Hello, and welcome to Citi’s Q3 2014 Earnings Review with Chief Executive Officer Mike Corbat and Chief Financial Officer John Gerspach. Today’s call will be hosted by Susan Kendall, Head of Citi Investor Relations. (Operator instructions.) Also this call is being recorded today. If you have any objections please disconnect at this time. Ms. Kendall, you may begin.

Thank you, Brett. Good morning and thank you all for joining us. On our call today our CEO Mike Corbat will speak first, then John Gerspach, our CFO, will take you through the earnings presentation which is available for download on our website, www.citigroup.com. Afterwards we’ll be happy to take questions. Before we get started I would 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 in capital and other financial condition may differ materially from these statements due to a variety of factors including the precautionary statements referenced in our discussion today and those included in our SEC filings, including without limitation the “Risk Factors” section of our 2013 Form 10(k). With that said let me turn it over to Mike.

Thank you, Susan. Good morning, everyone. Earlier today we reported earnings of $3.4 billion for Q3 2014. Excluding the impact of CVA/DVA net income was $3.7 billion or $1.15 per share. Before I address the quarter I’d like to discuss the actions we announced regarding Global Consumer Banking. As you know, we’re committed to simplifying our company and allocating our finite resources to the business where we can generate the best returns for our shareholders. Consistent with these priorities we intend to exit our consumer businesses in eleven markets – among them Japan, Egypt and Peru. We’ll continue to serve our institutional clients in these markets which remain important to our global network. While these consumer franchise have real value we didn’t see a path for meaningful return. We believe our Consumer business will achieve stronger performance by focusing on the countries where our scale and network provide a competitive advantage. Sales processes are already underway in most of these markets and I expect these actions to be substantially completed by the end of 2015. At that point we’ll have reduced our Consumer footprint by 19 markets since 2012 and Global Consumer Banking will be serving 57 million clients across 24 markets. I’d also like to address the announcement we issued earlier this morning regarding a legacy Banamex unit which provided personal security and protective services. While the fraud is not financially material, in light of the conduct we found in the interest of transparency we thought it was best to inform you. As you know we’ve been reviewing our franchise in Mexico and have already made meaningful changes to strengthen our processes and controls, and will continue to take whatever steps are necessary to make sure that every part of our global franchise lives up to the standards all…

Okay, thank you, Mike, and good morning everyone. Let me briefly review the results of the quarter and then I’ll go into more detail on the strategic actions we announced earlier today. To start, I’d like to highlight two items that affect the comparability of this quarter’s results to prior periods. First, CVA/DVA was a negative $371 million pre-tax, or $228 million after-tax this quarter including a $474 million one-time charge due to the implementation of funding valuation adjustments related to certain derivatives. Together these charges had a negative impact on EPS of $0.08 per share this quarter, similar to the CVA/DVA charge last year. And secondly, last year we recorded a tax benefit of $176 million or $0.06 per share related to the resolution of certain tax audit items. Adjusting for these items, we earned $1.15 per share in the recent quarter compared to $1.02 per share in Q3 last year. Throughout today’s presentation I will be discussing our results excluding these items to provide comparability to prior periods. On Slide 4 we show total Citigroup results. We earned $3.7 billion in Q3, a 13% increase from last year. Pre-tax earnings of $5.9 billion grew 28% driven by revenue growth and lower credit costs, partially offset by an increase in operating expenses mostly driven by higher legal and repositioning charges. However, our tax rate was higher this quarter at 36%, reflecting a higher level of non-tax deductible legal accruals versus last year as well as higher tax costs related to the sales of our Consumer operations in both Greece and Spain. On a year-to-date basis, we generated positive operating leverage with modest revenue growth and flat expenses, and our return on assets improved to 83 basis points. In constant dollars, Citigroup end-of-period loans grew slightly year-over-year, to $654 billion,…

(Operator instructions.) Your first question comes from the line of Jim Mitchell with Buckingham Research. Please go ahead with your question. Jim Mitchell – Buckingham Research: Hey, good morning guys. I appreciate the sort of disclosure on Mexico – obviously that’s been a focus of investors. Obviously you’ve probably done a very thorough review. Can you give us a sense of how you feel about just overall risks – people talk about AML issues or worries about that? As you’ve gone through the process can you give us some comfort level there? And then I guess taking a step back, second question being as you reduce complexity by getting out of eleven more markets, potentially getting rid of One Main, how do you feel that helps you going into CECCAR next year? Thanks.

Sure. Jim, I think from a Mexico perspective we said as part of OSA we were going to embark on a comprehensive review of our policies and processes. That review is significantly underway; I think we’ve made some meaningful changes to the way we come to work and think about things in Mexico. We continue to be focused on those things and again are committed to getting the franchise to the right place. It’s an important franchise for us in every sense of the word and a place where we think there’s growth and a place where we need to and should be making investment; and we’ve got to get those things right, and we’re committed to do that. And we’ve put a lot of resources forward both locally and from around the globe to help us be able to do that as quickly as we can. I think from a complexity perspective, I think two things – one is you hit on part of it, and John and I talked about it: these eleven Consumer markets plus the Korean piece were those that were in the optimized bucket. They were those that we were working with the businesses on in terms of trying to create a pathway to proper returns. We didn’t in the end see that in these, and so I think in many ways these decisions were made around a couple axis. One is that we didn’t see the prospect to getting to adequate returns in a reasonable period of time. Second, we felt that we could take those resources and we could reallocate them into other parts of our business where we would certainly have the ability to try and get more out of them. And I think the third piece you touch on is around those: if you don’t have a pathway to that it doesn’t make sense to keep complexity or keep things in the firm that aren’t going to be able to touch those. So I think we were able to tick off several boxes by making these moves. Jim Mitchell – Buckingham Research: Right, makes sense. And I think with these sales though it seems like it helps profitability. Does that give you more comfort on the ROA target? And then just a quick clarification, your ROA target of 90 basis points includes Citi Holdings and that contemplates, I’ve had some questions around the selling of One Main and what that may do to your targets.

That’s right, that’s right. Yes, and so the ROA target includes Citi Holdings so that’ll be there to begin. We’ve put all the caveats around big gains or losses that are outsized, etc., but that’s there. And again, I think you can see in these moves – and again, as we’ve described we’re going to move these businesses into Citi Holdings; and in Citi Holdings I think we’ve proven that we’ve got the people and the expertise that can manage these exits well. And we don’t want our go forward businesses distracted in that process, and again, we’ve already started the process against most of those and have an expectation that we’d like to be out of the majority of those by the end of ’15. Jim Mitchell – Buckingham Research: But otherwise you still feel comfortable with the target even if you sell a profitable business like One Main?

We do, yes we do. Jim Mitchell – Buckingham Research: Okay great, appreciate it. Thanks.

Your next question comes from the line of John McDonald with Sanford Bernstein. Please go ahead with your question. John McDonald – Sanford Bernstein : Thanks. Following up on the targets, John and Mike, I was wondering how you’re feeling on the Consumer Bank, on the GCB targets for efficiency ratio on Slide 12. John talked about the target and you give the helpful box there. The 49% to 52% efficiency target seems like a stretch from the pro forma 55%. Can you help us feel better about kind of what are some of the drivers there?

Sure, John. When you take a look at that slide I think you’ll notice that at the top of the slide there’s a blue box that has the repositioning charges and legal charges of $800 million, and that both the 56% and the 55% figures include what we would think of as being rather outsized repositioning and legal charges on a trailing twelve-month basis. So that, I think you’ve got two things. One is, as you can see with the dark blue boxes both on this slide as well as the next slide, we are continuing to drive down the core operating expenses in the business. But at the same time then I don’t think that we’ll see the same level of repositioning charges going into 2015 that we’ve seen during 2014. John McDonald – Sanford Bernstein : Okay, that’s helpful. And John, did you mention that there will be any repositioning charges for the simplification you described today? Or is that a driver for the $400 million that you talked about for Q4?

I’m sorry, John, I missed the beginning part of your question. John McDonald – Sanford Bernstein : I was just wondering what repositioning expenses might be associated with the strategic actions you announced today.

Nothing specific in that $400 million related to the eleven markets. Those things, whether or not we have repositioning charges associate with that will really be determined based upon the structure of whatever deal that we negotiate on a sale. So it’s a little early to call that. John McDonald – Sanford Bernstein : Okay. And then just to clarify the CECCAR expenses, you mentioned incremental costs of $100 million to $150 million in 2014 over 2013?

Correct. John, $150 million to $175 million is the number that I quoted. John McDonald – Sanford Bernstein : Okay, and you spent $60 million or so this quarter?

We spent an incremental $60 million year-over-year this quarter. John McDonald – Sanford Bernstein : And was there any in the first half of the year that would count towards that $150 million?

Yeah, there was some. Certainly beginning in Q2, I don’t have that number right in front of me but it would have been much less than the $60 million that we had in Q3. And we expect those expenses then to continue to ramp up into Q4. John McDonald – Sanford Bernstein : Got it, okay, so we can kind of put the pieces together there. And then you said one-third of it you expect to be nonrecurring?

Correct. John McDonald – Sanford Bernstein : Okay. Okay, and then just on Credit, John, you had the reserve release in International Consumer. What drove that and how are you feeling about reserve releases continuing in the other parts of the businesses, domestically in Citicorp and then also in Holdings?

Yeah, I’d say that we’re still seeing, well first as far as from an international point of view that was largely driven by Asia but also by continuing favorable credit trends throughout the countries with the exception of where I called out the NCL rate issue that we have in Mexico – although again, the dollar losses there of net credit losses were largely in line with our expectations. It’s much more of a rate issue. We continue to see real favorable credit in North America, certainly in both our mortgage business but importantly in both of our cards businesses – Branded Cards as well as Retail Services. So that story is still continuing. When I look at the net credit margin which I think you see it in the supplement – the net credit margin in our Branded Cards business this quarter was over 950 basis points. So that’s really outstanding performance in that US Branded Cards business. John McDonald – Sanford Bernstein : How should we think about whether we’re likely to see some reserve releases in Card or in the mortgage part of Holdings going forward?

Well the mortgages, as far as from a holdings point of view, John, you can pretty much expect that we’re going to be you know largely netting off reserve releases against the NCLs that come out of mortgages. You know, this quarter it was just about 100%, I think it was like 101%. Last quarter we were in the 90% range, so you’re going to see a large portion of whatever losses we take in the mortgage book in Holdings offset by reserve releases. As far as the rest of the world I don’t think you’re going to see much more in the way of reserve releases coming out of our International Consumer operations. We continue to grow those books and so just as you continue to grow the loan book you’re going to have to build loan loss reserves against that. And then in the US it’s really going to be driven by just how much better our credit performance can get in our two Cards businesses. You might still see some reserve releases in the near quarters but I wouldn’t look out much past that. John McDonald – Sanford Bernstein : Okay, thank you.

Your next question comes from the line of Glenn Schorr with ISI. Please go ahead with your question. Glenn Schorr – ISI: Thank you. Maybe just a little color on timing and what drove the one-time implementation of the FVA on the over-the-counter derivatives that you mentioned – I think you have the bullet on Slide 3.

Yeah, this is something that we’ve been looking at for some time. There’s been a couple of other institutions that have adopted it so it’s been something that’s been knocking around in the market. We’d set ourselves a goal to adopt it sometime during 2014, as soon as we could get all the systems in place and we had the ability to monitor this type of calculation over several months, a full quarter. And so we had gotten everything in place and we felt comfortable then pulling the trigger on the formal adoption in Q3 instead of waiting until Q4. We think it’s the way the industry is going and therefore we wanted to adopt it as soon as we felt comfortable that we had the systems in place to track it. Glenn Schorr – ISI: Okay, and is the one-time [catch-up], and like you said – some people have adopted it, some haven’t. And you expect everybody through by year-end?

I don’t know by year-end but I do think that over time, and I don’t know whether time is this year-end or next year-end, I think the move is to go that way. And we just felt it was better to be at least in the middle of the pack. Glenn Schorr – ISI: Got it, okay. We can move on, thanks.

No problem. Glenn Schorr – ISI: You’ve had a big benefit as others have as lower average rate on long-term debt, and that’s been a driver of your stable and actually even growing margin. So I heard your comments about the one or two basis points, I’m not overly focused on that, but my one question is going forward in terms of debt coming due and all thoughts around TLAC how much more optimization do you see coming in say the next two years on the cost of financing, impact on margin and then where you fit in TLAC in general?

Okay, that’s a very broad question. That’s okay, that’s alright, it’s a great question but let me just try to break it down into pieces. So let me start I guess with TLAC is probably, because again we still don’t know where TLAC is going to come out. We’ve all seen the rumors and everything else but we haven’t seen the formal rules yet so it’s a little hard to judge exactly what’s going to be implemented with TLAC. But from a TLAC point of view right now, we would put our loss absorbent capital at just over 20% of our risk-weighted assets. Now that’s again our calculation based upon our interpretation of the rules, and in order to get to that 20% for instance we have eliminated all of the structured notes we issue as saying we think that they’ll be ultimately kept out of the rule. That may be right, that may be wrong but that’s what gets us to that little bit over 20%. So we feel like we’re okay with TLAC, but obviously there’ll be more work to do and we’ll have to see again how the rules come out. So let’s put the response to TLAC aside just for a second. And then when you take a look at our existing book, you know, I still think that there is some optimization work that we can do on the liability side of our balance sheet. Don’t forget we still have debt that we’re carrying that was issued in ’07, ’08, ’09, ’10 when our credit spreads were much higher than they are today. And so as that debt runs off that can still give you some lift. Glenn Schorr – ISI: Maybe the other side of the equation is I’ve noticed growth in international markets has been good on the loan side. The deposit growth has been less impressive and I don’t know if that’s something that you’re doing consciously or just a product of some of the markets that you’re in. Just curious on…

Glenn, what you’re seeing is we are active managers of our balance sheet and again, you’ll notice that. Especially take a look at the US Cards business – I mentioned that before. You’ll see there that we’ve actually been driving up yields in the US Cards business. As we’ve let those promotional balances run off we’ve actually experienced higher yields than on those interest-earning assets. So I don’t want you to think that everything we’re doing is just on the right-hand side of the balance sheet; we’re actively moving on the left-hand side of the balance sheet as well as we think about driving our NIM performance. But to your other question then on deposits, yes, we’re active managers of our deposit base as well. And we’re looking to run what we would term a ‘compact’ balance sheet. We’re not looking to grow the balance sheet much beyond where it is today. We don’t think we need a balance sheet much larger than $1.9 trillion to serve our clients. And so within that construct then you need to be very careful about both what you put on the left side of the balance sheet and how you fund that on the right side of the balance sheet. And so when you deal with all the rules that are out there as far as net stable funding ratio, the LCR, the SLR – all of those rules come into play as we think about how to structure the right side of the balance sheet. Glenn Schorr – ISI: Okay, maybe just a really quick wrap-up. We definitely appreciate Slide 8 on the impact of the strategic actions. Are we looking at that slide each quarter as we roll through ’15 or is there chance you move those eleven markets in something like discontinued ops and we get a clean look at Citicorp without it?

No, Glenn, one of the things that we mentioned is that effective Q1 we’ll move those eleven markets into Holdings so that we will give you a clean look at the GCB. We’ll show it on a pro forma basis again next quarter but then beginning in Q1 we’ll give you a clean look at the Global Consumer Bank. Glenn Schorr – ISI: Thank you, missed that one. Appreciate it.

That’s not a problem, sir.

Your next question comes from the line of Brennan Hawken with UBS. Please go ahead with your question. Brennan Hawken – UBS : Hi, good afternoon. So first one, just a quick one, I don’t know whether you can comment – JP Morgan gave us a little bit on the source of it. The legal charge, is it possible to say what that’s tied to? I think JP Morgan indicated it was heavily tied to FX.

Yeah, Brennan, as you know we typically don’t comment on reserving actions unless it’s related to a specific settlement that we’re announcing. So that’s as far as we’re going to go today. Brennan Hawken – UBS : Okay. And then on the funding side, I believe you had said that funding costs drove the NIM expansion. Can maybe you give a bit more color on specifically what was behind that?

Again, as we manage both the cost of our deposits as well as the cost of our debt, we’ve managed to improve the cost of funds. I don’t know if that’s giving you enough or if you need something, but the improvement was just about evenly split between the two. And so that’s actively managing deposits – we’re managing down things like time deposits and instead concentrating on getting deposit growth in operating balances, which are either interest-free or interest-light. And then on the long-term debt, again we’re swapping out debt where we had issued it under higher credit spreads and replacing it with debt that is a bit more attractive to us today. Brennan Hawken – UBS : Yeah, sorry, I meant is there any geography impact there or anything beyond just shifting away from time deposits?

Well, from a geography point of view most of the debt would be US-centric and the deposits would be a global phenomenon. Brennan Hawken – UBS : Okay. And then thinking about your rate shock scenario, can you give any color about how that might look in Year 2 or how you might think about that in Year 2? Just trying to think about the benefit from rolling the portfolio into higher-yielding securities versus your expectation for deposit pricing pressure.

Yeah, when we put out the $1.9 billion impact that really is, it’s a rate shock type of thing. So it’s an estimate as to what the revenue impact would be to the firm over a year if rates just moved instantaneously by 100 basis points. Now, obviously then as you begin to operate in that environment there’d be a lot of moving pieces and give and take, but I would say that for the most part that $1.9 billion should be sustaining into Year 2. You might have some changes a little bit around the edges but it should be largely sustaining. Brennan Hawken – UBS : Okay, and I guess so effectively the benefit from rolling into higher rates would probably be largely offset by increasing deposit pricing?

Yeah, if you’re in a rising rate environment again it’s going to certainly impact both sides of your balance sheet. That’s why I say it would be largely sustaining. Brennan Hawken – UBS : Okay, terrific. And then the last one with me, is it possible to get a rough idea of the cost basis of One Main?

No. Brennan Hawken – UBS : Alright, figured I’d give it a shot. Thanks a lot.

That’s okay, Brennan, thanks a lot.

Your next question comes from the line of Guy Moszkowski with Autonomous Research. Please go ahead with your question. Guy Moszkowski – Autonomous Research : Hi gentlemen. So you announced what sounded like very logical moves on the Global Consumer side. I was wondering if you could give us a sense for the capital free-up potential – what’s either your capital allocated to those markets or the RWA impact?

Not at this point in time, Guy. We’ve given you the capital attribution for the overall Consumer business and we’ll refresh that in Q1, and when we refresh that in Q1 you’ll see the impact from those exits as well as other changes. Guy Moszkowski – Autonomous Research : Okay, fair enough. When you think about what you’ve been doing to try to get a more positive CECCAR outcome next time I was wondering if you have had some discussions with the regulators about how they would view this type of strategic action that you’re taking?

Sure, Guy, it’s Mike. Obviously we’re in pretty constant and consistent dialog with the regulators. I think in there the business model and the running of the business is our decision in terms of what we want to do, and provided that we can show we’ve got the ability to run it in the right way they’re fine with that. I think to the earlier question, in this case given that these aren’t and in the immediate case we don’t see a path to being accretive for our shareholders it’ll certainly work towards a smaller, simpler Consumer business, a more focused Consumer business. And in the end I think taking those factors, you’ve got to view that as a positive. But the regulators haven’t commented specifically on it. Guy Moszkowski – Autonomous Research : Got it. Just a question on the DTA utilization: the level you did in the quarter was kind of comparable to what you did last year on a quarterly basis but I think in the first half you had been running more around $1.1 billion. I was just wondering mechanically maybe you can explain to us why it fell off.

Yeah, really it has to do, Guy, with everything. Earnings has been fairly consistent, so if you look at the earnings impact over the last couple quarters, our earnings – both coming out of Citicorp as well as Citi Holdings – have been running at about $800 million a quarter; I think one quarter it hit $900 million. So the real change from what we were running in the first half to what we ran in the second really has to do with the impact of CVA and OCI and it’s as simple as that. But the earnings potential, if you go into the back of the deck, Page 39, there you’ll see that for a trailing twelve-month period the earnings of Corp and Holdings utilized $3.4 billion of DTA. Now on a year-to-date basis that similar number is $2.6 billion and in the quarter it was $800 million. So again, very consistent at $800 million, $900 million a quarter, the earnings power of the franchise begins to utilize the DTA. It’s the other stuff – it’s how the OCI moves that gives you a little bit of noise that you see over there on the right side. For a full year the impact of all of that was $200 million of utilization but you’re going to get noise quarter to quarter. Guy Moszkowski – Autonomous Research : Got it. So the noise is going to depend on what happens to your credit spreads and those of your counterparties, and OCI – in other words, rates. And so you’re really not going to know about that until the end of the quarter, basically.

That’s exactly right, Guy. And again, that’s going to be some noise but I think that the number you really want to focus on is how are we doing as far as utilizing DTA driven by the earnings capacity of the franchise. Guy Moszkowski – Autonomous Research : Yeah, understood. Absolutely. JPM called out emerging markets’ revenue in [FIC] as a driver of the relative strength in the quarter and I was kind of surprised that you didn’t, that you indicated securitized products more just given your mix. Can you give us a sense for emerging markets’ results in [FIC] in the quarter versus the two reference quarters?

Yeah, our emerging markets franchises performed very well in the quarter. They didn’t necessarily contribute as much to growth year-over-year because they actually had a pretty good performance in Q3 last year. Now, the FX franchise performed well globally driven by September but if you’re just trying to isolate what changed year-over-year securitized products had a slightly larger contribution. And if you think about the environment that we were living in in Q3 last year compared to Q3 this year I think it’s pretty easy to figure out why there would have been a little bit more client activity around securitized products – it was just a little bit better. Even though it wasn’t a great rate environment it was certainly a better US rate environment than what we had last year. Guy Moszkowski – Autonomous Research : Yeah, makes sense. Final one from me: during the quarter at least some of the, I guess Dodd-Frank driven new daily filings on liquidity and I think some of the Volcker stuff started to go into effect for the GFEBS. And I was just wondering to what extent you might ascribe some of what we were hearing towards the end of the quarter, [which] was some liquidity issues in credit markets – does that have anything to do with it?

You know, I don’t know if I would ascribe movements in the credit markets, certainly not to Volcker. But I think everyone is looking to see how they’re going to manage in a SLR/LCR/NSFR type of world. And anytime that you put out brand new rules I think it takes a while then for the system to sort of adapt to them. And that may have been some of the noise that you heard about at the end of the quarter. Guy Moszkowski – Autonomous Research : But do you think it has or maybe had temporarily an impact on the inventory management for the big dealers?

I would say that anybody who’s concerned about managing their balance sheet, yeah, it would definitely have an impact. You have to be highly cognizant now of your SLR ratio and you’ve got to manage through both the SLR and the LCR. So depending upon what deposits you take in, those deposits could have a high liquidity value or they could have zero liquidity value. If a deposit has zero liquidity value then you can’t do anything with it other than invest it overnight, which means you’re holding either cash or overnight Treasury securities. Now that drives up the asset side of your balance sheet and now you’ve got to be worried about your SLR constraints because all of a sudden now you’ve got to put capital against that. So depending upon where any individual firm was at quarter-end I would say that they were definitely watching both the asset side of the balance sheet from an SLR point of view and the right side of the balance sheet from a combined LCR and SLR point of view. Guy Moszkowski – Autonomous Research : Got it. That’s very helpful, thank you. And thanks for taking my questions.

Not a problem at all, Guy.

Your next question comes from the line of Matt O’Connor with Deutsche Bank. Please go ahead with your question. Matt O’Connor – Deutsche Bank: If I could follow up on your comment about a strong CECCAR submission, if you can elaborate on that – on what does ‘strong’ mean do you think from a process point of view, from a capital [deployment ask] or just any comments you can give around that since you did mention it?

Yeah, I think as I described, Matt, really we’ve been focused on a number of things. But one is that really taking the CECCAR process and really embedding it into the firm and again, I think that goes along a few different channels. One is management engagement – how is management thinking about the business? What are the risks in their business? How do we quantify those? How do we position the firm against those? Second is I think work we’ve done around our models – building model validation, model integration into the firm. I think that we’ve worked hard in terms of making sure in essence we’ve got the boots on the ground across the different areas, in particular second and third lines of defense and making sure that they’re synched up against our businesses and really operating in the right way. So it’s a big focus towards model build-out, that infrastructure, but most importantly how really that gets embedded in the way we think about and run the business on a day-to-day basis – not a one-off submission and then back to the old ways. Matt O’Connor – Deutsche Bank: Okay. And I realize it’s still about five, six months away in order to get all the guidelines, but as you think about what a successful outcome would be is passing on a qualitative basis enough or would you want to also be able to have a meaningful amount of buybacks as well to view it as a success?

Well I think as you alerted to we’re not going to speak to what the number is but we’ve got to certainly get beyond success being measured as a successful submission with no capital ask, right? We’re in a position where we’re fortunate to generate large amounts of regulatory capital and we’ve got to put the firm in a position to return that. So I would view a successful ask as a combination of those things. Matt O’Connor – Deutsche Bank: Okay. And then just separately on expenses, the Q4 commentary of relatively flat on a core basis is helpful. As we think into next year maybe before we account for some of the business exits, but how should we think about the expense run rate beyond this year? You’ve been taking some of these repositioning costs that I know have been driving the positive operating leverage. Is there more benefit from those still to come?

Matt, at this point in time we’re still focused on in 2015 on delivering being able to run Citicorp in the mid-50%s efficiency ratio. So that’s the target that we set out for ourselves a year and a half ago and that’s still the target that we’re working at towards 2015. Matt O’Connor – Deutsche Bank: Okay. Alright, thank you.

Your next question comes from the line of Mike Mayo with CLSA. Please go ahead with your question. Mike Mayo – CLSA : Hi. As far as the GCB restructuring, Mike, is this it – going from 35 markets to 24? Or is there potentially more?

Well I think as you look, Mike, just to kind of put it in context – I think we’ve gone from a number higher than that. I think in aggregate we’re down somewhere around 15, 17 markets in the past couple years. And so what we’ve said is that we’ve got an ongoing process which we’ve talked very openly about, about our country bucketing and our business bucketing and the way we think about those. We do still have businesses in the optimized bucket – those businesses obviously not being on the list are making progress towards the goals that we’ve agreed to in terms of where they’re going to get those businesses. And again, those buckets will continue as they’ve been to be fluid and we’ll keep assessing things against what we’ve laid out. But right now those businesses are on track and feel like they’ve got a pathway to get to a place of having adequate returns or good returns in the consumer business. Mike Mayo – CLSA : Is there more restructuring in the US that you can do? You mentioned mortgage and branches – what else could be done?

Well, as we’ve laid out a series of metrics from a headcount, a product perspective, from a site perspective – things that are probably the largest drivers of costs in there, it’s on Page 13 in the deck. And so we’re committed on delivering those. We’ve made significant progress against those: continuing to simplify our products, continuing to rationalize our branch footprint, continuing to shrink and consolidate our support sites. And again, those are the big drivers of expenses. So as we’ve laid out there we’ve got more work we think we can do. Mike Mayo – CLSA : So getting to that target range in GCB of 49% to 52%, that would be more than simply less legal and repositioning costs? John, I think your answer earlier said that that was going to be a nice driver of it, but other than that what would be the main drivers?

No Mike, as I said before there’s two elements to it. I drew your attention, at least I intended to draw the attention to that Chart 12 and note that there were two areas of the expenses. We had the light blue box at the top which talked about the legal and repositioning charges and I pointed to that as one area that we felt would contribute next year. But more importantly, and I think this is where you’re driving, it’s the big blue box at the bottom that really talks about those core operating expenses. And there we intend to continue to drive those core operating expenses down. We lay out for you on Slide 12 the progress that we’ve made on a trailing twelve-month basis but then you can also see when you flip over to Slide 13 that we’re making progress in that area on a quarter-by-quarter basis. And that is going to continue as we continue to execute on the actions that Mike talked about – as we continue to reduce headcount, we continue to simplify the product offering and we continue to rationalize our branch and support site structures. So all of that work continues; it’s ongoing now. It will remain ongoing into next year and beyond. Mike Mayo – CLSA : Okay, and last follow-up on that: when you say ‘support sites’ I’m just trying to get a little more meat on the bones on this Slide 13. Is support sites going down, is that a big expense takeout; or the headcount reduction, the branches, that should all help. I’m just trying to get a sense of magnitude.

So support sites, Mike, I’d break into probably two big buckets. One would be service centers and the second would be datacenters, and obviously as you can consolidate those, turn space back, create more scale, etc., you’ve got the ability to get those costs out – centers of excellence, however you choose to describe them. And so I think we’ve shown the ability to do that and we’ve got more work to do.

Yeah, Mike, I think when you look at those four items that we lay out there they all are somewhat interrelated. We don’t have “standardize the platform” there but clearly as you simplify your products and you put everything onto one standard platform that means that you can then collapse a lot of individual call centers into one because you’re not running individual call centers for different products in every country – each one then having to deal with a different operating system. So we standardize the information available to our customer service personnel. We make it easier for them to understand the products that we offer. That then enables them to provide a much better experience to our clients. So we can simplify the products, we standardized the platforms; we can reduce the sites and therefore we can actually provide our clients with a better experience with less people. Mike Mayo – CLSA : Alright, that’s helpful. Just one other separate question: I opened up the paper this morning and saw some comments from Mike O’Neil, the Chairman. And so Mike Corbat, what’s your current relationship with Mike O’Neil, and just I thought the timing was interesting to see the Chairman. And Citigroup’s the last major US bank that has the CEO and Chairman position split so I’m just wondering your current thoughts on that – the tradeoff, the benefits, the costs of having that.

Sure. I think from our perspective, I won’t speak to others’ – I think our relationship and our structure works well for us. I think our relationship is excellent. I think the dialog with the Board is very good and I think from a governance perspective and a relationship perspective when we think about and run the firm and the delineation of duties, it certainly works for us. Mike Mayo – CLSA : And the degree that Mike O’Neil’s giving you council when it comes to these restructuring moves, like the one you announced today?

I think we always have good, engaged strategic interaction with the Board – not just Mike but with the Board. And so the Board was aware of these actions and supportive of the actions that management recommended. Mike Mayo – CLSA : Great, thank you.

Your next question comes from the line of Betsy Graseck with Morgan Stanley. Please go ahead with your question. Betsy Graseck – Morgan Stanley: Hi, good morning – just a quick, ticky-tacky question at this stage. You mentioned the core operating expenses at $10.9 billion looking to keep relatively flat into Q4. I know we have some CECCAR expenses coming up a little bit. I mean maybe that adds a percent or something like that but we should expect those CECCAR expenses are on top of what you did in Q3, would it be incremental? Or are you saying that you think you have other things in core operating expenses you’re going to peel back and that’s going to offset your CECCAR expense increase in the quarter?

We would say that again, we should be able to keep the expenses relatively flat into Q4. We still have benefits that are rolling off for other expense initiatives that we’ve introduced. I mean you’ve seen the amount of repositioning charges that we’ve taken – those repositioning charges do generate real savings. But those savings in Q4 are likely going to be reinvested then as we continue to enhance our capital planning process, CECCAR. Betsy Graseck – Morgan Stanley: Right, I get it. Thanks a lot.

Not a problem.

Your next question comes from the line of Gerard Cassidy with RBC. Please go ahead with your question. Gerard Cassidy – RBC Capital Markets : Thank you, good afternoon. Can you share with us, in your last (q) I think you put in there that a 100-basis point shift in the yield curve would contribute an additional $1.9 billion or so to revenue. If the yield curve flattens and The Fed does move rates up next year, but as you notice the ten-year today is down to about 2.2% - if we don’t get the parallel shift how much of the benefit would you likely see with the front end going up but the long end remaining anchored where it is today?

If the front end went up but the long end dropped, there is a scenario we’ve laid out for you which has a 100 basis point increase in short-term and a relatively flat long-term. I think what you see in that type of environment, we capture the lion’s share of the $1.9 billion. I don’t have that number in my head but it’s a substantial portion of the $1.9 billion. Gerard Cassidy – RBC Capital Markets : Great. The second question is can you remind us, in terms of your capital ratios, your Tier One Common ratio for example, what kind of cushion do you want to keep above whatever the final number turns out to be? And I know that’s a moving target because you’re seeing The Fed and others ask for more capital and they haven’t given us the exact numbers yet, but are you looking to maintain a 50- or 100-basispoint number over whatever the final target becomes?

Well, as you say it’s a little hard right now because we don’t know where the final rules are going to come out. So give us a chance to take a look at the final rule and then we’ll be happy to tell you what kind of buffer we think we need. There’s still a bit of rulemaking yet to be laid down. We’ve got the promise of another G-SIFI surcharge. We’ve got OLA that still needs to be finalized. So when these things begin to settle down we’ll be happy to come back to you then with a more informed target. Gerard Cassidy – RBC Capital Markets : Okay, thank you. And then as of today what would you point to as your binding constraint on the capital ratios? Which one do you guys look to today? And again, I know that this may not be the case a year from now.

Well let’s see – on October 14th I’d say it’s Tier One, Basil-3, Advanced Approach, Tier One Common. But check back with me by November 14th and I may have a slightly different answer. And I’m not trying to be cute – it’s just that as the rules begin to change and they intersect you’re constantly battling one against the other. If you had asked me a year ago I would have said SLR was going to be the binding constraint. Six months ago I was really worried that Standardized RWA, the standardized approach was going to be the binding constraint. Today I feel like it’s Basil-3 Tier One Common, and then of course there’s always the ultimate is of course the CECCAR submission itself. So we need to keep our eye on all four of those and it doesn’t do you any good to just manage one. Gerard Cassidy – RBC Capital Markets : Great. And then one last question: the Shared National Credit Exam hasn’t been released yet, probably will be shortly here, but there was some commentary by The Federal Reserve. They’re still concerned about leveraged loans by some of the larger banks – they’re aggressively underwriting them – and they now claim they may use this in CECCAR as part of the qualitative area. Do you guys have any color on that or what do you guys think about that? Are you concerned about that if they bring it into the CECCAR process the way everybody underwrites leveraged lending?

You know, those rumors are there, Gerard. We haven’t heard anything on that formally so obviously this has been a big area of focus for The Fed and the OCC, so evolving. But we haven’t gotten any guidance on that so far. Gerard Cassidy – RBC Capital Markets : Thank you, guys.

Your next question comes from the line of Steven Chubak with Nomura. Please go ahead with your question. Steven Chubak – Nomura Securities : Hi, good afternoon. I was hoping you could provide some clarity on what drove the sequential increase in risk-weighted assets. I guess historically what we’ve seen particularly given periods of elevated FX volatility that there’s a natural capital hedge from FX translation on the RWA denominator. And I didn’t know if you could provide some more detailed guidance as to what were the sources of RWA build in the quarter.

Yeah, that’s a good question, Steven. Since the beginning of the year we’ve absorbed about, well, you can see it on the chart back on Slide 20 – we’ve got about $60 billion in incremental RWA since the beginning of the year. The impact of business growth in Citicorp has been more than offset by reductions in Holdings and we’ve gotten a little bit of FX benefit in this quarter that was probably worth about $10 billion or so. But the entire net impact really is the result of enhancements to our risk models, primarily credit models, and as well as our interpretation of the final B-3 rules. So we’ve been enhancing our models and that’s caused us then to increase the amount of risk-weighted assets that are required. Steven Chubak – Nomura Securities : Thanks, that’s really helpful. Is that model enhancement process, is it largely completed at this juncture or should we expect that there’s more to come which could result in some RWA stickiness going forward?

Yeah, I’d say we think that now we’ve done an intensive review of the models certainly, especially in the period since we’ve gone live on the Basil-3 advanced approach. And we’re certainly comfortable with the models as they exist right now but here comes the big “however.” However, our regulators still continue their reviews so there still may be additional enhancements required going forward. Steven Chubak – Nomura Securities : Alright, fair enough. And just one more from me relating to the Securities portfolio and specifically the breakdown of HTM versus AFS. The last two quarters we’ve seen an increase in the amount of securities you’ve classified as hold to maturity, and just looking at last year’s CECCAR results and in addition to that your midyear stress test exam which was published for public consumption, the AOCI losses were actually quite substantial and presumably should only increase as the number of Basil-3 deductions are recognized within the transitional horizon. I was wondering whether CECCAR considerations have actually prompted you to accelerate the reclassification of some of your securities portfolio and is that something that we should expect to persist going forward?

I’d say if you looked at the percentage of our investment portfolio that is classified as HTM we’re probably underweight compared to many of our peers. And so as we look at the possibility of reclassifying things between AFS and HTM it’s a little bit more being driven by our view as far as volatility in our OCI, and therefore how that impacts the numerator in our regulatory capital. So again, that’s really our focus. We want to make sure we’ve got the right mix and again, we don’t want to overweight towards hold to maturity. But we would look at it right now and say perhaps we’re a little underweight where we are. Having said that we’re very comfortable with the level that we have right now so I’m not leading you to the fact that we’re going to be increasing it dramatically. But we may continue to add bits and pieces into the HTM. Steven Chubak – Nomura Securities : Alright, understood. Thanks for clarifying that, John, and thank you for taking my questions.

Not a problem, Steven.

Your next question comes from the line of Erika Najarian with Bank of America. Please go ahead with your question. Erika Najarian – Bank of America : Yes, my questions have been asked and answered, thank you.

Okay, thank you Erika.

Your next question comes from the line of Ken Usdin with Jefferies. Please go ahead with your question. Ken Usdin – Jefferies & Company : Thanks, guys. Just one question for me: John, you alluded in your prepared remarks to the recent bit of slowing in some of the international businesses. And I just wondered if you could flesh out for us when you think about your international businesses and developed versus emerging markets, do you see that slowdown as either A) partly seasonal, B) any change in terms of how you’re perceiving growth; or C) related to just this kind of downgrade of growth expectations – and how are you responding to that?

I would say it’s more of the latter as far as just the overall impact of everyone’s expectations for global growth coming down a bit. In the comments that I made earlier I think what you’re referring to is some of the comments I made as far as loan growth that we had in Latin America, specifically Mexico. So you do have certain market-by-market where you can see the impact, but from an emerging market view we still see good growth, good overall growth coming out of the emerging markets especially when compared to the developed markets. It’s just a little bit less growth than what we would have anticipated earlier in the year. Ken Usdin – Jefferies & Company : And just as a quick follow-up on that: have you noticed anything then, you’d mentioned a couple of comments in your prepared comments in the deck about spreads but has the spread and competitive environment changed at all in that too? Or are you finding yourself still able to gain share within those faster-growing economies?

Yeah, we’re doing fine and I think that we’re managing to keep pace within the economies in which we operate. We have seen spread pressure hit us in the trade product – that’s certainly something that hit us this quarter. When you take a look at the revenue growth in TTS, the revenue growth in TTS was impacted both year-over-year and quarter-over-quarter by a roughly $40 million decline in Trade product revenues. And while the spreads in the cash management business were largely stable overall trade spreads have been declining now for several quarters. So we’ve seen that impact but we are maintaining our market share in that product, but we’re doing that by shifting to an originate for sale type of approach. So we’re maintaining market share but instead of originating for balance sheet we’re originating to sell – that means that we forego net interest revenue in return for an upfront fee but as a result the trade revenue assets have declined, so have our trade assets. But we’ve preserved and in some cases have improved our returns. So there’s different ways of managing through lower spread environments. Ken Usdin – Jefferies & Company : Very well, thank you.

Your next question comes from the line of Matt Burnell with Wells Fargo Securities. Please go ahead with your question. Matt Burnell – Wells Fargo Securities: Hi John, thanks for taking my question. Just first of all, and I don’t want to make too much of the midyear DFAST numbers but I was curious – your PPNR estimate for the most recent midyear DFAST was down about a little less than 30%. In fact that was in line with most of the other big banks but I guess I’m just curious if there’s any color you can provide as to what the difference was between the numbers that you put together for this year’s midyear cycle and last year’s midyear cycle just in terms of the PPNR exchange?

Well, I think there’s two things. One is there’s a different scenario. Obviously each year you construct a different scenario in which you then assess your stress within that scenario. So there’s a scenario difference and also as Mike said earlier we’re in the process of enhancing our overall capital planning process and I think you see some of the results in those numbers. Matt Burnell – Wells Fargo Securities: Okay. And just moving on to the mortgage business, I know that’s not a huge contributor to your overall bottom line but I guess in the bigger picture I’m just curious how you all are thinking about the potential for loosening of standards by the FHFA even if it’s minimal loosening in terms of opening up maybe the lower end of the mortgage market; and how much that might affect your ability to generate mortgage revenue given that you tend to target slightly better credit quality customers?

I guess I would start in that, Matt, in terms of saying I think that that’s important. I think it’s good for the market because what we’ve seen is the mortgage market today isn’t functioning the way we’d like. If you’re not 20% down and high FICO it’s been quite tough for people to get in and to be able to afford and buy homes. So one is I think for the overall system we would be supportive of that. I think as you rightly point out our model is largely focused around our Citi clients which tend to be higher in FICOs and probably have the ability to make higher down payments and higher deposits. But again, some of it falls in there and we’d certainly be open and we’d be supportive of that. So I think from our perspective I don’t think it would have a big impact on Citi but I think it would be very constructive for the market. Matt Burnell – Wells Fargo Securities: Okay, that’s it for me, thank you.

Your next question comes from the line of Chris Kotowski with Oppenheimer. Please go ahead with your question. Chris Kotowski – Oppenheimer & Co.: Yeah, hi. I was wondering in the context of the Page 8 disclosure about the impact of the strategic actions is $7 billion in loans roughly; and on Page 31 we see that Korea alone has about $24 billion in consumer loans. So I’m wondering what specifically is in there and what isn’t, and particularly I guess I was wondering is from all those countries is Citi Cards also withdrawing or is it just the basic branch system?

Yeah, let me try to help you through that one. First is we are not exiting the consumer franchise in Korea. We’re exiting a specific element of that business – the consumer finance business in Korea which is a much smaller component of the overall Korea franchise. So when you take a look at the $24 billion worth of consumer loans that we have in Korea it’s a relatively small amount of those loans that is actually then coming out. Chris Kotowski – Oppenheimer & Co.: Okay. And then just the cards – in those eleven countries are you basically out of the branch system, the branch banking system or also out of the card business as well?

It’s going to be out of cards as well as out of the branches. Chris Kotowski – Oppenheimer & Co.: Okay. And then lastly for me I’m not sure if you can comment but on the cover of the One Main S(1) it lists the proposed maximum offering of being $50 million in size. That seemed very small and I was wondering if there’s any color you can provide us on how we should expect the disposition to proceed in the year ahead.

Sure. I would describe that as a filing and again, I think our stated intent all along in this is to go towards a process that drives this business in terms of best price, best terms to the right buyer. I would say that kind of going in this we’ll run a sale process and if we don’t get a sales process to the right place then we’ll pursue an IPO. But we wanted to have the flexibility to do that and if we got there we didn’t want to have to wait the time necessarily to have to do all the filing. And obviously in preparation for the sale process you do a lot of those things that are requisite in the filing anyway. So it was I think convenient to be able to do that. So again, move towards the sale process and we’ll always have the option to do an IPO if we want to use it. Chris Kotowski – Oppenheimer & Co.: Great, thank you. That’s it for me.

Great, thanks Chris.

Your next question comes from the line of [Brian Klein-Hansel] with KBW. Please go ahead with your question. [Brian Klein-Hansel] – KBW : Yeah, good afternoon. I just had a quick question on the strategic actions today. You mentioned that these were coming mostly from the optimized restructure market that you had identified previously, but also on that same chart you’d also identified 20 markets which were the invest to grow markets. And I’m assuming that you take these dollars allocated to the eleven markets and move those to the invest to grow. Kind of what are the top three markets that you’re looking to invest in these days?

I would say as we look around we’re clearly in no particular order investing in the US in several different ways; we continue to invest, we had a stated investment program that we’re gearing towards Mexico. We’ve talked about other markets in Asia where we’ve been targeted and continuing to grow our businesses. So I think there’s several places. I don’t think there’s a shortage of places where we can put these resources so to speak at better levels than they’re being used today. [Brian Klein-Hansel] – KBW : Okay, great. And just one other question on the tax rate guidance that you gave: are you assuming that all the legal charges going forward are now going to be tax deductible and that’s why you’re getting to the lower tax rate there?

No, no. We anticipate that again it’s going to be dependent upon item by item as far as whether or not we would assess an accrual to be tax deductible or not. But as we look into Q4 right now we think that a 32% more or less tax rate is where we’ll end up. [Brian Klein-Hansel] – KBW : Okay, great. Thanks for taking my questions.

Okay, not a problem.

Thank you. We have no further questions in queue at this time. I’d like to turn the call back to management for any further remarks.

Alright, thank you all for joining us this morning. I know it’s been a busy morning for many of you. If you have any follow-up questions please feel free to reach out to IR. Thank you.

Thanks, everybody.