Q4 2019 Earnings Call
Hello, and welcome to cities fourth quarter 2019 earnings review today, we are doing by <unk>, Chief Executive Officer, Mike Corbat, The Chief Financial Officer, and Mark Mason CFO today's call will be hosted by Elizabeth Lynn head of Investor City Investor Relations, we ask that.
Thank you operator, good morning, and thank you all for joining us on our call today, our CEO My core about will speak first Denmark basin. Our CFO will take you through the earnings presentation, which is available for download on our website Citigroup dotcom.
Afterward, we will be happy to take questions before we get started I'd like to remind you that today's presentation may contain forward looking statements, which are based on management's current expectations and are subject to uncertainty and changes in circumstances actual results capital and other financial condition may differ materially from these statements due to.
Variety of factors, including the precautionary statements referenced in our discussion today and that was included in our SEC filings, including without limitation. The risk factor section of our 2018 Form 10-K would that said, let me turn it over to Mike. Thank you. Liz. This morning, we announced we had a strong close to 2019.
Boarded earnings of $5 billion for the fourth quarter, bringing our net income to $19.4 billion for the year the highest since 2006.
Our earnings per share of $2 and 15 change, we're over 30% higher than a year ago and the $8.04 for the full year was over 20% above 2018.
We finished the year with the return on tangible common equity of 12.1% just ahead of our 12% target for the year.
This is 120 basis points higher than our 2018 return on tangible common equity of 10.9%.
Constant dollars or 2019 underlying revenues increased by 4% in both global consumer banking and our institutional clients group.
Good revenue good revenue growth paired with disciplined expense management allowed us to deliver positive operating leverage even as we continue to make significant investments in the franchise.
Pre tax earnings were up 5%.
We also had loan and deposit growth for the year and for the 16th consecutive quarter.
Our return on assets rose to 98 basis points for the year.
Our strong finish to 2019 was the result of balanced performance, a bull across both products and geographies.
Both North America, and international consumer banking had 4% year over year revenue growth.
In the U.S. branded cards revenues continue to grow at a healthy clip with a 10% increase for the quarter, bringing the full year increased to 8%.
We continue to attract digital deposits from both existing and new customers, bringing the total to $6 billion for the year.
Better sediment helped increase our wealth management revenues in Asia, and our cards business contributed to growth in Mexico.
Investor sentiment also positively impacted our institutional business for the fourth quarter fixed income was up nearly 50% from a tough final quarter of 2018 equities didn't perform as well mainly due to weakness in derivatives.
We continued to gain share in investment banking and the private bank posted good revenue growth of 6% Treasury and trade solutions continued to grow despite a lower rate environment as we work to ensure our global network remains indispensable to our multinational clients.
We ended the year in a strong capital position with a common equity tier one ratio of 11.7% and we're on track to deliver our investor day commitment of returning more than $60 billion of capital to our shareholders over Threec car cycles, having returned over $22 billion in 2019 alone.
Our dividend creates a very respectable yield for our common shareholders and we reduced our shares outstanding by 11% during the year.
Our tangible book value per share increased to over $70, a 10% increase for the year.
I'm very proud of our firm's performance as we did in 2018, we hit our return target for the year, despite an uncertain environment, which our trade disputes rising geopolitical tensions and still no finality regarding Brexit.
As we told you entering the year, we prepared for multiple scenarios and use multiple levers to manage the from through the uncertainty and deliver a solid year for our shareholders.
We enter 2020 in a strong competitive position from capital and liquidity to talent and technology, we continue to invest in areas, where we see opportunities for client led growth and in our infrastructure in light of the enduring need to beat indisputably strong and stable institution.
We're looking forward to sharing with you how we'll take our from forward over the next several years with that in mind, we will hold our next investor day on May 13th.
The environment has changed meaningfully since our 2017 Investor day, and we'll lay out what we aspire to this year and beyond now let me turn it over to Mark and then we'd be happy to answer your questions. Mark. Thank you, Mike and good morning, everyone. Starting on slide three net income of $5 billion in the fourth quarter grew 18.
Were sent from last year as growth in operating margin was partially offset by higher credit costs, and we benefited from a significantly lower tax rate.
EPS grew 34%, including the impact of a 10% reduction in average diluted shares outstanding as we've continued to buy back shares throughout the year consistent with our capital plan.
Revenues of $18.4 billion grew 7% from the prior year driven by higher non interest revenue and reflecting continued solid results across consumer as well as our accrual businesses in IC G along with a rebound in markets.
Expenses increased 6% year over year, reflecting higher compensation and volume related expenses, along with continued investments in the franchise, partially offset by efficiency savings and the wind down of legacy assets.
And cost of credit increased driven by volume growth and seasoning in consumer as well as volume growth and a few episodic downgrades in IC G. While overall credit quality remained stable.
Our effective tax rate for the quarter was 12% better than our outlook, reflecting discrete tax items, the discrete tax items equate to a benefit of 25 cents per share this quarter.
Excluding this benefit our tax rate would have been roughly 22%.
In constant dollars end of period loans grew 2% year over year to $699 billion as 3% growth in our core businesses was partially offset by the wind down of legacy assets and deposits grew 6% with contributions from both our consumer and Institute.
No franchises.
On slide four we show our full year results looking at 2019, our progress was broad based with revenue growth positive operating leverage and operating margin expansion across both our consumer and institutional businesses.
Revenues were up 4% on an underlying basis, excluding the impact of FX as well as the $150 million gain on the sale of the Hilton portfolio and the $250 million gain on the asset management business in Mexico in 2018.
In global consumer banking, we generated 4% revenue growth across all three regions.
And I see GE revenues also grew 4% with continued momentum in our accrual businesses as well as growth in our market sensitive businesses.
And even as we continued to make critical investments in our franchise, we maintained expense discipline delivering roughly flat expenses for the year inline with our outlook.
Credit quality remained broadly stable across the franchise and underlying pretax earnings grew by 5%.
EPS grew by 21%.
And we generated and ROTC E of 12.1% ahead of our target for the full year.
Turning now to the businesses slide five shows the results for global consumer banking in constant dollars.
The consumer business show continued momentum in the fourth quarter.
For the quarter revenues grew 4% with contributions from all regions, while expenses were down 1% driving continued grow and operating margin and earnings.
And looking at full year results in consumer excluding both gains in 2018, we also generated 4% revenue grow while expenses were roughly flat, resulting in 9% growth in operating margin and 13% growth in pre tax earnings.
Yes.
Slide six shows the results for North America consumer banking in more detail.
Fourth quarter revenues of $5.3 billion were up 4% from last year.
We have continued to make meaningful progress against our strategy to create a more integrated client centric relationship model launching new value propositions across cards, and retail banking and continuing to enhance our digital capabilities.
In 2019, we introduced the rewards plus car.
Digital lending products flex loan and flex pay.
New digital checking and savings accounts and relationship offers for both cards and deposits.
And in digital we enhanced our account opening and servicing capabilities. For example, streamlining the digital account opening process, which has roughly doubled our application submission rate.
These actions are resonating with our clients driving deeper relationships and better growth in deposits, you EMS and loans.
And while most of the new offerings. We've introduced in 2019, how have leveraged our proprietary products and reward programs. This year, we will be expanding our reach and the breadth of our customer base with both existing and new partners.
For example, we're expanding our partnership with American Airlines to include deposit products, and we recently announced a new partnership with Google to attract clients digitally.
Importantly, we are building these capabilities in a scalable manner with the ability to expand to other partners efficiently.
Turning now to the results of the individual businesses.
Branded cards revenues of $2.4 billion grew 10% year over year.
Client engagement remains strong with purchase sales up 7%.
And average loan growth improved to 4%, while our net interest revenue as a percentage of loans expanded to 921 basis points this quarter.
In retail banking, our deposit momentum continued to improve with average deposits up 7% with a strong contribution from both traditional and digital channels.
And our Oems were up 20% or 8% excluding market movements, reflecting strong engagement from our city gold clients.
We saw continued momentum in digital deposit sales, bringing our full year total to roughly $6 billion versus the $1 billion, we raise in 2018.
And our experienced to date gives us confidence in our ability to drive towards national scale in retail as we deepen relationships overtime.
However, retail banking revenues of $1.1 billion were down 4% year over year.
As the benefit of stronger deposit volumes was more than offset by lower deposit spreads.
Finally retail services revenues of $1.7 billion were up 1% year over year with continued growth in loans and purchase sales across the majority of the portfolio.
Total expenses for North America, consumer were down 4% year over year as efficiency savings more than offset investment spending and higher volume related expenses.
Turning to credit.
Net credit losses grew by 10% year over year, reflecting loan grow and seasoning in both cards portfolios.
Our full year NCL rate in U.S branded cards, and retail services were 319 basis points and 513 basis points respectively.
Looking ahead, we expect NCL rates in 2020.
To be at or slightly above the high end of our outlook range of 300 to 325 basis points for branded cards, and 500 to 525 basis points for retail services.
And I'd also note that we typically see higher NCL rates in the first half relative to the second half of the year, reflecting normal seasonality.
On slide seven.
We show results for international consumer banking in constant dollars.
Fourth quarter revenues of $3.2 billion grew 4%.
In Latin America consumer revenues grew 6%.
Including a few small episodic gains.
Loan and deposit growth was muted in Mexico again this quarter as we are seeing lower levels of client demand in the current environment of decelerating GDP growth.
On a slowdown in overall industry volumes.
But importantly, we delivered strong year over year EBIT growth again this quarter.
Turning to Asia consumer revenues grew 4% in the fourth quarter.
We continue to see strong growth in our wealth management drivers in Asia.
With 10% growth in city gold clients and 9% growth in net new money versus last year.
In total operating expenses for international consumer banking increased 3% in the fourth quarter as investment spending and volume driven growth was partially offset by efficiency savings and cost of credit was down 6% driven primarily by Mexico.
Slide eight shows global consumer credit trends in more detail.
As a reminder, this quarter, we realigned our commercial banking business with all commercial banking activities, including those previously reported as part of GCB now reported in ICICI.
The consumer credit trends on slide eight reflect this change.
In North America, and Asia. This shift resulted in only a slight increase in the reported NCL rates.
However, it did have a larger impact on reported NCL rates in Latin America, given the relative size of the commercial business, there, which had structurally lower NCL rates and represented roughly one third of the GCB loan book.
Overall credit trends credit trends remained favorable again this quarter.
Turning now to the institutional clients group on slide nine.
Revenues of $9.4 billion were up 10% in the fourth quarter, reflecting continued momentum in the accrual businesses as well as strong performance in both investment banking and fixed income markets, partially offset by softness in equity markets.
Total banking revenues of $5.5 billion were up 3%.
Treasury and trade solution revenues of $2.6 billion were up 2% as reported and 3% in constant dollars as we drove strong client engagement and solid growth in deposits and transaction volumes, partially offset by the impact of lower interest rates.
We continue to see robust underlying business drivers in TTS, reflecting growth with new clients as well as the deepening our relationships with our existing clients, including 10% growth in average deposits as well as double digit growth in our cross border payment flows this quarter.
Investment banking revenues of $1.4 billion were up 6% from last year outperforming the market wallet, reflecting strong performance in equity and debt underwriting, particularly investment great underwriting as we leveraged our global capabilities to help clients optimize their funding needs.
Private bank revenues of $847 million were up 6%.
Driven by higher lending and increased investment activity with both new and existing clients, partially offset by spread compression.
And corporate lending revenues of $732 million were roughly flat as growth in the commercial book was offset by lower volumes in the rest of the portfolio.
Total markets and security services revenues of $3.9 billion were up 28% from last year.
Next income revenues were up 49% largely reflecting a recovery from the fourth quarter 2018.
Coupled with strong performance, particularly in rates and spread products.
Equities revenues were down, 23%, primarily reflecting a more challenging environment and equity derivatives.
And finally in security services revenues were down 1% on a reported basis, but largely unchanged in constant dollars as higher volumes from new and existing clients were offset by lower spreads.
Total operating expenses of $5.4 billion increased 8% year over year, driven by higher compensation related expenses and legal costs.
And credit costs increased to $246 million, reflecting overall volume growth as well as a few episodic downgrades, while overall portfolio quality remains strong.
And on a full year basis credit cost of $563 million.
Were consistent with what we would agree with what we would expect annually given the size as well as the quality of our portfolio.
For full year 2019, our net income grew 3%.
On the combination of revenue growth.
Positive operating leverage continued credit discipline, and a lower tax rate.
On a constant dollar basis full year revenue growth was 4%.
From a client perspective, our revenue growth was largely driven by continued strong engagement with our corporate clients across TTS and investment banking as well as both fixed income.
An equity markets.
And looking at our results from a product perspective, we generated over half our revenues in banking, which grew 3% as reported and 5% in constant dollars on continued momentum in TTS investment banking and the private bank.
Security services revenues were largely unchanged on a reported basis, but grew 4% in constant dollars as we continue to acquire new clients as well as deepen existing client relationships.
And in fixed income revenues grew 10% with strong contribution from both rates and currencies as well as spread products.
The combined solid performance in these businesses helped to more than offset weakness in equities and deliver positive operating leverage for the year.
And finally, while our cost of credit was higher it was in line with our outlook for 2019, reflecting a normalization in credit trends and credit quality remained strong with roughly 10 basis points of loss of losses for the year.
Slide 10 shows the results for corporate other.
Revenues of $542 million increased 8% from last year, reflecting gains on investments, partially offset by the wind down of legacy assets.
Expenses increased 34%, reflecting higher infrastructure costs, partially offset by the wind down of legacy assets.
And the pre tax loss was $80 million this quarter roughly in line with our prior outlook.
Looking ahead for 2020, we would expect a quarterly pre tax loss of roughly $250 million in corporate other as we continue to invest in infrastructure and controls and see some impact from lower rates as well as a reduced level of gains.
Slide 11 shows our net interest revenue split between our markets business and the contribution from the rest of the franchise excluding markets on the top of the slide.
As you can see we delivered 3% growth and net interest revenue or roughly $1.4 billion year over year in constant dollars in 2019 inline with the high end of our latest outlook, mainly reflecting strength in North America branded cards.
And TTS.
Looking at results for the quarter, we saw a rebound in markets net interest revenues both year over year end sequentially, while growth in the rest of the franchise was more than offset by the headwinds of lower rates.
And net interest margin increased by seven basis points sequentially also driven by the higher markets net interest revenue.
And turning to noninterest revenue for total Citigroup.
This quarter, we generated strong year over year growth in noninterest revenue of roughly $1.2 billion.
The strong end to the year allowed us to deliver nearly $650 million of grow and non interest revenue on a full year basis or 2%.
Above our original forecast.
Were roughly flat.
So if you look at our total revenues for full year 2019, we realized 2% growth on a reported basis and 4% on an underlying basis with a balanced contribution from both an IR and non and IR revenues.
Looking ahead to 2020, we do expect to deliver some growth in net interest revenues this year.
Despite the change in the direction of rates as loan growth and mix become the primary drivers.
And we remain comfortable in our ability to deliver continued growth and noninterest revenues. This year driven by continued fee growth across both our consumer and institutional businesses.
So in aggregate for total Citigroup, we expect to generate modest year over year revenue growth in 2020 on a reported basis.
On Slide 12, we show our key capital metrics.
In the fourth quarter, our tangible book value per share increased 10% year over year to $70.39 driven by net income and lower share count.
And our Cc, one capital ratio increased sequentially.
To 11.7%.
Driven by a decline in risk weighted assets.
In summary, we made good progress in 2019 with broad based revenue grow positive operating leverage earnings grow and a sizable return of capital to our shareholders.
We improved our ROTC by over 100 basis points, achieving a full year ROTC of 12.1% ahead of our target of 12% for the year.
We drove 2% revenue growth with a balanced contribution from both our consumer and institutional businesses.
On the expense side, we were able to hold expenses flat, while making significant investments in the franchise as productivity savings continued to meaningfully outpace our incremental investments as well as offset volume related expenses.
We maintained our credit discipline growing our loan portfolio, while maintaining loss rates within our medium term expectations across every business and region.
On the tax rate, we continue to work to better position the from post tax reform.
And we delivered on our capital optimization goals, returning over $22 billion of capital through share buybacks and dividends during the year.
Importantly, we continue to deepen and broaden our client relationships in order to drive sustainable client led growth and a steady improvement in returns.
Our results in 2019 give us confidence in 2020, and we're committed to delivering continued progress going forward.
For 2020.
We expect to deliver modest top line growth and roughly flat expenses, while continuing to manage the franchise responsibly.
We expect cost of credit to remain manageable.
And we expect our effective tax rate to be around 22% in 2020, excluding any discrete tax items.
As Mike mentioned the revenue environment has changed since we set our targets for 2020.
With lower interest rates slower global growth and the pressure, we've seen an industry wallets in markets and banking.
In an environment similar to the one we are operating in today, we expect to deliver an ROTC E. In the range of 12% to 13% for 2020.
So we expect we will continue to make progress in improving our returns and we look forward to having the opportunity to talk more about this year and beyond at our Investor day in May.
With that Mike and are happy to take any questions.
At this time, if he would like to ask a question. Please press star one on your telephone keypad now again that star one for any questions. We'll pause for just a moment to compiled acuity roster.
The first question will come from John Mcdonald with Autonomous. Please go ahead.
Hi, Good morning, Mark wanted to ask about deposit growth seemed like an accelerated.
Throughout the year, you kind of doing that 2 billion per quarter. It seems like towards the end of the year.
Is that a pace you thinking keep keep up with a new initiatives on deposit growth.
So we've seen good deposit growth as you said through the year on both our consumer business as well as on the institutional side and that in many ways. I think is a an important proof point around our consumer strategy.
We're continuing to focus on value propositions on the consumer side in order to to grow with our card customers and outside of our retail banking markets. We just launched the the high yield checking account will continue to develop new new new products, such as with our partner in America airline.
Lines in those those types of initiatives, we expect to continue to fuel continued growth on the deposit side in consumer.
We've also as I said seeing good momentum on the on the on the institutional side, we expect that growth to continue and Thats an important metric as we think about.
How we continue to increase our engagement with clients and so yes, we do expect to see.
Continued growth in deposits.
The next question is from Glenn Schorr with Evercore. Please go ahead.
Hi, how are you.
The cloud and good morning, So I'm curious branded cards doing well up 10% when you look at retail services.
Up 1% I'm curious if you could talk about the compare contrast of.
What's driving one to better growth I don't know us there were any partnership repricings or loss partners along the way.
Thanks sure.
So on the on the branded card side, you've heard us say through the course of the year we've.
Continue to see good good clock good traction with our clients there we've seen purchase sales up 7%.
And you've seen continued growth in loans in on the on the branded side, so 1% growth in quarter, one 2% growth in quarter, two 3% growth in quarter three four in quarter four so good good momentum there a good pace of increasing the average interest earning balances and so.
So that has been a big part and contributor to to that 10% growth that you that you referenced and and sizable growth for the full year as well on a retail services side as you know there are multiple portfolios that make up.
Retail services and we've seen.
Good momentum and a good number of those portfolios, but within that obviously is.
His Sears and which is a partner of ours and that.
The results that we have do reflect the impact from Sears that said, we have delivered on the 1% we've talked about as guidance for the revenue growth for the quarter and I think it's 2% for the full year.
We would expect to see continued pressure from the Sears portion of the portfolio, particularly on on the purchase sales and.
That said it is still a very.
Profitable portfolio for us, we still very engaged with the customers there and some 80% of the spend is outside of those stores and so.
Profitable good returning but some pressure given everything going on with that partner in particular the store closures yes.
And very important partner, but lot going on there.
The next question is from Steven Chubak with Wolfe Research. Please go ahead.
Hey, good afternoon.
Afternoon. So so mark one of the start off with the question and just on some of the RTC guidance certainly commendable you guys delivered on the 12%. This year that said I believe it does include about 50 basis point benefited from discrete tax items and so as I think about the core rate, it's maybe somewhere in the zone of 11 sex and.
I'm just thinking as we tried to unpack the walk to that 12% to 13% you spoke of and the fact that you do have provision likely trending higher in 2020, and assuming no further benefit on the tax side, just help us think through whether some of the key drivers to help us get to that 12% to 13%.
Sure. So look I think it's.
Think about what we saw this year in some of the key.
Important drivers of outperformance you can kind of look across many of the businesses and see good topline growth underlying.
And good EBIT performance, we expect that topline growth to continue, particularly as we continue to execute on our consumer strategy.
And more deeply penetrate the card customers that we have bear and develop new value propositions that we can get out to market, having proven those digital capabilities that we've invested in so continued topline growth on the consumer side.
We do expect to see good underlying metrics with our institutional clients, particularly in TTS, which is core to our network, but also has linkages. Our route of linkages with the rest of the EISG. So good continued momentum deposit volumes and engagement with both new and existing clients on.
Institutional side and in TTS, and so topline growth of a couple couple percentage points in a constructive capital markets.
Environment with flat expenses, and so you we referenced that at the beginning of this year.
And manage to that with all the uncertainty playing through the year and we are targeting that again.
For 2020.
And the combination of that and continued work on the cost of credit.
And of course will continue to look at the tax line, but we leave we believe the combination of that focus on and continued productivity benefits funding the volume growth that we expect to have will get us too.
The range of the 12 to 13 that I referenced.
The next question is from Saul Martinez with you BS. Please go ahead hi.
Hey, guys. Good good afternoon, sorry.
So I guess following up.
Actually first to more of a clarification I just want to make sure I heard something.
Correctly, you said Mark you said on the corporate and other pre tax.
Estimate for next year, I thought I hear 250 million per quarter that can't be right is that did I.
It seems awfully higher obviously, it's a much higher run rate than what you've been doing what can you just repeat what that that outlook was pre tax so another.
Sure. So I did I did reference.
That we would expect to see and impact of about 250 a quarter.
For corporate other that is higher than the prior guidance that I'd given of 102 $151 million. The last time I gave guidance on corporate other so a bit higher.
There are couple of things that that impact that or that will drive that one of which is the impact of race. We obviously had three rate cuts in the back half of 2019 that place through the business performance, but some of it also plays through the revenue that's in corporate other.
We also have will have fewer gains I referenced some gains that we have from investments.
Play through 2019 in through the quarter here, so likely to have fewer of those and then we are and I've referenced the investments that.
That we continue to want to continue to make our will continue to make and infrastructure and controls.
And those investments will will be in the form of of technology and people in and focused on.
Things such as data data governance and.
And infrastructure.
And so those are important investments that that will be making and those three drivers.
We will be what impacts or or is underneath that guidance not all in the expense line as I mentioned, we will move to keep the expenses flat.
The next question is from Jim Mitchell with Buckingham Research. Please go ahead.
Hey, good afternoon guys.
Good afternoon, and a follow up I appreciate the unpredictability of particular capital markets revenue and I assume thats why the wide ranging ROTC, but if we look at the second half of last year.
Operating leverage subsequently vessel bank has been minimal.
Okay, but you had 7% as a firm at 7% growth topline growth with some investment gains 6% expense growth in the fourth quarter I just want to understand I think the upside the upper end to that range would imply some pretty good operating leverage so is it some unusual items in the back half the year accelerated spending that you expect to slow or.
If if if we see higher revenue growth is actually offset by volume related expenses and you just can't get a ton of operating leverage just help me think through.
The expense.
Trajectory and different revenues areas.
Well, let me Mark when I started maybe just talk a little bit about the the revenue environment and what May drive so.
We look Jim it at 29 teen.
Mark referenced the back half of the year in rate cuts, but I would say throughout the year. We saw what I would describe as a lot of things out there that was driving uncertainty be it the lack of a China trade deal.
U_s_m_c, a where was that headed Brexit Hong Kong and I think we see ourselves in a position now where the horizon looks like some of those things may clear right hopefully we get a trade deal in the next couple of days here at least phase one of the trade deal.
You hopefully u_s_m_c aid it looks like it should be pretty well along the path to being ratified and it looks like we'll get a Brexit deal. So I think some of the things that were overhanging some of the volume related parts of the market.
Might have a chance to lift and we maybe get a bit more action out of the C suite not if some of our some of our investors you would see volumes pick up but I think you know as we look at.
The activities that we see and again I think a pretty reasonable close to the year here. When you look at the combination of SCM. When you look the combination of DCM banking more broadly.
Obviously, M&A down a little bit, but I think the backlog looks pretty good and I think the forward calendar as we look into the other areas look good. So one is I think there's a pretty good driver on the revenue side.
Yes.
I guess I, just I'd just add to that I guess, a couple of things. So one in the in the broader sense.
Again, we as we think about 2020 were targeting flat expenses with that said.
There are couple of things that are that are playing through that that I think will benefit.
The expense line in 2020 and cover any volume related to increases or investments.
That we're planning to make so one is the productivity.
Saves that we've talked about over the past couple of years and those outpacing our investments in so we expect yet another $500 million to $600 million a productivity benefits to play through 2020 and that'll be used to fund some of those some of those headwinds or investment opportunities to you would have hurt us reference.
It's a number of times through the course of the year.
Repositioning charges that we've taken.
Severance charges as we've adjusted capacity.
Those were obviously increases in expenses in the year that will that will play out or damage or reflect or generate benefits in 2020, again, creating creating capacity.
And then you remember we referenced the back half and particularly if you look at.
The IC GE.
In the in the last quarter, you got to kind of keep in mind that that growth.
In expenses is 10% topline growth, 8% expenses expense growth.
But that comes with the compensation increase associated with those revenues the volume increases associated with that activity that we saw in the back half of the year in and so you really got to think about the full year expense base as we go into 2020 as the the timing for both investments and the product.
The benefits will will Barry through the course of the through the course of the year and we'll get into much more of this and the forward look beyond 2020, obviously at an at Investor day.
The next question is from Mike Mayo with Wells Fargo Securities. Please go ahead.
Hi, can you talk about technology spend and where you are in the process and priorities for the back office in the front office I know it to a broad question, but maybe for the back office like.
The number of data centers, you have or the percent of workload you intend to move to the public cloud or for the front office little bit more color on the relationship with Google and where you expect that to go and then just overall with total tech spend where you are in terms of spending are reaping the benefits of past bent.
Sure. So why don't I started out in my career Mark you can chime in so.
I don't want to steal the Thunder will go into a fair bit addition, detail at Investor day, but Mike I'll give you a couple of examples you've asked a question before in data centers and.
City at its peak had just over 70 data centers at Investor Day. We told you we were down to 20 and today, we're down to 10, what I would say is based on the combination of the necessity of redundancies GDPR and other things.
I won't say 10 is the static number but as you get to 10 and you run a global large organization approaching a 100 countries I don't think theres massive opportunity and again, we've got to see how the regulatory and how the legal landscape unfolds in terms of data and data storage.
Second piece beyond data storage is around data itself that in many ways city per personifies Big data operating all the places that we operate in if you look at the way that the company came together through acquisitions and through other bolt ons, we think theres, a significant opportunity to really modernize or to take our data to the next.
Stage in terms of giving us benefits in terms of safety and soundness in terms of giving us benefits in terms of straight through processing all of those manifesting itself in better client experiences show.
Part of the number a reasonable part of the number that markers referencing here in terms of spend is around what I described as the modernization of our data and our data approach and so we're excited about that.
I'll give you. One example on the consumer side that we talked about last time and I'll take you to back to page 23, again around our consumer drivers, but if you look at is an example, the things that we've been doing around our technology in the call centers and if you look at the upper right hand box route agent contact rates, what you've seen issue machine.
Basically circa 15 million dollar reduction in calls inbound calls into our call centers and at the same time the way we're handling those calls through the combination of Ivy are in chat is changed where we're able to dedicate our specialists to the more.
Complex things and not being forced to deal with what's my balance wins might payment due.
How do I collect by thank you points types of calls and show.
At the same time, we're reducing significantly those contact rates and you can see it there were also.
We're also taking on more volume right as we are growing as you're growing your cards footprint is you're growing your digital deposit base, obviously, you're getting more engagement and so we're not only add on the absolute level, reducing the number of inbounds, but we're also taking on volume.
At.
At at obviously very attractive rates so.
I think that underscores our highlights why we believe it I think you've seen in the numbers that we've put up as we've made some of these investments in technology, we've gotten pretty good payback and we think the paybacks that we can get out of the things that that we've got on the slate.
Certainly warrant going after them.
Yes, I'd I'd I'd agree with that and Mike I think about it as Mike described what kind of in four buckets and so as we think about technology investments their investments that we are making.
That are that are directly client related think about new products, New solutions think about the work, we do with our TTS clients and as we identify pain points, whether it be managing their receivables are managing their invoices, we invest in other technologies, we invest in our own solutions to service those client related needs. If you will think of.
Our client service from a client experience point of view and the investments that we're making to do things like streamline onboarding I referenced that regarding digital customers Onboarding, but we also invest a lot in how we onboard our our corporate clients in new countries as we enter markets with them those are technology embedded investments at the second bucket.
The third bucket is just how we streamline our own operations our own internal processes, how we do more in the way of automation less manual reconciliation and manual work there isn't as an opportunity there for to manage data from inputs straight through output as mikes reference and there are in paybacks on the.
Streamlining of internal processes, and then the fourth pocket knife and I separated because of impart because of its significance, Mike as referenced before which is cyber.
And so cyber is a very important.
Technology investment for us to both protect the franchise and protect our clients and weve been growing that over the past five years and expect to continue to grow our investment in cyber. So just another way to think about the lens that we look at technology investment in need for it as we as we go into 2020.
The next question will come from Erika Najarian with Bank of America. Please go ahead.
Thank you good afternoon.
Mike This is the 12% to 13% ROTC for this year fully capture the potential of the franchise or an expected to give us more detailed investor day, Eric do you think continued improvement I could be realized from here. If we keep the rate curve fairly flat and there's no major.
Change in the global economic outlook.
Yes, again, we've we've kind of talked about the steps along the way and you mentioned the word improvement in improvement is Paramount in terms of the way we're approaching 2020, and we think we've got the ability using technology client engagement wallet share gains a lot of the levers that we've spoken to.
On the revenue and expense side of continuing to make improvement and make progress against against those benchmarks, yes, I completely agree I mean, if we are focused on.
Significant improvement overtime, we've made progress over the past couple of years, when we talked last about our underlying performance consumer and the ICICI, we pointed to consumer as having the opportunity to close.
The gap between where we were you two years ago and something we thought was up in the 20% or so we're making good progress on that we think Theres continued upside there.
We also have talked about when you think about our t. CE and how it's broken out between consumer IC GE and corporate other we know that over time some portion of what we have in corporate other that Tc that's tied to the excess capital that we have the DTA Citi holdings overtime that will work itself down.
Down in that in in of itself will contribute to.
Improved ROTC, so we've got a real sense of urgency.
To improve our ROTC responsibly overtime.
And we intend to continue to do that.
Thank you.
Welcome.
The next question will come from Matt O'connor with Deutsche Bank. Please go ahead.
Good afternoon, I Wonder if you talk about.
What you're working on any equity as business.
Obviously has been an area of focus velocity years. He has some signs of progress a tough quarter. This quarter I don't want to overplay at its only a few percent of revenue, but you're very strong and gaining share in SEC.
Strong and seems like gaining some share and banking.
It's still kind of call it the missing piece.
And the puzzle from from my perspective, So maybe just talk about how the strategic outlook, there and what you're working on.
Sure so.
As you recall.
Several years ago, we embarked on the mission and at the time, we were about number nine of moving into the top five today, we find ourselves that number six in along the way we've consistently taken share.
And this year, probably not show, we look like based on some coalition data or others were probably kind of flat to market.
But.
Now certainly not where we want to be and not not where this ends I think as we look at things that we've done you've seen us adjusting in particular front end capacity against the business in particular in terms of cash making investments in delta one derivatives prime broker but.
I would also urge you not just to look at what we posters the trading revenues call. It roughly $3 billion for the year I think you've gotta look at the aggregate business, which includes GCM about another billion dollars of revenue as well as our security services business about.
About another two and a half billion of revenue shows we look at and think about our equity business. It's about a 6.5 billion dollar business to US show. It is in aggregate a meaningful business that being said, we still have our objective to break top five that being said, we still think we can improve profitability and returns in the business but.
Again, we're focused on the end to end the pre trade the trade post trade and trying to maximize the overall.
Benefits of that to our franchise, but but Matt more more more work to do there.
The next question is from Betsy Graseck with Morgan Stanley . Please go ahead.
Hi, good morning.
Hi.
A couple of questions one on the.
Capital side of the broadly I think you did indicate that you feel like you have some more opportunity there too.
It gets back excess capital I guess I wanted to understand in the most recent see CCAR cycle do you feel like you maxed out that ask or that you were holding back and I'm just.
Thank you I'm wondering if we should be expecting an acceleration from here as we go into 2020 see CCAR cycle.
Yes, thanks, so we.
And we've obviously work down over time much of the excess capital that we have we've gone from having a C. One ratio.
Somewhere around 13, or so and kind of working that down to we'll end the year roughly at 11 seven in so there'll be.
Less excess thats there we obviously.
We'll go through the C. CCAR process as we've done in the past and try to responsibly come up with.
As much as we can return to shareholders that as an important driver in us delivering on the continued progress that we that we've talked about we obviously would want to and will first look to what opportunities for for growth of the business exist. So out of the out of the earnings were able to generate and.
First to fund that growth and then with what's what's left in.
Available to two to shareholders, including.
The benefits from a reduction in the in the disallowed DTA that we've been targeting from year to year, we would look to distribute that both in form of of continued dividends as well as buybacks and so.
There is some excess that that thats. They are obviously there are number of factors that go into that analysis, including the scenario and so on and so forth, but we'll we'll continue down the path of returning as much as as we responsibly Canada's makes sense given the growth trajectory we see.
And so on your 12% to 13% Razzi goal is.
You know the degree of capital year, you're envisioning, returning and I would think a function of that range as well.
That range is being driven in part by the capital I know you did you discuss yet so that yes, but the range does does include continued return of capital not at the payout ratios. We've seen in the past four for the reasons that I've mentioned, but but absolutely. It includes a competitive continued payout.
In that 12 to 13 range 12 to 13, and then and RTC range right. Okay. And then just separately on your hard guidance you gave some guidance for.
Pardon net charge offs, both on the branded in the retail partner.
And I guess I'm wondering.
Does that include your expectation for what you know day to Cecil impact is likely to Bay, and maybe you could speak a little bit to.
You know, how you're thinking about Cecil on what your.
Assumptions are for the reasonable portable period of Cecil for an economic input perspective.
Sure. Let me, let me kind of break that into pieces. If I can so the on the the guidance that I gave regarding.
Regarding cost of credit and cards or NCL rates I should say in cards I referenced that'd be a little bit above the 300 to 325 basis points of a medium term target that we'd set and for branded and my reference there and I think I've mentioned this in the past is that we've seen a higher percentage of conversion into.
To average interest, earning balances and so with that higher volume than expected, which is a good thing that comes with its profitable high quality of volume activity, but with that comes comes higher higher NCL isn't so much of the increase that I referenced that would put us potentially outside of that rate.
And is driven by that.
In terms that we have in how we think about our forecast and certainly a range that I've articulated.
We have.
We have factored in.
The impact of of how we think about Cecil.
We've I've referenced in the past.
A range of roughly 20% to 30% on the high end in terms of the day one impact.
We expect the day, one impact to increase the reserves.
By roughly 29% to get a little bit more precise will roughly $4 billion.
So inside of the range that I've communicated in the past.
The regulatory capital perspective from a regulatory capital perspective that will be about six basis points of CPT one capital in 2020.
With a full impact of about 24 basis points by the time, we get to the first quarter of 23 2023.
As you would imagine the significant build is on the consumer side. So to your to your reference to your reference to cards, it's is being driven by cards.
And that is based on the increased coverage from 14 months to about 23 months.
And so thats the that's the more significant pieces offset by a decrease in the in the corporate build which nets down to about the $4 billion.
You referenced kind of day too and we'll talk more about that I'm sure in the in the forward quarters, but theyre, obviously, a number of moving variables that go into that calculation.
Whether it be kind of economic conditions or the seasonality of the business. There are number of factors there that impact day, two and we've considered that as we look at our 2020 forecasts and as I've given you that range it factors in that consideration.
Okay. Thanks.
Welcome.
The next question is from can you stand with Jefferies. Please go ahead.
Thanks. Thanks, a lot. Good morning, just question on on capital I know, we're far waiting just the finalization of FCB and the stress test framework.
Also coming out of the yearend.
Any I assume that there was no change year over year beer GE said were you landed at all and so I guess it just a question is just what do you. How are you setting up in terms of the expectations for regardless of timing around FCB any potential changes to what the final framework might look like in any anticipated changes now you're off to think about that.
Sure so.
I guess I'll first just address directly or your reference to to the GE some score.
At the third quarter, we ended up at about 628, which is right below the 629.
And so still in that 3% bucket, we end, we should end the fourth quarter.
Well into or inside of that 3% bucket as well so below the 629 in the and the low six hundreds or so im just given some of the seasonality that we see and the focus that we that we obviously put on.
On ensuring that were.
Managing the business in a responsible way and so so 3% bucket is where we expect to be afforded by the year end or for the year end here 2019.
In terms of the stress capital buffer.
We've heard as you've heard the into a lot of.
A number of comments around the interest in getting something out for this next car cycle.
We haven't seen anything as of yet.
That would need to come out I think by middle of February .
We obviously are continuing with the normal planning of our CCAR submission.
When I think about how we consider that or how we factor that and I kind of go back to the CDT one ratio that we manage to of about 11.5%.
And we have.
A number of buffers in there, but one one buffer in there to account for our estimation of the impact of the stress capital buffer. So about 50 basis points above the capital conservation buffer that we have there and then we also have a management buffer and so my my thinking is that as that as we get more information and Clara.
I'd on the proposal.
We should be able to cover that inside of how we're managing.
The target that we already have for ourselves on the final point I'll make is that we continue to take some comfort in.
The regulators comments and views that.
Whatever we do with any one of these proposals, including the SCB that.
We are targeting capital neutrality across the industry and want to take a holistic approach that is factoring in how each of these proposals will work together in an integrated fashion, while preserving that capital neutrality some.
Got it understand and just outside of the seasonality is there anything that just given the environment and some of the ins and outs of balance had balance sheet of volatility seasonality got you inside that Jason Thanks for clarifying that and anything else is changing in terms of just flows that you see from the business outside of normal course, that's coming via.
The repo markets the fed balance sheet expansion or is it just really was a seasonality.
It was it was seasonality and we obviously had a work to ensure that we.
We were meeting client needs, while being able to.
Deliver inside of that bucket, but nothing outside of that nothing related to kind of the repo activity as you mentioned in the market.
Okay. Thank you Mark.
The next question is from Brian Kleinhanzl with KBW. Please go ahead.
Great. Thanks. It has a quick question on the and IR guidance can you kind of walk through some of the puts and takes a good too comfortable with being able to grow and 2020 and then also what's the macro assumptions are using behind that thanks.
Yes so.
As I mentioned, we expect kind of.
Total revenue growth.
In 2020 with a mix from both an IR.
And and non and IR.
We would expect that that would be driven by both loan growth as well as mix to to get to that and IR growth. That's there.
They'll probably be some or there will be some kind of volatility on a quarterly basis.
Just due to the idea that an IR has market business and I are that flows through there as well and I walk through that dynamic last quarter.
But we do expect loan growth in mix to be primary drivers there offsetting obviously some of the pressure in terms of in terms of the impact of of rates of interest rates and your point around kind of how we think about.
The forward the forward look as we as we plan for 2020.
Similar to what's out there in the where the forward curve, we've assumed one additional rate cut.
Of about 25 basis points towards the backend of of 2020.
So 2020 will have the full impact of the three cuts we saw in the back half of 19 and assumed one incremental rate cut.
In the back half of 2020.
Great. Thanks.
The next question. The next question is from Marty Mosby with Vining Sparks. Please go ahead.
Thanks for taking the question and the net its margin kind of bounce around and it's not really.
Hi at are trending like what you would see in the rest of the groups. So just was curious the positive benefit you got this quarter didnt seem like the balance sheet really create it looked like it was a real positive earnings impact does and I was stronger.
Is it more sustainable or how do you kind of what are the bearings that kind of move that as we go forward.
Yes, so the.
The net interest margin grew by about seven basis points quarter over quarter.
And much of that as I mentioned earlier was driven by.
The markets the markets revenue, so we saw a big uptick obviously.
Year over year as the fourth quarter rebounded.
And so that that mix resulted in an increase in the NIM.
To to 63 and as we go forward I haven't really haven't given a forecast on NIM going forward I have spoken obviously as I, just mentioned to near and non near.
Obviously all of the factors you would imagine such as the loan growth in the mix and all of those things will will factor into how how NIM plays out in the India in in the balance of 2020.
And then Mike I wanted to ask you at last Investor day, the Citigroup posted.
It really was about capital.
Also then talked about how you had the best in the business in the overall revenue outlook. It was was pretty.
Dicey.
It's still as like we're in a totally different place where revenue starting to pick up a little momentum.
The investment that was required or last couple of years, you accomplish that supply may maybe not as much going forward. So the dynamic kind of move away from just capital as being the driver to actually now the fundamentals of the business starting to.
Perk up little bit going into this next investor day.
Okay, Bharti I'd love to tell you, it's an easy environment.
But I think as we is we look towards the future I think one is that our levels of client engagement.
And what you've seen since Investor day, we talked about revenue gains.
Coming off of kind of potential was expansion, but in particular market share gains and I think as you look across all of our businesses are certainly most of our businesses. We've had that and I would expect at Investor day, we're going to talk more about that as as the things. We do I think continue to resonate with the clients as the investments that we.
We've made in our products the investments that we've made in service I think continue to to reap good benefits you'll hear us talk.
Again about continued expense discipline, but at the same time, you'll hear us talk about the investments in technology and technology infrastructure in those pieces, which we think gives a gives us a multiple benefit to safety soundness gives a benefit to customer experience and obviously gives a benefit on the cost side of things show.
Again, I think you as uses you site I think the big Big Outsized times of capital return versus net income are probably coming to an end, but I think at the same time to momentum in the franchise accelerates.
Thanks.
The next question is from Gerard Cassidy with RBC. Please go ahead.
Thank you good afternoon mine commercial.
As Ron drug.
Mark I know you just gave us some of the assumptions that you guys are looking on the macro for your revenue growth for 2020.
If we're talking on this call a year from now and you guys have better than expected than modest total revenue growth.
What are some of the data points, you think we need to look at throughout the year, where the revenue growth could come in stronger.
Sure.
So I went out when I think about 2020, there there are couple of.
I think critically important factors that I look too.
One is continued execution on our North America consumer strategy.
We've gotten some some good momentum.
Through the course of 19, we've made meaningful progress in terms of.
The capabilities to more deeply penetrate our customers.
We've seen good client engagement across that portfolio and so that continued momentum.
Playing into 2020 and to the extent that it plays and even more significantly I think you'll see that as we penetrate more customers as we grow volumes with those customers as they use our products and services more whether through purchase sales or any of the other metrics with Citi Gold How city Hall city gold households.
Cetera.
The second category.
Is as I think about our global corporate client.
And our institutional client group.
And the continued good engaged great engagement that we're seeing with those clients.
Not just in NTS around the world not just existing clients, but new clients that we've been able to to onboard and grow with very rapidly not just with cash management products, but also with capital markets offerings like our FX capabilities and the benefits that those clients are.
Our realizing as we invest in and technologies that bring those product capabilities together were sold to to Kirk to create solutions that allow them to run their operations more efficiently and so more traction there would be a second thing.
That you would that you would look to I think and in the third thing.
Would be something that one of the things Mike as reference to a number of times on this call.
But but that discipline around the need to invest across the franchise.
And not just in in growth, but certainly in growth around those important capabilities, but also in how we improve the way we go to market. The way we run our businesses in the efficiency around that I think the combination of those themes and return of capital obviously will be the things that you'll be able to.
Look at at the end of of 2020 and have a greater sense of clarity as to why we ended up where we ended up in on and or better than that range.
I got up anything you want to add to that you also.
No. Thank you.
And tying into some of your answer Mark Mike.
Obviously, the consumer business credit cards is a great example is economies of scale in the community banks in this space and even some of the regional banks really cannot compete with you and your peers at a profitable level that most investors would find acceptable.
If we shift over now to the capital markets business and I know you have that economies of scale in Treasury and trade solutions do you think make in three four years could the capital markets speed something similar to the credit cards, where the five dominant banks really kind of run the show like in credit cards for example.
I think I think George you're already seeing some of that and.
We can cite different examples but one is in Europe . The fact today that in Europe . The top five banks in the market space or are all us banks right and.
By nature of the businesses those banks are largely all certainly we are operating at scale in the businesses that we're in and so scale matters and we we measure scale lots of different ways and certainly in the consumer business, but also in the institutional business partner scale as your ability to.
Invest control and build your your tech stack year Youre Your tech infrastructure to make sure that you're at are out in front in terms of attributed the evolution of the business. So I think I think you continue to see consolidation in the in the in the capital market space.
Thank you.
The next question.
The next question is from Vivek Junichiro with JP Morgan. Please go ahead.
Thanks.
Couple of questions.
Closely.
On revenue growth outlook.
Right.
Well no revenue.
Starting point.
Hello.
Okay great.
Well.
So I guess.
As you look.
Morning.
Correct.
Wheels.
Okay.
So what.
Outside.
The Guy I apologize I just have had a hard time hearing your question I really apologize if you could repeat that please show.
When you look at revenue growth. If you look at the revenue grow that plus when I look at it on a core basis.
Excluding trade web.
Okay and ability dollar increase in securities gains it was about 2% year on full year 2019.
For 2020, when you look at your guidance Mark are you expecting.
More securities gains all these gains to continue and against them for the sales of businesses our portfolios and also what assumption do you have for rates outside the U.S. Mark.
Sure so.
There are couple of couple of questions in there as I think about our forward look in estimate of revenue growth. We are expecting that revenue growth from all of the buckets that I've described so core underlying.
Revenue performance.
Is what's going to drive what we see going into into 2020 I'd be careful about looking at 2019, just through the items that you mentioned there there are other things that don't necessarily reflect the the underlying strength. The franchise. There. There are some so anyway. There just to do just be careful about kind of narrowed.
I want to just those two things, but the answer to your question is in fact.
Is in fact that we see good underlying growth in our businesses in terms of the the forward look on on rates.
I guess, what I'd point you to is if you look at kind of our interest rate exposure, that's in our Q and ultimately being our K.
We often talk about the impact of.
25 basis point move there's there's an analysis there for both.
US dollar and non U.S. dollar and you'll see.
That the non us dollar impact to get to your question around non us rates is is not a material impact on a quarter to quarter basis. Its.
Little bit less than $30 million a quarter for a 25 basis point.
Shifting the non us dollar rates and obviously there are number a different you know.
Countries that make up that but it's about just less than $30 million.
Okay. Thanks, and I have a question for Mike, Mike just going back to the equities business and I recognize that are activists small business, but I know you had big hopes for this business with billion dollar increase in revenues a couple of years ago, when youre talking about it.
Recently, you've had some headcount cuts I know you've already put more capital to work in the Prime finance business.
So what do you do what can you do tangibly now differently to really.
Get that revenue growth was going again, because full year 19 was here at the low end definitely have been in the last five years.
Yes, we.
Prior to 2019, and we'll see where the coalition data and other data shuttles, but it seems like we're we're coming in somewhere about flat to market wallet, where we had the past several years taken share.
So one is we've got to get back on the track of taking share I think the second pieces that we've got a continued to assess the capacity of our front end and continue to use technology to drive parts of our lower or low touch business I think we feel pretty good about the derivative space I think we'll.
We feel good about Delta one we feel good about prime broker, we feel good about our security services businesses and all of those are obviously higher returning businesses I see.
In some cases less capital.
And again I think based on the nature of the clients that we covered the consolidation.
Of assets not just in the us but around the world. We think we've got the ability to face off against those continue to take share and again as we pull the business together to drive returns that have it makes sense.
Thanks.
If I may one quick one Mark you went to the high end on seasonal day, one from the 20% to 30%.
Given the <expletive> economic environment has held up pretty well any color on what brought you towards the high end is at a shift in your card business, which also drove that a little increase in charge offs or is this something else.
Again, it was just a there was no particular.
Change as we work through it we obviously developed.
And our motto there were shifts and balances.
But there are number of different factors that go into that.
I think I've been communicating guidance towards the towards the high end not just on this call where I talked about the actual number but on the past couple of calls and so no meaningful shifts that I'd point to.
Thank you.
The final question as a follow up from Mike Mayo with Wells Fargo Securities. Please go ahead.
Hi, I wasn't able to get this in earlier.
Just as you look at efficiency.
Yes, clearly your guidance implies better efficiency ahead, and its improved the last several years, but you know weve slice and dice numbers different ways doesn't seem to be as efficient as it could be if you take out cards. For example, so where do you how much does technology help keep the expenses flat and where do you think.
Efficiency can go in the short term the long term and just I had all SaaS to prior question about the Google relationship if I can throw that into.
Well, so whilst I'll start with Google and Mark you can chime in as well so we're out with the announcement obviously.
Q1, two Q2, we're going to be launching some products here in the U.S. for them and so we're not out with the exact design of that but.
More to come in the in the not too distant future, yes and on the.
On the operating efficiency in the in the earnings deck, we kind of show a a chart on page 18 of just the LTM efficiency ratio and their you'd see we've got discontinued downward trend.
56, five for the year 89 basis points of improvement.
What I would say Mike is that.
We put out a target we've put out.
A target not just on returns, but but on flat expenses again this year.
We're gearing up for Investor day.
We're going to make sure that we can talk too.
How we think about the future, but also how we think about technology and the role that it plays.
Now and going forward, we've given you some descriptions on.
The benefits that accrue to the from from the investments. We've made already I think we've we've demonstrated proof points of those generating productivity savings consistently and we expect that to continue but in terms of much more detail around the technology benefits or around how we think about beyond too.
The 20.
Ask that you.
Got you.
Kind of wait for us to get to Investor day, where we can talk about it in a more holistic way.
I guess I'll reserve may 13th of my calendar. Thanks, a lot Mickey Thank you.
At this time I would like to turn the conference back over to management for any closing comments.
Thank you all for joining today and of course, if you have any follow up question. Please feel free feel free to reach out to us and Investor Relations. Thank you would have a good day.
Ladies and gentlemen, thank you for participating in today's conference call you may now disconnect.
Yes.