Hello, and welcome to Citi's Third Quarter 2024 Earnings Call. Today's call will be hosted by Jenn Landis, Head, Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you'll 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. Ms. Landis, you may begin.

Thank you, operator. Good morning, and thank you all for joining our third quarter 2024 earnings call. I am joined today by our Chief Executive Officer, Jane Fraser; and our Chief Financial Officer, Mark Mason. 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 earnings materials, as well as in our SEC filings. And with that, I'll turn it over to Jane.

Thank you, Jenn, and a very good morning to everyone. We certainly live in interesting times, and while I usually start our calls with our views on the global macro-environment, we're particularly proud of our progress this quarter, and so I shall start there. In a pivotal year, this quarter contains multiple proof points that we are moving in the right direction and that our strategy is delivering concrete results. We saw revenue growth and positive operating leverage for the firm and across all five businesses. Our businesses performed well as the rate-cutting cycle began with a double-digit increase in fee-based revenues, reflecting the growing diversity of our earnings mix. We continue to have share gains in services and banking. In wealth, we saw a sizable increase in client investments and flows. We brought expenses down while continuing to invest in our transformation and businesses, and we continued to attract top leaders in the industry and successfully combine them with our teams in banking and wealth. While we are not yet where we want to be, the impact of the changes we're making is clearly evident in our momentum and our improving performance. Turning to the macro. While growth is a notch slower than last year, global economic performance continues to be surprisingly resilient. Whatever you want to call the US landing, the sentiment around it is more optimistic, supported by the recent positive payrolls report. We see a healthy yet more discerning US consumer and a US corporate sector on its front foot. Manufacturing weakness is restraining a modest rebound in Europe, which continues to struggle with more structural challenges around its competitiveness. In China, consumer sentiment and the property market remain a concern as markets await details on the expected fiscal stimulus. India, ASEAN, Japan, the Middle East, Mexico, and Brazil are notable bright spots globally. Today, we reported net income of $3.2 billion and earnings per share of $1.51 with an RoTCE of 7%. Overall revenues grew by 3% ex-divestitures, with each of our core businesses delivering growth and positive operating leverage. While we continue to make substantial investments in our transformation, the efficiencies gained from our simplification and other efforts drove a 2% reduction in overall expenses. In Services, we delivered a record quarter with revenues up by 8%. Fee growth, the best indicator of underlying momentum was significant. Both Treasury and Trade Solutions and Security Services achieved over 10% wallet share in our target markets through the first half of the year. Last week, we announced that we are the first global bank to complete the integration of our cross-border services with Mastercard Move, enabling near-instant secure payments. Our continued strong performance in equities validates both our strategy and execution to grow Prime and Cash. Our strategy in banking continues to gain momentum, and during the quarter, we announced an innovative $25 billion private credit partnership with our long-time client Apollo. We also started to see the positive impact of the significant changes we've implemented in our Wealth franchise with revenues up 9%. As Andy and the team intensify the focus on our Investments business, we grew client investment assets by 24%. While we have more to do to reach our medium-term margin and return targets, this quarter is a good indicator that we're on the way there. Our customers remain healthy but are more discerning in their spending. Overall, our capital position remains robust, and we ended the quarter with a CET1 ratio of 13.7%. We are committed to meeting our revenue and expense targets for the year and I feel privileged to lead this firm. With that, I would like to turn it over to Mark.

Thanks, Jane, and good morning, everyone. I'm going to start with the firm-wide financial results, focusing on year-over-year comparisons for the third quarter unless I indicate otherwise. For the quarter, we reported net income of approximately $3.2 billion, EPS of $1.51, and an RoTCE of 7% on $20.3 billion of revenues. Total revenues increased 1% on a reported basis. Excluding divestiture-related impacts, revenues were up 3%, driven by growth across each of our businesses. Net interest income, excluding markets was down 1% year-over-year, primarily due to lower interest rates in Argentina. Total expenses were $13.3 billion, down 2%, largely driven by savings associated with our organizational simplification. Our corporate portfolio continues to be resilient, and overall, we feel comfortable with our $22 billion in total reserves, maintaining strong credit discipline across our card portfolios. We expect NII ex-markets to be roughly flat sequentially in the fourth quarter. In Services, further improvements in NII were driven by client relationships and higher deposit growth. We recognize the importance of these metrics as we continue our focus on opportunities for growth. Overall, we've seen positive operating leverage across the board with year-to-date revenues up 1% on a reported basis. The ongoing transformation and simplification efforts provide us with reasons to be optimistic about our expense management and future targets.

Hi, thanks very much. Good guidance. I appreciate it. I'm curious about the card losses in Retail Financial Services. If you could talk about the 2024 exit rate, it seems like it will be higher than the full-year guide at 6.25%. Maybe you could talk about the trajectory there and then the huge reserves that you have built in there and anything you could tell us about the portfolio so we can keep the expectations in the right spot. Thanks.

Yes, sure. Good morning, Glenn. So a couple of things. On Retail Services, you're seeing spend volumes trend down a bit. Lower payment rates have contributed to the average interest-earning balance growth that we're seeing. There’s a healthy reserve level correlating with a reserve-to-loan ratio around 11.7%. We do expect the number to be on the higher end of the range in the fourth quarter, which will depend on traffic and holiday spending. We actively manage this and feel confident about the reserve levels.

We're delighted to partner with Apollo because this unites our comprehensive banking reach and expertise, enabling us to offer clients more innovative financing solutions. The $25 billion figure is significant, and the support extends to other partners as well. We're always looking for ways to serve our clients better and enhance access to private capital resources at scale.

Good morning. Mark, can you speak about Slide 7 on NII? Looking at the ex-markets NII, $11.96 billion this quarter. Based on what you've said, can we conclude that the ex-markets NII bottomed in Q2 2024? I noticed the securities yield actually went lower 7 basis points quarter-over-quarter. Could you clarify the impact on yields this quarter relative to earlier expectations?

Yes, when you look at Slide 7, the sequential variances come from a combination of factors. The third quarter set of volumes and spreads, particularly in USPB, were beneficial. However, I want to help contextualize the factors that may lead to flatter projections for the fourth quarter while reminding you of the need to manage beta effectively that plays a role in NII. Expectation remains flat with some tailwinds from ongoing loan growth and reinvested securities.

I agree with you regarding Wealth's progress. Our target is between 15% to 20% RoTCE and we are seeing traction towards that, especially as we grow client investment assets by 24%. This year has been about reshaping the business and positioning it for growth, including key talent acquisition to drive this strategy forward.

What assurance can you give that Citi can meet its 2026 expense guide of $51 billion to $53 billion? We note the amended consent order and there are questions about Citi's capacity to manage effectively. How do you see these factors interplaying?

We’ve set targets, and while we'll face challenges, substantial savings from organizational restructuring and expense reductions are being pursued. Our productivity initiatives are geared towards supporting these objectives as we expect to continue managing costs against revenue achievements over the next few years.

Our transformation is focused on addressing historic under-investment, enhancing our risk control environment, and becoming a simpler, more accountable organization. Progress is meaningful, with closed consent orders and substantive improvements in risk management positioned to strengthen Citi for the long term.

Our dedication to capital optimization remains high. We’ll strategically manage buybacks and maintain firm focus on maximizing shareholder value over the long run.

At this time, we will open the floor for questions. Our first question will come from Glenn Schorr with Evercore. Your line is now open. Please go ahead.

Thank you, everyone, for joining the call. Please follow up with IR if you have any additional questions. Thank you.

This concludes Citi's third quarter 2024 earnings call. You may now disconnect.