Citigroup (C) 13 Oct 232023 Q3 Earnings call transcript

Hello, and welcome to Citi's Third Quarter 2023 Earnings Call. Today's call will be hosted by Jen Landis, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question-and-answer session. Also, as a reminder, this conference call is being recorded today.

If you have any objections, please disconnect at this time. Ms. begin. may you Landis,

efforts, remains implies and the recent to turned the macro economies enduring distinctly and picture the structurally organizational use still in macro seeing would area week are soft last but landing, work Jen, cracks that through desynchronization. touch more quarter negative. I more and The the briefly may has euro economy and in property labor the challenge the competitiveness In suggest summer data month's backdrop unemployment to global but weight and it The the is otherwise, weakness by on industrial China's environment have announcement. reached energy story a higher stimulus the bottom, good you, a a has sentiment, cyclical region. of pain supported U.S., everyone. morning consumers. In market. in U.K., should and spreading we and the some Thank suggests the its before modest for the costs south of history lower reviewing government's FICO

beginning have and from of are the struck The dynamics rate these access impacted globe. clients, corporates rates more waiting stopped clearly catalyzed around sentiment. September and to however, how question always markets how activity, few in All shift for are a the come high to has XXXX how being debt month client long the consistently have is CEOs to than capital down about less busy ago. optimistic client a macro I'm months

and strengths bank invaluable earnings portfolio, asset network. a strategy, proving we landscape are plays we evolving all our diversified our base, our in particular, are seasons. between our are our and clients their strong truly adapting are resiliency. that for liquidity to levels operations and and ample reserve high-quality multinational Our the to And to geopolitical are this redundancy And our global building clients

we reported RoTCE $X.X billion Today, EPS and quarter. the of net of and to Turning an $X.XX X.X%. income of

of businesses We divestitures, revenue ex to the Our revenues we interconnected meet each up revenue XX% growth. and guidance expense X for our core set and were year. remain on the track posted

fastest-growing the year That's up TTS Let's the that in was Investor highest quarter business, ago. of continues the our growth set was, services. and decade, over business and other from growth, Day. long Argentine globally with a target of of half, our drivers, we drove which devaluation, at the franchise. revenue And XX% with of Half potential the leading sign rates. best the the even start to outpace we it fee again impact expected a is

making. Markets technologies clients. Citi on of and for We XX year-over-year third clearing. Security pipeline the quarter, We first of investments has years trillion to our it year-to-date. Banking and with a our for traditional momentum took seamlessly deliver have growth some allows good with partially activity contract up asset keep nicely. by share strong to distributed growth. cloud underlying was good services Token we with network are of bank over revenues grew as This our XX% deposit we also solution we're had which Amongst AUC such up ledger innovating to use tokenized had the and us and revenue and clients grown relentlessly rates back continue announced grown with balances in launches for currencies of prime having permission XX% by dollar last and data quarter momentum a equities, from this, quarter commodities, smart Services, in the good This And in business digital as XX/X the XX% to was which year. $X offset who have fee the our a and down playing this TTS our the was the clients. will and is we which other Despite creation this slightly. industry again, we considerable cash, AUA best integrate benefiting Services cash mix. see a

far Now our while signs showed helped remains corporate sheet, when lending IPO so I'm our it biggest a how of flat sustainably a we albeit the up deal was wallet. DCM will was year. drive of remain some globally life. very XX%, here about healthier. revenue market and disciplined low predict proud activity Sitting rebound. of deals essentially This banking base also small role we the hard as Still, this investment today, to use some balance And on of advising

key banking know, synergies provide we're more us begun sectors, investments, key our umbrella. of growing bringing talent leverage been right franchise. important committed the you this one in in brought situation. in all We've to management the structure we've banks between to corporate clients under help the We better the new finance and and together And commercial for drive X. will As

in XX%. Personal at continued The in is were disposal Retail to entertainment. in drove a was still U.S. growth also branded digits both revenues spending double the their Indeed, affluent, tilt with who decelerating have travel the they and excess and our spending on. the mindful up is and Cards Banking more spend at growth consumer strong savings what portfolios. Services

that those clients we our to our reaction fee clients been going Simplified very us. offerings and quarter, for banking our we're deepen has Banking believe We During simplifying to retail to the improve their with positive. the incentivize along lines structure, early the by from experience clients. peering relationships introduced And client

And Day. new investment the stabilized referrals, won up have mandates as for work, notably, drivers at at of world. an franchise, picked the net highlighted around were important quite we such were wealth up geographies. we revenues the slightly. new acquisition And and Most across client and revenues offering all our strong Wealth inflows had Investor

uniquely firm. Andy it. we're a around happening will This what's is our creation, our time joined positioned of franchise for wealth officially ensure forefront global now of at has Sieg world. massive Andy is the the and

a deposits enabled grew client the our us and disciplined quarter discipline during has to of quality years. by balance base loans the We growing X terms of remains In maintain stable past credit selection. our aided extremely our sheet, deposit operating over strong, our

Our CETX which XX.X% and to ratio XXX grew and above is billion internal minimum a buffer. $XX includes still regulatory management our bps

returned we quarter, buybacks. to common the through dividends stock During $X.X our shareholders billion and

known to buyback evaluate of ultimate is approval do potentially Endgame we I the III Basel to by impact will the modest our while continue be We finalized. capital requirements quarter, a subject the continue fourth and higher in level Board. And quarter-by-quarter, expect to until won't

mitigating We through have actively working been actions.

As can executing we our X, on see you Slide are in relentless strategy.

to second the of we divestitures. the this consumer the wealth quarter, under closed consumer week, consumer consumer includes sell of in the deposits. In announced billion assets approximately that we Asia quarter, on This business. to and fourth portfolio close the and And of in this our on business, and billion our earlier $X.X $X Taiwan China our management we sale of Indonesia largest sale HSBC, that's we will expect

terms the exiting. In businesses, we're international of consumer

Knowing to efficient tech upgrading processes, work regulators' will to followed on modern, and in #X deep restarted wind into down doing separate to next our Poland, remains the platforms by to our We're a large and the right year, an to committed we way. sales process of the take the track of in we've IPO architecture. X priority. addition deliver meet fragmented more We're expectations automating this body it and manual remain Mexico controls data and XXXX. Transformation consolidating Markets, our time In infrastructure.

run bank Last allowing the month, to duplication the divestitures. results. to we clients our the announced focus structure strategy to consequential Investor team enable I changes the how bank. our to at eliminate said the our operate with The will drive organizational Day, breakthrough leadership would on X the changes that and align we agilely core changes simplification organizational more and and freeing layers, accountability people will us me my and and businesses execution. Elevating sustainable complexity up follow

also to regional the reports won't internal up top of approximately We've of will take over last annually. it which of we at X committees, XX% actions It we've X identified functional need of out frees life. any roles longer. the management our the bring or in The tens company. to people the layers over and taken weeks hours thousands eliminate XX% financial that So of XX X,XXX

details. showing enable And next aim to update by in X first position we and speak January, have other decision-making. early We're to dual you we organization to these taken and the mid-November, changes the a the and be cascading be the faster the bring a of implemented at next changes by will will up the through to lines financial year. When metrics close September, reporting other co-heads in Mark and amongst set we simplification impact of announced and I the entire on process We layers pace. in

transform Now the And the while changes, how note help shareholders. implement Citi have in firm the next understand to to changes faster, we especially a quarter the and they of how run end need And serve it us embraced and unlock start year. expenses them. with all. the have stepping can value fully for fourth simpler curve we up and I've our the how that is made bending next the order the operate organizational I They of generation, the better expense we once here. to at will truly to been of We've leaders driver decisions tough not are of pleased want in work, these that our firm, for primary will clients change

address to like I'd people close, I in Israel. Before our

of to friends our in dealing our loved are frankly, the awe they country, in of are Despite are We country. their with, all to they're and commitment ones. Others our in clients each many other. up lost called being significant running and bank bank people the a keeping have I'm, serve. And and

over to as as innocent unfolds, we paying to price More the that, would to civilians are take with questions. I is to your like witness. it delighted devastating and then broadly, absolutely will And crisis always turn be Mark, this

on good billion to firm. the otherwise, full results unless the driven time for sale. results, and I third third with I'm on indicate X.X% of Slide morning, Taiwan everyone. X, $XX.X $XXX the and approximately we of quarter, net In going the comparisons of little income million Jane, financial for approximately consumer $X.XX quarter, primarily impacts revenues. then results firm-wide the more start in business and spend billion, after $X.X financial tax, on are Thanks, Embedded reported these the focusing show we a RoTCE year-over-year businesses. On EPS by divestiture-related of an of

banking, increased with driven impacts, partially divestiture-related offset markets a by on these items, in revenues as from Excluding exits was and the an as and EPS revenue the across X.X%. In XX% the reported wind strength $X.XX RoTCE quarter, closed cards, excluding reduction downs. by and of modest X% by and total well basis growth services,

Our by total up quarter and of a reserves technology RoTCE to transformation wealth an was number the approximately and And the actions X, X% credit million loan orders downs. improving which results product At by quarter, This on modernize client severance, include card volume year-to-date to firm. all and billion, roughly expenses in themes. $XXX up banking, of of driven increase be consent expense our factors, on basis. our and business-led and included credit and technology inflation controls, a investment quarter, reported million the show Cost savings $X.X approximately functions. losses the in X%. and And partially is continue of as in divestiture-related this reserve approximately in ratio and the normalization expenses factors, the funded billion by exits by end the key net in growth. and as of expense was from offset $XXX enhancements including macro investment continued including level reported $XX.X Expenses had basis a X.X%. XX% quarter over our X% primarily for investments were as of a we billion, X.X%. On the we with and up was well third Slide costs, and drivers of $XX year-to-date, the up investments, was driven and and the as reductions billion, also in excluding $XX.X billion closed as development, well spend the up markets, address FX, of risk the driven driving in across enterprise-led continued experience. Also firm we wind transformation platform for the investments And X% $X across largely and productivity the we

full we our improvements. last said with And year following we client quarter, and quarter, I'll roughly interest income, guidance process show remain and Slide investments and where $XX and assessment. On $XX and and data technology transformation infrastructure security span experience the third income speak billion, excluding the themes: of enhancements, As variances. line FDIC the deposits interest in our platform In modernization, to by loans, sequential divestiture-related we special million. impacts, net decreased X, simplification, net

$XXX net of management, and growth growth see Markets, pickup income higher from in as million, active deposit beta higher downs. wind by we spreads. as interest PBWM, and Excluding A reductions interest loan in services, primarily increased exits result driven by closed partially to continue and a higher driven offset by rates loan spreads

show we metrics. and consumer retail as loans by net nonoperational TTS. saw point. On we were up largely as as driven quantitative by were deposit corporate interest driven well tightening, outflows and our increased growth Personal X cards basis credit Average X, Banking in light as and margin Slide services, banking key Average X%, of expected and largely U.S. down in deposits across X%,

environment are reserves. billion $XX the total over of We well for current with reserved

subsidiaries. multinational approximately funded of and of X.X%. is or Retail exposure, is NCL or of and loans reserves below Services total are cards largely of in international ICG in their loan funded ended grade wealth, but loans total predominantly The reserve quarter PBWM, low cards of increased basis our nearly customers scores line million $XXX of XX% and with margin And nonaccrual our X%. XX% are with to XX% at pre-COVID normalizing both in expectations. U.S. corporate still but points a grade. approximately exposure is to the that to is U.S. branded are our loans. X.X% are XX% remained And FICO mortgages of clients our Of Corporate in the loan levels, Our higher. or remaining investment ratio that, lending. In loan by PBWM our within exposure, we XX with exposure, investment cards XX% XXX approximately portfolio, rates to In ratio and is

on see of totals exposures which over billion, sense of can lending break you is out which billion grade a a PBWM, across estate As the macro loan funded with X.X%. To total scenario of to our commercial $XX ratio real $XX give reserve we you of ICG that and reserves. our the XX% page, approximately investment underpin

X%. average scenario weighted current with approximately includes rate of average X%, rate Our unemployment scenario unemployment is an which a roughly downside

quality, very and uncertain, scenarios. On review environment portfolio while continuously So about metrics. stress trillion levels, liquidity high-quality, into across and maintain exposures and the deposit of good we types, a reserve trillion geopolitical account capital customers and in and our remains diversified the and balance we macro strong regions, under which industries, feel we range sheet key show our which asset a Slide X, very part by $X.X a well-diversified and sheet, We balance summary assets. $X.X funded base deployed is is

reflects sheet our balance business Our strategy model. well-diversified and

$XXX to by Banking institutional capabilities unique our are nature investors These The deposits, operational deposits of and U.S. leverage are $XXX span countries. needs. billion serve institutions, global global and of corporates, with majority assets and individuals deposits. XX complemented in billion across and Personal and wealth our We financial institutional

$XXX billion and We HQLA have and resources billion. $XXX approximately total of billion $XXX of we maintained liquidity loans, of approximately

Our standardized LCR XXX%. constraint. RWA, We a quarter which ratio binding ended our CETX was is the on based XX.X% with

tangible our end quarter. Starting was year this largely activity. a a RWA show the advanced X, our binding, more on not Slide increase quarter, X% And from book provide sequential by details to drivers business from of driven up $XX.XX, CETX share per second the we did this the quarter. walk Although value ago. On

common, net basis $X.X which income we generated First, of added XX to points. billion

of the deductions XX.X% requirement share common CETX quarter and October points. billion about $X.X as and lower dividends or in a approximately capital a of drove basis basis a regulatory which finally, net reduction DTA point by of repurchases, in XX our reduction Second, driven ended form the X points of XXX basis X. capital RWA. And remaining primarily We XX.X% $XX above billion with the increase returned we ratio, current was

I'd on Before we a capital. minute move like on, spend to

capital, optimize execution mix as XX international simplifying to our our diversifying a strategy, which continue our exiting and to is model, markets. business including our over we tailwind time. further expect such be business Contributing the consumer to of and this RWA We our

out. our investments but stress transformation final data, both to in actions, will capabilities, rules other how divesting And certain actions those capital light and enabling optimization. buffer. of Our the play looking management investments also could will the exiting deploy analytics and largely continue include how testing reevaluating equity at depend our or we're the on regulatory mitigating continued enhance certain capital evolving and capital course, we restructuring These in products, of environment,

our XX% We results Clients up and markets we'll levels. foreign quarter, continue our Group basis, normal consistently an we a the revenue course revenues demonstrated Institutional FX would On Slide RWA quarter. and the and regulatory translation been banking. through for for XX%. this and ability ICG. to quarter, net growth impacts evolving various to services, do driven macro currency so. On Revenues capital ICG in across In have double-digit the landscape, by were manage XX, ex third drove the environments our up headwind show

impact TTS, our devaluation in currency was in on Markets there Services. $XXX approximately mainly the net million from Argentina Additionally, across an and the investment negative Security country,

how clients volume-related was of This increased offset as risk and $XXX the partially we reduction Expenses in billion and the credit revenues, productivity driven were $X.X loans credit by loss. deployed as down our were expenses credit Treasury driven were and new in by an outflows. client were XX%, and out subscription acquisition cost quarter very including income. and higher in we and ICG by up basis, performance XX%, Cost ROTCE and delivered were deposits FX ex would and X%, Trade partially deepening million, deposit net Solutions, Average up offset nonoperational driven an at net Revenues expenses the in higher by up flat approximately business by revenue X%. by highest existing been laid up including interest Noninterest XX% XX% decade. revenues across $XX primarily on saves. about we facility. growth of X% resources In relationships with for investments deliberate up higher show million year-to-date. On we the have Slide income we of last the net quarter revenues noninterest were credit. Average Investor controls drivers XX%, revenue in offset key XX% by businesses, Day. and of XX, continued resulted of recorded

year-over-year healthy see that up payments dollar driven X% card with up consistently flows flows were commercial growth to underlying XX%, the year-to-date, in and card in year-to-date. were up continue XX%. both volumes clearing global by indicate We GDP and and X% drivers entertainment client travel cross-border TTS And are spend. up And XX%. outpacing activity strong year-to-date, up in were U.S. year-over-year cross-border and quarter volumes growth commercial business-to-business volumes

last similar quarters, are as operating fact, primary wins mandates, the bank. XX% serving approximately across segments. marquee the up are few These client we to In include where client all client's

on to client make good commercial We continue our strategy. progress

by revenues XX%, in with Security trillion. multiproduct from were revenues new income. currencies. fixed XX% were than and custody continue higher Markets clients XX% markets more expansion up franchise. currency the XX% we're with interest are or doubled, very $X.X we by which X%. and as wins driven and Noninterest and our Services pleased net year-to-date income driven to revenues under in revenues by income driven approximately As into across onboard up administration up Securities progress were by strength Services, mandates up growth Fixed up cross-border were largely needs. In We're and driven in seeing rates assets

RWA the decline While And partially revenue see by by were revenues. target. And volatility we revenues progress in remains make did overall versus to finally, continue derivatives, a of we driven tick down offset relative solid subdued a equity prime. cash volatility banking year higher the on X%, our ago, Equities to beginning and growth in to quarter.

hedges loan basis were XX%, XX% which banking, Excluding up XX% gains and losses reported driven increased on investment a excluding marks. by and on

the earlier we saw a couple in of but particularly we DCM, weeks deals a M&A few as activity than expected. too, Here, the pickup also closed last of quarter, in in in

done, in So challenging, work overall, remains progress businesses. there's our market environment making strategy we're while and solid the be against these more to

Expenses to net for Personal due Now We to of noninterest payments in results our growth up higher card and business. billion, we normalization wealth. investments risk investment product by and XX. of driven turning a Cost interest the Wealth as in Management Slide severance, control lower Banking Services income were was X% in credit losses credit higher continue partner offset were in up by primarily our savings. Retail and Revenues revenues XX% productivity predominantly X%, driven by show by increase portfolios. partially and and driven to revenue, XX%, net see $X.X

platform. X% key by reflecting decreased X.X% putting increased show XX, RoTCE mortgages loans work our investments by largely as metrics. Slide PBWM as and drivers and product we year-to-date And Average and Average installment an a well on X.X% PBWM to of basis. On on X%, deposits driven our delivered business revenues cash lending. in cards, clients

Branded driven in Banking, income. was driven cards by of revenues our quarter XX%, Personal consecutive primarily cards. by up double-digit quarter This net interest were fifth growth higher

acquisitions to XX%. card underlying new loans We volumes spend and up account up see with continue X%, up X% average strong drivers

cards on Retail we of XX% heels see the were card In and net and XX% payment and investments Retail payments Services losses. portfolio, partner continue rates balances as up income we've interest Services. of making well the lower XX% in growth revenues credit higher lower by in in net contribute been to interest-earning branded higher as driven the to

higher the from up Wealth business, segments. higher by partially decreased regions wealth higher by lending driven and were and The to revenues relationships of the by and relationships from revenues driven and revenue. banking deposits spreads. transferred retail fees all banking deposit X%, offset associated investment transfer X% Retail across benefit our

we And across client bank were across acquisitions new Slide we private in strong new the We making wealth these we the for and in regions. gain businesses. On reductions the onetime Asia businesses the revenue at Revenues also down by impacts franchises. up pleased with in show are consumer XX% difference closed were from downs, net on and in sale as XX% exits almost wind partially offset are driven as consumer Overall, all XX, XX%, work. by the results saw legacy year-to-date, over largely in well progress higher inflows Mexico.

but income seen expect costs that we non-U.S. lagging noting the Having FX for XX%, above on rates based worth by and XXXX what now primarily $XX.X be year-to-date we briefly non-U.S. by interest driven XX, and year peso outlook. and largely driven Mexican in XX%. play net up appreciation. Ex were that, Slide XX, And up of terms year billion, of on out largely slightly growth. and were full our Mexico's Slide betas, volume quarter billion impacts appreciation, Mexico the in in driven expenses driven to billion, wind in I'll year, peso the Expenses excluding Revenues transactions decreased $XX we Corporate/Other. prior by It's decreased on mark-to-market exits divestiture-related expenses said consulting we've absence expect certain derivative year, were up U.S. lower increased, show XX% revenues X separation the XX%. On offset XXXX for FX, Mexican Mexico expenses by X%, results higher were excluding and touch of With full Ex in remaining to revenues partially closed continue year interest to Markets. and $XX impacts. fees. On full down, up rates and revenues Mexico by consumer primarily

impact roughly Net assessment. normalize credit levels portfolios expect quarter. expense to a And relates XXXX continue buybacks FDIC divestiture-related our with should it in special in by level the buybacks, year-end. billion, guidance do reaching as of And of to losses cards the modest are we to maintaining fourth $XX we excluding and pre-COVID both

and top on of I'd Before executing few year-to-date. to we strategy end our with line points. delivering move growth We're to Q&A, revenue a X% like

which our of track to for continue speed while our We long management to focused execution. our on term expense with We're structure, invest the deliver discipline and simplifying on support further guidance. organizational remaining will

capital to ability capital more our we light continuing headwinds of questions. managing to to disciplined our term. look return And to hosting take confident and shareholders, we in in to forward we outlook medium We're share the saves RoTCE call, and optimize happy achieve XX% again, I as of plan in simplification while to and remain in would be to Jane expansive way the regulatory XX% a target our fourth expense details including related that, as quarter related for severance earnings a to where XXXX. With additional expected and well organizational your our

question Mike [Operator Mayo Instructions] comes And with Fargo. our first Wells from

why XX restructurings heard creation heads downward much more this like the different? than week restructuring this talk think, about about why or spoke time or you ago, Jane, just we've different on restructuring dual this simplification, this the a say other about, I'd current We and is heard -- but XX I Citi's different? that you X hear and question that the commented XX is committees, form in the we've cascading recently. years so the The real ago, its is, why so reducing is

very Yes. important question. asking It's a thank Mike, you it. for

As financial is I've up decades. we the our but set simply a are run the made, That supermarket. today. changes the model, these org the almost in bank how which model simple, piece most our we was said, just to not bank we've consequential as -- for we And is first view is organization not X

changes truly we're down we're driven changing the all the how bank. strategy. through organization. permanent So we aligning organizational But And these model are different what's with business simpler is run and will mix way be that the the that

through of So theirs, some layers about through delayering rid continue will examples We roles. first and bank. let or aggregator the it life. me organization talked to spans give the the X bring getting to X the you That particularly of

banking And head. have had The in HR Institutional example. HR, Client head, a the region head, had me region. an you Group the let give you we you

We're South and local In had into head that in a head collapsed the the Asia eliminating because consumer activities going them. longer South to in two. we need running you those head. all and North are addition, roles North Asia have we franchises geographies a head. And the Asia Asia We're just those anymore just no don't of

updates opening a the that by by I sorry, effectively over X,XXX for all Mark reporting to What XX%. management Shadow than our shadow country, performance matters referred the take management are the that can about tracking and reconciliations That's outlooks, financial let's We monthly to reports. that shareholders. quarterly reports reduce our one does P&L there So reporting the the P&Ls -- that in mean? rather associated and remarks.

greatly so a looking will at to getting you work transformation. We're we taking them. that benefit moved some of processes controls. processes, those accelerate we automate firm for means into also of It centralized on do embedded the And we're centralizing and will scale that activities that our A will the how that rid go If need can get don't utilities activities we're declutters. that they're do those to process, business automate duplicative can of a so where whole economies. that lot from and and client it anymore, transformation, eliminate of we them, up businesses out the and the

points strategy heart nonproducer, that business realizing, more sitting shareholder drive because of points fewer But also who our those of of aligned of getting layers decision-making and We'll us the producers, interest as we're the as of we're strategy to are in or low can. number more the We're the teams, grade here. metrics looking that the more take execution rights and X decision the in of single measure Again, much many possibly with rights over our mixes, expectations up revenue so of we a is I'd of to what types accountability synergies X places looking accountability. decision our say to some just trying client. layers, from many we're changing places in to These spans, time, the products. And and one of marketing we people can more that giving that drive clarity XX, with layers. build from, down industries speed committee teams, at this, up voice help we're at cottage

of don't legal want in the strength I our our the what's also organization. duplication to entities. clients, engaging and with monty on the network. them of our geographies global focused processes that on delivering focused product are of responsibilities their Our is full our I to managing management happening want clients a

it corporate same organization, way investment bank really synergies commercial realize The the the our for putting bank, bank together for us the make banking to across them. easier and

that mid-market a and to commercial cross-sell the customer into our examples. movement corporate banking company lending bank much up company organization and easier and all product a company, suite corporate selling or of commercial the So they're a the or banking same in other

layers want we clients So how to driven down through into finish to first amount transparency, all transformation, third to moment a people in making we work. getting end driving huge freeing and the and fourth the the of do up until and the these focus into We it's of decision-making, depth now detail much the in all of greater at and rights, in the quarter. the design activities really the That organization of and designing on as second then types changing way work changing the is decision at summer put synergies. through

very different. So it's

an is of gives place. It's is I both but are call, org it fourth in a you that the more quarter flavor just get we're earnings hope necessary. the how this really different. why sense running restructuring, not You'll This

And our Glenn with Evercore. Schorr next question comes from

of the still to you different the of your with bit was going denominator XX%, in getting -- ask curious, I'm is upping where little up -- other dominator by that. XX%, is XX%, lot a the you're are So words, but because up good XX%. question towards they everyone My towards marching with in there things threw a which curveball going -- is working mentioned a the that transformation,

mentioned of on longer you're speak. we So for mitigation as you seem working you to also be higher And for a beneficiary sure.

you So the maybe confidence you don't that line what are give about offsets that? see working. Because towards the still working that talk top stuff could we is

Yes.

you. let -- good to from So hear morning Good it's me Glenn,

comments Jane, like. free a and if on me you'd Let to in feel make that, couple chime then of

the One, obviously, to mentioned as just strategy attended, Basel written. assuming the fully capital through look to Those as looks range, consistent And of repeatable structured, have to I business, managing what consumer That say is like. I now. What couple that We be will the of period it's the business it's inside range as that in that exiting There's the a what III that obviously, when and the a on this mix things last continuing of haven't a a stress somewhere our going business businesses. that's we at proposal relates the is executed about it The that conference matter has final. SCB. like were of we that's first in factor things, losses against not to about increase PPNR. sheet that review of thing in Glenn. and that's I'd we in likely terms international XX% described. XX% changing the balance talked to simplify analysts the transformation, we're talked and the Jane impact and And might more predictable something our be

as expense that lowering an is PPNR well. as well As the factor in know important we which math base,

things And so get might into to period. the required of reduce medium-term that be those think, we that amount I capital as help,

look point that final. into as extent it a hard Importantly, are the out, actions as they require that proposal of to you going and the at other the we mitigating there elements identify that well make take are to

that's is already So think advocacy, in big of headwind to but of about the some that work we'll included the kind point of a operational something that's of and through. have in obviously SCB increase that fact risk a

mention models, of a I light keeping a The as are as at advocacy that of going for the to and relates hard it a now in and XXX% impacts FRTB we're that. And but worth now whether that component those then look higher from enhancement to capital through associated to and corporates take with them, go well, not market the think again, both the that's point example. to and through strategic of they that's going at the XXX% those need to do risk-weighting consumers to another global going shock look investments risk-weighting, equity going work to there's we that challenge lens, That's we're even credit to unfunded to the us commitments, force different returns.

of pull mix And so are those, whether returns take around we we're like associated opportunities to it product have other and for look decisions other we've means there done types or have whether as with our pricing reg with to the levers to going at changes, what SACR to those.

again, And are yet, I working actions already. paper there putting and rule mean is final be so that because I the to thoughtful and discussions had that mitigating by through. what around mentioned to be that's we those on and the want But we're dimensioning more important not elements

And our next question from with comes Najarian Erika UBS.

about well? And of outlined and of put sort if lot a down And really of your in is that Jane in which terms talked probably a to maybe that terms and like the of is you But of surface the I of address nice -- Jane You've expense interest it, look in transformation of income maybe terms debated in you the us and for underneath you revenue Mark, very target, momentum in noted I'm terms that help curve. fees. the net as could part both think revenues, what's of X%. I quarter wondering call up and CAGR defense sort it going both that had most what bending break

I well, the from it we think TTS be we're is surprise to to I'm continuing to to going are upside. like, going continues to years -- now, oh, X well. TTS do take,

feel being you think you is for longer? really enumerate of about hire and cyclically under target? as strong And path how the what what that recognized about sort businesses position least to that So -- are secular could to come versus is still we momentum RoTCE at that

strategy love of potential it because about it. firm this this the how I I'm really say, am continue has. is Erika question, I as to revenue and the do you have is say our about unlock -- excited we I And the to potential it really and really

bank regulatory, supply riding I own it resiliency, there decade we've long. their And whatever green, we're that to today of be be on corporate they be think years may for of into a trends unstoppable -- absolutely of The long-term next they're has couple seen trend there's going chains and there operations. in the of to in the few -- into last be The build of think it because resiliency. trend. the is it's this because such are where building had a it and indeed world, operate client multinational of the client growth So that of is as geopolitics, them. a you've strong TTS, reasons multiple, -- I where of drivers around at the be, resiliency different the having build beginning in because

important clients are an there. to want go, we is one. the that So Wherever

the opportunities possibly suitcase flying We globally. We with there decades. have level that the connected can't who's understand someone We And been in We risk. understand a it's micro deliver. and for understand client base. at local there the that. level That

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connect So competitively you've got advantaged a huge because post clients slightly similar the to got story -- trade client different and trade, X you've efficiencies matter. that's going for the base, the the to we free TTS

now people Sieg that to massive the you way tell how knows he's the floors wealth unstoppable about is that's hit a all in can't desk. globally. going excited on, building. trend are global to the to global Next Andy creation. is be he's And is I his And road And wealth creation. there

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investment our then private bankers on then our And And them. bankers on call them. call

term grow our have to them And new on a feeding big teams the help and of that engine we succeed. be calling medium in is market acquisition them. capital We going client And us.

do relationships, terms with uniquely be keep we'll -- some sure our areas that investing and way. we are that win client we TTS, the we're of our great positioned into new we're going going innovate full growth megatrends that to it fit we in is on. And and to sure so more we're XX% to the and like make areas know in rate in deeper clients of get make are and that front we fairly we behind, continue pretty riding So to proposition uniquely that crushing

X% be this, the X% this -- -- about doable is just I feels very Mark to and to sorry to So, but I. so very, excited

question next from with Global. And our Seaport comes Mitchell Jim

NII talk let's there, discussion revenue the on about maybe a Mark, little bit.

footprint been deposit You guys have unique smaller base, been very already a high. lot have consumer. in Betas low-cost a

like think cuts? much next for beta as before non-U.S. seem takes you. the stabilizes rate XX% next trajectory your as it the year? about on doesn't roughly. you risk and about of you do How year we puts NII it NII think do How So It's do catch-up -- there's think into

reasonable Look, far to I'm But for not trends seen going fourth XXXX for expect to XXXX. so the I think that that will Thanks guidance it's earnings. quarter question. we've continue. give of Yes. We'll the at do that the obviously some

what's underneath continue currencies. about think benefit this, you If we'll across to rates from higher

card benefits think interest-earning continue balance from see growth. to we'll I

Recall payment card that at this interest-earning spend continued IRE by at neutral to rates. our driven point. and be position, U.S. when dollar you growth it's expected look relatively And lower balance is

that important it clients our end year. to U.S. we've that last global got, kind terminal to as of for And relates dollar it's what's think so seen betas our side, on reach, of corporate levels particularly while at in business that the is you're the I we've reach right remember

curve different non-U.S. rate and dollar increases. of a On there's betas there the lower, different lag pace they upside still side, a because it's and run

And be in. how that factor puts will moves the some then to volumes, and the evolve, of the of of takes so curve those and think speed betas rates, kind the about will

we both show that is in remember and Markets. And with it then the final to thing our without NII,

the On that drag impact countries kind the play exits the the the of of we'll have from out. Markets, ex of

we So to NII. impact, quarter's exited the just going next obviously, Taiwan, that's

think fourth to you XXXX give about. and factors I'll the at on of more detail call. earnings couple And quarter obviously, a just So

Kenny And Ryan next Morgan from comes question with our Stanley.

pipeline? on I completion market bringing when update significant deals or rate to the around it comments or thinking last over give the few us On volatility just about on have the to side, impact being on color you M&A, ECM the hard capital across and Can live markets sustainably the any weeks deals and are DCM? does bringing And how will rebound. an activity heard deal predict CEOs more

is I seventh with QX Well, actually current think the quarter downturn. a IB I couple start of of pieces. the

-- have not takes quarters realities. last downturns how XXXX, tended adjust to long because pricing that's fully expectations X since new So longer to often than it to for downturns have

but And bullet to still waiting ECM. way to for investment-grade main rates, wallet -- and no That's on how get macro where talk seeing the a that see we're increased that. We piece a expectation plays sidelines long interest CEOs think seen recovery when and capital the markets into out high, debt how the in is starting meaningful them. debt that, in for of that the and and the the capital more we're longer dependent you ECM, how largely return particularly normal bite environment. get we've and to longer on activity off markets, clients the just no market, on

had things watching in obviously We're to But And X several -- may big just coming in. big how few was fragile. have in September, involved unfolds. it that move the we're ones IPOs You that closely. market market to QX. We still somewhat to quite a questions QX, see

will we a confident the recovery a pipeline. we gradual DCM continue. In pickup in had in the beginnings mean that feel there's and that of good there's I thin-one debt, lot low demand But DCM, of here. a pent-up big

of M&A lot right companies clients. And with M&A, really key You're healthy situations in are going more big. to in pipeline. see A transforming then is the certainly active to in space low sort industries the for -- us of thin our think a their wanting sell-side

improves quite see markets. we'll quarters new further. which equity by unlocking think in Companies the a just reality, product. accept from obviously sentiment nature that materialize rebound will pricing be the That of our revenue do I few to end given the a helped when takes into

I where But is sustainable that in to just make one it's macro, call to point. banking going is that when the geopolitically at from going think we're given as no and to see So there. this everything particularly term

comes Chubak Steven Research. Wolfe And with from our next question

prior that context as number the And could well a of recognize order was in But the actions consummated. That to with your XXX,XXX fulsome the was frame today. staff. Citi expense Mark, recognize of with you'll next mind even and on things update hoping opportunity I as quarter. So direct Jane, was COVID I an more running divestitures trends. XXX,XXX It's the of provide to do multiple I expense consent is you've that you, count increase you one head XX% closer

an level the of baseline So of head how should count such And versus would for an XXX,XXX. or the appropriate we of think magnitude order impact city target actions? timing about optimal pre-COVID consent head that whether or count

Yes.

with look, the give So divestitures progress heads I'm those not divestitures you see guidance. what a in as going of We'll heads to that have continue made talked before to down. will progress head we lot is, those And are count But about obviously, underway. James the I already. say associated come

important part point our effort, been as out in-sourcing. also It's to that of there's

eliminating. we as org that point just the processing from to the and extended captured we've announced, are that undoubtedly, the I workforce Jane that investment, streamlining we've layers execute that continue of mentioned we're putting we that the then fewer And have we implement here. so that the technology the be the in the And head straight-through the work will in count think simplification final is The occurs that those transformation automation reconciliations place, against required. as all

All will well. to reduce as of those things count also head work

as And heard probably head that charges. count out markets of in reduction. One come that the clients, with mention taken we efficiencies repositioning additional that upside hiring is will also turn, $XXX to with repositioning we've but million coming to year-to-date we're point on also about me end the XXXX-or-so position ourselves so head you've roughly associated those that as charges. And we're before count down capture come or and while grow to going realize with investing front so

the -- to and do way. that, continue so by And we'll

that's come quarter We fourth quarter begun to the will next with the haven't associated and even take the org first of repositioning simplification in underway. charges That year. in

we use keep mind in-source need look so But at to And evolve heads that will we associated as takes see are external where to through puts parties. that there process. continue and we in versus with this

of our question comes Ebrahim [Operator America. Bank next from with Instructions] And Poonawala

Just maybe, Mark, that. on up following

legacy of takes think maybe and curve can in think Like about the curve that going bending to the bending -- through from? between if we of and saves. as we ICG? cost or PBWM the year, save how you happen -- bending just much we to about and how is and are if break the around curve about next think How end As the where that expense about coming do talk as puts you versus the should investments savings -- think

coming Well, going year, down look, away would to costs from as And have benefits that next expenses of the the some quarter. we have quarter you'll think exits third of about we about from announced. fourth talked we that, the

we've of from exited some have the costs, You'll on further these. of benefit focused each we've which keenly been as in reduction stranded

we as to some we and in well spend you start start that that to structural of get think play out I to see have lower base. cost medium-term a And we investments efficiencies then in term, start benefits get to the would medium as the But period. from the transformation again, that that's as will made

will bending all of curve. drivers be to the to those of So things getting

the here broken to that. haven't how I'm not going down each important on of all -- from I much comes achieving break call pieces to down but -- not factors I'm are this

O'Connor question Matt next from with our comes Deutsche And Bank.

talking the of chart deck the from the on could of think were huge elaborate it's in of have that the signs you quotes, Jane a end some lower the But about I I card There consumer. not the that? portfolio. among pie pressure some you appreciate you media, showing in And percent

of mentioned is down. the rates we spends is being XX% kind that and that we little But year-over-year are in credit? of potential up spend at the loans, growth versus later So then as the also are disproportionate, if how look directionally And to a payment paying as I sign just ] kind -- in you're a of weakness think the you something the cards think couple in about it address a in coming loans of [ percent attention further growth cycle,

don't pressure lower I in customers have Look, a in the we lot FICO. of of Yes. think lower the most FICO,

the it we're We've Services So -- business. in some have seeing obviously in the we got Retail out market.

that for know. that, have it loss reserve sharing fully benefit We say the of we because really to the for but a revenue makes having that to the difference as there you also -- agreement have -- get back line, we're on

of look cards market much pressures in we spending, see lower the it's we for book, we FICO, at customer. some can the whereas the driven affluent as as certainly very at think the look look the by at about business, as some But of pressure when off-us we I the that

And almost from now all affluent the the of deposit spending Fed it's the coming excess similar accounting So that the the numbers there, of is rest. primarily down the for growth to with households income. from that's side, out that savings seeing. saw over we with are we're $XXX,XXX And sitting in the

worried And our not then an to on. I given it our prime affluent. keeping So I'm clear. about we of market, the clients, eye look that's for these portfolio. I of corporate in about very is rest we're nature card Citi, the things be are that the to the consumer. more exposure see But at very the softness them want PBWM tend obviously our talked where when I out to nervous be is

looking call category. -- partners. the more They're mindful that hearing them across been bargain been certainly We've within that retail they're they're So you're on it, hearing seeing much moving I our from more down where a front. the just And board. We've right? about spending,

good. loans is so of growth And card

is it's worrying. less but up it's softening, loans, not spend but I think Our than

Yes.

payment they're And rate, at pre-COVID I'd the we spot that's down, payment add started you and that thing in cards, while to come level. only The this on, think obviously above I still when the Jane. invested look have they've is rates business. branded

the how spend thing that's in that of acquisitions growth. is So But volume what terms portfolio loan that were this other outside is and expecting of normalizing. driving obviously we new drivers account see of this important that nothing again, there's the are ultimately, we

And Gerard our RBC. next from question Cassidy with comes

pointed the in opportunities very about TTS. you you're excited out, as Jane,

regarded you some is gives because well mandates You're other it in the what this competition this, has on area. always business. in struggling Can feel new the custody winning -- issues, Citi been is because with you

you what So that gives added excitement that is better? even this getting

bank excitement track coming that it at investments added making, the is the a lot that markets. it it's think we've is from differentiating is if that's clients of -- been X we're onto in CitiDirect Payment capability. really been for -- Citi talking in I U.S., in seamless -- the network I Look, putting on over had globally. TTS billion capabilities. with have Fed new Token the commercial very The see innovating so so live us you Thailand look they Express, momentum is about is we processed which year-to-date, a of whole you just That XX/X access our can in in terms clearing, place. have more put was our We Services, to $X

innovation sitting its the the its terms it's that its capabilities. But market a you're on in management, unprecedented one presence, type it's connected on putting that in platform cutting-edge globally. all top network of of receivables first cash just payroll, that's management, liquidity across capabilities, local board, So of in collections, it's really

it's that what how mean, I optimize is into can in efficiency extract client of very on because treasury saves, that their do sticky terms It's this data thing business. how to do what to a clients they terms technology their our in from really very, gives insights capabilities. critical hard. And of beauty, very embedded and thing systems. it's It's of risk into this a and and management

partnership linked as well not that factors world, the elements, So hard see opportunities what's other one its when you his of in and these the Andy Morton look at our the TTS. with is business world Markets on volatility, is going headed talks opportunities. and differentiating to it's where all our with in And really time about

hedge bases they fund, manager profile, to serve In corporates, let's fact, them. are one we asset say, and of a our uniquely major have or a different an client can and

combination that's that we piece. So and the see. It's trends

many huge I as for the space Jane. which always we're enough side, North strength real the right? on but thing in TTS reality is leveraging -- that America, us, then really said We've I get of finally I'd to is thing that's major Security spot earlier, here platform. had in The Services only that mandates think some market middle excited we're is seeing North that other add is really opportunity regions, only the And commercial a in winning traction on, The think of about. America, you kind the

what and better I high do to earnings get to and mix of that of drives focused strategy that that, is terms earnings, will of pieces the get trying that target help me, And other are us what we so medium-term in to we're lot quality think return then that on. a to

our question JPMorgan. from Juneja comes And Vivek next with

just reorganization the a to wanted little clarify bit. I

So Jane, North Asia, Asia North get I Asia keeping heard say, -- and you to heads. South

product in So country, product did -- to and get you head. who're where head of each product just rid heads the the get rid regional reporting heads a Asia of

What's -- your of So with all perspective? MIS And is to the management get replace that monthly reporting, on is you there? management? Your no from going rid planning longer there? that are you dotted when line what

anything. them. consistently not me planning that need franchises are geographies. very the second countries. in businesses Instead, on first. don't got we've consumer replacing the let take global longer We I'm no one in the operating We're it running So individual with

need legal we replace us them. the it entity management And have don't just need. to So just that non-financial and enables we

taking internal our get greatly out that and of as different then another lot also greatly And PBWM is simplified they ICG -- reports. eliminates a layer reports get eliminating simplified same by

wonderful a the answer simplicity. So nothing, is

we've what first you The was okay, help understand about, done. question

and we So to just regions One put me. geography -- eliminated is put main already. things on I've have head front, X single the international we've the we've done a reporting

it collectively. makes the and help we manage X -- simpler then international that for he us I will me. head, much So have geographies

clients to and our delivering of and piece second to clients our mandate the in countries the geography is really secondly, management. their legal entity we've narrowed The covering

markets, onshore business heavy a because before, multinationals and local bank, retail It's very the credit markets. They've a clients committee that's amount the lot wealth otherwise in necessary local of was to as card manage. serving huge a some just in That on investors the different wealth business, had And subsidiaries and are structure. a gone. shadow business. and a we multinational, the business some P&Ls of -- And much simpler still was very local a management

regional helps too one. And just get but more they clusters had that much before, is a it on straight I'm focus really network. not So the much manage of this less yes, also bit have that the excited we today, but have a they focused layer, mandate jumped we and simpler of the rid we us about global than it down to it could -- makes the just to

Now X feel? banking management collectively for our Mark? delivering and our organizations much it, core you just and else, it makes team What client together give do geographies sitting they're against a Does the structure same And our serving are that accountable easier. to in on base. it

we Jane that different segments. capture we can leverage here spend to franchise time we is Vivek, in the thing, right? have think to really investment is I important we offering about the other that for Because as talked client financial the client of a across on synergies bit ability little talked those The terms lens more the and about, want the the reporting,

that we already those metrics looking client so can that So to at growth upside. we at lens capture at want that returns, will that P&L, something through where that be we that enhance that around looking have looking opportunity, the

the piece financial lanes flows, By -- changing, food, And it. trade, important I the really East, connection that all U.K., think having international actually Asia, et changing are organization Middle changing seeing just the between The them points point. Europe, the around an South also is other and clusters, moment. single different Africa. is at Globalization a North then cetera. and LATAM, these We're

I agile world us think delivery makes in our because more much And of more so is much this today. with how network it's operating global the the in line

comes next our with And question from Martinez HSBC. Saul

normalization So in implying guess third I is a to guidance the back credit of I the on more year-end, over that is levels to continue sized and your -- quarter. by losses. decent had the get thread Services normalized which of have And cards you branded guys wanted you uptick Retail levels

in And of more -- it to that importantly, I kind I imply know driving losses? want something like does guess that above-trend to still that So what talking that, Because the But where have And imply we still view? I in more to does labor more pretty forward? we're have go seasoning would and get XXXX think what's we going we not about only vintages. this market. extraordinary some XXXX late an environment

something risk bit your losses us trending a bit if that more on what terms -- just on a normalized levels? in losses is whether higher give more bit there's we So a we're expectations more color are than than normally of just credit you could to maybe thinking little what little and

Yes.

in, then Jane, So that's let and chime to want me start fine. if you

and I the we the snapshot think you but what you because both of rates I'd next been see delinquencies rates in indication of point that deck loss the can gives a good trending kind of also trending, that been you trend us so. And that the to a have how nice loss likely have been the it or have where is XX have delinquencies how to gives up, Page trending. quarter in are

the normalized year, X.X% to we likely that end , about at and we're X.XX% end Retail X.XX% to rates. to normalized X% the rate on Services, can at pre-COVID X.XX% branded up And the of by see cards on that so up getting NCL to X%

see rates. expectation into above the to that made, this is you've environment, pre-COVID on Our that likely 'XX, we're as depending tick point the macro go we to up normalized those

see to a then settling again, in before some down kind subject the like what down slowdown the looks of point macro the economy, path. we at As

expectations. tick for of to would as is, see we account for these loss those so we significant so reserves have to have as advertised, again, And we that do both And yes, This reserves, up. portfolios expected. speak,

with Retail Services. cards, loan X.X% in we to branded So ACL in of an reserve sit

with We have XX% losses and partners. shared Jane Services Retail mentioned get earlier that ultimately in the

and we feel look normalize might so like. what mature, speak, we while expect to so And well reserved to that would for this very

-- going our hearing -- portfolio prime. not manageable. We're is old bells you're We're us feeling. not exposure. We're credit very of not you'd some the this very is, Citi off no there's around different may I out be very is that And and think prudent we're we're overly This think ringing. there's seeing data bit I I alarm all there's prudent. very at -- disconnect and being expect from it. consumer manageable. bells But responsible there concerning. alarm We're on how in just a the what no be around is And conservative of all being this It's that It's And a mean of questions Citi. pieces terms this versus from should it this. our as is the about to us manageable, being is be.

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

thinks determined? of what's going getting frankly, those you spoken degree you're at get way or would maybe some of least be Citi about delayering lower targets revise efficiency below Or of those targets together, one numbers to in of and But it decluttering you want target. And cost and investor the above to lines, is XXXX your your those capital? you get to targets add not and we'll X/X I it Jane, conviction to XXXX, management From your have when with to and or reporting, restructuring, getting your you global answer, in and relates consensus to as initial return some January. for I hear deconstructing to what targets who all maybe

Look, that behind we've remain been got growth confident as Yes. me core and what we the targets. got behind these to We've drivers the heard and control achieve. strategy as to hit you our investing the tailwinds of us ability revenue the that are that around and talk well earlier some -- of around we're in we've

We're couple trying you expenses as Day, unchanged. would as drive would when adoptions of I at X%. geopolitics the in needed we we're piece strategy. along have on not at is plenty will third we years, strategy But our reductions of And we've about. And to. say that it regulatory the So of revenue had the laid org revenue I confident purpose, think we've guidance macro It's we've in that's the do the the really into the expense the we in also certainly drive the primary that a X% We've on also driver expense is look way and the the the and delivered. last headwinds firm what we've out growth the made said that, we targets talked -- revenue to Investor culture. to of but simplification

do will will different we adapt say to we'll what we accordingly and areas. do, We

the adapting about capital depending to what requirements, they talked Mark are.

and This levers pull, have capital the our we're we're that getting lot there We've beginning lot allocation, DTA. a a of message is just Look at We scorecard is lot the building my to point. other buffer, -- going execution. at on, is a there. a management deck we But I strategy can and page proof achieved a investors done. that relentless

But building can end we're there we're us return road the those points those targets. don't there, getting Mark? you that proof do we'd what the We yet. pretend Anything achieve we up of at and said add we're to see done so

so. transparent, we're to how being going you to achieve As we're and and right? said, and keep delivering the how points, building transparent going to So about when going we're on be and it credibility proof

And from our Cassidy with Gerard RBC. comes question next

percentage big. I it's section an low. credit share portfolio, can in know with that us particular you and anything Mark, there North corporate loans, you still But curious Again, very the a mentioned was on the was uptick. as in loans not just delinquencies that America, the area? to in relative that in of rising they're I are the

the On corporate loss. saw we loans,

million the $XX were losses think in quarter. I

America, really the one North in So adjustments there. that increase we by names out in really point rating in And Both current, then a nonaccrual small that one uptick X was in amount. loans. We saw did the was NALs, see are driven or they and some did in the an the we but That an made. see uptick, them drove you That X reserves. country quarter as were the EMEA. of

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

Thank us. you all for joining

you If please Thank IR. follow-up you. have questions, contact any

the This Call. Earnings Third Quarter concludes Citi XXXX

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