State Street (STT) 17 Apr 202020 Q1 Earnings call transcript

Good morning, and welcome to State Street Corporation's First Quarter 2020 Earnings Conference Call and Webcast. Today's discussion is being broadcasted live on State Street's website at investors.statestreet.com. This conference call is being recorded for replay. State Street's conference call is copyrighted and all rights are reserved. This call may not be recorded for rebroadcast or distribution in whole or in part without the expressed written authorization from State Street Corporation. of website. will broadcast the housed authorized Street's State only this be call on The

would to I Investor Now, like Relations Head Bieler, at of Global State Street. introduce Ilene Fiszel

us. our for thank XXXX presentation, all of CEO, and Relations earnings investors.statestreet.com. O'Hanley, first. will slide our speak download which we Investor will Eric will call section our take morning Good you Ron for joining through in today, Afterwards, On the you website, happy our Aboaf, CFO, available take to Then is our first quarter be questions.

please to During limit the re-queue. then questions Q&A, yourself two and

items started, Before GAAP. non-GAAP these to on get to today's basis available Reconciliations presentation the to include measures comparable presentation. GAAP appendix the most I are we our more remind measure a you slide adjust that or from would like in or regulatory that of presented results exclude directly will or one

may contain such In from as addition, factors filings, XX-Q. discussion will referenced due presentation those important factors those today today's Actual factors forward-looking risk our our in in differ a of including SEC in statements Form our materially to variety and results the statements.

speak any even statements of forward-looking we update views if change. as disclaim Our and obligation today, our only them to

to Now, let over me turn Ron. it

everyone. Thanks Ilene good and morning

proud with seen team You our results. pleased such earnings performance our quarter achieved I of am will who that I during am have times, today, we first released members results. our these turbulent worldwide and

a liquidity some The general have of driven volatility Street financial in and has withstood markets. crisis health significant of markets economic rapid has in and activity, volatility State COVID-XX necessitated which income well. in specifically, curtailment The a the fixed market turn lack

our market strategy, against banks has serve rapid Central continuity which our quickly exceptionally reflected in supplemented our period, we to us planning, to long-standing execute well. our by strong continued performance. business have employees this enabled to innovation, and alleviate clients protect Throughout stress and operate, Street's help state is moved

of Before financial our that resiliency discussing safety quarterly we have Street's our focused performance, excellence, clients performance. some and while in of protect our of business all want taken and State to operational on the to the actions review workforce, global remaining I support

three, Turning of Street's response of slide I will to key aspects some the the outline to State pandemic.

operating of since somewhat global adapting with our had its coronavirus countries, the significant to a our our employees globe. As and X,XXX rapidly been model employees the concerns company, the start head as approximately in addressing a XX,XXX very clients safety well approximately on across needs to have inception global changing XX China, operations as in we we of of operating the

Our our this economy. financial employee global broader actions maintaining the resilience, in and while to and clients, on crisis continuity the have business concurrently safety health supporting and markets response centered

me with our people. Let start

Here, wellbeing. our and Senior the with has across Global and since health Team world management local relevant safeguard Crisis employee worked to mid-January continuously authorities

is access working IT to cyber for maintaining Our workforce our rapidly today, solutions, safety. approximately remote while of from capacity allowed capabilities add us And global XX% also home.

workforce through the suspended that announced COVID-XX light in reductions we We of the reasons of crisis. for year, the conduct than or any performance end other

It the aligns our strength. our decision and our is reflects and clients right financial values this for our believe I our people, communities. and with culture

the this are which decision, later offset will undertaking to We of presentation. in we actions describe the cost

the behavior, influence world uncertain and owners broader to and the pace me clients recovery and our our clients, the financial capital. are of an managers will remains macroeconomic investor economic in markets. who conditions market Let environment the turn timing The and of

increased of system. business deep operational time our the in a capabilities central a This crisis plays the significantly Street at demonstrated role infrastructure has of financial global volumes. State

split run seen operations activity. Our with global to significant time a operating we disruption can a client expansion where enabled efficiently at when transfer minimal have service work we model in to has us

experienced example, price calculations office to market For run checks per the per XX% in Similarly, high we moves, at an for over March, increase transactions. asset XX% due day; in is height increase valuation which significant approximately as and X a NAV back-office typically it day at in volatility. $XX,XXX middle of transactions million the

market have of the crisis, the weeks. COVID-XX managers the focused and globally, few uncertainty. to to Due been continuing cope scale workforces and of last many access have a number infrastructure impacted and to limited on To asset during these priorities normal clients, owners with current we asset disruptions, struggling reduce with workplace reach assist

assist First, and challenging we engagement and better and ensuring we we client have increased them client environment. rapidly how in can unique our communication level this understand needs of

Second, with maintaining operational and put earlier. we as a readiness are through increased I resource strong IT state continuity of action, business mentioned tested into capacity plans

Third, we solutions. are providing a of suite liquidity

including clients, number and State clear investment also cash strategies. range money a options repo funds specialized investment advisers of full cash of a to fund deposits, Street market via has our range a access has portal for of Global centrally our connect. short-term

In addition, capacity with of credit overdraft global committed our lines credit. clients finance and team supports

their the work paper clients and clients to set MMLF as fully administrator Federal and custodian facility, programs to the ready also is liquidity clients of the liquidity facilitating MMMLF while funding clients that also credit, approximately for support access money Reserve market various facility. which serving to closely support appreciated State broader of it's tap stand even assisting with liquidity enable Federal fund We usage, helped to Street or up we the and accounting the stabilize that mutual funds. commercial before actively Many operational, economy. our XX% Reserve flow the

clients to longer the partner of at grow of strategy when need technology term, global evolving needs the scale all they and provide to macroeconomic conditions recover. As we are over to center and uncertainty look our our be the essential of clients' out the current our and the continue dissipates

with front-to-back provider the will clients Street. of operations State accelerate crisis only a this and more capable desire outsource to We fully of like believe partner their

four, Relative year performance. basis, total strong total to slide of am and demonstrated by first X%, progress prior quarter the X%. to direction is by a increased revenue quarter Turning first revenue on pleased sequential the strategy quarter and I our increased our period,

First was pleased and notable XX.X%. XX% I quarter year-over-year, our excluding EPS $X.XX, report ROE by quarter percentage three am was improved over that to to up margin XX.X%, first items. pretax points

our first domestic fourth Despite during equity market quarter stable the quarter, volatility relatively the unprecedented XXXX. levels the benefited from market relative of equity to averages of the results

the particularly a Industry market mutual move were materially we money bonds. averages market positive the U.S. aggregate of Market dramatic the result sell-off as were ETFs in investors quarter At long equity year relative positions ago recovery into in period saw late as XXXX. of first strong fund from flows global higher to Street, a flows than XXXX. and State in

the benefited tumult FX low and the the That results, plus first While levels of with associated materially volatility, half quarter, record remained investments, half ultimately, experienced to our innovation for our levels of the of latter FX higher results. FX volatility from quarter COVID-XX. market at volatility led during the multi-year

end to as clients higher deposit dramatic benefited part and rate First short despite reductions. their turn us to as quality, significantly from quarter of long flight levels NII

new result lower trillion Assets as $XXX under wins end saw the fell to a market administration billion. period totaling quarter-over-quarter $XX.X custody during of and level We a levels. X% quarter, of healthy

end. be to at stood installed yet at $X.X trillion quarter Assets

of fell quarter assets under quarter, end XX% advisers first At a equity $XX Global total net to the in year. $X.X of Advisors, market during result Global quarter-over-quarter highest the billion lower a as of inflows management trillion levels. period recorded net inflows

in inflows Net strong driven After for SPDR I and clients institutional by offerings our suite more was ETF a that as in inflows State ETF time net outflows net particularly were Street's than in inflows. strong good February, $XX and month of to a the our of business, January note turmoil. in cash billion gathering turned March in business, would inflows with experiencing

a of client well sizes, and Aided fund integration large clients scope. wealth value State focus in front-to-back a and proposition a one. provides our mix we of sovereign Development, River developing platform for strategy a is on this pipeline deal quarter an XXXX. advancing us Alpha We that for functionality building Alpha by key front-to-back to and attractive in The continue as our the see signed with Charles remains good Street front-to-back

first expenses, expenses items. total were notable relative excluding period, to ago down quarter Turning year X% to the

the to firm-wide program. on actions building and expenses XXXX, during management are culture improve our of significant savings strong a we through established We efficiency, comprehensive successfully expense we undertook expense reduce operational when

are more even model, operating this as driving ever productivity unprecedented we strengthen automation improvements period. we on focused benefits, than and our during Today,

expense hiring addition, we current decision actions, our are freeze a non-critical a operational for positions. to additional including the result and In of environment suspend reductions, workforce as taking

pandemic duration focused three we discretionary all manage the carefully very economic and the while to impact, associated cannot on and priorities. To continue the predict very, scope remain we also We expenses. conclude, of core will

First, our for and supporting clients, our excellence driving communities, shareholders. employees second, providing value and to our operational third, and our service

volatility investment serve. While capabilities. our remain connected the achieve balance better sheet, Street operational navigate globally outcomes on We a they laser-focused unpredictable, the are and this and prepared State people with markets well position to be helping proven clients strong for may outward capital we at looking,

capacity and stand we has good our navigated moment through ready this our Street for and We will times for be different. bad can. centuries workforce support State in two clients global our and clients any over times no to

And let turn to me take quarter through you that, in with Eric to more over it detail. the

of and up Ron, XX% you to of go results, start EPS everyone. I'd five, good to year-over-year. review To our slide morning, my we where like you, $X.XX, can reported see, quarter Thank first

call left On panel, top the two attention your items. I to would

of more record shortly. extraordinary our which discussing had quarter, client business of trading First, volumes I'll $XXX million and demand, spend increased revenues generating time FX

And million COVID-XX, effects forecast. increase economic provision with by sequential second, a largely $XX on expense we a of the driven our had the

million $XX expected right had restructuring top million panel, to River of the the related redemption Charles pretax our C as well with charges, $X and costs preferred we acquisition of securities. primarily On associated as Series after-tax of

panel, would see quarter want in pretax first some results, note improve year-over-year. helping we also first items positive our able the trends. you our On we operating of XXXX left quarter, of quarterly show to margin those were generate ex-notable the that to I bottom underlying leverage who the for to

by had year-on-year a AUC/A transition slide announced affected Year-over-year, Turning end, deminimis previously client levels and revenues. year-on-year that quarter-on-quarter. X% six, effect a were to on X% decreased period AUC/A

equity Quarter-on-quarter, due to AUC/A mainly decrease levels. lower the were end-of-period market

lag, approximately has of month is impact a our sell equity reported March off the half a on yet year. in not AUC/A reminder, reflected the one so some seen of As the of

end-of-period both over time largely inflows strong decreased periods. XX% $X.X market levels net levels, and partially by lower driven to quarter-on-quarter X% AUM trillion, offset by year-on-year

of $XX market cash quarter, Amidst largely State conditions the global extraordinary driven saw in inflows by billion, managers first inflows. the for net institutional Street advisers and asset

trends Global two in of Unpacking of a in approximately bit, first February ETFs. $XX was after as quarter, the the a versus net Advisors inflows months AUM billion billion the seeing and quarter, $XX first it cash March tale outflows January in strong $XX saw with billion inflows of March in modest and

Global in its class. $XX the Advisors of and into inflows S&P SPY, saw offering, most alone our largest than ETF March billion product in strong and XXX more premier liquid

were Moving slide fees equity servicing business X% quarter-on-quarter the and up X% core to momentum regain year-on-year on continued as lower down to seven, markets.

quarter, disruptions. business minimal saw navigated significantly the inflows activity in service successfully elevated during said, March Ron with and the investment activity services client the As particularly

scale ever market than our Through exceptionally clients more stressed perhaps we this the value capabilities challenging of environment, believe conditions. and realize, during

asset that an of investors are monitor clients our with both By able worked a strong they servicing their that them deserve. sense which fund the of State their and have and expressed business our gratitude partnership timely, to sell, ensure number investment performance, buy, has for fact manager gives the fund tirelessly to accurately of and way example, confidence their Street

the bottom sales we've this again of panel dynamic. included underlying page, performance right some that this indicators On

wins can March. coming the quarter $XXX late through you totaled several As AUC/A billion see, in with deals pipeline in first the

is the first it expect some near-term see to expect installed to period assets end as has be moderated strong we fee sales, and quarter still do in at of in quarters. $X.X trillion, recent We remain slowdown but pressure to as

mix fee by quarter-on-quarter, down Turning mix higher average with revenue changes revenues fee discuss ETFs. to management but driven and away partially slide changes Beginning the offset fees, first up year-on-year, other eight, institutional positive let were lines. market lower products, X% in X% levels from quarter by me

in something were XX% more more earlier, detail quarter-on-quarter increased I I'll amidst As and XX% saw year-on-year demand discussing -- be record the COVID-XX given mentioned pandemic, FX as trading up the volumes business shortly. market services volatility client and

demand. Securities and were in fixed towards hedge Finance fund shifted due markets enhanced custody as down revenues were down down investor as asset assets the XX% quarter-on-quarter foreign drove spread deleveraging mix to factors. year-on-year income XX% lower similar Revenues

fees down processing and and XX% year-on-year software were Finally, XX% quarter-on-quarter.

line this These other as includes impacts, CRD of as advantaged tax other revenues lumpy and million such know, as certain slight such you software items, mark-to-market long-term business as investments, negative items fees, about the the well $XX As plans. positive. usual adjustment amortization the on this translation worth incentive quarter currency certain the to are employee opposed as

Moving wanted we to trading slide saw FX to incremental franchise. the the nine, quarter color we some provide on extraordinary around

set of low been broad been while now, For business focused been platforms. FX several that expanding base building in we've client share confronting reinvesting levels, had historically on highlighting of our the quarters our have we that wallet, volatility but and

support This pandemic, client the spurring needs various as our quarter, thus, venues. to our volatilely surged well-positioned COVID-XX demand clients' elevated FX volumes we and to are trading across level

and the in including As increase Connect saw our trading increase the a and you XX% period. over can levels, see, average volumes in FX same FX FX custody business, FX, direct Currenex including while XX% FX from and trading sales platforms, a volumes saw

most the real number asset and its for recent this give important right-hand side ranking the of the sense including page, of one On years of you to for FX the franchise. Rankings depth to breadth money included in related we've business, row a this a two Euromoney managers

summary quarter stand-alone and CRD's revenue left XX, slide to panel five see the a pretax income. of Moving top in you'll

CRD revenue and would to first of XXX quarter-on-quarter. any results. X% was year-on-year I revenue read and standalone audience which one down recognition this up not For quarter, million, the lumpiness generated remind XX% quarter's in $XXX across again standards ASC inherent

somewhat over do as we fees some updates that, the curtailed. expect on-site professional and coming activity disruption months services said currently Having in is

is business right again how texture panel, the the we've some progressing. the the and momentum we're integration On included around seeing in

We revenue continue at the acquisition. synergy of cost time in goals the announced to and remain confident the

but The episodic Turning to was of million, up X% year-on-year, approximately sequential slide by XX, NII deposit by balances partially X% driven long-term increased primarily and NII market-related offset $XX was debt costs. down increase benefits in quarter-on-quarter. issuance

wave surge average as with fourth flight-to-quality of XX% up saw the XX% client increased XXXX, were quarter-on-quarter assets Average deposits quarter-on-quarter increasing end period deposits from deposits quarter at as we a were We've from levels. deposit of end particularly April, to seen still but somewhat they there in clients. March, asset elevated levels We managers. XQ support remain since our receipt versus XXXX

markets. the off clients leadership fund End-of-period $XX clients assets by and new functioning Fed's mutual Street of billion were volume or access as of supporting also as XX% our asserted driven over role MMLF just facility the market help facilitated we our the State liquidity money smooth we MMLF. in

color Moving company's here to slide the included losses. well XX, some portfolio on loan we've the for as credit as allowance

and fund and conservatively finance, leveraged portfolio loan high-quality of loans. commercial and State estate assets consist is of mix municipal know, relatively underwritten real Street's XX% loans, you typically average As or generally so small, of

panel of a some detail page, loan current Approximately book characteristics. On the included incremental highlights this investment-grade the and quarter. sheet exposures. as the environment, the to of few sheet of book I'd XX% is exposure grade In the the XX% we've its of investment on-balance off-balance around of XX% and with note first right

has has billion is index. portfolio relatively average traditional of cyclical BB, focus of low The factors approximately stronger $X leverage an to currently in than loan which and the exposure rating

FX elevated in March. we primarily April. higher have Compared the driven client activities trades average settlement and already These clients grew help of overdrafts overdrafts loans during XX%, XX%, loans to receded XQ period-end grew as while XXXX, by facilitate

the losses on panel, to $XXX for bottom the the increased effects $XX of allowance to March forecast. end total as million by we of credit pandemic added to the Moving to reserves, million related left the economic COVID-XX largely

are XX, slide really we've visible. quarter, a underlying trends provided that of again view ex-notables, On this the expenses so

lower and expenses expenses expenses. timing XXXX quarter items efforts were down X% Our driven by X% and primarily professional discipline and foundation quarter-on-quarter, lower the first and driven funding, reengineering resource travel year-over-year, of excluding down by seasonal notable

We these execute meet goals. costs, position in market believe recent us various lowering that detailed benefits and of investments seen and conditions continue compensation on savings track and making We're occupancy good and on in weeks to efforts navigate to and lumpy optimization and our in many expense costs other are the costs together progress costs IT extraordinary year but too. the earlier the initiatives taken

the of and to year. be pandemic to we plans begun for on take revenue, full X% we'll to accelerate This further we've but our we begin and more. as easy, them impact obviously potential intervene the expenses the expect Given know need down COVID-XX to now on won't X% to adjust

First, as concludes for we earlier, Ron mentioned workforce remainder reductions. year of will unless crisis suspend most the the earlier, the

a also hiring instituted We positions. freeze non-critical for

see opportunities we travel professional other Second, in expenses, fees. occupancy, such non-compensation to dig and deeper contractors, as

will we growth adjust judicious we will And in the our be finally, needed situation drive about as to business. reinvestments the Third, develops.

quarter-on-quarter. see you ratio with slide the and capital to first CETX our standardized Moving at can LCR XX, our and XX.X% during we quarter binding first ending levels for flat liquidity maintained ratio, essentially quarter which that strong was

driven As X.X% ratios ended by the influx see right at our and X flight-to-quality you an and panel, respectively, Tier in of the sequential X.X% leverage client can SLR with decline middle largely deposits.

both support X. Section to post-implementation room client the ratios, activity given the XXX especially X.X% would been on SLR have of April under that our We have

agreed repurchases Forum of quarter. quarter, second Financial in $XXX million other approximately the acting repurchases to our temporarily with sub share to in members During capital including $XXX before a in shareholders, coordination we total we of Services the suspend returned of million

to the and markets to our to our robust financial our clients, in the and continue our balance levels broader ongoing ability deploy confident sheet remain economy. support We capital

XX Turning our to we've of a slide results. first now, summary quarter provided

out As times. assisting these we been crisis, ourselves difficult we reaching mentioned clients have earlier, differentiating proactively this for throughout by and

resiliency the during as post COVID-XX volatility volumes execute clients without look sacrificing created in with time heightened future to record we Our and quality service ability goodwill period. our our has to the

That said economy obviously, uncertain. of the outlook. the than variability environment and This degree higher into usual uncertainty, has potential of length made a pandemic COVID-XX operating impact the financial the depth introduces our of on

to of would share like of XXXX I certain the set a current However, for expectations remainder assumptions. our under

reasonable set broad While are pandemic is the the the impacts. we these assumptions, regarding length the of COVID-XX potential and of believe possibilities of range a there scale economic

providing such, are expectations range of As they may are represent not potential potential outcomes full actually the the we outcomes, current today that of occur. will range one representative but of

So, second short-term flowed situation and us, rates rates to central long very with that banks keep global quarter then up points economic front XX of end year-end. about assume a difficult in we low by basis

March equity in and assume in for market levels be averages the compared to quarter leave float with We of second as consistent to XXXX. year. This the lower levels potentially half second will equity up XXXX average

significant year-on-year Given the to will currently outlook, full for expect be down we X% that X% revenue to these changes fee economic year XXXX.

Looking through revenue; the one. at fee go me pieces each of our component let

averages. servicing will Beginning down we driven by lower-than-expected market to fees, X%, be with X% largely expect they

may the although new momentum clients adjust underlying We the in and sales in continue pipeline slight slowdown to operating over see environment. be near-term the as servicing the a there good health business,

I a equity the in would now to market largely and sensitive year. be of which performance. expect short-term will money the in second on fee approximately million fees, impact rate business, of waivers, management to they million are zero included half this interest have the $XX market X% we year-on-year, rates highly $XX modest introduces outlook, fund the environment depending down could of X% likelihood to to that on Moving our

be continue will businesses by markets informed the environment. Our trading to

spike the volatility, leverage. revenues lower expect impacted in volumes securities We continue market of be with trading to levels while finance FX will subside and will by

in we the CRD deal synergies. and processing Within software confident fees, remain

of clients and several current uncertainty down by services now introduced CRD is go-live and projects However, create office operational the pressures professional delays the expecting pandemic on the clients. front the COVID-XX to slow

to revenue a result, As mid-single-digit year-on-year percentages full for XXXX. year now be we up expect CRD

At the this $XX absent rest to expect time, fees quarter any of be adjustments. million and processing we million between per for year, software the market-related ex-CRD, and would further significant likely $XX

X% sequential minus the Regarding the revenue the X% servicing revenues. fees trading much to market depending quarter of X% X% equity basis, and in levels. our fee coming The overall on reversion the fees a some be the considering end the we range, towards lower second towards on of quarter XXXX, management expect range end down minus of in to

approximately as strong lower XXXX, be still Regarding by year-on-year mid-March, quarter. the the for driven previously down NII, XX% full in I of and the relatively we impact to indicated expect rates in year primarily first performance

to For quarter driven the be currently about of rates. quarter-on-quarter second down XX% quarter, by full lower ex-episodic we NII items, impact the expect

to fourth We the expect NII quarter. stabilize by

we on Turning automation sustainable driving to period, benefits. even and laser-focused expenses, during this remain unprecedented productivity improvements

earlier. to expect We I of full goal X% now down exceeding expenses, that will be ex-notable mentioned down our as X%, items, year X%, original

In results we regards new in expense, updated embedded models, any in of GDP XX% our the of and by minus had a CECL general to economic GDP minus plus driven specific will range of those full our factors end March, Among numerous of inputs, XQ At reserves. provision be year X%. dominant scenarios a for reserve. assumed our scenario of XQ our forecast number

additional Had we would taste million of an X%, but a this gives to dozens of where full and are variables, sensitivity scenario roughly of minus simplifying, of GDP year important to reserves. you dominant $XX moved potential economic have different we the built reserving than was CECL I'm the a there scenarios. of example, process example course, for

items will rate of some though for expected full we points discrete percentage rate are four that the quarter. down for to within for that XX% tax drive expect about the to previously a lower land XX% range provided to continue we by taxes, second On year,

are believe this the our morning included previously And financial finally, in we medium-term earnings right they disclosed our because presentation again targets targets. we've

onset rate around the magnitude of the the XXXX. on raises its uncertainty impacts, COVID-XX timing run of basis realize the for when were the and targets, which a of and duration the question those might pandemic we significant with regarding set However,

We are impact monitor COVID-XX anticipated the changing point, we'll length continue timing not going closely the this but the at to of forward.

me hand let that, back Ron. with the to call And

the Thanks, open for questions. call Eric. Operator, we can now

question Blostein first with from Your Sachs. comes Alex Instructions] Goldman [Operator

Your line is open.

Great. Good question the Eric, thanks guess Great. first morning, around everybody. detailed updated for guidance. deposits. maybe I

So below fourth levels, spread really you obviously, there. it's I March above, but said guess, quarter, wide a

us So, average? deposits maybe just stay a for currently flavor where give in April, on sort of

then able absorb we you And of as additional about would you the think sustain much leverage be importantly, how lower guys levels, or any capacity How deposits that to that? the ratios? to your respect current guys to think should take with capital

its Eric. Alex,

me of the bit just trends on on Let you little texture and the give deposits a because. start

that I deposit bit. the that, think moved you. quite obviously, levels would And a help

recall, were just deposit in February, and you billion those back aggregate. If in to they on in averages. fourth levels literally And quarter, spot about our January $XXX were

saw beginning What at we started to was change March. the of the surge

And so average half first if we're running the about we at $XXX March, of billion total of deposits. about just think

end we half that, drove of the to of to And literally quarter. about billion. the of I deposits the for our got operated a north at is of second averages for end-of-period that was billion, level quarter. print spiked the think higher March The and very $XXX you saw -- together us week $XXX at a And what

a call billion, that of I'll them a certainly what's so scenarios. today, or We're billion, get not? that? support of we our and, risk In We kind hefty I expect there we're to and somewhere down. around ebb $XXX the think still pace clients. at question resurgence do is, been of we've there's of Do But seeing And terms off range quality running slight the to $XXX levels.

Fed on What facilitate them is them to And them delighted for are facilitation, we're the supporting now clients, we're as that I on do needs for there the our on there the We're at them deposits, much overdrafts, we're I deposits way on a for the of facilities. for we're on there would right? they're say us for think possible. as -- them to repo,

in capacity, got terms these to support deposits I think capacity my said I ample In the our at remarks, as we've of levels prepared clients. of

You about post is ratios, reported X% -- our were change on whether against -- the the at that's the -- Xst, new capital level. it's can the high. on April SLR, quite X% And see that basis a

leverage. X Tier see You

We still quarter, that's minimum. a and against this well X% ran

certainly we're There's some for deposits billion that us they in if range, asset at the comfortable billion range. of kind our to levels perspective there's unlimited So, to our not quite that's $XXX for but the $XXX do we to clients. stay today here that, is are and what need

helpful second for Thanks that. it. That's is Got CRD. detail. around then my And question

the in quarter So, $XXX million revenue X%, is up about that's first only I year-over-year. guess,

to increase high single-digit you guys hoping that that are think I the further. range, of business has been obviously kind and growing in

impact that of out first results? is already quarter in the the sort of COVID-XX playing So,

that the slowdown? that obviously, any that, timing us way get the couple Thanks. the the and quarters, in of really look And that events is down, on? backlog flavor that's of pipeline else wins current it, understanding business of timing at hoping the And the some in kind kind Or recognize going revenue but been over you of you to something I have highlighting guess, the frame there? last part guys just as to there help up front-to-back could to move and

full of the built will. CRD as having as very we end you up, have that mentioned on don't me our pipeline with before, remain in part even the cases, that up we Alex, didn't And I've pleased end we We over if relationship that grow but continues turn business. toolbox, relationship is that, I'll impact to out some Eric. with to before. having to or with front back, in on a and let front-to-back it end a then CRD The start and a it's

For or either this example, quarter. client the this even It that one quarter we an front-to-back not we -- had State CRD existing was of win that announced Street.

value Street State proposition an working overall that's from enhanced well. So,

to when As are accounting Eric things very, if sensitive -- and it's something treatment. accounting and revenue. very rules of gets does did sensitive reported contours or the of to if the the very timing we And changed revenues delivering the gets delivery noted, the changed, it reported affect we're

a very strategically, activity It's new for us. and So, integral of remains a activity. office driving lot the profitable business driving into for It's this us. back important

So, in we -- it's talk impact the Eric And your financial you're unchanged, us important remain strategically. question? actual to about and that can

Eric. its Alex, Sure.

for revenues bring you on when quarterly it million are a in potential in basis, on-premise $XX an a and will the midsized client So $X goes live. always when installation lumpy, that just I'll it's potentially remind million,

smaller $X million, The million. obviously, $X clients are $X million,

can so big swings you've negative. or rates, got base a on And see you -- in see, growth positive $XXX could we million, of

wouldn't I too much So that. into read

have with kind done our in business sort to for integrate fee to to revenues we our work the the there's also through an of is done, on-site co-development services with contrast What of that. think platform this asset to billings that servicing business, on-site likely this has needs managers, there's And if started business more professional year. be that go

them I we likely work the professional being we to of home, from the lengthening not those some billings -- think be then and dates. out. services expect don't go-live there'll be but between with down go-live be don't pushed So, dates expect slowed just there, do to

been the mid-single-digits opposed in timing underlying The it's be we is that think just CRD ago. think, pipeline this around low-double-digits revenue clients, actually from mandates as And performance. We growth the X%. we to going our to now continued as year. at levels months that's as mostly in strong X%, as we at that looking it to about few interest had It's And at We're healthy. ever. had the opposed securing specifically expected said a

Great. taking Thanks questions. for the

from Next question comes Evercore. Glenn Schorr with

Your line is open.

Hi, the question loan thanks. Quick book. on

quarter. So, second Thank environment you to on I heard you be could loud it in and in -- you environment and worse what a underwrote what the clear.

focused are not they if look the overdrafts, of So, book, it's of scare that. trying I'm gut my -- at And -- on through to finance loan fund composition and is think don't me reserves much much. you the

correct levered billion it of is most real $X loans and towards reserving that $X say So, goes commercial the billion the estate? to the

curious those just you portfolios. bit I'm contextualize more And can of little a quality if about

what XX%, reserving. all. because good, terms you just but up Specifically starts it adding looks That's XX%, of said in

Eric. its Glenn,

I on a then right book, categories. frame it's modest-sized think so within And across XX% the our you've loan mind assets. and which loan categories book of the is of diversified both got pretty total

for So, primarily mentioned, one the recourse business us the that's premier nicely. that's in with where loans fund of largest attractive call -- world, finance finance, investors area some to and pretty a as grown capital you in is

and Leverage real environment, straightforward. loans moment a -- overdraft and this pretty a are an commercial and spend that about come talk time we'll we area obviously, then back that extra in is munis in little I'll estate

that the more to book right majority reserves than leverage are hypothesize You of the a is for loan for our book.

it this there, book. tends or an we're do And to things is happen be have to with on that not here upmarket the reasonably individual say name comfortable reason an book, that won't

market loan be book This in change tends some than gravity rating opposed market book. seen the -- about we've And different. for prices in as of typical it's to quite tracking prices as better to We've Average than points is the is the index is the average the -- been average center literally, this the B. market single six, index. the seven to have BB leverage

so So, it's performed far. well

And it's and diversified. any aren't in There's unusual particularly oil pretty not well There it. exposures. gas much

period. operate time think we're we So, -- it'll during this well

a the the it's at end it's of and high-grade day, leverage guess lending, relatively I billion. $X But of only version

it's think a will well it'll we just the for of so the company. be broader and And piece picture -- perform

on NII, Cool. follow-up overall. just I one the perspective, appreciate

deposit the at process for just as I'm it the XX more. thought non-interest is a lot curious book year, deposits but keeping of in come down lot bearing. in, So a the

long curious little NII, but see less how hang we'll why interesting. there, rates least. so going just know And be out for I'm the with bad? while, at greater to bit little base a knew I'm but I a we rates they're curious, deposit sit a wouldn't were they think,

Eric. its Glenn,

think I remarkably They're XX you five-letter use. at as Bank, if repeat a said you are I won't basis at think low, interest the points. the right. you right? rates But benchmark of it Central IOER word prevailing

or a So, if at it, one, taken you think spread there. taking there's deposit zero whether a deposit about we at little very

there there the other them, -- balance to we for they're our by against our use of while can support and value they're them deposits, and on the sheet, lend so we transient, And they're can books, large.

And the value is small it's relative been. what to

to basis quarter back were deposits XXX on quarter, roughly points. think average, you If first the worth first

rate. Just versus cost the funds about of the IOER think

deposits XX be closer quarter, fraction a to spectrum second the points. to that we In across the worth basis expect

So, magnitude it's just of an order in difference.

we higher levels a we'll while not have we'll deposits, renumerative time particularly around. have -- be of so, may this surge And or

I guidance. thanks all I got appreciate the Thanks. it. for it and

Brennan Your comes with from next Hawken UBS. question

open. Your line is

questions. Thanks my morning. for Good taking

you to saw really to But dig think us you we last just should know like on should magnitude? a little you potential can we kind the bit the for expectation watch what referenced wanted should you your sort what How we as you And help year how back it expect to trading run year with Eric to on subside. did revenue. in Are I about of that revert in we XQ? decline calibrate? Just of from rate? expecting it progresses? what Or

good that's a with conviction. Brandon, thinking hard let then and one answer how you the possibilities. about real forecasting of any But a a share to really standpoint and we're with from me question some it

is, any we they third fourth will to the and and pre-crisis. in expect should be to quarter. view environment, back by volumes what changes standpoint, will absent our quarter May forecasting a then levels, pre-crisis, what FX normalize other From dramatic those the that June, were And

markets, markets, that have or that's right Now, to of going any situation all to assuming the predict. I'm bond us saying that, hard in global were. further stability where to back And, we and is situation health markets, equity deterioration obviously, we economic push the

for for enormous we've seen. So, disruption for -- hoping we're the the and opposite of just we're that, the that quieting hoping not

that just of If of events, a a March. of, impact not in there on about range the if some said, think of outcomes right? year, could we coming rest set is repeat that here, But All like from the have see economic pandemic we higher the again. the months, also set saw in we markets its a you and there's of volumes and

U.S. We've point, elements, going to We've come at got ways. series Brexit have I trade tensions we'll may there. different of continuing think, We've -- some and in political, done have we elections. got some a economic, world is back global,

for it's predict. to so hard And me really

in to to that knowing there FX, particular, our it in. we'll try with when happens tend probably careful certainly think could be in all be it we so, and But that forecast upside. And some I see factor can

Okay.

then you they Can that that finance sleep talk circling great. have exposures to the managers pieces for The overdraft. back night? disclosure about Glenn's to one that. book on biggest any REITs? two fund Okay, for Thanks And are nervous, questions the in mortgage book. What go follow-up fund or you risk you in finance book additional of makes a as might the your and the at Thanks there. to loan when

like you think that -- this, not about. it's into necessarily stuff always we worry the obviously, it's when need a And to you go market not

by hit get you surprise. Sometimes

that can you you how we is it that, is that How how about managed? it book? think risk -- So

that paper where to with end big on we what sheet for a had we become you headache conduits, do a the that the what don't coming cycle balance the liquidity stops up back sudden to a asset-backed assets was And to have ensure similar we and thought with. situation, commercial deal end how in of like all up good,

Yes, Brennan, it's Eric.

between in teams, risk and business finance, Let $XX spent texture and a our how imagine, the time. our think of little we finance on it. extra bit over organization and we you can billion you of what's me included give fund perhaps the about And month, last

oversight But monitoring. and how and we of heightening have there, and books And about the what each let we maintaining the like. you me that think kind -- describe for our those we of quality

been the to the that's some within of That's capital done is allocated a the on premier finance, investors on So, world, financing. and largest around fund-by-fund that's a call basis. fund piece -- lines literally

a of set that was work the of the maintain as concentration. And investors that, leads we behind all what do is on funds those diversified those investors. to avoid behind a we want of it. each But And to group to scenes goes is need

an a unknown or to any make lot gets where grow because of that basis, concentrations that are within on So, concentrations we we done recourse. all work the there's limits, literally investor-by-investor book sure as that that's a there have aren't

financing. the call on approach capital primary the that's So,

are The Act have the of is next have finance Act in liquidity can They're -- that amount XX of rules these that certain well XX they and think, piece fund very funds the leverage they funds a within limits on the amount leverage. can. I the described,

What's what have the the pool? we limit version line It's a do and appropriately the the structures? effectively there, What And underlying is monitoring our pool? are of lending. asset How asset constrain margin those sizes?

monitoring margining. literally daily leverage is the there in then of that that And

never. pretty never that's you in straightforward say, sense. But, say, you So, like just some

oversight on basis, in expect. literally as the collateral and extra a there's so, monitor volatile And daily these times you'd underlying to measure to

fund finance over the smallest just underlying BBB the It pools BDCs. billion. loans. to $X And of be piece is within then tends It's with BDCs

there, of BDCs. it's And the diversification about so

asset some because set about of alternative providers, and a to size from manager be clients Some trying who of to we're that's most our it's there. tend the ongoing largest support And of limits premier monitoring. They right? there,

So, bit that's a texture. little maybe of

these I I'd level I the reference and think of different, of is you monitoring. guess of have like of frame a a each each little these give different

than most if changes is to is possibility and I get than process -- the vanilla simpler see expected, occasionally that's like escalates. and more quickly bank, margin covenants, but think, of of banks questions ours you -- there're the more kind if And now, around that any adjusting any

react that those proactively that we consciously. have make to how to sure we So and

those our we exposure our -- exposure the or them. ask their to -- sometimes And grant sometimes we those to actually reduce leverage or and grant and borrower their to

pause set And texture. that there's a that let least an a say I'd on intervention with a use, basis. and natural so of there's on both -- But actions me basis monitoring there at very we ongoing

it. That’s great Appreciate color. thanks. additional Yes

Jefferies. with Usdin Ken from comes --

open. is line Your

Good is expand comments morning. on your wondering there. cycle -- slower was maybe you about little thanks. a gave bit I that if upon talking you the CRD could Hey, the

how working, regular changes sales clients, how you've with in-sourcing terms business? having conversations do Just how that the approach cycles? we're process in that engagements -- of in you those moving new your all the are forward way and been Are does -- with you're with going? And servicing giving conversations Thanks. already

engagement developed month, level large Yes, of high, And almost work has the a this Ken, world middle be this all home. to working that through. fact, of new weeks even mean, five last -- right remains the high we've the of in situation very continued in the during from I started with to and in -- everybody

both I asset for critical with themselves. the would structure say or achieving trying that for and the costs operations, an to critical the outsource clients their underlying of owners. same investment, their but idea improving of managers really of to do of things and themes remain the asset Cost their lowering not that this are better outcomes, improving to

Many, prepared to I work not home, and for changed for applied managers think they stress consideration were managers now added what's been since prepared operational and many been a weren't global that's from home. the from work is of then. certainly to these what's all the

fundamental even in So, anything, can we on that we business plus to business, installed. enterprise see is line business. it's focus that, catalyst playing what consider, we if through these And that our see new providing be another you The of, new outsourcing. to kinds

installed underway And that product about for And multiple see business, remains reflects just -- kinds the to we as multiple And a quite is have less single business about clients. initiatives, much this the you that increasingly think offerings we can see, the more fact and continuing. number our the that of high.

desire and the need see -- this to the outsource at extreme. We

it's too we've successful but just managers good antiquated and that scale clients want saying, that for upgrading. use a with a this, do and there be systems we work operations this, asset need want and be could that You'll highly can extreme that have fundamental to are we other and we At able experienced us. have owners our time, to to not the partner of or

continuing we this and probably trend whole accelerating. So, see

Understood.

this -- are large, year think I the based and about I'd just installation by and of add obviously, the also revenues wins we're the last from that these -- on process. bookings year the

with I And implementation. the pleased we've think been continued so far,

active on Our the seeing the been rest of are April, we've have month through halfway clients has of onboarding the on-boarding March delays. schedule. major or sizable team and -- of we're through end visibility some and unusual April any not

could we off. right? to the needs business being needs it previously for one But the to I be provider through tends if well. You've the time get so who got that will and be, the And think and March installed -- April, on bode to come schedule because previous

a got lot You've been of preparation that's done.

the And to which to accrued. so, tend when is important that's revenues so or far, because progress on we've actually side, the continuity be begin good onboarding seen good

turned stop side, the the institution. have And you looking regardless results But that you quarter. environment an the at continue the were Understood. buyback to credits not would on just guys into. second the a obviously, follow-up, would of of credit services -- credit-sensitive what guys being the as a this just part buybacks to buyback through financial agreement it quarter, capacity form seem And of

have your could quarter, of start to would I'm thoughts just Or whether has for so? decisions your to decide to the not a you on that? do just own than continue capacity own making make based second be or of the -- your Thanks. to wondering forum on longer rest the if part buybacks stop to you

should decisions make on this. be our We clear. own Ken. Yes, We

We We would or we -- forum. a and system move talked it whether time actually in the instill where very questioning be remember banks to happened make the good people confidence to and are forum considered of were part a at this there. to not

to not we not own the to crisis. banks two us time But -- was to have useful be part there the spent our committed being it are decisions. or opposed of and one to to this more outliers why on, I during as felt be are make going the And for we

You're right.

credit than and We results play different, intensive differently very are our out will banks.

So, than been planning are it's And are still it can plays the the with more implemented, that has is take capital the new that of uncertain. I as past. in out. much the good we'll that being dynamic that situation rules highly the realities advantage mean, news be

You is heard uncertain. environment and that -- highly the

You put reflected been based estimate. get that what could situation -- to heard you. one we in lot point our our as than the that worse assumptions out the also a which but we've there what a that very could could One guidance we conservative, argue upon argue

That's outcomes. end average -- is the market I already We've -- within point wide is, will they levels higher level done. March. markets exactly there a than a one. period range one potential is what assumption estimate much we've The are the that given mean, of that's at the were we're biggest spot that. what be And

going we decision we question to but a think it's So, dynamically we in really why see, to this don't is be to quarter-to-quarter. we'll out to know capital, that here, make we wise on back your position plays which capital, be if as distribute believe all able

number, quarterly basis just to dissimilar of what a I If on what that's like a to just an potential not on XX ask XX happened can waivers, Eric, quick happen remarks. basis? opposed your year of prior fee to just that full follow-up, could cycle. The prepared one aggregate the Is as a like Understood.

because of Ken -- -- been basis two range. the the also the highly a or points repo year, second on end quarter. could the right? of in primarily But go seven that are or If it or be one its the literally the it's that Eric. dependent rates, the primarily upper have the half. XX Yes, could to overnight you gave that's of in and to large what XX, would rest you or rest short or the rates you year, for second range, I from zero be would six for

you. Thank it. Got Okay.

Yes.

from with Morgan next Betsy question Graseck comes Stanley. Your

Your line is open.

Hi good morning.

Good morning, Betsy.

be And you expenses to than anticipating down down commentary prior X% X%. going X% that the you're you're that around wanted side. in the to more dig looking to able at bring bit little a everything. just I to indicated on we're expense now I know

to just there's you I -- not speak to could opportunity environment any an this in And to wanted understand where dig year, that? set some where you're doing obviously, where into redundancies,

The initiatives of of it's And when you've to opportunity broad tougher, Eric. think are I the the theme more got that a that act you. in Yes. dramatically, is -- underway. set is we its set with had spirit and Betsy share I things

conscious areas think as about compensation of think, I if expense as appropriate benefits you our won't the different and So, our a made of base, people. the very line choice much protecting a on we've, be tailwind

But you that's that expected, employ. to workforce base, compensation end significant within up half example, only amount And line, it, about about benefits contractors, think a going larger think of of there for expense right? expense if we are if the the the even you contractors we than we're base. And with about employee if there's

we Contractors could adjust. that area be -- an where we

you whoever instead as might taking thought a could that one, balance. natural another at doing we is does Occupancy give it have action. as or but we a us of a always lease XX% that work either of or potential perspective you're company exits or role run kind that from ads there's you and it's additional So, real where a leases, XX% rollovers planning been on have load home,

And moratorium. move back, my I on space we rollovers, I in now You clearly why we do can't you employees the can complete come direction let had we say, ads more when this can imagine, go? and but hey, we're a imagine, than would. flexibility And where we've back, starting got to lease have opposite employees ever want all

that's So, example. another

technology, other be in around there's Third cetera. et the hardware one might software, purchases, all expenses there's

more time for our the we say can some literally some of we it teams software, supporting opposed of of a hourly or medium While the of it's and naturally about in to time we've on basis, think daily some capital -- investments. shifted spending clients won't purchases future, are to to does energy of those purposes some back outspending term of also natural our because time but as situation our immediate and that it's come us and some doesn't that slow slow mean equipment

naturally So, which the the of We'll I think -- extent. the is slow kind to some reinvestment. that's other one,

down And did remember showed call the chart we fourth X%. you we the quarter if January, expenses at earnings in

X%. of to other we're But X% that, going investments Now, expenses in increase X% to to investments the X% or within down was saying decrease X% there due in and direction. X%

about pacing doing of them. And we're now think, also, so part doing reinvestments disciplined we're being those and I what more that is

while you people as to in Got might it's interesting it. time, as the occupancy been you have might too the because come over back past. have be work No, on densely not side you organized

So, makes least I that's rollovers actually the of you one additional the was reduce occupancy -- or leases, sense on you for of still and the in ahead. interested reasons why go Are not, but definitely kind can at near-term. lease

What I or add comments couple. to would Eric's a

we a would you and is work had how the is when underway, the right? that automation, and and realize benefits not of stopping. as delayed, have we How lot work of and We work process -- stopping, it know, but on may be change not redesign

there. we're anything, efforts if and -- our redoubling so And

both on that. just that how we're with full our connect speed we that it's this to would moratorium, and and think work, and working note we've clients thing absolutely we got our -- in But do. IT right I then So, remains operations, the

with can time, of be that long for State not I'd think make from at effective least one a I is but there's The just probably in surprised be home. agree a at that everybody, it's the point dense period leases Street, other vaccine. won't how But as work on your point we until elsewhere, I

have would and see space us we I over you'll long-term, believe the today. that to medium having less than do And that

going still moving your be to Got it. you Are headquarters?

that are. us. to always was And financial We natural a benefit

of that's the for So still end XXXX. underway

it. Got

so Thanks much. Okay.

from next Bedell Bank. Brian Your Deutsche with comes question

line is Your open.

focus Thanks. average terms the non-U.S. XX Good on rates deposit guys. balance negative the of morning, points. in just sheet of Great. Maybe basis

there I that go FX think What's could that. driving that just be you against that? into If may expense dynamically? swap

the just that the you the to? And comment. in points a deposit quarter? described as mentioned And that basis the a you of driver what on then then also, linked deposits episodic XX level prior or net on missed was interest -- also income in commentary I episodic

Sure.

let me me order. Let -- in take Brian, those

So balance footnote points. they fell, in swaps, points out that are four The costs on the non-U.S. minus were page. effect sheet, diagrammed on right. the of the minus the basis you're literally which average XX deposit or FX It's basis

financial well of rates, will seven Asian and the central interest page it's And well. flow jurisdictions, the rates think so in modest as as I in and that addendum. foreign Some some as reductions line through drop that right? banks European of

But In first terms NII really deposits higher-than-usual that we from deposits. in away from welcome of about note and NII the the separate quarter, loans million for did deposits The and the $XX and that we there million additive $XX investments, reported of NII. was was into split two.

creates loans, you've debt coupons a hedging the rate got literally the as or some in We was market. of hedge of that mark-to-market half effect debt and on goes either that About the the changes that through.

about half million. So it's $XX worth the of

good And Dollars the rich. deposits half of in actually we deposits, the positioning were we dollar quarter quite dollar with the particular and valuable. was other were influx some in that took

And kind so either one and overnight we those and the invest us. of quite -- did swaps renumerative was in to They're treasury or that to team well euros. two-day yen basis

either that provide. $X it in some helpful dollars poor to clients who and of same the needed or time, those the at to jurisdictions we And foreign access the was counterparties were could

of million. the two components $XX those were So the

were we happy value deposits that deposits. clients. on sheet mean, a needed earlier basis them -- kind typical point in to Finally, balance deposit. say The P&L quarter I on significantly of of our big in is made a value impact questions of always and high is to year then from and more the we the the terms. the to did last deposits because of had the But a first has accept NII, deposits the I that level large the were one that not what of changed deposits, I

Fed. of kind rate at versus basis worth the have would simple the XXX IOER in swap for that think broad in would very might points, saying approximation. on the been me a the the have about of use That we average cost Let U.S., paid kind deposits, be

that fast you It's second or points three. It's And say, If quarter, to same cost U.S. of how the April deposits basis zero deposits? closer It's be our of in mix or in valuable because funds points. why forward cost or in, could less. or is those us -- of two one is much basis to that? XX

of But reinvest at we XX them rates points. IOER basis

of in between Fed then of the value moves the deposits and we so move. Fed effectively had is a change post And large very kind incremental the what pre

the was I making. was point that So,

in but would -- will matter they a nearly mattered bit little profit forward, the as much to have in the the NII as not going past. So

That's Right. very clear.

Is just And at the on synergies from track to you're on I side the CRD XXXX million $XX can whether and think Obviously, $XX then on on side. given cost of you what's net to on and, expense work still on think, on $XX the million -- commentary net the benefit Okay. of revenue EBIT the on million delay. and investments $XX that going the revenue million for you comment makes home. sense

gets then trillion delayed install also delay that is left of that $X And in of you implementations? servicing the COVID-XX? pushed in think the Whether business, sort the with timing to also out by

The different, related a imagine, two And questions. course. try quite on track. those but take in a we'll still do and of me you On let River, matter bit, we revenue as expense are actually synergies. ones Charles those but we're something those to expense can confident Brian, accelerate are the

and of Charles actually those from of on good moving along as and schedule a lending businesses markets our some And activities side, other we then the securities trading are that's on synergies bit pace. coming River, plug-in revenue FX our and and at into

our in River. currently for So, synergies we're Charles on the confident delivering

$X.X during in be track time the think I on-boarding as as side, for play of mentioned, stayed the the servicing the on we On the to will year. has servicing and about that business, we that and client think installed so trillion April out March line

talked to are those I've some about it's recall, custody of where accounting and perhaps, wins offshore take like those products, some cross-border mix you something a wins the others, tend longer. say of install, and, If to those custody. fast and And of

it part those a are but we onboarding of longer. point, middle in the of you business. And see slowdown this rates. all When don't, add at course takes And the office, implementation on even standard --

forward. fee our far, with business to Because in adjustments. ways, clients won that move so And that are eager remember came some we some

to the are those implement -- so on want conclude and need service. Clients they to

track think paired on sides. those up, are stay now And we'll because so on they're both I

for Great all color. the Thanks much detail. very

Your Carrier of next Mike question comes Bank from America. with

open. is line Your

Thanks. Good morning.

quick Just follow-ups. two

on CRD. First,

or in you terms you want much like low-double-digits? implementation people is just people the sort expect that double-digits, timing significant if and from or an medical I there that would possible like sure of Like to a and, most would actually headcount people acceleration the just acceleration? Or XXXX Just treatments the how of just takes? back not get let's power it the understanding, like pretty versus go what accomplish, we you given can the like are make are of would say, back mid-single-digits to get just work, from like to a to

me let begin that. on Yes,

I think would what's synergies that is tends River be quite I laid we XXXX to and there. seeing larger, the And Charles by out complicated stand Eric here we pipeline that clients. seen that is versus that, sophisticated more as the noted, happening that think the have It pipeline different. now it's

multiproduct It tends installation. of part to a be

to of So, it's that install it's seeing therefore happen. what gets taking River, the is part longer for for longer just deal to Charles taking that to the just and credited you're

in you're recognition. and revenue fact, which changed firm that's that's we since the now has in one before out there seeing very of acquired delayed been the large And over installations, current and the underway, two installations time,

the medium can grow this Yes, us over -- was us? and do business we believe do. under faster prior that long-term, long-term So, than over to it the we

made Okay. The sense. then FX. just And on that comments you makes

maybe investments uptick traction of some could the get been any be a but that in that the new sustainable at level of anything you be has like of volatility? kind pace? at have in products on a platform, volatility, moderation, there that if you've number have we Obviously, could clients the higher seen guys that seen get in some the to platform continue made we'll of the level you Given increases terms when in of

measure to market and provider. the the really But -- that that the market demonstrate clients, and we have, in have nobody invested years low build X to era uses is this came business time. show heavily a share of hard past this We when because share capabilities over in to it volatility thing Yes. we just couple of helped

And and period that going execute, hard came the the got be done, occurred team transactions remember to difficult end roles, clients through to roles were that. really and

market built for this share last think us. we that So, we've will

to As crisis currencies Eric moves and certain driven. others assets, base move to volatility, of saw kind risk-on risk-off including out immense of what noted, we was an just immense from all

we'll if bad news higher of level seen describe has see So mean, maybe Possibly, the see of than have it, would better what again, any era one elsewhere. there's think almost forecast, we've is we I see -- volumes that could or to an lots XXXX-XXXX Because I -- way a to we then we be timeframe? some risk. of in believe right? in Will heightened likely likely

some of that thing too tends back, to saw I giant rotation mean, beneficial particularly a our and markets. also at point, there'll other The rotation be I is, too. we be to mean, emerging out, us

four recognizing the of range range least saw expect forecast sustained we our a to -- case the not one at and there assumptions. what the where here, above be tried in eight So, amount of QX, in therefore we gave is to uncertainty estimate possible again, to or could But levels we've the that conservative certainly levels, quarters. seen we see but of you an prior in and

Thanks.

Brian from with Kleinhanzl comes question next KBW. Your

line open. Your is

morning. Good

overdraft kind had you the in end -- of question look one that at quarter. Just we're the balance at update if the maybe sheet, in at on you came where of the April, an

of You that sheet. billion securities were the the also balance $XX MMLF investment the from on had

are back give you what in with that maybe could the roll just same update then those now money where microphone on off And the things mean, flows? April? you have kind And seeing thus also far of just an stabilized? stand? Those I

balance question. -- Eric. good sheet on starting a it's end-of-period Brian, frame The follow-up here's how for that is point I'd to And it.

$XXX deposits, to is, March we're the at been closer or MMLF to had in And over the billion. $XX the reporting billion we've range a weeks about $XXX think has of that to which period billion mean, And XX. they've balance been range, first I billion April. then spiked on at in for billion few $XXX I end that two the probably plus/minus dollars of just

of So deposit billion call reduction -- be are by the will balance smaller adjusting in movements. it's other that period relative a sheet really the what There end the down deposits $XX few it, saw. we to

started traditional revert. books continued the back to to mark on FX forwards float and the the more have levels, have down Overdrafts to

couple biggest billion the but few one coming be billion we So, areas, deposits will the guidance, here is there I far and so there's $XX of or a from by gave the the change levels, biggest about that see. a on other end-of-period down

with question Wells Our next Fargo. comes from Mike Mayo

open. is line Your

market. help little government Fed long-term you're you're When gaining I helping sheet, being I part basically competitors company? doing of talk by the that out trade-off solution, you doing of money tone the the the offense, share a Maybe versus expands the of offense the bit extra. more like as smaller sending balance about versus Hi. with Ron, can think of think the defense, share, its to market

to When think not with that. stock. hunker then back buying much of what employees, defense, still I another kind even down, more living if I quite maybe of they're for live like doing you for not day, you're you're as short-term making And of money, think clients,

trade-off you world? in this unusual about think So how do that

or would those a from manage our I expenses, other. on one the we we've we gotten year, we be levels, just can't expense the expense particularly it over very since manage Mike, -- but last that, handle But it's not how Well, year-and-a-half, say good the feel how productivity. like level, an

I think our find our you are that around mostly will offense. tone and actions

their home unparalleled clients, there engagement. levels Certainly, will had working we as and pay come. and And that time efforts re-triple in And to client from a of communication client support anything, to be to for have off relates to the cause redouble people to it years clients. if

think and protecting of creation we short-term, And opportunity we've in at actions be that, we don't there, we've employees, think we -- but our them the mentally. kind our and we So, their expense shareholders. any taken ourselves to both of physically appropriate have taken think long-term the the for

an And markets, as to fees it relates of bond the vanilla emerging plain clients, mentioned than you rotation a would historically; out higher emerging custody equities portfolio. markets fund generate

lower-risk, not you're doing under So, if high-risk custody? extra maybe much? a people that bit as getting fees paid even move of for into out clients, wouldn't And hurt assets you're to little though

to It medium my make that's certainly, over that, sense it anything itself rotation believe long-term. term. even over markets, reference I won't the -- over don't I just was if make mean, played month. that sense happening, doesn’t the Yes. further emerging Well, out and makes over sense last has the

as the looking at see as in the the opportunities situation see world, just expect markets. stabilizes valuations emerging they'll situation and would around start the we And -- the value to investors relative --

rotations wasn't question I back the suggesting is rotation, largely greater will even when rotation a So, occur? The happen.

go vanilla where less plain more clients does I to mean you fees? if of, then that portfolios just in there's -- risk terms off, get

the what and short-term, Yes. amount you're paid that's doing, push put at mean, a be investors increasingly and I are into one -- Again, to in. Well, first, monetary seeing but opinion. getting right? stimulus, fiscal certainly, cash, that's they're the levels in person's going giant it's of that the

I much uncertainty cash in think of short-term to previously ingredients And to system, -- but provide superior in the in this, of the there that lots not in risk returns. unknown, a certainty. to interest are the on the equities of until like return more you're But rates, the stimulus, more uncertain, a monetary see to likely is low place, long-term appropriate trend is particularly which low time. for see risk is assets, all as at period of continue only to not going lots

were on. then, And follow-up, one more Eric,

other you do what can you of extra U.S. gives to in the more your point like since -- Just, obviously? the especially this percentage insight that versus I trends one in Asia U.S., office Asia is you you Or glean happening or the or the insight said outside in than at from what's U.S.? workforce look, like, anything country, any are

Yes.

what of start probably and We operation -- started is a expect of example back great there can returning China, the March. worldwide. go-ahead given the were Hangzhou our So to -- we in employees middle we

as XX% metered we're back back -- up And noted now we've we've facilities about -- testing actually that. between XX% And not -- office work. We've on We the we've the densified XX% and way to put have to got in. we much. as earlier,

And mask. wearing that working outbreak. much another not environment. were now for seeing as you're long people there's as think normal Initially, I a And will stay more

quite as live world. also work. And fast I we're around not see What outbreaks. of Asia guidelines we're to that's probably and flow, kind seeing return But elsewhere, to as is, periodic seeing in but you're think with what the -- to you ebb going

whether recovery, don't to it's terms be work this I to gatherings. will back think in back straight-line a or of

need outbreaks. to that and think periodic those. I be to will Businesses there respond will governments

if way, anything They're Kong not in going respond Hong same the guidelines. from they'll targeted and be to or very the lessons Singapore

but For example, limited didn't from in home they just Singapore, again, restaurants, everybody they recently send work.

will, the expect as we vaccines. with to steady get to lumpiness along to outbreaks, get can that's way think you then you testing, a But of recovery -- are a we until see, So, back some if time. and I there widespread what until over first to availability

that's XX% China? how China great. XX% you are fascinating That's a work to to in And in many because have employees specific, back

X,XXX in our vast in facility. them, majority X,XXX, Hangzhou China, the of

you. Great. Thank

with comes Research. Steven Wolfe next Your from Chubak question

open. Your line is

morning. Hi Eric. Good

ask to I the question So wanted a Eric, on securities portfolio.

book, given XX-K, in it. Just the I peers longer for sighted X.X towards years you a versus are fixed managing of some to duration think where your mix around floating, of relative your heavier your

of I'm what yield headwinds causes of basis you're stabilize could by if year-end, frame or points the just NII some to reinvestment just what the persist. wondering could the reinvestment earnings And level the maybe securities assuming, bookings you versus XXX today? given

our There assemble of got together. of NII. Steven, its Eric. you've all them. just to one XX-K, a of the securities to really are And we path them the assemble number tend predict is to factors that in portfolio And

sheet about think are is floating has of average average duration X.X right. the duration the asset sheet, of X.X, But side of much years. you you securities The If of the an portfolio actually more rest our balance the balance rate.

is sheet. to ex remember, $XXX the a shy $XXX of it keep securities And of the billion just simple portfolio typical out MMLF is it, billion balance call

So the it's piece, only but important not piece. it's an

it's or average and of half securities duration balance we portfolio. lower total net about would years, asset duration balance that about have the faster just the so duration the tends side be by that sheet the of of And is -- effect of side a than the creates is little about that a of to you that shorter that the portfolio. The of expected sheet is the what have the re-pricing asset of thinking investment the that asset X.X

a are factors, those two So, there played that but models through as of lot our we've our are and, obviously, different in models, ones. important

You of from see down to gave quarter significant. step a first an I that's second quarter that. indication

quarter another of see quarter first third in as a you quarter. percentage second down, second starting XXXX. our see to and between from the not stability then quarter, quarter might fourth what we of And then of in see guesstimates large fourth step We and the fair terms in but amount

that interest you've creates that growth, Then got some you've of playing a which rate And out. natural sheet part tailwind. a balance got effects the bit is of

fourth out, rate onwards. bulk we'll the to headwinds stability we so from happens interest see we the once of why is of first tailwinds effect, tend get couple through and the roughly some which think in quarter And the quarters, which the even the

hoping yield is was Thanks or on you the level color. I The for could assuming reinvestment Eric, book? what piece you Okay. clarify are one helpful securities really that, you,

good a I'm you. that to way Yes, trying the -- think to about to describe

of So, And that's towards fell -- just over down that's quarter. the will about very right is quickly rates our investment now that X%. portfolio just that been but marginally, yield floated -- end because the

of first describe If lot I the new for X% and average average it Maybe portfolio, talk quarter. the we rolling think There's what's yield I could about levels portfolio on in about guess about that. investments, reinvestment outs ins that off. to way the a better on the is of is

look If and that's to about if third X.X% the will think amount, in about we're But quarter old rough average kind be new driven that a averages the second maybe in rough of coming what's off. to like. roles I for probably by we start good the the a estimate fourth and yield good the added eyeball you. roughly And will being and roles what closer quarter,

that, helpful than if for you follow-up, on look we versus you bit one more your compare reported There provisions of was the composition. mix bit reserve. that losses, a DFAST and Eric. in If Thanks And that peers. a reserve under basis, detail just may. Lots mealy loan screen or were a that lighter levels I on

with company run being looks of peer the your you're it the tests, like stress at line rest look group. you if in But

company for just what Fed a lower comfortable you run? in the the of speak relative could why And you're using modeling are assumes the lot some And DFAST was of forecasting provisions, so clarify differences to investors given to versus guys Fed in losses Fed? are you I for hoping that the or assume your stress a as test the what framework

Steve its Eric.

on which a perspectives you of touched some others, and couple there of So, I'll which add.

think I $XX to added first, million. we a about reserve

scanned on one-third. And and So, the anywhere reserve books. XX% XX% you of between peers, increases I across I when reserve was saw up about think corporate

forecasts what right just upward made of the So, we what the I were XX. at and we do adjustment we're -- think given March as our time

is the the In all of book CCAR loan losses, Fed that's the -- terms book. sensitive or in ratios mix at think the loan where the is or either models own of the to to comparing say, those the loans, to incredibly of reserves I our model mix

well. go to it, finance crisis, particularly think loans last could the performed crisis, back and about fund XXXX one you our If the

got we've factor into so that to reserving. our And

I reflect say to math, math different is the its us is losses would both do to asks there does just the but CCAR a books. say, natural what And is it then will on estimated the under fed and that of to bid not ask, hey, the nature our be reason

losses? If under it's think spent as amount lending to an that the it the time corporate Or of result typical Fed enormous typical -- card it, I in and you book the in, expect credit of about would book you terms stress? think mid-market going what on will perform what's is how

less have they that, time the think and on finance book while just our industry. call spent would to extensive modelers, it's probably around I not it's little fund because widespread a line they capital small

models sensitive particular tests models been averaged Fed bit be all because than stress to because is company more least you've of circumstances, be say that a that mind set indicative informative, May. indicator tend to the at But would banks. are of more a good in it I maybe they referencing more across much some credit of non-custodial our are the kind of a just So, in run stress I'll our and under

helpful Appreciate Thanks so much for your color. it.

Rob comes Your next question from Autonomous Wildhack with Research.

open. Your line now is

more what year-over-year seeing you. Thank the what both Good to macro? pricing And here expand and just in are the on deck, declines morning some thoughts guys. the line. you your broadly, fee out headwinds Can In slide from you called servicing you're sequential shift on then there? contributing the pricing given in

I don't begin--? Why

it's- Bob, Hey,

I'll I of on question the your Why In will -- start, second Eric your terms start don't part first. the -- with of answer second Eric? question,

clients. spent of with a of got our a have book lot Remember, time We fairly concentrated we've business.

the a of XX-plus And term that, big total. clients through out of portion them. gotten lot percent constitute a we've Our of we're XXX of largest

more just to we in have past. than how this importantly, we've better the do But learned

be So, not clients heightened under will this, we their sure, of result level of sets while, a our own are a as for stress price compression. anticipating of

a remunerated can the Part going away. -- a as of in we're client we return that it that of part that -- think as is given is is way that of and can they that about is NII it's well the you relationship, that see a if source

as think assume what is couple so will it's that as -- level opposed abate seen to normal we abating, -- going pressure said continue away, will will level, but we've a nothing just So, that. to we've go normal it's this that which and of be out reasonable it at level is it to not pricing, on the to that pricing a before, anything the over past been different year years and it's

activity, Eric. has in for the deck add pricing natural this Rob, a just been decades. custody tailwind, on given and of quarter Yes. business I'd the forward then appreciation doing part and the a the it's And actually disclosure this pricing new net other which what's what very we're business roll market slide that transparent going is literally for was servicing fees, and way. you and depreciation flows up were client

and part just our of a disclosure it's So, natural now on basis. going-forward

said, year. X% levels, we're we're line as on in last be -- a and we certain will headwinds to seeing X% we're moderate for year's saw that last that will we currently from currently pricing so suggests come so with expected it But everything from that down And expect. it year -- track we during at through kind of amount level, Ron of this the what

it. Thank guys. Got you

question next comes from Your Gerard Cassidy.

open. is line Your

morning, morning, Ron. Good Eric. you. Thank Good

morning. Good

for the helpful. loan portfolio, you detail the on thank Eric, very

portfolio, the exam the As syndicated that then the loans, to Or on And of they portion loans? another those are second, are you participant loan type primarily in all leveraged subject process? question, shared a you lead? the are national credit

Gerard its Eric.

answer is an the those. think I of to yes both easy

large to a tend we be we at occasionally, We'll the the but participant closely in work tend of table. syndicates a and So set banks a to with them. with participant other be

within credit of very terms a about it's feel just and to that the particular And credit covenants, conditions sister lead we it's appetite when are we but thoughtful because banks operate matter. it's and syndicates that they loan, tend not the

make And is join, of to partner so important. choice we syndicates to the banks which lead and up which with

be that -- tends to participate. to our position but So

SNC we absolutely, then tests. reviews participate SNC in And the and

And I that's way our supervisors to, sure that us industry credit consistently. make a so to think, for evaluate we for for the and

marketplace. what's about loans is also think the leverage helpful in I traded they're

So, that's are they there's an -- external market benchmark, external ratings. and

but oftentimes And prices, review the in participate also are We there SNC there's that. process.

And and under level. into the to book BBBs be I feel it double of like as higher quality and the actually some average And so tends health BB with we mentioned, and the very we've and book. a got few -- our good just read very

a Great. quick follow-up. And then just

different customers gave flow actually share they us the now a deposit who on it you or of customers customers, that then. of end you that the are primary then drivers information deposits? Can the that with and the that the what is happened withdrawing were group withdrawing or positive what's good saw the the are since and inflow? the same You at quarter what were are are And us

about it's me insurance, little of breadth. texture alternative you a client asset let a because give you owners, providers, Gerard, managers, wide Sure. bit if base, our asset think

had and managers. across so while go tended liquid what think from is and we some increase that our in to largest we all single I more asset all those came saw -- segments, cash, deposits from they the to what area become we

the derisking were it funds And deposits running sometimes, managers then and money they were us. leaving was funds those and the with who asset

sometimes And those the funds, funds where asset shifting it we funds and custody U.S., cash. international, cetera, funds, bond managers various they were that derisking et just for equity was to running within

And different so asset And two balance those probably sheet. back sits manager the -- factors cash and are our management come complexes. asset it's on that's within that

think how run? managers part complexes cash they is money want of those kind do get quickly whether that for I the what to stay, so watching it's how does reinvested we're And versus market of liquid

long the the factors, off and in But it are opposed they Or to how stay to and asset those risk treasuries. And was be. around cash even players short the of buying want even so sometimes or primarily alternative providers as some medium-term managers.

balance And on to remarks, flight quality these -- as deposits my or overdrafts, even that's we're of business. both as -- prepared operationally to have as I said parts support our our them, both make those available to sheet with important because in they the delighted them we are of

off-balance to and that provided, the facilitation sheet source another of some activity, even we as sponsored other liquidity let's of In get well. addition, the repo

Thank Great. you.

Ron to That over for call concludes I'll the questions time. closing O'Hanley remarks. at back turn the this

for Thank thanks you, operator, us. all joining Thanks on call. to the and

This concludes today's conference call.

disconnect. now You may