State Street (STT) 19 Jan 242023 Q4 Earnings call transcript

Good morning, and welcome to State Street Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast. Today's discussion is being broadcast live on State Street's website at investors.statestreet.com. This conference call is also 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 held authorized Street State only this be call on The

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

items us. Relations which thank and XXXX all Investor CEO, we and presentation in full of GAAP. Reconciliations O'Hanley, measures non-GAAP the would first. will our will Before year basis in our speak of like most is today's earnings presented website, download to GAAP also or investors.statestreet.com. to section Eric appendix directly results will call the our available take morning, Good you you slide Ron for more of joining through on available in today, are our a On for that you section presentation, adjusts we'll I regulatory take available our from Aboaf, CFO, started, presentation, happy be our include Then slide IR questions. website. our fourth the quarter or measure Instructions] that these [Operator to Afterwards, to get excludes comparable remind or the one

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

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

Now let to turn Ron. me over it

XXXX released full Earlier morning, and fourth our quarter financial good year Ilene, results. you, we everyone. Thank and today,

continuing anticipation our investing the and host business investors, XXXX and took business, Services our of notable and complex us world's in industry, operating our ahead. We a XXXX, implemented substantial world's significant year excluding additional growth, in that and The which on the many and drive in full capital returning while faced execute these for productivity navigated against we forces enhance helped to all strategic on our on items. proud actions, model industry our years quarter, and the market potential several shareholders, quarter, broader how and drive drive the events to banks, focused strategic equity to key investors productivity change Street operating we Further headwinds reflect a agenda. We our and areas: enable and on As cost earnings environment during Investment Street State markets banking key challenges about sales our was businesses, XXXX. In actions macroeconomic the second while delivered our various the XXXX, a seen across wins largest catalyst fixed the for point, in in strong led will dynamic State and artificial management. some helping move economic of to decades. In of sector agenda to carefully I'm X higher. resolution for the announced remained first the of I benefit from for set that ultimately of productivity market achieved was which turmoil in income disciplined last of measures the efficiency intelligence, that with in grew to

a much in and muted our for to level to quarter businesses. Slide highlights the substantial more Reserve share modest concerns a market items, the provides client Federal in raised we rates $X.X cause was financial third as and as yield treasury financial into the first XXXX, rates was securities volatility low the to equities years the U.S. the earnings investors front excluding longer However, combination rates our level presentation tailwind the X offset strong by full led contract, higher items. the of notable Year-over-year, or interest of sidelines the of Reserve servicing FX performance, the XX-year equity exceeding only which single global growth, the and and year. higher an in Beginning digits to vigorously stayed even activity during increasing and a appreciation underlying rates sentiment business, fees our well soft still investor number eventful by share year. In since signaled the progressed the the last Then fourth further continued lower growth about for than despite year, in of repurchases, prospect revenues, trading landing globally while in controlled. overall lower in interest as record with year. this with our excluding year of from EPS And year momentum revenue, the and data our pivot NII, markets October fourth supported finance global X% rallied geopolitical per for common such of providing year software for the $X.XX was uncertainty management expense $X.XX market for quarter, increased higher notable markets as in selloff Federal billion struggle. July, some continued to equity our benefited full while and of growth bond a equity crisis. Rate and of our results impact quarter, financial inflation sum, daily highest gaining headwinds in XX was average grew positive fee to the which month optimistic revenue office on an time of market investors creating receded with the increasingly interest as last just of

term position growth advancing revenue in clear fee our are ahead. stronger the key To the you turn X. broad which build at achieved as in we Street number success. and year end, we see generating a XXXX, longer momentum capabilities, to results sales of important momentum on accomplishments today's business on making to in highlight Slide that and progress in can of aimed contributes is innovation product better State continue We A across franchise

fee bookings a important State front Alpha for and breadth Street's year Alpha markets income across Within distinctively plan by capability unveiled execution our measurable last business, significant to against our grow as solution ensuring clients quarter key particularly year Alpha level wins, attractive fourth of quarter Alpha revenue the fee for the required of by driving intensely first mandates sales key growth our we areas, one while the recording upon regions in software number positioning back-office and new at together of software XQ, the sales the data highest Investment of new as proven of our Alpha's depth custody. Encouragingly, of in as $XX in relationships capabilities office back. quarters underpinned servicing of existing And with are competitiveness Services demonstrate fees servicing accelerating quarter, partner. we was and recording the and focused enables by servicing included business for sharpened from us points level is Street we strong and and X to opportunities core the in of an fee private ability the our a development low the servicing created in full position. client. revenue momentum goals. of execution actions potential XXXX business, full essential and growth new that deepening ability Street servicing future delivery. just organic record the million which sales our of clients' recorded Alpha State third we true for module, quarterly of of our continued today's our very year, to a further client strategy the XQ, fixed relationships, management noted had both revenue inception, The number and front million proposition better value our last Alpha portfolio will new years. From CRD realizing market Global which recent in our a deepen to we the to new as State broaden proof $XXX X drive product forward. In in and and Alpha establish built stronger propels deliver we results and on our volatility the tie aimed its demonstrating headwind, continue We I see XQ, wins even sales. Within Markets a noted, as have

For Magazine Street in Euromoney for State FX best the money as including its categories, important XXXX named FX bank clients. awards, X the example, winner real across

we continued undertook aimed innovate the trading targeted also and We our Advisors, actions reach capabilities Global of driving acquisition and geographic to and in product planned strategic strategically market including years. Global growth Trading. At coming from share gaining at CF expand outsourced the

performance a As look we A momentum number us XXXX. optimistic saw ahead. we GA records in business number with of a setting as key encouraging indicators make result, of growth

to flows ETF QX of management. quarter ever XX% within best the including capture a assets recorded GA quarterly SPDR record total ETF QX, total in ending amounting record our a flows in total of example, under For global with level ETF of aggregate XXXX flows, of and franchise,

had AUM share a money key market Our income, low-cost of fund also we institutional in money funds an Overall, market reaching annual ETFs. U.S. business flows and equity number and with exceptional delivering institutional market fixed in year, XXXX cash areas, gained record record. a including

effectiveness just and realized improve productivity growth notable to our full with efficiency priority a in productivity of for important efforts X% ongoing that expenses, excluding efficiency items. multiyear controlled expenses growth operating our excluding and our Turning reflecting impact was aimed increasing QX actions. underlying key steps end, well our rose expense operations expense Transforming announced we X%, at us. improving to items, and our productivity XXXX year remains model. in quarter-on-quarter, To efforts the notable

previously are operations in our As announced, we we India. streamlining

close joint consolidation country of in spring. assumed We joint now control expected to that have our with in a second ventures the of venture

actions leverage transformation as and of savings State experience of productivity improve these fee quality client our enable expect us Street's deliver positive to in global We operations, XXXX. service plans accelerate part to operating achieve will and the

our detail. X you Turning quarter momentum to see indicators, fourth take highlights our more shortly will in of business Eric you and financial can through which Slide presentation,

I like which has amount our a enabled sheet conclude return substantial opening us my I remarks, balance recent Before excess touch quarters. on would capital of to strength, to in continuing

quarters over December, the X last to to of our example, $X.X shareholders. capital For billion end of have we the returned

results. point up highly of earnings in year focused more our in Directors pivot an to subject intention As to an market encouraging accountability XQ, capital level approximately XXXX, our businesses as morning, the on return, creates common no and expiration form Board of year, XXX% share we a return program This which announced our a purchase normalized remained of of of $X share currently was strategy repurchases, it we share starting we date. To is has of authorized our conditions. Accordingly, in XXXX common this eventful dividends execution new set to to the both conclude, for into while and with for finished billion strongly XXXX. the we

performance and and clear. are and positive second operating and must the in demonstrated will model in of improvements capital product all the fee to implement productivity to efficiency our goals longer-term continue a operating our leverage We sales set that while returning initiatives drive that continue Our of in our enhancements half we in deliver XXXX, improvement effectiveness XXXX, shareholders.

these We goals. are laser-focused on

the will to the hand call in take you me quarter let Now through more who Eric, detail. over

Thank good morning, everyone. and you, Ron,

EPS. review me recognized our collectively Slide the million on briefly totaled Before items full $XXX let pretax and quarter of my of which XXXX fourth we the notable I begin quarter results, X, or year in $X.XX discuss

million, recognized an we is expenses. FDIC reflected of $XXX First, assessment in special which other

next $XXX of productivity recognized of we program. enable the repositioning phase net Second, charges to our million

As employees. severance X,XXX around relates bulk the the December, of to primarily action we indicated had of in this

staff allow will streamline functions initiative and and reduce improve sustainably Our technology expenses. us efficiency delayer and our to to operations,

collectively the expect and quarters These to payback of the subsequent with related will operating XXXX. of benefit roughly to years. these quarter We occurring for and begin actions contribute savings have XXXX X roughly our a fee in this X/X in and goal leverage actions

year and Turning to financial Slide results. X. full I fourth quarter our review XXXX will both begin my

much year. the and table, muted total the geopolitical notwithstanding revenue year. for combination was all the for pushed flattish on slight the full comparison the to of quarter see for central appreciation investors concerns market The bank of the can you periods quarter-on-quarter, volatility, fee pivots sidelines of year-on-year and As

a in revenues, terms our business, and more of and basis office up momentum benefit was the continue software on year-on-year front In X% data XX% strong from durable to on year which our full quarter. we

minutes. to share. Back-office flows have begun we that result full X% agency and total minus areas year an picked thoughtfully lending started a environment control, was In terms that FX X% positive for the year. NII continue performance to businesses as the areas as for coupled predict industry-wide allocate but for be operating this the in servicing begun and markets. to intensifying throughout and much markets to fees of activity up, expenses actions in continue year I'll Markets muted, well quarter. the reflect to as were for as in we Global see was the in I turn fee resources tough transactional client XXXX. the where controlled year the we but of rebound, seen the quarter progressed. X%, tough at management we've ex affected And Expenses year-on-year for been this with quarter to turn repositioning recent year to a quarter levels rebound mentioned, quarter and to in to in greatest and has is lift top notables low equity just a prepare the has up a were compared to This as to deliver few us up and gained and down up course, surprised positive in year-on-year fee to the third growth. Relative challenged given the franchise in with savings expense positive we productivity X% opportunities the line activity management of across was cost special the by ago, our headwinds volatility has leverage

we items. challenging conditions. was of EPS office record growth is year less software supported the delivered level of share and dynamic This XXXX growth by notable a macroeconomic business, despite of excluding a environment, X%, and NII data repurchases, our Finally, operating front full exposed which to and

net was to driven increased period-end X. XX% Slide largely net end useful aggregate which I'll of right, market AUM sequentially. quarter, saw increased and on largely to up strong AUC/A best a ever end period increased describe recorded quarter Year-on-year, AUC/A levels momentarily, XX% Quarter-on-quarter net reflecting by AUC/A earlier, the billion, year-on-year and by sequentially, was due and XXXX. of in the primarily X% plying agency business. higher us that now Advisors, center new we've FX Ron GA end indicators mentioned increase volatility fees, period-end fourth well period market transactional in and we Turning as levels. higher believe the indices, X specials basis year-on-year which a We and servicing market levels period higher can At table Global with be XX% trading. On up inflows. Notably, flows market sets flows added Slide margins At in for $XXX and and activity now. and of lending drives also activity

equity you'll the disclosed by fees of disclosed was and from to sidelines. total Sequentially, by transition. adjustments and offset as servicing fees see up side left client adjustments, the page, and a On client activity year-on-year, client average the servicing which activity offset lower a higher headwinds nice net previously total fourth pricing of started as clients see to primarily X% previously partially client headwinds, the markets, higher in a down were come primarily off result pricing X%, partially transition quarter

even many On the recent fee of including processes of the sales were the the servicing see this summarize we pleased of quarter, performance $XXX bottom offerings, years, new slide, highest product some in in North to of indicators wins key reflecting servicing at period sales total America, business. towards in our for the million left million sales We fee to primarily the of revenue enhancements where after quite and and of the higher our we're $XXX XXXX to million million performance. underperformance. we is progress full the wins year for outcomes saw $XXX revenue These $XXX our servicing servicing Recall, stronger of goal fee year. strong making a underscores wins contributed

servicing Finally, we quarter-on-quarter. at fee had up quarter of million $XX year-on-year installed $XX million to revenue be end, and $XXX million

We expect install XXXX. about to in of half this

be of installed $X.X trillion period had to end. We also AUC/A at

described Slide some offset year-on-year, up equity flat, flows. Relative certain by X. partially of management higher million, market previously shift initiative management higher NII product strategic Fourth the X% performance initiative. and $XXX impact described a fees ETF has primarily reflecting offset average and fees repricing fees, that certain of previously by into of impact fees Turning management of to fees a were suite a and ETF aided mainly the repricing by quarter, third performance were to NII driven strategic the suite management the levels into quarter shift fees product

As our Institutional bottom remains consistent you saw contribution we into total products. And quarterly $XX billion, our inflows driven experiencing of the defined record cash business, businesses. with net net SPDR market the franchise, ETFs, of its gains. XXXX contributed billion, billion, funds, of net and quarterly low-cost had billion by of can suite, management institutional into primarily the strong the cash very $X and broad-based In by as investment market gains. lastly, share money across quarterly $XX right we well inflows net of year on cash flows inflows In saw inflows $XX net U.S. market portfolio slide, which momentum we of money across primarily fund as see full market business each SPY well to driven positioned record record share our franchise

agency higher slightly FX and volatility. Fourth due higher revenue. services securities lower offset balances, from Services to prime now lower the primarily by relative ago, lower volatility, a due sequentially, activity year-on-year to Slide from market X% volumes. quarter revenues revenue finance down year-on-year spreads, to ex was spreads were to by muted muted and Turning higher XX. FX revenues down was offset specials year period Trading quarter the reflects Fourth Quarter-on-quarter, the decrease direct partially decrease FX notables agency X% XX% mainly

quarter revenues. up year-on-year by CRD, driven Software shortly. were I'll to which and largely XX% Fourth fees to on XX% and Moving sequentially, Processing turn

primarily revenue accounting Finally, tax midyear impacts Argentinian associated credit quarter change, investment for other the partially to fee $XX with million year-on-year, the devaluation a by of peso. the the increased due offset

XX. to Moving Slide

increased Data the implementations Data professional services conversions and that quarter was software-enabled by see Office revenue SaaS and panel go-live Software Office and as Sequentially, result renewals fourth revenue Front primarily revenue XX% left driven and a Software driving growth. You'll continued the and on on-premise XX%, primarily implementations. Front up of higher year-on-year,

portfolio panel. Alpha the business clients right the XX to means differentiator usually more conversions sets value year, with office year X Alpha We for us to pleased more fixed functionality the live new of our record business wins wins driven to Turning front proposition our which which increased income be covering of for and for $XX Fourth X a million. X for the continues quarter, for at State significant X us had to up to XX-plus SaaS bookings by important brings quarter implementations we for quarter years. We've with well new Alpha and X also metrics managers. an gone mandate in on Street which XXXX. the terms XX% client year-over-year some added an ARR report XXXX full contractual attractive clients, X were and Alpha creates to and

repositioning to interest-bearing by rates were had year-on-year primarily of investment better the Sequentially, delayed. to driven quarter sequential of impact decrease $XXX increased expected we the noninterest-bearing Fourth the NII largely Turning higher mix results deposits interest by client certain were portfolio further performance to quarter repricings higher quarter impact basis shift, on partially XX. in and X% balances offset impact Slide both NII deposits a balances. The The deposit and but million. and full XX% than due loan was deposit was increase the rates. year-on-year and as and third average the of previously NII well lower sequentially interest as as increased quarter increased

but the off quantitative reverse Some will the higher been higher we're quarter to seems know tightening first having this balances hard which with trend, Fed going in pleased the of have Fed's bank deposit been to operation, XXXX. of have to may but repo balances. It's offset deposit the how reduction deposits inclines seasonal, have into resulted step the by of higher appears

quarter-on-quarter we of On side X% quarter. the noninterest-bearing Average the right balance deposits quarter. the sheet our up deposits increased slide, the average show during with X% fourth for

company, only Fourth custody X% efforts, elements core our XX. Sequentially, fourth actively were and Slide X% private to savings investing including productivity notable and ops tech in expenses markets, optimization improvements quarter continued we FX. automation. in increased as year-on-year quarter excluding managed and strategic and items, ex all or while expenses, process Alpha, Turning the X% carefully expenses up of

sequentially, notables, driven Information spend primarily higher year-over-year On and offset compensation vendor higher employee increased offset ongoing the expense incentive to in by efforts professional to X% reflecting benefits in benefits partially the higher reflecting a investments, episodic from line-by-line marketing optimization partially mainly and costs. expenses and due due increased and up flat brokerage technology an by Occupancy contractor increased performance-based credits. Transaction processing communications sale-leaseback mainly transaction comp. increased employee fees. and lower prior basis salaries ex sourcing the period. in X%, and were and X%, other of infrastructure higher benefits, by year-on-year, absence expenses And X% mainly XX%, largely systems

moment let spend a me Lastly, headcount. on

model. consolidation we Street's unlock and of spring. This in and productivity transformation quarter expect contract productivity operating our years in continues services us the assumed as we to joint this model a consolidation in a in simplify in to of full ahead, transformation start part a India third intend this country discussed our recently will of one the initiatives, and as we our operations ongoing of reduction the announced streamlined undertaking our second and fragmented ownership which As global have that ventures enable through we we've State with now operations, the we operating savings, quarter, and similar

joint consolidating capabilities. roughly would we in global venture in-source headcount expect, quarter increased the As as first our X,XXX you FTE the

to the for under However, savings actions our reported these XXXX. costs were higher and benefits targets in already comp line. These historically contributing productivity and are base our expense

to Moving XX. Slide

side our our and of CETX the by ratios of followed slide, the right On of the Tier leverage show X on capital slide. we the evolution left trends the

continue you operating came capital the levels, As internal regulatory the see, to our which very navigate can above strong minimums. in targets both and we environment with

As AOCI, basis CETX during partially the of by continuation quarter-on-quarter, up was ratio XX share driven of and standardized by lower in common of repurchases. The offset points in episodically our quarter interest XX.X% rates RWA end, improvement decrease to largely December after the about and end-of-period market week basis completion ratios of factors XX contributed points XX contributed basis the our CETX roughly conveniently of our buyback December another over RWA print. some last points to the

I RWA at Going the to expect various run businesses. our support forward, higher levels would to

Our LCR stock repurchases healthy over share the return for dividends. Corporation pleased was and million over shareholders, of for were State common Trust. a XXX% & quarter, In Street quite to million to $XXX State we $XXX common and $XXX consisting Bank of XXX% million in Street

date. Lastly, Board as no up today, of expiration authorized we to multiyear earlier billion our announced $X a common repurchase program with new equity

XX. Slide to Turning

the some year. the Before for first I share of and underlying let current me assumptions start, our full views

which Let our potential year provide more variability of XXXX operating macroeconomic full me quarter, environment than the cover as thoughts we're on well in. first usual, for given both as some the have outlook

up here daily to flat XXXX, In as point-to-point expectations, be macro we the XX% expect which being today, average current equity markets we year-over-year. equates global terms our stand to about of in

continues move. aligned to rate curve would forward interest for I outlook with XXXX year-end as the XXXX, note Our largely of which

higher see in impact we depreciation, fees weaker unfavorable we remind dollar support but a has muted X.X to on expect modest trading are volatility, and increase that percentage expect And on quarter. impact FX revenues year, this in slightly which and would impact services I to translation point an and volatility FX have expenses should less first to still than We the U.S. currency and revenues equity favorable you a dollar due expenses. seeing on

and growth to full items Office total headwind be we Front So This from less little revenue servicing with a to X% notable in X% expected growth previously includes strong approximately by transition. management them than up growth Data. disclosed year percentage the and fee and X driven fee will ex fee a point Software continued that of client expect fee currently

X% up XXXX, and SaaS, to we X%, to management quarter X%, over a the and to to conversions up year-over-year increased fees business servicing X% expected first Regarding data be be up front and expected of XX%, new renewals. on-premise on fee revenue and basis, due be fees largely expect with office currently to up software

expect XXXX about XX% XXXX. outcome of is record We on predict. dependent are rate compared year-over-year the and down year to be obviously levels, a full mix NII which on a This to cuts difficult basis and deposit to global

in given deposit a first significant a XX we on Regarding quarter X% flat the of XXXX, after step-up down XQ mix 'XX, sequential basis to to expect be XQ NII expectations. quarter current

Turning expenses. to

driven largely level. our in see X.X% walk on basis can year's XXXX, you largely As X.Xx by is about last approximately worth savings we up be on a continued which expect which through offset $X.X investment Page greater nominal expenses on the XX, in billion, we the savings expect to full year business, ex notables productivity will gross

occur X% a year-over-year expect mind Regarding expenses basis X.X% quarter. ex in on the first quarter be the of to usually seasonal items keeping notable the in up expenses to XXXX, we first

achieve expect fee positive As operating in excluding full the fee well-controlled year to for reminder, expenses. and leverage, XXXX, a revenue notable we projected items given growth

that, Finally, with in for be the the let Ron. XXXX. to XX%, And back XX% me we expect hand taxes range should call

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

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

have little unpacking talk start hoping a some the Eric, about drove the details. dynamics, uncertainty I NII with sort and kind But you the I of deposits. on of you in if in appreciate 'XX. bit And all core we ultimately franchise and for give levels? stabilize back maybe balances deposit half could where Thanks what the of to us in quarter of fourth upside seasonal when the I more view guess what was some maybe insight it versus client to driven a comes expect the on

Eric. Sure, Alex. It's

surprised a with continue actually deposit to in the again in into say large, downtick I volatile. particular, I'll saw but Let a share we saw on deposits in NIB you They October, then deposits we texture a the and levels uptick in think, to and have, just September, we nice me And November the side upside. December. be

So for the our as the expectations. of deposits $X and that And you in big saw which of through. December in had interest-bearing up. billion up a quickly for million relative time, adds is difference. month also $X spread to at averages kind of billion And came worth multiply a $X a quarter, made $X billion, NIB the we we up same

some that of way is regular with Now clients. engagement just our

of that did to Fed more deposits quarter-on-quarter up the think see the Some there fourth is I And X%, are from banking us. X% quarter. third with leaving deposits quarter reports, system in you

something seasonality folks year. seem it in -- in to the stability, like more ETFs little at There's of cash, a happening So that's some a see bit accumulate little to amount buoyancy. the that the always in as of end market the dividends does of creating and next there's year we tend sometimes pay

goal. client range put and expect deposit A of to operate their just of to that and the to work. that's the read, try And So forward, If We'd like to billion through look out in billion. hard better look hard end. of to cash helping the through it's kind played it what $XXX year. That's out. to our the $XXX lot played and for to it's is very operate but engagement forward quarter then just I

holding sweeps. category they the -- put -- those there's using category in to clients I'll is in And of right, it, we're just one cash all including work is each what treasury deposits, But and above, the a sometimes And important market money securities. repo, clients. seeing call outlet for an all in

So the those to down flow quarter. What's a expect for those X we zone with to downward just think the in expect deposits roughly last will downward. are harder largest to do to the in over deposits They read how first that continue, clients that is our continue the flow ones tend noninterest-bearing been floating have years. funds, out. be we the and little We to play

first a quarter guided quarter, to or And basis of expect to out expectation. repricing continues just X to give plays that's be continue down we on I for to first well. So little deposits. an roughly flattish flat as of that but X% that see There indication, a an NII to be the the bit bit to little on you we into that why

helpful. Very around is enter sticking as the deposit with deposits cutting cycle. to beta we My just it. start Got follow-up, sort of rate

for back through So we upper half guidance? on as just down the beta the to we of kind cutting about think or 'XX maybe. the the how cycle hoping cadence the the sort 'XX, assuming broadly, high curious or end could you're should articulate in deposit into lower And deposit your NII you But of of at way know progress betas rate what opposite? towards beginning 'XX the then maybe the

clients. how it's topic an many interact It's in Alex, it's operated important the for with price It's has we years. our products. because our we how industry how

They're a XX% pound in bit you think know start have the the XX%. a XX% euros, climbed cumulatively In U.S. to the betas since it's to quite the I cumulatively that of so cycle. or around closer sterling, deposit XX% in cumulative basis our on

up. What rates amount moved reverse. the clearly is and There's certainly deposits they're symmetry. as, of is happens and some when when, beta if So say I'll fall,

reverse we they Fed to We realistic think and to time be quarters careful any We over there's the certainly an adjustment. be to fair. over Now multiple with our and be clients. want want got do frame, instantaneously. cuts, But that

that a has a feature. broad to indexed They're there indexed then are quite indexed have are right? Now with up. amount of that symmetry see happens few because to part good down are of a of indicators. you'll that a deposits But market. market There generally bit we our of, And administered call it, versus kind amount in I'll small deposits that a transactional now spread. a are

are think in in international you that mind keep somewhat in markets, betas the XX% sensitivity, different international need between the We're U.S., and our though, I sensitivity still liability cumulative and to still are what the to do asset sensitive. range. In asset because is right? XX% those markets

rates. interest will that's down decreases -- that's -- with NII today. our So And where in more money trim rate rates. we're in we sensitivity we make increases with actually most And

still slight. positive towards have I'd On but call a almost it's U.S., liability-sensitive, slight bias being the it relatively neutral. we

deposits come. navigating interest U.S. actively just part whether And exactly So prudently. manage we'll what At not time, part what's not to cuts we'll this is rates to clear our or of before coming. rate doing It's and do the the we're of It's when is the fairly vice same environment. try Europe clear versa. what our portfolio advantage take price of

UBS. comes from Hawken Brennan with question Next

fact you down 'XX XQ little the extrapolating that's today, you we non-U.S. am But flat, to to that going for some based in explain probably going might to when exit of little could minus it's think rate on the get can piece? the time to that decline maybe low. think about reading the suggests either Am this. that XX% that totally weakness. of sort be I rather it's just of more the on And XQ that thinking NII, said a see you side it that your drive on to triangulating by bit see the correctly some be NII. back-end is to non-U.S. think a what correctly weighted And I I going we comments what

Eric. it's Brennan,

-- third that the expect but exactly a framed really middle Clearly, of next the earlier top get in around well, couple of general step I NII quarter, of when. down. last couple right the probably half in year, of range quarter. where of ago, the so a in of -- hard direction some year, the NII. stabilization you've trending a But the $XXX an into described exact then think hard just earlier we into We by And a it's range, have top range area we quarters had December, And that end got a -- million. bit We to shape. little that off around think million $XXX this the know to we expect we'll the got right I the first and just maybe quarter. in half then strong pattern tell you've range, to flow travel. And second the will but of very fourth half, which particular, of we in

step and X really drivers ask, drivers? continue are There underlying that what you important. back are the to If be

as the to of portfolio rates, balances a that of continue the portfolio recoupon tailwinds, higher first the as the at terms of continues through we long that's In as the positive. playing a through have and particularly in less rates half year, half second so investment year, the they but little the important in

rates short down. continue our sensitivity markets, to impact start to position to because on those come through. headwind come global have, And as mentioned, then a You NII you starting of does that the across have cuts as

over which pattern to might The the weekly. And below that, third deposits $XXX a continue zone deposit, But little of kind deposits. the because That what's right than client will forward, they'll of next seem in of as play in and be bump think income. us that little the literally versus international our see then to predict broad through million, mix happens half in level brings we'll to to, of that means reasonable up hard that And in we repricing be through of of continue and what cuts. in working longer expect feature to pegged can the we but the in if a okay. they think, above symmetry, while some first That's And cases to well. then now, consistency see come shave It's of -- that's that, lot quarter they'll interest-bearing a back of around quarter we you or accrete million, U.S. the again, those is inflation the expected. just mix. or bearing moving stability pace then the I some really two we've daily, but year. Now to through those noninterest down we'll we're keep shows it's expectations there's taken zone. stages some see out have client of and two, a And we to $XXX final

Eric. And I for It's background noise very, is the way, here. the helpful. apologize by that very

more strategic. question, Second bit a

servicing recently. of a seem So of those flurry Bitcoin ETF It saw landed any here like we you actually opportunities. all launches didn't

whether a digital restructuring? So what of of that magnitude I read to the led assets, we is learn from what the is that did missed confirm you group? you've on And that And change investment my focus on you And digital to asset that? if the want as given made guys the early the what on and should right. see restructuring

X day only that custodians. or were And the of the So digital day we're that -- Brennan, the ones SEC I there after the across and gave we XX servicing approval, service them. actually different on launched think X

the X major So helped this of happen. we make players

except I we So quite the actual for active space. custody as And each the we're you'd those do that in everything expect, know. of the X for think for you reasons

it What of be What assets. think active see market, over to very lot out keen space. be versus And watching them in I versus in days. there's did How the this these went was are we into early. for the of what who terms It early up. of cleared interesting we're is the does to all good get of everybody mean levels -- no, work it's does retail institutional to is that to with of some consolidate? buyers So existing time And launched, and the a will is, was intermediary, for players actually but I -- it part it. uncertainty are get high the learn? we're it some

Ron, thanks Yes. versus pure servicing, helpful. clarifying for custody very Very, the

capital it's custody of difficult for everybody I XXX% clarify, imposed now, Yes. pure just right But a requirements that capital. -- I mean, mean, because basically I it's this. mean extremely on think are to bank. the knows bank And to a I it's do

the custodian, So non-bank all of in. of therefore, virtually with, which custodian, participating of digital with we familiar ecosystem, quite but a digital we're everybody working some is other parts are the kind

Schorr comes Evercore. with from Glenn question next Your

doing on education clients specifically So in if what get to mean, color you're ETF things big SSGA, unpredictable, the The great I'm differently the average what And and I thoughts they? flows? is fee? see am had but front on sustainability, which distribution it buying, towards are I flows are front to are flavors clients, those these sorry, would maybe of at what you curious be of any what

Yes.

throughout So the XXXX. there in things there quarter, and are Glenn, a on number of going fourth

exceptions, rates were we've certainly, observed, year fourth as you risk-off all going. with would most a noted, environment and some got have where once think of the that in episodic sense it was as interest predicted I a changed investors -- it of somewhat was was there quarter

pause. did Fed less the third they more or quarter communicated the a As when in

activity started that going. think I

the classic of in highly the risk of on SPDR have late in benefiting would liquid much activity been Core, So, SPY ETFs. But sector would put underlying the kind ETFs, on, let's it -- positions by the the be different the here quickly, be year intermediary throughout an advised low-cost an tend which the like investors, these holders They're represent year, RIA. and often ultimate to individuals. the

income is So -- seeing and income, fixed build we the the very sticky. have equity to a low growth. continued And board, fixed share it's both there, in cost. Across dramatic

moving both allocation active long ETF seeing acceptance, investors And in. coming. a you're just the that all it's a ETFs way. And of and vehicle increasing investors income then sort, by finally, institutional fixed seeing been I time is think growth you're asset that that there's retail and to hold good

core that standard how it's overuse to As to ironic managers terms greatly in they're ETF. asset lot space. And ETFs there more active servicing the very, income, very, active core known or from ETF see putting playing to fixed growth what well word, of servicing not it's side funds as in the but you'll been get we either you active offerings benefit benefit everybody it's on We strategy those play over decade it and because we converted on this that investment a a out just believe some in launch side how GA it ETFs. of taking we're the know, And is their of is actually and on and going out. the doing in

really pleased GA side. the So we're on

In is your we question, think next focused intermediary I institutional our channels. channel. the the various but mean to part was much terms of of dedicated mean, I it the and resources in -- part it channels, I was lots the what drove of in it, the more growth the of intermediary are roots

recognizing of part to and to very, I reprice And quarter, it. worth a that durability because at particularly very pricing, sticky. ETFs it tend them the gain was we we about, as felt hard look that's to they their took believe, be talked low-cost So the to last so-called investment continue share then in market

wins. curious I'm multiple I'm on how That's a is I the space drill the just it. how It's of that lot the same client? of detail. piece tell different markets Or but servicing private us It's know down. happy the is But perfect. curious on I it more one follow-up. developing. if appreciate it wins premarket much servicing it you importantly, servicing could Maybe on it is to quickly was. and the question times, go want -- what you it's we just I'll with front, is not noted. the yet, how huge

secular not it's active both. here. first, it a bespoke the complicated. That's do inside we've the client. XX, as become of are certainly more operations and happening trend a was it's long-only are I And Products the of sets To what's just in it's years fairly in. that of to we're we no, held No, locations. it's invested -- these all firms that couple following space known I followed part was this well a product sitting very X now. And mean, straightforward. last answer stuff is often expensive products, I so are Glenn, ago. they have not this where a when highly many mean, more see trying are it inside, complicated, XX path industry in,

that it, you've think then investments you And permitted, net enable As about added start are there's complexity. got participate individuals oftentimes, to cetera. the that high et worth structures to in that side

very very itself business. It's it's still outsourcing. to much complicated. It lends in-sourced an So

different. get that fund fees but are growth in is lots fees invested. the So the the fully are in see characteristics potential also of it. the higher, It's when Positive fee we sense fully recognized

talked innovation continue strengthening is set our draw further at -- can product investment that expenses investment money in our then very so moats goal part and But to of There's raised there. what's we attention we about one, of we actual, that to business. Much position we around our And excel and the XXXX the match guide continue there Eric includes do of the to in to pay to the our new about to is it. us we're that? how down? So do lot best a expected excited

strong it's growth XX% private as it described just different Glenn, add I'd up for us. has XX%, in been Eric. area quarters. of real We've a And

in $XXX agenda coming big as a that of range plus private, this X/X $XXX to help sales of continue going million it's million And to year drive So -- be part in then past around year. us think our least this to private We at goals take going the our to and year-on-year the we up, growth as that's is what's XX%-plus revenues. of growth. terms we

distributed, we've I So broadly large good as actually and Europe actually well. that Asia mix and through It's small and U.S., coming it's with both area of and well an it's a sales got think midsize.

banking going the pushing -- about into to of regulation the equity and it's that's adventure. Yes, it's fact not the as, booming. private should private that private it's out as the happen beneficiary private well of right just credit And is we area, equity, and what's system bank that complaints going every be for with activity growth. credit Glenn, that

next Your RBC. Cassidy Gerard comes from with question

with that I going on XX just the Eric, Street know State share how is your net to -- run But volatile the comments about in in and due you what's years interest with market more can you us and ago. bond interest Are outlook net income for the it able to on that Federal be might you're be we sheet. insight indicators, balance there a give us any State might basis? could the look when at their go-forward better Street to income predictable Reserve monitoring a more

I Eric. question. sigh when it's I Gerard, think take this a about

turn as say in sustain since the XX really deposit in do on the years. The This asset -- rate created the -- I you this well, rate I the off if predictability and is characteristics century, we've match want partly back -- manage at I deposit, right? with seen around we've go challenge think is we lowest also that rate tenor, you X of that of the seen do take Fed with regular basis, we've is level the right? volatility. Can of decades and to probably Well, volatility. couple kind the right? little really that of That's years, And we level to -- So highest relative the duration. more wide to a side the we have actions, these portfolio, the we're try if too duration, even mitigate? bookends

you've the too you portfolio, If the to got AOCI take of more on have side duration much risk. asset

negative work And to a so point have implications. up to our then tools stabilize and some

a just to turn this into a part feature really that somewhat bank. and don't it's sensitivity to liability is like to way at I So very or just And have. what flywheel deposits relative it of our have way sensitivity turn do. we asset what of we'd I see a a a don't see certain a of rates institutional to regional pace, moves simple metronome to more

with So peers. we'll That's part more, of but the I a in little tend that's think -- we're line industry. have to

good. almost the to and Investment In bandwidth business. talked should any having the careful constraints the growth? you remarks, with the is Servicing in if there handle product business, the got Is about capacity say. about got future prepared your Services success when of momentum you're you the it that be in Ron, to Or you've Very I momentum now continues? plenty Alpha

would client, has these strength complicated large of which really some most capacity constraint better Over past in the are of year are the ones, the been been particularly I which onboarding. particular, capacity say well, at large onboarded, that we've that. around with gotten still being has Yes. --

in look if be $X.X at $X.X we're and to trillion. -- number, were just assets to down roughly now can trillion we at that as onboarded, about, You recall, I you

be element do operation, onboard So better to often has a at tends it to not we're a in The mean, outsource getting mess taking you less. does I is client actually to in requires gotten and better any engineering particular you way of for element that as possible specific kind with that the to standardized the time. ultimately, to see I by engineering that to the kinds wants a things and because with it how us, and constraint and engineer customization it be middle about like them need in interested that. we much where it's somebody's mean, an to way, we're we've things industrial how to of as client quickly the limited that of just can of real that applied. is that because And or user other are office that's client outsourcing. A over it interfaces at work actually

don't as see forward, looking being meaningful a say, would I we that So constraint.

Your question with Mitchell Jim Global. Seaport from next comes

worked? private you've up other quarter, do million? sort maybe $XXX even see What's follow-up above we a net of wins. a success? markets, talk you've What terms -- had private opportunity on new are maybe hasn't kind X getting worked? get the of in And if about servicing of you a you've maybe quickly the markets of ramped fee Just of to $XXX And the pretty million your outside seen little what bit can set where the of quarters,

no still than seeing of one first question as it answer And board important your Managers lot active us. firms segment the a allocating, trying asset Jim, I of particular, Investment I in long meaning time saying middle all given money the they're interested all Gerard, comes mean, we're activities strong pure amongst across what a fashion, different remains things when cases, actually this And asset is of ramp doing level, it's kind do, support. But right? just the a of assets part all to pretty to incremental that themselves thing allocating or it, but a is as the execution. really time really some at our thing, focused more almost requires finally, the and timely the I easy, the would back the that assets, it's with in earlier then or with we're which managing strategic but of Where telling it. to talking is it. And part takes -- comes to are office healthy a to for owner facing us. A up to truly them asset was things bit on some about of a actively a what was to with it resurgence Ron. a same market to and regions. back outsourcing ensuring we're core those more Because just do tactical either again in not and they're talk allocators, element is, in marketplace the pretty little to comes straightforward. instances, listening office longer the in and on asset or owners doing else scale consultant pretty onboard everybody that just do that Onboarding office, margin aren't be managing with us just of and in

the in in growth a about second strong done. most of been have probably north Pacific pipeline. Japan Europe impact year. with and U.S., strong the to was the -- all between. The has us. invested how were always pleased years, year, in just we're were that half all And in couple capabilities where we It pleased parts heavily in really, particularly we seeing Australia but regions from talked not you Pacific. has good everything that past, with in Asia past been softer the of see our from little We the in over the last a very of we've Asia We're of this the very again, we've reasonably where actually XXXX, the to

not but and and things we're very the into much sharing, regional just very accountability practices down you move accountability. for focus product, is actually the pushing technology but -- these the So the forward, how clear decentralizing making that level what, regional where the but country obviously, sure responsible that and it's in who best

kind or Okay. see benefits X%. through in on maybe, we the you -- That's quick of a And little one just all really held and reinvestment How book just maturity portfolio? some walk a helpful. of Can us Eric, the over pickup the to yielding still maturity that? turnover long that start profile from

The Eric. a It's a it's we've Yes, in roll-off way year. I describe about natural $X got portfolio. is billion it that

the latter, that's in sort that it out maturity and of couple years. So next related to down will come the over the plays of so

the at [ because X.X% happens, ] that for pickup at yields average, our least line, Our a in coupon range. There's As it's average portfolio that you that through relative as lower real say, are to comes right? even, the once get for the we is next help guess, think curve, that and we'll some steepness years yield quarters, stabilize, probably will I also through. couple do next because couple that in rates of the of

that obviously insulate next It's the versus think moves. will few the some cycle there be rate I up we'll last portfolio coming way. is So cycle, in years, down see. don't us are also from this then that a benefits that

it so serve will as well. its then And purpose

Your from Chubak Steven next question Wolfe comes Research. with

a guidance. your benchmarking question the with So performance fee on wanted the fee versus just guidance. start And historical I to Eric, off

guide of meet gains. the at struggled least the exceed absence or market in You've significant to equity

me okay? you Sorry, hear can guys

Yes.

And about I'm that. sorry

guide And you experience, X% year. historical this granularity market for assumption hoping terms So that in just I additional X% lines different provide to the given the for a the just that in embedded you assumption that's of fee could conservative have underpinning across growth was fee coming growth year.

Sure.

that that some Let is franchise. and it are the be think good me of overall for higher a X% ways franchise because describe bit the of cases, that. a couple in some in X% will higher We there to maybe areas than

and flows in XX% towards markets, very then that geared about earlier talked fee the equity provide literally Management, comes And that call we line. of tailwind. to the management the asset the tends Asset half markets equity a tailwind on through through in nice right the

combination how it's So flow be the is see will through, exactly and we business those of healthy. is which it's need designed, market-based how two, the markets but to play based,

data software single digits, processing, sometimes we've low digits. and think said historically high I double

part If of you We've couple XX% years, data Alpha last Part visibility the and sales. look software that of average of got year that X%, at is full at growth. good outright you're and there. the is

so that's And strong.

It at tuned to I and market. need is a come on that and in. will of drive, fees organic go the net we the below how think that which core we some bit in will be is now servicing the to X%, sales other that new business particular reshaped X% bookend, why we've area, to

how transition we'd which what of will the trading in the conscious ] some the be we're hoping see. And and like reasons lower will activities, FX [ ourselves. somewhere year to is of being will benefits range, coming had You're that previously this then the there. some the mute one middle markets finance. through, of sec But of very measure whether there We're and seeing announced we that coming that we be one

we half I think what whether plays fees mean client and of we of they're describe the X as past year on that whether how out behind around points why X to headwind. is the don't this that was which our that on literally. what activity, clients percentage worth need are sometimes client market dependent our servicing fee the -- transactional in, are areas I activity, servicing sidelines all or fees, much

because $XXX activity don't custody, math, the us. to that's do of valuable very derivatives, headwind you So in we very, million activity, transactional -- international worth which is $XXX those million, have that the in

is of I you've what macroeconomic the part plays of sentiment, got through important. client, kind these risk-on So features, think, markets one bond equity risk-off hand, on is

FX You've levels got and in lending. volatility agency

those through and live through. so we have navigate to And

less. and more those sometimes in sometimes And come strongly will

purposely very think is hold you hold finally, spent to very the our power think need about I and area But and and will then Steve, there's little And our that the where And cyclical that's on sales, there. accountable businesses, because us us got control, a part similar And can of targets elements go of the on, will to we've that's we area, is do by targets been goals which retention. We and if goals we've accountable. goals it's which come servicing. need kinds that we piece and deliver, a our can you extra us clear version time we deliver we But help through. particularly through in ourselves of line where still to go.

Eric. That's really color. helpful

Just follow-up assumed the me. client large for timing one for quick What's transition. the

to expecting sense in get XQ Just guide that's wanted that the year? later a or in whether the reflected fee servicing you're to as

At that out Let me the we're to transition, me see piece that be a to and say on including point, through rate to of and quarter. you helpful. try specifically, very a basis, let the quarterly how came in ways a this couple run describe -- I this about fourth in halfway

through run rate a halfway we're on basis. So quarterly

and our year-on-year in another we've way Qs about disclosed about of end points fiscally of X/X of We in we come 'XX. it said come worth basis. Ks. of 'XX have fees. That's has year-on-year was also, will percentage out through about a though, and describe quarter what the half out it to through it think total About that 'XX, on would about a And fiscal on I remember, the X basis, this fiscal

to So it just time through. takes play

we quarter guide include guide. 'XX is the headwind and quarter important that it in versus that so first 'XX did And first to

net guide and as And so our you've guide includes the a that, got result.

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

I very and reverse A XQ right $XXX about $XXX billion, about call the to you follow-up. say in deposits talk quick billion shake in growth we you on fourth think long. quarter as the the I gone deposits between has the of saw just expect level we know that did out? so heard you

think billion said No. it's What second, the I the the Eric. quarter, in through range in billion Ebrahim, we $XXX first operate that $XXX we'll to is year.

be to that expect where We land. we

talked also, the on little at, is talked there's quarter think up right, quarter $XXX we which billion for around think, I we think, bit in-the-period in average, data, fourth I ended average, months, on the we about volatile. a XQ. But very in I remember,

call range But then deposits a tell. that. There be just a of flattish XQ. tax a year-end. with got at but into hard around There's in for And so It's of purposes to cash think you've in low point things tends -- I'd it to flattish we the and there March. with roughly seasonality scheme February, building range into is --

point we cutting we stabilize around get and do it deposit happen the NII shift NII, well? bigger and is to see stabilize need is done before Like maybe can question mix a just mix as than that? short, that do to to to need with QT Or And picture NIB a sooner point? rates where get we Fed the

or third is question. in to think of NIB by on in by middle instinct sometime this XXXX the -- My a the begin the It's we fair quarter. will sometime year stabilize

point, kind at since -- of that I'll stabilize the peak, ones XX% seeing that by on accounts, and are through it, smallest down are largest more NIB. are those more. about You've and those down were of the since accounts burn peak the kind call a XX% its The

boards and in and million see and or NIB tax their some some $X especially some the $X made So with stability have account, in get you'll to ones don't clients have I just fund want that reporting, million decisions, so an think because to stabilization. we'll the of them funds deal

stabilize. think So we that will kind of

to that then at betas stabilize deposit think and question NII point, come what kind of -- the on with -- will well. as tend how think broader I well, I

that direction at think I of half year, So what second rates question interest is the of point, on the front the in the next is real end.

expect -- NII, curve where accretive to good go? So is very international in end And it's where the to curve, And with long which some. particularly yield some a economy is important to U.S. to the banking and you the and end is going steepness, steepness remember been in in -- steepness is amount when had going to question, hard because versus go in sector markets. the have some the it's while, yield to amount in of of I -- quite a important what's we've the that to long the is going what's

that will feature. be a so And

So hard there's a to through, to, predict precisely. a series and think, I as too of will elements it's that come result,

question next Your comes Ryan Kenny Morgan Stanley. from

Just on a follow-up the side. capital

that mentioned of also this a Does So It help businesses. that be could like That billion the that sequentially. mean ratio. What drove looks higher then the RWA just dynamics temporary? you just us you had RWA. support RWA impact optimization by $X year improvement was you an XX.X% optimization? Can was And the to bit? various driven mostly a was CETX nice lower

Eric. It's Sure.

to describe RWA of it's you've and forward it requirements So because rules, couple Let it's every a even trading tries a spot try me businesses, you've a of book, take capital Right? volatility And manage or or vanilla a and of book got the it's factors. fully all returns. one What report if to measure, just part different to you've to a do -- of counterparty X in out in exposures. day any We're market is because create FX the tends the -- of got XX-day ways. derivative quarter, bank got the measure the carefully our if you'd it we we expect. we it as an

pairs. by the You've directly or goes of through the how And got last money the RWA particular mathematics around be those work, RWA. week quarter, standardize because might just to that positions money you in the in move of those affected out in of those in currency are right as the and

RWAs. could $X that size a billion $X our of of create the on So swing billion,

$XXX printed the that of we half About -- about around billion. Our RWAs markets is XXX is in area.

of bit and good a literally happens. what there's variability, so that's And

so low, up sometimes sometimes it will And end will it up end high.

we If -- low Page see X in billion billion presentation $XXX a RWA, higher of you'll quite and And if to you overdrafts. quarter last as see is market point well. that that look ago have. you'll driven Page point book year take of materials, have a at that, XX a then by factors $XXX like the the of in do, bit of you'll playing calculations addition those you're we just on through Overdrafts, into a loan RWA

quarter. we also this of And saw so amount benefit there some

way, describe But around billion. minus forward, a is said got expected. would be, billion lower par $X way view that. $XXX could plus billion, billion. the it it to think describe we be the up I'll billion it be that maybe would be than this going $X particularly put ended band might low might quarter. We $X I What you've $X that billion, $XXX I go-forward by It

cases. FX managed continue And returns. want so -- to businesses do we -- reinvest we our we to what we is want them to We've these want well. that because take have businesses have, we'll gently into to are now return The to capital good finance and XX%, single-digit but got connected administrative have we and typically fee servicing it's businesses clients. business in XX% to that very that's our important high many They've businesses, the and healthy, returns securities the

us solidify is view so And and to that with relationship ways are our for clients. these and deepen our expand

bank, billion we'll so a for growth. We're And add? to dollars, be each that around to will part a will reasons. of billion We And capital our more for want some there'll each some perhaps. billion that. high -- But our way we we the gently be How core year. work of we do $X add volatility $X of add to year a organic growth do But sure. that's few put RWA RWA drive much organic we return

comes with question from Brown Your KBW. next Mike

market And space. net XXXX. actually share institutional record you I cash mentioned inflows the you guess that I noticed in you took money in that saw

they your As differently we can head historically act here, about here? than I fund how could expectation markets, from what's trend money and these cash into assets guess quite a guess declining retail. I rate environment money institutional

you in investors? some thinking of reduce So out see what of flows once the about funds I could rates here, path of the money guess, to actually are from you still money begins the fund Fed terms inflows institutional

time. a all it's question about good think and Mike, the we Yes. one

market of my have part prior one way broader we've we a is client money funds So more going answers of base. to attracted just back

of them. market have down, that gained and -- We've balances in clients. up go whether or them, terms just assets, we've not helps. typically once you share, the And you So have more attracted but just

history I in this hang sophisticated marketplace. tend happened But terms look to really its back and and a on, so sophisticated funds what's little depending bit opportunities now market the are of money there rising, you've lags holders think see it, historically, Right? and we the to -- duration in rates of the itself, because haven't institutional direct. fund kind Because is -- when actually very of duration, usually holders are had got it's they go toggling on opposite in depending whether out on in the to a

don't activity. given we client nature base, that of see a lot the our of Just

I is that they to them, opportunities. needed do would bit see so little answer, them client relationships, we talking it that would really record. began reallocation lot we which is on attractive servicing market the keep then to because well everybody cause funds institutional of on to about expect and number back or more we is go indeed a see do -- their will see balances some a environment itself where around more So continued will it would and that I very where I risk is of of the on really clients parked money for be go they that if investment expect a saying well, that based much the parked it everybody and continue about here. But establishing sidelines, grow there's what track [indiscernible]

certainly a buyback $X really authorization as that come was takes the just Eric, to number. such to my The a on Great. and capital in puts share front billion of I Okay. into last XXX% question, XXXX You're targeting a just big with authorization? ratio. payout large the in alluded lot guess XXXX. consider you question there's and why is

to not of multiyear It authorization need this So all time. is kind desire just would this in or big XXXX. to have more over for a place certainly flexibility in that have to of a just you would horizon me seem that a

Just about that. to love a hear little more bit

a annual it's banking The Once used a was CCAR, we that the would buybacks submit. to I authorizations is say, into the had is pre amount time which there remember, very long that Mike, sector. defined evolved, here ago, you of background to open-ended Eric. be got industry CCAR, has in there

year, what CCAR process wanted you second In I first submitted keep you year to Fed submit fact, the what making the within with you and that had sure was consistency because did the lot and was to a actually there of that.

a regionals was peer is but at the and really that open-ended the bit of a to disclosure it's second annual seen I'd banks, probably X/X know, CCAR large And our June with a CCAR on realized scanned more it's of after to than if that And refinements the result. And industry the July. we've what you X-year quite of basis we've in end still you is of recall, really as as so now the our ongoing quarter at least we've the banking, the programs. happened moved right G-SIB, X-year earnings those is disclosures a an have announced it's some the towards lot at say either U.S. in process, of What peers, an SCB actually moved the -- it, process. or

X.X Over year, X years. the last

And so to wanted just we to conform that.

open-ended there. As one is a from result, take this it it's we'll and multiyear,

Securities. question Wells comes next Fargo from Your Mike Mayo with

number exist, III good $X do anymore? don't much you how that buyback no make what unpunished Well, billion buybacks goes if are gets say sense higher that Basel didn't deed last much price III at would and $X to billion modified you And be? assuming Basel that question. But so

III. Mike, maybe on I'll start the Basel

there. -- but it's where the And at comment period millions all on this know various of pages how comes getting response you to know a uncertain this. out pressure be submitted, many January regulators Basel The and lot were evaluated are think don't I the XX. is there's III that ended very I point.

it this going it I absolutely don't we that tell. to hard the therefore. a we have we would on know like perfect clarity be very but authorization it's to it's we it's not was a think out, So if factor, have was changed had and coming where --

So I hope that helps. Go ahead, Mike.

is where No, Basel during earnings just your RWA updates. changes gotten here the inflation, few We've recent the to III? what base so most a season case, due

Basel describe us about increase for written as Yes, XX%. The this is let the we've Mike, it's way. that ANPR RWA headline me disclosed for at it previously

we've what that's So shared.

discussion in of actually time, we what it around, of credits, of so now parts energy that which for would about come the would relatively how over even is make example, on. think operational lots that tax policy that been the There's much will I more that portion be arcane a the There's at few at us affected some the quite believe mortgages, and said we risk of public increases discussion and months, optimistic that. really not Basel impacts last more literally small. were and

are one So we've the direction but in to trying not encouraged. think right we're banking in but of months there's of constructive. and discussions, just We menu updated out hand over navigate the got you regulators a we it and there, the system last -- because the the public few are think -- it's policy on that to particular, level the capital

Your Bank. next Deutsche Bedell with Brian comes question from

Can me? questions you been asked the have Most hear of and answered.

Yes.

have Okay. questions Great. answered. of been Most

one repositioning. more potentially guess, sort enhancing to the desire quick securities do versus those capital and buybacks? potentially for what's share doing NIM Eric, of at losses Just and the more of the one I look take and on usage portfolio and that NII

that something It's Eric. continue it's think Brian, to about. we

just work rate about on every included. through feel at, think I how we about, in particular that We're just continuing up levels we to continues bank on to we're the think the the do curve.

and so areas. of that, international sterling are the euros We both in in positions U.S. conscious the We've forth. and pounds got in and

just So it. continue we'll to evaluate

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comes question Autonomous Rob next Wildhack Your from Research. with

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your on FDIC impact last how that business? on front, index regulatory the large around then And some providers. was you thoughts fund if can regulations potentially there the I'm have week commentary curious from there for any

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not So with Rob. I'm familiar just it,

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There are Please proceed. no further this time. questions at

Well, for call. thank joining you, everybody, the

concludes this and you gentlemen, Ladies for conference call disconnect today. We your that please participating thank your and for lines. you ask