Citigroup 2Q17 Earnings Call Notes

Mike Corbat – CEO

Asia and Mexico growth is reasonable

” sequential growth and positive operating story continuing in Asia and in Mexico. And I would say that those environments are reasonable environments. They’re growing well, we’d like them to grow from a macro perspective. No, we’ve had downgrades in terms of Mexico growth rates. but again, 8% growth – revenue growth coming out of Mexico in a country that’s growing sub 2, again, I think illustrating what we’ve talked about that we believe over the intermediate longer term we’ve got the ability to grow our international front franchises at or in many cases at multiples the pace of domestic growth rates. And the other piece if you look in there is that in Mexico, it’s the combination of our retail business in Asia, it is wealth management. And if you look at wealth management AUM throughout year over year and different metrics continuing to attract AUM into the business. So we feel good about the trajectory of those businesses and the ability to continue to get this type of growth. And as we’ve said, we expect that trend to continue in the near term in the second half of the year. Again, with growth and positive operating leverage.”

Assuming one rate hike each year for the next three years

“Well yeah, I mean again we’re not counting on that type of environment. So again in the projections that I’ve given you, we’re not looking at interest rates suddenly wildly increasing across the board. So it’s not rate – our outlook is not rate dependent. I mentioned in the – when I spoke – when I answered John McDonald’s question that we’ve got one more rate hike for the US built in and its December of this year. And quite frankly we’re assuming one more rate hike in ’18, one more rate hike in ’19 and one more rate hike in ’20. So again, we’re not looking as though this is all going to be rate influenced growth. We like the franchise that we built.”

We want more clarity around CCAR

“it’s likely that CCAR is going to stay the binding constraint and around anything that’s a binding constraint, you just need more transparency. So we’d like more granularity in terms of some of the numbers and have the ability to explore some of the approaches that the Fed has and because Secretary report came back, that’s one of the recommendations that they have. I would say things in there ranging from how do we think about, how do we bring together LCR and SLR and get some of the inconsistencies out.”