C
#Hey, thanks Mike and good morning everyone
Starting on slide 3, we showed total Citigroup results
Net income of $4.1 billion in the third quarter grew 8% from last year including a $580 million pretax gain on the sale of yield book, a fixed income analytics business which benefited EPS by $0.13 per share
Excluding the gain, EPS of $1.29 grew by 4% driven by a decline in our average diluted shares outstanding
Revenues of $18.2 billion grew 2% from the prior year reflecting the gain on sale as well as 3% total growth in our consumer and institutional businesses
Offset by lower revenues in Corporate/Other as we continue to wind down legacy assets
Expenses declined 2% year-over-year as higher volume related expenses and investments were more than offset by efficiency savings and the wind down of legacy assets
And cost of credit increased mostly reflecting volume growth, seasoning, hurricane and earthquake related loan loss reserve builds and additional reserve builds in North America cards which I'll cover in more detail shortly
In total we've built $100 million of hurricane and earthquake related loan loss reserves across North America and Latin America GCB as well as the legacy portfolio in Corporate/Other
Year-to-date total revenues grew 3% year-over-year including 7% total growth in our consumer and institutional businesses
Total expenses remained flat and net income grew 7% driving a 13% increase in earnings per share including the impact of share buybacks
In constant dollars Citigroup end of period loans grew 2% year-over-year to 653 billion as 4% growth in our core businesses was partially offset by the continued wind down of legacy assets in Corporate/Other
GCB and ICG loans grew by $26 billion in total with contribution from every region and consumer as well as TTS, the private bank, and traditional corporate lending
Turning now to each business, slide 4 shows the results for North America consumer banking
Total revenues grew 1% year-over-year and 5% sequentially in the third quarter
Retail banking revenues of 1.4 billion grew 1% year-over-year
Mortgage revenues declined significantly, mostly reflecting lower origination activity
However we more than offset this pressure with growth in the rest of our franchise
Excluding mortgage, retail banking revenues grew 12% driven by continued growth in loans and assets under management as well as the benefit from higher interest rates
We're continuing to see positive results from the launch of our enhanced Citigold Wealth Management offering driving growth in both household and balances with improving penetration of investment products
Turning to branded cards, revenues of $2.2 billion were down slightly from last year
Client engagement continues to be strong with average loans growing by 8% and purchase sales up 10% year-over-year
We generated year-over-year growth in full rate revolving balances in our core portfolios
However non-core balances continued to run off as expected
And we face continued headwinds from growth in transactor and promotional balances which we are funding at a higher cost versus last year given the higher interest rate environment
Full rate revolving balances which had been flat since the beginning of the year began to grow this quarter as new loan vintages matured and started to accrue interest
This drove 5% sequential growth in revenues this quarter
However, it was not sufficient to deliver year-over-year growth
Relative to our expectations going into 2017, we're seeing solid revenue growth in several products including Costco and Double Cash
However in aggregate we are seeing slower than anticipated revenue growth in our proprietary business mostly driven by a higher mix of promotional balances in our portfolio
Finally retail services revenues of 1.7 billion grew 2% driven by higher average loans
Total expenses for North America in consumer were $2.5 billion down 5% from last year as higher volume related expenses and investments were more than offset by efficiency savings
Digital engagement remained strong with a 13% increase in total active digital users including 22% growth among mobile users versus last year
We continue to drive transaction volumes to lower cost digital channels
For example, increasing e-statement penetration and lowering call center volumes while improving customer satisfaction
Turning to credit, net credit losses grew by over $300 million year-over-year reflecting the acquisition of the Costco portfolio which did not incur losses in the third quarter of last year, episodic charge offs in the commercial portfolio which were offset by related loan loss reserve releases this quarter, and overall portfolio growth and seasoning
We also built $460 million of loan loss reserves with a roughly $500 million reserve build in cards being partially offset by the reserve release in commercial banking
The reserve build in cards was comprised of roughly $150 million for volume growth and normal seasoning in the portfolios, $50 million related to the estimated impact of the hurricanes, and about $300 million to cover our forward-looking NCL expectations
About two thirds or $200 million of this amount related to retail services where we could see the NCL rate increase from 470 basis points in 2017 to roughly 500 basis points next year
And the remainder is attributable to branded cards where we expect the NCL rate of 285 basis points this year to rise by about 10 basis points in 2018. On slide 5 we show results for international consumer banking in constant dollars
In total, revenues grew 5% and expenses were up 4% versus last year driving a 6% increase in operating margin
In Latin America total consumer revenues grew 4% year-over-year
This is somewhat slower than recent periods driven in part by lower industry wide deposit growth this quarter which we expect to recover as we go into year-end
Card revenues grew slightly year-over-year on continued improvement in full rate revolving loan trends
And expenses also grew 4% in Latin America reflecting ongoing investment spending and business growth partially offset by efficiency savings
Turning to Asia, consumer revenues grew 5% year-over-year driven by improvement in wealth management and cards, partially offset by lower retail lending revenues
Higher card revenues reflected 6% growth in average loans and 7% growth in purchase sales versus last year
And while retail lending revenues declined versus last year we saw a sequential revenue growth again this quarter
Expenses in Asia grew 4% as volume growth and ongoing investment spending were partially offset by efficiency savings
Total international credit costs grew 4% year-over-year mostly reflecting volume growth and seasoning in Latin America
Slide 6 shows our global consumer credit trends in more detail by region
Credit remained broadly favorable again this quarter
In North America the sequential increase in the NCL rate reflects the commercial charge offs I noted earlier while the NCL rate declined in both card portfolios
Turning now to the institutional clients group on slide 7, revenues of $9.2 billion grew 9% from last year reflecting the previously mentioned gain on sale as well as continued solid progress across the franchise
Total banking revenues of 4.7 billion grew 11%, treasury and trade solutions revenues of 2.1 billion were up 8% reflecting higher volumes and improved deposit spreads
Growth in TTS was balanced across net interest and fee income with fees up 9% on higher payment, clearing, and commercial card volumes as well as higher trade fees
Investment banking revenues of 1.2 billion were up 14% from last year with a wallet share gains across debt and equity underwriting and M&A
Private Bank revenues of 785 million grew 15% year-over-year driven by growth in clients, loans, investment activity and deposits, as well as improved spreads
And corporate lending revenues of 502 million were up 14% reflecting lower hedging costs and improved loan sale activity
We continued to see strong engagement with our global subsidiary clients this quarter as they borrowed to support core business activities
Total markets and security services revenues of 4.6 billion grew 3% including the gain on sale
Fixed income revenues of 2.9 billion declined 16% on lower G10 rates and currencies revenues given low volatility in the current quarter and the comparison to higher Brexit related activity a year ago as well as lower activity in spread products
Our local markets rates and currencies business grew modestly as we remained engaged with our corporate clients across our global network
Equities revenues were up 16% reflecting client led growth across cash equities, derivatives, and prime finance
And finally in security services revenues were up 12% driven by growth in client volumes across our custody business along with higher interest revenue
Total operating expenses of 4.9 billion increased 5% year-over-year as investments and volume related expenses were partially offset by efficiency savings
On a trailing 12 month basis, excluding the impact of severance and the gain on sale, our comp ratio remained at 26%
On a year-to-date basis ICG revenues of $28 billion grew by 10%, even while trading revenues remained flat to last year
We generated half of our revenues in banking which grew 13% on continued momentum in TTS, investment banking, the private bank, and corporate lending
And we're seeing strong growth in security services as well which we view is similar to TTS in many ways as a foundation for developing broader relationships with our investor clients
Slide 8 shows the results for Corporate/Other
Revenues of 509 million declined significantly from last year driven by legacy asset runoff, divestitures, and the impact of hedging activities
Expenses were down 36% reflecting the wind down of legacy assets and lower legal expenses
And the pretax loss in Corporate/Other was roughly $260 million this quarter
We believe this level of $250 million to $300 million of pretax loss per quarter is a fair run rate to expect for Corporate/Other through 2018. Slide 9 shows our net interest revenue and margin trends split by core accrual revenue, trading related revenue, and the contribution from our legacy assets in Corporate/Other
As you can see total net interest revenue declined slightly from last year to 11.4 billion as growth in core accrual revenue was outpaced by the wind down of legacy assets as well as lower trading related net interest revenue
Core accrual net interest revenue of 10.4 billion was up 5% or $450 million from last year driven by the impact of higher rates and volume growth, partially offset by a higher level of long-term debt
On a sequential basis core accrual revenue grew by nearly $350 million this quarter reflecting day count, the impact of the June rate increase, loan growth, and mix
Year-to-date core accrual revenue grew by $1.5 billion year-over-year and we expect to see roughly $500 million of additional growth in the fourth quarter
However, on a full year basis we expect this increase to be offset by a roughly $900 million decline in the net interest revenue generated in the legacy wind down portfolio in Corporate/Other
On slide 10, we show our key capital metrics
In the third quarter our CET1 capital ratio declined sequentially to 13% as net income was more than offset by $6.4 billion of common share buybacks and dividends
Our supplementary leverage ratio was 7.1% and our tangible book value per share grew by 6% year-over-year to $68.55 driven by a 7% reduction in our shares outstanding
As we look to the fourth quarter, in consumer we expect continued modest year-over-year revenue growth and positive operating leverage in both North America and international consumer
In total we have achieved sequential growth in pretax earnings in global consumer banking for the last two quarters and we expect this to continue in the fourth quarter
On the institutional side we expect continued year-over-year revenue growth in our accrual businesses including TTS, the private bank, corporate lending, and security services
Market revenues will likely reflect a normal seasonal decline from the third quarter
And investment banking revenues should be similar to this quarter assuming a continued favorable environment
We remain on track to achieve an efficiency ratio of 58% for the full year and cost of credit in the fourth quarter should be broadly in line with the third quarter driven by the normalization of credit cost in ICG offset by lower reserve builds in consumer
Finally we expect our tax rate to remain at around 31% in the fourth quarter and with that Mike and I are happy to take any questions
Question-and-Answer Session
Yeah <UNK>, we are definitely rolling on new promotional balances
Well Costco is part of branded but I think maybe the best way to think about this is if you take a look at what's going on with branded cards revenues in general
I think there is three factors that you need to discuss in order to explain where we are with the cards revenue growth
And the first is that as we saw the competitive dynamics and the rewards offerings in the U.S
heat up late in 2016. At that time we made a conscious decision to shift our acquisition program away from rewards oriented products and more towards value products
Now value products as we've been discussing, those typically feature a promotional period and so this change in tactics combined with the fact that the initial response to our value acquisition offerings was even stronger than we anticipated has resulted in a higher amount of these non-yielding promotional balances in our portfolio
And based upon the performance of the earlier vintages we expect these promotional balances will generate growth and full rate balances but, in the near-term we're seeing a dampening effect on revenues caused by this shift in focus
So that's one factor
Then secondly there's also a dampening effect on the revenues against where we anticipated just caused by the higher rates
If you remember when we went into the year, our planning was based upon one 125 basis point hike in rates in the U.S
during 2017 and in fact so far we've seen two
And while the higher rates are overall accretive to the U.S
consumer business we've also talked about the fact that higher funding rates increase the near-term revenue drag caused by promotional balances
So that's the second factor
Now as late as June we believe that despite the drag of the higher promo balances and the higher funding rates we'd still be in position to deliver at least some level of year-over-year revenue growth in the U.S
brand cards beginning in the third quarter
However this is where the third factor comes into play
Beginning in July we saw a slight uptick in the overall payment rate across the proprietary portfolio but while small it was just enough to take us from a small increase in revenue year-over-year to a small decrease
So three factors; change in acquisition focus, slightly higher interest rates, and a slight increase in payment rates that have combined to result in the third quarter 2017 branded card revenues to be just below the level that we had in third quarter 2016.
Absolutely, Costco remains a real winner
We've continued to be able to grow account balances, we've seen continued growth in the purchases
So it's still looking like an absolute winner for us
Just the normal level that we would do every quarter
There was always a small amount but there's nothing unusual this quarter
Not a problem <UNK>
Yeah, that's it exactly, <UNK>
It's exactly what we've been talking about for the last nine months or the last three quarters
And while we've seen some improvement in those later stage delinquency bucket roll rates, it's still higher than what we thought it was going to be
So that's what is feeding into that
It has fed into the increased guidance that we've given you during the course of the year driving another 2017 expected NCL rate from 435 basis points coming in to the year to 470 basis points now
And so you know, reflecting about a 30 basis points, 30-35 basis point increase where we otherwise would have expected retail services to be in 2018.
Yeah, maybe if you want I'll go through both branded cards and retail services because it's the same three factors that impact both of them
So when you think about the branded cards, LLR build up, you know, we built about $200 million of the LLR of that 500 in branded cards
And there's about on a normal basis given growth and seasoning in branded cards we probably have about $50 million to $100 million in the quarter
So figuring the midpoint to be about 75, we added $25 million of reserves to cover our estimated impact of the hurricanes
And then finally in branded cards we're looking at an NCL rate of about 10 basis point growth next year and that will go from about 285 this year to 295 next year
That's a little bit higher than what we had previously considered
It's still in line with our long-term 300 to 325 basis points but we'll probably get to 295 next year
You take a 10 basis point increment in your NCL rate, multiply it by an $85 billion loan portfolio, adjust that for 14 to 15 months of coverage and that adds about $100 million accrual on to branded cards
So overall, 75 that I would consider to be normal, 25 for hurricanes, and 100 just to adjust to that forward look
So when you think about that forward look maybe perhaps we could have taken more of a wait and see approach over the next several quarters but our assessment was that it was appropriate to take that reserve build now
So all things being equal I'd expect that the fourth quarter reserve build would be back in that range of $50 million to $100 million in branded cards that we would consider to be more normal
And then if you move over to retail services, it is similar to what we just went through with branded cards
We had that $300 million reserve build in retail services and again if you look at retail services, the normal reserve build there is again kind of in that $50 million to $100 million range
And with retail services we'd likely be in the upper end of that range right now, just given the volume build that we've seen
So call that 90, 85, 100 somewhere in that range
Then there's another $25 million for hurricanes that we've put away in retail services to cover the estimated losses that we think could occur
And then again as we look forward and we think about the NCL rate next year being 30 to 35 basis points higher than what we had previously thought about, again you take 30 to 35 basis points, multiply it by a current $46 billion portfolio, adjust that for a 14 to 15 month coverage period and that gets you the extra $200 million reserve build there
So $75 million to $80 million to $100 million for normal; 25 for hurricanes, 200 for the forward look that gets you to that 300 to 320 that gets in the supplements
And again just like in branded cards perhaps we could have taken more of a wait and see approach but we thought it was appropriate to take the reserve build now
And again all things again being equal with retail services I'd expect that we'd be back in that upper end of that $50 million to $100 million normal range in the fourth quarter
Let me just finish it because if we’re adjusting that range up to 500 basically basis points of losses in retail services in 2018, we're also going to take the medium term view of retail services up from where we have talked about on Investor Day of being about 500 basis points to be more in the range of 510 to 525 basis points
So again, not a big change but we're going to make that change in the forward guidance
I think it's an area <UNK> if opportunities present themselves as we've seen in Best Buy and other and if portfolios make sense we clearly got the capital balance sheet, liquidity capacity, and if the returns makes sense we’d be happy to take them on
Well we think it's a growth business and again if you measure it in revenue <UNK> it's a little hard and I think we touched on this a little bit in Investor Day
It's a difficult business to measure just based upon revenue growth only because with so many of the partner relationships that we have we end up with performance sharing agreements and those performance sharing agreements, now the accounting for that all runs through revenue
So your revenue as your NCLs go up or down that impacts the performance of the business, that ends up in your revenue number
So that's why over time you might only look at that as being a 1% revenue growth business
But we like the growth aspects on pretax earnings
So we think it's a really good business and unfortunately with those performance sharing arrangements that tend to obscure the true revenue trends and even in the near-term economics we end up having to build the loan loss reserves for all the NCL's that we're going to incur in that business even though some of those NCLs ultimately as they’re realized will go into the performance sharing arrangement and so it's actually our partners that will actually bear a significant percentage of those NCLs
That ---+ I would say the best measure is probably pretax earnings less the LLR
I did, year-over-year
We expect year-over-year growth to be $500 million in the quarter
If you remember Jim when we, as we've been talking about growth in net interest revenue year-over-year we've been focused on that core accrual line and we said that in the second half of the year we would expect that to grow about a billion dollars year-over-year and we saw a $450 million in the third quarter and we're looking at $500 million in the fourth quarter
So we’re roughly in line with that billion dollars that we talked about back in July
Well we opened a number that we settle on, is going to be really determined based upon the overall portfolio mix between the branded proprietary portfolio, the co-brand cards, and everything else
So I don't want to give you a long-term target on the average yield
We have given you the target that we believe that branded cards in the medium term should produce about 215 basis points of ROA and that includes yield assumption, that includes our forward look of NCL rate of 300 to 325 basis points
I don't want to start giving guidance Jim on every little line item that comprise the cards performance
When banks file their capital plans, the capital return is approved not just based upon the full year but it actually is quarter by quarter
So we have to lay out what our estimated capital returns will be for each quarter and then we need to live within that whole budget for each quarter
So we've got some flexibility but it has to be within the quarterly numbers that we have told the Fed that we're planning for
No problem, thanks
It has to do with the instruments that you're using in any given quarter to help position your clients appropriately, how you hedge, what instruments you used to hedge the position
And so some of the instruments that you use are mark-to-market instruments and therefore any change up or down in those instruments end up going into principle transactions and then mark-to-market revenues
If you're doing that by actually holding a security then to the extent that you've got a mark on that security, the mark would go into principle but interest that you actually accrue on that security goes to net interest revenue
So, trying to predict as you said trading related net interest revenue, good luck
I'm sorry but you were breaking coming in and out, so in security services how much of it is market gains compared to actual client growth?
Yeah, certainly in both businesses we're seeing the growth that we've been hoping for
Security services we've had good underlying growth for six to eight ---+ six quarters now
But in the beginning part of this year and for most of last year then underlying growth has been masked by the impact of some businesses, some product portfolio that we had sold early in 2016. And so we lapped that impact in the first quarter of this year and that's why now the last two quarters, the real underlying growth rate that we’re getting out of security services is coming through
And again we consider that to be similar to TTS, a foundational type of business in order to grow good in this case investor client relationships
So we think that's a terrific business and you're now able to see I think more clearly the momentum that we have there
And you know when it comes to equities, Mike?
And I think the nice thing also you need to take a look at are we making progress with equities, I really think ---+ we are talking about, we try to gauge the progress that we're making in building the client franchise
And so in order to really gauge I think the progress that we’re making there, take a look at our secondary business combined with the primary equity business, the ECM business
And if you look at that ---+ the equities franchise revenues, the equity markets plus the ECM they totaled over a billion dollars this quarter and that's up 30% year-over-year
The ECM revenues are certainly up significantly versus the prior year, they virtually doubled and that's really because we will be able to generate about 170 basis points of wallet share gain this year
And that's all with corporate clients
So combining both elements of our equities franchise, we've got a growing and balanced business with good momentum going with both our corporate as well as our investor clients
No problem
Well, when we go back to the Investor Day charts we tried to give you a sense as to over the timeframe that we were talking about that clearly the wind down of legacy assets and think all of that is now in Corporate/Other
It is certainly going to be one of the factors that gets us to the expense profile that we put in there
It's one of the wind down of legacy assets depresses revenues, and it also serves to depress expenses
So we tried to give you a sense as to the revenue and expense growth that we're going to be getting out of the core businesses and then where we saw Corp/Other, those legacy assets also play a role
Alright
So I would say it is not just in the U.S
but as we look around the world we would rate the health of the consumer right now is pretty good
And again so you touched on a number of the most important things, so when you look at a consumer what are the things you look at, does the consumer have a job
If they have a job are they going to keep it, if they don't have a job how difficult is it to get one
And I think as you look across the world unemployment, slow employment is high
Probably the bigger challenge to the consumer or to the worker has been the lack of wage growth and again not just in the U.S
but in many places
And we're beginning to see some of that and again that's helping to the consumer
The other pieces when we look at the consumer and again when we go back to the crisis and know what we know from there, very hard to have an engaged consumer
the consumer accounts for about two thirds of the U.S
economy, very difficult to engage a consumer when housing prices are going down
And again what we've seen not just here in the U.S
but in many places there's a fairly steady consistent rise or at a minimum good stability to housing prices and I think the combination of jobs, a little bit of wage growth, stable housing, and rising asset prices has left the consumer in a pretty good place
Obviously we are a long way or we're a long way from the last credit cycle and so we're always challenging ourselves in terms of where we are
But a lot of the signs we looked for in terms of the deterioration of the consumer I got to say right now, we just don't see and if you go and look at our NCL rates and look at our delinquency rates around the globe from the document we've given you, again the numbers don't point to it
You know in general the promotional balances while the range of offers vary, they did you go up to 21 months
No, I don't want ---+ don’t freak out, that does not mean that it’s going to be 21 months before we see growth in anything
But it’s just that going into this year we shifted our mix of acquisitions away from rewards towards promotional balances
It doesn't mean that we won’t shift back again
Now the one thing that we know about cards is in trying to build this balanced portfolio with the balance business we're going to need to make adjustments as we go along every quarter
And so I just don't want to give specific guidance <UNK> as far as what month or how long, we do think again we are going to get sequential growth again this quarter
And we'll keep you apprised as to how we think we are doing overall with our targets on branded cards
And so you're right, we do use the services of Equifax but we've got to say that while this one is of a significant magnitude, data breaches aren’t new and us having to work with and work around out data breaches I think for us and others are said to become fairly embedded in our business
When you think about the risk that we bear we're really bearing two types of risks when incidents like this occur, one is the authentication risk
So is somebody presenting the credentials, are they actually that person or that entity
And I think we feel that we've got ways of working with different technologies to authenticate and obviously we flagged those accounts and we know and we go on heightened alert to watch this
The second form of risk is the acquisition risk and that is that if somebody comes in through the application process, are they actually who they say they are
And that in itself is challenging and probably causes or does cause us to go through more steps of making sure that that's them
So one is we would go back, we would flag the file, and we would go back and be required to do extra levels of work against that
And from that the natural question is what's the ramifications on near-term, longer-term formation of credit and I would say in the first instance I think we've got the ability to authenticate pretty quickly
I think in the second instance it does slow the process down
And again some people have been locking their accounts within Equifax, that makes it a bit more challenging
So I wouldn't say it's necessarily material in terms of the slowdown but it does slow the process down just a bit
Hey <UNK>
Again going back we focused a number of years ago around what we said growth is going to look and feel like for us is not a whole lot of new client acquisition
In fact we're doing more with less clients, more focused on our target clients, and growth is going to come in the form of taking market share both on the capital market side of things as well as on the banking side of things, and that's what we've done
And it's our expectation that we will continue to focus on taking share
And again I think the opportunities, we know having lived it when you go through restructuring and you go through changes to your business model how disruptive they can be
And I think actually with us taking the early actions and actually having of a lot of stability in our ICG franchise has served us well and we continue to want to be focused on that
You know, I would say <UNK> that it is ---+ it varies by product
Private banking where loans have been strong, private banking lending in both the U.S
and in Asia, but primarily in the U.S
when it comes to trade loans we have seen some good growth pretty much in Asia again in trade loans as well as some things here in the States
And it's been a nice mix across the place
You know we normally don't give too much guidance on the backlog but I think that you've seen that in the forward guidance that we've given towards the fourth quarter where we sort of said the investment banking revenues in the fourth quarter we expect to be pretty much on where we were in the third quarter
No, I mean Jeff when we got to the Investor Day we talked about the fact that the ROA was going to come down from 2.25 down to like 2.15. Again it's not a ---+ it's a tweak more than anything else and it was more reflective of a rebalancing of just the fact that we had a lot of the co-brand just growing faster than what we had thought was going to happen, so some of that is just a product of our own success
But we still think of cards as being a healthy part of our business but it's not the only engine for growth that we have
It's the first area that we talked about only because the investments that we made in branded cards were so visible, when you think about the early investment that we made in the proprietary portfolios we got into that whole rewards and rebates area and so you know that you're just taking a big drop down in your profitability
It's very, very visible, it's not quite the same as hiring a few more people in equities markets
These things were big and so we needed to really make sure that we talked about them and that you understood where we were going
But I think the nice thing is that we've developed many engines of growth right now
If you take a look at what's going on in the rest of North America, the launch of the Citigold platform, we now have retail banking revenues excluding mortgages which again we change our strategy on that
But the retail banking revenues up 12% year-over-year, yes, that is getting a little bit a lift from interest rates but it still is good growth
We've had our Citigold Wealth Management clients increase by 28% year-to-date
You can see the assets under management growing by 10%
So we've got a nice a nice growth coming out of retail banking in the U.S
We've got on the international five consecutive quarters now of positive revenue growth and positive operating leverage in both consumer Asia and consumer Mexico
You see the engines for growth that we built in the ICG and these are all client-led businesses
TTS, security services, private bank 15%, that's two ---+ that's a couple of quarters now we've had double digit growth in the private bank
So while branded cards was the first engine for growth that we talked about publicly we've built a whole series of engines for growth that we're really excited about and that we try to lay out for everybody on Investor Day
I mean we're still focused on growing that branded cards business but it's not the only engine for growth that we have either in consumer or for Citi
Yes Jeff, I think you may be getting caught up just a bit in the inorganic growth that we had in North America from the Costco portfolio because we actually like the organic growth that we've been getting now in Asia and in Mexico
In both ---+ like in Mexico a little bit ---+ revenues grew a little bit lighter this year this quarter than we would have liked but that seems to be something that's cutting across the industry
We have deposits we’re growing but now in Mexico what we've got now is we have actually finished the repositioning of the cards book, we worked our way out of that J curve type of thing
And now we've got cards revenues in Mexico that are actually have growth year-over-year
So we think that the growth prospects for Mexico are pretty good
Investor Day we said our anticipation is compound annual growth rate in revenues of 10%, we had been running at about 7% to 8%, we will probably be back to that 7% to 8% in the fourth quarter and then we should continue to grow into 2018 and 2019. Asia again we've got the cards business there now generating nice growth
We're starting to get growth in some of the retail lending
We like the wealth management business that we've got in Asia and again in both of those businesses five consecutive quarters of revenue growth and positive operating leverage
We think that's the way that you build a nice sustainable growth pattern by being able to grow revenues as you're generating positive operating leverage
And then in North America, again we will take a look, branded cards is coming along a little bit slower than we had thought but still coming along nicely
And I talked about the retail banks so I think we've got really three good engines for growth in the future there in the consumer business
No problem
