Citigroup, Inc.

Hello and welcome to Citi's Second Quarter 2020 Earnings Review with the Chief Executive Officer Mike Corbett and Chief Financial Officer Mark Mason. Today's call will be hosted by Elizabeth Lin, Head of Citi Investor Relations. We ask that you please hold all questions until the completion of the former 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, Citigroup.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. and 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 second quarter of 2020. With net income of $1.3 billion, we had earnings per share of 50 cents. As in the first quarter, credit costs weighed down our net income. However, the overall business performance was strong, which shows that we've been able to navigate the COVID-19 pandemic reasonably well so far. With solid revenue growth of 5% and strong expense management down 1%, both on a year-on-year basis, our margin was up 13%. We grew loans, and our deposits were up significantly. Our regulatory capital increased, and we continue to add to our substantial liquidity and our balance sheet has more than ample capacity to continue to serve our clients. The institutional clients group had an exceptional quarter. Fixed income was up 68%. We had our best investment banking quarter in recent history, and private bank revenues approached $1 billion. And while treasury and trade solutions continue to be impacted by the lower rate environment, we did see good client engagement and strong deposit growth in that business. Global consumer banking revenues were down and spending slowed significantly due to the pandemic. In North America, despite the decline in purchase sale activity, branded card revenue was up slightly due to a mixed shift toward interest earning balances. At the same time, retail services saw a significant decline in consumer spending with our partners. Retail banking saw higher mortgage revenue from refinancing activity, due to the low rate environment. In Asia, the slowdown in travel and consumer activity again reduced revenues. And in Mexico, revenues declined as the country is struggling from the effects of the health pandemic. Our capital position strengthened during the quarter with our common equity tier one ratio increasing to 11.5% on an advanced basis. I was pleased with our results from the Federal Reserve's latest stress test placing our stress capital buffer at 2.5%. This leaves us comfortably above our new regulatory minimum of 10%. Our tangible book value per share of $71.15 was down only slightly from the first quarter, but still up 5% from a year ago. We plan to keep paying our quarterly dividend as long as macroeconomic and financial conditions permit. During the quarter, we continue to support our clients, colleagues, and communities through this pandemic. While I'd like to see more of our people back in the office, we've been clear that we won't do anything to jeopardize their health and safety. Most recently, we paused plans to invite a limited number of colleagues back to sites located in areas where the health data was going in the wrong direction. We've also remained committed to supporting communities through a variety of initiatives. These now total over $100 million in contributions from our company and its foundation. But what I'm most proud of is the $2 million which my colleagues donated out of their own pockets to organizations providing COVID relief as part of our matching program. And we recently made our first distribution to the Citi Foundation, representing $25 million in net profits from the Payroll Protection Program to support community development financial institutions. We're also partnering with minority-owned depository institutions to help them extend credit to businesses through PPP by purchasing their loans through a $50 million facility. This effort is even more important as we look at the economic disparities drawn along racial lines in our society. And of course, we continue to serve our clients. whether it's providing consumer relief or helping companies access the capital markets to strengthen their balance sheets. We enter the second half in a strong position to handle what comes our way. We are in a completely unpredictable environment for which no models, no cycles to point to. The pandemic has a grip on the economy, and it doesn't seem likely to loosen until vaccines are widely available. We'll keep managing through this, With a sharp emphasis on our risk management, we continue to make investments in our infrastructure to enhance our safety, soundness, and controls to ensure that we have an indisputably strong and stable institution. With that, Mark will go through our presentation, and then we'll be happy to answer your questions.