Citigroup Inc. (NYSE:C) Q4 2018 Earnings Conference Call - Final Transcript

Jan 14, 2019 • 10:00 am ET

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Citigroup Inc. (NYSE:C) Q4 2018 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

(Operator Instructions) And we have a question from a line of Jim Mitchell with Buckingham Research.

Analyst
Jim Mitchell

Hey, good morning. And John, congrats on the retirement.

Executive
John Gerspach

Hi. Thanks, Jim.

Analyst
Jim Mitchell

Maybe if I could follow up on just, you spent a lot of time there at the end on the expense flexibility. I think that's a big sort of concern in the marketplace, given the revenue backdrop, at least in the fourth quarter that can change quickly in capital markets, and appreciate the commitment to the RoTCE. But when we think about in a more dire scenario, how much kind of a flexibility do you have, you're down 4% year-over-year in a tougher environment, can you get expenses down year-over-year in 2019? How do we think about sort of that range of flexibility so we can kind of play around their models.

Executive
Mark Mason

Hi, Jim. This is Mark Mason, how are you?

Analyst
Jim Mitchell

Hi Mark, how are you?

Executive
Mark Mason

Good. I'd turn you to Page 17 inside of the deck that John just went through. And what 17 shows, if you look back all the way to 2016 and you -- this shows the long-term -- the trailing month efficiency ratios. And what we've shown here is that year-over-year for the past number of quarters, we've been able to bring that operating efficiency down. But more importantly to your question around expense ranges, we can manage to, you can look at the fourth quarter of 2018 and see we ran at about $41.8 billion. And if you look back at any of those years in 2017 and 2016, that's about the range in which we've run over the past couple of years. And so to answer your question, I think as we think about the prospects for 2019 and our ability to manage expenses tightly, this is probably the range you should think about.

Analyst
Jim Mitchell

Okay. Right. That's helpful. And then maybe just one question on credit, in cards, you -- are you still comfortable, John, with the 3% in Branded Cards and 5% or is -- I know that was sort of your prior expectation, is that still the expectation for '19 for the card losses?

Executive
John Gerspach

Yes, we -- what we've said, the medium term in expectations will be the Branded Cards with operated net range of 3% to 3.25% and retail services in the 5% to 5.25% and those are still valid assumptions as we move forward and specifically for 2019.

Analyst
Jim Mitchell

Okay. Thanks.

Operator
Operator

Your next question is from the line of John McDonald with Bernstein.

Analyst
John McDonald

Hi, good morning. Mark, I was wondering, if you could just clarify the range that you were referring to, your answer to Jim's question that you mentioned the $41.8 billion this quarter is low on that slide. Was there a range from that to something else or just kind of this ballpark of $41 billion, $42 billion, just wondering kind of what you're referring to there?

Executive
Mark Mason

Ballpark range, if you look at the Page 17, fourth quarter of '16 the