But obviously, if we entered and announced a relationship, we’ve been very deep with them on what the box looks like and what it reflects. And we think our business reflects market conditions as does their appetite. So we would expect this to go well. It’s a one-year deal, and we will test the relationship over the course of the year. We hope it goes very positively because if it does, we’re supporting a lot more clients and prospects in growing our business. And again, given our we think differentiated distribution model; we don’t necessarily always need to grow the balance sheet to grow the business. But this is a case where we would expect to actually do both. We’d expect to continue to grow this portfolio, but moderate some of that growth with a partner, we’ll get a modest asset management fee to do that one that we think makes sense to both sides and again we’ll test it through the year and if there’s more opportunities to do this with Blackstone or others will investigate those were they allow us to serve more clients and serve them better.
Manan Gosalia: So in addition to the fee side, does it also help you with deposits because you can have more relationships with larger corporates?
Clark Khayat: Yes, I mean last I check, Blackstone wasn’t in the business of taking deposits or providing payment services and we are, so we like those kind of deals.
Manan Gosalia: Fair enough. Okay, and then as a follow-up on the loan review, can you chosen more light on what you learned in specific industry as you know, which of the industries that are seeing more pressure, and then in your role as a special service as well on the commercial real estate side can you shed some more light on what you are seeing there?
Chris Gorman: Sure. Let me start if I could on what we are seeing in our servicing business. Our servicing business as you can imagine we look at what goes at in and out of active special servicing and as you can well imagine office continues to be the largest area by far. We have seen some multifamily start to go into our active special servicing. Those are typically deals that we’re done it very low cap rates that were highly leveraged and as a consequence are very sensitive to the significant rise in interest rates. As it relates to our strategic reviews I mentioned we start with anything that’s leveraged, but a few industries that I would bring out to your attention, one, obviously is real estate we spend a lot of time like in a real estate very sensitive to interest rates.
The other one is health care. Health care is an area where we have a very significant strategic hold and there’s no question that there’s going to be a lot of consolidation in health care because a lot of health care companies are under a myriad of cost pressures. And the other thing – area where we saw some was just consumer services broadly. Those are the areas.
Manan Gosalia: Great. Thank you.
Chris Gorman: Sure.
Operator: The next question is from Ebrahim Poonawala from Bank of America. Please go ahead.
Ebrahim Poonawala: Hey good morning.
Chris Gorman: Good morning. Hey Ebrahim.
Ebrahim Poonawala: I just had one follow-up, Chris. When you think – when you talked about your outlook for a recession, the stress testing on your loan book for the higher-for-longer, I guess the markets have generally been wrong expecting higher rates to push the economy into a recession. I guess from your perspective, bottoms up, when you assume higher-for-longer, do you see a lot of pain within your loan book six, 12, 18 months out that causes you to have that view? And I’m just trying to wonder – are higher-for-longer enough in a world where the economy could continue to surprise to the upside in terms of growth. Just how do you think about it, especially when you’re stress testing these loans?
Chris Gorman: So in terms of just higher-for-longer, as you look at our book and you look at 2024, higher-for-longer works just fine for us. That would – from an NII perspective, that would be the best outcome just from pure NII. I will tell you, I’d like to see a perfect scenario for Key would be a couple of cuts late in the year because I think that would be good for business, fees, deposits, transactions, et cetera. As I think about the economy, my sort of word of caution here is if you look at the labor market, the labor market is very strong by any metric. And I just think everyone assuming that there’s going to be a soft landing without damaging the labor market. I hope the markets are right about that. I’m not so sure. So that’s kind of – that’s sort of my thinking if that’s helpful.
Ebrahim Poonawala: That’s helpful. And I guess just bigger picture, I mean, I think it’s been an interesting last 12 months for Key in terms of RW [ph] optimization expense focus, et cetera. Remind us, as we look forward strategically, like the one or two things you’re most focused on? Is it still in terms of optimizing the balance sheet expenses growth, like how – what should we be thinking about as you think about just coming out of this and where the next leg of growth comes for the banks?
Chris Gorman: Sure. So coming out – so there’s no question that 2023 was a reset year for Key for all the reasons that you just pointed out, and I’m really proud of what we did shrinking RWAs by $14 billion, taking out about $400 million of expenses. Having said that, as I mentioned in my prepared remarks, we now, Ebrahim, are playing offense. And what that involves is us leaning into areas where we already have, I think, a good competitive position, payments, investment banking, wealth, and I mentioned business banking as well. Because I think as we go forward, the loan-to-deposit ratios are going to be really, really important. We, as you know, have taken our loan deposit ratio down to 77 [ph]. I think kind of mid-70s is where people are going to have to be as you lean into these businesses that are really kind of fee-centric businesses. So that’s where we’re leaning in. That’s where we’re investing.
Ebrahim Poonawala: Got it. Thank you.
Chris Gorman: Thank you.
Operator: Thank you. The next question is from Mike Mayo from Wells Fargo Securities. Please go ahead.
Mike Mayo: Hi.
Chris Gorman: Hey, Mike.
