Citigroup Barclays 24th Annual Global Financial Services Conference

Yeah. Thanks. We continue to see strong financing activity. Capital markets are broadly open across both equities and bonds. There's a bit of a bifurcation with certain industries like technology, AI, of course, shipping also on the back of some of the supply shortages, and energy, where you're seeing a fair bit of capital-intensive needs and projects that are coming up versus some other pockets like auto or consumer, where you see margin pressure. Of course, we're watching out for geopolitics and what role that can play, or AI as well. But it's also true, and we have to accept the global economy and the U.S. economy, they both have navigated quite well so far in terms of adapting to some of the market dislocations to date.

Yes. Put simply, resilience. Consumers continue to spend, consumers continue to pay their bills on time. That's the simplest version. If I talk about spend for a second, we are seeing around 6% year-on-year spend momentum. That's more or less in sync with what we saw in prior quarters. That I'm excluding from here the impact of our American Airlines Barclays portfolio purchase. You're seeing in that spend good trends, not only obviously picked up from the oil inflation pickup and gas prices, but even you see, you look at travel, you look at discretionary, is relatively broad-based, and we continue to see that constructively. The second piece on credit is stable. Delinquencies, losses, leading indicators, they're down year-on-year, so that continues to be stable. Obviously, as a reminder, 85% plus of our portfolio is prime and above, right?

You'll decide how representative we are of the overall economy given our target market. But overall, we're seeing good stability in terms of credit, good performance in terms of the spend. Of course, we're watching out for the relationship between inflation and wages and whether there's any gaps there when you subclusterize it. We're looking for rates, we're looking out for the labor market, which appears to be in equilibrium so far.

Yeah. Before I go into each of those couple of components, let me paint the broader picture for a second. I am very pleased with how our strategy is working in terms of the execution discipline and the results that we are seeing. When I put together the performance year to date, which has been pretty strong in the first couple of quarters, as well as the good momentum that we are seeing in the quarter now, I am confident that we are likely going to end up for the full year a little bit better than the top end of our range for our returns. We had talked about how our guidance for the year was 10%-11% of ROTCE, and, at this point, I think it is likely that we are going to be a bit above our 11%, so the top end of that range.

Now, when I look at markets and banking, both of them, very strong performance year to date. We continue to see good momentum overall. Starting with markets, I think consensus has it broadly right. We are seeing mid-single digits year-on-year growth for our markets business. Continued good momentum in equities. That is one of the key areas where we have been investing in, and so we are seeing good progress in prime. We are seeing also in derivatives, good momentum there. On FICC, our spread business with financing and securitization, which we focus on a lot because it drives the stable sources of revenues, doing very well in the same way that we are seeing good progress and momentum in our leading FX and currency franchise as well. Both of those things contributing to that kind of mid-single digits picture for markets.

For investment banking, we expect to see in the quarter performance around low single digits, revenue growth year-on-year, with a bit of upside depending on the last few deals between now and the end of the quarter. True for both markets and banking, September is a key month, given how seasonally distributed usually this quarter is, right, with the holiday season in July and August. These few weeks are very meaningful, but overall, that low single digits with some upside is probably what we are looking at. ECM continues to be strong.

Up low single digits. Yeah.

Yeah. Thank you for clarifying the sign. In math, it's very important to know which signs you're pointing towards.