JPMorgan Chase & Co. (JPM) 14 Jul 232023 Q2 Earnings call transcript

Good morning, ladies and gentlemen. Welcome to JPMorgan Chase's Second Quarter 2023 Earnings Call. This call is being recorded.

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

We will now go to the live 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

go please Mr. Barnum, ahead.

to is Thanks, Good our please the morning, Presentation the operator. available on disclaimer everyone. website on and back. refer

billion purchase of First well investment inflows One XX%. and we a of $X.X of on and few portfolio we $XX.X the gain income were reported delivered Page million Republic These in of lending credit EPS on losses an in AWM for IB firm the Client CCB year-on-year, as billion, Starting long-term of assets of securities net results record billion the included Number $X.XX bargain investment share. X, highlights, Touching ranked ROTCE and build billion net $XX.X up on $X.X revenue $XXX wallet Corporate. Fee in reserve Republic XX% as had First

detail also me The settlement by you of is integration and mid-XXXX. Systems milestone X. Page giving being on of give on complete number are the with substantially pace is First recently financials, the status being the updates brief more integration on process FDIC the Before proceeding key a at Republic you on schedule, we completed. let targeting

$X still the deposit had acquisition. a with First in happy to as Republic days, back have on is we and client billion acceptance are very-high the inflows employees sales of although since early retention strong to have the formally pleased rates it's joined offers. us market, X, as of see net we about we're July the force our get And

on this to quarter's back X. Page turning Now, results

make out of the of generally presentation, Republic First Then, parts the I for we easier. results rest level. exclude of impact at things discussing comparability impact overall where Republic, that with the to I'm in this firm-wide To the relevant. see called presentation, order of periods. You'll the the to improve quarter's on of by going First First impact start Republic will specifically in have the prior various

mind, of Republic contributed $XXX billion quarter, in $X net $X.X million that billion revenue, income. expense of in and With of First this

on page, bargain of of noted purchase $X.X May the segment which Republic billion NIR build. results. Corporate includes numbers represent reflected And this on well in remember deal the As the first as in billion that of two X, is gain, as allowance months happened the so only First $X.X

First revenue in Corporate. substantially CCB, and You'll the quarter's see showing Republic that deposits are in for purposes are expenses as of all the CB of are and allowance AWM. results, the CCB we And in this line-of-business results all the in of

integration continues, some across get the of items As the segments. will those allocated

Revenue $X.X to billion driven or of Republic. excluding back or was year-on-year. turning ex-markets, NII, First billion XX%, billion by rates. results up was firm-wide XX% Now $XX.X up $X.X higher

was losses notable $XXX was ex-markets down NIR in of the year. revenue $XXX And year. items, largely securities by down prior offset primarily number or by a the year-on mentioned investment I earlier, net less Markets million XX% driven partially million,

in up billion higher and of Expenses year-on legal costs by of X% predominantly expense. including credit $X.X of $XX.X were higher card. wage net compensation billion primarily billion $X.X expense inflation year, billion, $X.X charge-offs And driven or included

in in net I commercial more will a the of million The and and corporate, all a $XXX later. million build included build cover card detail release build bank reserve $XXX which in in $XXX million

transaction was the on income Page information and Republic. capital sheet We offset First a And less benefit some about net page, prior X. the and of ratio we've CETX RWA by two in with ended see balance charts the of versus on distributions CETX both given the on the the the you as quarter impact to the can the as ratio. you impact at flat On XX.X%, quarter of

we as of completed couple And know, CCAR weeks a you ago.

indicative effect in SCB to the increase 'XX. new reflects new our also per Our SCB $X.XX third XQ is into to it X% in goes X.X% Board's intention The of current quarter. the the versus requirements dividend share and

lags. half repricing impact as in bank quarter And updating associated our liquidity, of XX-K, for deposit reduction anticipated earnings our Republic we On the transaction. the balance the will incorporate Investor LCR model at XXX%, line Day. is while we on second at the with with we the in ended previewed First what sheet, the be at-risk to About we're of

So basis will scenario change, will $X.X up when the the billion, of it absence $X.X would be positive about shift about you been this in quarter's we see XXX the negative have XX-Q, billion. released point parallel whereas

at Now, observed X. Businesses let's data businesses meaningful with starting CCB to resilient Small we U.S. haven't any on Both Investor to and and Day. discussed our go Page remained the our trends Consumers we in changes

speak revenue year-on financial will excluding First billion, which to CCB Republic I year. and $XX.X CCB, of income of up to of billion the now $X impact was which on Turning net for results, AWM. CB the reported XX%

seek adviser to were strong revenue net Banking by buffers, assets XX% including year, were Client spend seasonal digital year-on year-on-year, down driven XX% In tax Management, deposits market up driven End-of-period was products. higher and X% investment our channels. as down higher rates. higher-yielding performance payments quarter-on-quarter, up customers by for their inflows across Wealth NII and & on continue cash and

down seasonality, and down year-on-year, servicing was XX% although year-on-year. up revenue higher were production Lending, and spreads Home NII driven loan still driven revenue. Originations lower and lower XX% by In quarter-on-quarter, by

normalization account were up and which was continue XX% and on Card inventories recover. to were competitors balances, largely lower as income. revolve lease higher by was to auto NII driven X%, higher $XX up Services Card partially services And card revolving Moving year-on-year, outstandings pulled year-on-year result the of by Auto, up offset in Auto, originations XX% billion, growth. revenue new slowly up strong back &

wage growth as year-on-year, of compensation, due billion up we well Expenses to and invest as headcount to continue technology and office X% our were front $X.X as predominantly in inflation driven by marketing. staffing

reserve were driven Card past Card line credit by million up Net billion, as XX credit billion, build $XXX by costs have day with returned of expectations. year-on-year, Services. in the million, $X.X reflecting terms performance our $X.X driven pre-pandemic predominantly in charge-offs growth loan delinquencies were $XXX quarter, this levels, of to In

In billion. Next, down fees net down year-on-year up in on Banking on reported markdowns was X% were revenue down X% One wallet XX%. debt of down fees positive advisory, equity X. we and year-on-year the year-to-date of and or the excluding with quarter. billion more Underwriting of billion were bridge CIB ranked in X% CIB of Number last XX% fees were year. the Page XX% Investment for momentum month income for of $X.X IB up revenue $X.X book prior share X.X%. with the $XX.X

July seen for outlook, markets, of signs have in and good In terms indicator second-half activity of of be the remainder encouraging the capital should a we the year.

significantly, a year-to-date which M&A be will announced However, down headwind. is

was Markets, X%. down XX% $X to down total billion, Moving was Fixed-income year-on-year. revenue

Securitized expected, by year's was franchise last largely As and the flows. in macro performance volatility Credit. substantially normalized offset client Group and Products the of elevated improved from This levels

up particularly quarter, $X.X was markets prior billion, XX% down against derivatives. year-on-year. year XX% Equity revenue Payments in strong very a was

rates, driven by Security X% billion services year-on-year, fees. it offset higher was was partially revenue Excluding balances. rates, predominantly up higher deposit up equity of by driven partially offset XX%, lower $X.X investments, lower by by

up of compensation. inflation expense offset Expenses driven as by $X.X billion by largely well revenue-related higher wage headcount year-on-year, X% were as growth, non-compensation and lower

higher of and net Page Commercial Moving was year-on-year, XX% Commercial on Bank up of income was higher million margins. deposit of was billion up $X.X reported deals. Banking driven revenue by X. $XXX large revenue to by $X.X $X.X by M&A year-on-year, year-on-year, down Banking Investment fewer Markets primarily X% driven Payments Gross driven Revenue of the billion. rates. billion XX%

by year-on-year, higher inflows technology billion hiring to expense. were offset fun as expense, Average by client up as of driven were compensation by office in XX% deposits. X% investments, new Expenses acquisition, attrition and non-operating quarter-on-quarter up volume-related related including partially $X.X higher driven continued well deposits predominantly

as loans CRE also C&I activity. stabilization revolver year reflecting in real-estate loans originations on X%, affordable X%, where were construction prior we for demand new loan were up as areas well housing are Loans reflecting up increased current of in and X% the were as funding pockets in investing. up utilization banking well environment loans economic quarter-on-quarter. and growth as

certain Finally, were portfolio including activity real-estate Net $XXX costs well million, and the to were market to of as as office related $XXX credit million. downgrade the build Market assumptions the $XXX in banking. driven Middle charge-offs net updates in $XX by office reserve million was real-estate net million

AWM lines Page on X. Then, our to complete business, of

by driven strong of margin of on $X.X Asset X% & of and net $X.X year-on-year, Wealth up lower pretax management deposit reported billion higher Management balances billion income inflows. net Revenue margins on was XX%. with higher fees

growth $X.X year. banking of closed Asset X% including Shares billion up Expenses impact the JPMorgan revenue-related Management higher in compensation, were our last driven higher within of private Global China, advisor which and year-on-year, of the compensation and teams, both by

inflows inflows regions fixed-income and of in led quarter, net billion. positive channels, the by liquidity, long-term asset record $XX saw net all For billion, $XX were classes, we and across And equities.

lower were was levels Global by finally, of lending and securities-based were trillion acquisition quarter-on-quarter, X%. up XX% of deposits XX% and down overall net market driven up impact $X.X of trillion X% inflows, the down and And driven by AUM $X.X higher assets year-on-year of loans year-on-year, continued were the client Shares.

Turning to on Corporate Page X.

As purchase Republic and in the of substantially Corporate. gain I all are bargain upfront, we noted expenses First reporting the

the last was year-on-year $X.X $XXX of the net net investment Excluding upfront. million, NIR those mentioned of reported was of million; impact Corporate items, losses included securities million million higher $X.X NII I to $XXX $XXX billion, year; was and loss a revenue $XXX due up to up compared rates; income net billion

of the costs net of $XXX deposit with largely the First million in of up year-on reserve a Republic first million higher $XXX year, And eliminated million, reflecting credit of driven placed were $XXX Expenses legal were quarter as was the transaction. release expense. part by benefit

XX. the expect approximately coupled deposit repricing and Page with previously ex-markets to across and wholesale. rates on be slower increase by driven assumed both billion, XXXX now NII We than higher NII consumer outlook the Next, $XX

run-rate future, plays opportunity I again NII take the run should to the to substantially quarter's as some we do remained this below point And for and the in expect of out. uncertainty you once significant deposits that competition remind be at rate sources

Our expense approximately billion. net rate be $XX.X XXXX continue X.X%. XXXX credit, we And outlook charge-off to expect for the card approximately to on remains

proud this of So, to are strong wrap operating results we the up, exceptionally quarter.

through performance finalization the As despite scenarios. ahead, the Company's from we relating range the Basel delivering likely we capital impact outlook, the to a for economic Nonetheless, on the headwinds focused remain we ability pending the competition uncertainties on about continue remain the III excellent look significant to of deposits of forward, and rules. optimistic

With that, line operator, please Q&A. for the open

coming from The Jim the first Securities. of question from is line Mitchell Seaport Global

You may proceed.

funds maybe, you're Hey Good I far, seems makes about. more coming mix there? that about better talked it importantly, so term be up, the for deposit and I Jeremy, sense. around then help can guess, have you you outlook on expected. it implications rates first, probably of guess little a intermediate and what Thanks. beyond. in morning. broadly I outlook could and Clearly, guys the talked you futures discuss, to behavior next year longer on about you secondly for And NII and of guidance. think Fed kind the comment some are higher betas So guess us But NII seeing

Jim. Thanks, Yes, sure.

-- the passage combination and So two. with stable wholesale, revision, think higher just lower from seeing look feedback so and when drivers rates when a to reprice, deposit environment as about in slower migrations. coupled specifically, of hard that upward the particular And that of we said, you perspective. field has offerings quite the yes, positive I CD And I we're it's at Consumer, talk the untangle the the of meant time internal the it's from similarly in we're the getting

You asked mix. about

to continue CD even expect into and would we think capture year would the -- place, to that past would as continue money mix increase we to cycle we obviously, continue to rate that the we're take expect I of probably the we in motion. peak continue next seeing to --

a a before and the was is don't But I point it's know generation you talked be earlier, about whatever that said sustainable NII this you that Republic we of to mid-XXs that, run-rate level we lot than little that medium-term the as number. you previously important the and argue it as should in say, lower be could maybe but First the higher, the most number current consider is, fact

going want not we a be We that That's some when to happen. of don't competitive we We're in to it going marketplace, at predict do dynamics but to be to that's expect going the the know clear exact moment. point. function

just until Okay. I still if we outlook that later, for But, or follow-up I middle sort year the significant get just does to next you some next guess give of on of don't that, one about year confidence reprice? worried rate cuts or are to

evolution into mid-XXs rate would be and types sensitive to particular. consider we was put through-the-cycle wouldn't of what be necessarily that range the the different number number. the the I we at think to assume associated of current that outlook we with looked there, It a is of environments really that that. rate capture to meant sustainable out that reprice we a more When number that run-rate from in

dependent. I of rate it So, think particularly being as wouldn't

Thanks. great. Okay,

line we'll go the to from Erika Najarian Next, UBS. of

proceed. may You

morning, good to and to have just you Day, Investor you you I rabbits laughing at guess I'm to hat out because of any Jeremy. myself, NII do And do. said Hi, more the I pull

guess, a I I So here, and your really I'd want like maybe get to to broader thoughts. question Jamie ask

So hear loud we your you and ROTCE $XX billion. on generation more is XX.X% not that NII CETX clear normalized you earned XX% and

haircut of being above natural even Fed XX% your rate introduced the from and you we bottom a and talking taking from That is different potential that funds sort going were Fed everybody if into ROTCE fully rates in said scenario first when is maybe it is be the is cuts, III game, a that ROTCE in that natural the to aren't not target, end account possible because zero, about, when Basel through-the-cycle role zero. rate

So, any input on that great. would be

at XX% mean we the by remains have good in would I I normalized is about that that it's was even though environment. eurobond, a introduced Erika. true today. rate through-the-cycle we start There talk when that saying premised ROTCE, lowest some lot may moment where we in a it always And obviously. on guess Thanks, question. Yes. of brought sort there a a level, I

in to -- Furthermore if more but of Basel this the question have target. one you lot III in capital didn't the a you might the context end-game, denominator, relevant happens ask that explicitly, be, proposed what

cycle. produce I as So, returns think very about through in excellent we confident -- my ability prepared feel said remarks, I Company's the to the

There's parts that. right now a in lot of moving

Narrowly on to expand by some the them possibility of you know which point Some products of that services, course of them could straight-up capital have be the one, the down misses to the good, repricing real do back simply capital on that thing increases out the the and bad. impacts could is one be denominator diluting goes economy. on math, ROTCE these point of reprice, our the

capital. and the adjust we of can obviously way out and I'm higher products So, have suggesting that on we price the not we services, to it, need get our but will power, to where returns right pricing we

moving ability the scenarios, period. plays the good the point think of common we in see the feel especially the we'll and to of see there, and lot results the important about through various that a how is III through we parts out, our goes range after Basel it So proposal of mix I all deliver factors but

Erika, I'll say one thing.

earn to have ROTCE businesses course a XXX%. that mix a we Of from like X% of

we XX% of of so target. capital-intensive, and is some which all very look good We number and them a I are think have at good kind a

that now. we're be a it. card on credit going over is to it's will more normalized The time considering quite amount would to know thing it We kick-off cautious credit just a in other closer of credit. consider Look, We've be, than normalized as earning we we're is to X.X%. about for substantial been now, that

your so there, of remind And, what my us ratio follow-up quarter? could unemployment question maybe in rate you Jeremy, embedded the as has second ACL

still it's X.X%. Yes,

Thank you.

go of to we'll Next, Autonomous McDonald from line the Research. John

You may proceed.

wake that we RWA just and on potentially of about speech, ask mitigation, options to details in but for strategies recently? G-SIB well what wanted and don't capital you contemplate want you as heard par yet, you have ask kind front have of on Hi. both Jeremy, Good as to the the morning. the the about

Yes, thanks, John.

about a So, lot. that obviously, we're thinking

something. proposal, hand, to as this rumors or very out to month to there get detailed been do some other that you lot much there the of seem it's try ultimately might lead On actually we as have does it time a start this planning, to a real and like going sometime are

sooner to stop So get the actually not, we guesswork. and see kind we'll on something or of paper can

of are like just runs little introduced which Chair, biggest same, of in said the RWA bit driver XX% Chair the is guesswork, Vice roughly seem being of the the risk it about Powell's people a increase indulging getting the is Having standardized operational Barr's single way or including that, number that talking X% up does into pillar.

everything. of that, on simply a economy. bit the by but is have obviously, can impacts straight-up of power, that not your of fact little what that's with out exception, increase obviously tax what And that across-the-board It's sort you the the of hard optimize a want way of we to we assuming kind on real mean pricing that's and price, you

do there set it technical there of way get have markets good details, a and into to of very optimizing. be But weeds of we in mix of may lot a around this questions a FRTB ability opposed stuff, the a within as sort there more So business way. time fundamental around, track-record business the to optimizing can adjusting are the the and is we

a even level, of capital if changes Okay, doing of that's capital like to course couple we your pace versus the years? think next everyday your a of and for ROTCE of phase-in a buybacks How should And things and number investing this years over building high and down these new comes with that bit. for about at generating helpful. you the

of give here. standard to Yes. to won't stack capital a I you. hierarchy tempted I mean, our mean, early. you try Generally surprise to sort going back I with guess I'm not come investments, always right, going requirements to we're as to speaking, we're comply new that

capital we answer being, be So, right much to whatever how visibility, narrowly up requirements, obviously when given mean we generating I pretty easy organic the it comply, will now, when winds the know have speaking. we're

consequences pricing. don't be us I anticipating, to higher or the there But investments in as or requirements things ahead if returns that same as to capital see that's aren't reason, for are with not exactly we're comply we won't that saying critical to sacrificing strategically formal whatever. whatever see timing the And of order

for Okay, and room buybacks? there is some

that unlikely obviously, be would Unlikely, outcome. an

thank Okay, you.

go a Did ahead. John, Sorry, follow-up? you have

just a just next buyback? No, of you Yes. the couple in role do episodically play buybacks years, strategically,

about the hierarchy the moving new have $XX do for with we've and we mean, when money, I right. capital again, nothing to In of billion year. lot Obviously, talked this else end, we'll do the buybacks so all what although the list, but, equal, given year. end that's reasonable yes. at full there, number the still But, always parts the yes, else of for to be probably going we've a that's far, done

Got it.

Okay, you. thank

Next we'll Usdin of go Jefferies. the to Ken line from

may You proceed.

what similar in it banking Thanks. fees the investment terms in the shoots about the morning. feels of good in what's side. bit trade-off between thanks, ask green how like through a about just loan terms between and on trade-off to reopening and of come might demand like and people that about, markets pipeline, just feeling to how kind wanted are loan commercial you're those the versus future versus I getting growth talking economy happening Well, the of little of in

Ken. Sure. question, A good

last banking regulatory better-than-expected Well amounts especially we some in markets headwinds terms I there. some So month. lower activity, generally in shoots, definitely think about investment still in markets, headwinds M&A, capital talked yes, of green end

trend it's a So we'll too think I see a early there on results, -- based little recent to we'll call see. but

a different loan expect broader the for But expectations. a robust Generally, at that, away loan be cooling see growth it'd demand there. and especially we economy economy, products, from do revolver terms to if be In normalization, I little modest growth. different card off after bit of of and loan C&I, reasonably variety would the reasons relatively expect whether of of mortgage a or we still

we're But right the So really we're meaningful course, right through-the-cycle. we of went growth for expecting from away deals, terms, card. there right products, not

rather as that see function more a I will side. tightening the be So, any on than narrative, which of demand-driven our of economy a

to as sense. That And that. makes a follow-up

to using side, On a mentioned that little a you on just the consumer deposits, that and in albeit on continue more their the spend, consumer more and your by to slowly consumers bit state-of-the a what excess that mentioned little opposed more is Could have elaborate car bit you be as that just also you well. little feeling are to. kind as just to driven that of continued about to more wanting revolve needing the growth is deposits people side to trade-off consumers their

see has a Yes. not normalization levels to I account Actually we pre I still as to products. mean talk us, actually. revolve think per this we story consumer still about not when deterioration pandemic gotten

say there's here. our portfolio definitely yes, wanting rather for that the surprise point. I than at And think this consumer I at on upside to continues needing least would So, a

Got it.

Okay, thank you.

of Markets. go Gerard line we'll to Next ahead. Cassidy Please go from RBC the Capital

give like you're and fact funds a rates? versus maybe the as measuring that asset-liability guys way it Jamie. on Good of and can rate go in terminal it year-ago were the view managing your we're treasury looks morning, Jeremy, you we how morning, Jeremy functions and Fed approaching the on positioning us the balance the sheet you view good of forward your

honestly, about Yes. actually, been not risk Gerard, the higher say, concerned of change much no. consistently rates. there I pretty We've would

But equal, the out that a I these while that levels balanced fine we've scenario, focus range sure is actually and scenarios. was deposit playing of biased produce across case, less Of scenarios. of it across rates lot broad in been towards range things think in to at than although just margin, a course, at on of we're we higher a maybe higher-rate to outcomes to going all try the staying we comp little modeling. But always making consequence before, position to a reasonable of else continue in are any true

want positioning a change the of So and had interest not obviously, long liabilities, rate part longer get deal, still and even the on First so as took net Republic, as we we our We last we of same some quarter. that's lot fact in that are to structural result, to a took the the including which actually as a really of did that not about ensure we were position. actions of now

Very good. And then office Commercial as a you'd downgrades follow-up, area the in in what's both you Can you mentioned of happening on What tied business some you segment to that read-through well? the the estate in some a segment also but also little building real-estate giving had the reserve us some Banking C&I middle-market that seeing this deeper? loans, are at real area. in as guys the commercial go of and

I I drawing conclusion broad so. this. would Yes, caution a from too mean. you from

office about versus, example. when talk that we for think I

urban office is quite so-called portfolio, know as sort overall majority dense exposure and you even of small, smaller. our is multiply lending. portfolio our vast is Our to of The

but our like on of is properties like valuations ahead as of be office we'd observed So size to know, the cycle. sort resolved quite sample you small,

everything we on quarter. saw that this based And

see rest terribly little as that saw necessarily ratio. what in there comfortable broader to a the and of to I downgrades it's felt don't anything Middle get we the significant Market Across So sort segment, reasonable excess build read-across. indicative the of upgrades. of bit coverage a like But, of to

Thank you.

Steve of line Chubak go from Steve the to Research. go there? we'll you Next ahead. Wolfe Please

his It looks dropped. like line

America. line Next the we'll go Ebrahim to Poonawala from Bank of of

may proceed. You

similar the a for terms U.S. a worried XX a lag about versus Good or months morning. that Jeremy, cycle just we've the when expected effects is mentioned hike year businesses, about you towards following-up of quarter the How worried consumers credit a maybe months than you of rate the on now ago. have like be I concluding been you and an think outlook a leaning are think should relatively absorbed about year there the all outlook guess I unemployment to in question, late-cycle today recession ago. cycle first Fed from debate lot economy, better have we six for the we -- you

Yes.

I point views to trends. against more view, just predict get is trying Jamie our range So outcome many has know to a one less that on too and am when there. over I don't my positive too But sure, here. particular a predictions that about my think recent based we trying out euphoria jumping on in would conclusions in is I make about some And couple caution super generally of sure we to much particular people outcomes a there that concentrates of

that whether So we that right obviously, even to both comments lending is to still quite own on, -- whatever now. were potential know, or prior time soft -- loss normalize bit rates we're over-earning our probably meaningfully. for neither, lot focused inflation on a views talking and the be about we pandemics lending, a little No changed have it's on Jamie's don't point a continue but have the to I broader credit room

outcomes bit, come got is quite even, surprisingly some some even you've about a expectation talked the recognize to the the so NII negative is in whether should forgetting significant about that central case, you on that be normalization. today just always there we've the Obviously, down need going economy to

average is would hypothetical the scenarios CECL. Yes. not the the add, for under that use which we have unemployment our just that to X.X% prediction, of is multiple I

our recession, We the go on the rather clear good, something their headwinds predictions price-value into and in somewhat we're with cash. good here, really shape, their outcome. and trying going and to different be condition, down substantial the unprecedented. spending If consumer know borrowings good don't That's we we excess low still Asset are but all. Tailwinds.

breath think There those we be Gas, just team recession. And sure best. and for which the deep a market, governments, in never know should will is before, our landing of fiscal, of more that few mild needs don't recession Ukraine we've people I obviously, unprecedented the because timing, experienced we Oil take things soft

Two reforms. questions. And just Got upcoming a it. follow-up the Basel on

the And deaf You've the U.S. like on is secondly, at others this about said economy that talked of falling point impact maybe, Jeremy. ears. have the same

can touch that to you. If markets changes make you in you FRTB upon. because Thank of business . the capital This expect structural

Yes, so on our your agree clearly is this as early He read right. He first doesn't point. speech think that I right. of mean, just directly. you I Vice-Chair point addressed can

what So see we'll happens.

requirements, feel going for to cost which the all equal, economy. definitely that continue credit, is else higher of the increase capital We to bad are

we'll So on see that. happens what

like to options to it's really very much for written, proposal but immaterial be FRTB, an give but the honest, as curve not if and just becomes it's you example, product viable. probably FRTB through, goes yield has currently like insignificant useful FRTB nuanced, and On under spread one-product to call one detail that this

if accordingly. you're So one but stop to just thoroughly, example the it's cares, down to need no way, and that all the one capital of sometimes way really about really when doing we obviously, responding product, new products disciplined allocating

wind-up You having to change mix there. can our business

happens. you're Obviously, more some economy the harder the homeowners, risk the the proposal significant product it's even what layering mortgage the other more where, we'll through, if products like to making elements offer that operational of see, a of the the we'll of so see proposed, way on again, in don't once being come of matter real much especially beneficial

other a going we to And for further almost I anyone. here sheet adjustments. The make as just mix up business by-product, complications even doesn't clients would client it your for keep We are who by just might by to money, add these to just make recognize though Whilst whole, advantage don't that great the and loans clients. the and need various product to do effectively that managed the you you're do. and all through sense balance

Got you. it. Thank

to Mayo Wells Securities. Fargo Next line from we'll the of go Mike

may proceed. You

on this Bar's removing except in that do Hi. Vice-Chair terms question business about ratios another to think degree I the And your will to others business I you up what activities of remixing, would you. had repricing simply do you it. do from changing do perhaps for speech used capital model week. XX% go or

same ironic week Apollo hit speech. all-time to it's high of ironic, stock maybe not at or Kind as though, an price the

they business as as much industry JPMorgan how So potentially capital much proposed. have to the does or that ratios go -- up

Yes.

for credit, industries. Before that and private-equity, gas great the this question, news Jeremy answer hedge Blackstone private Apollo, funds, is

yes Exactly. Mike, I say to was going everything. to

for So, how that if that try not yes, means cases, generating certain the capital that right and repricing and how flows demand of is products. remix and To have mean returns economy to then extent some affects into and re-pricing, the pricing we And have we the how power reprice and shareholders, products in rename, we're we las, we'll that to getting sticks that see will will requirements, not definitely. services. higher successful out for that

Jamey that was probably elsewhere as think out, those as means have fine, that I regulated point that And services those Vice-Chair out, in Jim and addressed that's speech. and perimeter pointed go also into are points products and and we the clients Bar people

but risky So, had having has our negative perimeter in some we consequences. regulated traditionally, activities a have

So all to are these important things consider.

may on color a gives All the right. bit investment the more Day. separate little or question, appreciate not Investor may pan-out. And I that degree your It

you're more I'm to bit share wondering tempted tempted to you I'm saying are you this said We even just do like, you've billion the if aren't gaining by quarter revenue little closely. that that why without guidance one more, by not first NII, for spend so. watching between still and then $XX not dollar. Are just quarter Having changing and you guidance should. expense increased a

You've more not? $XX you're spending one billion dollar why more revenues, of expenses not like

enough, right? that actually Mike, expenses let right, this that is me get complaining high our you're aren't

or be a Wait, I asked part clear, back, it's just but. two just whether to the for going question not, years, of

the appreciate balance. I

we've all the in through based the power always this through-the-cycle earnings on through-the-cycle our produce cycle of been investment, is returns. on funding, generating right based spending the clear view through-the-cycles that right of company goal spending our pretty the Now seriousness, and to

flow fund So and will growing broadly up, speaking, the through you when both way, too been straight-through to as by it's remember. going tends down is moments, we've NII and bottom-line, to the those

carried have is see deploy to through-the-cycle about into opportunities revenue we is disciplined that flow, So, which this I a expense being of dollars item and this items stuff looked loading which which and far. part honest why actually whether there expense revised meaningful more about year, so the not and don't. item recently. and guidance have marketing that that, like some But not are don't being or at investing we

quick follow-up. last then And

kind we're of think as fast running as we can. I

bankers is full things set get We're the and market actually this things get want we compliance, -- you careful. So audit a thoughtful right it. down now. And credit risk recruiter trainers effort sure right to and make we

all it's to and the at people and money, things all can change it's not once. how the add once So many the just

that. And to quick then one follow-up

at you low-cost you we've quarter benchmark it extrapolate Your don't long-time. when down still now saying because against is guess where you're quarter there will closer? a just and this you NII long, you're point, getting look the efficiency go providers. can ratio lowest ratio this come simply seen do extrapolate efficiency I this the think, yourself because Where you're at in you but some

I yourself extrapolate Yes. but. definitely You current right? can't you or mean, the numbers,

benchmarking that broadly more speaks ourselves to our be fixed. of our you've on generally is investment doing the get technology in to an improve more a of too cost interested that sort in all think long-time, variable scalability been area and I versus that benefiting low-cost to we're which base for of providers

respond doing and doing we part that's AI talking terms In we're how we're type we're to volumes of that reason investments so. the cloud a of stuff and about, the big that modernization all of and that and that

our improvement. really is company, good for about definitely efficiency feel we think as but a there room I

All right. you. Thank

Chubak of Next Research. from Steven to we'll go Wolfe the line

may proceed. You

has to Hi, get expectations ask earnest. with outlook, wanted liquidity broader on the on the out of deposit deposits. have in drawdown you your thanks just for technical what the to begins versus both even I earlier. for ramp-in at really question signs deposit to taking and as just for growth the you recent for industry issuance second-half, issues thoughts industry, treasury especially come apologies and our the Wanted predominantly

Yes, good question, if. Steve

things say about this. So, let a me couple

some the now bounced kind saw obviously in of forward. as So a around as and transaction, little you this project function look deposits but we quarter public have obviously bit our a at banks, numbers if end-of-period of our deposit of as the well turmoil regional that

QTS that is branch core as get a noting with to trend point reassert we we of from downward our modest some sort couple of consumer. by itself broadly some would that markets starting offset got expansion Our of have expect for just seasoning. do a hope this like We've But, the of in view system. a higher function to examples share, taking

invested their share products services. a in we've increase wholesale, over in lot and And their and obviously so

And compelling are we we think helping have so win offerings that mandates. us

there so potentially across but franchise. deposit the are we And view there. core some are modest offsets declines broadly share remains

has same CGA that, about thing, desk it you the reserves as that noted market know, the in got RFP. have the that issuance. of question into bill come fueling lot was a effect of whether Within going of out out we build through the and have we The come come to big

GTA, with the something on so-far, at or they're and they're targeting And most of the guess XXX XXX, done. I almost

of has some and feared RFPs. You people know it kind of more

say. So, as you

a relatively good highlights. sign that's I think and

when you've the of got the So ample short the collateral system better video supply yield of curve. front-end works

it going significant, dynamics is to So see coming good that be continue to TGI is but down. RFPs to reserve whole RFP

muted XX quarter. associated other with just just were unpack factors. versus specifically, drag much follow-up income color. maybe the batch card revenues the in of could some how Helpful was more And a pressure, is you on sources hoping I of

income Yes, little a bit one-off has Steve of so number actually a card thing. that

a kind rewards liability a quarter technical So this thing. had of adjustment we

periods. and that's is small headwind a just positive one-off getting comparison prior the item the hurt temporary also sequential by also So a in

guys card sort income and thing much So the you we look ourselves. at that know is I obviously, of better that look

size you Can the reward liability impact?

It's sequential a that to significant, but Michael little to number to get . it's Why you. make the just look lumpy. enough don't that bit not get you

for taking thanks Great, my questions.

go line from of to ISI. Schorr the we'll Glenn Evercore Next,

may You proceed.

you. Thank

the you Just on? been landscape. be pricing greater businesses conversation. limited that sustain certain is, But meaning side, consistent not push bank over changed a want to due lot if on the when, European to time ability I the my power willingness follow would side that power now a you question institutional pricing -- guess to there'd up this regional I have Because has that you've competitive and think a the side, bank and ability on price to have

are real-world regulatory talking then for on to maybe the a users could markets material comments material what what your you're consequences when about you the the that -- in press changes? and And release tie lot. to are end that Thanks referring

Sure.

power, across depends right. pricing really landscape on look, the It product, you're the banks. depends and on on it competitive different So

And very in cases. granular. in product specific. so And power more we'll than -- have it's cases very other It's some pricing

increases overall just the make to trying point Basel think is end are in that connection excessive. like the I with that we we're game think capital

to puts Does generally put pressure all services in we how real obviously returns, the be plays price is on of it for different a economy. on increase that detail where and bad products else remains all thing to and -- across equal out that us seen. That pressure can.

Importantly, since we don't actually have the proposal yet.

So need we details. those

was half your I'm second What of question. it? I forgot the sorry, Glenn,

Actually, it. on I hit think you

follow-up related private is so a of the competitive may you Jamie's limits on about large the more be downside the price credit of investment-grade landscape banking the doing do push question talked part system? my a lending just -- is, I'll letter, that out in downside what's So traditional notion the ability credit or to of it of asset-backed pushed the mortgage business the if intermediation activity,

bad economic I it what home and outside by perimeter but happening regulated the think whole. seen societally a lending mean, downside, purchases outcomes homeowners and downturns, bad, is individuals depends as we've speaking, get you I when on history in I you things just recent guess when think on it I for have mean that

So about this written I mean, has extensively. Jamie

past, reasonably a channel actually right Beyond actually profitable, is a correspondent it's swings that, I margin bit. But how is then mean, picking the in financially, profitability cyclical. obviously it the now like we've talked so little lending was recent about -- very it's business. mortgage the thin up less And

It's challenging. And requirements, even makes Cap increase harder. you when the it it

And second that that talked less it the pricing we the me where So a regulatory do just activity you're for tension between power in as ago. perimeter. might credit that one about and outside we impact areas in becomes more moves remixing available that homeowners of versus risk the

Appreciate. Thanks, Jeremy.

to Stanley. Morgan of from go Betsy we'll Next, the Graseck line

You may proceed.

unpack understand what regarding to sensitive, asset I Hi, little of coming more way XX-Q, in just is? it. asset the the sensitivity read wanted the I outlined to at bit the drivers a I from of Jeremy, the to liability good the morning. Yes, sensitive change that's just you going that drivers least wanted that's

-- that's been it our sure. change. I you terms in measure NII of challenging that's has potential store, as management respect. usefulness rates to uneven somewhat to always been that a also in Yes, of able predict And mean, limited know, be manages an Betsy. so when a It's number. risk trajectory

just I roughly this supply, quarter right? last the the quarter and mean it in one - hold do from change the have answer talked -- effect included so increases like and we've the always been effect is $X.X EAR be about going deposit it billion, has which to $X would But I all the we and as different change to spoken that if more about, that shows. conclusion come you that we or the what to... from through reason without of change to cycle, by $X.X to best looked something billion. at what lags But it's all caveat of disclosure, in and was hiking and latest we've NII would improve the rates, it done is repricing But minus what modeling going never it billion to our that the to disclosure for given it number our usefulness we improve for another is any that, the this rate of tried the in the that usual

Okay.

term, change look, deposit longer betas we are And so as are forward today. that saying, fair mark-to-market And think a about think it about to guide where is here, you're to I accelerating. when me for your

through be put to anticipating quarters, are as down accelerating should five X.X% things together. just I'm deposit should the So I or over next betas go from trying the four to those here? going you're two that I that, because XX-Qs expect come

technical quite It's question. good a a it's issue. Yes,

So the was to I think through in the the and past, the way constructed all cycle betas this was assume number deposits.

deposit would forward been acceleration number a have then to would the essentially and the based would the on XXX% deposit curve shock terminal it using like that case notion on the curve. betas for been include your so And the because beta based forward have not

not we've to recognize that beta the predicts is will shock, instantaneous. nuance introduced The the the be that now given at reprice

beta get for thing. you bridge a translating far. about statement for into mathematical actually the just so that too sort XX that. that think a of to the I'm not be And guide draw consequences of But our our might I sure expectation months next can NII relative you

earlier, deposit saying and that that's mid-XXs. the were you here, term be But in part betas you are to Right. going the right? for anticipate longer accelerating normalize do Is to from of outlook NII

James. ahead, Yes. Go Yes.

built - beta that again. next from rates go yes, to latter. The is I X.X mean happens billion going yes, over will X.X XX up that's round be to you the X.X don't And the time product XX go up. exactly if as down the rates whatever to the to is, have actually the go as actually basically, is actually XX, if

to bit dynamics going consumer. as are to migration, the the by well move contains large the just coming reprice. is was level XX is down as the significantly potential, say, as which wholesale obviously, a different furthermore, element the projection we that no I number what in as And And corporate means at different of the segments product business from little guaranteed, then internal a of to both lower

Thank Appreciate it. All Okay. right. you.

of to Bank. Next, line Matt from the Deutsche O'Connor go we'll

may You proceed.

All right. morning. Good

consumers came ratios here. the change guess I make your about loan-to-deposit deposit meaningfully? more mean XX% So share, want low. I two will your consumer sensitivity rate rates So you top market what eventually have banks would are

growth, loan and is at for least outlook card. Your outside sluggish of others I fairly think

the banks common divergence kind there big and just sense, what deposits it's historically, else really that's of big don't for to So that that much we've seen I pay everybody need for reason. where big banks this is among and but get the

that? So change you what make would

and just In Yes. feedback it's Matt, from end from competition field. It's feedback field. the the the

position every different is about bank they what in I think a need.

have by a do whole we city. this you also so, outcomes. But And of remember, range

and you we have Phoenix different have Arizona interest do So rate and have products. competition. then Illinois, Chicago, high we

a things. of So combination it's those all

bank a small who to big we I and wouldn't report whenever like things or and bank, more that. you're of see call kind and going who a things it did the payable

going there So to and say are I think would is our to give business you look, little go going - power very pricing to of up. I in betas take most it's

move there you rates get funds. You that seen into we're go products migration or direct certain compete money going in that. we've take to of CDs is they banking have or rate as to circumstance through a it and market - where a have competing point for history given the ever to to or didn't And a no had that

in You already parts. not parts see other it in business of and our

Matters really just strategy. core it's just that our the relationships. And primary the bank that's of

Yes. mean, yours like I kind we've but of again, this ratios I low. seen loan-to-deposit banks agree, never XXX% for

to could mean assume a run time up. that's that you deposits trade-off at off you'll. for I I not eventually some let make to a quite So pay just the modest decision amount

loan et lot value a of - to lower that ratio because is That's because LCR, a more stuff, complicated cetera. of ratio, regulatory little that capital

you. Thank right. All it. Got

Thanks.

Peabody we'll Partners. Charles final Fortalis our for And question, from to go

proceed. may You

there's metrics. for shouldn't been deteriorating that your primarily. meaningful Good First I some And morning. of presentation, X a excess Jeremy, Republic liquidity Page or depletion some liquidity obviously say you showed of of deterioration on

So probably there's liquidity question that's liquidity? going liquidity my because are excess you look I is towards plans premium that want as your how what's to first variables question a make that 'XX, my have rebuild replenishing so half quickly event to out to for liquidity, is do that dozen a

Charles. Yes,

right? little is my HQLA ratio. the know this is number think it to someone LCR as Day, and rest I in to when balances First of bank just consequence LCR flowing bank the the into the we in talked decrease Republic. And about through expected bit prepared the said you change So at in I of half about a yes, So Investor remarks, deposits our

as replenishing is correct. think And not all that entirely therefore, that's notion expected. So I the

liquidity. still In ample have of fact, we obviously,

and in ensure Now of adjust forward, if that's accordingly you we'll asset expect want of different of principles to that's liability you balance sheet and story, a from quarter's products as trends mix banking, different and would our ratios compliance project to but sort business terms across the us.

And the down securities to at in just we I press that marketable top the page cash and number, at I've trillion just even release, of the add trillion. the we're the get got excess, have would $X.X $X.X to look exact of like no going

And excess liquidity. difference. have liquidity I the think is slightly ratio some we

the do to and one we multiple or two. system this change studies course, according think overnight of I in things to

wrapped So as follow-up. into of sort a that

quarter billion least you forecast least billion If of NII. billion and future, year at that for forecast $XX of NII, you your eventual of quarter some of one mid-$XX and $XX the in take maybe at your would imply at of implies NII $XX that of this one take billion point NII

what you billion. So about about credit NIM your balance sense from is drop. $XX you that's get what in your I I'm rebuilding that is reversals a it the thinking to just the is get of billion Or XX% an the point basis And hold deposit? driving of Or $XX of really impact? talking liquidity? you're to sheet are - trying as XX if better terms in a to drop steady, interest mean - it margin to deteriorates?

would complicated, It's really about we as being I story. Yes, a right? think think I that Charlie, deposit entirely that not did this.

fourth shows a are the paid terms, point very chart dollar the the on first whatever, either change or in consequences deposit in run was terms XX just page little basis it we in in NII it but think simple a put in rate rate. like the I like quarter what of quarter,

of trillion higher-yielding from it's rates money obviously you've reprices from relatively when kind lot deposits. whether it's or going as in are on of is of of got changes X% whether because dollars So small impact X% of CD there a big couple a migration to a consequence savings margin a to lower-yielding

really we that not why about forceful trajectory complicated more any expect being be that. that's about it's people so reminding And So what to than we're

Thank you.

no we questions at And have this further time.

Thank very much. you

for all today's conference. participating you Thank in

have disconnect may your a And rest this You great of day. time. at