USB
#Yes, <UNK>, thank you.
We talked a little bit about that earlier, but when you end up looking at what the Fed ---+ the Fed still needs to define the level of reduction in the balance sheet and really the pace of it.
And I think that they have been really transparent that that pace is really going to be gradual over several years.
And I think that will cause any impacts of it to be very manageable on the banking industry and as the market adjusts.
I do think that as ---+ or we think as excess liquidity comes out of the market you could expect to see, and you will expect to see, more competition with respect to deposits.
I would also expect that the long end of the curve on a relative basis would be a little bit higher as a result of some of their activities.
That competition from a deposit standpoint is most likely to come on the wholesale side of the equation.
I think it's both parts of the equation.
It's accelerating revenue growth and moderating expense growth.
Positive operating leverage which will improve the efficiency ratio and ultimately improve ROA and ROE.
So our volatility, <UNK>, has been a lot lower than everyone else and (multiple speakers).
Simply stated, if we are not adding a lot, we are not subtracting a lot (inaudible) we can do it.
Yes, <UNK>, that's a long list.
There are a number of initiatives across the Company from the way we handle our call centers to the way we do innovation to the way we communicate with our customers to how we share information among the business lines.
So there are a number of initiatives and I would say it's probably our number one focus at the Company right now.
So first I'm going to ask <UNK> to fill in the other details.
There was no material gain or loss in the second quarter as a result of these exits.
<UNK>, take the others.
Yes, so if you just end up looking at and trying to think about the growth rates over the next couple quarters, certainly reported growth rate is about 2.7 excluding the foreign currency, as we said.
I would also say that same-store sales percentages and organic business growth has generally been quite strong, which I think is good to see.
That gives us good insights with respect to the future.
Reported growth sales have been impacted by three factors.
We talked last quarter about exiting some large volume low margin customers and that has been muting sales volumes.
That has been dissipating and it's getting behind us.
It certainly will be behind us as we get into the end of the third quarter.
And so we are starting to see sales volume starting to grow.
We are experiencing some margin compression in Europe because of interchanged caps that were put into place late 2015.
And that has continued to impact our year-over-year growth rates and will continue to impact at least through the third quarter.
That will start to dissipate in the fourth quarter and then really be behind us as we get into 2018.
And then the impact of exiting the two joint ventures will have an impact on merchant acquiring really for the next several quarters as we think about [your] ---+.
To kind of give you some maybe specifics, when we look at the third quarter, we do expect the year-over-year growth rate for the third quarter to be essentially flat and that's essentially what we said.
As I look into the fourth quarter, I do expect the fourth-quarter year-over-year growth rate to be similar to what we saw in the second quarter or this current quarter.
And then as we continue to see organic growth that we are experiencing, that will start to benefit us as we go into 2018.
Yes, I mean the ---+ one joint venture is related to our joint venture in Spain with Santander.
And really they've had changing priorities with respect to what they want to focus on.
And as we think about Spain, it continues to be an area that has some economic challenges.
So from our standpoint we really do believe that we have the opportunity to continue to grow in that market on our own with a focus on the right customers.
And I would be very clear we are not exiting the market.
With respect to the second joint venture, that is the joint venture with KeyCorp, so we call it Key Merchant Services.
And in that particular situation our partner really wanted to focus on a third-party servicing arrangement and we respect that decision on their particular part.
I would also say that we are retaining the clients that we believe create the best growth opportunity for us as we move into the future.
Thank you for listening to this review of our second-quarter results.
Please contact us if you have any follow-up questions.
