nedialkov - Citigroup Inc, Research Division Mario Mendonca - Canaccord Genuity, Research Division Gabriel Dechaine - Crédit Suisse AG, Research Division Sumit Malhotra - Macquarie Research

Good morning, ladies and gentlemen, welcome to the RBC 2013 Second Quarter Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the meeting over to Ms. Karen McCarthy, Director of Investor Relations. Please go ahead, Ms. McCarthy.

Good morning, and thank you for joining us. Presenting to you this morning are Gord Nixon, President and CEO; Morten Friis, Chief Risk Officer; and Janice Fukakusa, Chief Administrative Officer and CFO. Following their comments, we will open the call for questions from analysts. The call is 1 hour long and will end at 9:30 a.m. [Operator Instructions] Joining us for your questions are George Lewis, Group Head, Wealth Management and Insurance; Doug McGregor, Chairman and co-CEO, Capital Markets and co-Head of Investor and Treasury Services; Dave McKay, Group Head, Personal and Commercial Banking; Mark Standish, President and co-CEO, Capital Markets and co-Head of Investor and Treasury Services; and Zabeen Hirji, Chief Human Resources Officer. As noted on Slide 2, our comments may contain forward-looking statements, which will involve applying assumptions and have inherent risks and uncertainties. Actual results could differ materially from these statements. I will now turn the call over to Gord Nixon.

Thank you, Karen, and good morning, everyone. I'm pleased to announce that RBC earned $1.9 billion in the second quarter, up 26% from last year. Excluding certain items pertaining to our acquisition and the integration of RBC Investor Services, which Janice will expand on in her remarks, our earnings were approximately $2 billion, up 13% from last year, and excluding amortization of intangibles, earnings per share were $1.31. We had solid earnings growth compared to last year across all of our business segments with Canadian Banking and our corporate and investment banking and asset management businesses being particularly strong, but I would emphasize that all of our businesses were up. Year to date, RBC earned -- has earned just over $4 billion, delivering return on equity of 19.1%. Our all-in common Tier 1 equity remained strong at 9.1%, and that's notwithstanding the 45-basis-point reduction as a result of Ally. That strong ratio gives us flexibility in deploying our capital as we strive for the optimal balance between investing in our businesses for longer-term growth and returning capital to our shareholders through dividends and share buybacks, which we started this past quarter and as well as pursuing acquisitions like Ally. The strength and complementary nature of our diversified business continues to contribute to our earning power. Even as the Canadian Banking industry is facing slower growth, we remain confident in our ability to successfully execute on our strategy, extend our leadership position and invest for long-term growth. In fact, during the quarter, we were recognized by Bloomberg in their annual list of the world's strongest banks. RBC was ranked the fourth strongest bank in the world, up 2 spots from last year. Let me now turn to our business segments. Personal & Commercial Banking had a strong quarter with earnings of…

Thank you, Gord. Starting with credit on Slide 7. Overall credit quality improved compared to the prior year and prior quarter. Provisions for credit losses on impaired loans were $288 million this quarter, down $61 million over last quarter or 6 basis points to 29 basis points. The main driver of this decrease was lower provisions in Capital Markets where provisions were $40 million or 31 basis points, down $6 to $9 million compared to the prior quarter. Provisions this quarter related to a couple of accounts within the technology and media sector. Loan loss provisions within our wholesale portfolio should be expected to show some degree of variability from period to period with this quarter's provisions falling at the better end of the range. Overall, we remain comfortable with the quality of the wholesale loan book. With respect to Canadian Banking, provisions were $234 million, up $21 million over last quarter or 3 basis points to 29 basis points. We continue to see stable performance in our retail portfolios, with provisions on residential mortgages of 2 basis points and 279 basis points for cards. Provisions on our commercial portfolio were up slightly this quarter at 33 basis points. Overall provisions of 29 basis points in our Canadian Banking portfolio remain near historic lows, reflecting very strong credit performance across all products. In the Caribbean, provisions on impaired loans were $19 million, down from the prior quarter, which we believe represents the sustainable level of loan losses for this portfolio. Conditions on the Caribbean remain challenging, and achieving ongoing stability and asset quality will depend on improving economic conditions in the region. With respect to gross impaired loans, new formations increased slightly over last quarter but remain within our historical range. Turning to market risk. Value-at-risk was $42 million and average stressed VaR was $84 million, both in similar levels to last quarter. During the period, we had 3 days with net trading losses, totaling $5 million, none of which exceeded market VaR with the largest loss of $2 million driven by RBC's credit spread tightening. With that, I'll turn the presentation over to Janice.

Thanks, Morten, and good morning. Turning to Slide 10. We had a strong second quarter with earnings of approximately $1.9 billion. Excluding the restructuring charge in the current period related to the integration of Investor Services and the loss in the prior year related to the acquisition of the remaining 50% interest in that business, earnings were close to $2 billion, up 13% over last year. Overall, it was a clean quarter, and as Gord mentioned, we had solid earnings growth in each of our business segments with particular strength in Canadian Banking, as well as our corporate and investment banking and asset management businesses. Turning to capital, our capital discussion on Slide 11. As you know, RBC, along with 5 other big Canadian banks, was designated a domestic systemically important bank by OSFI. As a result, we're required to maintain 100-basis-point capital buffer on top of the Basel III minimum common equity Tier 1 ratio of 7% by 2016. At 9.1%, our common equity Tier 1 ratio remains comfortably above the 8% combined requirement. Our Ally acquisition, which closed February 1, negatively impacted our ratio by 45 basis points. As well, we began repurchasing shares this quarter under our normal course issuer bid. Turning to the performance of our business segments, starting on Slide 12. Personal & Commercial Banking earned over $1 billion for the fourth consecutive quarter, up $117 million or 12% from last year, reflecting 9% volume growth in Canadian Banking, with growth across all of our businesses and particular strength in personal lending. Net income decreased $63 million or 6% sequentially, largely due to the negative impact of seasonal factors, including fewer days in the quarter. Turning to our Canadian business. Margins in Canadian Banking were down 5 basis points from last quarter due to lower…

[Operator Instructions] The first question is from John Aiken of Barclays.

Janice, a couple of quick questions on the Personal & Commercial margins. Can you give us a little more context about the accounting volatility that you mentioned? And in the Caribbean, can you give us some flavor as to what's going on with the margin compression there? It looks to be a little -- fairly significant in this quarter. And should we look at that in context with the improving provision for credit losses coming out of the region?

I'll first address the margins in Canadian Banking. The accounting volatility that we're talking about is on cash flow hedging. And it's basically with respect to our mortgage book. It is basis risk that we were exposed to, and going forward, we don't see that happening. So it was a onetime adjustment that we have. When you look at the issue with respect to Ally, it is about the deposits and some of the high cost deposits and the wind down of that business. So when you look at what we're looking at in terms of margin compression, we've always signaled that there would be around a 2-basis-point compression as we went through the year because of what was happening with interest rates. So I think that we are on where we thought we would be with respect to the margins.

John, it's, Dave, on the Caribbean, you're seeing a similar core impact on the lower rate environment in the Caribbean with the struggling economies and the interest rate environment and the rollover of our loans into lower yielding -- lower yields in general. So a very similar type of impact in the Caribbean right now.

Dave, in the Caribbean though, are you -- when you're rolling over those loans, as we're seeing the provisions decline, are you moving back on the risk? Or is this purely just the environment in terms of low risk environment and what you actually can charge in the region?

That's a great question. I would say yes, we are moving back on the risk as we've cleaned up our book and taken charges over the last 4 to 6 quarters as you've seen. Certainly, our risk appetite is one of caution on the commercial side given the challenges in the economies right now.

The next question is from Robert Sedran of CIBC.

I guess it's question for Morten. We've seen credit card loss rates at some of your competitors this quarter actually come down albeit from higher levels, and I'm wondering if the increase in your credit card loss rate this quarter is just related to seasonality. And perhaps if you can, what your thoughts are about the direction of these loss rates overall. Are we basically at trough levels and are just going to bounce around a little bit? Or is there some kind of trends still taking place?

I'll start and Dave may want to fill in. There is a seasonal feature to this, but I guess from a risk management perspective, I would say that having the cards portfolio perform at loss rates below 300 basis points is a good place to be in this part of the cycle. And I would say -- so seeing the levels, the 279 basis points, while it's up a bit from last quarter, it still reflects very strong performance. And I would not -- I would see it bouncing around at those levels if the economic conditions remain where they are.

All I would add is that we have very strong origination growth. So normally, cards exhibit a little bit higher rate their first year they're on the books, that first year advantage. So a little bit of the strong acquisition trend we're on. But as Morten said, the absolute rates of the card portfolio given the yields are in the 11%, 12% is a very, very profitable place to be. So no concerns there whatsoever.

The next question is from Peter Routledge of National Bank Financial.

A quick question for starters on Page 22. You gave the average LTV of 47%. I'll make an assumption that, that is an average LTV weighted by property value. And one of your peers disclosed the LTV if it was weighted by mortgage balance. And it's quite a bit higher when you weight it by mortgage balance at least for one of your peers. Would it be 5 to 10 percentage points higher if you weight it by mortgage balance?

Yes. Peter, it's Janice speaking. We'll have to go back and confirm that particular metric. We'll try to get some information during the call, so why don't we get back to you on that.

No problem. And just on mortgages, there's been a lot of rhetoric about put-back risk in some corners, and the risk being there would be systemic put-backs by CMHC to the banks, and therefore, you'd have higher mortgage losses than historic norms. And the trigger often cited is just faulty appraisals. Is there any reason to think that there is a systemic issue with appraisals that might redound on the banks in the form of the CMHC refusing claims? I mean, do you -- how likely an outcome is that?

Well, one, most of the banks, including ourselves, use the Emily appraisal service, which is CMHC's own appraisal as they would do their own due diligence with Emily. So I don't think it will be the nature of the appraisal service. I think where operational risk evolves is the representation of the facts. So if they were to go back to the loan application and find that the facts on income or on rental versus costs -- other costs are different than what was presented during the adjudication process, then I think you have technically an opportunity to negate the claim. But I don't think it's just on how you use appraisal. It's really the adjudication process that would create most of the operating risk, which is why our bank include -- I'm assuming most others are very careful about our facts that are being submitted and how we put those applications together.

And just on...

I would just reiterate, I think that in summary, that the likelihood of that is almost nonexistent.

And just to clarify, the Emily system, that's a technology service that CMHC generates revenue from, right?

Right, right. But I would assume they use for their own appraisals. They make their own adjudication decisions themselves.

But just -- Peter, it's Morten. Just in terms of the use of Emily, I mean, it is one of several tools that we use, and depending on the property we have, full appraisal or -- that we -- so Emily is a supplemental tool that we use in the appraisal process. I mean, to reiterate Dave's point, the risk around refusal on the insurance all relates to the accuracy of the documentation that we provide. We have ongoing audits and reviews with CMHC, and our track record with them is extremely strong. So the point on the risk of put-back here, first of all, would be completely inconsistent with our historical experience with them. And as Gord is saying, I think it's an extreme tail risk where they, obviously, as an insurer, have some ability to dispute claims. But I think our track record on accurate documentation is pretty strong.

The next question is from John Reucassel of BMO Capital Markets.

A question for Mark just on trading. Gord mentioned that trading has picked up since quarter end. Could you just give us some flavor on is that because volatilities picked up? Were you missing some of your client flow or is client flow picking up? And then just on the regulatory issues in Europe, do you expect Europe to respond to kind of the U.S. has imposed stricter rules on foreign subs? If so, is it prudent to expect that? If not, why not? And how does that impact Royal's European business there?

John, I'll handle the market question first. I'd refer you to Page 33 of the report to shareholders where you can see the revenue and VaR chart and you can see that the second half of the quarter was very quiet indeed. As we mentioned, Europe was extremely quiet. We basically didn't make any money there, but also, the rates business in the U.S. was also quite quiet. One of the reasons for that is we had the U.S. tenure down at 1.63%. And when down, there was very little secondary activity. On the positive side, however, we did see very good debt capital markets, DCM, activity. Corporate bond issuance in the U.S. now accounts for about 45% of our global DCM revenue. 2 years ago, it would have been 25%. Now what's different with that than usual is at such low rates, we were advising clients to issue fixed debt and not to swap back to floating. So we didn't get that additional secondary -- a lot of that additional secondary flow activity that we would normally see. Now coming into May, as Gord mentioned, we've had a pickup in volatility in rates. We've had a 60-basis-point increase in tenure U.S. governments. We've had a lot of volatility in other markets, Japan in particular. So we're now we've seen certainly a pickup in secondary flow. Other products performed quite well through the quarter. Foreign exchange, credit and municipal products performed quite well. And I think as Gord said, May is off to a fairly strong start. In terms of the European question?

Yes, I mean, it's hard to know which is the chicken and which is the egg. I mean, the U.K. was the first to introduce Vickers, which was their form of ring fencing, and obviously now with the potential legislation with respect to FBO in the United States, you're seeing some of that, obviously, in the U.S. I think from our perspective, we would be more focused on how the U.S. is going to unfold rather than U.K. I don't think it will have much of an impact or much change with respect to the U.K. and certainly the nature of our operations in the U.K. because it's primarily Capital Markets and Wealth Management. So to answer your question specifically with respect to U.K., we don't think it will have much of an impact, but we're obviously watching the U.S. very closely in terms of how the rules may unfold with respect to subsidiary regulation in the United States. And we're quite comfortable in terms of our ability to manage that, as we've said in past quarters, but it will obviously have an impact on structure.

But John, it is definitely weighing on activity levels in Europe, all of these regulatory uncertainty, and now you can add to that given the results in the U.K. and the strength of UKIP, with respect to exiting Europe for the U.K. that added uncertainty and that it's -- that the market has to deal with. And it's probably not going to improve much in the short term either.

The next question is from Michael Goldberg of Desjardins Securities.

I want to follow up on a question I had last quarter, and that is -- relates to Ally. At the end of January, the personal demand and notice deposits in ResMor were just under $1.6 billion. And the latest number is about $630 million. So you've lost about 60% of those deposits. My question is why didn't you just sell the deposit business? I know this isn't a significant -- these numbers aren't significant, but it would seem to me that getting something would have been better than getting nothing.

Yes, it's Dave here. The piece that you're not seeing is that we've been able to retain a significant number -- amount of those deposits in our traditional business. So while those high-interest savings accounts migrated from 180 basis points to 120, we were able to migrate many of those balances over to our own high-interest savings account. On the GIC side, we've been in the market with offers to our Ally clients, very attractive offers, and we retained significant margin of those clients. So we felt it was much more economical to retain that business in RBC products than to try to go through an extraction and sale of ResMor, which had been extremely costly, and our retention numbers bear that out.

So how much of that $900 million in the first 2 months would have moved over to RBC?

We've retained, I would say, between 70% and 75% of total HISA and GIC balances. So as you look at those decline in balance, it takes 75% of the delta, and they would have moved over to RBC. And the additional benefit of this is we've had really broad conversations with those deposit customers, and we've been extremely successful in broadening our relationship on the investment side at the same time as we put our best investment retirement planners in front of that client base. And we've seen significant investment cross-sell in addition to retaining over 70% of the GIC and HISA balances. So overall, I think the strategy to retain that business through organic channels has been very, very good for us.

The next question is from Stefan Nedialkov of Citigroup.

It's Stefan Nedialkov from Citi. I had a question on the Insurance business. It's quite a volatile P&L this quarter. It looks like investment income was quite strong, but of course, the disability benefits were much higher as well. Some of your peers are also taking charges for low interest rates. Could just give us a sense of how the P&L was likely to evolve over the rest of the year? Should we be expecting sort of high investment income being offset by -- being matched by higher benefits? Or is this really just a one-off type of performance?

Janice, do you want to take that?

Right. So Stefan, why don't I, first of all, take you through some of the accounting where for us, the -- some of the life qualities that we have, we -- of course, we increased the revenue, and then the policyholder claim is the contra or offset. So those 2 lines, we actually look at them together and look at the net number. And George will take you through some of the business color, but there is that nuance on the Insurance business, and that's why when you look at our metrics, we're always seeing what a metric is without that in terms of revenue growth, and the policyholder benefits claims and acquisition, some of that reflects the policies that are owned [ph] by our policyholders where we pick up the volatilities or the mark in the revenue in the claims line. So I think that if you look at the [indiscernible] business going forward. So George, would like to talk about that?

Yes. And just to build on what Janice said, what you're seeing is actually from an earnings point of view and a net revenue point of view, really a lack of volatility [indiscernible] that Janice just outlined. And I think overall for the quarter, it was a fairly solid quarter and one that I think reflects the run rate from the business. The only thing I would point out from here going forward and the balance of the year is that we did not benefit in the first half in Insurance from any new U.K. annuity contracts, and that's the business where we take on longevity risk as pension plans are immunized. And that is a source of upside, I would say, for the second half beyond what you're seeing in the quarterly run rate in Q2.

And the one thing I would also add is with respect to interest rates, we spent a lot of time neutralizing the business over the past 7 or 8 years for the volatility of interest rates. So of course, lower interest rates will have an impact on the valuation of the liability, but we have put a lot of rigor around asset/liability management in Insurance, so you would have seen over the past few quarters where comparable insurance companies have had way more volatility than we have because of the rigor we put around managing our assets and liabilities. And we started that about 7 or 8 years ago.

The next question is from Mario Mendonca of Cannacord Genuity.

One quick question on the domestic. I want to make sure I understand what you meant by half of the deterioration and being nonrecurring. Does that mean that you get -- all things held constant, you can get a 2 -- call it, 2.5-basis-point lift in the NIM next quarter? Or you're just saying that, that just won't reoccur?

Yes, we're seeing -- Mario, it's Janice. We're saying that won't reoccur. So when you're measuring NIM, it depends on where you are quarter-over-quarter or year-over-year. But we are seeing that our expectation given the low interest rate environment is about a 1- to 2-basis-point decline per quarter as we move to the end of the year just because of our asset portfolios, of course, running off and the repricing that's occurred in the market, and it has to do with actual runoff and duration. So we've always signaled that, that would happen over the course of the year.

And just real quickly on the reference that you're making to the regulatory issues impacting your trading revenue, what message are you trying to send us that if everything were precisely the same next year as it is this year, and I know that's not really possible, but everything with the same except for the change in regulatory, like how much of your business would be impacted by the change in -- the regulatory changes?

Well, I think you've got to look at that, Mario, by geography. In terms of Canada, which performed quite well in the quarter, it's steady as she goes. In terms of the U.S., while there is a lot of uncertainty, the only thing that really is looming for us is the Volcker rule, and we don't have the final rule to look at yet. So it is still tough to comment on that. So the question, I think, really comes back down to Europe, which is where we've struggled for some time now given the uncertainty from a credit perspective around sovereigns and not just corporates. I certainly think in the short term, we'll see some sort of improvement there. We've seen that as we come into May as volumes have picked up. But from a sort of a -- from a headline number perspective, I think what we've talked about in the past are still good. I think you'll just see more of it come from the U.S., and more of it's going to be linked to activity in debt Capital Markets and less of it coming from Europe. But the jury is still out in terms of what we've got to do going forward there.

The next question is from Gabriel Dechaine of Credit Suisse. Gabriel Dechaine - Crédit Suisse AG, Research Division: I also have a follow-up from last quarter. Mortgage risk rates in Canada, so you're the only bank that actually focuses on the mortgages. You don't lump in HELOCs in the exposure. But I estimate like for Canada, so I have to strip out the Caribbean mortgages, there's about 6% risk weighting on the Canadian uninsured mortgages. It's at odds with what Julie Dickson was saying about Canadian mortgage risk rates -- uninsured mortgage risk rates in the mid-teens. I'm wondering if you can shed some light on the discrepancies between what I'm seeing and what she's seeing perhaps. And then also in your commercial loan book in Canada, you've got $16.8 billion of real estate-related loans. The growth there has been pretty substantial like other banks. I'm just wondering if you can break down what components are in that $16.8 billion, REITs, commercial mortgages, development, apartment buildings, whatever?

Doug, you go first.

Okay. So in terms of the mortgage activity, what we have been doing is we've been making some larger drawn loans against our [indiscernible] to primarily REIT customers where we're very active, we're the market leader there, and it's all against large office buildings and shopping centers for public REITs and some of the pension funds, for instance, OMERS. And so it's a concerted effort really to take reasonable loan-to-value certainly under 70% against high-quality properties at spreads that we find attractive. Gabriel Dechaine - Crédit Suisse AG, Research Division: So most of that growth has been coming from REITs, which I -- I mean, I've seen your...

And most of that is -- a lot of that is outside Canada.

Yes, yes, I mean, in terms of -- that's the Canadian book. In the U.S., we lend to about 50 REITs. We have a fairly significant real estate practice, which is ramping up quite nicely. We've got a full research capability. And so we have been lending again to the REITs and some of the private equity funds. Two that come to mind are Lone Star and Blackstone, which we think are probably the market leaders, and we've done significant business with both in the U.S. and Europe over the last 18 months. Gabriel Dechaine - Crédit Suisse AG, Research Division: What's the $16.8 billion, like REITs versus other stuff? And maybe you can get back to me on that?

It's, Gabriel, Dave. In Canada, our commercial real estate book on the P&CB is around $13 billion, and that is largely developer risk, high-rise condo, midrise condo, some single-family home. We've been doing that for decades, as you know. The growth in that portfolio is not disproportionate to the growth in the overall commercial portfolio of 9%. Some of the characteristics that we're seeing in the commercial real estate development side are longer time to get to presales, as you know, 80% presale. Some projects are slowing down. So in general, slowing but still relatively good demand on the developer side, but not disproportionate growth to the overall commercial portfolio. Gabriel Dechaine - Crédit Suisse AG, Research Division: And on the mortgage risk rates?

On the mortgage risk rates, we probably will need to get back to you on the detail. I mean, the average is 5%, which is heavily weighted by the fact that the predominate part of our book is in Canada. I mean, I can't comment on Julie Dickson's comments. But I mean, if you look at the loss rates in our supplementals, you will see that the loss rates suggest a risk weighting lower than what we have on the book. But on the details, we'll have to get back to you. Gabriel Dechaine - Crédit Suisse AG, Research Division: It's a bit unfair to single you out because your peers actually lump in HELOCs, which make the risk rates look higher, and it's not a fair comparison. But anyway, if you could get back to me on this, that will be great.

[Operator Instructions] The next question is from Sumit Malhotra of Macquarie Capital markets.

Let's start in Canadian Banking for Dave Mackay. Your credit cards growth has been amongst the best in the industry over the last year. You've been one of the only bank that's actually been growing it. And this quarter, we saw a decent sized pullback of $400 million. Anything you can point to on that side, whether that was driven by customers or whether that was an initiative that the bank is looking at given consumer debt levels in Canada?

It's Dave. No, we're very happy with the growth on our portfolio. It's a combination of the acquisition of the Shoppers Drug Mart portfolio from MBNA and good growth in that portfolio, very strong growth in our core platform such as Avion, good acquisition growth overall, which I referenced in earlier comments. So the growth is strong. The pullback is more seasonal than anything. You always see very strong growth in Q1 because purchase spend is high and then revolve rates go a little bit higher in Q1. So you see a bit of a seasonal pullback, but there is no change in risk strategy appetite or outlook. We are bullish on credit cards and spend. We're leading the market in spend. We have new product in the Target co-brand coming to market. It is in market now, and we have high hopes for that. So we're looking to this sector and its product to continue to drive our business, and it's the leading growth business that we have right now at 20% year-over-year. So we're very happy with our credit card business.

Yes, Dave, you're right. As I go a little bit further back in the file here, it seems to always dip from Q1 to Q2. And if I just stay with you on the same product, we were on another call an hour ago and there was a lot of talk about the future of the travel credit card market in Canada. At least from my seat, it seems like you're pretty well positioned if the particular products seem -- or would [indiscernible] competitive response as potentially one of the bigger competitors maybe changing hands.

We do believe in the Avion product. We have the best product in the market. That's what customers are telling us. It is a very, very large portfolio. And with the WestJet co-brand product [indiscernible] will create customers to [indiscernible] point of significant opportunity for us to present our solutions to a large number of Canadians who might not consider them otherwise. So from that perspective, with Avion, WestJet and our co-brand portfolio [indiscernible].

[indiscernible] I'll leave it there. In your share repurchase program, you're approved for [indiscernible] is the level this quarter the amount you're comfortable using as a run rate? Or is there something we should expect the bank to step up given where capital your position is?

Sumit, it's Janice. We started the program later on in the quarter because we felt that we were at optimal capital levels. So we will continue to execute on the program. So it's a matter of timing last quarter because we didn't start until the third month of the quarter.

We felt it was important to absorb the Ally capital.

Absolutely.

Yes. And we've earned the bulk of that back now.

Yes.

I don't know where we are on the queue here, Janice. Is there time for one more or should I jump back in?

I don't think there is a queue, so you better go.

Okay. So very quickly for George Lewis in Wealth Management. Kind of surprised to see Wealth revenue flat quarter-over-quarter on what looked like a month of -- or a quarter of very good sales in Canada and obviously a very strong market in the U.S. Particularly with your U.S. Wealth Management operations, I've always thought of those as being more transaction-oriented. So can you help us understand why revenue was basically unchanged sequentially despite what look liked some pretty good operating trends or operating backdrop?

Sumit, I think it's a couple of things to highlight. One would be it is a quarter with fewer days, and so our fee-based assets are done on that basis. So Q2 over Q1 might have. Canadian Banking is always a little bit down in terms of revenue. The second thing would be we did have performance revenues that Janice highlighted. In the first quarter, that's [indiscernible] occurred in the second quarter. So the underlying volume trends to your point are very encouraging. I mean, year-over-year, our assets -- AUM is up 15%. Our AUA is up 8%. So apart from those 2 factors influencing the quarter-over-quarter, we think we had -- I was very pleased with our revenue growth. And we're setting up, I think, for a much better year-over-year comparisons for the second half given the trends that we're seeing in the business.

So those performance is for BlueBay. I think it's mentioned in the literature that they get booked in Q1 and Q3. Are you in a position to tell us how much that added last quarter, so how much the sequential increase would have been x of that?

What I can say is that they're recorded in the first and third quarters. The bulk of them are recorded in the first quarter, so Q3 is not as large an impact in terms of -- as it were in Q1. But it was a significant impact for our asset management business in the first quarter. Having said that, second quarter revenue continue to increase in that business as well.

[indiscernible]

Thank you very much, operator. I'd like to thank everyone for joining us again on this call, and we look forward to presenting to you again next quarter. Have a good day.

The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.