C (C)

“We are not looking at changing the buffer right now.”

“And as a reminder, we plan to increase our quarterly common stock dividend by 12% beginning in the 3rd quarter subject to quarterly board approval.”

“And we plan to increase our dividend by 12%.”

“You are then seeing this translating into the higher returns. We have got a clear path to the 15% to 20%”

“In short, we are going to be increasing our marketing spend and that is the scenario Pam laid out at Investor Day”

“We remain steadfast and focused on executing our transformation and confident in delivering our ROTC target of 10-11% this year, with a clear path to delivering higher sustainable returns going forward as we laid out at investor day.”

“Despite the usual seasonality in the second half of the year, we feel very good about our ability to hit our 2026 return target.”

“We expect to deconsolidate our ownership in early 2027, followed by an IPO as and when market conditions allow and further sell downs.”

“We do not expect any additional sales in 2026, and that is in 2010 It gives us and the new investor group the runway to drive value creation”

“You can expect that over the next few quarters, there is going to be a few quarters where the expense growth will be greater than the revenue and than the revenue growth.”

“When we gave guidance for the year, we expect it to be at around that same level or slightly below from prior year.”

“And so we expect that normalization to play through, but we are pleased with the trajectory that we are seeing.”

“So just to recap the guidance for everyone, the guidance on NII x markets for the year is 5% to 6% revenue growth.”

“And we remain well positioned to return capital to shareholders under our $30 billion share repurchase program.”

“As it relates to credit, we continue to expect total U.S. credit cards NCL rate between 4-4.5% while the ACL will continue to be a function of the macroeconomic environment and business volumes.”

“And as we have said before, we expect our full year efficiency ratio to be around 60%, as we ramp up investments across the businesses in the second half and incur additional severance as we target future efficiencies.”

“In markets we historically have seen revenues decline approximately 20% between the first and second half of the year. And given the strong performance year to date, the magnitude of that decline could be greater this year.”

“We expect the USCC NIR to remain in line with the second quarter's absolute level in the third and fourth quarters of this year.”

“Having said that, we continue to target an ROTCE of 10-11% for the full year, supported by: NII ex-markets growth of approximately 5-6% and continued NIR ex markets growth driven by momentum in services banking and wealth partially offset by USCC.”

“While we expect ROTCE to remain around our through the cycle target for the business, in some of the next few quarters, we do expect expense growth to outpace revenue growth as we invest in the business to drive engagement, and acquisitions with some of those investments reflected as contra revenue and others as expenses.”

“As we enter the second half, the pipeline looks healthy. And we are continuing to invest in talent to fill the gaps in our coverage to gain share.”

“we think there should be you know, opportunities for us to benefit from that when they become final.”

“We may look at accelerating some of the structural efficiency actions and, in that case, take more severance in the second half.”

“Additionally, we remain well positioned to return capital to shareholders and plan to provide more detail on our expectations for share repurchases going forward at our Investor Day in May.”

“I am pretty clear, and I think Gonzalo has been as well, that what we are looking at for CET1 for the rest of the year is about 100 to 110 basis points above the regulatory minimum.”

“I think what you are hearing from us clearly is we have confidence in being able to deliver the 10% to 11%.”

“We remain steadfast and focused on executing our transformation and confident in delivering our ROTCE target of 10% to 11% this year, and we look forward to laying out the path to delivering higher returns beyond that at Investor Day.”

“So with a very strong first quarter behind us, we remain well on track to deliver the 10% to 11% ROTCE for the year.”

“Through the year, you would expect us to be coming down on headcount.”

“Given the accelerated pace of the sell-down we have just done, we do not anticipate any additional stake sales in 2026 ahead of deconsolidation in early 2027.”

“As you see us go through the year, and we have been clear on trying to increase U.S. earnings over time, we would expect that the disallowed DTA would reduce this year in the range of about $800 million.”

“On NII, what we guided for the year—on the deck—is 5% to 6% NII ex Markets growth, anchored by mid-single-digit growth for both loans and deposits.”

“Clearly, upon deconsolidation, you can expect the CTA to come back. We have been clear in the past that that will attract about an eight-and-a-half percent PPA adjustment that will flow through P&L, but in aggregate it is capital neutral.”

“As we look through the year, we are comfortable with around 60% for operating efficiency.”

“Moderate net benefit, yes.”

“As we look into the rules, our expectation is that overall there will be a net benefit to Citigroup Inc.”

“In terms of credit, we expect a total U.S. Cards NCL rate of between 4% and 4.5%, which is lower than the aggregate of the expectations that we provided previously for Branded Cards and Retail Services, reflecting the delinquency trends and loss performance we have seen year to date.”

“Subject to macro and market conditions, we expect NII ex Markets up approximately 5% to 6%; NIR ex Markets growth driven by momentum in Services, Banking, and Wealth; and an efficiency ratio of around 60%.”

“The IPO most likely would be after that, when market conditions are favorable and when the regulatory requirements are met.”

“We will, of course, continue to buy back shares against our $20 billion buyback program.”

“We are intensely focused on completing our transformation and maintaining our trajectory to deliver the 10 to 11% ROTC we have spoken to you about, as well as another year of positive operating leverage.”

“you know, we are, as say, about 160 basis points above. We are still targeting a 100 basis point management buffer”

“The longer term is 25% to 30%, and so we still have some headway to make.”

“I do expect to see continued strength there despite you know, as I think about growth from as I mentioned earlier, more with the large multinationals more with some of our commercial middle market clients, I think a particular emphasis in growth in North America is what I would expect.”

“For deposits, total deposits for the firm, next year, we're expecting mid-single digits.”

“as you look at what we've done you know, in the year at $13 billion or so, I think you can expect that we would look to do more in 2026. In the way of buybacks.”

“we're over the course of the next number of quarters, we'll be our way down towards you know, kind of a twelve six, which would represent that 100 basis points.”

“we are still targeting a 100 basis point management buffer and as what that would obviously equate to is us getting, you know, closer to a twelve six.”

“in '26, about 30% of those securities maturing. They're maturing at lower rates than we're able to redeploy them at including in loans and cash and securities and other instruments. So that's gonna give us a bit of a lift as well.”

“The momentum that we've seen in cards, in loans, we expect to continue into 2026, and that's a big driver big factor in that NII momentum we're showing on the page.”

“I expect loan volumes to probably be up mid-single digits for total ex markets loans”

“On the volume side, I'd expect to see loan growth in cards and wealth probably in the mid-single digits in terms of loans and deposit growth and services and wealth, probably in the mid-single digits in the way of volume there as well.”

“I think that, you know, one way to think about market is probably relatively flat year over year.”

“and, obviously, mix will matter there. What I will point out is that we have seen meaningful growth in the spread products and financing side of the business, and that obviously does show up in part through NII inside of markets.”

“that momentum is expected to continue in '26 as well.”

“we're expecting continued momentum on the investment revenue side of wealth, as well as on deposit, but in investment revenues, specifically as it relates to your fee point.”

“We'll see what that looks like, but we also expect continued share gains against that constructive wallet.”

“We'd expect that to continue as we think about 2026. Now keep in mind, the 2026 banking wallet was north of $100 billion, and so we expect a constructive wallet.”

“In addition to our outlook for NII ex markets and efficiency ratio, we expect continued fee momentum across the businesses to drive growth in NIRx markets.”

“As you can see on the bottom left side of the slide, we have been reducing headcount, and we expect that trend to continue.”

“In terms of credit, we expect card NCLs to remain within the ranges that we gave for 2025.”

“We expect our disciplined expense management combined with top-line revenue momentum will drive another year of positive operating leverage as we target an efficiency ratio of around 60% for the full year.”

“We expect a continued benefit from our investment portfolio, including fixed-rate securities and derivatives, rolling into higher-yielding instruments, partially offset by declining US and non-US short-end rates.”

“Following solid growth of nearly 6% in 2025, we expect NII ex markets to be up between 5-6% in 2026.”

“In terms of credit, our expectations for the year remain unchanged, and we will continue to repurchase shares in the fourth quarter under our $20 billion program.”

“Given what I just mentioned about revenues, full-year expenses will come in higher than we previously guided.”

“In markets, historically, we've seen revenues decline 15% to 20% from the third to fourth quarter. However, given the strong performance in the third quarter, the sequential decline could exceed that range this year.”

“We will continue to prioritize returning capital to shareholders through buybacks, as evidenced by the $5 billion of buybacks in the third quarter and nearly $9 billion year to date.”

“I think you can expect to see more growth in the co-brand space versus the private label space.”

“We remain steadfast and focused on executing our transformation, achieving our ROTCE target of 10% to 11% next year, and further improving returns over time.”

“Given this uncertainty, we will be targeting a standardized CET1 ratio closer to 12.8%, which incorporates a two-year average SCB of 3.8% as well as a 100 basis point management buffer.”

“Obviously, we are targeting positive operating leverage for the full firm in 2026. You should expect that across most of the segments.”

“We're obviously putting together our operating budgets now, but I do anticipate continued growth.”

“When I put all of that together, I do see continued growth in NII, perhaps not at the same pace, but certainly continued growth ex-markets as I go into 2026.”

“The final piece is, obviously, I would also expect that there'd be more rate cuts, and the discipline around pricing and the importance of us reminding our clients that our offering is a lot more than just holding their deposits will help to mitigate some of that pressure.”

“I expect to see continued loan momentum, particularly on the branded card side, but also in the trade lending activity, which also showed up very nicely this quarter.”

“I expect that we'll see continued growth in deposits. Operating deposits, deposits on our retail banking side, both of which have shown up quite healthily in the quarter. I expect that to continue.”

“One, I do expect to see continued growth in NII as we go into 2026 at this point.”

“I think as I mentioned, it's going to come down in 2026 for all the reasons we've mentioned, including making significant progress on the transformation.”

“As I think about 2026, that has to continue for us to deliver on the 10% to 11%.”

“I'm targeting the less than 60 as I come out of 2026 or in 2026 as I've said before.”

“Mike, I'd say it's a little bit under $3.5 billion in 2025. And again, as Jane mentioned, a lot of work is being put in place to execute on that more efficiently, which is going to help bring that number down in 2026.”

“We're focused on getting over the finishing line for our work, and we're looking forward to the transformation expense coming down next year because as we complete the different bodies of work, the associated expense comes off both as a result of the implementation and from the efficiencies that we're gaining.”

“We are confident we will see a pickup here as markets have recovered.”

“You can envision in the second half, you know, a meaningful reduction in the amount of severance that we're assuming you know, in the balance of the year.”

“Our goal is to do everything in our control to be in a position to IPO by the year-end, but obviously, the timing there depends on market conditions and regulatory approvals, which could well take us into 2026 as I talked about.”

“And then on the NIIX markets part, we do expect to see you know, continued loan growth and operating deposit growth you know, play through in a rate environment that you know, is probably with fewer cuts than we expected originally.”

“The second half does seasonally tend to be softer than the first half. We're certainly estimating that as we think about the $84 billion.”

“In terms of credit, given the improvement that we've seen in both delinquent and net credit loss rates in both cards portfolios, we expect net credit losses to be within the range of 3.5% to 4% for Branded Card, and 5.75% to 6.25% for retail service.”

“However, if revenues were to come in above $84 billion, we would expect expenses to come in higher as well, commensurate with the increase in revenue.”

“As it relates to expenses, as a reminder, both the level of revenue and the mix of revenue inform and impact our expense base, which we expect to be around $53.4 billion this year.”

“As we announced earlier this month, under the current stress capital buffer framework for the standardized approach, we would expect our regulatory capital requirement to decrease from 12.1% to 11.6%, which incorporates the expected reduction in our SCB from 4.1% to 3.6%.”

“I feel confident, first of all, about the target for next year.”

“Our goal is mid-teens then high teens on the RO target for this business.”

“I still think of that as the target. For next year, as I've said before.”

“The transformation expenses, which are going up in 2025, will trend down over time.”

“And we'll also start to see some of the benefits from those investments help to reduce our underlying operating cost.”

“The stranded costs, which have been coming down, we brought cost stranded cost down by about $3 billion. There's still about $1.2 billion left. That'll trend down over the next couple of years”

“We remain steadfast and focused on executing on our transformation, achieving our ROTCE target of 10% to 11% next year, and further improving returns over time.”

“As I've said, next year's 10% to 11% ROTCE target is a waypoint.”

“We want to make sure that we are doing everything in our control to be in a position to IPO by the year-end.”

“This quarter, like I said, similar level of share repurchases. Twenty billion dollar program that we will continue to work through.”

“It's unlikely that we see that downward percentage in the remaining quarters because it's really a byproduct of what we assumed last year versus this year on late fees.”

“In terms of the curve in the NII guidance we gave, we assumed two to three cuts. We're now assuming, you know, a fourth, but given the timing and that it would be back-loaded in the year, it doesn't have a significant impact on the NII guidance that we've given, you know, the 2% to 3% ex-markets.”

“We did expect to see, you know, a pickup in the first half of the year before trending down, you know, in the back half of the year. And so that's kind of the, you know, the cadence that we'd expect between now and the end of the year.”

“We did expect to see, you know, a pickup in the first half of the year before trending down, you know, in the back half of the year.”

“We are targeting the 13.1% by the end of the year.”

“I continue to feel good about the NII outlook. There's obviously uncertainty that Jane has referenced, but that 2% to 3% ex-markets...”

“We'll be in the middle of facilitating that. So we expect to be very busy there along with the hedging and associated financing activity that goes with it because it's not just about TTS.”

“And we expect full-year expenses to be slightly lower than $53.4 billion.”

“Based on what we know today, and assuming markets remain open and constructive, we still expect to deliver full-year revenues of $84.1 billion, with net interest income excluding markets up approximately 2% to 3%.”

“And looking at the rest of the year, we remain on track to meet our full-year expense target.”

“So you know, we sit here today and as Jane mentioned, you know, with seeing nothing that would suggest that we shouldn't be targeting the 10% to 11%, so we remain committed to that 10% to 11%.”

“So let me also just say for clarity's sake, at the firm level, our ROTCE targets for 2026 are still 10% to 11%.”

“We are not the best owner of a domestic bank. So the timing of when we IPO will be driven by market conditions.”

“We still have a path to getting less than $53 billion in 2026.”

“We'd expect it to stay at that high end, although I'm sorry.”

“And so, as we get -- as we go through the balance of the year, as we get clarity on reg rules and what have you, you will see us continue to that 13.1%.”

“Despite the last couple of quarters at running above the 13.1%, our target is the 13.1%.”

“Partially offsetting these tailwinds are several headwinds including various scenarios around lower rates both in U.S. and non-U.S. Which we expect to be mostly offset by repricing actions across the franchise as well as the potential impact of card late fee reduction and FX.”

“We expect the continued benefit from lower yielding investment securities rolling off and being repriced into higher yielding assets such as cash, loans and securities.”

“We expect most of the increase to come from volume growth and mix, primarily driven by higher loan volumes in USPB, mainly in cards and deposit volumes in services.”

“Under business leadership, we expect to continue to gain on our competition in 2025 and beyond.”

“But over time, I expect that, the targets that I've set are the targets that we will achieve and even more, because as Jane mentioned 10% to 11%, while that's our 2026 target. It is not our longer-term target, as we think about RoTCE and the strength of these businesses in the aggregate franchise.”

“Let me just chat a bit through this. So how did what's the path to the high returns in U.S. Personal Banking? It's coming from top line revenue growth, improved expense base and also a more normalized credit environment. And that gets us to the mid to high-teen returns in the medium term.”

“As we enter 2025 and think forward to 2026, we continue to have a clear path to improve returns.”

“Our intention is to continue to improve returns well above that level and we are accountable for doing so.”

“If you look at our severance costs, which as I mentioned has been running high with 700. We're forecasting 600 in 2025. I think kind of normal through the cycle is probably, call it, 300 or so.”

“Banking will likely be a little bit lower than the mid-15% if I think about 2026, as being that medium-term target date.”

“I thought I heard you say RoTCE of 5%. It's actually 7% for the full year for banking and on its way to the target that we have set of mid-teens for our banking business.”

“Q4 revenue up 20%, operating margin at 21% on its way to 25% to 30%, 10% RoTCE on its way to 15% to 20%.”

“No, I mean, I think you described it correctly like we're seeing continued momentum on the top line and we're focused on continuing to bring our expenses down just as we did in '24, a tad bit in '25 and then more in '26.”

“In light of all of this, we are now targeting an RoTCE in the range of 10% to 11% in 2026.”

“The reduction in our expense base will come from a decrease in legacy and stranded costs, a more normalized level of severance, and an increase in productivity savings from our prior investments.”

“We expect expenses to decline from 2025 and are targeting an expense level below $53 billion.”

“In 2026, we expect continued revenue growth from both NII and NIR, with drivers largely consistent with recent performance.”

“However, when we take the required investments into account, we now expect our 2026 RoTCE to be between 10% and 11%.”

“With the acquisition of the Barclays portfolio, we will become American Airlines exclusive partner in 2026 and we expect to deliver more value for our cardholders and high returns for our shareholders as a result.”

“And so you can envision 15% kind of tranches that happened over a 12, 18-month, 24-month period.”

“We do not have an asset cap and there are no additional measures other than what was announced in July in place and not expecting any.”

“We generated $61.6 billion of revenue year-to-date, driven by NIR ex-markets growth of 12%, and are on track to meet our $80 billion to $81 billion full year guidance.”

“That should be better for the consumer and should start to play out in both the macroeconomic scenarios that we run for CECL purposes, but also ultimately in delinquencies and NCLs.”

“I would expect that we will have some next quarter, but I don't see us being outsider by any stretch, the range that I gave and again the range was for the combination of both.”

“We expect that will continue with our corporate clients and as we bring on new commercial clients as well.”

“We plan to be ready to IPO at the end of 2025 based on the factors that we can control.”

“Our singular focus right now is the separation of the two banks, which we expect to complete in the fourth quarter of this year.”

“But in light of what we saw earlier in the year and normal seasonality, we'd expect that number to be on the higher end of that range and likely higher in the fourth quarter.”

“In Retail Services, we continue to expect to be around the high end of the 5.75% to 6.25% range for the full year, driven by both the impact of persistent inflation and high interest rates as well as lower sales activity at our partners.”

“We continue to expect branded cards to be in the 3.5% to 4% NCL range for the full year.”

“So taking all of this into account, we expect NII ex-markets to be roughly flat sequentially in the fourth quarter and for the full year to be slightly down, better than we had previously guided.”

“And as you think about guidance for NII ex-markets in the fourth quarter, as short-end rates continue to come down, we expect a headwind on floating-rate assets, which will be somewhat offset by disciplined deposit pricing.”

“And in terms of our full-year expenses, we continue to expect that we will be at the higher end of the guidance range of $53.5 billion to $53.8 billion, excluding the FDIC special assessment and Civil Money Penalties.”

“And that's what's going to give us a higher utilization on a quarter-by-quarter in the coming years.”

“And we talk about starting to see efficiencies and benefits from the investments in the transformation and technology towards the end of 2026.”

“I'm not giving guidance for 2025, but you can expect that would probably likely glide down to that number.”

“We put out medium-term targets of $51 billion to $53 billion in 2026, revenue dependent, of course, and that's with the -- consistent with the target we gave of less than 60% efficiency ratio.”

“On the strategy we laid out at Investor Day, the wealth target we have in the medium term is 15% to 20%. And with that, a 25% to 30% operating margin.”

“But what I will say is to keep the growth momentum to get to our medium-term targets, that's 4% to 5% of a CAGR and that's going to be a combination of NII and NIR, but skewing NIR”

“We will continue to drive revenue growth through product innovation while improving the operating efficiency of the business and at the same time, we expect the credit environment to normalize, all of which will ultimately drive USPB to a high-teens return over the medium term.”

“We will increase our dividend from $0.53 to $0.56 a share as we announced in late June and we will resume modest buybacks this quarter.”

“We obviously review this pretty constantly ourselves. We're already working on the plan after it's finalized with the OCC. ... And we're expecting to get it, we're not expecting this to take long.”

“So, in the range that I've given, $53.5 billion to $53.8 billion, that includes our estimate for the full year of repositioning and any restructuring charges.”

“So, yes, the second quarter will -- the third and fourth quarter, the back half will be higher than the second quarter, but consistent with the guidance that I've given.”

“And then, the second quarter did -- yes, the second quarter did have a one-time or so in some delayed spending that will pick up in the third and fourth quarter around advertising and marketing and some of the other line items.”

“We do still expect demand to be quite strong across our capital market products because you've got a wall of maturing debt securities coming up in the second half that carry on for a couple of years.”

“Despite these factors, we still expect branded cards to be in the 3.5% to 4% NCL range for the full year, and retail services to be at the high end of the range of 5.75% to 6.25%.”

“We expect these investments to offset some of our sales and headcount reduction going forward.”

“We expect to buy back $1 billion in common shares this quarter, and we will continue to assess the level of buybacks on a quarterly basis, particularly given the uncertainty around the Basel III endgame.”

“Combined with the strong pipeline, advisory activity looks promising as we think about the rest of the year”

“And I just want to reiterate, we remain confident that we will meet our 11% to 12% RoTCE target over the medium-term.”

“But net-net, as I think about the combination of volume growth that we're expecting between loans and deposits over that medium-term, the higher yield we can earn on our assets, combined with the pricing capabilities that we have across the portfolio, offsetting some of that beta, we believe will have continued NII growth.”

“We will continue to execute our transformation and our strategy so we can meet our medium-term targets and then continue to further improve our returns over time.”

“Look, in terms of the consent order and the areas we've had delays, ... So, we are not expecting this to extend on the original expectations that we have on when we will complete the body of work for the consent order.”

“And you should expect in terms of the trend that we would have a downward trend towards 2026 and achieving that range.”

“As we've said, we'll have about $1.5 billion in savings related to the restructuring that we've done and another $500 million to $1 billion related to net expense reductions from eliminating the stranded costs as well as additional productivity over that medium-term period.”

“So, I think we said it in the past, so the target for the medium-term, I think 2026 is somewhere around $51 billion to $53 billion of expenses.”

“So look, I think that as we look at it out through the -- certainly through the medium-term, we expect to see continued NII growth at obviously a modest level, certainly lower than what we've seen historically.”

“And so, we would expect that those losses start to normalize and loss rates start to come down as we go towards the medium-term.”

“We do think that there is certainly upside to USPB. We're looking for that upside in the medium-term targets that we've set for ourselves.”

“As we said before, we will continue to take actions to manage through the regulatory headwind, lap the credit cycle, and grow revenue while improving the overall operating efficiency of the business to ultimately get to a high-teens return over the medium-term.”

“That said, even with the reduction, our capital requirement does not yet fully reflect our simplification efforts, the benefits of our transformation or the full execution of our strategy, all of which we expect to reduce our capital requirements over time.”

“Over the medium-term, we expect these simplification and stranded cost actions to drive $2 billion to $2.5 billion in annual run rate saves.”

“If rates kind of come off in a more substantive way, then we could see kind of a little less NII pressure than we're forecasting there.”

“However, across both portfolios, we are seeing signs of stabilization in delinquency performance, but we will continue to watch the impact of persistent inflation and high interest rates as the year progresses.”

“With that said, we will, of course, continue to look for opportunities to absorb the civil money penalties.”

“If I think about how the rate implies have evolved from the three to six to now something a little bit north of one, in the context of what I expect for our performance. It doesn't have a material impact on the guidance that I've given of $80 billion to $81 billion.”

“And we're confident that our strategy is going to drive the revenue growth of 4% to 5% CAGR in the medium-term.”

“And we are on the path to reach our 11% to 12% return target over the medium-term.”

“Now while there will be bumps in the road, no doubt, we will continue to execute with discipline and we are committed to reaching our medium-term targets.”

“I'll take the win, a downward trajectory from here through the end of the year in-line with the guidance of $53.5 billion to $53.8 billion.”

“We are not anticipating that we would be deviating from the IPO path.”

“I don't expect to see kind of year-over-year growth on the NII line anywhere close to kind of what we've seen in prior years, prior quarters, just in light of kind of how the rate environments evolved and in light of kind of quantitative tightening – and tightening and the impact on deposit levels.”

“Yes, I still kind of expect that trend line of peaking and then kind of moving a bit lower in branded.”

“And I'd expect to not only see them be higher than the average range in Q1, but also in Q2 before coming down.”

“we've factored that into the $80 billion to $81 billion. And the only thing I'd add to that is, it did kind of -- it's being implemented a bit earlier than what we had assumed, but again, it's inside of the range of the guidance that I've given you for top-line revenue for the year.”

“given where we trade, we think buying back is smart and we'd like to do as much as we possibly can and -- as much as makes sense, in light of the uncertainty that's out there.”

“And we expect for those to continue to drive some top-line momentum but we've got levers in case they don't.”

“there's some operating efficiency upside for us for sure is a combination of the top-line and the expense we're playing through the balance of the quarters in the year here.”

“those kind of reductions will start to play out in the subsequent quarters.”

“You'll likely see us seeking to remain competitive in the private capital asset class, that can be an important source of liquidity for many clients.”

“You are going to see us more active in the LevFin space, in the right situations for our key clients, and we will continue to ensure we are well-positioned to active around this important opportunity.”

“We expect that trend to continue with existing clients and more -- and new clients, as well as how we do more with our commercial market -- commercial middle market business excuse me.”

“As you think about the guidance we talked about for this year, we talked about the NII ex-markets being down modestly.”

“USPB getting that back to the mid-teens and then moving on to the high teens in the medium-term.”

“all of which will ultimately result in a higher returning business over the medium-term.”

“We recognize that this business is facing a number of headwinds from a regulatory perspective and from higher credit costs given where we are in the credit cycle, both of which are putting pressure on returns for the quarter and for the full year 2024.”

“In retail services, the NCL rate of 6.32% was slightly above the high end of our guidance range for the full year and will likely remain above the range in the second quarter, reflecting historical seasonality patterns.”

“That said, our current capital requirement does not yet reflect our simplification efforts, the benefits of our transformation, or the full execution of our strategy, all of which we expect to bring down capital requirements over time.”

“Therefore, you can expect our quarterly expense trend to go down from here in-line with our $53.5 billion to $53.8 billion ex. FDIC expense guidance.”

“In the remainder of the year, we expect a more normalized level of repositioning, which is already embedded in our guidance.”

“As part of these actions we expect approximately $1.5 billion of annualized run rate saves over the medium-term related to our headcount reduction of approximately 7,000.”

“The combination of these actions and the measures we're taking to eliminate our remaining stranded costs will drive $2 billion to $2.5 billion in cumulative annualized run rate saves in the medium-term.”

“As Jane mentioned, this will take time, but over the medium to longer term, we view this as a greater than 20% return business.”

“The reality is that if there's softness in revenues, that's why we have a range. Obviously, the volume-related expenses would come down with any softness in revenue.”

“And I think we feel very confident in the recovery in DCM, the beginnings of one in 11. And so cautiously optimistic here. I'm not -- so I wouldn't say that it's going to accelerate enormously and with incredible speed, but I think we're feeling much better about the foundation.”

“We think they'll peak inside of '24, so that's captured in that average forecast that we've given.”

“We view this as a helpful foundation for activity to accelerate in '24, assuming the tailwinds persist.”

“So we did see a tick up this year. We've got a plan for 2024. And if we've got to spend a bit more than what we spent this year, we're going to spend more.”

“You heard me saying -- you heard me say, we're going to do that again this quarter at a modest level.”

“And to your point of revenues are to come down or come in lower-than-expected, we'll adjust the expenses accordingly.”

“And we are committed to returning capital to our shareholders and, in fact, expect to do a modest level of buybacks in the first quarter of 2024.”

“From an expense perspective, we're now on the path to lowering our expenses beginning in 2024.”

“we expect continued momentum in cards, albeit more in line with mid-single-digit loan growth.”

“Embedded in this guidance, includes an elevated level of severance as well as additional potential costs related to the organizational simplification totaling approximately $700 million to $1 billion.”

“We also expect to continue to improve our retail brand performance.”

“In TTS, we expect revenue growth to be driven by new client wins, deepening with our existing clients and continued momentum with commercial clients as we continue to leverage our global footprint and product innovation.”

“And you should expect to see this trend continue.”

“The simplification of our organization structure will conclude at the end of the first quarter and will result in over $1 billion of run rate saves from the net elimination of approximately 5,000 roles mainly managers.”

“Obviously, I want to just jump in on one bit, which is, we are committed and we're very confident around the 4% to 5% revenue growth rate, and so there isn't any backing away from that number, and that's in various macro environments, et cetera.”

“Overall, we remain confident in our ability to adapt to the evolving capital and macro environment to reach our medium-term return targets and return capital to our shareholders whilst continuing the investments needed in our information.”

“From a revenue perspective, we continue to expect 4% to 5% revenue CAGR in the medium term, including the ongoing reduction of revenue from the closing of the exits and the wind down.”

“This will underpin our path to $51 million to $53 billion of expenses, subject to volume-related expenses.”

“We expect the combination of these three drivers to reduce our headcount by a net 20,000, excluding Mexico and generate a net run rate save of $2 billion to $2.5 billion over the medium term.”

“Backed by investments in key products we believe we can continue to grow revenues ex-divestitures by 4% to 5% over the medium term.”

“Over the medium term, between simplification, benefits of the transformation, stranded costs and other productivity efforts, we expect to eliminate 20,000 positions ex-Mexico, resulting in over $2 billion in run rate saves.”

“You're certainly going to see us more active in the LevFin space in the right situations for our key clients.”

“In debt, we had a big pickup in DCM, we feel confident that the gradual recovery in DCM and the beginnings of that LevFin will continue.”

“And we remain confident in our ability to achieve our RoTCE target of 11% to 12% in the medium term.”

“Our expectation is that as we go into '24, to the point that you've made, depending on the macro environment, we're likely to see this tick up above those pre-COVID normalized rates.”

“Well, look, next year, we talked about expenses coming down from third quarter to fourth quarter.”

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

“I think it's reasonable to expect that some of the trends that we've seen so far, we'll continue.”

“And as it relates to buybacks, we expect to do a modest level of buybacks in the fourth quarter.”

“Net credit losses in cards should continue to normalize with both portfolios reaching pre-COVID levels by year-end.”

“And we are maintaining our expense guidance of roughly $54 billion, excluding 2023 divestiture-related impact and the FDIC special assessment.”

“Having said that, based on what we've seen play out year-to-date in terms of U.S. and non-U.S. rates and lagging non-U.S. betas, we now expect net interest income to be slightly above $47.5 billion for the full year, excluding markets.”

“With one quarter remaining in the year, we continue to expect full year revenues of $78 billion to $79 billion, excluding 2023 divestiture-related impacts.”

“We continue to optimize our RWA and capital, which we expect to be a tailwind over-time.”

“We remain in line with our full year guidance of roughly $54 billion, excluding divestiture-related impacts and the FDIC special assessment.”

“And I expect we will continue to do a modest level in the fourth quarter, subject to approval by our Board.”

“Now, while expenses is not the primary driver of the organizational changes, they will help us start bending expense curve in the fourth quarter of next year.”

“We remain on-track to separate Mexico next year, followed by an IPO in 2025.”

“In the fourth quarter, we expect to close down the sale of our Indonesia consumer business.”

“Our strategy is unchanged. We're confident it will drive the revenue growth of 4% to 5%.”

“On expenses, it's the clear path to bend the curve by the end 2024, bringing those expenses down over the medium term.”

“We're confident we're going to meet 11% to 12% ROTC target over the medium term.”

“But we've given guidance on top line growth revenue of 5%, call it, CAGR through that medium-term period, and we've given you kind of operating efficiency targets that we've said as well, and we intend to deliver on those things that reflect the bending of that curve through all of those drivers that we've mentioned.”

“You should take confidence that we're at the levels, including the management buffer that we expect to be for the rest of the year.”

“And I would expect us to continue to see those types of shifts subject to how rates continue to evolve.”

“I think that when we look to print this quarter, that number will probably come down a bit in terms of interest rate exposure and skew even more towards non-US dollar currencies in light of where rates are in those markets and the US dollar will likely be somewhat neutral in light of that curve currently looks like.”

“We would expect, again, subject to how and when this mild recession kind of plays out, we would expect that they would tick higher than that before getting back inside of that range.”

“The answer is, yes. We still expect for both portfolios to hit those normal levels sometime at the end of the year, the normal level, as you pointed out, on the page for both branded as well as for retail services.”

“And we would also hope to see our SCB in a different place for the same reasons we talked about earlier Vivek because there's a lot of volatility in that SCB dependent on the scenario that comes out every year. And I would say, given the shifts we're making in the business model, we'd expect to see that one come down.”

“I do believe that the exiting of these 14 markets does play towards not only reducing our SCB in stress scenarios or as it comes out of stress analysis and tests, but also should play through helping to reduce risk-weighted assets and potentially operational risk as well.”

“The two that remain to be closed and the balance of the year will generate another $1.2 billion or so.”

“Our target is about 5.5% there in 2025 in that key growth area.”

“And then beyond that and through the medium term, we will see the curve continue to bend.”

“As we think about bending the curve, I look into 2024 and we're looking to bring the absolute expense dollars down from Q3 to Q4.”

“And our effective tax rate for the quarter should be approximately 25%, excluding discrete items and divestiture-related impacts.”

“As it relates to the third quarter, we expect continued momentum with clients, including fees and benefits from US and non-US rates on NII.”

“And we now expect the full year tax rate to be approximately 25%, excluding discrete items and divestiture related impacts.”

“Net credit losses in cards should continue to normalize in the remainder of the year with both portfolios reaching normalized levels by year-end.”

“We're also maintaining our expense guidance of roughly $54 billion, excluding 2023 divestiture-related impacts and the FDIC special assessments.”

“We are maintaining our full year revenue guidance of $78 billion to $79 billion, excluding 2023 divestiture related impacts, although the mix has shifted somewhat.”

“We expect to close the sales of our remaining two Asia consumer franchises by year-end, and we plan to restart the exit process in Poland.”

“Given the environment, we will continue to look at our level of capital return on a quarter-to-quarter basis.”

“To answer your question very directly, yes, it is still the case. We are going to bend the curve, as I have mentioned in – towards the end of 2024. It does mean an absolute dollar reduction in expenses.”

“What we talked about for the full year is kind of relatively flat performance. And I still think that based on what we see today and subject to how the macro continues to evolve, that we will be able to deliver on that.”

“The financial path will not be linear, but we are confident that we can achieve our medium-term targets.”

“Despite recent events and the economic uncertainty that remains, our full year outlook for revenue and expenses remains unchanged.”

“The beta assumptions that we have built in are for betas to continue to increase outside of the U.S.”

“Yes. Year-end, early next year, yes. We are still kind of on track on trend for that.”

“we would expect that it will get back to those normal levels towards the beginning of next year. It will likely play through those normal levels a bit before tapering.”

“we start bending the curve in ‘24, as I have stated, and that we end in that medium-term at a place where we have an operating efficiency of about 60%, and we are positioned to have returns that are in that 11% to 12% RoTCE point of view.”

“We do expect revolving levels to continue, but purchase sales, while they are up year-over-year, when we look at kind of the latter months of the quarter. They have been under – the growth has been slowing and it’s been quite concentrated in travel and entertainment.”

“And then the final point I’d make, Mike, that often people forget is that in that NII is legacy NII. And so as we continue with our wind downs, our divestitures, etcetera, that’s going to be a headwind that we will have to deal with.”

“It obviously will continue to increase outside of the U.S., but we will work the relationship that we have with those clients and the breadth of services that we bring to influence and impact pricing.”

“And we expect many of these investments to generate efficiencies that will allow us to self-fund future investments over time.”

“we expect these drivers to flow through to revenues later this year and beyond.”

“One is we won’t see NII momentum as we have seen in 2022, just as betas start to increase on the ICG side and get to terminal levels, that’s obviously going to slow or put pressure on the pricing as we go into ‘23.”

“And when I think about the potential or the forward curves and how rates will likely move next year, we will get the benefit of further rate increases on the non-U.S. side, right.”

“I think flat relative to a year that we have had up as significantly as it is, is a reasonable call based on what we know now.”

“Mike, when you do the math, I don’t think it will get to the positive operating leverage in 2023.”

“The cost of credit is kind of as we’ve been talking about for some time now, which is it normalizes over the next couple of years at levels that are consistent with what we’ve seen kind of prior to this COVID cycle that we’ve been managing through.”

“And we are investing in technology across the firm with total technology-related expenses increasing by 5%.”

“Now turning to the NII guidance for 2023, we expect both ICG and PBWM to contribute to NII growth as we grow volumes, particularly in cards, and we continue to get the benefit of U.S. and non-U.S. rate hikes in our services business.”

“And we expect investment banking to begin to rebound as the macroeconomic backdrop becomes more conducive to client activity.”

“And for Security Services, we expect a bit of a tailwind from increased market valuation and onboarding of additional client assets.”

“In TTS, we expect revenues to grow but at a slower pace, driven by interest rates and business actions.”

“We will make further progress on our international consumer exits, enabling us to simplify the firm and reduce our cost base.”

“U.S. Personal Banking will continue to benefit from the recovery and borrowing, taking full advantage of our market leading digital platforms and new products, particularly in the card space.”

“Markets should continue to benefit from our active corporate client base with the franchise further advancing on the back of investments and the businesses focused on capital productivity.”

“We are focused on changing our business mix to drive revenues and returns with the expectation that our businesses will close out ‘23 competitively stronger.”

“We would expect to see these investments pay off as the markets recover.”

“Despite this, consistent with Investor Day, we expect a 4% to 5% revenue CAGR in the medium term, including the ongoing reduction of revenue from the closing of the exit.”

“We fully recognize this suppresses our returns in the near-term, but we are deliberately taking the tough strategic actions and the investments necessary to reach our medium-term return targets and to create long-term shareholder value.”

“You could see kind of NCL rates tick up above normal levels and then come back down to normal levels in the timeline that Jane described.”

“We are confident we can achieve our medium-term targets in a variety of scenarios.”

“We are now informing them that we will be ending nearly all of the institutional banking services we offer by the end of the first quarter of next year.”

“As I indicated at Investor Day that will be an important part once more of the divestitures are closed starting in 2023 going into 2024.”

“There is going to be and we will not be shy in capturing as an opportunity to simplify our organization further next year when we have more of the divestitures closed and streamlining more of our regional management structures, more of the expenses at the global level.”

“I think I talked about the idea of the divestitures contributing close to $3 billion for the full year, $3.1 or so billion in terms of the capital impact for the full year 2022.”

“And so, over time, I think, we will see continued tailwinds from an NII as the differences between U.S. and non-U.S. activity play out and so that should play to our -- has played to our benefit, I think, and should continue to play to our benefit.”

“We are starting to see many more hikes around the globe outside of the U.S. and so, again, we expect to see betas, which move at a or operate at a much lower pace level outside of the U.S. but start to tick up.”

“So on the ICG side, we tend to see higher betas, and obviously, with rates increasing at a more rapid pace, we expect those to get closer to our expectations in the near-term.”

“We would expect to get to the heart of your question that we will continue to invest in the franchise that in the transformation, excuse me, that would obviously peak and then we would start to see the benefits start to play out from that in that medium-term period. And so, yes, you can probably expect some type of a tick up, but I will give you more details on that when we talk about the 2023 outlook in the next quarter.”

“What we have seen is that the betas have been increasing. They are still running lower than what we had expected, but again, they have been increasing. And with continued expected rate increases, I would expect that those betas will continue to rise in the coming quarters.”

“So despite payment rates remaining elevated, the investments we have been making contributed to growth in interest earning balances of 9% in branded cards and 7% in Retail Services, and we expect to continue to grow these balances in the fourth quarter.”

“With one quarter remaining in the year, we continue to expect full year revenues to be up in the low single-digit range, excluding divestiture related impacts.”

“Regarding full year expenses, we continue to expect expenses to grow by 7% to 8%, excluding divestiture related impacts.”

“So, for the fourth quarter, we expect net interest income excluding markets to be up in the range of $1.5 billion to $1.8 billion year-over-year.”

“As due to increasing regulatory requirements we build our CET1 ratio to 13% or so by mid next year and that includes a management buffer of 100 basis points.”

“At that point, our only operations in Russia will be those necessary to fulfill our remaining legal and regulatory obligations.”

“We are on track to close Bahrain, Malaysia and Thailand during the fourth quarter.”

“While our expenses are elevated as we continue to invest in our businesses and in our transformation, we are managing them closely and we remain on track to meet the full year guidance.”