That’s kind of apples and oranges. On the other hand, sometimes the opposite happens, right? Where we might be adding an AUC/A and a fee that’s quite high, one that’s quite low, because we’re just adding a small service and we’ve had some of those over the last couple of quarters. So I’ll just be — I’ll just be cautious about the quarter-by-quarter map. I’d encourage you over time, we can look at that through time. But, I think what we encourage you to do is take a look at the revenue — the wins on a revenue basis against the base of servicing fees, right, $91 million in the quarter against the $5 billion of servicing fees is a very healthy amount of revenue. And our ability to maintain that momentum gives you an indication of the kind of sales effectiveness and the growth dynamic that we can create net of the retention rates that we need to manage, too.
So I’d encourage you to spend the most time there. You can do a little bit AUC/A wins versus the AUC/A base that gives you another indication. But I’d encourage you to do it in that direction, because you’ll get a better indication, I think of our momentum.
Brian Bedell: Okay, that’s super helpful. And then the follow-up would be on the deposit beta, the differentials between the US and non-US, and we’ve heard this from the other custodians as well, in terms of non-US deposit betas being significantly lower than US, and just maybe some thoughts on as we move into this — into 2024 and potentially Europe, maybe even higher for longer versus US potentially. And should we see more aggressive or I say more incremental deposit beta moving through the non-US markets to sort of almost catch up to US or not so much?
Eric Aboaf: You know, our current indication in, we’re well through the cycle in the US, at least we think so, we’ll see. It feels like there’s little more to go on the international side and it started later, so it’s harder to read. We do see that there are some structural differences in the markets around deposit betas between the US currency and the non-dollar, even for the same clients in some cases. And part of that is just the — you’ve got this non-interest-bearing versus interest-bearing construct in the US and internationally you can have just an interest-bearing deposit construct. So, it’s a little more — it’s a little more straightforward. So as I’ve described, we have cumulative deposit betas in the US in the 70% to 75% range and we expect that will flowed up a little more as we kind of — as the cycle, let’s say, finishes, it could go up another 5, 10 percentage points but it’s starting to level off.
In Europe, the – we are in the 25% to 50% range of cumulative beta, I think could go up another 10 points, maybe 15 points, we’ll see, but it’s not going to reach the same level that you have in the US based on the indications we have, and the way we both reprice and we see others competitively price in the market. So, fairly, fairly different between the US and the international currencies. And in some way, that plays to — that’s good for us. We know how to manage in both US and non-US currencies. We’ve continue to have some tailwinds in NII in the international currencies. We obviously need to make sure that we share some of that with clients, but given the international composition of our balance sheet, that’s one of the areas that continues to be supportive of our — in a positive way of our NII trajectory.
Brian Bedell: Thanks very much. That’s great color. Thanks.
Operator: Thank you. Your next question comes from Ebrahim Poonawala from Bank of America. Please proceed.
Ebrahim Poonawala: Hey, I guess, good afternoon. Just a couple of quick follow-ups. One, on capital, I think I heard you regarding competing up to $4.5 billion in buybacks for the year. Can you give us a sense with the CET1 at 11% close to your target, how are you thinking about capital management going into next year? Would you rather operate with some amount of excess capital as you look forward to some of the macro uncertainties, relative to just continuing buybacks and paying out any excess?
Eric Aboaf: Let me start on that, Ebrahim. We — it’s Eric. Capital is one of the most important elements of the balance sheet and we spend a lot of time thinking about what are the levels of capital? How to manage? It is based on facts and circumstances, right? The economic environment, the uncertainty, our confidence in earnings and earnings momentum, what we can see in the strength of our balance sheet, right? We’re incredibly liquid, and we have a very up-market lending book, which is quite high-quality. So many, many things come together. I think what we’ve laid out on the page on capital in the material is that, our minimum requirement is 8%. We tend to run with a very healthy buffer above that. We’ve got a target range in the 10% to 11% and we’ve been way above that range probably because of a little bit of history over the last two years and we’ve bringing that down, but in a — both at pace and also in a thoughtful way.
I think what you’ll see us do, and I say this is — given what we know today, because we’re going to be careful. If markets disrupt, then you slow a little bit. If you’ve got a lot of confidence in markets fees and there’s confidence, then you might go in the other direction. But the middle of that range is a good place for us to aim towards, partly because you want to keep a little bit of extra, that’s still 2.5 percentage points above the requirements. On the other hand, there are some uncertainties in the world and doesn’t feel like we should run down to the lower end of that range right now, right? That feels like it wouldn’t be — it wouldn’t be appropriate. So there’s a range for a reason, I guess is what I’d say. We’ve been returning capital at pace in the last few quarters, billion dollars or more.
We’d certainly like to continue to return capital at pace. You can kind of do the math of 11%, go down to the middle of the range. You got to remember there’s pull to par that matters from the AFS portfolio that provides a tailwind and capital accretion, there’s earnings. And then there’s RWA management. You saw RWA pick up a little bit this quarter. Our goal is obviously to continue to optimize RWA and turn that into an advantage as well. So we see quite a healthy buyback going into the fourth quarter. We’ve got authorization, plenty of authorization to deliver on that. We know it’s important to our shareholders and I think, a good path forward.
Ebrahim Poonawala: That’s helpful. Thanks for walking through that, Eric. And just a follow-up, quick question around NII, I guess, as you’re thinking about [Alco] (ph) management. Is there — as things reprice on the asset side within the securities book, are we kind of holding duration relative to where the back book is? Will at any point the thought process evolve to adding duration? I’m just wondering, how you’re thinking about this cycle, the environment we might be for the next few years, and how that informs the duration you’re willing to take on.
Eric Aboaf: Ebrahim, the answer is all the above. So every one of those factors matters. If we get more steepness to the yield curve, right, that would encourage us to add some duration. At the right time, we want to — we may need a little more duration to protect against falling rates, right? That’s even ideally be ahead of that. On the other hand, rates could move upwards further and so you want to be careful. I think we’re careful in how we’ve configured the portfolio. You saw us do some of the repositioning. We unwound $4 billion or $5 billion of bonds. We reinvested towards the middle of the curve, but also at the front end, right? We have — so it’s not just an average duration position that we are focused on, but where are the points across the curve?
