On Thursday, Royal Bank of Canada (NYSE:RY) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Robert Sedran – CIBC: Morten, but for the addition of Dexia, I guess the exposure to Europe would have declined. So is the plan to continue to whittle that down? Or is it now in the range where it needs to be support – to support the ongoing business there?
Morten N. Friis – Chief Risk Officer: So I’ll start and then I’ll let my colleagues who want to add in some business perspectives, but so I mean we are continuing to, as I said, actively look at the exposure that we have and ensure that they are appropriate and relatively low risk. We continue to do business out of our U.K. operations that involve transacting with well-rated counterparties, primarily in the better rated countries and that will generate depending on our success (indiscernible) transaction, some variability in the exposure and given the counterparties we are dealing with, I’m quite comfortable to see that number move around somewhat, because the mix of it is with better counterparties. I think what we’re focusing on is making sure that the weaker end of the exposure scale or the areas where it’s not a strong strategic rationale for being there that we take proactive action to dealing with that. So I would say that depending on our business success you may see some ongoing slight reductions in portions of the portfolio but with any luck we’ll have that offset by some growth in business activities with well-rated counterparties that we’re looking to do business with.
Robert Sedran – CIBC: So you don’t see any need to high grade the portfolio at all, you’re perfectly happy with the counterparties as they said today?
Morten N. Friis – Chief Risk Officer: On balance, I’m quite satisfied with the exposure that we have. I mean there is always opportunities to whittle out some of the weaker pieces, but I would say we’re close with the end of dealing with those issues.
Gabriel Dechaine – Credit Suisse: Another one for Morten, the Caribbean PCLs are still elevated. I’m wondering when you expect that to tail off and then just on the trading over the past two quarters, how much of the trading results been benefitting from just the whittling down of your trading assets? Are there any substantial gains going in there? Then I guess, just to confirm Janice the operating leverage of 3.5% is now sustainable in Canadian Retail?
Morten N. Friis – Chief Risk Officer: It’s more (indiscernible) for the Caribbean and Janice probably has all the other parts of the question. So on the Caribbean, I guess, a couple of points there, I mean the performance continues to be somewhat disappointing, but I want to emphasize a couple of points here. One of the things we did during the quarter was have a thorough look at our portfolios in terms of allowance coverage across the region, particularly for the retail portfolios. So reasonable portion of the provisions you saw this quarter represents an effort (or a) result of our review of those portfolios ensuring consistency in approach and appropriate level of coverage ratios for those portfolios. So the $66 million worth of PCL for the Caribbean, a good chunk of that is more in the nature of catch-up and reflective of the view of the quarter. I commented on impaired loans formations and they remained relatively high in the Caribbean, but I think it is also worth noting that both impaired loans formations are down $20 million plus for the quarter. The overall level of impaired loans is also starting to come down. So, while asset quality remains a problem in that business, we are generally seeing movement in the right direction; and so from an asset quality standpoint, I would expect to see slow but gradual improvements. I guess the balancing part to that, I would say the performance from my perspective, on the Caribbean Banking business is now more dependent on seeing revenue and net revenue improvements than further improvements in asset quality. I think that will take a while. As I’ve said in my comments, with the economic environment, we cannot expect to see a quick turnaround there, but the trends are generally moving in the right direction. If we have economic improvements, the recovery piece on asset quality will speed up, but it will take some time to work through the problems.
Gordon M. Nixon – President and CEO: On the trading question, as we’ve talked about really for a couple of years now we had been very focused on reducing our legacy exposures and reducing complexity in the business. So really what you’re looking at is from a trading perspective, very clean numbers. I’d refer you to Morten’s Slide 13 where you can look at declining inventories from a year ago. You’ll notice that really Q1, Q2, 2012 and Q3 that we just reported really has not significant change. What really has happened as we’ve talked about is we’ve refocused the business around this very keen focus on plans and origination. What you don’t see is in these numbers is around that a significant pickup in velocity, that is the amount of secondary flow that we’re doing in the business to support client activity. So, velocity has doubled from Q3 last year to Q3 today. That’s really what’s driving the numbers even though generally in the market we’re looking at very difficult environment, especially on the equity side volumes are down significantly, but we’ve been able to gain market share and what’s been driving that is the focus that we had a year ago on the clients. We talked about supporting our clients through very difficult markets and that’s paying off. Then as Doug has talked about our focus on origination and quarter on quarter – sorry – year-on-year we’ve seen about a 24% increase, for example, in DCM revenues. So, the model has shifted and it’s proving to be in this environment certainly more resilient than a pure trading model.
David I. McKay – Group Head, Canadian Banking: It’s Dave Mackay here. I’ll answer your operating leverage question. Reflecting on Janice’s comments, we are just forecasting slightly lower operating leverage given the timing factor around expenses and the volatility there, but still forecasting positive operating leverage.
Gabriel Dechaine – Credit Suisse: Is that a Q4 comment, or like whatsoever, that the timing of investment?
David I. McKay – Group Head, Canadian Banking: Yeah, absolutely.
Gabriel Dechaine – Credit Suisse: Good quarter.