Operator: Our next question comes from the line of Vivek Juneja with JPMorgan.
Vivek Juneja : A couple of questions for you folks. Firstly, the deposit betas that you expect to get to the high 30s. Given the pace of change in the fourth quarter, should we and your expectation for rate hikes early in the year and not after that, should we expect you get to that in Q1? Any color on that, on the pace of it, especially given how rates have been going up?
John Woods : Yes. I mean I think we’ll not get there in Q1. That is an over-the-year expectation in terms of the cumulative growth. I mean I think you’ll see the growth in cumulative betas begin to moderate and flatten out. You have the big jumps early in the cycle. So we began and go way back to the second quarter of ’22, our cumulative beta was 6%. And then you get to the fourth quarter, the cumulative beta is 29. So you’ve got 23 points just in ’22 and you’ll have — and then we’re looking for in ’23 is another 9 points. So this — and it will increase over time. You won’t get to 38 in the first quarter and will gradually…
Bruce Van Saun : Deposit tend to replace reprice with a lag. So even after the Fed pauses, you still see a little bit of upward pressure on those betas.
John Woods : That’s right.
Vivek Juneja : But I would — okay. But then does that mean, Bruce, the bulk of it is probably early on and just a little further increase after that, after the Fed is done?
John Woods : I’d say the majority in 1H and it continues to trickle-in in 2H, and that’s built into our outlook.
Vivek Juneja : Okay. Different question, a second one. Fee income, your guide of about 7% to 9% growth in full year ’23 versus ’22. How much of that would you expect would come from capital markets or at least what’s in your forecast that you’re thinking how much comes from capital markets?
John Woods : Yes, I think there’s a big part of it. I mean, back to the big drivers, you had capital markets, and you heard about card fees from Brendan and wealth from Brendan as well. So those are the three big ones. You see mortgage really potentially rebounding as well.
Bruce Van Saun : A little bit of rebounding.
John Woods : But a big part of it would come from capital markets from the underwriting perspective and M&A advisory, just as we may have mentioned in the fourth quarter, we saw some deals pushed from 4Q into 1Q. So that’s going to support the capital markets business, which, by the way, over the years, has really become a very diversified capital markets business itself. I mean just broadening out M&A advisory, underwriting and loan syndications. Those businesses really tend to really diversify our overall fee outlook. But yes, a good part of it and a good chunk of the growth in ’23 comes from capital markets.
Operator: There are no further questions in queue. And with that, I’ll turn it over to Mr. Van Saun for closing remarks.
Bruce Van Saun : Okay. Great. So thanks again, everyone, for dialing in today. We certainly appreciate your interest and support. Have a great day.
Operator: Thank you. That does conclude today’s conference. Thank you for your participation, and you may now disconnect.
