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. Landis, you may begin.

Thank you, Operator. Good morning. And thank you all for joining us. I'd like to remind you that today's presentation, which is available for download on our website, citigroup.com, may contain forward-looking statements which are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these statements due to a variety of factors, including those described in our SEC filing. Before we get started, I'd like to thank Liz Lynn for being such an incredible partner during these last few months. I really enjoyed getting to know the entire Citi team, and I'm honored to be the next Head of Investor Relations. And I look forward to working with you all. With that, I will turn it over to Jane.

Thank you, Jen, and good morning everyone. I’m happy to be with you today. Let’s start the call by discussing the macro perspective and the strong engagement we’re seeing from clients, before I update you on our results and priorities. The recovery from the pandemic is still enhancing corporate and consumer confidence. I’m particularly encouraged by the robust pipelines we have for the rest of the year and beyond. Corporate sentiment remains very positive, with strong cash flows and liquidity spurring M&A activity and debt reduction. Additionally, consumer balance sheets are unusually strong, supported by increased consumer wealth during the pandemic. However, growth has slowed slightly. We are closely monitoring three key issues: the slowdown in China and its effect on global growth, inflation and supply chain constraints for labor, materials, and energy, and the ongoing discussions around the U.S. debt ceiling. These concerns have also been a recurring theme in our client conversations. Now, regarding the quarter, we reported a net income of $4.6 billion and earnings per share of $2.15. These results include a pre-tax loss tied to the sale of our consumer business in Australia, which Mark will elaborate on. Excluding this transaction, our third-quarter revenues would have risen 3% compared to last year, and our EPS would have been $2.44. In the institutional client group, we experienced a 4% year-over-year revenue increase, with strong client engagement and momentum in Investment Banking, equity markets, and Securities Services offsetting a 16% decline in the fixed income market. I am proud to announce that it was Citi's strongest M&A quarter and the second-best investment banking quarter in a decade. Lending in the institutional client group also grew again this quarter, albeit modestly. We had a very strong quarter in the equity market, with revenues increasing 40% year-over-year. Consequently, despite the normalization in fixed income after the exceptional performance of 2020, overall market revenues were only down 5% and rose 11% compared to the third quarter of 2019. We continue to effectively implement our strategy to increase fee revenue across the institutional client group businesses. For instance, even though our Treasury and Trade Solutions are facing headwinds due to interest rates, fees for this quarter were the highest they’ve been in a decade. Our global network uniquely positions us to assist clients in navigating supply chain challenges, which we anticipate will persist for the foreseeable future. Likewise, we achieved double-digit fee revenue growth in Securities Services and the Private Bank, as client assets under custody and assets under management continued their strong growth trend. In Global Consumer Banking, a solid consumer balance sheet and consistently high payment rates have kept loan growth under pressure. Other essential indicators are slightly more positive; U.S. branded card purchase sales are significantly above 2019 levels, and acquisitions across branded cards, Mexico, and the Asia hubs are now at or above pre-COVID levels. Ultimately, we continue to gain from double-digit growth in deposits and assets under management across the franchise. Briefly touching on our U.S. retail strategy, our digital initiatives and investments are beginning to yield results. Digital deposits stand at $19 billion, a 26% growth over the past year. Notably, more than two-thirds of our digital deposit balances come from customers outside of our branch network, with about half of those deposits originating from cardholders without an existing retail relationship. While we were disappointed by Google's decision to halt Google Plex, we gained valuable insights from the effort, and the majority of our investments will support our proprietary efforts and future partnerships. In summary, we concluded the quarter with a Common Equity Tier 1 Capital Ratio of 11.7% on a standardized basis. Our Tangible Book Value per share rose to $79.07, reflecting over a 10% increase since last year. This year alone, we've returned nearly $11 billion to shareholders through dividends and share repurchases. We remain dedicated to returning excess capital beyond what is necessary to invest in our franchise and ensure our safety and soundness. Overall, I am pleased with these results given the current environment, and while there is much work ahead, we are beginning to see the fruits of our past investments. Now, I’d like to provide an update on our strategic priorities. Turning to slide three, we’ve included a page outlining our top priorities and the actions we have taken to date. We will share this page with you each quarter to keep you informed about our progress and milestones. As you can see, we have been actively pursuing the priorities I outlined, focusing on transformation, strategy refresh, and culture and talent development. Currently, transformation is our top priority. A central aspect of this transformation is our commitment to safety and soundness, which involves addressing consent orders by modernizing our risk and control environment. During the quarter, we submitted our plans to our regulators and have maintained a constructive dialogue, shifting our focus firmly toward execution. We have already begun significant investments in our risk and control environment and are fostering a culture of excellence with a strong sense of urgency. We are also making headway in refreshing our strategy. In addition to announcing the sale of our consumer business in Australia, we are deep into the second round of bids for the remaining exit markets. We have commenced work on how these exits will help simplify our operations in Asia and reduce stranded costs. We look forward to presenting the comprehensive strategy on Investor Day, outlining our vision for the firm. Furthermore, as Mark will discuss, we are executing various decisions we have already made, particularly in TTS, wealth, and commercial banking, involving investments in front-office hires and enhancing our digital products and services. Early results from these investments are beginning to show positive impacts across these sectors. Finally, in terms of culture and talent, we continue to attract top talent while striving to meet our diversity goals, ensuring accountability, and breaking down historical silos that have slowed our progress as a company. This is a new Citi. All these efforts have one overarching goal: to responsibly close the returns gap with our peers. We will keep you updated on the metrics and milestones we will use for accountability, so you can hold us accountable as well. Now, I will turn it over to Mark to delve into our performance in further detail, and we will both be happy to answer your questions.

Thank you, Jane, and good morning, everyone. Starting on slide 4, as Jane mentioned, Citigroup reported a third-quarter net income of $4.6 billion, EPS of $2.15, and an ROTCE of 11% on $17.2 billion of revenues. Embedded in these results is a pre-tax loss of $680 million related to the sale of our Australia Consumer business. Excluding this item, EPS would've been $2.44 with an ROTCE of 12.5%. As a reminder, while we received a premium to book on the sale of the business, we did incur a pre-tax loss primarily related to the currency translation adjustment that has built up over time and is already included in our capital. Upon closing, the capital impact of this loss will be largely neutralized, and we will release approximately $800 million of capital allocated to the business. Revenues declined 1% from the prior year; excluding the loss on the sale, revenues would have been up 3%, largely driven by Investment Banking fees, as well as strong growth in Equity Markets and Securities Services. Expenses were up 5% year-over-year, and constant dollar expenses were up 4% in the quarter. On a year-to-date basis, our expenses have grown by 5% with two main drivers: investments in the transformation, including the six programs to address the consent orders, which drove about 3% of the growth so far this year. And business-led investments which focus on our front office expansion in the Investment Bank, Wealth, and Security Services, and investments to improve our client experience and digitize our network. So far this year, we added over 500 bankers, advisors, and other front office support in Wealth, including Private Bank and the consumer wealth businesses, and 200 corporate and investment bankers globally in high-growth areas, including senior hires across tech, healthcare, fintech, and private equity coverage. In our services businesses, TTS and Security Services, we continue to improve client experience and digital capabilities, which is enabling us to capture significant new mandates. In Consumer, these investments include development and marketing for new offerings like the Custom Cash Card and installment lending, as well as investments in our mobile and digital user experience. In addition, there were also increases in volume and revenue-related expenses, as well as businesses' usual expenses which were largely offset by efficiency savings. As a reminder, we will continue to analyze our expenses to look for opportunities to self-fund investments. And now turning to credit, credit performance remained strong with net credit losses of just under $1 billion more than offset by an ACL release of $1.2 billion, largely reflecting continued improvement in portfolio quality. In constant dollars, end-of-period loans were down 1% year-over-year, reflecting the impact of the Australia exit. Excluding this impact, loans would have been up 1% year-over-year, driven by active client engagement in TTS, Private Bank, and end-of-period deposits were up 6% year-over-year, reflecting continued engagement with our consumer and corporate clients, as well as continued momentum in client acquisition and deepening across both corporate clients and consumers. Finally, as Jane noted earlier, we returned roughly $11 billion in capital so far this year. And while we remain committed to continuing to invest in our franchise, we will continue to return excess capital to shareholders. Turning now to each business. Slide five shows the results for the Institutional Clients Group. Revenues increased 4% year-over-year and sequentially, mainly driven by Investment Banking, Equity Markets, and Securities Services. Expenses increased 9%, with about half of the increase driven by transformation, and the other half business-led investments and higher revenue-related costs, partially offset by efficiency savings. Credit costs were largely benign in the quarter as minimal net credit losses were more than offset by an ACL reserve release. This resulted in a net income of $3.4 billion, which grew 21% in the quarter and 60% on a year-to-date basis. And ICG delivered an ROTCE of 14.5% for the quarter and 18.8% year-to-date. Slide 6 shows revenues for the Institutional Clients Group in more detail. On the banking side, revenues were up 11% and Treasury and Trade Solutions continued growth in fee revenues of 20% year-over-year, the highest quarter for fees in a decade reflected solid client engagement and client acquisition, as well as a recovery in commercial card revenues. However, all of this was more than offset by the impact of lower deposit spreads, driving total revenues down 4%. We're continuing to see momentum across our payment business with 15% growth in cross-border flows and 10% growth in clearing transactions over the past year. As of quarter-end, TTS loans grew 15%, mainly in trade loans where our technology investments in supply chain and deep local knowledge is enabling us to meet our clients' needs across the globe. Investment Banking revenues were up 39% year-over-year, largely driven by M&A as we continue to see the benefits from our front office investments, which positioned us well to take advantage of increased deal activity. As Jane mentioned, this was the 2nd best quarter for Investment Banking revenues and the best quarter for M&A in a decade. Private Bank revenues grew 4% driven by growth in assets under management, loans, and deposits, reflecting momentum with new and existing clients. This quarter, we added almost 200 bankers, investment counselors, and other front office support, and onboarded over 200 new clients. Our investments in talent continue to drive growth, which bodes well for our overall strategy and wealth. Corporate lending revenues were up 17% primarily driven by lower cost of funds and a modest gain on sale, partially offset by lower loan volumes. Total markets and Security Services revenues decreased 4% from last year. Fixed income revenues decreased 16% reflecting the continued normalization in market activity across rates and spread products. However, we saw strong activity with our corporate clients, engaging with them in foreign exchange products to support their global operations, and hedging solutions to assist with their risk mitigation efforts. Equity Markets revenues were up 40%; our second-best quarter in a decade, driven by cash equities, derivatives, and prime finance, reflecting solid client activity and favorable market conditions. This is another business where we see our investments in talent and technology paying off. In Security Services, revenues were up 10%. Here we saw strong growth in fee revenues as the investments that we've been making in our platform and product capabilities enabled us to grow revenue with both new and existing clients, partially offset by lower deposit spreads. Finally, looking at year-to-date results in ICG, we've seen a strong contribution from Investment Banking and Equity Markets, as well as solid results in the Private Bank and Securities Services, which helped to offset the expected normalization in fixed income markets. Turning now to the results for Global Consumer Banking in constant dollars, on Slide 7. Revenues declined 14%, and 5% excluding the loss on the sale, as solid deposit growth and momentum in investment management were more than offset by lower card balances and lower deposit spreads. Expenses increased 5% with about half driven by transformation, and the remainder driven by business-led investments and volume-related expenses, partially offset by efficiency savings. Cost of credit was a modest benefit this quarter, as a roughly $1 billion ACL reserve release more than offset net credit losses. This resulted in a net income of $1.3 billion, which grew 44%. And GCB delivered a 15% ROTCE and a 21.5% ROTCE, excluding the loss on the sale. Finally, looking at year-to-date results, we've seen steady improvement in our drivers over the course of the year with purchase sales up 5% relative to 2019, and acquisitions nearing pre-COVID levels globally. And the business delivered 22.4% ROTCE, excluding the loss on the sale. Slide 8 shows the results for North American consumers in more detail. Total third-quarter revenues were down 4% from last year as we continue to see headwinds from higher payment rates and deposit spreads. That said, we are encouraged by the trends we're seeing in both cards and retail banking. In branded cards and retail services, purchased sales were up versus the prior year by 24% and 14% respectively, with both above 2019 levels. And in retail banking, average deposits, and within that, checking deposits, were both up 14%. AUMs were up 16% and Citigold households were up 13% this quarter. We're also making progress on our U.S. digital strategy. U.S. digital deposits grew 26% compared to the prior year. An installment loan balances, including our Flex Loan and Flex Pay products, have also grown substantially, up 22% compared to the prior year, and over 80% of these loans are originated digitally. On slide 9, we show results for International Consumer Banking in constant dollars. Revenues declined 30% year-over-year in the third quarter. Excluding the loss on the sale, revenues declined 5% with a 7% decline in Latin America and a 4% decline in Asia. Looking at International Consumer overall, we're seeing good momentum and investment management with 10% growth in assets under management, primarily driven by Asia, and the growth is meaningfully higher if you look specifically at the four international wealth hubs. Purchase sales grew 8% versus the prior year. And average deposits grew 3%, albeit at lower deposit spreads. Slide 10 provides additional detail on global consumer credit trends. Credit remained favorable again this quarter across all regions. And given the delinquency trends, we're seeing today, we do not expect credit deterioration in the U.S. portfolio in 2021. Slide 11 shows the results for corporate other. Revenues increased by over $300 million driven by higher net revenue from the investment portfolio. Expenses declined by $300 million due to the absence of the civil money penalty, which we incurred in the 3rd quarter of last year, offset by an increase in expenses related to the transformation. Credit costs were still a benefit in the quarter or reflect the lower ACL release in the legacy portfolio relative to last year. Finally, EBT was a loss of $330 million. Slide 12 shows our net interest revenue and margin trends, as well as non-interest revenues on a reported basis. In the third quarter, net interest revenue of $10.4 billion declined roughly $100 million year-over-year, reflecting lower loan balances and the impact of lower rates. On a year-to-date basis, net interest revenue declined by roughly $2.3 billion. Turning to non-interest revenues, on the bottom of the slide. In the third quarter, non-NIR declined by approximately $50 million year-over-year, driven by the impact from the loss on the sale of the Australia Consumer business. Excluding the loss, non-interest revenues would have grown by over $600 million or 9% driven by strong growth in fees in ICG. On Slide 13, we show our key capital metrics. Our CET1 capital ratio ticked down to 11.7%. During the quarter, Citi returned a total of $4 billion to common shareholders in the form of $1 billion in dividends and share repurchases of $3 billion. Our supplementary leverage ratio was largely unchanged at 5.8%. And our Tangible Book Value per share grew by 10% year-over-year to $79.07, driven by Net Income. Before we move to Q&A, let me touch briefly on our outlook for 2021. On the top line for total Citigroup, we still expect revenues to be down in the mid-single-digit range on a reported basis, excluding any divestiture-related impacts. On the expense side, we continue to expect full-year expenses to be up in the mid-single-digit range, excluding any divestiture-related impacts as we continue to transform our risk and control environment and invest in our businesses. And we will continue to look for ways to partially self-fund these investments over time.

Please limit your questions to one. Your first question is from John McDonald with Autonomous Research.

Hi. Good morning.

Good morning.

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

Sure. Good morning, John. When we look at it, it's on page 12, we came in at about $10.4 billion. I think there were a couple of factors that play through here. One was the Treasury investments that we've been making contributed to that as we put some of the excess liquidity that we have to work. On the second, I mentioned earlier that we saw some loan growth in Cards, sequentially, branded cards, in particular, up 3%, but also, within that, we saw some of the late fees and other fees in cards play through. As you know, there's an extra day in the quarter. And so the combination of those things contributed to the tick up here that we've seen. In terms of the balance of the year, that all feeds into the guidance that I've given for total revenues, and that really hasn't changed, but we continue to look to invest in the cards portfolio through new acquisitions with a long-term perspective of how we grow loans over time there.

Okay. And just as a follow-up. On capital returns, while your total return is very healthy, it doesn't look like it increased much from the $4 billion that you did in the 2nd quarter, despite the Fed lifting its restrictions. Is this something you are being conservative on, giving a lot of change going on at the Company right now? As you free up capital from the business exits, your stock is trading at a low valuation, how are you thinking about allocating that freed-up capital between investing in the business and returning it to shareholders?

Our philosophy remains unchanged regarding how we manage our income and investments. As we generate earnings and utilize our deferred tax assets, we aim to serve our clients and invest in the business. Any surplus beyond that will be returned to shareholders. The Senior Capital Buffer allows us to make decisions each quarter based on our expected performance and other factors such as capital release and regulatory considerations. We will continue to follow this approach, focusing on returning any excess to shareholders over time.

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

Hi. I'd like your quick comments on a couple of interesting developments. First, you received regulatory approval to operate in the custody business in China, making you the first custodian to do so. How significant is that opportunity? Secondly, can you elaborate on your plans to enter the Australian buy now pay later market and what implications that might have, not just for Australia but also globally in relation to your consumer business? Thank you.

Thanks, Glen. I’ll take that. Regarding our operations and business in China, we have been in the country for 100 years and have a strong understanding of the local market dynamics. We currently serve a significant number of investors in China, including 70% of the Fortune 500 corporations, and we understand how they operate and access China's Capital Market. We are pleased to have obtained the custody license in China, which will also support our operations in Hong Kong and contribute to the growth of our Securities Services strategy. You can already see the benefits of our prior investments reflected in this quarter's results. This latest investment is one we are excited about and believe we are well-positioned in. Regarding buy-now-pay-later, we are divesting our operations in Asia, but we have learned a lot from our experiences in the region, particularly applying those lessons to the U.S. over the last few years. We have been actively building our personal lending platform in the U.S. since 2019 as part of our broader digitization strategy for U.S. consumers. We have seen strong growth in our Flex portfolios, leveraging existing partnerships like American Airlines and expanding with new POS partners. I am particularly excited about our partnership with Amazon for point-of-sale lending for our card customers. These capabilities will be utilized across multiple partners and channels within the U.S. and in Mexico. Additionally, we have been expanding our product offerings by developing lending capabilities off our card products. As Mark mentioned, 88% of installment loan payments are made through digital channels. Overall, there is a clear trend toward various payment formats that customers prefer, and we are making significant strides in this area based on the investments we have made in recent years, and we will continue to do so.

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

Hi. good morning.

Good morning.

Wanted to understand a little bit more about what you think you can do in the U.S. cards business. I know we just spoke a little bit about some of the things that you have been executing on. But when I look at the Card business while it's up on a year-on-year basis, it is trending a bit below some of the peers in terms of growth rates. And then you've got the Retail Partner Card program, which has some opportunities there to, in my opinion, get a little bit of a refresh to be as dynamic as some of your best-in-class peers. So wondering how you're thinking about that and as well on the deposit side in the U.S. with Google Now partnership not going forward. What are you thinking about with regard to leveraging your mobile app across the U.S. in a way that might not be understood well by the investor community because it seems like you've got a great app and it's just under penetrating your opportunity side with your brand?

Thanks for that. Why don't I get started and Jane may want to jump in, and I'll start with your comments related to Cards. As I mentioned in my prepared remarks, particularly when you look at U.S. branded cards, we did start to see a tick up there as it relates to loan balances. The loans were up about one percent year-over-year. They were up about 3% quarter-over-quarter. You know what I think is really important here is the market re-entry. Because as you're seeing, purchase sales are up, but payment rates are still quite high. And we've got to see how stimulus and liquidity play out over time. And we're focused on how we're reentering into the market, and we're doing that both through our Custom Cash launch, which is helping to drive new acquisitions. In fact, our new acquisition volumes are back to 2019 levels. Over half of those acquisitions are in proprietary cards. We're being thoughtful about that, so over the last 5 years, we've been shortening our promotional periods and adding higher fees for balanced transfers, and targeting a lower mix of promotional balances. And those things, as you know, will feed future average interest-earning balances as our experiences that roughly half of those balances ultimately convert to revolving over time. So that's an important step. The second thing that I'll mention is just to reiterate what Jane pointed out, which is worth thinking about lending more broadly. And we're driving growth on the On-Card lending products like Flex Pay and Flex Loan. And those don't have promotional periods associated with them and they start to generate interest from day one. And so we're, we're keenly focused on this. We're obviously a big player here. It's obviously an important part of our portfolio and generates healthy returns. But we need to be positioned to capture growth. As the economy continues to recover and behavior normalizes and we need to be prepared if Behavior doesn't normalize as quickly as we'd like with things like broader lending products.

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

Hey, good morning. My question is maybe just focus a little on rates. I think we're so focused on U.S. rates, but given your global exposure, we've seen rate hikes in Mexico, Brazil. Now we're contemplating rate hikes soon in the UK. How do we think about your rate sensitivity to the rest of the world? And do you see some benefits coming up over the next few quarters on the NII side?

Yeah. Look, I mean, we have seen a number of rate hikes, and then with the talk of rate hikes here in the U.S. As you look at our IRE that we report, we're not that sensitive to the short-end or long-end, but that said, the rate in price increases are beneficial for us. And so we've got a lot of liquidity that's available for us to invest as we see rates increase. But also have enough dry powder to ensure that we're taking advantage of client demand as that starts to return as well. But for our firm, as you pointed out, the global impact on rates is quite important. And increases internationally helped to fuel our performance in parts of the franchise like TTS and elsewhere.

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

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

Certainly. Our overall expenses are in line with guidance. Year-to-date, transformation-related expenses have risen by 3%, while total expenses are up 5%, which aligns with our expectations. Transformation is our highest priority, and we're committed to investing adequately to achieve our goals. We also prioritize long-term investments across the organization. However, we are very conscious of our expenses, carefully managing our spending. Every single expense line is being reviewed to ensure that funds are spent wisely and only when necessary, while also seeking opportunities for increased productivity and efficiency. In fact, we identified between $300 million and $400 million in inefficiencies on a quarterly basis throughout 2021. We approach expense management with discipline and careful consideration of our priorities. I am not providing guidance for 2022 at this time, but I can confirm that our guidance for the remainder of 2021 remains unchanged. We are currently in the midst of our budgeting process, and we will share finalized details with you and our investors once available.

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

Hi. My question's for Jane. Jane, you said on this call, it's a new Citigroup. And I'm just referring to the 8-K from August where it announced a bonus scheme for top executives. Apparently, that'll be broadened out to many more. And so we, as shareholders and those who represent shareholders, we see this bonus scheme before we see the targets, so my question is, do you have the targets, and if so, can you reveal those, although I suspect that won't be until March 2nd, or do you not have targets yet, or what's happening? Because either way doesn't feel good for us investors. Thanks.

Mike, I'm glad you raised this issue, as we noticed your note recently. Let’s take a moment to discuss our management compensation, which is crucial for our shareholders to comprehend. The compensation for the management team is structured to be performance-based and aligned with shareholder interests. Specifically, any deferred compensation includes built-in downside risk, as we witnessed last year when the PSU performance only paid out 28% of its target. Additionally, the annual process holds management responsible, as demonstrated by significant compensation reductions resulting from consent orders last year. Now, regarding the transformation program, as I mentioned earlier, its successful execution is our top priority. We aim to modernize the bank's risk and control environment, which will ultimately benefit our shareholders through improved bank performance. The board and I ensure that the senior leaders responsible for this transformation are held accountable for its success. I am leading this program with urgency, and I must retain key talent in the current tight talent market. Achieving our milestones and delivering excellence requires a combination of incentives and accountability measures. To answer your question, we will establish rigorous metrics to assess whether any rewards will be distributed and what percentage will actually be paid out. The criteria will be outlined in the 8-K, incorporating input from the Board, myself, and other stakeholders. We will ensure that these details are included in the proxy statement for transparency. The key message is that there will be repercussions if we do not meet expectations, similar to last year for management and program leaders. I am accountable, my team is accountable, and we are committed to delivering results.

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

Good morning. Jane, I want to revisit your mention of disappointment regarding Google Plex pulling out. Can you explain whether you considered that to be an important opportunity for client acquisition? Additionally, now that it's not happening, does this create a sense of urgency to pursue other partnerships that could enhance your deposit gathering efforts?

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

Thank you.

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

Good morning.

Good morning.

Hey, Matt.

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

This is our top priority. It's important for all stakeholders that we execute this plan with excellence and get it right. We submitted our plan in the third quarter, and I take great pride in it. It's a multi-year initiative that includes six major programs, positioning us for success in a digital environment. It outlines clear objectives for our risk management and core operational model. We have made a definitive shift towards executing this plan, and our ongoing discussions with regulators have been very positive and constructive. We are moving ahead with full momentum, and I'm pleased with the exceptional talent we've brought in to ensure we execute effectively. We're focusing not only on modernization but also on enhancing our culture. Karen Peetz and her team are ensuring we have the necessary capabilities and governance to execute in a disciplined manner and achieve the outcomes from our investments. We've implemented a new accountability structure, and our board is consistently holding us accountable. We'll provide more details at Investor Day, but the key message is that we've shifted to execution and are actively progressing with our plans.

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

Hi, Jane. Just wanted to clarify this compensation 8-K that you talked about. You always had bonuses for short-term and you've had a long-term incentive comp that you always paid your Executives, similar to everybody else. So the transformation project seems to be over and above that, shouldn't that be part of what long-term compensation and incentive rewards are meant for? I'm trying to understand the logic behind adding an additional payment here is. Because that's what management is already being partly compensated for, which is longer-term moves and changes and performance.

Look, I think it's exactly as I will first of all thank you. Thank you for that. I think it's as I said earlier in answer to Mike's questions. We want to drive the program with the agency. We need to retain key talent and it is a very tight talent market, as you know, and I want to make sure that there is no question from anyone involved in the programs that this is their number 1 priority for the bank to execute this with excellence, that there are both carrots and sticks here. And those come through the individual program and the individual assessments that everyone participates in every year, as well as in this piece. So I think this is fully aligned with the shareholders' interest. You want to have management incentives to deliver this with excellence, but equally with all the downsides if we fail to do so. And the program is designed to do just that.

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

Morning. Thanks for taking my question. It's a bit of a technical one. Wondering if you could give a bit of color on the SA-CCR implementation for the CET1 ratio in terms of the quantum of the impacts and the timing of the implementation? Thank you.

Sure. Thank you. We are working towards the mandatory compliance date, which is set for January 2022. We have not adopted SA-CCR early and do not intend to do so. The impact may affect risk-weighted assets and the G-SIB score. As I mentioned, we are currently addressing this matter. I am not ready to disclose specific details yet, but it is a consideration in our planning, and we will provide that information when we adopt it in the future.

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

Good morning, Jane. How are you?

Hey.

Can you guys share with us, in looking at your Global Consumer Banking business in North America in your supplement, I think it's page 8, you guys give us a nice breakdown between the Retail Banking's, Citi-branded cards, and Citi Retail Services. And I noticed that in Retail Banking, there was a loss in the quarter. And can you just give us some color on what's maybe driving that and just the outlook for that part of the business? Thank you.

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

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

Hi, I wanted to follow up on my previous question. As Vivek noted, Jane and Mark, you've mentioned the need to serve regulators first, which resonates with everyone on this call. You also talked about serving stakeholders. My concern is what's being done for shareholders, who seem to have been overlooked at Citigroup for quite some time. Mark, I might have a different take on your philosophy. You stated that the priority is to serve clients first, then focus on the investment business, followed by buybacks. However, it seems that your approach has shifted because the discount to book value continues to widen, and compared to peers, Citi's discount has increased. Citi is struggling with poor returns, low efficiency, and unfavorable stock market valuations. Why not consider adjusting that philosophy to prioritize more buybacks instead of investments, especially when there seems to be a significant opportunity with your share price? What symbolic actions can you take, particularly since everyone is compensated in stock? Can you leverage the capital from the sale of Australia for stock buybacks? How can you demonstrate that while regulators and stakeholders are important, shareholders should also be a priority given the share price's underperformance? Additionally, as we can only ask one question at a time, I would appreciate more details on your U.S. consumer strategy regarding digital deposits, cross-selling credit cards, and partnerships like amazon.com. Thank you.

Okay, Mike. It's Jane. Let me start by emphasizing how important our shareholders are to us. In light of our current trading position and the underperformance we’ve observed, we recognized this as a priority during our strategy refresh and transformation efforts focused on culture and talent. We are committed to closing the gap with our peers by ensuring we have the right business mix and strategies in place to improve returns. You can already see the direction we're taking through the various decisions we’ve announced, which will all be discussed further at Investor Day. Additionally, we plan to enhance our operations, and we have outlined our key priorities in the presentation to demonstrate the value we believe exists within Citi and how we intend to unlock it for our investors. I hope the framework and principles we’re using are clear. As Mark mentioned, we are focused on revealing Citi's significant value, which I’m very excited about, and we’re also considering how to manage our excess capital. Since our stock is trading below book value, share buybacks make sense for our shareholders. We also have a healthy dividend yield, and both aspects are crucial. There’s no question that share buybacks are attractive for shareholders. We will return excess capital while being mindful of the necessary investment for internal growth. Our recent decisions, such as exiting certain Consumer businesses in Asia, reflect our strategy to return and reinvest where it makes sense, but we will prioritize returning capital to our shareholders. And I can see my CFO is eager to join the conversation as well.

Yes, thanks. I think you answered it very wide, I just add a couple of quick things. One, that when we invest in the business towards clients, or more broadly in the business, we're doing it where returns are above our cost of capital. We're making smart decisions about how to redeploy that capital to ensure that we're narrowing that gap to peers. The 2nd thing I'd point out is that, in the 1st couple of quarters of the year, we've maxed out the capital return that was available for us to deliver before the SCB came into play. That is because our shareholders are so important. And then the third, as Jane mentioned, is that we have a skew towards buybacks. Again, just given where the stock is trading and given where our dividend yield is. So thank you for the question.

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

Thanks for having me. Good morning, Jane and Mark. Jane, I wanted to ask about the wealth management opportunity, which is highly competitive. Many large competitors have been investing significantly in this area for years. I know you'll discuss some of this on Investor Day and provide more details. However, at a high level, could you explain what sets Citi's value proposition apart from your peers in this space? Do you have the necessary technology or infrastructure to support your growth ambitions? Lastly, can you consider mergers and acquisitions, or are you restricted under the consent order if you think about expanding inorganically?

Yeah. Thank you so much, Steven. So I'm pretty pleased with our opportunities here because we have all the pieces to be very successful. We have a strong brand amongst the affluent, not just here in the States of our Retail Banking franchise. We've got a pretty heavily affluent base, but around the world, and when you go into Asia, in particular, this is the aspirational wealth management brand on the ground there. We've also got a real breadth of client relationships, and this is where the connectivity points also become important in those full principles that we laid out for the strategy refresh. We have Commercial Banking operations in certain geographies around the world, where they've been operating for many years now. This is the engine of wealth creation in the world, and we have a relationship with the owner already. And so, the synergies that we will be out to generate by much more closely connecting them will be very important. Similarly, the elevator from the affluent client base in our consumer franchise all the way up to the ultra-high net worth in the Private Bank is obviously a natural area to build out that we haven't really invested in that elevator. I'm thinking of it that way. We have great platforms. Our institutional client business around the world means that we've got top 2 platforms for our Private Banking clients, in particular, to take advantage of, but it's also ones that our consumer clients have as well, so the opportunity here is to bring all these different pieces together into a single integrated offering across the full spectrum of clients in the U.S. and in the global offshore Wealth centers. And I would also point to the fact that we are already the top 3 players in Asia. It's not as if we don't have scale, and that this is a startup business here. And we've already seen that this is coming to fruition quickly. We obviously announced the focus on Wealth at the beginning of the year. We've already acquired 21.5 thousand new-to-bank clients in Asia so far this year. We've added over 500 bankers, investment counselors, and other front office support year-to-date. We've done one of the biggest tech releases for wealth in the 3rd quarter of this year, with over 70 plus features going live on the back of the digital platform we launched last quarter. I think the fact that we got all these different pieces, we're putting them all together, is really giving us momentum and accelerating your opportunity for us. And this is a trend, the Wealth trend is going to be one that is one of those unstoppable trends, particularly at our Asia in the years ahead. We would look at acquisitions at the moment. Obviously, it's more focused around what are digital capabilities, what are other things to enhance the value propositions and the technological side. And those aren't just acquisitions; it's partnerships and the like that we've been investing in so that we really serve the wealthy client across the full spectrum of their needs, rather than just narrowly as some of the other players are. In just this investment products, we've got the benefit across the board.

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

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

This concludes Citi's 3rd Quarter earning call. You may now disconnect.