Good day, and welcome to the Northern Trust Corporation Fourth Quarter 2024 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Jennifer Childe, Director of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Welcome to Northern Trust Corporation's fourth quarter 2024 earnings conference call. Joining me on our call this morning is Michael O’Grady, our Chairman and CEO; Dave Fox, our Chief Financial Officer; John Landers, our Controller and Trace Stegeman from our Investor Relations team. Our fourth quarter earnings press release and financial trends report are both available on our website at northerntrust.com. Also on our website, you will find our quarterly earnings review presentation, which we will use to guide today's conference call. This January 23rd call is being webcast live on northerntrust.com. The only authorized rebroadcast of this call is the replay that will be made available on our website through February 23rd. Northern Trust disclaims any continuing accuracy of the information provided in this call after today. Please refer to our safe harbor statement regarding forward-looking statements in the back of the accompanying presentation, which will apply to our commentary on this call. During today's question-and-answer session, please limit your initial query to one question and one related follow-up. This will allow us to move through the queue and enable as many people as possible the opportunity to ask questions as time permits. Thank you again for joining us. Let me turn the call over to Mike O'Grady. Michael O’Grady: Thank you, Jennifer. Let me join in welcoming you to our fourth quarter 2024 earnings call. Our fourth quarter results kept off a solid year of progress executing against our strategic priorities. Relative to the prior year, fourth quarter trust fees were up 12% and net interest income grew 15%. Excluding notables in the prior year, revenue was up 13% and earnings per share grew by more than 50%. Importantly, we generated positive trust fee and total operating leverage for the second…

Thanks, Mike. Let me join Jennifer and Mike in welcoming you to our fourth quarter 2024 earnings call. Let's discuss the financial results of the quarter starting on Page 11. This morning, we reported fourth quarter net income of $455 million, earnings per share of $2.26 and our return on average common equity was 15.3%. Excluding notables relative to the prior year, the stronger US dollar was immaterial to revenue growth, but favorably impacted our expense growth by approximately 50 basis-points. Excluding notables, relative to the prior quarter, currency impacts unfavorably impacted our fourth quarter revenue growth by approximately 50 basis-points, largely within our Asset servicing, custody and fund administration segment and favorably impacted our expense growth also by an approximately 50 basis-points. Trust, investment and other servicing fees totaled $1.2 billion, a 2% sequential increase and a 12% increase compared to last year. Net interest income on an FTE basis was $574 million, a new record, up 1% sequentially and up 15% from a year-ago. Our assets under custody and administration were down 4% sequentially, but up 9% as compared to the prior year. Our assets under management were down 1% sequentially, but up 12% year-over-year. And overall, our credit quality remains very strong. Excluding notable items in all periods, other non-interest income was up 13% sequentially and up 17% over the prior year. Revenue was up 3% sequentially and up 13% on a year-over-year basis. Expenses were up 1.2% sequentially and up 5.5% over the prior year, and earnings per share increased by more than 50% as compared to the prior year. Turning to our asset servicing results on Page 12. Our asset servicing business performed well in the quarter. Transaction volumes were healthy, capital markets activities were up 20% and new business growth continues to be booked…

Thank you. [Operator Instruction] And our first question today comes from Glenn Schorr with Evercore.

Hi, thanks very much. A quick follow-up on -- and thank you for the NII guide. I'm just curious on the durability of some of the underlying trends, meaning, the 7% growth in non-interest-bearing deposits in the quarter. Like, was there some parking of cash by clients that naturally flows out? And then, if you could just clarify, when you talked about made pricing decisions in-line with market conditions, is that just rates came down and you lowered some deposit pricing on clients? Thanks.

Yes, thanks for that question. I think non-interest-bearing deposits were up over $1 billion. I think that's probably higher than other quarters and my guess would be that there's some seasonality to that number. And certainly, we welcome it, but ultimately, it's not out of step with what we've seen in the past. In terms of the pricing adjustments and we've talked about this before, we really have put a lot of effort behind our overall liquidity management and balance sheet management as it relates to deposits. And so, when we think about our pricing adjustments, it's more than just a normal-course of business type of pricing adjustment. It's really taking a look at all the multiple currencies that we do manage on our deposit base and having a much more fulsome review of everything we're doing and making sure those betas are consistent with what we think they should be.

Okay. I appreciate it. The other one I want to talk on is, alternatives were a big part of your objectives across each of the wealth asset management and asset servicing objectives. So my question is, A, are things accelerating? And then maybe you could talk about what is already built, what needs to-be-built? And then I think we're all curious on some specifics, like what product, what asset classes are seeing the most demand in? Thanks very much. Michael O’Grady: So, Glenn, I'll take that. And you're right that alternative investment solutions is something that cuts across each of the three businesses. And I think the way to think about it is instead of necessarily the businesses, but think about the solutions that we're providing. So from an investor perspective, whether that's our wealth clients and the segments within that or institutional clients, can we bring a broader set of solutions to them on this front for private market solutions? And so right now, we offer that through 50 South Capital, which is a part of our asset management business and that's in a largely a fund-to-fund structure. We've seen great success with that. We raised over $1 billion that we closed on this year for that. So that's one of the solutions for a subset of the investors. But in addition to that, we also have a platform that has another -- other private capital managers on it. So different funds. And at this point, to your point, it's built-out, if you will, but we think that we can offer more options on that platform. So that's another way to build it out. And also when you talk about what needs to be done. We want to make sure that all of our portfolio managers are fully versed…

I appreciate all that. Thank you.

And the next question will come from Brennan Hawken with UBS.

Good morning. Thanks for taking my question. I'd love to start out maybe a bit granular. In the past, you guys have spoken to targeting keeping the expense growth in 2025 at 5% or better. Dave, you had some comments that you made in a December industry conference where it seemed as though there was a little bit of uncertainty around that. Could you maybe clarify, is that a reasonable level to expect for 2025? And if not, what are the variables that we should watch?

Yes. Thanks for that question. I was in the chair maybe a month and a half or two months when I was asked that question. And now that I've been in the chair for four months and have gone through our planning period for 2025. I have very strong conviction around a 5% or below number. So, we can take that issue off the table, if you will. And obviously, what we try to do is in putting that number out, we don't put it out in isolation. So, our North Star is, obviously, what Mike talked about earlier, which is positive operating leverage. But at the end-of-the day, we know that we -- the markets were pretty buoyant in 2024 and we want to prepare ourselves to have a resilient business model. And the only way to do that is to keep driving expense curve down.

Got it. That's very clear. Thanks, Dave. And then just taking a step-back, you guys provided some good details here in your strategic update laying out the progress. But I'd like to lay out a question that I get from investors a lot, which is the ROE targets. Do you think that the ROE targets are ambitious enough? The lower-end of the range doesn't really suggest a ton of improvement from recent levels. And why is it that we haven't seen those ROE targets move higher, particularly as we've seen maybe some of the growth rates begin to slow. Michael O’Grady: So we've had, to your point, the 10% to 15% range for some time and that does cover different market environments and also different capital requirements as those regulations have changed overtime. And we've seen even in the, I'll call it, past couple of years here where there was the expectation there was going to be more capital. Now we may be in a different environment where those requirements are not going to be as high. So that's what it would take into account. To your question of, why not higher per se, certainly, we're driving to higher returns on capital, but we're also trying to drive to growth. And so if you just said, could you hit a ROE, you could, but you might be detracting from your ability to grow the business, which we think it's the combination that you want overtime. And as I mentioned in my comments earlier, Brennan, we're certainly shooting for the top half of that range. And in fact, in this quarter, as you saw, we were over the top end of the range. So it's not to say we're trying to constrict the other returns. It's just saying we want the optimal combination between growth and returns.

Okay. Thanks for that color.

And moving on to Betsy Graseck with Morgan Stanley.

Hi, good morning. Michael O’Grady: Good morning.

During the prepared remarks, you were talking about how you've been able to get some of the expense improvements from asset servicing business line in addition to others, obviously, but in the asset servicing piece, with some headcount reduction, if I heard you correctly. And the reason I'm asking the question is, Northern Trust has a long history of excellent quality service, right? Service quality is the other north star that you've got for yourself. If I could borrow that phrase. And I'm wondering, how have you been able to reduce headcount and keep that service quality high? In the past, it's been this friction point that's kept I think the organization from executing the kind of efficiencies that you're seeing now? And could you help us understand what is it that you're doing differently that's enabling this headcount reduction while maintaining the service quality? Is it something to do with where technology is today? Is it the AI? Is it something totally different, how you're organized? Thank you. Michael O’Grady: Let me start and then Dave may want to add. But Betsy, you're right and you can say that service quality is another north star, if you will for us, because it is something that we look to differentiate ourselves. And to your point, what we're trying to do is maintain that, but also gain much greater efficiency in how we provide those services. And so, just one thing I would say that we've done that's fundamentally different here is how we've organized our activities, how we've organized the company. And going back to kind of little past midway in 2024, where we created the Chief Operating Officer role with Pete Cherwich and move the operations into that group. That's so that we can gain much greater efficiency out-of-the operational aspect of that business. So we can get greater centralization, standardization, automation. And when we do that, our view is that will make those services better that we'll get greater resiliency from doing that, but also just ease-of-use. And a lot of that it does come with investments in technology to be able to do that, but we believe that it makes the business more scalable as well. So that's the way we can, I believe, maintain both.

Okay. And how do you see the forward-look here? How many more years of this do you feel that you have to be able to leverage this new structure? Michael O’Grady: Yes. I would say that I -- it does take some time to gain the full benefits of what we're talking about here. So the way we've looked at some of the things we're doing here is, these are, we say, multi-year, but that means kind of two to three years where you're really getting, I'll say, the greatest benefit. But then importantly, we're trying to set it up in such a way that it's sustainable as well. And so you continue to get additional benefits overtime. But you're right, you're going to capture more in the first kind of two to three years of it before it reaches that level.

Thanks so much.

And the next question will come from Ebrahim Poonawalla with Bank of America.

Good morning. Michael O’Grady: Good morning.

I just wanted to follow-up on the global family office piece. Looking at the Slide 13, just talk to us, it was a priority in 2024, I'm assuming remains a big area of focus. When we think about the revenue growth, whether or not that should be sort of leading the way going-forward. On a year-over-year basis, pretty strong growth in revenues within the GFO segment. It sort of plateaued out over the last few quarters. If you can talk to how we should think about revenue growth within GFO, given the investments you've made, given just the secular growth in that segment would be helpful.

Sure. I'm happy to do that. What I would say is GFO probably had its strongest year than it's ever had in terms of organic growth. It was exceptional, very high single digit organic growth. And we've also been reaching out more to international markets as well. And so, from that perspective, it was a great year. Also keep in mind that our assets under management in the fourth quarter were up 5%. And I think there is a lag effect there, right? So depending on when you bring that business in, you'll see it in your numbers. And so there's that issue as well. So I wouldn't say that it actually has plateaued. What I would tell you is the pipeline looks -- the GFO pipeline actually looks more robust going into 2025 than it did in 2024.

Understood. And maybe just a separate question. So heard you on the NII guide. How should we think about the gearing of the balance sheet? One, do you think that we are at a point where if the Fed were not to do anything, rates stay more or less the same, NII and deposit balances should grow from here, all else equal?

Yes. I mean, we're still anticipating a certain number of rate cuts at least a couple this year in the US. And then globally, there's a lot of other potential rate cuts that are in our numbers as well. Keep in mind, our deposits aren't all-in dollars. So, we obviously did some pricing adjustments, which help on the NII front as well. We also have a pickup in loan activity, which we think could continue into next year. So there's a lot of different puts and takes when you get into the NII number apart from just the various cuts in interest-rate cycles.

Yes. But rate cuts alone, would that be incrementally positive or negative given the balance sheet mix.

No, we think obviously, if there are less rate cuts, that's better.

Okay. Got it. Thank you.

And moving on to Alex Blostein with Goldman Sachs.

Hey, Mike. Good morning, everybody. I wanted to ask you guys a question around expenses again. So I heard you loud and clear on the at or below the 5% number. I guess in the past, the revenue base or rather the expense base, sorry, used to flex a little bit more up and down with revenues. So I just want to understand a little better, has that changed at all, meaning that if you are in a sort of better fee environment in 2025 versus what you're contemplating, are you still kind of committing to the 5% as the upper-end of that? And maybe a better way to ultimately calibrate this is to talk about the expense to fee ratio that you expect for the full-year 2025. Michael O’Grady: So I'll start on that, Alex. And to your point, there's always going to be a relationship between the expenses and the revenues, even with the market impact or rate impact, I'll call it, on NII and even the capital markets activities. So just take capital markets as an example, because we don't talk about that as much. And we had a lot of success with capital markets this year and saw double-digit growth on the revenue side. There are certain expenses that come with that. If you think about just clearing expenses and things like that. The same thing with asset management, where depending on how the asset management products are distributed, there are some costs that go with that as well. And so, we had, again, successful year with asset management, capital markets, both of those very scalable products for us, which is good, but there is going to be some expense that comes with the additional growth. So that's just then, I'll call it, the relationships that there. That said, we believe that we're trying to get less of that flex, if you will. And so if you look at the fourth quarter here, obviously, strong revenues and expenses still at a level that's higher than we think it should be and that what we're aiming for, but it created a significant amount of operating leverage on that front. Now as the revenue growth goes down, that's where we have to push that down faster and harder. So we're trying to hold it down even when revenues are more robust. And then when it's much tighter, ensuring that we keep them much more under control.

Got you. Yes, I know that all makes sense. Like obviously, ultimately higher revenue comes with higher expenses and that's a high-cost problem. But I guess as you think about the expense to fee ratio, which would kind of normalize for that flex, so to speak, what do you guys are aiming for 2025? Michael O’Grady: Okay. Yes. So without putting a pin in on a number for 2025, definitely looking for positive fee operating leverage, which would drive that down. We're at 115 for the year. We're at 113 for the quarter. So you can see the trajectory. And the reason why we use that ratio, as you know, Alex, is because that essentially is trying to say how do we take some of that flex out of the financial model, if you will. And so we've identified the 105 to 110 as a level that says -- that's the right level of efficiency that we're able to maintain in providing those services and having them at the right level of service, but also to the extent that you do see revenues come down, your expenses are not too high, if you will, and therefore, you've essentially taken some of that, again, flex out of it on the downside. So no specific target for this year other than continued progress into that range.

Got it. Okay. That's perfect. Thanks you guys.

And our next question comes from David Smith with Truist Securities. Please go ahead.

Good morning. Your capital levels are still pretty elevated versus your closest peers at 12.4% CET1. Can you talk about how you expect to use your capital in the near-term and where you might want to bring your capital levels to over the next year or so? Michael O’Grady: Sure. So I would agree. We have very strong capital levels right now and that's a result of both the strong income generation, but also the benefit of the Visa gain that we had earlier this year. That's enabled us to repurchase stock at a higher level and that's how we think about that lever is the share repurchases can flex up and down depending on our capital levels. So we would expect as we go into 2025 to continue at this pace. We're, as I mentioned, very comfortable at the current capital levels, but also would be comfortable moving them down somewhat. We have a target range to be above some of our closest peers when it comes to capital, but the level that we're at right now is very comfortable and gives us the room to be able to do more. Dave mentioned for this year, if you exclude the notables, our total payout ratio is in the area of about 78%. We would expect to be at that level or higher as we go into 2025.

Thank you. And then separately on NII, if I just take the midpoints of your 1Q and full-year NII guides, it would suggest NII staying pretty consistent throughout the year, at least on average. Is there anything that we should be considering in terms of the cadence there across the cuts in the forward curve as well as your expectations for loan growth or balance sheet shifts.

Yes. I mean, one thing to keep in mind with us as it relates to NII is that, we are a very liability driven institution. And so -- and that's why to Mike's points about capital, that's why we keep this excess capital. And so, for example, we saw a very large pickup in our loan activity over the last quarter. And so, we want to make sure our balance sheet is there for our clients. We can't always predict when that's going to be, when they're going to want to put deposits on or take loans out or things of that nature. So we've guided still for deposit -- for the NII to be up over the course of the entire year by low-single digits. But at the end of the day, trying to land on the head of a pin as to exactly when that's going to happen quarter-by-quarter is going to be difficult to do for the entire year.

Understood. Thanks.

And we'll take a question from Brian Bedell with Deutsche Bank.

Hi, good morning, folks. Thanks for taking my question. Maybe just to stick along the NII line and then correlate that with expenses, because clearly what you can manage more -- with more certainty is the expense to trust fee ratio. I guess the question is to the extent NII oscillates around that target range, let's say, if it's lower, are you still keeping a target of generating total operating total operating leverage on total revenue, not just fees, but combined with NII or would you just really just focus on the fee side? Michael O’Grady: Yes. So here's what I would say. So we're trying to build a sustainable financial model that can last through all cycles. So at the end of the day the cost curve has to go down regardless of markets, right? We can't rely on things we don't control. And so, when you look at what we're trying to do overtime is really get that expense line to stand-up and not be dependent on a particular market dynamic. And so, as to the earlier comments that we made around the growth in expenses. That's market driven. That doesn't mean that all the other expenses, if we have a great year in NII are going to go up sequentially, right? We've got to keep a lid on all the other stuff that's not market driven. And that's a -- that's going to remain a goal regardless of the NII number.

Yes, that's good color. And then maybe just shifting over to the wealth management business and the sort of the mission of improving the penetration within that channel for Northern Trust managed products and good success last couple of quarters with the cash product that you mentioned, Mike, which we can see in the results. How are you envisioning that over the next year, one to two years in longer-term product back several years ago, you -- I think the mix of NTAM product within the channel was in the north of 40%. It's in the high-30s now. Do you see that getting back to the mid, say low to mid mid-40s over-time? And then how do you think about the incremental revenue pickup from doing that or is that kind of neutral? Michael O’Grady: No, we see it as a positive. And we say that in the sense that we really have the asset management business and wealth management business working closely together. We made some fundamental organizational changes going back over a year-ago to better align that, I'll call it, the coverage of wealth management by asset management, the wealth client group. And in the past year, we've seen the benefits. It's still, I would say, in the early days as to how that will flow through. But the idea is by better covering them, if you will, understanding what the needs are of wealth management, we can provide a broader set of alternatives that are aligned with what the needs are of our wealth management clients. So that's been a real positive. In addition, I would say what we've seen is the opportunity to further segment the solutions that we're providing on behalf of NTAM to the wealth management business. So my point being the needs of our GFO clients from an asset management perspective are different than those for, let's say, our core wealth group. And so how do we differentiate that offering? And then importantly, when we talk about the ultra-high net-worth segment, so think about $100 million-plus, but not full family office, that's where we see further opportunity to tailor what we're providing to them. Some of that will be through alternatives, which I talked about earlier, but it's a broader set of capabilities as well. You heard about ETFs, for example, we're going to look to provide more ETFs that fit with the core needs of the wealth client base. So we see opportunity with the businesses working closely together going forward.

Great. Thank you.

And moving on to Jim Mitchell with Seaport Global Securities.

Hey, good morning. Maybe just on asset servicing. I see you guys obviously have narrowed your focus to more back office custody. So it seems like the pipeline is still pretty solid. But how do you think about the organic growth from here, the trade-off between that and the improving incremental margins? And then secondly, how do you think of -- it sounds like a lot of your larger peers are attempting the same strategy. So have you seen pricing pressure or competition increase for pure custody deals. Thanks. Michael O’Grady: Sure. So our balance -- our business at this point is relatively balanced in -- between what we do for asset owners globally and what we do for asset managers. So we feel-good about that mix. And so going forward, we would look for the growth rates to be similar, the organic growth rates. That has not necessarily been the case over the last five, 10 plus years where we were growing out the asset manager side of the business. And by its nature and what we do on that front, the asset-owner side is a more scalable business for us. So by having that balance, that's why when we talk about optimized growth and scalable growth in this business, it aligns with bringing on new business that is less, I'll say, resource intensive, but not to say that in any way we're carving back or pulling back from a particular market or service that we're providing. And to your point, as we go-forward here, we see strong business on both fronts. And frankly, improvements in, I'll say the pricing conditions in the market is very favorable and whether it's favorable for ourselves and our competitors, that's fine as well. In 2024, there are a number of situations where we declined to participate in providing a bid or participating in the RFPs because we didn't see pricing that reflected what we're trying to do for the business overall. We'll see how that plays out this year. But I think to the extent that it's favorable conditions, it certainly benefits us.

Okay. Just to clarify, so pricing, you feel has been better as companies just focus more on margins. Is that the takeaway? Michael O’Grady: Yes. I think I can only speak specifically for us, but I would say absolutely. We've already seen that in the, I'll call it, the portfolio of new business for 2024, which again transitions over essentially the next kind of 12 to 18 months, but it is higher-margin business for us because we are very intentional about that.

Right. Great. Thanks for that.

And our next question will come from Steven with Wolfe Research.

Hi, good morning. So I wanted to start-off with a question of just given the strong performance and better organic growth that was cited for wealth and asset servicing, looking -- given the favorable trends that were cited, I was hoping you could just speak to what drove the more subdued AUM and AUC growth relative to peers in 4Q? And are there any future plans to maybe include organic fee or asset growth targets in addition to the medium term targets that you just unveiled? Michael O’Grady: Yes. Thanks for that question. Looking at asset servicing, in particular, just take one issue off the table, it was not a result of any client losses. Our client activity was very good in the quarter. Yes, it's important to note that currency movements were about 80% of the sequential decline. We also have a pretty high exposure to certain markets like fixed-income that were lower. And then the broader international markets also had some issues as well. So it was really more that than anything else.

And regarding any potential plans to include future organic fee or asset growth targets as part of like the range of targets that you guys just revealed? Michael O’Grady: Not at this point. And part of it is just the, I'll call it, the calculation and determination of organic growth does involve an estimate for the impacts of markets and currencies and things like that. So it's a great metric and KPI for us to drive the business at a granular level for us, but it's not, if you will, kind of a reportable number. And therefore, that's why we talk about it in the terms that we do.

Understood. And if I could just squeeze one more, similar line of questioning to what Brennan asked on the medium term targets, but I actually want to drill down into pre-tax margin target. Given you already achieved a 30% profitability level in the back-half of this year, heard a lot on this call about the commitment to drive better efficiency from here. I was hoping to get some perspective or context as to what informed the decision to set the bar at 30 and not something higher in terms of the longer-term objectives.

So to your point, we hit 30% for the quarter, but we didn't hit 30% for the year. So we're still working our way into that range, which over-extended time periods, we've been in the 30 plus percent pre-tax margin range. And the rationale is similar to what I mentioned with Brennan's question, which is we're trying to drive the combination of growth and returns. So getting the margin up to some very-high level, if you will, but doing so by essentially cutting off growth is not going to produce the greatest value for shareholders. And so we think that right combination is in that kind of 30-plus range. So if you said low-30s, that's the area we've seen where we can have the -- that best combination of growth and returns.

Understood. Thanks so much for taking my questions.

And next will be Gerard Cassidy with RBC.

Hi, Mike. Hi, Dave. Michael O’Grady: Good morning.

David, when you mentioned in response to one of the questions about your Northerns focused on building a sustainable financial model. Can you -- through the cycles, can you define what that sustainable financial model is from your viewpoint?

Yes. I mean, obviously, it means you can't rely on factors you don't control, right? So when you think about expenses, that's obviously a huge focus and you think about organic growth. Those are the two things you can spend a lot of your time on making sure you control those elements. And so you're always going to get buffeted by external events. There's nothing you can do about that, but you certainly can't predict it and you definitely don't control it. So the more organic growth you've got built into your model, the more resiliency you've got in your financial model and that's sustainable through time. So that is the overall goal is to get that expense curve down and get the organic growth up so that we can weather the storm if there is one going forward.

Very good. Thank you. And then a more macro question for Mike and you, Dave. What are some of the optimism many investors, we all seem to be sharing this optimism about the outlook for your business as well as the markets in general for 2025, the economy. We have a new administration coming in as we all know. What are the risks that you guys keep your eyes on aside from the geopolitical global risks, which we all know about? But when you guys sit around at the end-of-the day and the outlook again appears to be optimistic. But what are the risks that you talk about and always keep your eyes on? Michael O’Grady: Sure. So it's interesting, Gerard, because it's basically, I'll say, the opposite of what Dave just said, right, which is, we focus on the things we can control and then I'll say we worry about all these things that we can't control. And that's the nature of, I'll say, the business we're in for our clients is so that we are resilient, we are trying to look-forward, but also just being a market participant and trying to generate obviously financial returns as well. And so the things that we focus on or are concerned about do relate to the macro-environment and what could happen to the extent that markets are down significantly. How are we prepared for that? And again, not just financially, but also for our clients or to the extent that there are, I'll say like operational risks in the environment that come as a result of greater volatility. How are we prepared for surge volumes in different parts of our business? So it's those types of things that are the greatest concern. And certainly, Central bank activity has a big impact on our business because it can affect the level of liquidity in the markets and it can also affect the rates that are earned and we're carrying obviously a large balance sheet. And when you think about time periods where we've had zero interest rates or negative in parts of the globe, that puts a lot of pressure again, not only on our clients, but on our financial model. And then when you see rates spike up, you get a different impact. So it's those types of things that where it's less about, I'll say, predicting what's going to happen and more about just being prepared for what could happen.

Very good. Thank you, Michael.

Thank you. And that does conclude the question-and-answer session. I'll now turn the conference back over to Jennifer Childe, Director of Investor Relations.

Thank you, operator, and thanks everyone for joining us today. We look forward to speaking with you again in the future.

Thank you. And that does conclude today's conference call. We do thank you for your participation. Have an excellent day.