And so that’s what I mean by the mitigating actions that we’re dimensioning and putting on paper and working through. But again, we want to be thoughtful because the rule is not final yet, and there are more discussions to be had around those important elements that I mentioned already.
Operator: And our next question comes from Erika Najarian with UBS.
Erika Najarian: Good morning.
Mark Mason: Good morning.
Erika Najarian: You’ve talked a lot about defense, as I like to call it, in terms of the transformation that Jane had outlined and bending the expense curve. What I’m wondering for Jane and Mark, if you could sort of address what I think is probably the most debated part of your target, which is that revenue CAGR of 5%. You put up a very nice quarter in terms of revenues, both in net interest income and fees. And maybe help us sort of look underneath the surface in terms of that momentum, and maybe break it down in terms of what’s really going well? I think TTS continues to surprise to the upside. It’s going to take — are we going to be two years from now, and we were like, oh, well, TTS is continuing to doing well. So what are the businesses that really sort of strong secular momentum that you feel is being under recognized versus how you could position cyclically and hire for longer?
And what is still to come as we think about that path to at least the numerator of that RoTCE target?
Jane Fraser: I love this question, Erika, because I am really — I have to say, I’m really excited about our strategy and the potential it has. And it is — as you say, this is about the revenue potential of the firm and really how do we continue to unlock it. So there’s a couple of unstoppable trends that we’re going to be riding in the next — I think it’s decade long. The corporate client of today and indeed consumer has the build resiliency. The multinational client is on a long-term trend of building resiliency, be it because of green, be it because of geopolitics, be it because of regulatory, whatever the different reasons may be and there are multiple, they are having to build resiliency into supply chains, into their own operations, as they operate around the world, where the bank is absolutely there for them.
And I think you’ve seen that in TTS, where we’ve had such strong drivers of growth in the last few years at the beginning of this trend. So that is an important one. Wherever the clients want to go, we are there. We have been there for decades. We understand the risk. We understand the client base. We understand the opportunities there at that — that micro level and local levels that someone who’s flying in with a suitcase can’t possibly deliver. And it’s connected globally. So this thing is just a thing of beauty. Linked into it is what I think of as a hidden gem amongst our crown jewels is Security Services. It equally in custody has this extraordinary global network, the connectivity everywhere. We have been investing behind this business.
We’ve been growing our market share in North America in asset managers where we’ve been underweight with a number of material marquee wins. You can see the share gain that we’re getting in this business, the pipeline of deals that we’ve already won as well as the new pipelines going forward. Very high return. We’re investing both in terms of our cloud, our data, our client experience. And this is in a way, let’s say, I do view this as a hidden gem with extremely attractive return profile, fee profile and other dimensions to it. We’ve quite a long way to run here. So a similar story to TTS, slightly different client base, competitively advantaged because you’ve got both the — you’ve got the pre-trade and the post-trade, we connect the two huge efficiencies for clients that’s going to matter.
Next trend that’s unstoppable, global wealth creation. And there is going to be massive global wealth creation. I can’t tell you how excited Andy Sieg is now that he’s in the building and knows the way to his desk. And all the floors as people are on, he’s about to hit the road globally. We are so well positioned to deliver against that. And as you can see, we’ve not been happy with our performance the last couple of years, but this is going to be a very important driver for us. We’ll see the recovery in banking wallet eventually, none of us are calling when, that will sustainably happen. That will be another driver. And I’d say cards continuing to go from strength to strength, particularly, I think, as we look forward, playing to our lending-led model there.
And finally, the other one I do love, which is our commercial bank. We serve these entrepreneurs all over the world who are going to be the drivers of many industries going forward. And we’re serving them, helping them to go international for the first step, tap them into global supply chains and the like. It’s almost by definition the fastest growing of the mid-market companies are the ones that tap into what we can offer them. We built great relationships with them. And then our private bankers call on them. And then our investment bankers called on them. We have our capital market teams calling on them. And we help them grow and succeed. And that is going to be a big engine in the medium term of new client acquisition feeding us. So deeper client relationships, more growth in terms of new clients that fit with our proposition fairly uniquely and some great megatrends that we are going to be riding and pretty uniquely positioned on.
And we’ll keep investing to make sure that we’re — where areas we’re behind, we get into the full front of and the areas we are crushing it in like our win rate is 82% in TTS, and we’re going to make sure that we continue to do so and innovate that way. So, sorry to be so excited about this, but this is — the 4% to 5% just feels very, very doable to Mark and I.
Operator: And our next question comes from Jim Mitchell with Seaport Global.
Jim Mitchell: Hi, good morning. Mark, maybe on the revenue discussion there, let’s talk about NII a little bit. You guys have a very unique deposit base, a lot smaller footprint in low-cost consumer. Betas have been already been high. So it doesn’t seem like there’s as much beta catch-up risk for you. It’s 50% non-U.S. roughly. How do you think about the trajectory of NII as we — do you think it stabilizes next year before rate cuts? How do we think about the puts and takes on your NII into next year?
Mark Mason: Yes. Thanks for the question. Look, I’m not going to give guidance for 2024. We’ll do that obviously at the fourth quarter ’23 earnings. But I think it’s reasonable to expect that some of the trends that we’ve seen so far, we’ll continue. So if you think about what’s underneath this, we’ll continue to benefit from higher rates across currencies. I think we’ll continue to see benefits from card interest-earning balance growth. Recall that when you look at our U.S. dollar IRE position, it’s relatively neutral at this point. And interest-earning balance growth is expected to be driven by continued card spend and lower payment rates. And so I think what’s important to remember as it relates to our business is that it’s global that we’ve got, while you’re right in that on the U.S. dollar side, we’ve seen betas kind of reach — particularly for our corporate clients reach terminal levels at the end of last year.
On the non-U.S. dollar side, betas run lower, they lag and there’s still upside there because it’s a different rate curve and a different pace of increases. And so those will be some of the puts and takes to think about volumes, the rates, the speed of the curve moves and then how betas evolve, that will kind of factor in. And then the final thing to remember is that in our NII, we show it both with and without markets. On the ex-markets, we’ll have the impact of the drag from the exits of the countries that kind of play out. So we just exited Taiwan, that’s going to impact, obviously, the next quarter’s NII. So just a couple of factors to think about. And obviously, I’ll give you more detail on 2024 and at the fourth quarter earnings call.
