Susan Kendall - Head of Investor Relations Mike Corbat - Chief Executive Officer John Gerspach - Chief Financial Officer

Jim Mitchell - Buckingham Research Glenn Schorr - Evercore ISI Brennan Hawken - UBS Matt O'Connor - Deutsche Bank Mike Mayo - CLSA Steven Chubak - Nomura Betsy Graseck - Morgan Stanley Erika Najarian - Bank of America Matt Burnell - Wells Fargo Securities Eric Wasserstrom - Guggenheim Securities Gerard Cassidy - RBC Capital Markets Brian Kleinhanzl - KBW David Hilder - Drexel Hamilton Marty Mosby - Vining Sparks Christopher Wheeler - Atlantic Equities

Hello, and welcome to Citi's Second Quarter 2015 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. 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. Kendall, you may begin.

Thank you, Regina. 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, citigroup.com. Afterwards, we will 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 and 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 factor section of our 2014 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 $4.7 billion for the first quarter of 2015, or $1.45 per share, excluding the impact of CVA and DVA. It was a strong quarter overall, and we continued to make good progress towards our strategic and execution priorities. With half the year behind us, we’ve remained on track to hit our financial targets in terms of return on assets in our efficiency ratio. We again achieved both positive operating leverage and strong loan growth in our core Citicorp businesses. Citi Holdings was profitable again during the quarter and we continued to wine down its assets which are down 22% from a year ago and Holding’s assets now comprise only 6% of Citigroup’s balance sheet. We continued to utilize DTA this quarter bringing the total to $1.5 billion for the first half of 2015 and we added $3.5 billion to our regulatory capital during the quarter even as we returned roughly $1.7 billion to shareholders in the form of share buybacks and common dividends. Our tangible book value increased to $59.18 and our common equity Tier 1 capital ratio increased to a 11.4% on a fully implemented Basel III basis. We submitted our resolution plan to the Fed and the FDIC which details how we would resolve Citi without the use of tax payer funds or harm to the financial system, viable resolution planning is critical to our making Citi as simpler, smaller, safer and stronger institution. In terms of our businesses, we saw balanced performance for the quarter across our institutional and consumer segments. In ICG, we’ve grown our investment banking wallet share year-to-date and our Private Bank continued to show strong rise in revenue growth. Treasury and Trade Solutions saw a revenue growth on a constant dollar basis. And our Markets and Securities Services revenue grew from a year ago driven by rates in currencies and security services. In consumer banking, high quality checking deposit growth improve spreads and higher mortgage originations drove revenue growth in the U.S. while we’ve optimized our branch footprint to focus on seven cities. And internationally, we also grew revenue, despite continued spread headwinds with growth across investment sales, deposits, loans and purchase sales. We’ve remained focused on our expenses and driving efficiencies throughout the organization. Despite significant investments in our regulatory and compliance functions, we continued to lower our overall headcount and we’re reducing both our real estate footprint and our employees in higher cost locations. These actions help to keep our expenses lower than they were a year ago even before the benefit of foreign exchange. While I am pleased with our results for the first half of the year, the environment remains challenging and unsettled. Growth forecast continued to be downwardly revised and we still don’t have clarity on when interest rates will begin to rise. While some volatility may create trading opportunities, we would much prefer to see growth strength inconsistently across the developed and emerging markets. But whatever the economic conditions are we will remain focused on our clients and executing our strategy on behalf of our shareholders. John will now go through the deck and then we’ll be happy to take your questions. John?

Hey, thank you Mike and good morning everyone. Starting on Slide 3, I’d like to highlight a couple of items CVA, DVA and the prior period mortgage settlement that affect the comparability of our results to last year. Excluding these items, we earned a $1.45 per share in the recent quarter compared to a $1.24 in the second quarter 2014. On Slide 4, we show total Citigroup results. In the second quarter, we earned $4.7 billion generating a return on assets of 101 basis points and a return on tangible common equity of 10.1%. Net income grew by over $700 million year-over-year driven by core improvement in Citicorp. Revenues declined on a reported basis to $19.2 billion, but increased 3% year-over-year in constant dollars. Expenses declined 7% year-over-year mostly reflecting a lower legal and repositioning charges as well as a benefit from FX translation and net credit losses improved offset by a lower net loan loss reserve release. The tax rate in the second quarter was 29% somewhat lower than the 31% outlook we had provided on a full year basis. Turning to the first half of 2015, the total efficiency ratio for Citigroup including Citi Holdings was 56%. Net income grew by 17% year-over-year, we generated a ROA of a 103 basis points and our return on tangible common equity was 10.5%. In constant dollars, Citigroup end of period loans declined 1% year-over-year to $632 billion as 4% growth in Citicorp was more than offset by the continued wine down of Citi Holdings. Deposits also decreased 1% driven by Citi Holdings including the reclassification of $21 billion of Japan retail deposits to held for sale in the fourth quarter of last year. On Slide 5, we provide more detail on second quarter revenues in constant dollars. Citicorp revenues were up 5% year-over-year mostly driven by growth in our institutional franchise and revenues declined in Citi Holdings reflecting continued asset reductions as well as the impact of classifying our OneMain business as held for sale at the end of last quarter. As a result of the HFS accounting treatment, OneMain loans are classified as other assets. As such approximately $160 million of net credit losses were recorded as a reduction to other revenue during the second quarter. This lowered both revenues and cost of credit by an equal amount and therefore had a neutral impact on earnings. On Slide 6, we show more detail on expenses in constant dollars. Citi core expenses were down 1% as ongoing efficiency savings and lower legal and repositioning cost will largely offset by higher regulatory and compliance cost. And Citi Holdings expenses also declined on lower assets. On Slide 7, we show the split between Citicorp and Citi Holdings. Citicorp net income grew 22% year-over-year in the second quarter. And as I just described, we generated positive operating leverage again this quarter in Citicorp with 5% growth in revenues and 1% decline in expenses in constant dollars. And for the first half of 2015, we achieved the Citicorp efficiency ratio of 55.1%. Turning to Citi Holdings, we were profitable again this quarter with over a $150 million in net income. Citi Holdings ended the quarter with a $116 billion of assets or 6% of total Citigroup assets. On Slide 8, we show results for international consumer banking in constant dollars. Net income grew 25% year-over-year driven higher revenues, lower operating expenses and an improvement in credit cost, partially offset by a higher effective tax rate. Revenues grew 1% year-over-year in the second quarter, reflecting volume growth, partially offset by spread compression and ongoing regulatory headwinds in certain markets. In Latin America, we grew revenues 3% driven by modest loan and deposit growth in Mexico, partially offset by the impact of selling our consumer franchise in Honduras last year. And in Asia revenues were roughly flat year-over-year as 3% growth in retail banking revenues including wealth management was offset by lower card revenues. Asia card loans and purchase sales both grew year-over-year by 4% and 5% respectfully but this growth was offset by lower spreads driven by continued higher payment rates and the impact of regulatory changes in certain markets. We continued to believe these headwinds will abate somewhat in the second half of 2015. Asia card revenues grew by 3% sequentially in the second quarter. In total, average international loans grew 2% from last year. Card purchaser sales grew 5% and average deposits grew 4%. Operating expenses declined 5% as lower repositioning cost were partially offset by the impact of volume growth, higher regulatory and compliance cost and technology investments and credit cost declined from last year. Slide 9 shows the results for North America consumer banking. Net income of $1.1 billion declined slightly year-over-year as higher revenues, lower expenses and lower net credit losses were more than offset by a decline in the net loan loss reserve release. Total revenues grew 1% year-over-year. Retail banking revenues of $1.3 billion grew 11% from last year, reflecting continued loan and checking deposit growth, higher mortgage origination activity and improved deposit spreads. Branded cards revenues of $1.9 billion were down 5% from last year as 5% growth in purchase sales and improved spreads were more than offset by the impact of lower average loans mostly driven by the continued runoff of promotional rate balances and higher payment rates. And retail services revenues were flat to last year with improved spreads being offset by the continued impact of lower fuel prices and higher contractual partner payments. Total expenses declined 3% mostly driven by ongoing efficiency savings as we have continued to rationalize our branch footprint and capture the benefits of our global scale in cards. Our retail banking results reflect the strong progress we’re making in North America. Over the past year, we have reduced our branch count by 15% to 779 branches. And at the same time, we've improved the overall productivity of our network, concentrating our resources in 70 markets and deepening our relationships with our target clients. Despite the branch reductions, we grew checking account balances by 7% year-over-year. Card acquisitions per branch were up 10% year-over-year on a same store basis and we continued to enhance our retail mortgage origination platform reducing our reliance on third parties and better integrating our operations. Over 80% of our growth in origination volumes year-over-year came through retail channels. Slide 10 shows our global consumer credit trends in more detail. Overall, credit remained favorable in the second quarter. In North America and Asia, trends remained broadly stable and in Latin America. the NCL rate improved in line with a lower delinquency rate. Slide 11 shows the expense trends for the global consumer banking. Over the last 12 months, our consumer efficiency ratio was 54% including overall 150 basis points attributable to legal and repositioning charges. For the first half of the year, the total efficiency ratio for global consumer banking was 53.3%, down from 56% last year. We now expect the total consumer efficiency ratio for 2015 to be somewhere in the range of 52% to 53% consistent with our plans to begin gradually increasing the level of investment spend during the second half of the year, primarily in the U.S. branded cards. Turning now to the Institutional Clients Group on Slide 12; revenues of 8.6 billon in the second quarter grew 2% from last year and declined 6% from the prior quarter, total banking revenues of 4.4 billon were roughly flat to last year and up 4% sequentially. Treasury and Trade Solutions revenues of $2 billon were down 1% year-over-year on a reported basis. In constant dollars, TTS revenues grew 5% from last year as growth in deposit balances and spreads more than offset a decline in trade revenues. This represents the sixth consecutive quarter that we've generated both revenue and operating margin growth in TTS on a year-over-year basis. And while trade revenues continue to present the headwind this quarter, we see some early positive signs that spread maybe stabilizing. Both cash and trade revenues increased sequentially up 3% in total. Investment Banking revenues of 1.3 billon were down 4% from last year as higher M&A revenues were more than offset by lower underwriting activity as compared to a very strong second quarter last year consistent with overall market trends. Year-to-date, investment banking revenues were up 4% driven by strong M&A results and we have gained overall wallet versus 2014 particularly in North America. Private Bank revenues of 746 million grew 13% year-over-year, driven by strong growth in investments and capital markets products as well as higher loan and deposit balances. And Corporate Lending revenues of 445 million were down 2% on a reported basis. In constant dollars, lending revenues grew 4% from last year as higher volumes were partially offset by lower spreads. Total Markets and Security Services revenues of 4.2 billion grew 4% year-over-year and declined 12% sequentially. Fixed income revenue of 3.1 billion were down slightly from last year as continued strength in rates and currencies was offset by lower revenues in spread products. Rates and currencies revenues grew by double digits year-over-year in the second quarter as investor client activity and market volatility were improved versus last year, G10 rates was the key driver of growth. In North America in particular as we saw strong client activity and a favorable trading environment offset by a small decline in G10 foreign exchange. Local market rates and currencies grew modestly year-over-year driven by our franchise in Asia. In spread products however, activity levels declined versus last year in credit products in particular resulting in lower revenues. On a sequential basis, fixed income revenues declined 12% driven by seasonal factors as well as the lower rates and currency activity as compared to a strong first quarter. Equities revenues of 653 million were down 1% year-over-year and down 25% sequential. Our equities revenues this quarter included a charge of 175 million for valuation adjustments related it certain financing transactions. And as of today, we have a remaining exposure with respect to these transactions of less than a $100 million. Excluding the adjustments, equities revenues would have increased by 26% from last year, driven by growth and derivatives, improved trading performance EMEA and strong client momentum in Asia. In Security Services, revenues were up 7% year-over-year and 3% sequential reflecting increased activity and higher client balances. Total operative expenses of 4.8 billion grew 2% year-over-year as higher regulatory and compliance cost were partially offset by ongoing efficiency savings and the impact of FX translation and credit was a positive in the quarter. On Slide 13, we show expense and efficiency trends for the Institutional business. Over the last 12 months, our efficiency ratio was 57% including roughly 140 basis points attributable to legal and repositioning charges and our comp ratio was 27%. We continued to expect to achieve a total ICG efficiency ratio closer to the mid-point of the 53% to 57% target range for the full year 2015. Slide 14 shows the result for the Corp and other. Revenues were higher year-over-year and sequential, driven mainly by gains on debt buybacks as well as real estate sales in the recent quarter, partially offset by hedging activities and expenses were down, mainly reflecting lower legal and related costs. Slide 15 shows Citi Holdings asset which totaled a $116 billion at quarter end, down 22% from a year ago. We have continued to make great progress in winding down these assets. During the quarter, we closed the sales of our consumer businesses in Peru and Nicaragua and we have signed agreements to sell an additional $32 billion of assets including our consumer businesses in Japan, Egypt, Costa Rica and Panama as well as OneMain Financial. On Slide 16, we show Citi Holdings financial results for the quarter. Revenues of 1.7 billion declined by over 300 million from last year, driven by the reduction in assets as well as the impact of classifying our OneMain business as held for sale at the end of the quarter. As I described earlier, as a result of the HFS accounting treatment, approximately $160 million of net credit losses were recorded as a reduction in revenue during the second quarter. The HFS treatment had no impact on expenses which declined 13% year-over-year, primarily due to the asset reductions. On Slide 17, we show Citigroup’s net interest revenue and margin trends. The bars represent net interest revenue per day for each quarter in constant dollars, showing a consistent growth trend year-over-year even as the contribution from Citi Holdings has continued to strength. Our net interest margin increased sequentially to 295 basis points, driven by a higher than expected contribution from trading NIM which can fluctuate quarter-to-quarter. Excluding this impact, our net interest margin would have been closer to 291 basis points and we expect to maintain roughly this level for the third quarter. Looking to the fourth quarter, our results will depend in part on the timing of divestiture including OneMain at our Japan retail business. We estimate that without these businesses on a combined basis, our net interest margin would be lower by roughly 7 basis points before using any part of the associative gains to redeem high cost dept. We believe we can ultimately mitigate more than half of this NIM pressure through a combination of the upcoming debt redemption actions as well as the April acquisition of the Costco portfolio. On Slide 18, we show our key capital metrics on a fully implemented Basel III basis. During the quarter, our CET 1 capital ratio improved to a 11.4% driven by retained earnings and DTA utilization. Our supplementary leverage ratio improved to 6.7% and our tangible book value grew to $59.18 per share. In summary, we continued to make progress in the second quarter with revenue growth and positive operating leverage in Citicorp, lower legal and repositioning expenses and continued favorable credit trends. For the first half of 2015, we are tracking well to our financial targets with a Citicorp efficiency ratio of 55%, a Citigroup ROA of a 103 basis points and a return on tangible common equity of 10.5%. Of course we would expect our results to be stronger in the first half of the year given the seasonality of our markets business. But for the full year, we continued to expect to deliver a Citicorp efficiency ratio in the mid 50% range and a Citigroup ROA of over 90 basis points. Finally, we ended the quarter with a strong capital position improving our CET 1 ratio to a 11.4% and our supplementary leverage ratio to 6.7% even as we returned roughly $1.7 billion of capital to shareholders in the form of buybacks and common dividends this quarter. Turning to the second half of this year, we continued to expect modest revenue growth in Citicorp. In consumer, in North America, we expect continued underlying revenue growth in our retail banking franchise, although comparisons for the prior year will be impacted by certain onetime items that benefited our mortgage business last year as previous disclosed. And the North America cards, revenue will likely remain under pressure in the second half of the year as it will take some time for our incremental investment spend to drive top line results. In international consumer, we continue to believe we can generate revenue growth and positive operating leverage year-over-year in the second half of 2015, driven by continued modest growth in Mexico as well as continued volume growth and abating spread headwinds in Asia as we begin to lap some of the spread compression and regulatory changes we absorbed last year. Turning to the institutional franchise, we continued to see good momentum across Corporate Lending, Treasury and Trade Solutions, Security Services and the Private Bank which together generated 8% year-over-year revenue growth in the first half of the year in constant dollars. Investment banking revenues will depend in part on the overall market, but we continue to feel good about the strength of our franchise generating 4% year-over-year revenue growth in the first half with overall wallet share gains versus 2014. And finally, in markets we expect our overall performance to reflect the market environment with the goal of continuing to gain wallet share with our target clients. In Citi Holdings we remained focused on winding down the portfolio, while staying above breakeven. As I’ve described earlier we have signed agreements with a sale of $32 billion of assets virtually all of which we expect to close by year-end. And in particular, we continue to work towards a late third quarter sale of OneMain financial. We expect credit cost to increase somewhat in the second half of the year driven by loan growth as well as lower loan loss reserve releases and we expect to keep balance sheet discipline staying at or below our current size. And with that Mike and I are happy to take any questions.

[Operator Instructions] Our first question will come from the line of Jim Mitchell with Buckingham Research. Please go ahead.

Hey good morning, guys.

Hi. Thank you, Jim.

May be we could take a little bit just about the expense trajectory from here, you highlighted higher regulatory expenses in some investments in U.S. cards, but maybe you can kind of give us, but you’ve also haven’t seen much of a decline in markets expenses in the corporate bank yet, seasonally we should expect some decline revenues. And then layering - maybe layering on top of that date on single operating platform in the global retail business and what that could mean for expenses longer term? Thanks.

Lots of mouthful Jim, okay.

Yeah.

It’s alright, that’s okay. I’ll try to take it one at a time. As we’ve said we’re really focused on operating Citicorp towards an efficiency ratio and so we’re committed to operating Citicorp overall in an efficiency ratio in that mid-50% range for the year. And so that’s you know –certainly near term that’s what you should expect us to do. Regarding some of the items that you mentioned, I do think that as we get further into next year, certainly we begin to see some of the regulatory cost growth, those trends begin to abate. So we think that we are towards the end of that growth cycle, but that’s something really for 2016 story, I don’t see that for the second half of this year. As for everything else, we’re focused on being the most efficient that we possible get can, we’ve given you the efficiency targets for those different businesses. And certainly in a different rate environment, we would certainly expect our efficiency performance to be even better.

But ex-rates you would say 55 is sort of your steady state?

You know we said mid-50s for this year, could we do something more sure, but you take a look at the progress that we’ve made already, we’re operating Citicorp at 55%, we’re operating Citigroup overall with an efficiency ratio of 56%. I’d say that to date we are certainly well ahead of what most of our peer institutions have been able to do. So I feel pretty good about the work that we’ve already done and while, we can continue and we always will continue to get better. I don’t know that we want to get much better. We do want to make sure that we’ve got enough power to make important investments in those Citicorp businesses.

Now that’s fair. And then maybe one just accounting question on the DTA you used 1.2 billion last quarter, it seems like that dropped the values using up 300 million this quarter, yet looks like North America net income was pretty similar to last quarter, why the balance, why not using more DTAs this quarter?

Well the answer there is three initials OCI. When you take a look at what happened on the available for sale portfolio which some of their rate rise that we had, OCI ended up impacting us. If you take a look at the contribution from earnings, the contribution from earnings on DTA was roughly similar to the first quarter both Citicorp and Citi Holdings combined to use roughly $800 million of DTA in both the first and the second quarter, but the difference in the way the two quarters pan out really has to do with OCI.

Okay, that’s helpful, thanks.

Not a problem.

Your next question will come from the line of Glenn Schorr with Evercore ISI. Please go ahead.

Hi. Thanks very much. First one is just the timing and the puts and takes you mentioned OneMain be in the late third quarter hopeful. Can the debt repurchase coincide with that, how long of a delay there and then also Costco coming in. I am just more of timing the good guidance you give us on the puts and takes on the NIM in the back half and going as a next year?

Yeah, I mean you know Glenn, what we’re working to would be to do the best job we can of matching up the cost of the debt buybacks with the gain recognition on OneMain, that’s a very much our focus and that’s what we are going to try to do. And then as far as Costco, you know as we’ve said that contract is due to kick in April 1st of next year, so that will be something towards the second quarter.

Great, I’ll look for a simple clarification on the equities and the 170 as I think you said charge on the valuation side, what were you financing, why is get revalue, I am just curious of the mechanics, I understand that it’s not going to repeat I hope?

No, these are just financing transactions that result from the processing and funding of client treating activity primarily on our prime brokerage business. And the charge that I mentioned was related to a very limited number of financing transactions where we just felt that was necessary, they were just the value of collateral to reflect the current estimate of its liquidity characteristics.

Is that - is that means there is some realized losses related to PB balances because it’s a - actually don’t think I am in real …?

No, no, no - no, no, this is not they do is realized losses at all. As matter of fact I would say that given what we know today based upon everything that we’ve got, what we’ve done is we’ve just took an appropriate and a prudent charge to revenues. We continue to work with the parties involved and so this is still very much a work in process. As of today all the promise payments have been made on schedule and we anticipate that these financing transactions will be resolved hopefully over the next several weeks. And to your question is as long as the remaining schedule payments are received, we will not realize a loss and therefore the charge that we’ve actually taken would actually be reversed back driven.

Good, here is a last one. I thought given all the volatility and pick and your EM heavy franchise, the local markets franchise, I thought the performance is good concerning all the disruption late in the quarter. I am just curious, was there disruption late in the quarter and the things that happened late in the quarter, have we seen a reversal of any of that so far in July?

You know I’d say we had a couple of periods of disruption during the quarter that we manage to work our way through. And I think it’s a little bit early right now to make comments on the overall tone what’s rating will be for the balance of the third quarter, but we managed to work our way through a series of events.

Alright, thanks a lot John.

Alright.

Your next question comes from the line of Brennan Hawken with UBS. Please go ahead.

Good morning, John.

Hi.

Just to clarify, you guys sort of adjusted the GCB target for the full year versus last quarter but is there any impact to your target that you are shooting for to exit the year or does that still remain in the previous rate?

No, the - what we would say is we haven’t adjusted the target. The target is remains that we believe that business should be able to operate it in an efficiency ratio of 49% to 52%. However given where we are in this year and given the fact that we do want to begin to put some additional marketing spend against U.S. branded cards in the third and fourth quarter which we think is the right thing to do from a top line - future top line growth point of view. The overall efficiency ratio for the business for this year is likely to be slightly higher than 52% somewhere in that 52% to 53% range. We’ll give you guidance on next year and where we expect that business to be when we are talking about the third and the fourth quarter.

Okay, thanks for that. And I know that sequential quarter doubt is can be somewhat difficult, but is it possible to provide some color on what drove the pickup in Citicorp expenses quarter-over-quarter on a constant dollar basis and maybe the quarter-over-quarter uptick in quarter efficiency for GCB?

Yeah, most of the expense increase that we are seeing really has to do with pressure coming out of regulatory and compliance types of cost. I think that’s something that you are probably here throughout the industry at this point in time.

Okay and those regulatory and compliance costs are captured in the quarter expense as opposed to be considered legal and repositioning right?

Absolutely.

Perfect.

They are in our core operating expense and everything is in our efficiency ratio.

Got it, got it. And so is that way you guys highlighted on the expense front in international GCB that you had the up west from volumes but you didn’t see that translation into revenue, is that because of that regulatory headwind?

Well that’s not the - that’s not an expense headwind but that is a different type of regulatory headwind. As I think I mentioned in the past, what happened in Asia especially last year and it continues somewhat into this year, almost every country has passed some form of what the U.S. did back in 2010 with the Card act and so they put in a series of debt caps and interest rate caps. So those are headwinds that are impacting us on a revenue point - from a revenue point of view and we now believe, we do believe that those spread headwinds are beginning to abate particularly in the second half of the year as we lap the imposition of those new regulation. But that’s what’s impacting us on the revenue line. That’s a little different from the other regulatory and compliance headwinds that we faced on the expense line.

Okay, terrific. Last question from me, thinking about Holdings and the North American mortgage book, as of last quarter, about 24 or so billion of the 54 billion mortgage was second lean which is might saying that it’s basically not market above, so I am just kind of curious of the remaining roughly 50 billion of mortgage that is first lean. How much of that do you carry the core responding second lean on your balance sheet and therefore you probably wouldn’t want to sell those mortgages to put yourself kind of orb yourself negatively in the structure, I just trying to think about sizing what’s left to sell in mortgage?

You know Brennan I don’t have that particular figure either with me or in my head, so I can’t answer that question for you right now. We do have as you can see later in the deck, of the mortgage that remaining 51 of mortgages, about 23 of that is home equity. And as you can see that’s declining at a fairly steady rate of about $1 billion a quarter. Obviously we’re going through the reset period now ‘15, ‘16 and ‘17 are the year where virtually about 13 billion of 12 billion of that portfolio go through rate reset. And the rate resets are performing well now. What we’re hopeful of is that the market begins to get a sense that the rate reset issue is not really a big detuned that perhaps a market for home equity loans will open up if not later this year then perhaps earlier mid next year. And then that might give us the opportunity to work down those balances in home equity loans at an even faster rate.

Thanks a lot for all the color John.

Not a problem.

Your next question will come from the line of Matt O'Connor with Deutsche Bank. Please go ahead. Matt O'Connor: Good morning.

Hi Matt. Matt O'Connor: The color on the NIM - the color on the NIM in terms of OneMain and some of the houses was helpful. Just as I just try and put all together and thing about the earnings impact and the capital impact of those three things, one there in Costco debt restructuring. Any color there you can give us?

No, I really haven’t put the whole capital impact a story of each of those things into my head, so I apologize for that. Obviously we are not doing, OneMain is something that we’ve focused on for some period of time, so that is all part of the holding story and trying to continue to wind down holding, so we would look at that as something is exiting a what is really a good business but if one that just doesn’t fit with our strategy and Costco we continue to believe that that is something that will be accretive to next year. So we feel well about that. But I can’t link the capital story for you of those three separate things, I am sorry Matt. Matt O'Connor: Okay, are the earnings impact, you said past that a way is to have the NIM drag but obviously there is some credit cost and expenses and things like that especially to OneMain as well?

Yeah, OneMain you know again, OneMain is part of Holdings. You know what we are trying to do with Holdings and our target for Holdings is to remain above breakeven. OneMain certainly is a contributing of significant contributor to Holdings profitability but it’s by no means the only profitable business that exists in that portfolio. And so we continue to believe that we can even with the disposition of OneMain, the earnings of the remaining portfolio plus the effect of the ongoing expense reductions as well as the continued retirement of high cost funding and we’ll have other episode of gains and losses. So we think that that will enable us to maintain Holdings into next year at no worse than breakeven on an annual basis. Matt O'Connor: Okay and then just within North America retail banking you mentioned that passes spreads for improving and that was a key driver of the revenue. What’s driving their deposit pressure that just mix of what is that?

Yeah, we’ve been - if you take a look at our overall focus on deposits, deposit quality and cost of something that we’ve been focused on for the better part of two plus years at this point in time. We see a definitive tradeoff as far as what you can do to be able to optimize your deposits. When it comes to optimizing deposits, we look at both making sure that we are improving the liquidity value of the deposits as well as then optimizing the cost, but there is a lot of situations where we’re actually willing to pay more for high quality deposits if it gives us the ability then to shed low quality non-operating deposits. The whole - this whole topic of non-operating deposits is something that again we’ve been focused on now for five, six quarter and we’ve been steadily driving down our non-operating deposits. You know that’s benefited us both from terms of a liquidity point of view and I think from and our ability then to overall fund the franchise. Matt O'Connor: Okay, thank you very much.

You next question will come from the line of Mike Mayo with CLSA. Please go ahead.

Hi. With regard to your efficiency ratio, you are at 55% for Citicorp, you mentioned the growth and some of the regulatory growth should abate next year and you also said it should be better if and when interest rates go up, so and you saw project Rainbow actually if you give an update on that? So where should the long term efficiency ratio go and at what point would you think about being more aggressive with that target and again an update on project Rainbow?

Mike I think a lot of and John touched on it a bit where we go with our efficiency ratio is going to be function of the environment. We would be pushing towards in a rising rate environment. Obviously we’ve talked about our sensitivity the rates and the impact in terms of revenues and our belief that we could get a lot of those revenues to the bottom line as rates begin to come up. And so we’ve tried to be mindful, we said when we set to mid-50s that was predicated on a low to mid-single-digit revenue growth environment which is unfortunately proved to be the case as that revenue environment changes we would adjust our efficiency of that again trying to deliver positive operating leverages a result of that.

And what about your ROA target, I mean you added over 100 basis points low and is 90 basis point. At what point would you consider increasing that target and I am not saying to do away with the concrete targets over a concrete timeframe but for next year or long term normalize so where should the ROA be?

You know Mike, let me just jump in for a second because I think it’s going to be hard for us to give a long term guidance as far as return on assets until we get more clarity around some of the regulatory rules that still need to be set including especially the TLAC. So it’s possible that all financial institutions including us might actually as a result of TLAC, we force to put on levels of debt that would serve no other purpose - no other purpose but is certainly serve the purpose to end up grossing up our balance sheet which could therefore inhibit any bank’s ability to improve ROA. So before we give longer term targets on ROA, we’d like to see the rules under which we’ll need to be operating.

And then just going back to my earlier question, one factor that’s more unique to you guys project Rainbow as you consolidate your systems, you think it had more efficiency gains from that how much you are going to reinvest some of the savings, where do you stand with that?

You know Rainbow continues on its path of implementation, we continue to go live in countries around the world. And as we’ve talked about historically when we launched Rainbow, we launched it with the premise that it would be an expense savor for us and in essence have rationalized the target that. What we’ve seen is a combination of not just expense save but also some revenues gains as we’ve got the system in place. We’ve talked about from timeframe perspective, we continue to roll that out and fund it organically. And so work in progress but the result so far are quite positive.

Alright, thank you.

Thank you, Mike.

Your next question will come from the line of John McDonald with Sanford Bernstein. Please go ahead.

Hi this is [indiscernible] on for John.

Hi.

Just had a quick question on revenues, the revenue in corp other has jumped up a little bit last few quarters and I know you mentioned some gains. So just if you could talk a little bit about what level at you are a little bit more sustainable at?

Yeah, I think that you know longer terms you’d probably expect Corp other revenues to be something in the 100 to maybe 200 range, so somewhere maybe even 150 to 200. So this is at somewhat higher levels right now. And we noted the fact that it included some gains on the sale of real estate and continued debt buybacks. Debt buybacks, the hedging activities that’s all what we consider to be normal type of activity that could go into Corp other. The sale of the real estate gains and that generated about a $140 million of gains this quarter. So that’s what I think you are really seeing is pumping up Corp other.

Alright, that’s helpful, thanks. And then somewhat follow-up, looking at international consumer loan growth, it looks like trends are pretty good, ex-Korean, just wondering sort of what your outlook was there?

For international consumer or for Korea, I just want to make sure.

For international consumer more broadly.

Okay. Well again we think that the drivers that we have in that business continue to reflect pretty well on the strength of the franchise. We would continue to expect to see both growth in deposits and average loans. And hopefully investment sales will continue, obviously investment sales are somewhat depended upon the overall state of the markets. And as I mentioned, we’ve gotten I think reasonable - in the current environment reasonable growth coming out of the retail banking piece of the franchise. We had 3% revenue growth this quarter. We need to get the card’s franchise back contributing and that’s really more matter of just being able to lap those regulatory changes and make sure then that we’ve seen the abatement in the spread pressure that we’ve otherwise been facing, which is why we are more confident on the revenue growth of that franchise going into the second half of the year.

Alright, thank you.

Not a problem.

Your next question comes from the line of Steven Chubak with Nomura. Please go ahead.

Hi, good morning.

Hi Steven.

Hi. John I had a one quick question on capital. I was hoping you could give us some inside or incremental color on what contingency plans you might have in place if the Fed were to incorporate GCB surcharges in CCAR, just given that it could have a pretty meaningful impact on your return profile as well as your payout capacity?

Yeah, if the - let me approach it this way, one, if that would have to happen it would impact the entire industry not just us. So we’d really have to take a look at what the entire industry response is. Secondly, it will depend upon what GCB surcharge they were to add to the CCAR requirements. I don’t know how the GCB surcharge will be calculated, I guess we’ll all find that out Monday and that should be informative. If they give us the opportunity, if they come up with a GCB surcharge that we can actually manage and therefore take effective actions against then certainly part of our action plan would be to really focus on managing down our GCB surcharge. Thirdly, if they were to add the GCB surcharge into CCAR, I don’t know what changes they might also make in the CCAR process itself. Don’t forget some of the things that they build into CCAR such as the market shock actually serve the purpose of putting more stress on the larger institutions already. So you would think that if they were going to put the pressure on the capital then to be fair, they might take some of the pressure of the CCAR calculation themselves. So there is a lot that is unknown about what may happen and so contingency plans at this in time are somewhat dependent upon the scenario in which we’re ultimately dealing.

I understand. I appreciate that color John. And maybe just one more picky question on DTA, I did appreciate the color you had given surrounding the AOCI impacts of weighing on the pace of consumption. But just wanted to get a sense as to what drove the increase in the net operating losses, just given AOCI hedge are typically a timing DTA as you and it did increase by north of 500 million which is not immaterial?

No. No, no, no, you’re absolutely right. What the - that roughly 500 plus million dollar increase that you see in the back of the investor deck during the second quarter was actually cause by a $900 million in state and local net operating losses. That all resulted from audit settlements that we concluded during the quarter. So that influx of the state and local NOLs was partially offset by the utilization of roughly $500 million of FTCs in the quarter and the difference is it has to do with the general business credits. But the NOLs that we added in as a result of the audit settlements have got a 20 year life on them. So we’ve got every confidence in the world that we’re going to be able to generate use of those that $900 million of NOLs. And importantly the FTCs that were utilizing or the FTCs that will actually near term expiration dates in ‘17 and ‘18.

Okay, thanks for clarifying that John and thanks for taking my questions.

Not a problem Steven.

Your next question comes from the line of Betsy Graseck with Morgan Stanley. Please go ahead.

Hi, good morning.

Hi Betsy.

Just a follow-up question on the expense ratio and just a little bit of different angle on asking about the consumer where you’ve indicated that for the near term the expense ratio would rise as you are reinvesting in the business. I know just you didn’t change the overall company expense ratio, so just wanted to see if what you are saying is you’ve got other cost saves even further ahead of plan happening elsewhere in the organization that’s funding, this investments spend in consumer or you are saying we see good payback relatively good timeframe and as a result we’re just going to let this rise up a little bit as reinvesting, we’ll get it back next year?

Yeah, I’d say it’s some combination of all of that Betsy. When we take a look at trying to manage Citi, overall Citi to an efficiency ratio, it’s very much as you say we’ve got several things to look at, the performance of the ICG which from an expense point of view, even at efficiency ratio point of view this year has been quite good. We’ve got consumer which has made great progress on its expenses but with the performance of the ICG and the performance of other things that we see in some of the staff functions, we feel that we’ve got a little room then to let consumer and run this year at slightly higher efficiency rations and still bring the full firm in at our overall target. And we thing that letting consumer go a little bit higher in this year especially because of some higher levels of marketing and investment spend will actually then have much better payoffs in the future exactly as you outlined.

And so when you are thinking about where you putting your incremental dollar to work, as you as considering the best place right now?

We’re very focused on U.S. branded cards. We think that U.S. branded cards is an excellent business. And consumer overall we think gives us excellent returns, we obviously have a lot of things going on with Rainbow and what not, so you don’t want to overload activity into anyone area, but focusing specifically on branded cards, we think that there is good payback to begun from branded cards. As a matter of fact well all the investment that we’ve made in order to I think that Jud and his team have done a great job as far as completely restacking the product offering that we have in U.S. branded cards in order to get the maximum amount of the work that they have done, we need to put a little bit more marketing dollars at work.

And then just lastly on card, you indicated that you are likely to get back some of the NIM compression from some of the - from the exists impart from portfolios like Costco, you know it’s - you know understanding that there is some other portfolios out there that could be of interest to, could you just give us a senses to how you are thinking about, what kind of financial hurdles and goals you have in mind when you are looking at portfolios for purchase?

Well, we look at each portfolio standalone. We understand the targets that we’re working towards. And it’s not just a matter of looking at a portfolio and seeing does it make economic sense, it has to be a portfolio that really fits in with the business, that’s one of the reasons why Costco was so attractive to us just because of the incredible client strength that they bring and it meshes is very well with the client profile that we’re looking at. So for us Costco was a natural fit, other portfolios may not have that same good client mix.

Okay, thanks.

Your next question comes from the line of Erika Najarian with Bank of America. Please go ahead.

Hi good morning.

Good morning.

Good morning.

My question is on how your best in class capital ratios particularly on the leverage is impacting your client conversations in markets. Do you get a sense that some of your competitors that held for example a much lower SLR and therefore have a less balance sheet to give are being less aggressive with in terms of competing in market or not really as competition really as curious as ever and the leverage ratio differences aren’t really making an impact?

Erika, it is Mike. I would say that competition is fear so I am not going to dismiss that. But we don’t have some of those same constraints and I would say we probably see it more pronounced in Europe where the European banks by enlarge our constrained by their leverage ratios. And I think we’ve been able to consistently be in front of our clients and smartly trying to use our balance sheet with them which obviously drives the ancillary revenue. So we have seen that and have tried to take advantage of that as an opportunity.

Got it and just a follow-up question. John, the way you sort of answered Steven’s GCB question on the CCAR, I am assuming also that until we get final rules in TLAC, we won’t see you guys lagging in any potential issuance ahead of having the rules finalize in the U.S.?

You know we’re continuing to do debt issuance if that’s request and obviously we’ve matter of fact when we take a look at the amount of preferred and the amount of debt that we issued last question, I’d say was quite substantial. We issued roughly - roughly we issued $2 billion of preferred, we did $3 billion of sub-debt and we did $5.5 billion worth of senior debt. So we did $10.5 billion worth of issuance last quarter and of course we also bought some debt back but overall we were in net issuer of 8 plus billion dollar worth of offerings.

And based on how you are understating the proposals, could you give us a range on what your TLAC is at the end of the quarter, the TLAC ratio?

We’ll give you more guidance on that next week when we do fixed income call, but the numbers that I’ve seen would suggest that our TLAC ratio now is a - instep a little bit over where it was last quarter, I think we’re at 21.3% as of the end of June, but we’ll form up all the numbers for you when we do the fixed income call next week.

Got it, thanks so much.

Not a problem.

Your next question comes from the line of Matt Burnell with Wells Fargo Securities. Please go ahead.

Good afternoon, gentlemen, thanks for taking my calls - my questions. John, just a question on the U.S. branch system, that’s down about 15% year-over-year, however you’ve got sort of expense reductions at least for part of this expense reduction is down about 3% year-over-year, is there more to go in terms of the U.S. branch count or are you pretty much done with that?

I’d say we’re pretty much done. There is still probably some slimming that we could do as far as completing the focus of the branches on the seven focus cities. I think we’re a little over a 90% now of branches that are in our seven focus cities. So there could be some additional but I think also importantly there is probably some case to made for opening up some additional outlets in some of those cities as well just to make sure that we’ve actually got the proper coverage. I used the term outlet as opposed the branch because I am not sure that in the future every outlet that we open will look like one of the branches that are out there today. It’s much more likely that the branches of the future will be somewhat smaller in line with the fact that many more of our customers who are transacting with us by alternate mean is using mobile banking and the Internet.

And then from my follow-up, just a question on your comment in terms of investment banking taking market share, it sounded like you were taking more market share in North America perhaps then at least in this quarter than you did in outside the U.S., is that also true in the markets business because a number of other banks this quarter have implied that they continue to get market share at least on the market side of the equation outside the U.S. to a greater degree than they are getting it in the - within the U.S.?

You know you take a look at market in wallet share on any individual quarter. We try to look more at market share in longer term trends. We are continuing to add market in wallet share especially against our focus clients in both investment banking as well as with our markets business. And we see that as a strength of our franchise but I can’t tell you whether we actually took market share in a particular business during the quarter. I don’t track it quarter-to-quarter, I tend to look at more trends on a trailing 12 months basis.

Okay. And then just finally, you did 26% increase in equity markets if we exclude the valuation adjustment. How much of that was the result of improved activity in Asia?

A very piece of it that stem from Asia, Asia was one of our primary engine for growth. I don’t have the percentage in my head but it was - it was the primary driver.

Great, thanks very much John.

Not a problem.

Your next question comes from the line of Eric Wasserstrom with Guggenheim Securities. Please go ahead.

Thanks very much. John, just a couple of clarification questions please. One, I just want to make sure on the efficiency guidance for GCB, was that new guidance than what you had previously stated?

I believe it was.

Okay. And so can you just repeat that?

Previously, just to be clear, I believe that the when I spoke last quarter we would have said that we thought that GCB would be end the year with have an efficiency ratio for the full year near the top end of the range that we had set out the 49% to 52%. But with the some of the incremental spend what we are looking to do particularly in U.S. branded card that’s going to knock that just slightly above. So that’s why I wanted to make sure you were aware of the fact that it’s likely to end they have for the full year an efficiency ratio slightly above where I would have said at the last time.

Got it. Great, thanks for clarifying that. And just on the debt repurchases and the debt issuance that you went through with Erika a moment ago, where those consistent with the plan for this year or they - is the plan different than the one that that we talked about last quarter?

No, it’s consistent with the plan. I mean we may have pulled forward some of the issuance into the second quarter that we otherwise would have planned to do in the third quarter, but we’re still on our plan and we’ll have more to say about debt issuances on Tuesday.

Sure. And the pull forward presumably was because of rate and market opportunity?

Yeah, we have the opportunity to do some larger amounts than we otherwise would have given on the heels of certainly the first quarter results that we had and I think you’ve seen kind of continues with the second quarter results, we found a favorable market for debt and we didn’t want to disappoint any investors.

Great, thanks very much.

No problem.

Your next question will come from the line of Gerard Cassidy with RBC. Please go ahead.

Thank you. Hi John.

Hi.

John, can you remind us putting off to the side for a moment the possibility of GCB being included in CCAR, can you remind us what the binding constrain on the capital ratio, which ratio were you guys looking at as that binding constrain?

Yeah, right now, if the GCB surcharge comes in at the 400 basis points that we would currently estimated to be, it’s sort of running neck and neck between the CET 1 ratio including the GCB surcharge. And what we would look at as far as the CCAR requirements. And that is somewhat dependent upon the scenario that you might get out of CCAR et cetera but it’s pretty much neck and neck CET 1 with GCB and CCAR.

Okay, thank you. You’ve talked about growing the card business and you’ve had success with acquisitions, now you are putting more muscle into growing that business organically. If you - as you go on the offence from the defensive position you’ve been in the past, are there other areas you guys are looking to grow possibly through acquisitions separate from cards?

I would say that when we think of acquisitions as John spoke earlier would need to be very much in strategy and it would be probably much more bias towards portfolios rather than business acquisitions. So again around our framework fitting in business and having the right accretive attributes where worldwide open to portfolio purchases.

And then my final question, overall credit continues to improve for you folks and the industry but I did notice that nonaccrual area incorporate North America sequentially had a jump in your nonaccruals whereas Latin America had a significant improvement. Could you give us some color on both of those line items?

Yeah, the - let’s start with the Latin America line item, that really refluxed an asset sale that we had done, so we actually exited a nonaccrual loan during the quarter so that - you see that reflected in bringing down the nonaccrual loans in Latin America. And then as far as the increase in nonaccrual loans in North America that’s largely driven by some additional classifications of nonaccrual loans coming out of our energy portfolio.

And was that as a result of the Shared National Credit Exam, I assume or nowhere something separate?

Well, it’s in connection with the Shared National Credit, we had decided to classify good portion of those loans is nonaccrual. And then what happens, so that let’s leave it like that. But again so from an overall energy exposure point of view, our energy exposure actually declined during the quarter, as far as the exposure that we have to the producer type of client other than that we added to the energy exposure in what we consider to be more the high grade energy processors as far as our multinational clients. So we saw an overall increase in the energy exposure but a decrease in the exposure that we have to the exploration type of clients.

Great, thank you.

Not a problem.

Your next question comes from the line of Brian Kleinhanzl with KBW. Please go ahead.

Great, thank you. Yeah, most of my questions have been answered, so I have one follow-up questions related to the North America cards and the additional investment spend. I mean we think about it from a receivables point of view I mean where you have additional investment spend, I mean what are the expectations around receivable growth? I guess so differently, is that investment spend needed just to stabilize receivables or you expecting growth above from the arm what you have already because from 1Q to 2Q you saw 8% growth annualize, so you looking to get even further beyond that with those additional investment spend?

I am not quite sure but that 8% number that you referenced that doesn’t quite ring with me, but we would expect then that the incremental market. When you are thinking about cards, it is somewhat of a time sensitive process and so when you spend marketing dollars, the first thing you are doing is you are acquiring accounts then you make those accounts active then those accounts get into spending and then from that spending you end up growing receivables. So marketing dollars spend today are likely to be growing receivables more in the 2017 range than early on in 2016. So it’s not a case of you just add marketing dollars and you certainly sprout receivables.

Okay, great, thank you.

Not a problem.

Your next question comes from the line of David Hilder with Drexel Hamilton. Please go ahead.

Thank very much. Just a quick question on the Citi Holdings assets, I think you said that Citi Holdings is at 6% of total assets and it looks like from the footnote, it’s more like 13% of your risk weighted assets, so it looks like the risk weighted assets in Citi Holdings are not coming down as fast as total assets, do you think that kind of relationship will continue and is it related to any particular type of asset to the Holdings?

Well when you take a look at Citi Holdings in particularly, as we got out of the risky assets in Citi Holdings early on we were very focused on making sure that we got out of the most risky assets in Citi Holdings. That relationship between risk weighted assets and GAAP assets in Citi Holdings has been steadily declining. So we’ve got now a $116 billion worth of GAAP assets sitting there in Citi Holdings. The RAP assets, the risk weighted assets associated with Citi Holdings earnings $169 billion. So you know David, we’ve been de-risking the Holdings portfolio all along and so there isn’t a big multiplier effect anymore associated with that holdings asset. Within that 169 billion, $49 billion of the risk weighted assets are there for operating risk. So it’s really a $120 billion worth of credit and market risk RWA associated with $116 worth of GAAP asset, so it’s virtually a one to one relationship at this point in time between credit and risk - market risk, risk weighted assets and GAAP assets.

Great. Actually the reference or explanation on operating risk is actually quite helpful. Thanks very much.

Very, very happy to help you.

Your next question comes from the line of Marty Mosby with Vining Sparks. Please go ahead.

John, I was very curious in your comment, most of the banks are getting ask about G-SIB in the inclusion in the CCAR, but now so we had done, there was some talk about counter cyclical buffer side the very beginning of this going into G-SIB. If you look at the counter cyclical buffer average for the money some of banks have 2.5%, the credit loss is in CCAR averaged 2.7%, you look at the G-SIB buffer average for the money center banks kind of looks like now it’s around 3% and if you look at operational loses, it’s actually 3.1%. So your concept of well what through the overall G-SIB buffer in the CCAR then they had have to make some adjustment to operational losses. I think I just was going to ask you to kind of think about that and expand on that concept?

Yeah, I wasn’t focused so much Marty on operational loses but there are other aspects of CCAR such as the market risk shock that we all go along with. That market risk shock is really targeted against the major banks. And because the way that market risk shock actually impacts the banks there is a doubling up effect on PPNR reduction and market risk shock. It’s something that it’s known by I guess CCAR [ph] autos and I mean - and again if there was going to be some add on the I can call it the denominator the capital, the I am going to say hope or my thought process would be that we could explore some reduction then in some of the add-ons that go into generating the losses. But I agree with you, it wouldn’t be operational risk, it’s really just in the way that the CCAR calculations are done and the scenarios are constructed.

Just on saying that that would be coincide then all that these buffers are almost equaling the losses in CCAR and then when you look at the non-money center banks, they have very little operational loss at all and then have any G-SIB buffer. So it’s just the parallel calculation seem to be more than just reveal?

Yeah, maybe, I don’t have any inside into how the Fed has come up with some of their models, but I am sure they are quite good at it.

Last thing I am going to ask is, and I appreciate the time. As you look at your tangible book value, you’ve without these extra charges because you’ve tied a lot of thing reserved and those what’s are ahead but just assume that less of the head versus what we’ve seen in the past, are your ability to repurchase add or below tangible book value when the returns improving, growth this quarter annualize the tangible book values about 8%, it just seems like that acceleration could continue into the future and just want to see your thoughts on that? Thanks.

Well, agree with you that we do think that overtime we have the ability to grow tangible book, obviously as I mentioned before one of the items that you are always focused on with tangible book is the impact of rates on your AFS portfolio and you’ve seen that there were times when that can have a - that can play a heavy hand in dampening down the growth, but we do believe that if we can continue to perform we should the way we have been, we have the opportunity to continue to grow tangible book. It’s one of the reasons why we think that continuing with stock repurchases is the right thing to do from a capital return point of view.

Thanks again.

Not a problem.

Your next question will come from the line of Christopher Wheeler with Atlantic Equities. Please go ahead.

Yes, good morning, gentlemen. David Hilder set my question out really well, he is colleague of mine. I actually do with the rundown of Citi Holdings that how that impacts this weighted assets because you mentioned the 34 billion which you basically got baked in and you just touched on the relationship between the GAAP assets and the RWA. So if we were to be looking at what is going to happen to the 12.79 billion of RWA you had fully faced at the end of the second quarter, I mean obviously I would imagine that a minimum would be 34 billion coming of that pro forma. And I supposed to question I am asking is how much more might come off in respect of the uplift between the GAAP assets and RWA? And also perhaps how much you think you might use in actually growing the business during that period? Thank you.

Thank you, Christopher. Let me pass through some of those questions. First, just to be clear the assets that we’ve got under contract is 32 billion, I think I heard you say 34.

I must - I think that’s just me, I went too many bank results obviously in few days.

Sorry, I don’t mean to add to your numbers, but I just wanted to make sure that you’ve focused on the 32. As much as I said that overall there is a virtually a one to one relationship between credit and market risk RWA and GAAP RWA that obviously is not the same with each asset that we have and included in that $32 billion worth of assets that I mentioned of course is the sale of our Japan retail bank. On our Japan retail bank would be one of those situations where the RWA associated where actually be much less than the GAAP assets. So I can’t guide you to how much RWA is associated with the overall 32 but I wouldn’t immediately jump to the conclusion that the 32 is one for one reduction in RWA.

And John the piece I would add to that is from an expectation perspective, John mentioned the $49 billion of assets associated with operations, as assets come down you can’t simply release the ops RWA, it’s going to take time to work through that, so you should expect to see as a percentage of Holdings RWA as we reduce assets that ops piece continuing to growth both as a percentage. Yeah.

Both as a percentage. Okay, thank you very much, that’s very helpful, thank you.

Not a problem.

And at this time, there are no further questions.

Great, thank you all for joining us. If you have any follow-up questions please feel free to follow-up with Investor Relations. Thank you.

Ladies and gentlemen, that concludes your conference for today. Thank you all for joining. You may now disconnect.