Good morning, ladies and gentlemen. Welcome to RBC's Conference Call for the Fourth Quarter 2019 Financial Results. Please be advised that this call is being recorded. I would now like to turn the meeting over to Nadine Ahn, Head of Investor Relations. Please go ahead, Ms. Ahn.

Thank you and good morning everyone . Speaking today will be Dave McKay, President and Chief Executive Officer; Rod Bolger, Chief Financial Officer; and Graeme Hepworth, Chief Risk Officer. Then we'll open the call for questions. To give everyone a chance to ask a question we ask that you limit your questions and then re-queue. We also have with us in the room. Neil McLaughlin, Group Head Personal and Commercial Banking; Doug Guzman, Group Head Wealth Management Insurance and Investor and Treasury Services; and Doug McGregor, Chairman Capital Market; Derek Neldner, our Group Head Capital Markets is also with us today. As noted on Slide 1. Our comments may contain forward-looking statements, which involve assumptions and have inherent risks and uncertainties actual results could differ materially. I would also remind listeners that the bank assesses performance on a reported and adjusted basis and considers both to be useful in assessing underlying business performance, adjusted results reflect the items identified on Slide 30. With that, I'll turn it over to Dave.

Thanks, Nadine and good morning everyone. Thank you for joining us today. We reported fourth quarter earnings With over $3.2 billion, largely driven by continued strength in our Canadian Banking, Wealth Management and Insurance businesses. I'm pleased with our results, particularly given the challenging operating environment including low interest rates and continue trade tensions Canadian Banking recorded strong volume growth as we continue to leverage our scale to take an outsized share of industry volumes and generate strong operating leverage and earnings growth. Our Wealth Management businesses continue to extend our number one position in Canada. Benefiting from constructive markets and strong net sales also driven by a growing advisor base and our leading asset management platform which continues to outperform the industry. Investor and Treasury Services had another challenging quarter impacted by secular industry trends and difficult market conditions. And this quarter, we took a number of steps to reposition the business, which I will speak to shortly. In Capital Markets solid fixed income results were offset by the impact of declining global fee pools on investment banking revenue. Stepping back and looking at 2019 overall, our diversified business model and disciplined approach to cost and risk management. Enabled us to deliver record earnings of close to $13 billion. Our leading ROE of 16.8% allowed us to generate 60 basis points of capital this year, ending 2019 with a strong CET1 ratio of just over 12%. Our profitability and balance sheet strength enabled us to keep investing in our leading franchises and navigate an uncertain macro environment, while also returning over half of our 2019 earnings to our shareholders through dividends and buybacks. Let me now provide some highlights on our business segment performance. Canadian Banking generated record earnings of over $6 billion in 2019 nearly half of our…

Thanks, Dave and good morning everyone. Starting on Slide 7 against the challenging macroeconomic backdrop, we delivered solid fourth quarter earnings of $3.2 billion, down 1% year-over-year, diluted EPS of $2.18 sense was down 1% as well. For the last two quarters. I've given an update on our cost management progress and I'll do so again this quarter. We are focused on driving efficiencies. So that we can continue to invest in future growth during this prolonged low interest rate environment. This quarter expense growth was 7.4% year-over-year or 4.4% on an adjusted basis. Over 40% of the increase was in client facing roles as well as technology and digital initiatives as we invested in serving clients and continued business growth. Indicative of our expense discipline expense growth in the second half of 2019 slowed to 3.4% on an adjusted basis, as compared to 6.6% in the first half of the year. In other words, the growth rate was cut nearly in half. Looking forward to 2020, we expect to continue to slow expense growth by leveraging our scale, while continuing to strategically, grow our client base and deepen client relationships. Turning to Slide 8, our CET1 ratio of 4.1% was up 20 basis points quarter-over-quarter, strong internal capital generation was partly offset by organic RWA growth and share buybacks. This quarter we bought back 4.5 million shares for a total of $474 million that puts us a 10.3 million shares repurchased for the year or $1 billion. Moving to our business segments on Slide 9. Personal and Commercial Banking reported earnings of $1.6 billion this quarter, a 5% year-over-year. Canadian Banking net income of $1.6 billion was up 6% year-over-year. We continued to see strong volume growth of 8% year-over-year across our core products this quarter. Residential mortgages grew…

Thank you, Rod, and good morning everyone. Starting on Slide 16 this quarter, we had provisions on impaired loans of $434 million which equated to 27 basis points. Additionally, we had, we established provisions on performing loans of $71 million or 5 basis points for a total of 505 million or 32 basis points. Provisions on performing loans increased by $41 million or 3 basis points from last quarter. Unfavorable changes in our overall portfolio mix including seasonal factors related to our cards portfolio and credit migrations contributed to the quarter-over-quarter increase, these factors were partially offset by a more favorable macroeconomic forecast in areas such as Canadian housing and the impact of model changes for a few of our retail portfolios. Provisions on impaired loans increased by $35 million or two basis points from last quarter mainly due to higher provisions in Canadian Banking and City National which were partly offset by lower provisions in Caribbean Banking. For fiscal year 2019 PCL on loans totaled 31 basis points up 8 basis points from last year. Provisions on impaired loans for 27 basis points up 7 basis points from last year, which represented a shift from the cyclical lows of 2017 and 2018 to more normalized levels this year. Let me now provide some additional detail on three of our businesses. In Canadian Banking PCL on loans of 400 million increased by 5 basis points from last quarter, about half of the increase was due to provisions on performing loans related to the factors already noted, the remaining increase is a result of higher provisions on impaired loans, primarily attributable to our cards and personal lending portfolios. In Wealth Management PCL on loans of $34 million increased by $7 million from last quarter mainly due to a new impaired loan…

Thank you . [Operator instructions] The first question is from Ebrahim Poonawala with Bank of America. Please go ahead.

Good morning. I had just a two-part question on expenses, I guess not you mentioned expenses deeper relative to the 3.5% growth we saw in the back half of ' 19 I guess does that imply something like 2% to 3% expense growth expectation for 2020. All else equal and just taking a step back and just listening to Dave, in terms of first cautious outlook on the revenue environment, is there anything bigger that the bank needs to do in terms of flexing the expense lever more as we think about 2020 and beyond.

Thanks, Ebrahim. Yeah. On the expenses, recall that we have a large Wealth Management business in Capital Markets business, so as revenue ramps up or down. We have a natural hedge on expenses. So if the first quarter ends up being strong for capital markets and-or wealth Management, you might see expenses, expense growth picked up a little bit or if it's weaker, as it did in the second half of the year. Is it came down a little bit versus the growth in the first half of the year. Expenses will be a little bit lower. So it does moderate. We're taking the core rate of expenses down in terms of the growth rate and we took and you'll see that in a number of the line items . If you look in our supplements our marketing costs, and travel costs, things like that. We have taken the rate of growth of that down and our technology investment. We have been growing that over the last five years. Significantly, and over the last year or so and we expect to continue to take that rate of growth down. And so, given the macroeconomic environment largely the interest rate environment. Now, which had been providing us tailwinds for two plus years, enabling us to invest in future growth, invest in continued market share. Now we have a lot of the pieces in place, both from a technology standpoint and a talent standpoint in distribution standpoint to continue to grow revenue despite those macroeconomic uncertainties and expenses toggle down a little bit with it. So, the guidance that I gave that we expect to continue to see it to moderate would hold and we'd expect to see low single digits.

And we shouldn't be expecting any bigger actions on expenses like the restructuring, you did. I know it was specific to the investor Treasury business, but anything much larger is something that should investors anticipate something like that. Over the course of the next years?

Ebrahim, it's Dave. And what I'd like to reinforce we continue to look at our cost structure and we're managing it the same way across the organization. We have over the last five or six years, which is trying to get ahead of our cost structure, invest in technology managed through various levers over time and bring our base down. So we don't forecast. I mean you take an aggressive short term repositioning because we are trying to get ahead of things have a number of programs across the organizations. We saw this coming. So I think you can expect from us generally a continued management of costs programmatically across the organization. So that's how we see the world right now. Having said that, we did take a short-term repositioning of investor services because we had to make a quick pivot, a quick pivot from Europe into, into Asia and a number of roles and there and adjust our cost base more quickly. Given the things that we're trying to do in the business so that he made us quite quickly and I'd say that was more out of the ordinary for how we manage our cost structure than typical of what you've seen us do in the past. So the core messages continue to expect us to manage our base down programmatically across the organization that we've done in the past.

That's very helpful. Thank you both.

Thank you. And the next question is from Gabriel Dechaine with National Bank Financial. Please go ahead.

Good morning. I want to ask Graeme about your outlook for 2020 on the PCL loss range. I don't, I didn't come across in your materials, but you were a smidge above your target range for this year. I know there was something idiosyncratic losses earlier in the year, but on the other hand, maybe some seasoning effect in the cards portfolio capital market seems to be in an upswing there for PCLs balance the factors. Where do you see the ratio lining up in 2020.

Yeah, I think as I made in my comments, we're forecasting the ratio that Stage 3 to be 25 to 30 basis points. The Stage 3 side of it that an additional 3 to 5 basis points in Stage 1 and 2, I think some of your observations in the comments I made all factor into that as you, as you referenced. Certainly in the first half of the year, we saw some were idiosyncratic events in our wholesale portfolios, but Capital Markets. And in the end, in commercial and Canadian Banking. I mean the latter half of the year. I would say it's been a bit. It's been a bit more broad based. A bit more what we would view is more normal. And so when you look at longer-term trends in retail at around 34 basis points and in wholesale, around 31 basis points. We still feel we're certainly coming off two very strong years for the PCL perspective in 2017 and 2018 where they going the wholesale things I would say they were abnormally low, but we're still, I would say below long term averages but acceptable levels and levels that don't concerns.

You also mentioned in the cards and personal loans as drivers the seasonality and I always thought of that as more of a Q4 thing. And on the Quebec regulatory change there for making minimum payments and that's like a five-year phase. And so I'm a bit surprised to hear that already having an impact, we are seeing insolvency data of moving higher across Canada and just wondering, is that where you see the most pressure coming in next year in terms of normalization or seasoning [indiscernible] portfolio.

Well say normalization is not specific to Retail, again as I highlighted in wholesale, 2017 and 2018 were quite exceptional years they would be more abnormal than what 2019 was it's one wholesale. Again, I think we can, you can expect to see a continuation of what we saw in the latter half of 2019, retail had continued to very low levels, we expect to see that tick up moderately, but overall, there'll be some puts and takes there that give us comfort to that overall 25 to 30 basis point range. Retail more specifically, yes. We've seen some factors that want to overstate the fact we've seen in card, that was just trying to highlight what we are seeing their cards overall this year was up 12% year-on-year. About half of that is related to growth. It was a portion of that would attribute to weakness in Alberta. And then the insolvency factor that I highlighted, but overall and retail outside those factors, we continue to see very stable delinquency profiles. Our origination quality continues to be very strong . So again, we feel quite comfortable with the profile there. But do reflect the fact that we're probably coming off some very strong years and we'll see a normalized to some degree.

Thank you.

Thank you. The next question is from John Aiken with Barclays. Please go ahead.

Good morning. Taking a look at your objective for US Wealth Management. Given the challenging year that we've had as well as the margin compression that we've seen those operations. What's the level of confidence in achieving the stated objective for 2020 as we sit here today.

I think if you look at the progress we've made in City National the real strength as we've doubled the size of the core franchise over the past four or five years. From a balance sheet perspective, we continue to maintain double-digit lending growth numbers throughout the cycle, we dipped a bit on deposits, but you'll see our deposit strength came back nicely in Q4 I think roughly 14%. So, our primary focus is to continue to invest in that core franchise expand geographically grow our mortgage and our commercial business and continue to expand our private banking business. So from that perspective. From a balance sheet growth perspective a client growth perspective we're at or a little bit ahead of our overall targets what we can control. In our forecast that we gave you, when we did the presentation in 2016. Was the level of interest rates. So we made that forecast of where earnings where we had rates coming back and holding a bit longer than they've held and we didn't forecast the quick reduction in rates and the Fed rate cuts that you've seen over the past year. So if rates continue to hold where they are in go lower. It's going to be tough for us to generate enough margin off balance sheet growth, which has exceeded our expectations to meet those targets. So we are looking at slowing cost growth we're looking, as I've talked about in our recent investor conference, we've significantly ramped up our cost structure, beyond where we thought we'd be to try to meet the growth opportunities we saw in the marketplace. The US economy doesn't perform where it has its potential. You could see us pull back on some of that cost structure and deliver some earnings there. So we've got a number of levers. But I think you should focus on the core franchise customer balance sheet growth has been significant, it's double its ahead of where we thought it was, the margins are a bit off and we can't control that with the core franchise performed exceptionally well.

Thanks, Dave. And as a bit of a follow-on, given what we're seeing on margins. Now, I understand the overall profitability of the platform, remains quite strong. But as margins are under compression. Is there any discussion about slowing the growth that we've seen over the past year.

Yeah. I just referenced side, as we've talked about I -- I'm heading out to LA tomorrow. Absolutely. We've accelerated growth we've opened in Hudson Yards we've opening other stores in New York. We're opening in Washington and we can slow some of the staffing of those stores, but we can certainly slower back office growth which ramped up for a significant growth, and if the growth doesn't materialize, but even having said that, I think we've kind of run-up or back office growth quite aggressively and there is an opportunity to reduce it through technology investment, but also just through kind of managing that cost structure down in a slower growth environment. So we do foresee the ability to grow our earnings by managing our cost structure as another lever that we haven't pulled to date, we've allowed that cost structure to move ahead to grow because we have not made an acquisition and therefore we've invested in organic growth where we get the highest returns. So I think the answer is absolutely, that's something that I'm focused on and Kelly coffee, our CEO of City National is focused on. So thanks for your question. I think we'll take the next question thank you.

Thank you. The next question is from Meny Grauman with Cormark Securities, please go ahead .

Hi, good morning Rod in your commentary and kind of, you talked about I think it was 46 basis points of additional margin pressure given the competitive dynamics. Just a clarification, I assume that doesn't include any Bank of Canada rate cuts, but I just wanted to see how that would change your outlook.

Yeah. Thanks, Meny. That's correct. I mean the market is not forecasting with high likelihood of a rate cut until potentially the end of next year. So wouldn't really have an impact. Certainly in the first three quarters and maybe marginally on the fourth quarter if it happens. So a lot of that is really the stock and flow of the growth in the book. And so I think it's important step back and look at the strong volume growth 8% in Q4. The strong net interest income growth , which was 5.6% in Q4 and over 7% for the year. And so part of this is mix and the mortgage market has come back and there is continued reports on that. We continue to grow share in that space. Those products tend to have a lower spread than other unsecured products. And so as we grow that book is the market grows at higher level, you're going to just see some mix issues caused that NIM to come down and overall with good volumes. It's still a positive and install a positive revenue story. So part of this is a little bit of math. When you look at the underlying rates versus five years ago. So a lot of our deposit the track during and the internal transfer pricing on that. It is positive interest rates, the five-year rate actually despite the low rate environment today is still higher than it was five years ago. So structurally in the deposit side, we're okay, the mortgages is a competitive pricing element. So there is nothing that is, that is actually ominous in this outlook. It's just, it's just a factor of what's the market is bringing us and our continued market share growth. So I wouldn't look at that as a negative per se. I think the business is quite strong.

Just as a follow-up on that you highlight improve mortgage growth and I'm just wondering your perspective on what's driving that and is there an element there that is concerning in terms of that re-acceleration.

It's Neil. I'll handle that one. No, definitely nothing concerning, we would look at the strong mortgage performance in 2019 direct was directly as a result of a review, we did around some internal processes and just making sure that we were following up on better lead management, following up on leads more quickly. Getting back to customers, more quickly, as well as changes in our adjudication process that made sure that once we had a transaction in front of us. We didn't lose that customers. So Graeme spoke to the underwriting, which continues to be very strong and we would look at both house prices and home sales across the country being quite balanced and starting to stabilize. After be 20, we have seen the fall have more activity and sort of the buying season a little bit elongated. But as we look at it all around. We would feel very comfortable with the performance of the mortgage business.

Thank you. And the next question is from Steve Theriault with 8 Capital. Please go ahead.

Thanks very much. If I could just start with a quick follow-up. Rod last quarter you talked about 40 basis points of NIM or thereabouts over five quarters given rate cut expectations maybe, does that still hold and if so, should we be thinking of the Q4 impact of 29 basis points or the 21 basis points you mentioned on a more adjusted basis.

Thank you, Steve. I assume you're talking about City National.

Yes, sorry City National. Yeah.

Yeah. So, I would think of in terms of one that it was a one-time gain. And we tried to call that out last quarter as well as this quarter, not to build that in. Yes. So we ended that kind of 314, I spoke to last quarter that if the Fed was cutting which the Fed ended up doing both in September and October that basically the Fed but, Fed funds rate was going to be back to levels that you had seen in 2017-ish, which were, which is when City National had spreads in the high-2s -- the 2-8-5 to 9 range and absence a big tick up in the 5-year rate which would help with some of the asset pricing and the tractors on the deposits. You'd expect the margins come into similar levels as what it was. So on adjusted basis you're at 335 in Q3, 40 basis points would take you down to the 295 range. I think you're within that range. As I mentioned, I think on my messages. We expect to continue downturn in Q1 given the two Fed cuts but then we see it leveling off and we see modest spread compression from there and that's what the markets are saying right now based on our expectations for Fed activity, but we'll see what happens with the trade discussions and tariffs and future Fed activity, one way or the other that would change the outlook for us.

Okay, that's helpful and then just lastly, a question on Investor and Treasury Services post the restructuring and repositioning. Can you talk about what you can offer up in terms of the earnings power going forward, what type of bottom line benefit. We'll see from that $83 million of restructuring this quarter.

Yeah. It's Doug. Couple of things, one is the, the charges that we just took that is point to the effect of that, as Rod said in his statements is really going to be seen of leaking into the P&L in terms of reduced expenses over the course of the year. So as you get towards the back end of the year, you'll see I think more improvement on the expense side. In terms of the revenue side, we have been struggling with a flattening yield curve, but the short end, and some margin compression. We've changed how the trading reports, we've put on some more term and the accrual book is producing more regularly right now and so we're just going to try to manage that and so on the revenue side. We'll see what the market will give us on the Investor Services side. We're just working away in terms of trying to do more business with customers and we'll see how it plays out.

Thank you. The next question is from Robert Sedran with CIBC Capital Markets. Please go ahead.

Hello, good morning. Just want to follow up with Neil on the mortgage question everything we hear is that mortgage spreads are at historic lows. But when the market leader is growing at market-leading rates, it would suggest that this is something you're doing rather than something that is happening to you in terms of the competitive pressure. So I understand all the process issues, you talked about, but I presume you're also not shying away from the price competition as well so. Is this just part of a client acquisition strategy or are you comfortable with the mortgage as a standalone strategy that you can continue to grow at these rates this profitably as you'd like to?

Yes, thanks for the question. I mean our strategy is not obviously to lead the market down in terms of price. I think we're leading with advice and we're leading with distribution, so Dave mentioned in his commentary. We added mortgage specialists and my comments were more about the productivity of those mortgage specialists in terms of making sure they got back to customers, more quickly, making sure they got better leads and they can access those leads so reality as we do participate in the in the market, we don't have as much influence as I think some feel in terms of setting the price. That said, we are not going to have other customers come and put a mortgage into our customers' hands when we feel, it should be with us. So we're going to remain competitive on price, absolutely agree with your comments in terms of the level competitiveness and spreads and I think there's just a lot of competition out there, and especially in the last half of this year.

So given all that above average market growth is still what you'd expect .

We're maintaining kind of that were mid-single digits and that's still really our target range.

Thank you. The next question is from Sumit Malhotra with Scotia Capital. Please go ahead.

Thanks, good morning. For Dave, we've spoken many times about how the stars really aligned for the bank in the timing of the purchase of City National we, a lot of questions on this call about the interest rate environment and the growth of that business. If it's affecting your franchise. It's obviously affecting your competitors as well especially with your capital ratio. One of the stronger aspects of the quarter sitting something like 118, 119 on a pro forma basis, does the acquisition or external capital deployment supplementing that business become more attractive, given what's happening to some of your competitors in this rate backdrop than it has been in the last few years or are you can tend to whole Capital and continue to buy back a larger amount of stock.

Sumit, it's a great question. I would say, certainly leaning towards the latter than the former and that's we're going to continue to grow organically. You've seen the double-digit mid ' 14s, 15%, 16% loan growth 14% deposit growth we're investing in new branches investing and expanded sales force capability launching new products, building our brand in the US. So the organic build. We've invested heavily with and we continue to focus on that, because that drives the highest ROEs or our shareholders, being patient and waiting has paid off already and I think it's going to pay off even more to continue to be patient and watch the US marketplace. As we, as we watch the economy we watch valuation of banks and we're being very careful where we would only look at something that drove a strong shareholder return grew our franchise geographically or grew product capability and enhance the existing strong growth rate that we have right now. It doesn't overly distract management was something that's too small. So I think those are the same parameters. We've talked about organic growth. First, and with our strong CET1 ratio is it gives us an opportunity to return capital to shareholders. While meeting all our organic growth objectives across all our businesses. So we sit in a very strong position to continue to create relative total shareholder return for our investors.

That's very clear. Thanks for that. And then lastly for Rod Bolger, we've talked a lot this year on these calls about the declining trend in the tax rate in the Capital Markets segment and it took another significant step down this quarter, is there anything. I know there is some competitive factors at play here. So I'd appreciate any insight you can give us as to what exactly has driven the tax rate down to something like 3% this quarter. And are there any risk to the bank in terms of impact on revenue or normalization in this line in 2020 for how we think about earnings for that unit.

Yeah, thanks for that, Sumit. I wouldn't call it a risk to the bank. I would expect it to normalize a bit and be back into double digits in 2020. If you saw some updated guidance out of the US even this week on the, on the BEAT tax for example. And I think they're coming out with more guidance. So there is, there is a natural upward bias on the tax rate I think globally as come as countries try to capture more of a tax base especially and banks fall into that even when they're going after technology companies. But also there is an ebb and flow to, this is the earnings were a bit off in Q4 and Capital Markets. The geographic mix ends up being favorable oftentimes from a tax perspective. And so as earnings normalize going forward and increase as we highlighted, with the strong backlog and strong pipeline. I would expect that the geographic mix would be less favorable from a tax perspective than it was this quarter. So as a result, all indications are that we would be back towards a more normalized double digit tax rate in this business in 2020.

Thanks for your time and Doug McGregor. I think this is your final call. Thanks for your help. Over the years.

Thank you. Thanks for the comment. Next question.

Thank you. The next question is from Doug Young with Desjardins Capital Markets. Please go ahead.

Hi, good morning. Most of my questions have been asked and answered, but one I wanted to go back to you, because I think you addressed the adding 2.5 million new clients by fiscal '23 for Canadian Banking. But I think at the Investor Day, you also throw out a target for RBC Ventures of adding 5 million active users and converting 10% to Royal Bank clients, I'm hoping just to get a bit of color on how that transition is going because I think you added. I think you mentioned 3.2 million connections. But looking at conversion to Canadian bank clients just wanted some color on that. Thank you.

Thanks, Doug for your question. I'll start with the overall ventures targets and Neil will talk about the bigger impact of 2.5 million net new clients, of which we said 500,000 conversions would come from venture. So, and we're a couple of years into this now and we've really focused on building those 5 million new connections that we would have had to buy in a social media digital channel before now, we have a connection to a new Canadian potential client that we never had before and they've come through those 17 ventures. So we've really made that the primary focus and we actually haven't tried to convert them to RBC Product holders as yet. We're trying to build deeper relationships, trying to get to know them, and that's going to pay off over the long term. Having said that 2020 is a big scaling year where we are going to start the conversion process through a number of these ventures I gave the example of most Snap which we embedded into our overall mortgage process. Our mortgage sales force of over 600 specialist said it was one of the biggest tools, they had to help flows, mortgages in a price competitive marketplace, as you referenced. I would say though that RBC Detroit. We did increase our mortgage rates over the past year and given the volatility I think twice. Right. Neil, you can comment on that further. But having said that, we're competing primarily on creating value for our customers and boost that came into that fray. We have another 5 or 6 ventures in the mortgage space that's creating value that we're ready to scale nationally. So I think we've focused on 3.2 million were already 65% towards or 5 million target. After a year and a half to two years so we feel that will likely exceed the $5 million but the conversion proof going to come over the coming quarters and we're very much focused on scaling amply. I think when you can add 40 retailers over a two-year period and it look , if you look at what it took air miles or EMEA to add retailers over a decade, the fact that we have a team now of high-profile brands, creating value for Canadians, you're going to see us scale that aggressively and 2020 and convert off of that. So I think we are, we're really positioned well to start to show you some numbers on the bank conversion side, which is still not insignificant. I think we've done over 50,000 conversions just in pilot phase without any real marketing spend behind it already factored marketing budgets and to scale this internationally. So I think that is a little more color on bench alternative to Neil to talk about the overall client acquisition and how we're building on the 300,000 over the past each year over the past two years.

Yeah. So thanks for the question. I think the ventures we'd say is where we is on plan. That's where we wanted it to be . Dave talked about the first why we needed to make as they actually get the client engagement and so that's the first sort of the first milestone is to engage customers that we didn't have a relationship before have them coming back to these digital experiences. And we're also been very cautious about managing what is referred to as kind of the load factor, how many times. We want to put the RBC brand or an RBC value proposition in front of them is something we're really testing. We don't want to limit that engagement we're having and you've seen us another digital business models. I think in terms of, we have seen some of the ventures for example owner which is focus that -- is the venture focus that new small business originations we're seeing a very good conversion right there. Small business owners can go into the, into the app, they can register the small business immediately offered a small business banking package and we're seeing upwards of a 40% conversion rate on that venture things like the drive venture we've actually integrated that into our mobile app they've talked about the number of customers we have logging into the mobile app multiple times a month. So we're able to give exposure to the value proposition there moves snap it was one of the offers we put out into our customers the summer it proved to be actually as a more valuable than some of the more traditional offers like for example, just the cash incentive. So we're feeling that you know three good example is already providing value in terms of amply, Dave mentioned the relationship with the merchants. We really look at this is a key part of it, to have the quality of the merchants. So right now in the amply app we'd have merchants like Home Depot and Rexall WestJet the CAG Indigo. And so the key there is that we've got these relationships with merchants. They're willing to put value on the table for our clients. And again, it's that virtuous circle of providing getting the engagement providing the value and then us testing into how we drive the conversion. So that's really how we're thinking about it.

I think we should move on to the next question. Thanks. We have, I know we're at almost that time, but we'll try to get a couple more.

Thank you. The next question is from Sohrab Movahedi with BMO Capital Markets. Please go ahead.

I just wanted to kind of go back to that new client stuff Neil 300,000. Do you say. I think you've added this year, 300,000 last year. The 2.5 million target. Can you just, I know short on time, but can you give us a sense of how that is translating into your segments results and whether or not you are actually having to still provide incentives, whether it's iPads or cash to pick up some of these customers.

Yeah, Soharb. Thanks for the question. So the new client acquisition, those are both step-ups from where we'd be running with net new client acquisition in the previous 3 years. So we're feeling that we're on the trajectory we set out to your point incentives still are part of the strategy we are out, again with the iPad campaign as we do the analytics, those are, those are well performing solid returning investments you will see us on a go-forward basis. There will be a mix, there'll be some new value propositions that we feel can really start to drive an increase in that trajectory. And we'll look for that in the back half of the year. But right now, we're pleased with our new client results and we're also seeing in terms of this, the core checking account and service fees. We are actually one of the drivers of other income. So we are seeing it pull through on that line.

I appreciate that. Thank you.

Thank you. And the last question will be from Scott Chan with Canaccord Genuity. Please go ahead.

Good morning. Just quickly on the oil and gas portfolio. Maybe just a 2-part question, just on the credit, you cited was that US or Canada. And the second part, just in terms of the strong growth. I know it's modest part of your portfolio. But I think it was up 30% year-over-year. Is that kind of like it comfortable growth trajectory. With that book going forward. Thank you .

Sure. Thanks for the question, its Graeme, probably a little bit more commentary on the oil and gas or oil and gas portfolio is about 70% Canada and percent other if you will, the other being mostly the US of that portfolio. About 3 quarters of be exploration, production, the mix between investment grade and non-invest in trade would be roughly, I think 23% investment grade remaining non-investment create in terms of the growth that's happening there, just how that's kind of includes as credit quality. The growth over the last year that we've seen I would say, has been more balanced to investment grade non-investment grade roughly about 50-50 there, so we've actually seen the portfolio quality skew up a little bit over the last year and the non-investment grade piece. As I mentioned in my remarks is certainly the credit risk, we really mitigate through a really high quality structure the borrowing base structures. So that even though we see impairments in those sectors are our client struggle with some of the headwinds there. You mean, loan loss. It also be accrue to us have been relatively moderate. I think loan over the last 5 years. There have been around, just over 100 basis points despite the real difficulties at sectors facing. So that would be just kind of a quick summary on the credit profile there. I didn't Doug or Derek wanted to comment on what's driving the growth?

And it is there a couple maybe comment just briefly, I think as Graeme said I think. I think the growth we feel quite comfortable with. It's been an even balance between investment grade names and some borrowing base names that would all be conforming part of the growth was driven by a couple of larger investment grade M&A related transactions that came on to the books. And so we think overall it's, it's quite a comfortable risk profile.

Great, thank you very much.

Thanks, Scott. And before I end the call. I would like to recognize 2 of our leaders who are retiring shortly Jennifer is our current Chief Administrative Officer for her illustrious two year career at RBC, which includes roles. As you know as Group Head of P&C be and as I said, most recently as our Chief Administrative of the straight of Officer relates to sincerely thank her for her contribution over her career and we're certainly and as I've already acknowledged on the call. Doug McGregor for his incredible 37 year career at the bank include in the past 11 years as Group Head of Capital Markets. Doug sincere thank you for everything you've done. Thanks for everyone on the call. Thanks for the team for their leadership and for 85,000 employees for their dedication to our clients communities, employees and shareholders. Thanks. We'll close off the call and have a good end of the year.

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