Scott Siefers: Hi, everyone. Thanks for taking the question. Mark, I think you touched on at least a component of this a couple questions ago, but maybe just broadly an update on your rate positioning. I guess I only ask because it looks like we might be starting to diverge in terms of global rate trajectories, if we potentially go, lower in Europe but higher here for a while. In the aggregate, do these kind of complicate your management or make you feel better or worse about the overall NII momentum for the company?
Mark Mason: Yeah, let me try and take it in two pieces, I guess. So one is, if I think about how the rate implies have evolved from the three to six to now something a little bit north of one, in the context of what I expect for our performance. It doesn’t have a material impact on the guidance that I’ve given of $80 billion to $81 billion. And in part, that’s because, as I think about the timing for the planned cuts, which was generally backloaded, as well as some of the other factors that play through. So, you know, Argentina just announced a policy rate reduction yesterday or a couple of days ago. If rates are a bit higher for longer, we’ll watch how the betas continue to evolve. I mentioned earlier the late fees for the cards business happened a bit sooner.
Late fees are actually booked in our NII line and so those factors you know put me in a place where I feel like, there’ll certainly be puts and takes around how that rate curves evolve, and therefore I’m very comfortable kind of leaving the guidance where it is. To answer your broader question in terms of kind of how we’re positioned, you know, I’d point you to the 10-K that we have that’s out — and in that 10-K, we offer as we have before a number of IRE scenarios for plus or minus 100 basis points and what it means for our business. And if you look at it, you’ll see that for the aggregate firm, for Citi, U.S. dollar and non-U.S. dollar, that we’re asset sensitive. So as rates increase, we should see an increase in our NII performance. But if you look at the breakdown, and that’s about, I think it was about a [$1.4 billion] (ph) or something in terms of the impact of that move.
But if you look at the breakdown, what the breakdown will show is that for U.S. dollar, at this point, we’re neutral. So if rates were to go up, rates were to go down, no material impact as it relates to our revenue. For the non-U.S. dollar, we’re still quite asset sensitive, right. And so that should give you some sense for at that — and we recognize the limitations with IRE, it assumes, you know, a 100 basis point parallel shift across the curve, the static balance sheet, et cetera. But that should give you some sense for the implications of the rate curve moves as it relates to our book of business.
Operator: Our next question is from Gerard Cassidy at RBC Capital Markets. Your line is open, please go ahead.
Gerard Cassidy: Hi Mark, hi Jane.
Jane Fraser: Hi, Gerard.
Mark Mason: Hi Gerard.
Gerard Cassidy: Mark, can you share with us, there’s been obviously a lot of conversation around the credit card charge-offs and the credit quality there. If we could shift over to the corporate side, which obviously is very strong. We’ve seen spreads narrow in the markets on high-yield corporate debt, leveraged debt, et cetera. It’s very robust out there, but around the global geopolitical risk, do you think the spreads would be widening. Can you guys share with us what you’re seeing in the corporate side in terms of competition, are underwriting standards getting a little weaker now, as people are trying to grow their books, what are you seeing on that front?
Mark Mason: Look, we’re still seeing good demand for corporate credit. And what I’d say is that we’ve been very disciplined about where we want to play on the risk profile here. We’ve been very disciplined in terms of the investment grade, you know, large multinationals that we serve. And that hasn’t shifted from an underwriting point of view. We have seen spaces like private credit pick up quite a bit. And that, I think, will continue to evolve. I think, importantly, as we think about our corporate lending activity, you’ll note that, actually, we’ve been very disciplined about how we want to deploy balance sheet and part of that again is a byproduct of the revenue sharing that we’ve implemented where there’s been healthy debate and discussion around the names that we want to continue to serve and whether they’re positioned to take advantage of the broader platform that we have.
And so I think the space will continue to evolve. I think there’s been good, healthy demand, despite continued strong balance sheets. And part of that demand has been because of where rates are likely to go and continue to evolve. And I think we’re well positioned to be thoughtful about that. But Jane, you may want to add a couple points to it.
