C - Earnings call transcript Q3 2021

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Operator

Hello and welcome to Citi's 3rd Quarter 2021 Earnings Review with Chief Executive Officer Jane Fraser and Chief Financial Officer Mark Mason. Today's call will be hosted by Jen Landis, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question-and-answer session. Also, as a reminder, this conference is being recorded today.

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

Jennifer Landis

may management's to are subject Good current like in thank today's to for factors, those website, a in variety and to from materially our is Operator. which and may joining described results presentation, all us. available of citigroup.com, our Actual on differ I'd remind expectations SEC download these forward-looking morning. on you, statements you are And for which contain uncertainty changes Thank based you circumstances. statements filing. due including that

the Lynn With to started, being these And Relations. Before like that, over really the Jane. honored all. we get forward next I'd look months. I it be team, few an to enjoyed working I during Head thank partner of Citi with Liz to turn you know I'm entire for Investor incredible getting will to I such and last to

Jane Fraser

you Thank you, good I'm morning everyone. Jen, to and today. join delighted

off and So I give we're engagement our experience particularly and during like unusually to flows from increasing before the the remain clients the the and Corporate the liquidity the see seeing with the Sheets driving client deleveraging. network the robust activity Certainly, we an I consumer corporate with continue through on beyond. Balance pandemic let's cash pipelines M&A pandemic. of year back update sentiment tremendous priorities. positive perspective macro call consumer drive results you and on we the rest healthy remains And the kick strong consumer recovery very a confidence. to of and from what and continues with

that are the watching very These supply finally, constraints debt come and next growth ball what and off said, negotiations. conversations on the issues a happens in global surfaced closely: tad. that and with three in clients. We're in repeatedly the our materials, also ceiling labor, energy; inflation the impact its all and with China growth; has things slowdown U.S. Now

$X.X So quarter, is EPS on. turning the the of $X.XX. provide to Mark's we details a of business, in sale related of results consumer a Embedded pre-tax to loss the going to net billion and income Australia our which reported these

you revenues last our and quarter our been I'm see modest Citi's up $X.XX. X% momentum quarter quarter group, this revenues been than in the second-best the Excluding in decline Banking, would to proud more tell it by the to would X% have state. we transaction, as have institutional this again Xrd year, year-over-year we Services over lending very equity strong EPS income quarter, In Securities albeit grew offsetting markets, continue that engagement best XX% was client And Investment with client's a decade. market. investment and the grew M&A in banking in fixed ICG the and

We a strong year-over-year. in equity also very revenues the XX% had quarter up market with

normalization that third only XX% performance despite the in overall X% fixed up down pretty quarter So and were versus income revenues were of extraordinary the XXXX. they markets of XXXX, versus

the ICG across successfully strategy businesses. revenue to to grow our continue We fee execute

this while be the example, our headwinds, to in For highest by continues decade. fees quarter TTS rate interest impacted a was

under consumer a pressure. under persistently that Similarly, of network client exist for and You clients growth vigorous fee to chain as near revenue their expect us Securities Private Consumer loan elevated we facing; the payment see continued our navigate positions we double-digit balance did our trajectory. In growth Banking, them can that the so help uniquely drove assets custody, dynamic how healthy to challenges also Global supply Bank a many the global future. are assets rates, and sheet, in and mean Services growth under management remained

levels, management card levels. under across branded at to and and branded - The all from Asia the more COVID above XXXX cards, above also encouraging, we or benefit and bit Mexico purchase are now a acquisitions deposits key growth drivers franchise. U.S. across assets in Ultimately, however, continue pre are hubs well other the sales are double-digit

on U.S. Let touch retail strategy. me our briefly

deposits did are customers Now, have XX% investments year. a our half us. having starting last of digital to from retail And see with cardholders and our deposit pay strategy $XX deposits dividends. of branch digital balances at stand those of about X/X than relationship we not coming more previously Digital the our in footprint, who billion, with grown from our outside

effort the a disappointed Now proprietary learned the partnerships. decision will were we and of through efforts vast leveraged Plex. the and majority we our future be But lot investments obviously, by Google's Google to discontinue for

Tier So a year ago. all on Equity X in XX.X% XX% Tangible Capital basis. Book And per ended to over Common share a a quarter Ratio $XX.XX, increased from of the standardized Value with up all, our we

repurchases. over soundness. year, capital excess necessary this our committed far dividend the franchise We So maintain share $XX to returning we've shareholders, to and in healthy to returned and billion through and to safety amount invest remain a to our close and above

these overall, while work seeing the we're much we're previous given So have that ahead, we of investments results with environment have pleased results the we quite I'm made. the And operating in.

strategic our Now, update like I'd to you priorities. on

refresh, the the been culture And and we've are as laid along the can share against of our acting progress and that going priorities and you actions them. and we up-to-date priorities taken against the to see, out slide page you're milestones we're page the to you our we've I've top at Turning date way. work to three, the and that some clearly each talent. ensure this hard quarter transformation, to where And with included lays strategy a we've on out,

And safety by addressing and key the our control one right environment. modernizing that is the orders number risk and transformation is clearly, priority now. our Now, soundness our the consent to transformation and

towards execution. submitted And environment. the our bringing a we're We're firmly and our now this and constructive of already regulators, in excellence with and to effort in During risk a dialog to we are well we quarter, we really as underway urgency. the them, control our pivot culture continue moving to with plans investments have

make our refreshing to strategy. progress, continued also We

goals, ensuring returns accountability, new our this down the emerge hires, attract And in key the these diversity as announcing addition enable In bids talent, overarching We to we're And will enhanced with silos business markets. Xnd we're impeded exit front-office, towards peers. consumer work Company. round as Asia, deep we're starting in Australia, began remaining how in the historically the stranded gap work the high-caliber for going really all vision the of and driving together finally, presenting investments these our operations to sale products looking on, our banking, on including as forward work costs. has and well TTS, all exits touch It's responsibly And clear Citi. businesses. breaking the digital one of decisions firm. a begun turning simplify that these Day across continue whilst already of us executing as with Investor have to culture And eliminate progress And commercial to for to many external goal the on in made, and investments of service and strategy wealth, you and bringing impact you of already for to Mark's we've our the narrow to and we've our that to a we on drivers through offerings. talent, the our see in --

to will you Mark we'll metrics it hold can turn delighted update us so will as And performance go to more me accountable take detail. use be and ourselves then questions. both let We to the you we to over them your our in with milestones that, well. hold And accountable, to that with through

Mark Mason

pre-tax Thank billion, a EPS ROTCE net slide as Jane of related of business. you, to the of on billion loss of million sale these is $XXX $X.X results revenues. morning, Starting everyone. Jane, X, Embedded $X.XX, good and Australia and Citigroup income of XX% $XX.X mentioned, reported in Consumer of third-quarter our on an a

this item, ROTCE would've XX.X%. been an $X.XX Excluding EPS of with

dollar investments have the grown Securities we were loss expenses built translation business, the did sale basis, programs impact while transformation, has included the the adjustment to premium over by in to strong of related a in received to currency investments constant as Upon the a reminder, on is up which a neutralized, experience up in up digitize drivers: already and allocated including X% largely main capital. network. Services. X% Bank, on year-over-year, Security X%, X% Equity in investments from loss to closing, drove growth driven a X% pre-tax that prior office which quarter. Expenses address with primarily our Services, book the year-to-date time we business. so this incur capital well declined year, expenses growth the front far on the two will improve Banking in year. six and and up and largely business-led capital have our approximately and X% the Revenues about will by the as the release of the million On fees, the $XXX of loss excluding Markets sale, been And client the we would of were and our be orders, to expansion Investment this our As Investment Wealth, and revenues our consent focus

and marketing senior globally digital Custom enabling other areas, mandates. wealth as investment So and development coverage. equity these experience. and private and capture corporate far tech, Card Security improve mobile user businesses, client Bank bankers, Services, offerings this In hires our experience Cash like investments digital for Wealth, services businesses, over year, healthcare, front XXX including added support and investments office bankers and significant in advisors, and consumer which TTS fintech, and the we we us is XXX In across installment high-growth as capabilities, new the lending, Consumer, in Private to our continue including well to and new include in and

increases offset efficiency which well addition, expenses usual were In were revenue-related also and largely as expenses, savings. in volume there businesses' as by

just in reflecting expenses dollars, losses by As end-of-period turning In the ACL continue billion, to self-fund credit strong now will release we with X% $X.X billion look reminder, analyze Australia to to opportunities impact of for our credit under the reflecting improvement net loans of to an $X And more remained exit. portfolio largely quality. year-over-year, performance than of down credit, investments. were offset continued constant a

X% up deposits our reflecting client impact, and engagement been by corporate consumers. have year-over-year, up continued Private momentum year-over-year, consumer well as loans end-of-period continued in and with TTS, deepening Bank, clients, and of-period and were client acquisition X% both this driven across engagement as would Excluding clients corporate in active

And to will as return $XX our in excess remain we roughly franchise, in year. Finally, capital the noted committed invest we far this we to while shareholders. continue to to Jane continuing earlier, so returned capital the lion

Banking, as XX% increased resulted in quarter Investment Slide five ACL XX.X% XX% year-to-date. of were Services. Equity Markets, and savings. business-lediness revenues revenue-related net year-to-date basis. benign X%, than business. minimal quarter Revenues offset by by a about the ICG for transformation, the year-over-year Institutional the insticlient'sl the which and the an shows $X.X net losses east reserve XX.X% sequentially, And Slide by ROTCE resa in delivered half driven in and to X% the billion, results the Group. detail. group increased other now Credit for of on X were by in for grew more an This of credit Securities shows the and client's and costs, Turning release. Expenses mainly a more increase income largely and partially costs higher driven with investments efficiency half led Clients offset quarter

in were revenues revenues. in as acquisition, and the XX% Solutions engagement and side, client a year-over-year, fees client fee solid continued banking decade the and quarter in On commercial of as growth for well XX% highest revenues reflected up recovery Card Trade a Treasury

with in of down across all was growth by impact busina of total cross-border transactions and ess deposit payment X%. this lower We're growth to past driving see our XX% flows year. than However, revenues in more clearings continuing the offset spreads, momentum the over XX%

largely Investment well the local globe. ments our grew office to from supply XX%, by activity. clients' the we see enabling quarter-end, driven to As knowledge were XX% up benefits our our trade continue to revenues chain M&A us Banking and year-over-year, in which of positioned take mainly deep as needs technology investments, increased TTS in of advantage front us the meet is loans loans across invest where deal

in quarter M&A the driven decade. As assets for quarter Investment grew Banking Jane growth and mentioned, momentum and new best was reflecting the Private Xnd management, this revenues with loans, best in deposits, Bank X% a revenues and clients. existing under by for

clients. and quarter, XXX new bankers, front added investment and This we almost counselors, other office XXX onboarded over support,

Security our for modest XX% up strategy lending in decreased reflecting which normalization volumes. bodes spread drive driven overall X% a by investments cost lower were Fixed continue markets funds talent sale, growth, year. activity and from Services and partially offset last lower the rates XX% gain revenues on Our and Total revenues loan of market well and to continued by across decreased products. wealth. income revenues Corporate primarily in

However, a decade, clients, by hedging XX%. where In in efforts. our Corporate we cash solutions and their is risk their up technology to products paying activity second-best to were engaging client our revenues This with saw another driven reflecting Services prime conditions. business and talent off. strong with we equities, revenues favorable finance, activity foreign mitigation derivatives, up market with were Equity them investments exchange global solid operations, quarter Security, see and in in and support XX%; our Markets assist

strong been grow growth both in product enabled clients, deposit us platform revenue our saw existing in lower and as revenues spreads. that fee new the with partially making offset investments by to we've Here capabilities and we

Services, Finally, markets. helped we've as expected ICG, and in and a Private solid results contribution results strong income as Securities to Bank which the year-to-date Markets, Investment the and offset looking at well fixed Equity seen normalization in Banking from

loss ROTCE investments with the X. growth ROTCE, the business-led the on resulted excluding momentum a driven to transformation, Global by offset X% delivered for results loss XX.X% savings. a income This as modest $X net deposit partially was Consumer grew benefit and losses. in declined volume-related and deposit GCB a this $X.X Cost credit investment by than increased and solid remainder of a and sale. lower quarter, more than by Slide reserve constant ACL XX%, on roughly driven offset balances Banking and XX% card half efficiency the Expenses net by now management Turning spreads. dollars, excluding in more lower XX%. were of the sale, on And about credit X% in billion, as a expenses, the billion release, which and offset Revenues

consumers balances, progress XX% banking, quarter. our strategy. XXXX U.S. prior on XX% deposits by above levels. to XX%. rates were in excluding services, continue XX% digital the and making deposits, from year-to-date average X% both at encouraged the headwinds households and year with with Total from pre both are were within Pay as levels Flex steady compared That and year. branded improvement more looking - XX% course loss And digital third XX% also seeing our slide trends retail detail. originated and Banking up Finally, In drivers including sale. said, constant year-over-year results cards Flex sales Revenues the Slide relative the were to third-quarter the products, our International XX% spreads. these deposit American were globally. results, up also sales grown revenues down by declined X, of Consumer year for the show business in loan X% we prior purchase quarter. in compared see XX% versus XXXX, year up An to acquisitions results digitally. And cards we in substantially, COVID seen delivered banking. are and over loans X last Loan year, the have we're ROTCE, up the XX% and we to and purchased AUMs in respectively, we've higher checking payment shows North that, deposits, retail this up grew We're On and the of nearing both in dollars. the and over on XX.X% retail the were up Citigold prior U.S. for installment

in a Asia. X% X% decline in sale, Excluding the a the revenues America and decline declined X% loss with Latin on

XX% albeit good across today, primarily meaningfully increase you at in deposits overall, other. driven or Purchase increased seeing not in management, credit quarter Looking in portfolio year, Wealth U.S. last we're shows higher Slide by is four momentum release civil Asia, global deterioration at seeing average delinquency the the related net additional revenue quarter incurred favorable And driven benefit XX the and for $XXX by the assets the investment and given consumer credit do the money last we by relative management Consumer And deposit International we're year. all of to with an lower remained portfolio year. by versus the portfolio. in X% in higher $XXX we Slide grew regions. results growth XX in specifically X%, again trends. expenses corporate penalty, absence at hubs. XXXX. transformation. look Credit still on growth trends, legacy ACL expect under to reflect spreads. international offset detail sales over prior the costs grew the if the provides which investment lower by Xrd million Revenues Credit declined from the the million were due Expenses the in of to the a quarter this

of net $XX.X rates. declined impact by interest lower a as EBT a billion roughly revenue our quarter, $XXX roughly trends, basis. non-interest $XXX $X.X third basis, reported and declined the the revenue and billion. Finally, revenue In well a reflecting of XX loss loan of million. million net on interest Slide net margin was year-over-year, balances interest as shows On year-to-date revenues lower

of the $XX the million Turning slide. to by In the on year-over-year. Consumer Australia non-interest revenues, loss declined the from the on sale quarter, by the Driven non-NIR impact business. of bottom third approximately the

million fees our strong in metrics. revenues Slide show grown capital On in non-interest over by have by would XX, ICG. the key we or Excluding $XXX growth loss, X% driven

XX.X%. ratio CETX capital Our ticked to down

of billion and to $X $X share common billion. of billion returned During the quarter, the of shareholders form dividends repurchases Citi in total $X a in

Book $XX.XX, ratio to share year-over-year our unchanged per grew leverage at Income. by X.X%. Tangible driven was largely supplementary XX% by And Net Value Our

move touch Q&A, we let XXXX. outlook Before briefly to on our me for

total top mid-single-digit a on we down the basis, On the for still reported excluding be range line to revenues in divestiture-related impacts. Citigroup, expect any

expense continue our in continue any to self-fund these With the excluding divestiture-related full-year that, be continue side, control we your ways will questions. time. range, we and to impacts transform to take businesses. look in I for investments to we would be expenses over risk mid-single-digit up On expect our And environment to invest and the to Jane as and happy partially

Operator

one to question. limit [Operator's your Instruction] questions Please

of Your first line John with Research. from the question is Autonomous McDonald

John McDonald

Mark Hi. Good -- morning.

Mark Mason

Good morning.

John McDonald

Could interest came in ask seems have I bit little might income. it in a the than you like, to when wanted Barclays about at overall, expected conference It September. net better you quarter the spoke us here? this in a about from you the core you what give color little improvement and makes drove for the more on how NII that NII growing ex-markets the feel setup

Mark Mason

Good we page came morning, it, John. billion. at about on in we When at Sure. it's XX, $XX.X look

the I factors some put we through making we've as that think investments Treasury that there liquidity a was the here. were of that of couple One that been contributed to work. have we play to excess

I loan we playthrough. that, bow some cards up cards, that X%, we also, fees and fees Xnd, and in some within earlier sequentially, but mentioned growth saw saw Cards, the branded particular, in con the On of late

you As in extra quarter. know, day the an there's

up things the the combination of to And we've so here contributed tick seen. those that

guidance of how to the in look through into over we a continue of revenues, total all long-term time loans balance and there. the new that given we the for grow the to acquisitions really cards portfolio invest of changed, that terms but hasn't I've year, perspective In feeds that with

John McDonald

it Okay. Fed up change from follow-up. returns, in now? in Company free your quarter, on, investing $X lot the something the in that while of And you this a the thinking capital on about its valuation, it capital freed-up giving increased did total On the your much Is the being billion at is As restrictions. you lifting the right to business from how you shareholders? exits, like low business are that are between trading allocating conservative it look and a doesn't healthy, stocks very return going despite returning just Xnd capital as you a

Mark Mason

sure. Yeah

for say on in as that we a changed shareholders. to want from as then any our That decisions invest as us quarter, philosophy we factors all you've do, our perspective and number continue including clients. based of and we that in anything to times, transactions over of has released to those serve over on on DTA we're this ensure utilize we the the how time, SA-CCR, generate philosophy has not to and want -- terms excess capital mentioned, return the time. that seeing sort, and that in to the terms of able really do expected look, in so heard mind, So those that capital have that not our the We changed. we with of decisions me which we're gets performance make Obviously, we that based of to can the we and the release, excess ensure given we'll what to things allows in to is I make in other want we shareholders SCB business, our return income, of

John McDonald

Thank you. Okay.

Operator

is question Evercore. with line from of next Glenn Schorr Your the

Glenn Schorr

Hi. plans in you're custodian And enter your custody consumer you is. approval business? if Australian viewing I on you business how on my then [Indiscernible]. but so we comments that buy the kind later in more quick the the just frame connection rest to that and your for what of Two business market, if means regulatory opportunity perspective same China. wonder Wonder Australia, -- much. things One how thing that onshore perspective. interesting receive your pay and to outside on could the first was globally, with in became material now of Thanks not get

Jane Fraser

access large XX% terms understand to we're currently and the the will the happy of we've And in corporations China's a in market I'd it's in that and And country It very license they the have China, in XXX at operate got. of say the China. how our -- our been In of dynamics business XXX we in Kong. looking Capital also that very Services for don't on We're gain growth market. well. that our support in Thanks, start-up, we've take Glen. Why the I Fortune Securities in to of one? custody that serving operations local operations, strategy of help number years, ground we're Hong Market. China, investors part

buy-now-pay-later, [Indiscernible] benefits our -- quarter's the learnings of I over Asian investments. this this in throughout those the we the way, of to our some in like that one we're front, that that starting few think applying years. certainly one business is that results U.S. in. operations been taken from And and through them just seen You've we've lot particularly think of another a on last previous investments well-positioned we're is the we're the to and making Asia obviously, divesting but this we've we the region, terms And taken from in operations

many in certainly those leverage developing Mark, we Cards part the suite been our lending on heard the particularly our installment expanding some We've with capabilities. expand about and XXXX, into new POS. And payments the we've And out in our not in by one of our largest of existing strong personal with we're excited existing Flex off product partnerships Cards So we portfolios, additional in are state And been been such if very to strategy consumer. partners that doing point-of-sale total and player, that's digitization American Amazon, of our XX% from platform with and the sitting on U.S. sales of Mexico. loans the Cards customers, lending channels and customers. be Airlines. we've growth lending And the are watch e-commerce And it leveraged still areas seeing finally, broader partners I'm both digital our is in as those been in for channels. as you've partnering will capabilities since building U.S. We've

So will the on I so. multiple and say, a can years the front strong making last progress clearly, we're the some to pay. if of at really for few towards trend that all would on And wants do and we've to back and formats look the over how there's a we this, been of different customer making of investments this, continue

Operator

of from is the question next line Morgan Stanley. Your Graseck Betsy with

Betsy Graseck

Hi. morning. good

Mark Mason

Good morning.

Betsy Graseck

a basis, it my the executing cards at Wanted opinion, bit is you trending of the on. some in the look what as to about growth to understand opportunities it's of of some then has to, up I But there a a do when in little a Card been think we business. Retail bit And bit more the can you spoke U.S. I things a that terms business you bit just about year-on-year little have while in know on some your a which rates. the of dynamic program, got best-in-class as peers Card you've Partner some below little of get refresh peers. be

U.S. side the thinking penetrating just going about you've investor way and because your with are well community that wondering the by brand? deposit not the understood got in U.S. forward. partnership a that Google you might with opportunity as to leveraging regard the your app in it's your with Now be a you're about side great like and across app under not seems on thinking how So well mobile What it

Mark Mason

that. for get Cards. to don't to Thanks want Why start I'll may and I started jump your with and related comments Jane in,

we As quarter-over-quarter. up Cards, They remarks, loans as up at X% prepared about year-over-year. one particularly were see did there it U.S. Were up when percent branded loan tick you The start balances. about I to relates mentioned to my look in a

play high. important you're we've still and stimulus payment I what quite rates And got is here as really out market but know to liquidity are up, is think seeing, re-entry. the You Because over see time. how are purchase sales

reentering acquisitions. what Custom which the market, so focused that both we're on new is to how helping and drive Cash into through we're doing we're launch, And our is

volumes as those being shortening adding back that, last things, over mix know, targeting And fees acquisitions future are of roughly X and you for that our of periods levels. acquisition proprietary convert in experiences promotional feed balances higher thoughtful lower the a new ultimately to we've as our cards. half and to half average We're revolving balanced Over been balances of those are fact, In interest-earning years, XXXX transfers, those promotional about so balances. our over will time.

So that's an step. important

and second from start out, promotional to The is thinking which Loan. about broadly. And lending worth like Flex what that we're is just thing products and one. driving On-Card don't Jane with they more interest I'll have And them generate to reiterate lending growth those Pay on mention associated periods the pointed Flex day

here. We're important And so this. to we're, generates we part our returns. on portfolio player positioned big of a It's focused and to growth. capture obviously obviously need But we're keenly be healthy an

As the as and recover be lending quickly doesn't we products. things with economy behavior need and to like like prepared to broader as Behavior we'd continues if normalize normalizes

Operator

Your the of Jim question line is next Research. Seaport Mitchell with from

Jim Mitchell

maybe Hey, good just a on is focus morning. question My little rates.

on but Brazil. I we've focused your global in exposure, hikes rates, so U.S. seen given Mexico, rate think we're

see next contemplating Now coming rate your on up think to side? you hikes few soon do the UK. benefits of rate world? How the And quarters we're over some in NII sensitivity rest the about the do we the

Mark Mason

hikes hikes, talk we a here then and mean, Yeah. in the with U.S. Look, of have rate of the I rate number seen

long-end, IRE that our us. price or increases at look short-end for in the said, sensitive but not report, to that we beneficial the we're that you As are rate

in to franchise pointed well. important. have out, available global increase. we're to our enough for demand we client and TTS performance fuel see elsewhere. But to And increases of dry of powder And return we've starts impact as us the as is also on as rates got for you internationally parts taking the to But quite liquidity of that a that as like advantage helped firm, ensure invest lot that's rates so our

Operator

Usdin is of Ken question next with from the Your line Jefferies.

Ken Usdin

at thinking your year. sure moving Good for Morning. just that's from this But group Thanks versus understand across just next required transformation, a we other can underneath might cost for bank bank. to up can the the going like. next in growth about should from what what stay guide color, update year. parts of help run-rate the But just here? costs If the on reiterated I we things comp year's question and talk large away in on investments incentive any early be you about for lot terms the Thanks. us And coming even terms of looks know,

Mark Mason

Sure. Yes.

as as expenses start pointed is the X%, So on the the our year-to-date. Again, guidance, up up so me year-to-date well look, in as consistent remarks, with in are guidance. expenses to X% speak. I which to Both saying, are our total span expected which prepared as let aggregate transformation out relates by it

important As those this, I X spend. about of think are very categories

transformation's and going continue priority, we to out, necessary and to across get pointed top do franchise, to investing what's are that. our going Jane expenses that highlight that the we're spend need also we're that and As we so that But to would to something has long-term done, we're I ensure control.

efficiency we're to they're be putting fashion, that very expense dollars you dollars And in the the work put also and that, And seen have we're fact, see through we every that levels about you spent. expense fact, that work optimal scrubbing that today. seeing. looking we doing ensure spending opportunities. -- scrubbing So in in that for being we've deliberate that productivity to we're that to I'm necessary in the are are play an to are And single line

going we've if very million $XXX in a is handle If through XXX as of you And our we very that budget I in about, the of will our our as between look not something guidance we I'm disciplined at that management that balance we'll and investors that tell finalize and we were at that up broadly. for generated the the We're middle very more expenses, XXXX. fashion, with for recognizing -- quarter Expense Right. give XXXX, you obviously you somewhere our and hasn't deliberate you we -- firm XXXX. out. inefficiencies season. changed that we to and we're guidance that, about, controlled priorities pointed share look

Operator

Fargo Wells is line question with Mike Mayo Securities. from next Your the of

Mike Mayo

from more. question's Jane, a bonus you for top referring broadened announced a to out the August that'll this be And scheme I'm where for new executives. it many said Jane. to Citigroup. Hi. on call, My Apparently, it's X-K just

targets, yet, if before see my and bonus and the the And who not happening. us those, I we have so doesn't this or represent you have targets be do Thanks. reveal targets, although way March Xnd, you for suspect good what's until either so, we we shareholders that so or you do is, scheme see feel shareholders Because won't question can those as investors.

Jane Fraser

Mike, note I'm day. as obviously we actually saw the really glad other you up, brought your this

compensation a just with for Vegas. you'll start a with Las our let's take back If step bear me and for minute,

really think understand for shareholders important our this. to I it's

be Most is our the interest So team aligned of the management with shareholders. to compensation performance-based. of It's importantly. the designed

from and of So then, which we have And process with year is for also built-in paid what of we last XX% annual downside in accountable as management resulting the have, deferred comp its only the the consent hold out reductions first, last orders. PSU saw year performance, clearly secondly, of target. this meaningful saw the out any we

pretty do know. talent The performance I'm talent right board said program, So terms we of the execution its a then we certainly and environment bank modernized than in as senior the the if program the the and the input successful make be leaders the that's will we'll so, the program. laid proxy, control obviously, going then the the tight to And ones as the and more we that isn't I hold the and be We this at it final paid metrics urgency. you'll note need -- also successful can for also them. out? accountable priority. retain stakeholders we're And a to the sticks. to to if reflect excellence. drive me, rewards And we and so question, and this and your accountable and need criteria To X-K outcomes, shareholders hit to now, our what I get we benefit in of execution. in one milestones paid driving out in And And will with see that the etc., we [Indiscernible] anything in other in sure all. transformation that turn all I bank. risk deliver percentage because there it's the number want out we to from the so need will people its of, metrics, It's market both important make is our And of transformation the involved. if key from carrots, to Board, need driving rigorous with put determine opening, hold

will must for we short the of just fall will there last the what if were we So there is as expected, my main accountable, for and as of consequences I'm message the we accountable, and see, year can the team's very you leaders be is simply me deliver. management and program.

Operator

Bank next is the line with America. Poonawala from of of Ebrahim Your question

Ebrahim Poonawala

Jane, Good you to back pulling at Google morning. I -- to, out. disappointment Plex want just go mentioned

that not to to terms put talk client Just in us acquisition other terms deposit of did that's a critical as in that of you partnerships tool, gathering and the urgency view sort you does forward, may of some moving that given that improve strike efforts?

Jane Fraser

dimension. we've have new I as a that we're is deploy. now. their digital deposit which eggs invested the future That's in disappointed for well put the few lot am very and with opening, we easy is growth added with most the reusable embedded lagged in ready it bit strategy. We've efforts. talking about now were is decision. sticky me, And the The obviously geographies alive. partnerships branded a that for across pleased communications. in I U.S. this the about I doing importantly, been we right that in world probably just very existing things we what strength the very a of forward. to like part for we've across But certainly in We've around doing basket, of proprietary of is deliberately the industry the also digital APIs, a really going piece ones real-time, and Yes, all operate in digital partnerships it's together our digital U.S. make It's whole I it other what suite the developed engagement a And are we seeing that the can that like didn't in in learned come to and our And quarters that seeing But said capabilities as we're We alerts, make as partners. valuable own services have, are one on geek as try this. and stacks we for partner maybe and this tech

consumers the doing of day, some our things with end to in is all both returns the going continue drive we're feeling the also been world, I with the Google, urgency always I would U.S. and around say, strategy and consumer work further the the in think performance, improving partnerships but in of grow we've at us digitization the the So the that and And franchises. helping returns here. the growth,

Jennifer Landis

Thank you.

Operator

Your Matt O'Connor line next of is the question Bank. from with Deutsche

Matt O'Connor

morning. Good

Mark Mason

Good morning.

Jane Fraser

Matt. Hey,

Matt O'Connor

what when able you about submitted abilities I think for them? expect you share points internally, to you can always you're do hear stuff. what things the you'll looking when what discuss sense a us. data can the So the limited But are in And of there know regulatory us the Can of give are back of you and that them? quarter. be you to you plan from kind this regulators to communicate then to all

Jane Fraser

Yeah, this X from as priority. is me, our heard you number

done plan it's we the plan. think of I'm this get said, I as It very excellence us quarter, the and submitted it. we get all this proud with our of benefit And is of we right. that Xrd stakeholders multi-year a done in personally we

states years provides clear in a position our element. comprises and the As it said, in operate digital for our major with excellence And very model it six to core ahead controls will risk In for target us world. Mark it and programs. operating particular,

dialogue say with constructive, and regulators. we we've very As now ongoing have been said, helpful a have that's we to plan. And firmly executing I to really pivoted that our frankly,

being So constructive is very way you spoken through. haven't not has as -- then if as all been and you the This submit

executing importantly, that outside firm, rigorous on to full a In can we're with the account. we're a culture so her We ensure I the we way, investments the here. on we steam from terms I caliber data. governance, accountability ensuring so as have We team know execution, a regularly in say way. of going and we're in capabilities about, from of really with on excellence, in the And the in Peetz talent brought have areas of hires ahead of outcomes as pleased board very talked us Karen holding our Mark is certainly think framework. with as effort put inside some executing making. we're the and modernization, we I'm are firmly putting new much new and and and disciplined deliver to

this, Investor this. we're we go message So pivoted we've obviously to is at and me think on main we'll be getting more sharing through the for as I but execution Day and details, with

Operator

is Your from of Vivek Morgan. next question the with line Juneja JP

Vivek Juneja

Hi, Jane.

compensation talked X-K to wanted that clarify you about. Just this

comp You you've to always had that your Executives, incentive bonuses had you for and similar paid a long-term always everybody short-term else.

understand for? changes long-term over is to and So behind logic and shouldn't I'm are being is compensated and the additional is. transformation already partly compensation performance. incentive for, Because which project longer-term above and to what what moves be that, here seems meant be adding of management part that's that payment the trying rewards an

Jane Fraser

Look, you. Thank for as I of that. it's thank first exactly will all I you think

that that very agency. We as to the the both anyone as know, through here. every I and and program in involved as need with I that the that as said carrots to talent execute for piece. think in the in programs and want number talent drive is it's this in you answer sticks questions. key tight earlier this year, to their well individual it the make those participates question individual assessments to excellence, priority, no is I program Mike's a to sure and We market, there with retain everyone want X the come And is this there bank are from

interest. fully aligned this shareholders' is with think the So I

but incentives we to do if management designed that. program downsides to to deliver And You to the this with have all just with so. want the is fail excellence, equally do

Operator

of question with Lim General. is the next Andrew line Your from Associate

Andrew Lim

of a Morning. for color bit a you the of impacts one. It's CETX the give Thanks Wondering ratio timing question. of quantum technical implementation? could the of you. my the on terms implementation the bit a taking for Thank in if and SA-CCR of the

Mark Mason

Thank share we Sure. now. said, SA-CCR it we're our through and be in I'm we're the Obviously, that Look, impacting share at day. working to plan with I towards don't -- not mandatory range the doing that impact date, one's early how adopted working risk-weighted to can to. compliance G-SIB January assets of will factor like which a prepared a We've impacting that score. we we're we'll XXXX. we're not you, from but and planning adopted you. is later when it What

Operator

is question the of with Gerard Your from next RBC. line Cassidy

Gerard Cassidy

How Good morning, are Jane. you?

Jane Fraser

Hey.

Gerard Cassidy

and in Can cards, give the at And Banking looking you. Services. -branded the you us outlook Citi noticed Retail breakdown quarter. you nice in it's Thank of page the Banking's, a Citi and us, supplement, guys color your maybe for business? share And give what's a that in was some I you just I the part just loss between Banking, Retail with Global can on there X, driving guys in Consumer your in think us America business North that that Retail

Mark Mason

higher retail impacting the the playing the performance, drag is in part banking the that's On through and from there income spend expenses there. transformation

Gerard Cassidy

you. Thank

Operator

Mike is question Mayo of the Securities. from line Wells next Fargo with Your

Mike Mayo

and as Vivek and Hi, regulator, number follow-up The I to just question that my mentioned serve wanted you to one. to follow Mark, have up you it's Jane again. other expressed.

everybody in think call. you to this And then that's serving stakeholders. mentioned clear I

for being left frame. over I and really behind maybe shareholders? Mark, a philosophy -- gets question why little time Citigroup think any bit. And with the to the almost what's at been I have done shareholders And -- might disagree comp

is "Is because you greater. do What just then is changed you to value Your " philosophy the and in investment clients, said business, first serve then definitely book getting buybacks. greater philosophy your discount

peer valuations. Your has has increased. worst-in-class market adjusted versus stock efficiency, and discount returns, Citi

matter, up have from and Amazon, buybacks point-of-sale share time, bit that stock, a bit to from nature, you. just why the to what the do deposits, can that we're but in do shareholders opportunity do to stock, price? a such consumer you show So with follow-up on So to all philosophy use giving Thank you credit show a your gets freed your in such the that. little of digital you since also more if what of stakeholders Australia can underperformance little or cross-selling investing, only great share a given more then, matter, question you change buyback with not regulars or as And as what about you that on little versus more symbolic price? capital what at strategy paid can far the a obviously do everyone as sale that matter, one U.S. can a cards,

Jane Fraser

Okay, Mike. Jane. It's

Let's obviously. go,

are shareholders to of have laid culture value the but of that returns. narrow determined incredibly realize and are together Day, peers. we all work from the where look necessary to our our around the And to benefit. gap their ensure you're and strategy Citi think us. Let different Investor going what -- mix we're announced, important it secondly, we unlock drive underperformance be by the strategies and when me Unequivocally, with this. in presentation, the going doing starting to that, with going talent And different to what is up on obviously, out, the address we all bank doing in decisions trading do the will it we've we're business lies on and it better. We're to We're and that in we've to right headed come already to investors to where the that to we to doing, And and that kick is X the so we're the for that priorities page do we this running also see are where one-off. our we're the we're the what is something at that refresh, in transformation what going that

I that it's the of hope the clear that. think and I framework using -- pretty around terms in we're principles

with really the tremendous think obviously do then, and disappointingly quite I'm so of, Citi, I about, in we see Mark sense trade You've share that heard we say, below excited shareholders. said, pretty not what make capital? we In do will which given unlocking is as also is terms our only our from excess book, for repurchases me value where

Consumer on that exit we'll with can we my that in is important healthy be do very but And also for there's our the the mindful that's relatively be think excess we dividend part returning yield, to exits the around appropriate, shareholders. businesses. we've that will a here and of We as to well. you've have made buybacks. the the investment will an their capital at bit But of stock bar that and reinvest jump see chomping that the no seen attractiveness some returning return the internally. to shareholders of required the and at decisions other question but mix. where CFO And on the moves, We is Asia And of certainly shareholders I in for

Mark Mason

Yes, thanks.

wide, more very return out of business doing or in for couple deliver before the into us quick the answered we're play. where I in a it as the shareholders you towards and that, was add One, the that just think given that have available yield when that the in of clients, stock gap the dividend couple I point third, of redeploy capital. broadly given is capital maxed the where SCB mentioned, business, where is our that to came our And we because making that things. quarters to year, just it the above narrowing Xst returns about we're towards peers. is. a Again, then we've that to thing important. cost so our skew We're The how capital to ensure of smart are are I'd we is buybacks. Jane decisions is out Xnd trading invest That

question. So you for the thank

Operator

Research. of Wolfe Your final with question Steven the is from line Chubak

Steven Chubak

me this Good Jane and about for of to was great an intensity. the Jane, hoping I wealth And in is Thanks area management Mark. competitive morning, ask squeezing opportunity. here.

And investing been peers high and hoping in whether consent M&A, to And the what to going you some was years. whether you're on expand growth technology lastly, you your prop to this have of you that I in the detail. look Day precluded cover ambitions. were You the could speak then, large know of heavily under the at just to peers for more that some place I arena some But this many in space, in or can or space engage if level, to Investor just Citi's differentiates have a value from you if support infrastructure is provide inorganically. a large of have into -- order,

Jane Fraser

so Thank Yeah. much, Steven. you

So be with our I'm opportunities because pretty here all we pleased to pieces have very the successful.

breadth there. We in connectivity here for management We've the is have Asia, strategy wealth amongst you we got the the of affluent, the world, that of also principles refresh. full into the relationships, We've this laid Banking important aspirational and strong not Retail around is the a States in affluent where ground the our brand got s out a become when pretty franchise. heavily base, just points also client a brand and in this on particular, those go real but

of a for in where in with now. have years Commercial operating many and already. is have world, relationship geographies certain around This been world, the owner we the Banking engine they've the We operations the wealth creation

net that is worth it elevator. thinking build a important. Bank to Private the elevator synergies the much consumer the to to more base will by the will our area connecting so, all in be natural closely that that from way that very really obviously haven't in of ultra-high out the them way. invested I'm be out we Similarly, generate up client affluent And franchise the we in

We great platforms. have a we -- great some have

the year-to-date. advantage here don't the And We've here. of, Asia coming startup quickly. point Wealth is client far so this the year. pieces beginning releases the clients tech with that together advisors, we've biggest the have as We've in across and this bring office scale, platforms the and support Banking wealth we and fact Asia. on would opportunity not so that the on but in centers. already is as front We acquired that platform We've seen the full done for in the clients one around this business bankers, Wealth the focus X added a to I got other of global consumer of we've have players that in integrated the to XX.X launched means clients to ones the And digital these single we top institutional over Our over of if into that the of is in XX it's our also offering Private different to clients, offshore It's also in U.S. all well, last X our particular, spectrum take world the Xrd year. for top this announced going thousand of obviously fruition business a already XXX live back new-to-bank at plus quarter already we quarter. features year, are

in value capabilities, products, like so are. spectrum the the as the across of [Indiscernible] just just players other technological And that be giving and just and is got across would digital trend, of needs, this is investment are the the it's what got one we we've the their is we're that your momentum client for these board. unstoppable other different the wealthy are that at enhance than together, all us And opportunity we've benefit moment. fact narrowly in and all been a them trend the really rather ahead. us. the acquisitions full is we this years accelerating at those In serve the partnerships think some investing acquisitions, propositions putting pieces, it's things particularly to the really at what going Wealth Asia our to focused look around that side. the of more Obviously, aren't those We trends, one I

Operator

There are call questions. further to remarks. Landis will I no over closing turn the Jen for

Jennifer Landis

all questions. Please out any Thank to reach you feel free today's to Thank you. Have joining follow-up for call. IR a great with day.

Operator

This concludes Citi's call. Xrd earning Quarter

now may disconnect. You

Citigroup (C) 14 Oct 212021 Q3 Earnings call transcript