Bank of Montreal Earnings Call Insights: Purchased Credit Impaired Portfolio and P&C Canada
Purchased Credit Impaired Portfolio
Robert Sedran – CIBC World Markets: Surjit, can you just give us an update on the evolution of these purchased credit impaireds numbers, please? Appreciating that there is a lot of caveats, but your guess is certainly better than mine. I think last quarter you suggested that H2 could look like H1, but after Q3, I think H2 already looks like H1?
Surjit Rajpal – EVP and Chief Risk Officer, BMO Financial Group: I have always little reluctant to be very definitive about what happens in the purchased credit impaired portfolio, given that it’s a combination of the workout process that we go through and loan sales. And in quarters in which we have some loan sales, you do see better numbers. So, I would suggest that for – if you want to look forward, you got to bear in mind that the portfolio is only down to 29% of this side, so it’s a much smaller factor. Having said that, I would expect the next quarter to be good, because we are trying to take advantage of the improving market, and through resolutions and loan sales I would see the results to be good, but not at the level that you’ve seen for the last two quarters.
Robert Sedran – CIBC World Markets: Just as a follow-up on the similar theme in Canada, we keep hearing about the Canadian consumer being a problem, and then, you’ve taken provisioning levels down and your peers are doing the same or at least have been doing the same. How much of this is good performance today and how much of this is you feeling optimistic about the next 12 months to 18 months when it comes to consumer? I mean, considering that the loan book is more heavily secured than it was in past cycles, should the trough be lower than past cycles; have we got this wrong in the market?