Citigroup (C) 14 Apr 222022 Q1 Earnings call transcript

Hello and welcome to Citi’s First Quarter 2022 Earnings Review with Chief Executive Officer, Jane Fraser; and Chief Financial Officer, Mark Mason. Today’s call will be hosted by Jen Landis, Head of Citi Investor Relations. [Operator Instructions] Ms. Landis, you may begin.

Thank you, operator. you joining thank and morning all us. for Good management’s that which website, to is like based may to for uncertainty presentation, you remind on are circumstances. which our I’d and available changes are today’s download forward-looking statements expectations in current and contain subject citigroup.com, on these differ a due variety in of Actual results statements described filings. may factors SEC materially from to including those will turn it I Jane. that, With to over

who And I’d the to like to in reiterating last by Day appreciation you you opportunity through value Jen. start those our and my month. of next the refreshed you, for few participated walk greatly Investor our strategy Thank We plans years. our to

the the new time say to Given see committed, Day. quarterly that feels first on we lot have Slide reporting got today, updated an time say are will quarter. we we will Today since happened strategy has keep on our report a our I latest our X. track to understatement which is you can Nonetheless, spent like segmentation, you how progress also and you efforts. as we much we our that it on under day, card on the focusing Investor results help will be

to So then are we handling macro the after through going quarter, I And in will am is it discuss how Russia going to environment I also the first. go talk more about Mark I talk detail. about and

rates momentum income support central the will in market considerable triggered nominal placing near-term economic U.S. and growth in further levels. growth a since so. curve. it is normal and start to the the year strong recently only prepare the and inflation, unleashed labor banks we in global the Russian inflationary emerged we we fall view new regional remain and hit storm and the center seeing macro the as it economy we higher and front clients face of continuing sanctions Back for all have The shock be food, strategic complex enormous the and and inflation resilience growth we believe are of We supply long our do has fueling more first super the to been operational that Ukraine responding of yield a while of Energy businesses of Middle cyber intend the flatter energy, and the under from on that can expect we U.S. with an my at in are potential top rest war pressure. the differences The to foot world, globally, in outcomes, for the consumer individual outlook on at commodities to hardest. risen is impact help invasion entering and to the for pressures. is are to prices uncertain. period But defense, a the And With growth or but East, don’t expect their security, cycle of in Europe dialogue. described material of Europe job the in

related our given units. of XX.X%. well These as net the of our services, performance XXX let’s stronger about so was five main of the include RoTCE performance reasonably performed I well basis am growth our Markets performance pleased RoTCE. to Treasury to buoyed EPS cross-border reporting to business, of reported by Well, revenues to the revenue think rates performed impact a business Services higher almost tune particularly on our emphasis of our well, markets And corporate with divestitures, an Earlier the transactions equal clients very of performance $X.X and I with today, by year-over-year active and trade underlying turn the first to points aided this So, of quarter. loans despite FX the led $X.XX, we backdrop, the environment and amongst revenues with also that strong firm of of and quarter income This notable In numbers mix our a impacts Solutions, Trade in up billion, and volatile quite XXXX. to commodities. XX%. traders led navigated fee gains with growth, in X%. Security

As you a Banking story. might Investment different expect, is

think advisory capital can and the equity a I remains debt perform smaller. the While better was wallet side our in going even bit if we performance on markets respectable, forward,

Banking, engagement to their signs healthy continue the our is is growth. resilient spend the such capital demand Personal and until rates. see key and that, see U.S. good through consumer and in robust of client cost We Our to the resume said credit we Having loan and and the don’t pipelines as card through situation expect are we In loans geopolitical markets volume on the how sentiment payment of rise. in healthy drivers improve. activity industry,

So, dampened we where business like is Geopolitics in this Wealth Global headed. quarter. Management this performance

U.S., improved Markets we as well. franchise pulled in investments back in saw Asia new our in our revenues the While on clients something and

month know, you we to support Alliance, as advisers. a we Citi our As client which hiring such launched are offerings enhancing independent unique and bankers as last platform

in add bank result and in a Citi efforts, we both these to continue clients the Gold. of private As

capital to our impacted $X we fewer first time, quarter. than X and want the and returned ago. X% ratios year we geopolitical caused with shares Tier with same and common about through through At the about, ratio about I to for in be I capital the upfront create which you our macro our the this shareholders divestitures, to during both this spoke stock fact buybacks and now year. the of in OCI come rates a that XX.X% increase did headwinds at to tailwinds environment, We outstanding billion a sharp Turning impacts capital have largely negatively equity common combined our capital, quarter. our dividends interest

through buybacks me the path stock a remain And our to walk excess going these details. our impact clear, of Now, committed this we of capital be XX% whilst to is have shareholders. we Mark our year, continuing return let this you and to to end target year to will level

heard we regulatory recognize making the term. I at medium in we that improving I culture that our investments focused will returns success modernize short impact run. firm. bank Day, you only our and and our But the in make competitiveness our expenses but also also to Investor transformation are a talent infrastructure, our returns in not firmly risk Citi and these investments our and to our As our satisfying are our the lead on and winning in controls obligations, to and to believe here our and

further sell to EMEA, So far have we Asia the year, of which recent Bahrain. and X new in businesses announced and consumer this were most agreements a India

in significant franchise. beginning interest iconic in Mexico the process and this are sales there is We

As you retain we heard have institutional not our an presence. given this in is me order uncomplicated say, to transaction, separating our will operations be

our and operations course, January from carefully on benefited front of Russia. to three the being take on remaining necessary will in to concerning and posted We Poland the and the time in of we will markets: shareholders. way reduce Russia exposures you in keep we do is right to decide foot any this We China, developments our And the interest the and which our started here. best transaction

have in reasonable and are reserves the during at and been level, managing given the exposures We level we both especially financial composition additional our took they down quarter. a

intention And war Russia have our local of Russia remains. the impact second increased the reserves We beyond and also for portions significant and to in Ukraine. of our order third sell business

every with communication of But have the tragic continue proud the of the incredibly U.S. how remain war continuous in of corner the our occasion our part out to describe words people and we to in I Ukraine. consequences to to risen our firm. of do are We have sanctions government enforce the regime. I run from

people kept their we the can bank And best possible. colleagues and can. the society our function opened deliver many help country, NGOs of continue Our will as have in Ukraine help as homes help on have we to and where refugees ground they operating to our aid anyway in in

equally last one is the brief remain I the encounter that and with strategy unnecessary as tragic to having I the execution personally, I to our to unpredictable in and and remain pandemic. And all recovered the a laser speak can I would in to, just on for So transformation. environment war, can’t least a going as world, it. which COVID, from backdrop much of we macro blame focused the of is expect say our the Paco like on persistent with

it like take your and Now, to be we to delighted then Mark I’d questions. will to turn over

unless quarter, in firm-wide the I’m expenses on the Thank the to focusing On X, end little Russia you, first segment. everyone. for results with Slide spend with time indicate good Jane more financial going a year-over-year the firm. and and morning each results otherwise, show for then comparisons we financial full start I results of on

shared of the in a than are includes we an increased impacts net Cost Asia the billion on $XX.X as was Services strong net with by of or PBWM by to losses $XXX XX.X% and Personal Jane underlying release in presentation. account given is the earlier, RoTCE Russia-related decreased offset continue impact on revenue the billion $XX.X a to specifically across related revenues strength reserve, of As detail the reported the walk This offset as of of the of $X credit offset by more are billion $X.XX, for driven in partially primarily that impacts COVID-XX $XXX the income of ACL you million the ACL In exposure build broader were net Russia U.S. XX% environment. net macro in non-interest the more just in net credit lower Investor Embedded continued to of a Day, X% release. the business I a uncertainty million see said, $X.X which appendix about an results in detailed drivers XX% quarter, we divestiture-related will This and related mentioned billion. excluding mentioned. interest the in was U.S. expenses these approximately release revenues. first resilience through $X.X of That divestiture-related Banking, key Embedded EPS million Total portfolio, was shortly. than performance $XXX by to total in on Asia in we income quarter, and businesses. I to billion consumer of

have ratio X, billion with loan drivers. for in of the quarter the total an expense $XX.X a walk first reserve with to about Slide As reserves, funded of On show X.XX%. today, we key underlying we

impact goodwill These franchises legacy It as we in capital As to part I goodwill a important costs incurred to our note is incurred divestiture-related the that and largely costs related quarter. of earlier, is divestitures. some we this mentioned resegmentation neutral. write-down

divestiture-related that of to costs, of to well finance investments. approximately the XX%. transformation investments advisers. About increase by Excluding approximately data and increase X% as two-thirds the with of was to hire the bankers related was the by is risks, related continue driven investments driven investment X% commercial and expenses client increased and we technology about controls, by as as XX% business-led programs

by exposure we expenses we in is and for volume-related X% Slide addition, markets all other In technology are update of services, our and investments to cards continue savings. and XX% to was across these cards. wealth control to and Across invest On revenue and driven provide X% partially by on up we and in X, an buckets, quarter. largely offset and Russia. due the which technology, inflation was in approximately investing risk productivity higher

And mentioned, Russia of mix down from billion, of shifted quarter, about the Jane changed a way. positive the stood at exposure at the our $X.X to end. exposure importantly, has of billion year $X.X end As the and in as remaining remaining

Bank, consist risk with derivatives billion now $X.X AFS, our cash We to off exposure. The sheet of billion, and the and $X.X billion have which $X.X of billion, remaining repos exposure, reverse balance cross-border Central and which Russia reduced from totals direct exposure country consists totaled deposits about previously loans, exposure. $X.X and

about broader million approximately $XXX $X translation approximately adjustment down billion of given related direct in And about billion. reserves billion the investment Additionally, $X currency and for environment. at Russian to to billion, Russia now for mentioned or as credit at million, another investment with year $X I stands And previously, our took the impacts from $XXX we macro entity CTA net end. our exposure net our about $X.X is

to billion, course taken result feel a as And we a our income believe at at point. reduce we So, now our that at $X.X of that Russia. meaningfully severe this show X, loss Slide basis offset normal sequential of approach management, by we actions down scenarios, quarter, our increased higher reserved $XX a as prudently have net to we partially potential taken well as we from of In what of planning by stress range estimated the stress have risk exposure we is our loans interest loans on and approximately income count. Day. the our to same under scenarios net risk, interest first the income, Investor with risk $X were have now a interest of from spreads approximately billion On and day the million run and deposit In I we described deposits. range as

and key assets, balance services high-quality partially strong $XXX margin basis, income Slide $X.X interest and and by interest cards, sheet approximately were X, $XXX or PBWM. balance summary portfolio, Of in and grew net as investment very are income in lower liquid we a sheet. by trillion spreads show we maintained XX% by volumes by net Excluding net our day points billion ICG our approximately Markets offset and maintained HQLA We both and driven growth deposits approximately a net metrics. sheet end. loans lower in liquidity On well interest from in balance or about income Sequentially, ratio, interest by both under sheet, a CETX ended loans year quarter liquidity X% Markets. XX.X% $XXX partially of standardized total approaches, higher ratio On by capital average approximately capital of from and as million, we as we average the standardized interest at resources binding income X increased million. billion. and increased year-over-year deposits by basis count, down balance from a income the XX.X% approximately with with increased advanced perspective, From remaining the capital $XXX offset

SACR During in interest quarter, rates. the adopted we sharp a move significant impact absorbed and from the

shortly detail We of will in capital into go the drivers more quarter. on the

to of However, to we increase due to continue the XXXX. important despite the to impacts, of to X.X% GCIB the CETX of it expected end at ratio a manage the is to beginning these note that XX% by year surcharge expect

DTA ratio year. We reach of combination generation, the generated utilization expect the of the of Asia the end sufficient to exits the capital and consumer XX% be net several of income in CETX by closing by the to

throughout to as would Investor billion portfolio, the And we at to on we said we As committed interest rate pull given to the capital a to level excess and to deploy Day, we the par And quarter-by-quarter continue over and basis do that we impact, our we the under shareholders. capital SCB framework know, see buybacks macro are assess will uncertain time. be able right returning in to year. a of environment, investment so the as expect $X reversing driven that you

level into sequential account throughout capital For a conditions. evaluate that CETX we more quarter. On the to the Slide show and this on buybacks amount walk detail quarter drivers modest the market only will second we we a X, quarter, ratio of provide expect taking

ended As mentioned, of I absorb capital our XXXX. as the our at just our impact stood to RWA. year XX.X% ratio Post of SACR have X, as SACR CETX XX.X% we ratio the adoption, on January capital at built

minute to to we Given walk CETX how a and the quarter XX.X%. I this the the about puts quarter takes and sizable ratio drivers, a the some of of wanted spend with of impact through ended

net First, added basis XX we income, points. which generated

points. reduction of buybacks and Second, of XX dividends over basis drove about $X billion a

the in reduction. investment mentioned, basis I basis Third, the another on a interest DTA, rate point our due disallowed driven impact reduction. increase the reduction largely drove Fourth, the to CETX just impact interest rate in by XX drove through portfolio XX point AOCI

we uncertainty returning we we continue a driven RoTCE strong will in and strong each largely ICG down driven laid our Trade a by new very performance show momentum healthy. revenue. Treasury was as excess RWA. remain increase by portfolio release Average and largely as clearing environment. Finally, credit growth growth in were in see Banking net at both billion as billion and X%, hedges, X%, and see driven XX%, a slightly Investor XX.X%. Solutions, the by client up see less up revenues XX%, combined are commercial And existing heightened approximately our key X%. volumes quarter, in client markets. expect grew activity. which a cross-border continue. income higher Investment on income loan grew strong revenues resulted due corporate underlying to including down markets results Income largely to partially to impacted Slide backdrop nearly up strong revenues saw the Fixed expenses with fee an Day, sheets volumes interest Banking acquisitions clients. our trade largely the year XX% under deepening out With ACL X% of income outside XX% products In also and prior XX% continued interest quarter that Services, on with total compared and strong the the said, fee activity Revenues across with partially a a end the quarter. light losses down in overall driven continue and macro with custody. Securities drive offset Expenses drivers higher revenues by were versus saw pipeline loans client of large clients clients geopolitical the we were Again, debt related new activity, were very Slide remain were negatively strong show by client relationships exposures indicators X%, In net by capital prior versus as benefiting period. a U.S. impacted in that finance services performance On billion, strong metrics down to In driven our to continue basis, down interest activity driven continue dollar XX, business This were we drivers fees, up delivered and uncertainty. clients’ revenues year an We you or and equity higher we Markets ratio $X.X year. and and to XX%, we Markets Group. benefited M&A. by to by On $X.X gains see by balances. savings. XX% as capital average TTS indicate XX%. of FX in commodities, overall derivatives client volume-related and productivity well of the and activity strong and a client repositioning revenues, we driven credit year. client of continue assets and our And from existing we Spread were that well approximately driven deposits currencies, these X% markets in balance decreased Institutional TTS and momentum shareholders. loans. expenses Clients revenue Lending declined broader we Banking Equity net good a revenues in flows commercial increased rates against the Corporate as investments grew X% as deepening by as of We excluding to on higher grew levels largely volatility. and offset performance transformation for as we driven XX% grew down and growth driven strong geopolitical by investments, average from last an by factors, build last of to $X particularly across Russia, Markets finance. and just Overall Cost build capital Services business-led impact revenue. revenues our by of quarter down fee with X% offset Investment by by macro client remainder And and X% I to activity other of XX% and Russia to partially Fed by combination engagement, committed a business the a was to the by mentioned, show capital CETX all a strong reduction were have path XX, contraction corporate quarter, lower X%, year. of management strong risk actions grew equity In revenues prime in in in card rates

and revenues been release, maintained XX%. in of customer resulted U.S. on or rewards declined over average $X.X would against income approximately On costs XX. Adjusting by to and credit volume-driven had and interest reserves uncertainty an and investments, over billion business driven partially Personal metrics. strong a release lower portfolios Slide that PBWM ACL Cost just was for we the Wealth to investment over Revenues as cards were more an X% loans. release release, savings. the X.X% Credit opportunities in to higher non-interest by attractive net reserves. business-led business. of credit offset even than this income by our Management offset than offset was engagement. higher X% have as show acquisition declined ACL well more million XX% turning net show and COVID-XX We and XX%. as productivity RoTCE product cards Banking of ACL losses. our of see total net credit RoTCE decline by a billion note drivers as of Now a for approximately XX%, XX, We rates This net investments transformation results of Slide we $XXX revenue. payment Expenses as up higher related revenues and $X after would benefit key continue I expenses, we

by was we underlying performance. drivers card XX% X%. partner and And up are volumes were seeing up with up XX% positive Retail loans revenues with services spend seeing and up accounts up spend credit also loans interest X%. by We average income are offset net average driven new encouraging flat payments, as improved underlying XX%, higher drivers higher

we remain rates payment While normalization. we have see finally elevated, begun believe to some

result, and interest relatively basis, X%, declined originations. branded partially Investment cards while driven higher clients mortgage Services X% capital volumes. largely back seasonally balances As declined activity driven impacted Retail by interest-earning by activity, card Retail in a revenues lower declined client their balances grew offset revenues were deposits. lower in a by sequentially spending sequential despite banking earning flat on revenues geopolitical markets, investments, Wealth X%, trading in as by pulling resulted less tensions particularly the Asia. which

driven However, and Korea largely underlying revenue would driven largely I drivers on Corporate/Other. goodwill up neutral take to $XXX XX%, credit lower see this mentioned impacts happy quarter, in we up and driven average earlier, expect XX%, in divestiture-related well Asia. XXXX advisers by remain declined year to significantly, still Revenues down is Cost questions. were up be the investment activity muted by point, I are markets, results driven client was up but the mid-single-digit and X%. the million outlook, deposits single-digit expense losses, low Slide across excluding growth, briefly franchises. for full touch as Slide that, strong, On both and Jane as revenue with expenses. by to investment loans again, on revenue we this results for this your the down the from credit largely net we And Expenses the significantly. net capital. by wind lower X% legacy the year. impairment to growth of with at income largely portfolio. Expenses up exit average On compensation assets show result, net XX%, And Revenues higher declined client increased XX, by show driven as a X%, XX, the

[Operator you. question with first Instructions] Thank from Evercore. Glenn Schorr Our is

open. Your is line

there, Hi, how Okay. are you?

to everybody So like, when now because including scenario first Russian release, $X.X start you’ve are million looked reserve what we’re wait, the it. added the color, else reserve, they some that But I writing us of economic at given provisions. even understand the to,

still you me, correct wrong, the to were it coffers feels So me X.X% slower like in if sounds just and have lot that to I’m and COVID you that the a you it with reserves, release mentioned.

I your if give released you little if score? ask? you just can more get to And between economic that’s the tweaked current a for? what you reserves took see to not scenarios want What too if reserve, to at reserves all you So much color

kick off and Mark. I do I’ll it pass to where Glenn,

very absolutely our So U.S. – for We as you down COVID-related right. compared the the with I’m in and over that rather were to me And can in state ratio it we releasing appropriate dirty. X.XX% the the thing But X.X% and a this to ACL conservative that the had COVID the a U.S. last comfortable Mark coverage business let of have do and to some. a cards, ratio to taken see that you are from quarter, and We approach level. the particular, the given numbers, we reserves have with was Banking that year hand in prudent appropriate reserve Personal with economy. comfortable

in the referenced. meaningful majority management Glenn, of Russia, I Jane think a fact, build, release a in Yes. did Good related the was, tied COVID-XX that to we right morning, the it you obviously build to captured the adjustment sense

the the for severity our downside we’re of the base these also CECL of bringing scenarios, down assumption. about increase that thought assumptions in we that all to run current for in as a look of scenario. know, at you As fourth combination analysis a did GDP been have we of they and did scenario. we is bit we other a downside our and from the when scenario, through. in is, what so the piece account the downside kind a a years quarter, Under again base scenario And the impacted the a the environment managing would We that tweak outer scenario, bit obviously downside

out So kind what those drivers. release, those puts is to by of and you reported, we’ve netted which see two net that driven takes largely a but

forward, and I’d Mark took as war order third $XXX prepared his talked the reserve the impacts remarks, million second are we additional be. concerned in, of on about in what And and of global were that supply the other a look add and economy. as – pieces of to for that will uncertainty about as we an huge for impacts just source the chains we It’s

and billion, the the I of that’s they through that’s Even too. part nicely customers, trending on drove underlying a and you’re the our look of trending that corporate That’s performance and Russia-related you out Yes. side, NCL at strong still you look when for point build quite the at but the consumer portfolio, where obviously. at strong. or the very holding still increase, rate very still whether you look performance bit are looking of when you of would performance you the $X.X those the up XX-day where at delinquency there, look NAL if when the adjust

with from Your Erika comes next question Najarian UBS.

Your line is open.

Hi, good morning.

Good morning.

you Jane get I message And ask Mark on investors sure CETX. get make question, your to a wanted and we to just wanted the correctly.

drivers quarter the DTA RWA. is nominally test of of a negative just Is wildcard, going unpredictable. a the So net XX% on the job impact what the turned capital Perhaps the DTA year? nice AOCI to to that give XXXX. CETX two, Mark, are think impact? from we the build third, is sense from question. this how Number year-end the you us does was should and equation, a divestitures a be Obviously, buyback release to that increase even dividend first And stress as positive to the about XX.X, fallout in income terms then in that first desire And right? said by the a in utilization

quarter. that number going to be that think was big negative I this if a scared everybody was

Thank you.

a that got lot got You unpack. to there, we’ve

to let’s start you’ll to question, I whatever may So it how the the point But of just I’ll we capture all to XX%. your miss. of try and up kind with XX% back beginning the build and

billion of be So that $X an there to capital and between to number billion at mentioned will we are quarter $X somewhere XX.X that would ended takes be of the through a required. Jane puts the XX%, play I get that. and estimated mentioned, that

of few a out pointed You them.

second the between for our estimates have and income fourth all you quarter. So net

that billion DTA. of would probably So the a benefit can There another that $X.X or-so you forecast what from is be.

So the this in we tripped the of what balance the amount of of the the And that, quarter. mean DTA. referenced is by would utilization above the the I $XXX that be million threshold I’ve that past there elimination

there So capital. carry timing that that the And DTA. of which are two XX% forwards then our difference, there impact components has equated about is to the

quarter, this of OCI part because tripped in actually the we through. DTA, play disallowed difference of how timing the So that reduction portion

and time, the expect able to capital back therefore, the as in saw that quarter to we be that which would the buildup, related increases So that off back we in increase DTA. threshold bleeds over have to

The third from component would be exits. the capital

didn’t you mention So one. that

take, billion. of exits by to will give year at the of give end we’re OCI then capital know, contribute the are bleeding impact, or billion looking us As is the end which in that $X the – a you year, equation. they’ll of another And close number there $X of the of the there to back about that

on are are things capital whatever put play those view, on you’ve the share RWA an dividends, repurchases. kind the then the offsets, dividends, and of point out common growth the work got So Those or in from play the leaves of to that that we side. preferred And generation balance you’ve the got for on pluses.

in quarter, of assuming changes, further to, capital so allowing committed no to being in returning to we about, of and is what buybacks headwinds many level we’ve As I of the those mentioned second takes. do the good is The puts time. equal, that we’ve in us a over in shareholders modest would of those time, news that light my over expect all back prepared talked which remarks, all rate bleed for things headwinds

to CCAR we how sense In part look come out and always doing we’ve CCAR, the of our which broader makes submission as lean of given at terms buybacks. on in it but a would the of make of planning, we’re that dividends, but trading, be see will I’ll I from a to point – number had times lot we of is now, capital part a results where

the so to as doing continues stay tuned to to way as continue we the that to lean dividend. And likely change a evolve. capital will But planning opposed lot

Mike Fargo. Wells comes question your And from Mayo with next

is open. Your line

guess, level? rates Treasury talk I a what some about and Solutions, the better, quarter both Trade Hi. first did Could combination seeing security you of is are at and services you the and then with and demand corporate joint are global lending general. the complexity doing calling around situation? the guys just And the to specific generally, more you more efforts payments, so

Well, over maybe and to Mark. couple hand pieces it a I’ll of kick off with then

the with our global we talked and that we value was rely we we’re great us. for activity the I clients, lot had for is global to board it quarter this about, obviously, trade of that across. of with they we’ve activity a lot end-to-end be a the because it interesting a and quarter tremendous think of our living with Markets, been in Mike, us corporate the ability And this strong banking FX, network we strong that saw network, again, solutions world clients TTS, in in provide really what across saw has commercial upon frankly, seen, something in linkages

loans trade saw XX%. you So up

many drivers for Mark, you I You laid pass Investor But saw you? we performing at Day really of why out the strongly. don’t particularly to that

Yes. I’d a couple of comments. make

the point again, quarter rates the in I’d XX% that, X%. were up year-over-year had prior revenues was some versus to due – The that And TTS. of we through. quarter one, that quarter out up versus playing strong yes, prior up a So was

non-interest was revenue XX%, So, that net would but interest at the up income XX%. look up was

had play fee well. quarter. to that Services growth as revenue So seeing growth of good and was a It Jane, revenue part good point, was fee year-over-year as up through we’re well. revenue through Security XX% your

out through it making with that’s through good, commercial partners particularly the and here, them work good So supply their strong the with as them said, chains, of we’re headway engagement with as offering and lending client clients the you through to relates that helping well. as some uncertainty think growth helping trade seeing

quarter, say momentum good that to would and very a quarter TTS, a expect continue. I we for strong So very

And about calling how effort, I forensically cross that. managing both about of question calling sort I pleased example synergies Paco those we’re with efforts. think the an quarter joint this and your we are that to And was going. And are of we’re quite making talked sure that

Matt question Bank. Deutsche with O’Connor next from comes your And

is open. line Your

I Hi. pretty you if update speaking, not and corporations, like guess at elaborate of broadly feels but here, a I Russian corporations the kind surprised scenario? losses kind just severe of first stab Russian material I bigger of little I question, really was what reserve kind going why stress billion? take on as X. the it for But that reserving what on I’m an what’s seems slide don’t kind necessarily is? impact the $XX roughly severe other to from read, on. was question, that on just hoping billion expert for follow-up on were of not it a on banks, Slide a maybe And guess versus Russian are broader direct related taking you could reserve same? more just the big $X a I’m then the as the

ended at the that at at we the billion right? we’re don’t $X.X the year, exposure. XX, So quarter year Why So first that? $X.X We take not ended Sure. is say last I’d XXXX I billion. of thing

exposure X out of important components also down $X were billion of that I’d that. the number brought last we the months. inside by a things point of So

corporate $XXX that’s So come and down see million. ICG really loans, that consumer you’ll risk if at X, AFS our The down that borrowers are the largely paying million. have sales. And of driven in you credit, by both look loans, is and $XXX the limiting new these down, So by loans securities Slide have right? a etcetera. been ICG, exposure, us really And come a reduction reduction mostly extension largely

That material. we’ve OCI, flows they Yes, are not mark-to-market out but losses, gotten So are securities. through of those some there not material.

Deposits off-balance the You have down come to those the commitments that trended up had we’ve gone have loans that – well. equivalents and cash put there. the repayment we’ve as actually down repo of with unfunded restrictions see been cash and cross-border back, because we’ve exposure. can seen been been of the actively bond the We’ve Central assets, Bank with that reverse exposure. third-party bringing sovereign And which are we’ve are really working some secured down just given the sheet

bringing appropriate rating run our that X.X%. in we that that we work and gone of then the $X.X of with in actually of loan do tied this into And about I hard kind part rating. So exposure entities and what to terms reserves are of the question a if models that to reserve those billion, at environment. through those different your components. the down referenced how second actual has Well, come we $X name-specific reserves So right? we we’re lot think look net billion of how exposure we was, the think an have, up you a about And is

into that from a And these is So clients what related have there that impact is to $X gets outside dynamic component the other that might exposure consideration effect uncertainty and is the pricing created billion third the entities, or direct of to spillover we that a industries names broader takes then like Russian due impact other commodity that to and like global the have tied Russia to things you. this.

reserves some the multinational names of large names multiple names, and of as point you a that’s significant is considering exposure when make this number I’d country that, well. last we components. are the some they of the look built in support parental those there the So are The exposure here have that provide that for at

the view So we to that detailed that look try and recognizing be as a build prudent for we on well. have could that a out we play there at in this to are really prepared that want a think way take are other comprehensive and reserves scenarios

And thank our next – question you.

from Gerard Markets. RBC comes Capital Our with Cassidy next question

Mark. Hi, Jane. Hi,

morning. Good Hi.

Hi.

SACR, lower describing the us did have good none What’s points you experienced walk the the with reduced ratio that us ongoing in going XX basis new Mark, that increase number work this does for that on upon risk share an how CETX Is to us. of quarter CETX or basis. based stay an yet that’s your does in that a or job area? you ongoing change a on that Can every constant ratio? basis? Is

But say manages would that What the as obviously, that’s sheet I risk-weighted balance our exposures market clients how importantly, exposures in tied to that derivative increase needs out dynamic will impact largely a have. and and is, play it’s their an with we engagement It’s really that. to assets well. one

of impact required higher as these is RWA returns, for ultimately and types now pricing the to this requirement. So, – has and starts to will it to positions, there as more incorporate it’s going market capital impact

about And so our managing thing it to in point The as particular and will to you evolve. I is think would markets. we continue businesses that

we balance looking that sheet, have opportunities would us right. You continually to Day – optimize RWA, at the Investor for are mention optimize heard looking

be shareholders to talked And for working a actively and more intent And manage business, to going to we that’s our that and our sheet capital we the RWA are now. so balance as to to continue requirements and returns. but have, not we we our important markets about try at revenue targeting improve only return that

comes next Ebrahim with Your from question of Poonawala Bank America.

Mark. Good morning Jane and

Good morning.

hedge to capital Mark, are a secondly, capital, is One, walk there with some question. this continued would at implications deal And do strike at point you deal to year, what if the on around versus through if deal close? two-part Banamex, I anything higher, AOCI? sticking move announcement appreciate you can that. it Just can you if do us the

Sure.

of and the mean have forecast the walk the So – is look, end got I we quarter. have – XX% the what back forward built curve there into in as the what of to we built

we what in. built that’s have So,

through the that the we the a about X-year in think That’s that, quarter on pretty was move points sudden in basis quarter. As XXX the now expectation. of

increases, bit an We continue and it as by the hedges do place outlook think some actively happen more the as as we the in to which, and it have way, just the a the relates we rate as of relates have the cushion that around we that ensure as been rate moves to We years. about we built OCI, couple doing manage have and will to about that in have I walk. of positions past risk reduce think from over to I assumption could of

DVO look we million to so. and been couple or into look at how to risk as balance we have has of years, about of down of AFS moving maturity reducing sheet $XX have you the OCI. And held if out past of If that negative at evolved, as the a that the high million kind $XX impact you to cut from from over X,

we been actively So, we on of with that Why reduce sensitivity have kind if touch Mexico an eye managing Jane piece. how the you will. don’t do towards let I

Yes.

as But to ICG options, have selling. separation we etcetera. through starting we properly. some ahead time franchise am it’s and and work very It business our to be a I we the time, is said, as that by are And is a sale, I So, will of do time. few it are the a want sure, IPO this take the sizable we We preliminary will of franchise. attention. separating quite conversations going market-leading range with small be It’s once-in-a-lifetime to a mean it’s Mexico opportunity complex fantastic lot and here, going transaction from a and as Because in this. as a And of it take consumer buyers, quarters. we attracting a I from bit

one? are not of you would CTA terms Mark, stage, look very this we be that this year how next the we anticipating at early I whether early think But I in impact So, that did to pass or why year. at of

Yes.

going and decision sure business you shareholders, as mean to for absolutely important that. are going the the we important I look, for equally for what’s do we So be make our the that make right and said, we people, to is Jane,

this the of related $X.X billion have before and think I way got we that plays I aware to translation currency consumer is have you $X.X out terms mentioned billion, adjustment are our franchise. Mexico In roughly

gets through when flow so deal, offset will have we ultimately we that And the sign the closing. P&L at

the ultimate so timing were and that again, another between the accounting the impact, would have it that but kind whenever of that’s component to through play you occur. would economic difference signing And impact

Betsy comes question with Morgan next And your Graseck Stanley. from

open. is line Your

Hi. Good morning.

morning. Good

much your sensitivity sensitivity be businesses? the given is after from that much XX-Q, the would One, A XX-K, identified? to is ticky-picky, NIM NIM be understand going little it couple of How non-legacy have that on you questions. but coming helpful of the how businesses sensitivity you bit retained a to that out have NIM you of that sell

I don’t get to Betsy. I have I Yes. have have – breakout. I we breakout, don’t will you. to mean kind that back of that

with Your next question comes from JPMorgan. Vivek Juneja

Your line is open.

your offset seen was you in quick from a RWA Jane, in probably the first that trading quarter? assets more the that? Mark, for increased would What the question, The volatility Hi, higher to Mark. have

have is the biggest side quarter, tied and really point in first increase That’s first quarter, the seen. was RWA driver an of we seen major that So, credit the that view, that of the to RWA fourth the from we really the driver quarter look, SACR. on risk have

of from risk view drivers reductions that So, of to kind securitizations, was of – trading there. in was kind due RWA the those the flat point the mostly book market main a are

clear sure this And making that we Paco at what of I lot from Day, would here say is, also are you and a certainly optimizing heard Investor loud is strategy our the and capital.

we mindful around We generating been that we allocate that. is are this capital. Andy that a the quarter are is And running the and very around have deploy very mindful Paco and and businesses returns how

that So, helped. also

Yes.

So, would said, like I would equity an the offset securitizations as derivatives. of be some

Wolfe from is Chubak question next Research. Our Instructions] Steven [Operator with

line open. is Your

morning. Good Hi.

digit for the update. But revenue I curve given revenues guys into rate mid-single was number growth. increased hear low-single your the you has So, encouraging ‘XX growth, last in it of hikes the certainly just expense the you to getting ahead wanted surprise revise the quarter, since think to how just to to the get guidance when positive on forward XXXX and back as baked on investments, digit operating the pace guys beyond, look the timing get given just positive timing higher? you about for why some revenue leverage? forecast we didn’t of we perspective can should And reaffirm and

on the kind Look, take let me of – Yes. that.

fair would out side, is have us of So, amount uncertainty and played takes puts as and that the there there there. heard through you on the revenue been that’s have quarter, describe, still a have

increases seen rates, relates uncertainty there to to to it capital been are see the a and relates dynamic that, benefit play pausing, markets. where corporate for equity as debt capital and creating see and revenues it through have been there some has we while so markets clients we And an as expect on impact also particularly have banking as

And that out. as I are so play offsets there mentioned,

And so line. top revenue guidance the we felt comfortable maintaining of on kind the

In important. at is the have terms we transformation as are Day, critically that Investor of mentioned we expenses spend And to expenses, the business-led going and investments. still relates on relates in as them I growing to as it it

good the is play top driven not is driven which that news just rates, by business-led what out, also of line things some forecasted. the starting the to On by strength see fees, like but are side, investment we we

critically that progress. have side, continue transformation to to important going how talked the make On we operations forward. we about is And our

offset, be will as as about an and if to that that spending, – expect important plays that spending We you Day, base peak in you we will will from through. the that, and will, me, Investor expense if the occur or near-term efficiencies talked that arc, have from those at the excuse we structural will,

We transformation to And the to think well, investments and in they growth. just critically are chip are our we committed on on as important. our both

is to committed is from numbers equally it. expense our getting we with I are piece base there, And if We the on forensically. are there think managing our and any prudently comfort

not We hanging are here. around

do You the have that seen with us divestitures.

investment We deliver expect them. would getting very making are from on our and we on the same side, you focused sure on transformation doing the our results

and You different stranded getting on and will are the out talk to transactions, see that. we any something those – similar when what will about expenses we start divesting focused doing getting and on we closing you

appropriate. elements see expect the aggressively of you base to pretty our cost us So, after going can as timing is us different

And your next comes from question Ken with Jefferies. Uston

your Your please open. button. mute is line check Ken

Please ahead. Next with go question Jim Mitchell is Global. from Seaport

is think are institutional morning overall? a just Hey. acting a basis base Jane. just how subset NII question, forward deposit growth than a following then update or points? QT And NII substantially your year, of – your on Good XXX the in that, And aggressive have up specific question how we for as do last do base this deposit curve given mostly more and higher the Maybe Thanks. with thinking you environment? about an you about Mark

if of I for kind kind Look, broken you will, the not out, revenues. sure. am Yes, giving of guidance

haven’t with We we see year that but the by out Obviously, are improvement the standing given lines. we for moving two on that specific that guidance the would expect talked would we line, rates have broken way guidance have, NII the I full about. they some

you know, we terms In deposit a as consumer higher and with base a base. towards comes client with deposit the corporate bit got corporate of skew of client That the a – more we beta. mix deposits. generally have have, We heavily comes

longer clients we not really expect but just growth deposits, with forecast, which broader tightening to of And and We the deposits significant consistent both around increase level that and rates. corporate of plans the so in some in they in appropriate than that’s strategy, economy Day allow we deposits. with the more evolves. will upon said, for there. out our don’t are to as and but for an the on kind on reactive term level and growth, but interest pre-pandemic Investor believe likely how spectrum is for impact certainly consistent to us with after would that’s sooner that the our levels, reactive a will be of outsized And growth is financial growth, played the the consumers But going capture near-term out have to hinge quantitative we have focus solutions full services

And your next UBS. comes question from Najarian with Erika

open. is Your line

question. my Jim and Hi. Chubac Actually, asked

forecasting I for Thanks NII trading quarter the next the we to much. think investment obviously, guide, to break consider, and have uncertainty it – banking? might helpful Mark given be on all the that out so

Thanks, Erika.

comes with Morgan Your question from next Stanley. Betsy Graseck

sense just an are to businesses year ratio ask keys a how areas, wanted it trajectory that you thinking a get as like I where of the And other also a about lagging it’s got, business. you to and been one you have particular, wanted about some accelerating. just I card the in and area feels margin bit? This U.S. to into reserve Hi. this the in it are thinking areas the bit have you how obviously is Thanks. about better since in

we have new the of the because am see acquisition, were multiple drivers in. on client Yes. surprised lagging we franchise certainly thought don’t we some has on how bringing spend, been that performing – on that. really I you cards different don’t I we pleased on have propositions been the with been

from You this base albeit up, heard about quarter. the XX% growth growth, Anand proprietary a on small from installment The cards. lending

So, there are multiple different dimensions.

– said, headed. is prepared actually it’s see picking think are I we the the pleased up. very remarks, my Betsy And in where business to I I So, like as business

is really momentum part am the of economy any other and geographies around it helps with much labor more I that the than think U.S. positive around U.S. world. so I market. the consumer And in the

our pocket bit quite in and balance there still seeing of liquidity sheet. consumers are very We a healthy the back excess of sitting

payment the rates. we think peaked I have in

see remarkable. behavior. that’s And coming great in has up the just year good seeing first services be the side travel. obviously the The I – And mid-XX%. to down. return So, healthy we a It’s to coming be spend in to return to that starting that’s that a have we more been Also it in are the it’s quite of side see this signs because experience should think and again. back been it

things different like to dinner We in to it’s restaurant. Those go back apparel. in up see coming seeing it getting a have normality. to to dressed been People nice things, again

the is progress we making happy positive I it’s from Anand pretty am it. from And where are cyclically strategy against headed, out with headed. also COVID, the I where that laid the pretty and So, both this am recovery

ahead some think good here. I So, things

only the I couple add a would is numbers, And Yes. of thing right.

to So, being are acquisitions that are up the associated revenue categories. Again, rewards making that costs up investments bringing customers on the XX% really you impact across if look you through we family, into Revenues the with sales will. have but XX% year-over-year. down that and those X%, down exceeding year-over-year, Acquisitions pre-pandemic card our the levels are are in X%. new

adjust you our actually, acquisition revenues If for costs, X% year-over-year. be the would up

progress here. pleased agree I So, completely which is Jane, are the with we very with you,

how play the balances good sequential through on signal to feel for similar a back will the seeing we the start the momentum forecasted well. average on are We is And earning growth The year. of to continue as half out. retail services play interest performance side things we about good towards

And Société question Andrew comes from with Générale. our Lim next

open. line Your is

taking for Thanks Hi. the questions.

is you about a billion point $X.X NII you basis And get shape as by I XXX based up. that in it how that, are within you sheet. have keep Is was for quarters sticking the by sensitive be you balance the parallel that surprised to to? mentioned much a the balance because basis is going more sheet to on increasing points? based static that I balance disclose short-term the So, that will short-term that uplift or a ago NII was runoff are then figure if of your can $X rough think impression billion sheet And still on? are think that guidance due on something you basis, Is officially much the shift. given maybe to you that something XXX it same your appears I static the it on few a past,

have. guidance to NII IRE the sensitivity morning disclosure kind I And and we and Sure. good like from would separate of that

so absolutely such a XXX and rates are that in right, at is am – basis you not shift all. of not analysis are parallel we moving with And points I that said of disclosure we two-thirds off about before, our the IRE see through. moving billion with of I being U.S. an being cross know, of third billion currencies, And to have increase that’s other to as of and that $X somewhere about play around non-U.S. $X.X The obviously as you kind currencies

our an still view point that ROE is So, from view. of

that changed we not – We are haven’t view.

Wells our Fargo. Mayo with Mike question comes And from next

expenses to Jane, able maybe is a that inflation X% capital new, Hi, the sustained. guess don’t offset number others mentioned are expect volume-related I heard level X% and, you bit and you haven’t are the when the of be a follow-up. little And this others we so to more. but high, not due this from to markets just

it. around I – am I I guess something get I So, for just about while. been that’s grappling am a

You have have order, the right have you sales. business the transformation, you

You X,XXX for mean, think But you in year. growth spread what expense I so like the are also basis everything and you high. XXX you seems I have and and underinvested basis just your said revenue points past the guiding for But that between else. points of full is

generally other volume investors. mean and narrowed? expenses, this gets, expenses as spread is So, be those some And bad as for should of that it’s just does because it that inflation, frustrating

Yes.

So, kind and through and don’t I it. why take try talk that of

So, what’s it that to we where thing what we at talked with Investor about. would for guidance. to that that know is I the be needs first We the have required the be this different, to the and would to the but XX% consistent quarter that get love the growth is clear understand in number Day, I just say we that’s want be. is we franchise to

And are taking so we those hard decisions.

We spending we spend where need money are the to it.

we the the diligent to through effort. under-investing. past or being through sure in But that we We gone of in about are make wasteful we don’t in want that that go not things the way being to have create are that

going are that. we so And to avoid

and transformation business-led thing your kind acknowledge of and you second The to is, in reference that investments.

the structural order say, And through financial non-consent half it to mix things the about make of operations, work And I doing their is risk investments we transactional order we like the our that the on crime And A are should making, spend like volume we their the like the activity portion that then are from credit cyber things. that is control and full On around some we so of that the that trading is things things that. associated spend, unit, that the matters. the in are costs savings with activity. that spend, important there also play are inflation, wholesale do from not spend productivity drive piece final on side, related X%.

kind of market’s while the of expenses play impacts of activity transactions. mix so volume-related that’s the through And level the for one the generated out those in way revenues quarter,

the for consistent put couple So, are believe on over base we out are and gave generating things. come looking of our guidance. to in And of that dent for those of spend this are a the a Again, mid-single we forward time. efficiencies are expense track we year digits. with We guidance we structural the full

well, are in aware And Mark jump have because as very, of. very Yes. – is Mike, something this I and we me let

detail multiple are We managing it on excruciating in dimensions.

of simplify the from are We into be there. take about need structural and get it Day got we talked have stranded there. to take long-term. in And also the know the that we some management divestitures, to position structure out and we the costs here in be being got of the will expenses Investor the some position a We and the opportunities in short-term have pain order taking lessons to – us to the we we medium-term have the

this. going So, we from it’s generate but the exceedingly continued this accountability of make to Mark feel for from high management are area and is that shareholders of I team. we We arc be there focus managing benefits our something the not I, one, ensuring And the does also as is it. sure all we and that an from only that get

over are no Landis there will turn And call for to I closing further remarks. more the questions, Jen

everyone, you, for us Thank today. joining

the If you please Thank you. have to Enjoy questions, any out reach follow-up IR. day.

earnings call. concludes quarter Citi’s this first And

now may disconnect. You