“However, we are taking a closer look at our expense base given these near-term NII headwinds and plan to take actions to mitigate the impact of lower-than-expected NII to our overall profitability.”

In context

“ssure for the industry, and that dynamic impacted our net interest income this quarter. Our NII on a taxable equivalent basis of approximately $4 billion was within our guidance, albeit on the lower end of the range. We are seeing good opportunities for loan growth in targeted portfolios. And notably, we continue to see consumer deposit growth despite the impact of QT on industry deposit levels. Over the past few weeks, the outlook for potential rate cuts in 2024 has meaningfully changed as long-term rates have backed up. Client behavior across the industry is adjusting in response to the potential higher-for-longer interest rate environment that has impacted our deposit mix and pressured deposit costs. As a result, we now expect our NII for the full year to be lower than anticipated. However, we are taking a closer look at our expense base given these near-term NII headwinds and plan to take actions to mitigate the impact of lower-than-expected NII to our overall profitability. John will go on to more details on these topics, but importantly, we believe this is a near-term phenomenon. Turning to Slide 6. We continue to feel good about the momentum across our differentiated fee businesses. Fee income represents about 40% of our total net revenue, which stands to position us well in a lower interest rate environment. Overall, we are encouraged by our current trends in our client growth and penetration rates, as evidenced by the continued strength we have seen across many of our fee revenue businesses this quarter. Slide 7 provides an update on our differentiated payments ecosystem. Over the past few years, we have made good progress to both expand our business banking and payments relationships and grow related revenue associated with these relationships. You”