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C Citigroup

Participants
Elizabeth Lynn Head, Investor Relations
Mike Corbat Chief Executive Officer
Mark Mason Chief Financial Officer
Glenn Schorr Evercore
John McDonald Autonomous Research
Jim Mitchell Buckingham Research
Mike Mayo Wells Fargo Securities
Saul Martinez UBS
Steven Chubak Wolfe Research
Erika Najarian Bank of America
Matt O'Connor Deutsche Bank
Betsy Graseck Morgan Stanley
Marty Mosby Vining Sparks
Ken Usdin Jefferies
Brian Kleinhanzl KBW
Gerard Cassidy RBC
Call transcript
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Operator

Hello and welcome to Citi's Third Quarter 2019 Earnings Review with Chief Executive Officer, Mike Corbat; and Chief Financial Officer, Mark Mason. Today's call will be hosted by Elizabeth Lynn, Head of Citi Investor Relations.

We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question-and-answer session. Also as a reminder, this conference call is being recorded.

If you have any objections, please disconnect at this time.

Ms. your begin may you conference. Lynn,

Elizabeth Lynn

Mark Good Thank our take earnings for Corbat, presentation, thank will website, Then all which to is download Afterwards, and us. you, will you On on the first. Mike citigroup.com. operator. happy joining CEO, our you our we questions. CFO, be for morning call through our Mason, available speak take today, will

to may based Before forward-looking statements our including, without remind differ variety precautionary management's referenced started, we like a in section you contain are are to I'd presentation Actual limitation, results, and the and our statements, today's SEC filings expectations Risk and financial statements capital, which our materially in from uncertainty and Factors changes Form discussion XX-K. due on included circumstances. that current the may to of factors, other of including today get subject conditions these those in

Mike. you With that said, to turn let over me

Mike Corbat

Thank you, of quarter everyone. we Liz of XXXX. the morning, morning billion for $X.X and third good reported earnings This

were per higher earnings $X.XX XX% of share ago. than a Our year

target return the common on XX.X%, our was our year. return Our to remains which equity year-to-date XX%, bringing tangible for

We, a of XX%. growth deposit the We loan revenues, growth EBIT with in also and Consumer had and a balanced in Banking XXth again, consecutive Global for growth quarter. saw underlying X% increase

last year. drive we with scale and continued and growth America, traditional multiproduct leveraged cards accelerated momentum our XX% branded Deposit clients. North credit to brand in from a business in our In as our from relationships strong cards with channels digital both deeper, contribution to

on continue and manage to improve, up slower environment through to Mexico, year. Management expense resulting Asia, was In revenues. last XX%, continued sale Internationally, through Wealth sentiment higher in excluding In a growth the discipline. investor credit gain EBIT we

performance had in with clients solid businesses. both institutional and market-sensitive balanced accrual-type group results also Our the

strong due resilience while performance & backbone revenue of engagement. Banking, the constant to continued network, growth The while at well. had showed share grew our of Investment gains in our Solutions, as strong X% Our Treasury Markets Bank global client Private Trade dollars,

achieving capital shareholders shareholders we with X% we income, which we in stronger or Consistent we outstanding period, over on year. the focused shares shares book next our our plan they've buybacks, of have million made to our through year deliver billion returns by ends share business significant remain which to addition the a drive to planning. three-year in return In commitment remain XX% The lowered our pace per helped net our improving growth capital XXX on over in $XX performance, to XXXX, XX%. Combined with tangible last includes alone. common up the value

highly our of The whether it's negotiations these being is now, resolution For our for -- the own We'll also adaptable year unpredictable the elusive closing resource to it when will on clients it focused we're XXXX. the and our help trade keep waters at of or help given mercy we'll environment how is Brexit. much while and planning out political -- navigate machinations, our clients flexible on comes allocation. keep choppy we even

well safety and in remain opportunities of products purpose our investing growth Despite the the to as see for the all, which we infrastructure best committed it in own as soundness. we in

we're and to going advantages. our the have We leading maximize competitive global network

be over then Mark it to we'd happy your and to I'll questions. now turn take

Mark Mason

shares buy our the the of the from continued year both excluding and as million results prior good Slide grew consumer decline throughout you, the of with solid average outstanding, Mexico across grew plan. up and in reflecting capital third our back year a year, business billion consistent driven $XX.X by we've billion from grew net X% the last X% sale gain X% last Thank our $XXX quarter X, our and in roughly institutional on management to EPS $X.X Starting asset and on Mike of Revenues XX%, everyone. in morning diluted income shares mostly year, were businesses.

with and X% of in increased year-over-year assets. Expenses the and savings of remained by stable. credit cost consumer, driven partially And volume as in while by increased offset growth, were the continued volume along investments efficiency wind-down quality overall franchise legacy credit growth seasoning

discrete discrete tax benefit of for items XX%, the equate tax our to per tax rate effective reflecting was $X.XX share The Our than better quarter quarter. outlook a items. this

dollars, in have our constant by franchises. end-of-period Excluding contributions this loans with was core tax our rate X% grew billion, been year-over-year would both institutional as legacy XX%. assets the X% from $XXX of partially consumer and businesses wind-down roughly and grew In to deposits benefit, our growth X% offset

previously medium-term sale XXXX results at in on the of gain gain up management impact of have roughly excluding the business well Looking quarter consumer Mexico. FX the in year-to-date mentioned underlying roughly on basis, Revenues the expectations. asset with portfolio the and line the first X. $XXX our Hilton million X%, were in of slide the revenues X% Overall, an as on on as grown

EPS the even On line institutional with side, an make critical RoTCE X%. earnings pretax our businesses. year. as we in grew franchise we XX%, declined accrual with the continued underlying Expenses full generated XX%, for are in X% revenues growth year-to-date investments continued X% up and by our expectations of our grew and year-to-date to in

Consumer businesses. shows consumer Slide X the Turning Banking in showed to business constant now Global the in quarter. continued momentum The dollars. for results the third

XXXX, while while continued contributions in And looking driving and margin consumer, XX% earnings. growth margin in pretax from grew X%, in and operating revenues growth growth in at earnings. Excluding were in year-to-date results excluding in we operating X% both expenses gains the resulting gain last all regions, roughly with X% revenue flat, growth year, down were generated X% expenses

X America for more North Slide shows results Banking detail. in the Consumer

last from up billion Third X% were year. quarter revenues of $X.X

more make we quarter, continued integrated a the relationship During progress towards model. to client-centric

improve. to momentum deposit Our continued

than through generated sales We across with with seen total $X compared nearly year strength our over in We've $X more last the deposit billion traditional channels. tripled to in Year-to-date both quarter, digital third digital billion. in deposit digital and inflows total deposits bringing year-to-date channels. growth accelerating net raised

Consistent of strategy amount, were relationship were half nearly card banking who these deposit drive in towards not customers existing with us. did our roughly this national of two-thirds footprint. sales scale of retail, a our outside have with to retail branch And with previously

far confidence provides and most for engagement deepening of programs, us products And leveraged reward proprietary our programs experience time. while our to digital forward. relationships more solid see so products we've expand these you'll we into gives Our model, foundation a over the date capabilities in and and us as of partner have introduced move

businesses. by revenues spreads. accelerated Retail deposit year-over-year, of to the $X.X we lower under than year-over-year. as customer down average X%. benefit in by Average stronger of more assets X% grew now the were growth results management to billion balances deposit at Turning was individual offset deposit the looking and And banking of aggregate, X% volumes deposits

strong, Cards. year-over-year. X% $X.X loan Branded average to Turning purchase to remained Revenues improved XX% growth and of with X%. billion Client up sales grew engagement

balances growth quarter, drove up revenue percentage higher generate quarter. this of in interest-earning This balances to earning in as interest growth X%. basis to net in interest points loans a our XXX a continued year-over-year improvement this We

X% Total offset grew consumer organic volume loan more savings as down expenses $X.X for revenues of driven Services Retail spending and related by North America were X% growth. higher efficiency expenses. investment year-over-year billion Finally, than

credit. cards Net reflecting Turning portfolios. loan X% by to in seasoning credit grew both losses year-over-year, growth and

our Services and were Cards Our Retail in respectively, year points, full XXX basis XXX consistently U.S. NCL with Branded quarter, rate points and guidance. basis this

On Banking dollars. show we in Slide results International for X, Consumer constant

a Third sale Consumer are profitability industry this deceleration in overall year. growth returns, we year-over-year. are managing and this seen maintaining and strong as revenues X%, the seeing EBIT our the and environment in deposit grew a to X%. credit Latin was in reflecting America and order again in excluding basis, importantly, quarter we growth mentioned this revenues preserve grew quarter gain GDP expenses billion current of But on where growth discipline muted On carefully $X.X again quarter, volumes. Mexico last in previously slowdown Loan

grew revenues Consumer X% the in quarter. Asia. to Turning third

our strong in year. in net Citigold in growth and We last versus underlying with money continue X% in new X% drivers clients management growth see Asia wealth to growth

operating and volume-driven largely spending offset expenses unchanged LLR And growth. release were build as efficiency total, in investment was of In savings the down relative a year. credit in third a cost quarter modest the prior to reflecting XX%,

again in detail. regions. our more credit favorable delinquency remained and quarter Credit stable Slide across rates X with this broadly NCL trends global shows consumer

performance in by were the in $X.X Turning up equity fixed with Clients the now income of softness Private on momentum TTS Banking in Revenues and partially to quarter, X% Slide offset reflecting stability X. Bank, combined lending. and corporate Group strong markets markets, billion in in the and Investment third Institutional continued

billion & in solid and in dollars, spread of of revenues and as up client volumes, $X.X engagement reported growth as partially up offset to strong X% revenues X% were banking were $X we Treasury by Total constant continued Trade see X%. billion Solutions transaction compression.

integrated footprint the in ability drivers deliver underlying expect solutions continue around business to multinational would the our continued environment. uncertainty well unique to macro given our despite We and clients TTS, global to perform to

revenues million strong by and spreads M&A, Investment debt Banking million hedging spread of $XXX lower of the higher Corporate particularly driven EMEA. $XXX billion partially as and outperforming lending were with in X% investment in down Lending from costs. offset Private both higher activity deposit market strength year, wallet, existing in new up compression. And well clients, X% as last Bank X% $X.X increased were continued by revenues and revenues of reflecting and volumes reflecting up were underwriting performance

from activity as $X.X rates. investor solid although currencies Income and GXX Securities see clients, we as both particularly Fixed in up did a roughly quarter billion with in flat, revenues last well were Markets Services rates Total better X% and year. revenues corporate were of and

and Services, constant but X% Equity's reported And reflecting from lower higher revenues were reflecting X%, primarily in down revenues balances derivatives. lower activity a volumes Securities down in activity in clients. offset prime by client X% dollars, partially brokerage, and client new finally, in strong were existing basis, up on

offset of savings. growth strategy. credit costs were quality strong, operating increased with year-over-year, client billion our volume-driven X% $X.X And Total expenses by as higher and partially efficiency investments, consistent target remains compensation

X% by strength our and Looking improved as results Investment the by solid margin Markets' operating revenues. ICG, at offset in in Equity TTS in in Banking decline results were year-to-date

Revenues this the $XX outlook. Expenses quarter for pretax Slide reflecting assets. in costs, was XX loss shows partially by wind-down of reflecting higher the XX% infrastructure offset from the last declined the assets. $XXX our Corporate/Other. million And with year, wind-down legacy X%, of million results line of legacy increased

we as a would loss quarter expect infrastructure $XXX million in continued Corporate/Other range invest to the we in million to controls. the ahead, for $XXX Looking pretax and of in fourth

XX the the the shows Split net our rest our revenue. business between top of the Markets franchise slide. Markets interest of Slide and the from contribution on excluding

grew and can TTS well see, reflecting $X.X FDIC of in driven you X% constant year-to-date the net Branded strength interest America in Cards revenue by billion surcharge. by North or year-over-year As X% ex-Markets, absence the growth dollars, as as roughly

Looking lower year-over-year Markets' at roughly And points Markets' declined and driven interest revenue. reflecting interest roughly declined lower by interest XX net the of the revenue. by flat was basis for also the margin results sequentially, quarter, sequentially, net revenue net interest net million impact $XXX

quarter of important decline this bottom fully shown offset higher noninterest Markets' net is to it However, is almost in interest the at the slide. revenue revenue this by in that Markets note

for million quarter And the which revenue of even Markets' million, quarter, of gain faced last this as noninterest ability in growth to year, strong confidence roughly revenue deliver in by noninterest Citigroup, we including the driven noninterest our gives all the growth year-over-year in noninterest $XXX across generated next to revenue. franchise, $XXX headwind revenue better us we of higher growth turning total total

to higher a our Citigroup, in continue So, did interest dynamic basis. on remain X% the revenues, at in which constant year-over-year net growth see in noninterest driven by original generate than dollars basis, pressure by the the for of flat reported total while in interest revenue, seen I Markets, revenue forecast dynamic to better below revenue mentioned X% original to ability growth comfortable on in our we which least XXXX by year net forecast, driven this in be for quarter the in modest into just year our we could offset a full should quarter, Markets, of given XXXX full but fourth

we likely originally year-over-year but to again, Citigroup, somewhat than in be on generate expect is aggregate, So for in different anticipated. we total still to a revenue modest composition growth the reported XXXX basis,

On slide And increased dividends driven was XX, lower of in the sequentially year-over-year share to income metrics. value and quarter, by net an share we declined book weighted share our billion show count. XX% common as along by our net our to In total the income increase $XX.XX, third capital per key with assets. $X.X ratio CETX offset XX.X% risk buybacks and tangible

let a Investment the but we quarter. spend reflect Banking Before on for few and the Q&A, me our go environment, to minutes fourth Markets overall we In ICG, should outlook are revenues a not from of environment the of accrual continued engagement volumes. repeat and last quarter benefit anticipating challenging And businesses, client in seen strong fourth the year. higher trading in revenues our should

partially driven lower continued growth, In by spread we be of would somewhat expect spreads. by expect consumer, offset growth interest all by the revenue regions, offset to we this deposit year-over-year and impact given loan rate However, compression deposit continued environment. the lower in

decline to earnings grow should and we of For pre-tax Citigroup, growth expenses total importantly continue should solid year-over-year. credit sequentially, modestly, expect cost

of Finally, discrete a tax any absent we items. XX%, expect tax rate approximately

With I take and that, are Mike happy any questions. to

Operator

Instructions] line of first Schorr [Operator from the question with Glenn Our come will Evercore.

Glenn Schorr

very Thanks much. Hi.

Mark Mason

Good morning.

Glenn Schorr

balance a Branded the that think that's about on the Cards, you're doing the breakdown in how card and where I the customers writing Cards, part specifically follow-up or give Branded relationship I us I of non-bank you. coming the talk bank quarter. about box I just XX% Thank you're the growth talk but -- incent a heard how to in, in you to? could growth where about on transfer just comment what is focus and in Can you're your growing wonder around portfolio, if of derived, being growth? through get XX% the

question. jumbled that about Sorry

Mark Mason

you. okay. That's Thank

that of would seeing, you guess from One, couple Branded Cards number made we've point conversion the promotional-type we're quarters balances. on a a and mentioned as now, I average I balances we've offerings So of interest on what is to things. earning

continuation now converting that on growth. the through interest a ago is paying this of customers of of a balances. that's have part that we weren't to so And fueling who years offerings And couple interest we brought promotional to any earning

sales see quarter. up are X% the You'll purchase in

You'll loan volumes are up well. the as see

as use the evidenced purchase of top being those benefit so the continued earning And us. getting them we're by for use, of sales card, now of wallet interest and balances

spread volume quarters. continue case quarter the the been play the out for number to from We'd to some in forward expect well XXXX, of play continue continue benefits. that's view. -- going that should past fourth of and But that And a to to into point likely the get benefits will out

growth So volume be well. important an continue will to as factor

Glenn Schorr

tweaking And XX-month offers promotional noted balances there. a I've margin? I don't the offers? some or that's of growing just know percentage just you're on type doing the book the out long just at what if

Mark Mason

in now promotional We've we've portfolio. -- to of looking the the reached we're kind our have desired of mix, mix that balances

you've balance, forward which got the balances Now going we'll interest earnings, promotional at imagine at mix. continue what been to to offerings promotional interest that order between that we've in maintain maintain strike to means once the as they into you mature, earning. and promotional And those you ultimately do would pace convert balance running is that

we fuel And investment important go-forward as part so -- and important kind strategy. strategy of Branded of growth parts or the our Cards on they say I'd execute they're a of

Glenn Schorr

desire it's on that? doing follow-up convert have maybe that, are deepen to work. sounds don't then exactly of banking It relationships know, card the And that a card last What it. to relationships side is, starting to I you. customers Got like penetrate and with that you other that flip existing

Mark Mason

Yes.

to work. So, it starting is

I sales and growth deposit think that. referenced in digital earlier the referenced I

is not previously portion customers good did a of us. have who relationship retail card that a In coming banking from with fact,

we banking think We and are, a customers, about create ability yeah, that likely we've of as and respond to technology to open-up propositions us. to we our that value to mine investments made in our with we're data retail the able account they're have

other know our we to offer that and a customers programs programs respond of ThankYou for point of and card enjoy card of our rewards So prefer view. rewards our example, we customers many the from of which which

them And they benefits packages to account digitally, to with if for so they're retail points, are responding. willing them like banking open able reward ThankYou that and clients we're create us to with a respond

ability speaking And to to in that clients to propositions has create with data, growth – so mine things value our our or that we're motivated motivated to that resulted the around now. are has

Mike Corbat

is in other we future, that some partners. retail we'll co-brand that, as our out to products. the of have our proprietary be done so piece Glenn, exclusively far not-too-distant of But as our rolling think with of well the I own that some And

I continue ability to think to we've So expand got the on that.

Mark Mason

Yes.

Glenn Schorr

much. so Thanks Okay.

Mark Mason

Thank you.

Operator

of is from question next line Research. the John Your from McDonald Autonomous

John McDonald

show for think what's for a RoTCE, are targets. this about Good ambitious the conference. for still wanted just you both how then And environment? guys feels in improvement it RoTCE planning? darn the confirm, XXXX, guys. versus this XX% go XX.X%, balance more and what And your for through of to quarter outlook. we given want that the XXXX for year, be close target kind as as to Barclays a year you, difficult your for target know gotten you about ask next to Hi. I that But obviously morning, environment. your prior on of Mark, good XX% at all about fourth you going environments RoTCE to Mark, your wanting acknowledged the feeling or to might tougher

Mark Mason

Sure.

remains your target. the John, XX% point, So, first first thing, our

As at we RoTCE year-to-date. – quarter, this did out, are XX.X% we you XX% pointed we're and

that well. we you've and close, get and said as darn I've as target, number the to though And now or as so feel remains said that we'll

I'll and the it. the again said different it terms we XXXX, the alluded of than kind at environment and it In Mike very Barclays, think I've into say expected It's a for of XX.X% year. coming to I

amount uncertainty what the play going of the reductions like. be, impact in a factor we but likely in to the environment, are XX.X% out, that's midst or impact uncertainty – and of we need budgeting demand in our of full target, the that's remains remains. that business. client what the look And the And there there the There's how is to puts to the in parts look fair rate in XXXX of what process. to year now think takes that's are likely we like, might

There'll these parts be business could pressure we volatility some be of from Markets, there see the and as uncertainty of some like persist. positives

gap so line really to top progress, understand need do be what us we on levers we like, to budgeting order And continue through we to to pull both targets. is look to demonstrate see what narrow process and have what that get the likely available and our to in that to deliver think to to able understand we might

Mike Corbat

of necessarily the I consumer's than morning look I of other – to probably terms would things. any to, new continuing that the thinking in out this And to growth. been Mark to I to as talk the I where the benefit get many U.S., more information, more downward. they're thing We morning heard shape. us saw globally our but at very i.e. in terms IMF about X% John, when think do fine growth clients global Not catch-up of alluded think have this how of just you a revise as that want is and in much probably the broadly as describe you come consumer,

global as high be, not So growth. is like X% to as but growth it still we'd

themselves be terms reading hiring. I think really too of of in see in terms of And way into in direction think that. of terms investment lot And we CapEx, of a to it spend, don't want any in clients premature I our positioning depends in much either so how of

not a they're how so to And our gain but get here U.S., in in we room. businesses the around information continue want want of just clients, things. to terms in our thinking the world to from about We

year example. prejudging great think as year we'll get several to better come I past closer this we is to early think, informed a I shown, the the declare of before have we be last The kind able as can And and back. opposed anything, to years more the

John McDonald

would XXXX? just The I quite guess push most should to think, in be on as mind, of even a I franchise And is -- little as do environment, to this reachable a hope paper. your And absolute do level With guys than this bit better year? that to you RoTCE able next think, bit. definitely think in than peers. year to to do push below better Like do goal Mike, you that what people in you that is a do is you a

Mike Corbat

Absolutely.

think to and I to got to progress show that continue continue we've narrow we've got to gap.

John McDonald

Okay. Thanks.

Operator

Jim line with the question Buckingham next Your of Research. is from Mitchell

Jim Mitchell

Good morning guys.

year. was on was back -- Just ICG any of revenues in had you I severance Was it and were was volume; I thought expenses the or being little investment think that out messaging quarter-over-quarter, the the surprised; the maybe trajectory know you'd up just in I despite was do about there? bit. half in little How ICG a those other quarter, come down. severance a first expenses? first It we start some in taken it to expenses see the

Mark Mason

Sure.

There X%. and how investments the client are of investments particularly ICG, we in So obviously in are and deepen experience yes, up some those improve and were client important. we're relationships making that TTS expenses those business the the our critically

expenses. growth some to it, And as transactional There then well. there are volume-driven some largely costs around compensation tied are

the base point So higher that of from made hires parts some we've strategic performance there's franchise. There's compensation the view. a in of

and obviously on pressure you business longer-term play kind we've about that alluded and capacity with some a lastly model of it, as come technology cost. -- thought then will And quarter And out, as as but this in we've we've of adjustments made benefits the to adjustments. well, from capacity certainly wallets, some long-term the played it those and seen out or

the quarter X% as that of part in see And -- increase. well what you so is in that the

Jim Mitchell

still even the growth, that you growth, you lower a get the over feel intermediate lower can negative environment, leverage that growth term? operating So in

Mark Mason

mean we the adjusting to -- see benefits we the will evolve in able I that topline out obviously obviously some much we're efficiently play able of So matter we're the in be going XXXX. is to think and continue run What look, capacity to and how perform business how continue will to to accordingly. and share wallets But think capture. continue we to here, we

Jim Mitchell

fair Is Right, growth And by basis Really rolling driving a on that period off? ICG. of then growth? particularly Or your enough. just maybe that? think on of of strong end end so, that's sort deposits. some and positioning on some do of quarter that's you clients And balance what's sort sheet if sustainable

Mark Mason

in -- did you're growth clients. it's It's the of new with actually both which in board Frankly, across regions right. across We in TTS deposit is existing see deposits, as well. strong and TTS. The We specifically majority deposits good. of all the consisted growth operating

deposits clients. new renewed growth a the about or from were of operating in frankly, And X/X

to And broad so roll think engaged We're is to with our that likely out actively solution we're we opportunities continue. our clients. seeing and them with

Jim Mitchell

Great. That's Thanks. helpful. Okay.

Operator

is of Wells Mike with question Securities. Mayo Your line the next from Fargo

Mike Mayo

Hi.

Mike Corbat

Hey, Mike.

Mike Mayo

you're running revenues X% one-fifth row XXth was that think, I it you than what expenses. than of a made didn't revenues, that call of in out faster you by First, year-over-year estimate it grew expenses. I faster This quarter the look, revenues

back look then But couple were the And doing by question like it or touchdown went So you X. -- a kind made you a revenue's ago, is, you field when bit so it down expenses, goals. of faster of a to it. growing than

like push exceeding Now by it analogy. the you're an extra point to seems it

faster in so? And is the So do strength confident that how question of role are growing year-over-year? of you the technology expenses to is, what revenues you than helping continue

Mark Mason

first the take one? I'll

Mike Corbat

Yeah, okay.

Mark Mason

So right, we margin. look, you're positive operating reflected have

for we've that both when about top And line, for that the minus and continue XXXX. expect XXXX, XXXX. talked we And GDP deliver of We about we to the we've or year on growth flat described full plus to expenses. expect talked roughly XXXX as

we're margin is you operating what take leverage Mike, deliver. positive operating yes, to expecting So the and want technology? to

Mike Corbat

Well, I add couple of think I'd Sure. pieces it. there's a to

think by is I the at so X% you the Mike, say, alluded capacity down focused would here, on That hasn't been really almost go infrastructure. between quietly, and relatively, been year, X,XXX, to one It I you was about count past the over X%. at has exclusively numbers, Mark at aimed front focused and somewhere head look end. our So as if or

so you we when was that we we lever year, came the that. do. at the things I And would and at we've be all told this what done going into we And looking year, think every could

in to moving, in the to us terms consumer those to continue those at reactions the I I And some benefits service penetration, right technology, cost that clearly, as those. think, very when nicely slide rates, direction. give go contact back XX only benefits, you but or of the mobile look importantly, more engagement, think and digital and e-statement our business of of around drivers all

but fit, either same the sacrificing multitude to Mike, the attempt of to guessing, kind everything's make We're will there, out what's that to as of competitive that not a continue I'm at investments of year going pull and U.S. So, that we to the on look or going and the see at to build the need where levers to XXXX we're continue advantages given those around kind table. we in time be the those to at world. maintain

Mark Mason

that The able -- manifest to add problems. offerings our to benefits create think if and technology as our about so ability it relates the for you we're how to they themselves, only our clients' to one, I'd thing so create that and clients, its is solutions around

been invoices And tried capabilities partnership good that. to they surround as technology in match companies we as with deal create TTS a You think clients, for example. HighRadius to to about payments, like able example, use and with with we've

with helps technology offerings. So our

suggested helps also with terms we improving And the but have with operations. then how of the the that experience, experience the efficiency run and way Technology of in technology serve, to costs our Mike helps us. clients client finally, as the lower our with

using service, automation, infrastructure, So removing and example. expanding our for legacy cloud centers physical data

spend So impacted buckets a continue we'll benefits. we make, by technology that in different make number light and the are of to those of spend that

Mike Mayo

easier then asked RoTCE RoTCE you. I the and And a easier just one it Mike up I'll about I over really is X%, to target. it Corbat, the -- few gone as look, and question XX% your mean, I X%, thing bit, the relates make up years. for know guess quite follow-up, I'll John you, ask a -- under harder has I to guess,

to XX.X% lag your still So peers. that's you progress, tremendous target. expects but I consensus get And you don't think

I kind think look of the hearing in let's of is on I'm light say the you're at today environment. new you but -- it what table, everything's

assume So might be it not XX.X%.

we'll want guess to the quarter I till to So unless confirm fourth just that now. wait have you

you look, of target it's moving be irks guess getting as we'll you're But everyone get to on it better, just long it's And I'm are, that side I good. possibly that's I is competitive, though get that darn striving you just -- right do, firm whole at of what you're of say direction, this close. should darn what know when not of can internally, sense feeling just year's you is, perspective. me the intensity, let's even the mean, that the target. it if RoTCE have this I competitive. both as But close, know you're Everything XX%, you XX% your firm's It's the for.

intensity? a of degree just could us the of sense So if give you that

years you ago, restructuring lastly, over. said our I mean I two is And guess,

versus model. issue you management or either the So U.S. peers, is your worst-in-class RoTCE if a have

up and pick new it's to question. last management that's either fresh a that retract So So needs take my is statement maybe a over intensity restructuring the you out look? or to need

Mike Corbat

Okay.

that you're right, say, Mike, are Mark I and competitive. So would is I what

people. fourth quarter, focused this. disappointed, just But like We don't firm to that I to on year's you what are is The the is having do were last don't intense completely things make environment, I when long-term. to some for sense know want in commit

at saw don't efficiency way Yes, decisions? be could In our and As year, all last of an to rebound and target? have have we right that I we year light example, slashed our case. been we the the gotten cut the have. would those this believe could to

trying pulling have XX% commitment, smart. our but we're And that you makes commitment, And so and the going this longer to get I realm what do every seen intermediate my we XX%. in quarter, can of are do again need -- to to firm, committed everything we to particular, think it sense Mark's our continue for And there, you've over we're lever deliver within we're to term. to shareholders to the that to we in for the

Mark Mason

we're, the model. the we obviously, to run around through the agree add the how evolve smart completely this just and long-term I that. that is around quarter shareholder the I’d that how means And one though, I we for value thing decisions money and that sustainability trying to with firm we highlight can point making for its spend guess that create.

we're are having So, what I talked increased expenses that mean the capacity quarter through had by that of that take in to and the adjustments around think is about way we've we repositioning and to those if year. what the that, make in you the about

short-minded to run A take to you're because franchise. they against to to that do would sustainability, that When long-term over the firm and time, you decisions that that we're deliver. dividends right a XX% will of that trying the pay and they're target trying you decisions realize for is be benefits those the view the

responsibly. is without to in target. know that People up firm. this yes, and doubt, XX% a so, our down going run the we're But And firm

So sense, Mike. hopefully that makes

Mike Mayo

Thank Yes, all right. you.

Operator

line Please is your open. Saul, ahead. go

Saul Martinez

Saul Hi. Martinez. This is

there's I XXXX. about ask level also the of to high wanted outlook. macro in I a uncertainty So realize

still how currently. are some through you're some -- curve sensitivity, are at, that revenue rates what is you XXXX what is base you rate next case long telling for going revenue now economy, the the the You're the budgeting confident about what right forward you is for base seeing target your current year? given case know in But your growth where still process

Mark Mason

as through any got that see additional in We're you and be far we of we're Saul. to the have seen the suggested rate there off. a that will Yes, the to be to headwind you. full we've do Thank year you of that year budget face -- said, so know, that that's pulling like that reductions the thus and going year, impact we balance process. rate reductions as the together part We a

certainty puts terms There's through still uncertainty volatility caused because bring on generating there. make uncertainty and seen volatility, year that is there happens that the that across up we've that out I through markets around how Brexit to reaction play said, client and there's market our takes year There's continue what That and much progress trade has the a still in And been that topic. around of And businesses that as direction the around play we FX out. that are activity. there evolves.

to target. that target And view additional finalized get we and so, to we XXXX hopefully will point what made, plan pull got and to factors or an or get of that before RoTCE get speak to pull as is we've look together able levers that be those we're can consider as those things at what from to that decisions

in to so, progress, And Saul. to I is have still it guess I'd how respond that is

Saul Martinez

are wasn't specifically I you. RoTCE, that than there too topline some obviously -- you I whether get environment less that does that that a that fact confidence But be your No rate of much just this the -- degree growth in the the okay... would because could and lot sensitive differentiate Okay. actually asking peers of but and about

Mark Mason

to mean cards continued do expect do continued I consumer And our I to franchise. do growth in expect -- see business. global -- I we our see growth We do in

do there, headwinds franchise reference have of if these the kind core we we as some expect will of you but into those we continued and our So, to in factor network to components unknowns. do momentum businesses,

Saul Martinez

Got it.

and credit the not of bit day loan framework, Let one of They accounting but how loss I some we a regardless given CECL forward? and think day a range the losses same losses impact the about loan. ask impact. Credit lot know But the me going guys one the the time takes. gears be two you should about provisioning day change will over on CECL and estimated little life of puts are for the have and you a of there. there impact are

a be content will you level role. provisioning lending starting plays an U.S. and ratio mix through will seems it higher, growing of about But where mean an important of maybe of going just point, And so of have takes of forward of towards maybe CECL level in backdrop given in have things thought the your much are CECL impacts don't you kind how more but don't like, we and puts deteriorate where ongoing the charge-offs ALLL and the loss in macro higher some provisioning thinking the big team, change how Your environment that? really

Mark Mason

Yes.

quarter on in of given I impact of be So We I given balance really given as will speak what we specifically the and Obviously, the longer-term our than guidance factors be. day any any said. CECL, impact composition we thought those as haven't have portfolio forecast in that can't important factored factor any more about we is, going in guidance that. would loans all an guess, to a come and would be loans of obviously mix you play. we so, and consumer I of any it into the what to say will and particular the corporate haven't two estimating both is of what but

Saul Martinez

right. much helpful. All so That’s Okay. guys. Thanks

Mark Mason

who Operator, is you. next? Thank

Operator

with line your question is open. Steven, next the Our Wolfe Research. line from comes of Steven Chubak

Steven Chubak

much. very Thanks

question related pressured hoping a could of some NII. speak the NII to the wanted I markets with So, specifically. that to on to you start was off factors Mark,

on last trading As as costs liability-sensitive the back I were consistently were years book. your drag a highlighted to rising, over rates three higher two think funding as

could declining, isn't I help the seeing and sensitive? Why any time what's us was unpack continues we rates acting see a happening easing? the costs liability bit benefit really that should the little with way on side. we're from benefit down trading as not Fed book funding more Now lower funding on over hoping And you the

Mark Mason

Yes.

funding completely is of And will. being that's non-NIR. think that's that, while overshadowing right, benefit mix that I Markets talked as and XX obviously that look markets to NIR around if plays business page that and we markets -- -- -- that turn the you're So, -- through is costs seeing revenues its in there funding come cost we're which on referencing the completely that, rates that I it's kind the spoke if -- down, a I you're our and have page that our offset you dynamic impact the the from is dynamic think highlighted about you lower

funding significant we're the is more seeing. than So, impact cost/benefit mix this that

that we business that as so So, that not example Markets and total non-NIR would the mix of say I'd thing revenues and NIR is imagine, our an this, first can varied. and and for for manage you has but composition

traders The out is is manage and NIR that the and a positions, component here. function seeing risk fund and demand of play we're the client essentially how what so

hedge NIR So, one in be principal an facilitate have on activity. could because We hedge transactions. impact that example in long for could that have that and place -- derivative, of long generates asset was we we client example revenue, of that interest that hidden that we in inventory position is to a with

this the And cost/benefit. that funding impacting the so is it's that positioning mix type mix and of overshadowing is

Steven Chubak

view, as trading be over NII funding a holistic plus do side But assume, as principal even looking key it. some you sounds see guess it should the I'd Got -- proxy, the taking I may transactions But come like still more thinking rates time benefit different. down. geography, at the on

Mark Mason

geography are funding It's The benefit. different. may we just seeing being Again, overshadowed. be a

Steven Chubak

it. Got

And one Okay. me. just from more follow-up

bank the highlight of through sales. channel legacy the digital and strategy, On the card retail growing some deposits you progress

could I might maybe the new speak some possibility look hoping forging of if to was partnerships those partnerships what scale like. to to you of and build alluded maybe further also You

and make whether a might current industry as option then you And picture, the retain? even need retail that of current U.S. liabilities inorganically, currently to franchise, is scale the more or about share you size think your add just the it bigger grow to viable to that sense given

Mike Corbat

businesses know our with propriety the coming and propositions offerings. you'll been of and going Services we've own more rolled call, Again, specific and new co-brands not-too-distant I'm we've similar ways not, a Sure. that in coming future, but to our out. that. this to Retail those of speak on in portfolio our will us so around you on number our working not-too-distant world-class in value in to them the partners on out hear And very products the see future, names, you

Steven Chubak

retail picture, maybe bigger just the then bank appetites strategy organically. And growing and

Mike Corbat

client open types perspective, and on depends portfolios inorganic of accretive demography so our definition it. and It and we those a to to your of of line loans things fit that we obviously wide are again, business returns, find, example, to fit perspective can or acquire from an continue as cards or a if from

-- there valuations buying very -- things see of but given I today we are but investment side in we're it. given things some that digital of again, can stake being a the our bank, what's focused out national don't consumer the and But never where in terms particular, on dismiss do that think In digital. organically, I at on

side, we've the done terms the side, the in there reinforce to what of grow digital And again, I not franchise. you've continue consumer strategy using think to our seen but on institutional just

Steven Chubak

taking Great. Thanks questions. my for

Operator

of Erika, Bank go ahead. the is your please of next Najarian from America. Erika question line And with

Erika Najarian

morning. good Hi,

Mike Corbat

morning. Good

Erika Najarian

few points On could to a net in there's the to remind you on balance interest sheet sensitivity expectations? questions today, of is terms cuts? been remind of curve clearly, of lot And follow-up how with terms revenue, volatility basis XX is could your questions. a what of -- us us you regard positioned Just Chubak's in yield rate

Mark Mason

Sure.

past talked the the the IRE in we've So, at you in our of XX-Qs. terms if -- about in this we in that have look

that that, changed. third see won't the quarter, For materially have you'll

in that result So, would XX-basis-point $XX reduction the a is million. simple cut math of a

well the is cuts of of in And shift that analysis math is, pricing imply. the IRE and we've important sensitivity pace than the parallel that is on as flattening And as a it's greater deposit greater an impact the math. what based faster. Now, is because seen the factor. simple impact would fact, the certainly on the curve And is obviously

curve pace that's the the we will of shape of the depend future on a of competitive expected. lower And curve impact than flatter the the and kind and and cuts So, got the environment.

that those all math, factors the simple changed. has influence but not that math simple So are

Erika Najarian

growth that Card question you're follow-up growth of mix year-over-year a Glenn's loan we mid-single-digit you And in in Okay. XX%, reflect the to Branded XXXX, Got of in at in as the right noted, revenue Cards Branded portfolio. shift of been terms showing? should that more revenues you've sort that think Mark, it. the growth of And just about earlier, sort

Mark Mason

still at at be we a There it volume the off taking at or may still be up Yes, the pace would would will this you've spread, expect that seen stage. be mostly driver. volume picking at bit major that – stage pace be there little but of this

Erika Najarian

Got it. you. Thank

Operator

Your next please go question Matt Matt, comes ahead. with from O'Connor line of Deutsche the Bank.

Matt O'Connor

Good morning.

Mark Mason

Good morning.

Matt O'Connor

You're some a And in if And I puts just talk of than of wondering, that areas obviously there more could is you by you in and perception that two, down impacted past, takes. banks, maybe about think this one dragging are of business. uncertainty, naturally you're is some then, terms one, the trade there all think it most others. was global the the given the talked what all and about you

country, there with one trade are some offsets So others. some less if with do you

So on circumspect? just elaborate of those some try to

Mike Corbat

Sure.

in trade. And consuming movement the places we've I trade. in I less trade It's have think that perspective, a tensions in impacted Matt, in world. the I which just And two doubt, certain was is One, think volume rerouting and reinforced, its also getting that we It's tariffs, seen not ways. ago soy. without of a you to, trade see gave a economies today, this China, around is soy example, the few second we necessarily weeks alluded when was think less from China is today. way, I certainly the the from different world, impacted that in

our and chain them terms the think trade ability bank exporter those some think and with I slowdown I our terms can of has that trade. is be very so don't rethink both And with been And in we've looks effective like, it clients importer now move routes and other on these for I right helping of to supply global that a sides think of what what as to I the that, uncertainties least escape piece in caused think at. any at us a of

I trade think numbers. again, have of resiliency. businesses our as included a is our good TTS shown our And part

our point, some that. the get we things think bit – future, to can where surety of Mark's But terms start a little earlier clarity of to these of some in definitely I from benefit can have trade businesses on business would if think I more

Matt O'Connor

in let's a of – the with one I directional kind it that global But think And you obviously, the your do think of out trade few you of you're you kind the to negative, Because of could relationship increased here. complicated? be shift of to all corporates, more the revenue have do think, on your near-term you this kind of flex than banks muscles so mix trade can there just maybe wasn't if right? and the some

Mike Corbat

think right. I that's

something in positioned trade, the lot it couple of room of of in of we're with well a of and companies that obviously more really Our we're today ability our inventory what that India an means And supply a operate part but to clients our sure be just-in-time broadly pretty make we've terms being there what chain us in of to beneficiaries China and the has And with to not the is room routes means and as terms of I what management, that. Vietnam ability of. example, out think the wanting that seen move out kind is critical. just is mix trade this define in in

Mark Mason

think globality part just the countries, given so. that I cetera we're of And in dialogue, presence XX over be uniquely positioned our to et in

Matt O'Connor

Great. Thank you.

Operator

the of question Betsy line Betsy, Graseck ahead. go is next Morgan from Stanley. Your with please

Betsy Graseck

morning. good Hi,

Mark Mason

Good morning, Betsy.

Betsy Graseck

thinking does. questions, matter wanted you're Not Because think how to of to sure a in just you? couple understand that about I Does December. GSIB were one if little you bit size. surcharge you're where A above it

Mark Mason

Sure.

December, -- we obviously were we So at are in a X%.

TCE you bucket being how into it as fits matter targeting at a Where at capital our requirement. implications for again X% if are We does XXXX. about we're think in that

targeting matters we're at So the the end being year. a X% it by of and absolutely

Betsy Graseck

you to And have to in is particular just normal do that course? anything Or there get it is there?

Mark Mason

Well, be obviously to at franchise, sense for our primary objective. where I mean returns kind objective look primary We'll the sheet we balance that can so that would demand we grow And make and have. we use obviously with and have. so we’ll look returns a demand client for of the at of meet we that's client the that do

takes the us we X% beyond the and can how we're we that growth bank. through We to do we make balance getting think the we that, sense. of that and capture be returns about, this want deliver commensurate and responsible year see thoughtful as in If start GSIB to future that that ensure a that

where makes we're need But we're we're with our to how it assets, higher balance how using get it to where where we to that actively the we're And end manage on managing returning those returning, sheet, so. the clients. doing we're so. that sense engaged put reduce to doing And be And for sense dynamic lower makes we'll year. that are to it's of the

Betsy Graseck

it. Got

Mark. thanks Okay,

So Mike, little business, a question just on the consumer broader. bit

well, You're you nationwide mortgage. are targeted you a used nationwide to be and more card, business little in in -- bit a

around customer targeted Now your you're more set.

geographies. know you're I into move looking different to

of the have maybe you're businesses. where to want or business, years the taking that You you understand the over think business just to is and -- the got I'm three where -- say, and next, that U.S. deposit And us understand collection us how trying And angle help footprint you give about and you've the strategic U.S. wealth. take some in so.

before? can lead is fill with in you and into discussion new Or that then products? deposit maybe you geographies first Does inorganic some of you the -- them other loop have

Mike Corbat

it technology-driven. say, is than fundamentally organic Well today, would I it primarily is

So a across got presences using saw, of large the one, we've some the things today from States. physical that you United you presence, cited X

retail But you we've got touching depending you every States, partners, consumers at line co-brand national across virtually go XX our many we're network in state. franchise. whether referenced, United to proprietary of million as a or our as truly and you the some cut as And cards the

the of markets. in on in we've in And I site, the X/X and think as not brought year-to-date, footprint outside quarter, doing experiments of those Mark really in ability some six to that of of the numbers but of the our the deposit those deposits outside brought grow just referenced

depository by the Of over those do bank. -- the that in were those who with have of deposits relationship deposits were people not XX% brought in; brought relationship the

around And to the will so, I that smart ability these our know people. have, that continue that we think on and build advantage to is be we

think that. When spend, about about way, you we And we some you the relationships co-brand know we you is think we you know how what where our around and by of be targeting we what bank much length you or and people proprietary we know the know of your perspective earn. who can know, live,

ways. from think out our that bank a So real there there's have we We because really same a has portfolio. we very unique presence it's that in the there's opportunity think much many no cards opportunity national

do future. I with against in direction. that how from you're of and but a we've plan proprietary how not again, and not-too-distant to the value each be perspective, got in we that, a partners right going do engage think good just propositions the we And So more our create seeing

Betsy Graseck

build back you Because where set that with different much across incremental bit wondering, broader and much products? products feel line like here; revenue value, just geographies, going nationwide like Okay. the little where you a mortgage and were it great more these of so, kind to do I'm on maybe you underlevered of pre-crisis were in a does brand

Mike Corbat

and and – branch But going openings it's that higher. six that again, something or that to from add are start I out on digital digital Betsy, of first, then like And out through deposit the changing on we've people relationship relationship. rule come wouldn't rule from build number likely to the digital been And through engagement, that. in engagement. you'll And most us you asked, wouldn't to off space, see continue to that a card I

proposition works. the sure for make us, so And let's value

I think that. seeing we're

open on build Let's makes that. products. success, that more to certainly branches we open more to And building adding and where have as then sense areas and

Betsy Graseck

Thanks Okay. Mike.

Operator

please is question Mosby next Marty Vining Sparks. from line your ahead. the Marty, And go with of

Marty Mosby

the the Thanks. of the that financial at markets, tied down, funding long the rates come the end is assets in and curve, yield two I looked shorter of back the are it is the curve. have of when odd an in we number. the of going inversion Isn't One to kind questions. inventory curve tied that as part the – also to the longer to are the

really particular the makes also So, the as pretty a a the inversion up because have impact mix that your And in that segment. does Fed meaningful revenue catches with on NII benefit a see long the of different that end see curve, kind bank. going a what in of your normal you'll retail actually part be forward, than can will difference which of

Mark Mason

I but I think mix less to was there, relative impact some so dynamic describing. are There the that

So – dynamic. impact there but some right, you're is because that flows through that of

Marty Mosby

XX.X. that path. It's of about tangible over the up if value XX% investment, think talked you continuing book be as your able And target. is to been look story we direction target, creating and the I And at of that looking improvement at – direction of than it the a you're and say if this big and bigger I XX.X a that much picture think I've going words, last at of is side year. have is in, particular go important target, kind kind a I you're haven't right, tangible which I'm the a you value the other target, is when then and you what to through put hit And is word a more look it or in not on to piece yet Okay. book this, hadn't

then on value at that value to if a growing know love make defensible have dividend is growing you defensible returns good you're think your double tangible through sustainable value the upward trend, I bargain. it set pretty tangible your X% think is on So but digits, to whether not dividend, So in I got we progression the opinion and you in up if a your or book book is trading I'd book a the you're that's cycle, tangible CCAR downturn

So, just avenues wanted three think to kind metrics. those about of or those

Mike Corbat

dividend outstanding, perspective, north $X.XX that billion a say little shares don't team? Marty, over base why tag Mark, from one, slightly somewhere a a billion on would two income Sure. you I when in roughly So the dividend we X% that, share, look so at $X yield, of a net high-teens.

to up. sustainability dividend, clear to think any reasonable headroom that environment, of think ample and I I take continue So in

we've DTA-type The usage in again, of other of piece have capacity, in amount and us think the and of buyback talked the I more that a obviously flexibility. intangible there that ample of about earnings, flexibility we goodwill, the combination is terms gives there. so the we And bit components have

any in of focus just as use said primary you've things which around. earlier particular on hitting grow close some that but to equity, so try the not to absolute continue tangible and common up also that. any to And in obviously, return as continue target, in I other to to continuing and environment to reasonable think here, end, And conversations on as to proxies peers take part our and of here, – both we gap it's the for, our relative continue basis, is is

Mark Mason

cycles XX.X% a XXXX that's your were able Mike. progress is continued look of about track We're only a think that. at had about We're target around we XX.X%. year-to-date to We've the XX% on, billion-plus. I'd do to point to add $XX on back $XX returning talked year. this on to if spot the thing and We I billion-plus. RoTCE, The talked you deliver three we CCAR a at for over capital

and do continually those of continue important not this plan the so demonstrate to progress on RoTCE, metrics, to is so. trying And to are we very we which least

Marty Mosby

there. words you Yes, progress think talked the that and and are I key sustainability the two about

that wanted to achieved sustainability any – Continued progress is and would outcomes confirm. of what things the you've just already through I reasonable I

for thanks So that.

Mark Mason

Agreed. you. Agreed. Thank

Operator

ahead. of Ken next line Usdin the Ken, from please with is Jefferies. Your go question

Ken Usdin

lot. a Thanks Hi.

especially a quarter. act, Just ones. about against are couple And on putting good expect side you of – here? was strategies out national down do off from trying the overall the rate? start you're this to are asset just you side with deposit see quick the deposit how you How still to Thanks. you to Can the match cost to that lower cost? the betas turn deposit rate talk It

Mark Mason

Yes.

did we consumer spread betas consumer volume there, we those and consumer a our generally pressure about is from in U.S. low deposit mind, the Our deposits, view. did as in point see while Keep of deposits. billion, $XXX to growth get it relates are

And the so we saw as that. a ago, rate year benefits the not – didn't we or environment – of increasing see so as we're

and of didn't see And the impact we that. so similarly,

play And to we're play we cuts so see through similarly, as not out, see that rate either. going

kind we so consumer to betas of on low And side the likely continue there.

be to example, we we've part, we'll rates which that relates aligned that that doing adjusted as expect have with just the high you down, accounts, continue it been or market the part past money and for the pricing, of and growth for strategy, those been As savings pricing interest yield so accounts. we've our And has to come for seen over quarter should to do market. for

Ken Usdin

Okay. side. And on follow-up the capital

XX.X% CETX. at you're So on

underneath. about given big capital let terms underneath? seeing come Can XX.X% and post been a helper, number the in context what happens willingness obviously about down still just is return have what CETX ratio XXXX in continue for to like a continues you outlook of your of Rates to the capital Thanks. and the You earnings year-end. talked talk return the

Mark Mason

Sure.

you're of to second quarter. kind So third quarter CETX see from did right, come we down

thought dip capital we to what we down cycle. that that the hole, saw around we've as as XX.X%. on last approved as planning to what there's – of execute also of which There's start the quarter of also third a second year a talked the but there, CCAR somewhat is to capital about well prudent is We natural a return getting part that's think to we level

expectations to year. the our the end would line, So be at roughly of in I with we by XX.X% say, are

some that, is of You'll the XX.X% for have account that buffer meant some requirements. that on buffer a are and of capital recall proposals that it. impact could in outstanding still uncertainty has That an to and volatility management the

client to then the shareholders on net at common against be we first we DTA means that this firm. still of the to like able we're will But generate the and in change, clarity to have to stage, what of reduce. going things those growth complete how think we're XXXX, That that run way income at prudent the feel able available level is demand and juxtaposed which about to some XX.X% into without will

on a capital DTA, will how that much be disallowed shareholders. to And of able reduction we based return to we in can determine fact

return going CETX at we'll But And the how this think remains target forward. stage level. at capital the so that's XX.X% about

Ken Usdin

Thanks Mark.

Mark Mason

you. Thank

Operator

line comes question ahead. next Brian go from of your with Brian the And please Kleinhanzl KBW.

Brian Kleinhanzl

was thanks. that it of have It on you you the outlined think of to I Yes, two decided does efficiency last mean kind I that you've pull lower. million investment? ratio opportunity questions that mean on? Yes, quick to managing piece to expenses sounds here. trying $XXX just back were like do Mexico, not I get on and officially

Mark Mason

Yes.

So right. we – you're

been and there to revenues that we've continue we ensure and managing the in growth to that of softer that's seeing. environment have there We light Mexico been demonstrate very EBIT thoughtfully trying

of is that we there year. a that investments prior The we're in expense in made seeing part byproduct the management the

around so those is in efficiencies XXXX some cost building the investments we're out so so in And of those see of starting out to were good play and saves a and thing. our some operations that

to at cost to of and But want of those we're prioritize really how are Mexico in be to thoughtful pacing what's determine that in. the look investments investments the to want balance return we're we light how will seeing the those obviously We our we part improve byproduct pace made as that at strategy that stage environment around the the of we are left. made productivity on a this the savings and early of and

Brian Kleinhanzl

is in expect time Controls a Thanks. or reached in -- a that and Risk, where then that? on Would on you peak to mentioned and you've investment there's close continuing still point increasing? Corporate it separate feeling a you And just Other. down trend Are over that's one to the you

Mark Mason

things that's includes We into Sure. data mentioned I've for franchise. make includes our compliance risk finance as to being fourth We like infrastructure. do we result outlook enhancing as like capabilities. a think quarter the things a and the Corporate/Other costs. think going important slightly and cybersecurity capabilities, higher improving of expect That do I actually It infrastructure our continued

in things not sound So, but well. business ways, as that to all many a helping of and safe those operations to critical think are we running to organization, only drive better

we continue so investments to to area. And yes, that make expect in

Mike Corbat

I just to say, -- of in and on being and able things. of the other And would soundness, the replace Mark, paybacks around processes investment but in manual that, we all it's within safety there's and and that not terms

Mark Mason

that's processing straight-through are when automation Between said opportunities Absolutely. opportunities the are to alluding that to what there, improve business opportunity the that I I the was there, operations.

soundness and an we'll safety it's organization. So, as that and get those efficiencies

are they So, in with paybacks have them. associated do instances investments in fact and many

Operator

Okay.

go next ahead. the RBC. line Gerard please of Cassidy is Your Gerard, with question from

Gerard Cassidy

morning Thank good morning Mike. Mark, you. Good

Mike Corbat

Good morning.

Mark Mason

morning. Good

Gerard Cassidy

in had it share in identified over us M&A particularly hiring taking the particularly -- Can this success that people you're performance M&A having them due are some in it of in you quarter, you market that the some EMEA. guys some you strong is or to competitors, Was share from with struggling? Europe, of

Mike Corbat

both. it's think I

three think, or four gains years, for top but share market some been you've last I I third but to. seen spoken we've look, EMEA, phenomenon, you think just this And performers EMEA, I isn't a us pretty quarter us. back go I consistent there. the over one just think hasn't it of for And and has think XXXX been when the something of

so making been I in And of the been right seen you as people really making business have think in publicly, also, engagement, the you seats. client the those you've know, again, it's investments. And sure right as but both, we've

Mark Mason

Yes, share, we've seen in about in consumer. technology, think increases in in -- when you healthcare,

And so of we've number across it sectors. a seen

clients of our being well. those investments serve positioned a Mike made As it's to byproduct and said, having

Gerard Cassidy

and like the retail brokers been of business, in on side Schwab And Charles to many X we've that Markets obviously, all the commissions trading discount Fidelity. or the seen then have the dropped the

retail that trade going In cash per in trading equities cents has cash commissions steadily day has following to declined. we the equities all reduced the in the there a possibly institutional zero side? Electronic Is know we're see business, revenues. that actually

Mike Corbat

to do we're what and lot We could. a information that rolls our information it, and U.S. how have We again, permitted and GDPR I my do could. that of think I with to in and don't will there. more right in the But mind, we're think actually with information. ability use broadly to out

I think for a that's topic day. another

information. to But think for that people could pay you willing see that certain I theoretically

that investing of actually I front that's two areas going all point clearing, other look at of and you heavily is in custody think terms the thing indexation, terms the derivatives, is the economics with that when we've the economics economics on in that in. of the been in terms brokerage,

to in that So supported well. pieces, of think there's trade those around by to underlies other trade the several research out extent as that equity activities the and I cash play free more

Gerard Cassidy

success lastly, then Very the of and you And missed savings to high-yield and deposits this, pointed about I have digitally, account. good. your you just may talked gathering

they bonus doing an win they like $XXX or cash those account with open account? the savings is To extra high-yield something Or the get customers that? it if you there a up online, are deposit

Mark Mason

digital. just all, just account the -- of savings as growing through than are broadly We're we more we're more So growing frankly, traditional so channels the broadly first high-yield than deposits and well.

open said, that accounts as have rate. deposit as us also you for heard do high-yield an reference savings account But was what creating is offer in that well broke too, i.e., value -- clients to through specifically the offering card We propositions those as incentives points, of higher or to the us, with incentives incentive a aligned that of offering with Cashback, banking case, retail this types ThankYou in digitally. customers online those account for with are us; open Double and

Gerard Cassidy

Okay.

So right? you're not sending them toasters though,

Mark Mason

out stage. toaster of the sending at not. this We're not. We're business We're

Gerard Cassidy

you. right, All thank

Mark Mason

bet. You

Operator

your JPMorgan. from And question final Vivek with Juneja will come of the line

Juneja. not response Vivek getting are from We

Mike Corbat

He elsewhere, operator. may be asking his question

So with you. that, Liz, back to

Elizabeth Lynn

joining for everyone, the you, Thank today. call

If questions, out you to to in reach good Relations, and free Investor have any please day. feel have a follow-up us

Mark Mason

you. Thank

Mike Corbat

you. Thank

Operator

again you today's conference Thank you. joining Thank for call.

disconnect. You now may