Terry Dolan: Yes, and of course that’s the $100,000 question, is whether or not we actually move into a recession or not. But I think broadly from a macro perspective, some of the things that we’re seeing is that some of the excess savings that consumers have held in the past has come down to really pre-pandemic levels at this particular point in time. So, I think that manifests itself in kind of a normalization of consumer spend. So, we are seeing what was very strong consumer spend starting to normalize and soften, if you will. I mean, yesterday was retail sales information that came out a little bit softer than maybe expected. We’re seeing some of those same dynamics in the payments business where sales, for example in the merchant side of the equation, slower, softer sort of retail sales, but there’s still a fair amount of travel expenditure that’s taking place.
So, customers are certainly choosing and maybe being a little more choosy as to where they’re spending their dollars. Some of the dynamics that we’re seeing is while sales have softened maybe a bit, the margins in some of the businesses have actually improved. So, on the credit card side of the equation where sales have come down a little bit, the margins are actually a little stronger. On the corporate payment side of the equation, margins continue to get stronger because T&E spend at the corporate – in the commercial corporate sectors, has continued to be reasonably strong. So, we continue to kind of look out the rest of the year on the merchant acquiring side of the equation of revenue kind of in that high single digits sort of range, on the credit card fee revenue still in that mid-single digits, and on the corporate payment side equation.
It’ll normalize, but it’ll kind of normalize in that high single digits range. That’s kind of what we’re seeing, what we’re kind of forecasting at this particular point in time based upon consumer behavior.
Ken Usdin: Got it. And one follow-up on capital can you just give us, just so we all have the right number from your perspective, where CET1 was this quarter inclusive of AFS unrealized losses, and also just your view of, if rates stay the same here, what that pull to par looks like as you look forward to that year-end ‘24 point? Thanks.
Terry Dolan: Yes. So, if you were to embed the AOCI into the CET1 calculation under Category II, it’d been at 6.9%. And we expect that, based upon all of our capital actions, to get to kind of our target levels by the end of 2024. We have the game plan in order to be able to get there. So, we feel confident about that.
Ken Usdin: Okay. Do you do just have the AFS piece of what does pull to par by the end of the year? Because it’s hard for us to understand how much the risk-weighted asset part might be, but at least we can kind of track to your view of the portfolio maturity.
Terry Dolan: Yes. Do you have that, John?
John Stern: Yes. So, in terms of the burndowns between here and the end of ‘24, it’s about 25% or so.
Terry Dolan: Yes.
Ken Usdin: Okay. Got it. Thank you.
Operator: Next, we can go to Erika Najarian with UBS. Please go ahead.
Erika Najarian: Hi. good morning. I need to ask that capital question again just because it’s been such a big deal for your stock, and I’m wondering if you could indulge me in some sort of cave woman’s math here. So, 6.9% CET1, you have six quarters to generate capital. Based on what you’re earning today, you could add another 120 basis points, right, for six quarters times 20, and that’ll get you to 8%. So, given that you’ve mentioned, both Terry and John, throughout the call, some additional RWA actions. How much can RWA actions enhance that potential for 8% fully loaded CET1 by 4Q ‘24 just on earnings. How much can you add from RWA mitigation?
