Citigroup, Inc.

Hello and welcome to Citi's First Quarter 2020 Earnings Review with Chief Executive Officer Mike Corbett and Chief Financial Officer Mark Mason. Today's call will be hosted by Elizabeth Glenn, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ms. Lynn, you may begin.

Thank you, Operator. Good morning, and thank you all for joining us. On our call today, our CEO, Mike Corbat, will speak first. Then Mark Mason, our CFO, will take you through the earnings presentation, which is available for download on our website, citygroup.com. Afterward, we will be happy to take questions. Before we get started, I'd 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, capital, and other financial conditions may differ materially from these statements due to a variety of factors, including the precautionary statements referenced in our discussion today, as well as those included in our SEC filings, including Without limitation, the risk factor section of our 2019 Form 10-K. With that said, let me turn it over to Mike.

Thank you, Liz, and good morning, everyone. Today, we reported earnings for the first quarter of 2020. With net income of $2.5 billion, we had earnings per share of $1.05. Our earnings were significantly impacted by the COVID-19 pandemic. We had strong revenue performance as the economic shocks caused by the pandemic weren't felt until late in the quarter, and we continued to show expense discipline. However, as you would expect, credit costs reduced our net income. The significant loan loss reserves we took also reflected the day-two impact of the new Cecil accounting standards. In our institutional clients group, we had strong performance in our markets business as we helped clients navigate severe volatility. That led to trading revenues that were higher than last year in what is typically a strong quarter for that business as it is. Treasury and trade solutions was impacted by the cuts to interest rates, but client engagement stayed very strong throughout the quarter. Investment banking matched last year's solid performance as we continued to gain share among our target clients. Global consumer banking also fared well from a revenue perspective considering the environment. In the U.S., we had strong revenue growth in cards with branded and retail services up 7% and 4% respectively. We grew average deposits 8% with another solid portion acquired digitally. In Asia, We saw a slight revenue decline as the economic impacts of COVID-19 first materialized in that region. In Mexico, revenues rose modestly, excluding a one-time gain from 2019 as the virus had limited impact on that country's economy during the quarter. Our tangible book value per share increased to $71.52 at the end of the quarter, up 9% from a year ago. We ended the quarter with a common equity tier one ratio of 11.2% as our risk weighted assets increased significantly due to increased client demand. As I've said, this isn't a financial crisis. It's a public health crisis with severe economic ramifications. Although we did have good revenue performance this quarter, we exited the quarter in a dramatically different environment. While we've built significant loan loss reserves, No one knows what the severity or longevity of the virus's impact on the global economy will be. That said, we entered this crisis in a very strong position from a capital, liquidity, and balance sheet perspective. We have the resources we need to serve our clients without jeopardizing our safety and soundness. I'd like to take a moment to highlight some of the things that we're doing to help our people, clients, and communities, which you can see on slide three. I have to say I'm very proud of how our people have responded to this fast-moving situation. We've been very aggressive, shifting to remote working to reduce our people's chances of becoming infected. Where the spread of the virus dictates it, We only have people going to our sites if there's no possible way they can perform their roles remotely. For example, last week in North America markets and security services, 98% of our people work remotely. And globally, our people have adapted well to this new way of working with over 80% of our colleagues working remotely. The investments we've made in our technology have allowed us to operate very smoothly in a set of circumstances that would have been hard to imagine with such a large share of our workforce working remotely at the same time. Those investments are also helping us to serve our clients through digital and mobile channels, whether it's a consumer depositing a check or a corporate treasurer managing liquidity. Our investments in risk management and controls will never complete, are also serving us well in the face of a severe economic downturn and large swings across markets, whether in equities, fixed income, or commodities. We've tried to help keep our people financially healthy as well and reduce the stress they're facing. We decided last month to make a one-time payment of $1,000 to employees who make $60,000 or less per year in the U.S. that are making equivalent payments in our international markets, and we've halted new reductions in our workforce for the time being. From a consumer and institutional perspective, we're well-positioned to serve the clients and the customer segments we've been focusing on. We know many consumers are facing real struggles, and we're doing our best to support them. We were quick to implement the ways to reduce the burden on our consumer clients and announce additional accommodations last week in the U.S. While we haven't been a large player in small business lending, we're ramping up our efforts so we can support clients who participate in the payroll protection plan. And we have additional consumer relief programs in place in our international consumer franchise. We're working hard to support our corporate clients, many of whom are facing financial pressure. We've been able to support them while keeping within our risk and liquidity limits. We've also been helping the communities we serve during this extraordinarily difficult time. Partnering with groups like the World Health Organizations, Cities Foundations have already committed $30 million to date to support those impacted and will make additional announcements in coming days. We've donated personal protective equipment to hospital workers, and last week we started using our cafeteria in our headquarters to make meals for food banks. Our people keep coming up with new ways to help, and I couldn't be prouder. And as a bank, we'll do everything we can to support the broader economy. We serve as a transmission mechanism for policymakers for both fiscal and monetary, which they can use as a bridge to the real economy. Looking forward, there are too many unknowns to count. The path the virus will chart whether there will be successful interventions, the action government leaders will take to either reopen the economy or put in place measures that will further restrict it. We also have to bear in mind COVID-19 is a new disease, and the medical guidance continues to evolve, as you would expect. But I feel confident in our ability to manage through whatever scenario comes to pass, and with that, Mark will go through our presentations, and then we'd be happy to answer your questions.