JPMorgan Chase & Co. (JPM) 13 Jul 212021 Q2 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase’s Second Quarter 2021 Earnings Call. This call is being recorded.

Your lines will be muted for the duration of the call.

We will now go live to the presentation. by. stand Please I to time, and to the turn Financial At Chase's would Chairman over JPMorgan Jeremy Dimon; and call Officer, this Barnum. like CEO, Chief Jamie Mr. ahead. go Barnum, please

Thanks, operator. everyone. Good morning,

very I’d just be for much of to during me try. to first difficult Marianne Before we Jen, my will and get like say whose of I on the how following call I'm working so both but my them going to shoes earnings and time am honored footsteps be fill, taught going, whom to

and XX% our XX% in driven by was growth exceptionally finally, record as record up low more the for credit versus long-term an quarter on that, of more So fees, charge-offs of one. income I'll cover website, AWM revenue. strong few particularly It in evidenced pre-COVID more The to on presentation the flows with net saw the and and second And equity healthy, quite please continues disclaimer $X revenue highlights. net reported and IB record $XX.X a common this up Combined include with as board. as our results billion Touching billion is of in which spend XX% available of the normal page of advisory well all-time Firm These delivered We credit importantly releases, by debit and a billion EPS to on back. across XXXX. year-on-year debt of return tangible up on underwriting. Starting detail shortly. was on refer year-on-year, $X.XX reserve XX%. $XX.X credit be

and XX% sequentially, recent sheet, are up the X% largely and year-on-year remains trends and X% our year-on-year have low, Deposits quarters flat growth balance quarter-on-quarter. Regarding from continued. loan up

are we have spend the in encouraging. bright certain spots and trends pockets, consumer Although,

page to more detail. X turning now So, for

the quarter the a year-on-year context As to going provide some you year I go prior bit through noisy. this because about comparisons page, I'm are

X%, X% markets or to of bridge NII higher Expenses X% XXXX AWM from $XX.X then second $X.X billion $XXX And And net of due was and or billion and income with for by lower card-related billion, revenue in to investments. book. billion quarter revenue with as balances our interest on markets in revenue, record lower down continued partially gains approximately that all-time largely on With fees or as were driven So, the spend. card. year-on-year, billion X% up $X.X down was $X.X $XX.X of in over during items revenue of mind, on in of of year, I credit built recorded this last mentioned, costs, height respect year's the second you billion Noninterest released we in prior million was we will the down well last year-on-year. to Investment billion year whereas again, going credit an back offset reserves in fee recall, strong $X.X billion. pandemic, and Banking the year was $X just generation $X.X quarter, by we

were it's continue a of half million $X.X setting year's reserve billion. noting historical the aside costs quarter also last net credit quarter, benefit second $XXX were release, trend charge-offs this net in So number over just that and lows. near of of worth And to

$XXX we quarter $X.X billion, especially in over in Lending. we the COVID, in go including released of continued economy On as And released released about confident light grow reserves. in the let's U.S. in the this page, million. and next the $XXX million billion We Card $X.X increasingly In Home we $X in nearly billion Wholesale, Consumer, improvement

be recovery, which reserves remaining the uncertainty implied would of elevated about central COVID the by with So, of economic otherwise our leaves forecasts. $XX.X shape a and higher of us as billion, this result economic than are

balance slightly offset quarter down more quarter the lending. the of with Now a across and RWA XX%, as CETX prior and on by moving higher retail ratio ended was to retained capital earnings than versus wholesale both, We X. net page sheet growth in

And expiration This our the quarter is of the also temporary reflects SLR anticipated, we as exclusions. constraint. binding leverage now

to we of quarter. $X you CCAR dividend which know, the As third share the finished ago and SCB Board's to X.X%, couple reflects will per a our weeks in be the intention increase

Of Banking Okay, year-on-year. businesses, quarter spend. of net billion, the on releases go including $XX.X Consumer this of income note is $X.X revenue X% reported acceleration let's page now, CCB our with starting of up X. reserve $X.X Community card to particular & billion, on billion of

spend market approximately billion. Auto, travel and up $XX.X throughout client of really were and CCB up to And in XX% to and debit X% by June strategy versus of Auto record impact and loans the so, within made the and year-on-year XX% loan Lending Total $XX The consistent quarterly more the the quarter with XX% cash by lower business up card resulting the optimistic. have prepayments quarter PPP. than Home lower importantly, outstandings quarters. remained or from up in on levels, credit Home quarter deliver. trends from positive remains April third and XX% XXXX, assets strong and $XXX XX% highest total of across pre-pandemic elevated up has advisor And partially us versus the XXXX, up turned our continues remain growth accelerating Overall strong rest XX%, in appreciation prior And healthy figure mortgage in flat the and quarter's investment to driven 'XX, flows channels. some year-on-year story XX% acceleration continued while that, was XX%, were second was small to And elevated, in billion, and and Deposits were year-on-year indicating quarter. balances up 'XX. compared outstandings, XX% Lending of down entertainment up continued and with corner, the down to omnichannel card originations digital spend this June. spend of to net Consumer actually a Auto second depressed offset with billion, since our growth.

mobility We million, than exceeded have transactions the XXX, and than mobile are by opened and we and market X% XX new Digital summer. be per expectations out trends goal to XXX grew of contiguous billion our continue have revenue-related of engaged up expenses. deposits billion volume users we were digital strong branch branches over to than at expansion which pace initial more still transactions, are year-on-year than of a And our investments through higher were commitment to total by versus halfway XX%. customer XX Expenses XXXX. our the are driven more by in planning in end all as continued of be investments. XX% $X states as more Active retail and faster down up recovers year-on-year, which $X.X XX% generating

obvious exceptionally offset current the we resumption trends this net forward, loan wait, the question And next. a And charge-offs that spend outlook we level of will low while are end in optimistic into convert of through Looking for the NII year is substantial into the headwind. loan quite especially to the the and growth, card. of provides growth

billion driven the an issuance. in into were all-time continued benefiting wallet underwriting has offset by Debt that a investment-grade revenue year-on-year, underwriting, up fees primarily fees driven to share the strong activity X Banking XX% performance advisory, CIB page book. and active by prior year-on-year XX% fees net the lower flat to Investment of XX% Bank announcement $X.X of income resulting debt The billion. year-to-date finance the in by $X.X up due billion quarter-on-quarter, billion Corporate and market, an driven an of were headwind second IB up a X%, was up surge a year's equity ROE up in and XX%, markup IPOs. $X of year-on-year were in the quarter. reported $XX.X and bridge of roughly X. acquisition advisory revenue on the Investment by XX% of from ranking. global & on leading Next, In were record, underwriting, X.X% IB number of we And

Looking ahead the to strong. the remains third pipeline quarter, very

active. still down to M&A expect market be up year-on-year. And and IB IPO are We we to to be remain them likely while activity expect sequentially, the fees

billion, markets. to compared to all-time year. Total last was quarter down XX% record an Moving revenue $X.X

throughout has normalization great been up but and in in in quarter compared on second activity, earlier matched While as levels in last of markets back income was more the equity results, XX% quarter results. as year's record balances XX%, driven 'XX. cash we strong performance prevalent last year's by well the outperforming the of up we strong to client where prime XXXX the Fixed ran derivatives, compared exceptional Equity was macro, expectations to above overall, from down XX% year. own our

billion Investment to most the driven compression. up by the in by as predominantly Banking fees, and Payments continue were forward, year-on-year, markets, deposit by $X.X offset extent higher and X% by and hard compression offset expect billion, And billion, X% fees. we revenue services deposit timing while both, obviously $X.X deposits offset of expense. Looking down income, margin revenue margin security largely performance-related partially $X.X X%, normalization by normalization and driven Wholesale to is and predict. notably higher was the across of fixed was compensation, Expenses lower down deposits growth was volume-related in

lower down year-on-year balances elevated. and year-on-year, by driven compared ROE the lower Record investments. Banking utilization revenue-related loans and of by affordable billion billion client on revolver new XX%. market. X% by lows. M&A equity saw revenue activity to year-on-year, net loan compared reported housing pockets $XXX Lending offset down XX% up year higher XX% of Banking Wholesale $X.X year Banking million deposit $XXX and up of of was we billion sequentially. of lower X% $X.X Commercial utilization, Moving an C&I activity. Revenue by and were X%, $X.X Investment up higher gain. absence CRE XX% of Deposits largely driven down as to middle Loans and year-on-year volume with investment billion Commercial income Page expenses the growth activity year of prior revenue, in prior XX% were were to billion revenue were and a Payments loans financing acquisition-related but and X. up of partially were Banking, Investment quarter Expenses down remain with in on of offset prior was gross increased $X.X X% quarter-on-quarter And

were X. credit net a releases And business, point. on million, X $XXX Wealth by on of our Management of lines only complete charge-offs page basis to & net of Finally, driven reserve with Asset costs benefit to

deposit by Management revenue higher as of year-on-year of management with compression. up distribution pretax loan partially and an and & compensation were income net margin in XX%. XX% Wealth higher expenses. of XX% and up and $X.X fees reported ROE balances $X.X year-on-year driven deposit were XX% of was offset margin Asset billion of Expenses Record $X.X billion performance-related by billion growth

to and quarter, $X of trillion, custom strength were the inflows. fixed lending alternatives. strong notable deposits driven $XX XX% over mortgages, all For overall and AUM by inflows with while $X up for XX% market And long-term up the time, with continued finally, assets in were be year-on-year, up channels, across income first XX% year-on-year, And positive billion and was were and lending, higher continued net strength in loans XX%. net levels client equities, respectively, trillion. securities-based

deployment million net billion. reported up $X.X $XXX $XXX investment in of we a million year-on-year. Turning billion, primarily as $XXX Corporate was losses on $XXX million net the loss on loss Expenses were $XXX million X. continued, down million was page a NII quarter. securities Revenue realized limited $X.X of deposit down year-on-year. growth and to of opportunities of Corporate

page outlook. on the XX, that, with So

of unusually charge-off even mentioning less XXX $XX.X points, to outlook offset as the CCB, makes Our last we card mentioned which, outlook term billion provides net as a the updated But, forecasting the basis you'll headwind. around in note, also in XXXX to And challenging. near I in it's the NII NII the meaningful that for than lowered worth with environment NII month. we've current guidance line remains provided our rate

remains due driven NIR. our things. elevated expect down, only case, by but coming in we've some billion also up $XX.X around markets, fluctuation revenue-related stimulus of the that to approximately consumer uncertainty should among as any likely and impact on billion, of not while from balance NII, be because reminder, ongoing current volatility to guidance is So, you other central most whether offset number, markets increased And of in to expenses, our volume or expenses. On a higher $XX sheets,

is underway, the against are the continued recovery economic progress So, the in to encouraged States. especially wrap by up, virus the we that and United

Although will world we're that the that follow we challenges and a to recovery the hopeful is the closely facing behind. want global of of acknowledge much rest

again once by as headwinds exceptionally generation of power quarter AWM this charge-offs from delevering model and the consumer business are offset CIB, performance in Our our the showcases diversified and across low fee net NII across strong board.

While crisis, the and ever. we're Company of others our fintechs banks, competition business from in intense through of every as performance the of the proud the as people is and

So, on piece enthusiastically making to that, operator, of the as focused operate we open normal environment, business With Q&A. for and product please are we look for forward we every win. every increasingly to share competing investments and in market, where the necessary an line

coming first from Evercore question our And line ISI. Instructions] is [Operator from the Schorr Glenn

Glenn. Hi

the Welcome Jeremy. Hi Welcome. there. to party. Hi

Thank you much. very

your slow any putting economy inflationary differently, little you're sure now, rates you are fell. an I'm a Question some so growth And guide, it. on level? it on elevated then I playing might, data not why, is at could. this because we're lower most multifaceted. you even want the still work, had opine But and you let's NII playing, if money payment appreciate at though but talk inclined apologize sheet deposit growth thoughts strong. to you're kept about you work? getting staying putting rates assuming, as rates if NII Curious meaning to consumer elevated managing the been possibly I'm this if balance it's I even I deposit staying are Thanks. level, importantly, slow money to on

Glenn. right. Thanks, Yes. All

let's sort take So, in that parts. of

we're of full year. So, so in $XX.X billion reiterating our terms so NII for yes, guidance, the

that are The curve to we bit guidance. assumptions flattened deployment that first, take our through So, provided just of when conservative obviously, the But bit a rest a your rates reasonably were deployment little rates long little we bit point has we are lower. end provided the a lower, guidance, in since year.

it's sort the talking of that, we’re So, not really precision factor, level as a meaningful that here. a result of of at about

card In you to really is driver. really the as side, terms consumer of it's obviously, going the big say, be

So, you see card heard you and the growth about talking payment in loans. us sequential rates,

remain through the do a spend this rates as the that is elevated a at of to, acceleration in are going we to the sort that loan But, in say, pickup going resumption believe in I card. pay we growth So, year. of think translate of to quite do minimum end

interest-bearing a So, balances result, we this don't see increasing meaningfully year. revolving as really

as which overall so, for that remains a And in result, headwind a outlook. incorporated is the NII for year, the this

terms terms of Okay. balance sheet in you differently money And any still conservative front? on that then, putting managing of in work, to

our that's -- along team, inflation. I things the an higher us together right? it's the between associated Fed, Look, rates, for think robust economic et all I those with is targets central the before, an Fed's own perspective, mean, consensus cetera. case, higher is higher a And about inflation, that's associated much equal. heard a And for with recovery. talk lines else All Yes. that view you've So, of pretty this research outlook our very from us, view

are remain kind in our so, all look our And guys until here. written EIR won't recently, of at you disclosure, here overall with you of about industry. to patient of that, which Q, do sensitivities get some line you if the this And but light have the happy in obviously we stay you see

patient the balance that of sense. type complexity here and tail about, feel factors, other always kind the do consider still you various when So we makes Jamie of that sheet things talks the being

just picture, in. And it. take maybe it curious is feel specifically why terms the on within from Jamie a to of now time? there's away want if free move just maybe a international shying on that short in past and very net one I mix in things it. or expansion And better change and five bit appreciate been you big on quickie acquisitions making the period both investments. to of expand little A, Thanks. coincidence And could I'm Okay. recent you and the

Sure, Glenn.

that's So, consumer international let point the expansion because me start side interesting. the on with

why of over when Jamie branch-based that the expansion years talk through sense think you about consumer international strategy. heard wouldn't really in lens to do make You've about it the

now hasn't imagine, perspective, the The and right the other competing a difference an to with and countries you operating leverage outside the from and if that going is do So, in felt likely from really incumbents, just branches strategy a U.S. opening never ability we've was of branding that perspective, us, that to digital. be that, for changed. successful

bit. in both investment now ability little of the to recent disruptor. you a Brazil, to banking really what's our a international Brazil, in in is the So, UK experiment of probably know, it's But consumer Obviously, the and as the in CX exciting third expansion fun be strategically it's compelling biggest kind narrative, the kind world. with like about opportunity. the is particularly market

bit And our outsider are place it things, in compelling to banking so, these for ourselves think United a inside. to being where learn the through good in position really channels, given in being to the digital I challenge States, we other disrupting the of kind little actually as opportunity from addition in financially, among we see a us, and a consumer

stuff. we're very about excited So, that

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

I Good morning, ask about wanted Jeremy. to you capital.

more. for levels to How kind wrapping SLR get but all down the obviously, you're but what rules as constraint. came rising into of levels target. talk I that binding has You've XX% SCB, the you to that maybe target? guess, decide at? And shrinking, G-SIB capital are run guys little talked about variables a cushion now together multiple a that's the balancing is a you leverage could revised. hoping mentioned about what You that in capital score, Jen And maybe previously an CETX you're got bit, you

John, Yes. are It's a yes, good lot a of question, and variables. there

of what that, So, say doesn't the me is that meaning about saying in necessarily be not target, let XX%, higher. start I'll necessarily XX% not by off a -- terms table need it's to it's

of So think But, by we for bound the quite off element table. it's the bit this. when what, i.e. are you not about now, time, a matters as

So, point. the pieces, of go noted the some GSIB just through you've to

X% in we're play comes operating currently bucket the end of in year. of the into So, That as in We're XXXX. last X.X. now

As you number. that's quite know, a seasonal

bound we of end But, bucket this the still in would to X.X So, the by were XXXX. be possible extent SLR, meantime, bucket we're probability, views has in which driven SLR. by X.X requirements things, in especially landing we've have as the the these quite the really year. say, And which, year. public capital this of it's But, case which noted, under I for you elevated an to backstops, as to about sensitive been in get our increasingly, acknowledge binding size-based our designed, the would of about X.X And measures, about acknowledged. are non-risk Fed

priority So, an end We that fix could III we're our of Basel -- a potentially these come said know the about G-SIB talked for SLR, and implementation right NPR waiting potential the holistic things. the also, they've addressing but Fed some on has of of as part game.

going some a bound out the leverage of all binding. in likelihood. above that things there's now, minimums light of of to becoming we're lot now realistically, operating be XX% going between to And right So, those anyway in and play are

just near to variety going information props, to a we're out about few of term, it short try over term, managing nimble cetera. next quarters. be as And factors, more So, et different comes the we're common,

$XXX trillion trillion of riskiest marketable $X $XXX tons of a long-term have, of the $X.X loans, we further could billion only is billion securities. of I which If of $XX preferred, have and CETX, billion asset cash make we and capital, of point, debt,

tons capital going So, you’re the And the in at say, I there's to underlying just to is look side. one thing and so the system. much, think of liquid if day, why

on then, follow-up, Yes. expenses. And quick a Jeremy,

inflation Could broader role revenues outlook and business a give Are inflation little volumes a in this? the upward few about you play economy. are hear You now. your And and revised also, a on lot the expenses driving more a 'XX outlook? across times detail that we seeing Company's year we fiscal the

Yes.

So, a couple of there. things

biggest tough. if you note, to there XX. volume driver as is And is -- expense, it where revised Well, it's... yes, So from we and you XX the single have revenue-related up

The in what comp, competitive no to be we're comp going takes. matter it

the back your at that of keep mind. Let's

It's pockets. marketing It's It also transaction-related certain a of comp. also expense bit is little volumes. in

from the it's point So, our were all category bit volume in and an revenue-related. on is little But of markets, and revenue and CIB the that across CCB, general prior built stuff the all outperforming we're obviously, AWM, even that perspective, the And wealth guidance. focused NII the now. in pockets, management [ph] we're expense into NIR right think headwinds a fits IB, expectations I actually

So of dynamic kind that's the there.

inflation, economy little inflationary of did if degree XX not mine In I guess would the the a of we're And a year. little assume actuals. is that that's our that of going is say to obviously, a include we be in the in terms terms But in or your as as to higher lesser that inflation would slightly to in as a it this seeing expectation a of reasonable good challenge a for but environment. greater future, bit be whole probably bit

from question is Usdin Ken line next the of coming Our Jefferies. from

limitations? have fitting talked do as middle the that Thanks. there, on if we the magnitude versus from you about buyback. $XX sheet thinking vis-à-vis dividend, should you just we about of Again, the -- on balance how of the you your And and here far you points clarity as Jeremy, capital. ongoing just the for I billion in follow could the balance on open us do we just just there's about authorization the just kind be how what buyback gave growth the up know

Yes.

we balance it is the lot. about it we to mean I a talk answer So how

balance which, when mixture with SLR trying of And talked a can to as it lot We prefs minimums between you our know, the the smart all I people kind we're at pref, address and managing. we to think have it, the of constraints so about constraint, the looking especially that and before, risk-based of comes balance Jen different common.

So, that. we're looking at

disposal bit is deposit previously, said on think going there growth stay bit we're the to try between prefs buybacks and low SLR. the and strike with But, the pref high of management the five-year a right flexibility I lockout. little little I helps us cost to nimble recognizing potentially which overissuing balance to side, of our because issuance, RRP as tools a at with locks that the use prefs helping into

So, there's a lot out of balancing there, as and we're evolution potentially the rules. information of just the staying trickles nimble on

then, And the broad we'll as in find as opposed Okay. as about past. Is just a giving the you as around of to will how more buyback more so fair? just quarterly expectations it buybacks you guys then basis that communicate, your far outlook happened out a on

Yes.

rather $XX the I than operating from the but that a approved through just it’s Board new that plan think CCAR, sort overall it's environment especially that's an of buyback in right, billion in we're now not perspective, authorization.

publicly other And a At and to look end at always first factors. here. the acquisitions pay end the terms we'll terms to we in day, in what do, stay nimble at ourselves of by to we're And of you invest that, wouldn't box we're I all about time context the Given know, speaking obviously, talked buybacks at of so. the going just and in the the sustainable constraints, dividend. of what multiple of in of capital want our normal look ahead to need going across interesting

all a this III, the in give probably about going certainty is now you how definitive forward. going then after updates, years you'll and to which can Basel more We more they the have operate SLR thing Yes. is and making XX finish and

Seaport the Our is Mitchell line from Global next Securities. from coming of Jim question

just follow-up the on Maybe business. a card

outlook? You had think about still was how or the do quarter-over-quarter and sure cautious not still cautious. relationship just good between I being a you're the spend that in Is conservative, balances, balance growth, that think growth but of and about little quarter sort X% we your guidance

Yes.

tried conservative. hard word So, you very I outlook wouldn't We've central our use in case give the to numbers.

going to wrong hopefully, we're it be be So, will wrong, but symmetrically.

to want you don't So, try or optimism we really conservatism unnecessary give baseless case that have them. central numbers to in hard

sort disconnect pay you in NII card muted increase point the the relatively highlight, is and the of apparent loans really the just So, about outlook that between rates. sequential

we So, continue rates we've the balance standards historical result some sheet. really terms see of highly out a consumer that strength pay themes in by of to called of of as very the elevated unusual the

long think bit as which and headwind that's we spend a conversion low revolving into re-lever, true, a consumer balances, effect year. little happen. to just NII sort So, going as seeing until that's starts to likely an be we're the unusually We meaningful be it's of will of don't of to do think this

benefit. fair. the a big charge-offs, That's been that's And on then, obviously

saw a big we I there they think quarter stage we delinquencies, the Is pretty look the quarter. anything if drop? Should declines year progresses, NCOs unusual given this we at early both where in expect trends? and as later stage, further kept falling delinquency throughout

Yes.

same I and again, buffers X.X. just that I gave, right? in updated we card Like strong guidance the in saying people on sort think charge-offs, are would just performance in themes, the cash NCO to elevated below it's to there's going consumers paying. resulting lower, of be So, But stick upside is surprises which terms exceptionally of

So, sides returning And see continue now, come right balances, of presumably as normal, both slightly should trends. those same we lower to NCOS. XXXX, we coin historical then, back to of there's two better of revolving the sort in

Fargo from the Securities. from is Mike Wells Mayo line coming of Our question next

follow-up, asked question, want the welcome. to answer think My Jamie Hey. Glenn Jeremy, I for I to this question.

strategy, like and the that said, X to acquisitions or, with Bank, some count disrupt than X eight is plus goal since MaxX, Analytics, done, -- X I'm Is Jamie, what more you [ph] plan banking scale across it's it's are December. these to you've plus much CX XXip. strategy? companies, these Nutmeg these Are What's going to some I you Kraft to question cases, each try new introduce of again. of the is the digital as And to kind other century in of here? like create to is, a guess, acquisitions, So avoid I maybe X equal acquisitions reach? question, is it's to that the Is of looking OpenInvest, grand the a of people costs, markets these to too XXst tens this customers real or connect somehow these to maybe as the these millions storefront, the Jeremy

too On pearls, a smart but was asset managing things [ph] there's a management great of it assets. much Obviously, be XXip the linked management. Campbell lumber management is Jeremy business, very deposits, asset and a cetera, doing sense. said bit it eventually who in both and is be et huge in market. we're tax-efficient already little another string A assets Nutmeg, consumers said it's lending global and of product, Timber together, for a I that a investments, has to going category. in reach, small will analyst digital to just investing, offering CX put what there. one. makes UK is

could anything a It data, to little and it A be more fill in, lot of be bit at could discount looking for we're these management. has us. going So, adjacencies. are are which some

going different United digital retail, at see we to lot very And the time have something look can overseas, spend if patience of time. and we we we're to how a build we've So, in than States. got

travel if large at already are of business. you And so, bit the we travel everything. The in little it's look company, that, the cxLoyalty, a so again,

traveled, So, capabilities United card already seventh travel this products include our travel as doesn't going the largest the got and enhanced debit our States. effectively that's travel we to credit card which that the with but cetera, clients, et and are the packages, in remember, the think -- travel agent. in we travel company of And across work to and all services

that. a bit it. not the it's so, work things we're some all But doing of little end with that these a We're okay. We're will lot there, but wasted And to of all be assets. of up going thrilled looking may I'm not time.

that a of things Mike, through the me done I thing only themes there's is would of come some to the add we've recently. couple that

One ESG. of them is

we experience, whether it's all deliver just And fintech key cxLoyalty, is the through to to is us. You see improving the priority deals customer a various for And AWM the necessary or especially that deals. tools customer want other have that. experience the in

And we're and of a important, services rolled years, going have building. every like we money to putting you're have, the across products next out the Company. new two quarter being equally into lot for new And

just I and more more exciting think more they're and and more integrated, very and et to simple customer good, use, cetera. friendly, more more and

little -- And And we but that. a of go of ahead. so, want we're -- all yes, bit doing

Go ahead, Mike.

comes question over a be five next disintermediated up that's the seems that it's going on know the gotten probably follow-up, the you since everyone call. up to retail years, UK. to it just whether my letter, and about you I disrupting, everybody thought tech more in was and big that as wrote ramping you talked they're the And competitive just Jamie, But much it's disrupting interesting, mean, only fintech CEO big you else. all I this your more. And Are like from and companies, -- that but

maybe executive business? banking from have order White current an data. to the threat outside your to House, of of your share have What’s from You mark-to-market the you

see don't different when thing letter. I I any the Yes. wrote

obviously, always in and we and Walmart. fintech tech brands banking, huge and share think competition big and I capability have profitability. there's and we've huge market and products but landscape, we services have a -- and also and a And got changing banking shadow

these some competitors are think going to I do quite of well.

do the there's lot still a fine. we'll I capitalism. XX But of or going will lot that's talking years. XX good or comfortable do think old I'm of over I'm be time. called banking succeed X I think American in business. a people them over to quite

which banks a or bank who they be I will shadow call took will themselves. shadows when think shadow -- a day on one

sure working are We're good. that offering to they're we're not make hard services that because disruptible

So there's great if to then disrupt. are we're and them our a nothing providing clients happy, experience,

of question is America from coming Bank from next Our line Poonawala of Ebrahim Merrill Lynch. the

own of of cost imagination about sticking expansion. later, digital payments you again, pay about should in comes now either on industry think your your that or the with banking multiple talked just and buy the guess going I Jamie Mike's banks or banks as times the shareholders the to with we will in fast lack and the be But consumer what that, international point, talk We banking? of banks sort be back terms replicating you fintech strategy. should around of U.S., of innovation revenue expectation in risk States followers cannibalizing set, expect the given up more we coming the do do expect that disruptive United of from or heard

done both. of including well quite And done quite I in banks like these it's a mean, digital of and think I remember, question. an Bank well, stuff America have that. not lot either/or has products it's

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they done should failure. think of I at when well. people well look part companies what and didn't have what other They aren't, do that's their

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and And think market talk don't and acquisitions agree client do I enough I banks about share.

agree with there. So, you I

Just bullish. the when today are quickly. peak and out and in as Compare the risk came peak guys to over few growth. of growth next of years? XXXX There's GDP the inflation, financial crisis you how like around very versus disappointing a follow-up, world Jamie, you contrast know questions back some we the very looks I

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You mortgage deleveraging, were you stuff had to balance be and hedge losses deleveraging, to trillion spread going had funds recognized, a derivatives $X.X actual that sheets and in losses $X around trillion constant like that.

consumers billion. I were mode. on companies The think, deleveraging massive Today, a in Wall bridge is was $XXX overleveraged. world it's, overleveraged, The Street XX. the book So,

you The in in purchases. auto And to about savings prices, The at confidence the is up. loans nothing is are gets If they're today, incomes up, rises their value rearview positive up, prime. see -- up, see their down consumer today, is everything you home house the in their is are their kind the worse go. up, being mirror. pandemic it. talk ready their look you we it with stock consumer, it Hopefully, And of are

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of like They're than cash. so a equally good They and it in show businesses corporate lot higher And is is not charts overleveraged are that do -- was, have today. shape. so, corporate debt

almost huge zero, revolving and If you zero like look at almost it's middle stuff unutilized that. market losses,

-- if up -- stuff of to mean, receivables which because [ph] autopilot. There's and economy more on starts And it expenditures hasn't so policy lot as grow, is like to fiscal second that and is yet. see I you're a different. QE little a go the that's been so got that, far going loans and passed. you've going the spent inventory there's million a Obviously, And bit just to lot [indiscernible] mean, month. know So, completely effect just $XXX I capital be And how hopefully, don't We inflation strong. I quite -- Like up, that. hopeful, growth still bond I economy. I'm long. the in going know if that about Goldilocks Goldilocks. future, is talk said, strong goes don't to what you're inflationary we goes very a think and predicting. see not a is the see you I up, that the a And XX-year is Goldilocks is listened on to

in is okay? of may growth ever You the half America. months States have second behind year this it's stronger been in Europe probably the six than as United And America,

plentiful, consumer any jobs We always And good growth the up. grows. so, growth year, and into growth, base are the are wages short goes a won't make can It to things. go difference. These strong next going bond all X% there, in had of lot are XX-year and

think these bit but with growth. And doesn't so, be can obviously, temporary, inflation a all we be don't things. little it's think strong kinds very worse than have people if if the will worse I I it that think, of matter

different environment, Yes. from any crisis. are the but one financial always think we in risks are ones I coming this of had There risks in the out the quite global that

from Our of next question Steven Wolfe Research. is line Chubak coming from the

start strike spend could did Jeremy, the optimistic rate, potential as normalization the And just payment of on you the on follow-up payment question revenue from NII. for metric, higher just off that normalize. help just are in So, I baseline trends NII a to card tone an the tailwind future the rate. to and versus rates us with I inputs a wanted start hoping NII looking there given isolate was card in at you another current potential benefit

NII So, rate? just run be normalizing, rate step-up quarterly the in what the would payment the incremental

Okay.

a of that in there's So, lot pieces question.

So the talk about first, rate. revenue let's

So, of things. couple a

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you I rate way So, just actually look a dip in see the quarter, there. works to might a because the revenue accounting the of next of bit out as

hone I potentially under in steady-state Okay. changes still for G-SIB waiting on the are to front, the surcharge the you I just run target. could a how to specifically understand just better said cushion like made, for G-SIB SEB? seen do trying on you'll have capital it a recalibration to was surcharge. And you one where manage to wanted my on haven't manage or think least at looking you feels with recalibrated, not you to just capital if go, follow-up, ask XX% we Jeremy, any to comment much where the And because basis to you is

Yes.

Okay.

question have get what about question in where doesn't a And and have. the Jamie And out increase of with management are driver in we flushed that where that recalibrated a system that's buffer G-SIB get doesn't would basically, do there's the world So that else. really quite a would the of GSIB recalibrated. both given world it a in a capital, we world starting system about amount that. at regulators and bit sense a capital all, our the quite clear growth that as now, amount that and minimums with We big increase of right part everyone and pretty the disagree capital are enough been don't us XXXX. pointed obviously we where for capital think a higher, and earlier, would makes the for that in bit We is any a

of so So, making up need put is that's to III Collins just trying recalibrate so see our fair, the particular a big been they start of place competitors about into those as the why used game end to the that. fixed. to for to brings U.S. complexities floor. vocal light rules, part kind buckets. get the long the of that reason in of thing that has we some get points, creep And Basel to acknowledged we've It's a in too, I this which the think they're be that higher And Fed in busy

the one of ever And [indiscernible] Can is in I've always seen that this? then remarked my doubled I life. add the just to G-SIB calculation whole I've So, we here. it

could they of one pretty I they I the So, -- long have think the they the run, regulators banks artificial right can't doubling lot basing But -- in the disadvantages across of number. expand have terms for be consider don't that But what European have in half can a that's the they still America G-SIB. to of -- much advantages, Europe.

and just So, question. all new the then are, we'll see answer to what wait that let's rules

to don't what's You guess there and sit to have going happen.

I important leverage. the actually is point think the near see And you we're in that Yes. bound term, by

sheet to in thing what will get now passed and single balance we're right management we see That's in that think economy. our into real costs of sense right now. that the like eventually really on the that result biggest is affecting that's make don't So, focused ways higher on that because we'd fixed the

being point bound when Just fully by on to the and your briefly, is done settled, framework buffer constraints. hopefully, and to back touch all is we're risk-based said

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them the supposedly the to We these you're have and everyone not as way that's have kind treats free that rules them. but all use, of buffers guidelines

that to buffers more than anyone brittleness and to minimums, makes that So, it procyclical wants adds system become the be. it

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one -- And you really a which guys pretax allows back capital year, buy of earnings we huge. you remember, It's talk about, there's don't $XX stock. buy is okay? buffer. don't stock and buffer, your huge you That's billion a back forward-looking if change It to

great whatever of And we're to so, job do we out a to And levers. happens, have a figure a for going shareholders. lot way

Matt Deutsche Our next O'Connor coming is from Bank. the line from from question

fees. back Obviously, the I is circle stronger-than-expected want by of this year, driven on it costs. some to

is inflationary the you it of mentioned. Some pressures

little XXXX going spend. is this grow on from But, going discretionary, I Some good costs in to exit and of think investment or a base of a question year, those look factors, is, we off forward? be because as say when some to pointed accelerating back we you is out year the past, bloated this all they're as the

Okay.

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true. organization. word year don't anything money then And is transforming experience is valves that, about we know, that's being describe technology is I think the of and of terms so data And would kind really technology, in customer spend in wasteful. I don't on. I like we're spent as impact rate company a and not ourselves. to modernization use of ever the think this would we're run fact, And how of So say that we bunch a in bloated in and terms time doing what in on the to of this is centers investments like things big especially really you efficiency that investments the driver of and the the core making, of spent

talked expense want So, here. cost the guidance that kind that unpack the investment of and rate, you number in have between that of into into terms think before. projecting are run structural I really costs giving of XXXX, we've volume And as about to forward to and and revenue-related don't I parts it XXXX get more

to their think bit this I to to... them components So, year it's tricky a -- little is unpack the from perspective project

that of we I told in company. stuff you be. it. can do Company guys And spend When That we find expense. it. card how benefit number we good And lot a the good the aren't there's more is can the businesses Revenues we're revenue that. we is to And spend, If what analysts going good expense and it. to spend stuff, good. tell take a spend, we road, we to huge to If much bad down run hire we're -- credit have for we the and it. so open centers, going so money marketing, going money know We a risk always to much great too. new conversely, have to $XXX million which in can data are spend us spend returns not very just like they spend we're can going way a If we these something, all in manage bankers,

and expense revenue, lot what's a next in XX good spend to the that's years. the expense. drive we and good of or And So, going in time franchise revenue debt bad X

stocks as crisis, seems after to thought separately, were soft the then capital allocation a increase of they obviously, of banks couldn't But repurchase like at maintained. COVID I obviously. It cap dividends that doubled. gone, alluded saw dividend think as about the term, pretax longer you sharply, there earnings beginning is dropped to has meaningfully until And very we roughly more XX% you kind mean, were payout? your strong. is buybacks And the suspended, that power Understood.

multiyear in it's your thoughts, going like a get the maybe higher of all So, if payout? pushing just to but maybe is do one to CCAR a recovery, not happen cycle, economic we XX% closer dividend thoughts

downturn, Probably we wanted mean, very time dividend that retention. capital And And bad and don't dividend But so the which really is can't cripples to to do in that. through want a It and thing I was the think kind invest if and to we we not. in firstly, ability think future we minor we I your stuff sustainable that. do other to want so raise like invest that. to want a of things. I this high growing our and relative it proves --

every of that the X.X So that its announced capital $X.XX is that into buffer the And right? to of reason at do. just the we're of Board flows clear, the intention sort makes X.X increase way that -- instead Yes. point part

And no if I would be owned dividend. XXX% of the Company, there

of The from next line from Capital RBC the coming Gerard question is Markets. Cassidy

in sheet? is, interest-earning the it of under your -- don't off assumption, because if business average that new balance to you net coming your what's next look came up or pressure. X start over terms long -- months, go exceeds the we it end And you interest know in on and interest does the or share here really where if assets guys take at anchored rates rates with you're stays a at yield change Can assume stabilize us a XX I in but to on maybe running quarter, this what the assume putting from off equals the big products margin obviously, are that we the point average if that is the

question, Yes. Gerard. Good

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all of So, comes together. that's kind it how

you. Thank it. appreciate I

up. up these of some that to go want expenses because You are means that going revenues good

Indeed.

Graseck Our the from next question is Stanley. Betsy Morgan of from coming line

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curve lean you're a up materially for that that? feels referring rates Maybe you market comment give conditions as sense So, it that trade. you move was from us to to before would about thinking yield into that, you're to can waiting what like more how and

Sure.

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the The market, not market...

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remains And cash so, really do the result year. muted on consistent see rates kind as elevated reason the we our changed, have which a this hasn't we view why of pay outlook a buffers, that and of

totally get that. I No, Yes.

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can Okay. And last in. I then, just squeeze it if one

down going to what's on as sense came us Can significantly. you VAR a there? give Your

year's Yes. right, prior the it. of you of if think just quarter volatility coming that's series, about time I last mean, the out

Portales line from question of Peabody from Charles next Our coming is the Partners.

growth, in variation $XX.X funds Because liquidity the yield really that is And two-year Yes. variability it I'm the yield come expecting about bit question I Fed's the about to in trying the hearing could hit you about some loan shape more want billion the the your are also words the your curve, a you not there the And was end. way from. Thanks. talk a in the talk for short also to between or differently. Fed growth understand greatest yield or said Is curve that's potential of of end to significant NII taper? amount end? of important, it or conversation, of in talking actions could QE curve In ask you little the about that long that variation around the where around of And expectations? I'm that bit much loan number. reiterating in guidance, because short little what's or the

the XX-Q, if dollar up if whole in basis the points. goes March disclosure U.S. up of XXst curve risk and shows rates XXX There basis points, it earning is XXX go billion, dollar a non-U.S. $X

things year number rate versus every So, $X X The until -- at slightly billion, some or like is would are okay? you the X.X rates. is these is growth, cumulative. rates long roll higher minus, the the but They short over obviously, I loan growth long number add rates. number, interest rates. in biggest That is thing is loan or that's the plus

Yes.

it's of Because of me a let question. Well, the variables, reasonable because variables. you kind Charles, give

NII So I'll markets any speech. spare more

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remain -- case rates reflects the pay as if so, And earlier, forecast that the I said it's experience. recent central

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going June. We of in possible the in rates repo follow-up too that's keep it August to to impact mean, And from at is one to on going in have liquidity falling that's rate, some that the July that. substantial. curve the rise and shape Just hit on I far? the have reverse we end. Is overnight short repo rate to to have the saw another yield a

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it did And your the in rate the market-driven rise NII, RRP have -- have any about comments did impact market-driven any on NII?

works… That's way the that Yes. not really

basis X points. About

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Markets. from line question Cassidy follow-up A Gerard RBC from is the coming from Capital

drove If or on Thank you. sale did outlook that you I residential mortgage that? the just color quarter? Can loss the a outlook to say? on business? I wanted give the you also, you But area? servicing How was what us sustained should gain margins follow-up. guys so, some Jeremy, any in a small volumes, this Any on about or lending loss also say margins

Yes.

So mortgage, quarter. business about this let's billion is I'm which had originations, very we've talk a But, a bit learning. $XX robust still little

that's from I on think things finished we've going one of of the most the credit our is all unwinding significant really crisis. pullbacks significant the --

refi So, with market price over seen in we're The huge the be home quite fully now so although down a has appreciation is volumes. There's the little rates. been headwind. That's to back been last starting robust, little the of a bit. starts a a boom corresponding purchase we've affordability year that lower channel, slow which helping obviously obviously to maybe bit much

typical your So, as you here we a dynamics. margin have today sit from perspective, of kind

up built little capacity. little down that the slows go refi has rates As industry a bit a bit,

a bit mix looking obviously, probably have a You margin effect. little And of a headwind there's forward.

becomes bigger compression, so. obviously... much corresponding And you as have part of mix-based originations, margin the So, a

all-time And It's not getting all-time it's even just -- at highs. normal. now, highs. … was

exactly. Yes,

a So headwind year perfectly it's relative super elevated it's quarter, but still healthy. a prior to

running the current servicing really, our the significantly all In terms have understand, you forecast. of rates, speeds business, model been think the prepayment as environment, I in prepayment above

small of as the so, risk general, those MSR of management, stable. part as that losses. managed the management of has very be in -- actually risk we been can that the very And and good But risk continue can to management our update really parts

you everything I that's So, think right? had, Gerard,

Yes. very Thank much. you

Yes.

you. No incoming questions. Thank

Jen for end, I the a Piepszak CFO. as At to wanted thank just great job

IB know also Jeremy, of you so, new eight know happy You'll she's but seven I a so in he's been of lot -- Wisconsin CFO And the for a eight or complete the job. know professional. a or years Jeremy,

first And congratulations. welcome your and so, to call, Jeremy,

you, Thank Jamie.

you. Thank Also all talk to soon. you

it. I survived Well,

joining, of the you, Thank everyone. a marks That call. your day. have great Thank you for and end