Okay. Okay. Yeah. Good.
All right. So thanks, everybody, for joining us again here this afternoon. I will read a disclaimer, and then we will be kicking it off with Rob Reilly, CFO of PNC. One second. So for important disclosures, please see Morgan Stanley Research Disclosure website at morganstanley.com/researchdisclosures. Taking photographs and the use of recording devices is also not allowed. If you have any questions, please reach out to see your Morgan Stanley sales representative. Okay with that out of the way?
Well done. Well done, Mary Betsy.
Rob, thank you so much.
Yeah. Great to be here with you.
Yes. We're thrilled to have you here and really appreciate you coming pretty much every single year now. Really.
Yeah. I think we're up to 10.
That's great.
Yeah. Yeah. You and me.
Awesome.
Together.
Okay. Very good. Yes. This is my 15th year.
15th. Okay.
Yes. But.
Well, congratulations.
Yeah. Thank you. I do want to start off with a topic that everyone's interested in.
Sure.
Given that we are most of the way through the quarter, just wondered if you had any guidance updates for us?
Well, we'll go right to it.
Okay.
Yeah. The guidance update is no change to our guidance, either for the second quarter or the full year. So no change.
No change. All right. Now, your guidance, I believe, does include 2 rate cuts.
That's right. Yeah. That's right.
One in July and one in November.
Well, we've actually moved the July one back to November and December now. So we're not in the July camp. That's some fresh news there for us.
Okay. My bad. So then I guess the question is, if we don't get any, I guess it doesn't matter for the year anyway.
Yeah. Well, one, because we're halfway through the year. But two, as you know, and we've spoken about recently, we're pretty neutral on the short end to interest rate movements. We've worked hard to get into that position. So really, particularly for 2024, but just in general, not a big impact there whether they happen or they don't happen.
Now, you said you worked hard to get there to be neutral.
Yeah. To be neutral. Yeah.
What did you do? What hard work involved?
Well, we're naturally asset-sensitive, as you know, over the years. So we tactically moved to that position late last year. So nothing new there. And that turned out to be the right move in terms of being sort of immune to what was going to occur. They recall back in January, way back in January, the world thought 6 rate cuts. We thought 3, and now we're 2 on the back end. So we're well positioned.
You got there through swaps as the primary way?
Well, some swaps. Much of what we were doing in terms of our position, in terms of our duration, the swaps, the fixed variable. But again, nothing new there.
Okay. Now, expectations (let me know if this is correct) for NIM and for NII is to bottom this quarter.
That's right.
Then increase toward the back of the year. Could you walk us through the driver of that uplift?
Yeah. Sure. So for us, we're sticking to not only our guidance, but also that we see NII and NIM troughing here in the second quarter and inflecting into what we've been waiting for for some time, which is the ability to reprice our fixed-rate assets, as you know. So we're entering into that period there that mechanically will continue to drive our NII higher into record NII into 2025, which we're on the record for saying that it will be a record. And that's mechanical. That's just simply taking $100 billion plus of fixed-rate assets and repricing them from, pick your number, 2%-5%. And that's going to occur. It's a natural part of a rising rate environment cycle. This is the good part when you get to reprice your fixed-rate assets.
Right. Okay. And that's it. You don't need anything else other than that?
No. Nothing along those lines in terms of loan growth or other things outside of that. Those would help. But the big move is the repricing.
Because your current guidance for 2024 is for net interest income to go down.
That's right. Yeah. That's right.
Right? 4%-5%?
Yeah. That's right. That stays the same.
Getting to record 2025, obviously.
It's a pretty good growth.
Yeah. 2025 is.
Even I can do that math. Yeah. Yeah. That's right.
Punchy. Could you just help us understand how much of that 2025 growth is coming from just the rollover?
Majority.
Majority is.
Majority.
Okay. So your front-end securities duration.
That's right. Yeah. That's right.
And.
Well, think about it. Most of the securities we put on and some swaps we put on in 2021, they're maturing. In 2021, they were yielding our securities yields right now, and our whole book is 2.5%. So you get that ability to reprice up, and that's significant.
How much of it is swap rolloff? Is that helping at all?
Well, it's not so much swap rolloff as the swap repricing. So fixed-rate swaps are a key piece in terms of how we manage the balance sheet. The difference will be the yield that we receive on those fixed rates, which right now are below 2.5, will be that much higher.
Right. Okay. And so the duration of the securities book that's really driving this is.
Yeah. That's what we've been talking about. We're among our peers. Our duration, no reveal here, is shorter. So we're at the front of the line in terms of being able to reprice. Everyone will be able to reprice their fixed-rate assets, but if they're not maturing, you got to wait for that to happen, obviously.
Right. And then I think a couple of weeks ago, Bill mentioned that the NII guide for 2025 also includes an assumption the forward curve comes through.
Yeah. That's right. Yeah. That's right.
Does it matter if you don't get a rate cut?
No. So for us, an ideal would be a steep yield curve. Less ideal is an inverted or a more inverted yield curve. So we're neutral on the front end, asset-sensitive on the medium to long term where we would reprice those securities. But because rates have moved so far, so fast, we're in that 5% range, ±0.25%, repricing up from 2%. So we're asset-sensitive. Obviously, the higher the rates in that medium term, the better as we go to reprice. But even if they're not really optimal, they're better than what we've got today.
If we do not get rate cuts?
Yeah. I think, like I said, the short end, we're somewhat neutral. There could be some pressure on the deposit pricing if we don't. But offsetting that, you got to remember we have 50% of our assets on variable rate. So that offsets that. So we could see some ± on the margin, but it's a whole different world than the magnitude of the shift that we've seen when rates went from 0 to 5.
Got it. Okay. Sounds like a pretty kick-ass year for you in 2025.
Well, I don't know. There's always something to do. I don't know. You and I have been doing this a long time. I don't remember any kickback years, so I wouldn't count on one. But we're optimistic, obviously, in terms of 2025 with the NII growth combined with the fee growth that we'll produce this year and plan to continue. So yeah, we're optimistic.
Okay. Good. Well, let's dig a little bit into some of the details on the NII driver as well, relating to deposits first and then loans.
Yeah. Sure.
On the deposit side, cumulative deposit beta, I think for you, has been about 45% this cycle. The question here is, are you still seeing rate-seeking behavior among your customer set? Should we still expect some mixed shift between NIB and IB?
Yeah.
How are you thinking about deposit betas in a down and a rate decline environment?
Yeah. So just deposits generally, the message is stable, really. We're probably outperforming what we expected at the beginning of the year. Still down, but not down as much as we had thought. And we'll see if that continues to play out. Notably, in terms of mixed shift, right now, today, our spot non-interest-bearing deposits are actually higher than they were at quarter end on March 30th. Higher.
Balances are.
Balances are higher. That's the first time that that's happened in a while.
What's driving that?
Well, a lot of it on our end, it's the commercial non-interest-bearing deposits, which tend to be, in our book, the larger corporations and state entities. But what's notable about it, and again, that's spot, so it could finish down. It could finish down. Average will be down. But I'm just saying for the first time in a long time, we've all been staring at that number. This is the first time I've seen it go up. So that tells me that at a minimum, things have stabilized considerably. Recall last year, during the first six months of 2023, our non-interest-bearing deposits declined by $20 billion. So the rate of that shift has dramatically slowed. So that's encouraging. As far as rates paid, we're up a little bit off of where we were in the first quarter, but not by a lot we expected to be.
And again, that has slowed down. Could continue to drift a little bit, but again, on the margin. And then in terms of our mix, we had said we'd sort of settle out in the mid-20s. That's where we are now. That's a good range, and that seems to be generally holding. So I'd say stable on the deposits, in big contrast to year-over-year where it was down.
Right. Got it. Okay. Very good. How are you thinking about loan growth?
Well, loan growth, if you go all the way back to January, the beginning of the year, the world thought six rate cuts. We thought fewer. We did expect sort of nominal growth on the consumer side, and we're seeing that. We expected some loan growth on the commercial side, but at the time, we said the back half of 2024, which we're rapidly approaching. We still hold to that, but that's our best thinking. We've acknowledged that commercial loan growth has been more sluggish than what we thought, even though we didn't expect a whole lot in the first quarter. It's for all the reasons that we've talked about. When we look out at the balance of the year, it's two things. One is utilization, which is down.
It's down at the low levels that we finished 2023 at, that we typically see an increase in that utilization, which hasn't occurred in 2024. But when we take a look at sort of the leading indicators, we can see the capital expenditure to sales ratio is an all-time low. Inventories are low. New client acquisition, which is really strong, particularly for us in the Southwest United States. Clients are putting in credit facilities, new credit facilities that they're paying for that they're not yet drawn down, which is an indication of borrowing. So we see utilization picking up out of necessity in the back half of 2024. And generally, the economy is still pretty good. It's slowing, but it's still pretty good. We'd expect to see some new production, but not a lot. Not Herculean.
So our best thinking is that we'll see some commercial loan growth here in the second half. We can't control it. We're not allowed to call them up and make them borrow. But in the meantime, we've got plenty to do. We are, on the commercial side, we are adding record new clients, a lot of it coming out of the Southwest, on top of last year's record new clients. A lot of that operating business, a lot of that credit facilities that are being put in that are not yet drawn. So we're busy, and there's good indicators.
Typically, how long is it between a corporate client might put up that credit facility?
Not long.
Is it a?
Yeah. Not long because.
What's that mean?
Well, it depends. It depends on, obviously, the size of the company, what they're doing, and what they're funding. But there's some anticipation of funding. But in point of fact, they pay for that. So there's a facility fee and an unused fee. So typically, you wouldn't incur those costs if you didn't expect to use it in a reasonably short term.
You're talking within a year?
Oh, yeah. Oh, most certainly. Yeah.
Okay. All right. What size companies are these that you're?
Well, for us, I mean, so we've got a broad book, but I'd say our wheelhouse, in terms of generalities, tends to be large, middle-market private companies, $1 billion-$5 billion in revenue. Of course, we've got Fortune 500 customers, and we've got small business and commercial. But our wheelhouse is that general middle-market corporate book.
Okay. Now, that's also seemingly the book that private credit's interested in as well.
Yeah. Yeah.
So how are you competing with that?
Well, we get asked that a lot. We typically don't compete in terms of loans because in their model, they've got to make all their return on their loan, which means a higher risk borrower, which is typically too risky for us. Our model is less risk. The credit return is supplemented by the operational services that are part of that relationship, that the revenue in the aggregate justifies the return on capital. That's the way we've been for years. So in terms of private credit, they're typically looking for high single-digit yield, maybe double-digit yield, a different type of borrower. We have, however, and maybe this is going to be one of your questions, we announced a private credit partnership with TCW last month. And really, all that is a formalization of an informal process that's been in place for some time.
We've worked with them over the years, mostly in our business credit commercial finance book, which tends to have higher leverage. And our whole goal there is, in these types of companies, when they undertake a transaction or put themselves into that type of higher-risk borrowing category, that we'd be able to retain the operating business. And we're able to do that in these instances. That's our number one driver. There may be some instances where we could lend into that structure if it's a senior secured piece, well-collateralized, and maybe some economics on the equity side. But the big driver is the operating business, which is so essential for us, as you know, and we're a leader, and we're very good at it.
These are clients that you already work with, but are looking for different types of structured borrowing.
That's right. Yeah. Or it could be acquired by private equity or something along those lines.
Is it a different credit box than your credit box?
Yeah. Oh, yeah. Yeah. It would definitely be a different credit box. That's the point.
Are you acquiring?
That we don't get dislodged. Our relationship doesn't get dislodged with this arrangement.
Could you acquire new through this arrangement?
Acquire new?
New customers through this arrangement.
Oh, possibly. Yeah. Possibly. But we got a lot of customers.
Okay. All right. That's not the focus, but it could happen.
Right.
Okay. And then the question on how it's being financed from the PNC side, is this equity capital that you've invested?
Yeah. Yeah. Again, that'll be through time and as it evolves. Like I said, there's some economics there, but the primary driver is the retention of the relationship.
Got it. Okay. All right. Very good. And I suppose the other question I have for you on loans is the rest of the book?
Yeah. Yeah.
Let's just talk a little bit about growth. Card is like the industry, a little bit higher, but it's small.
Yeah. Yeah. So we're predominantly commercial, but we do have a big consumer customer base, which really resulted from the acquisition way back in 2009 when we acquired National City Bank. We recognized that we had 11 million consumer clients that would be inclined to borrow from us if we had appealing products and services. So we've been on that journey for a number of years. Consumers sort of muted right now because the residential side is slow. We'd expect that to pick up mortgages, home equity when rates change. But we do have some growth opportunities, and we're seeing that in auto and card. To your point, notably, we've got a lot of new card offerings that are coming out to our client base that are very attractive. So we would expect to grow that.
Right now, it's pretty small, $6 billion or $7 billion on our balance sheet. Real opportunity, not just because of that penetration within the consumer base, but also because of these expansion markets that we're in, these growth markets that we're in, that'll add to it as well.
Did I hear you correctly that you're leaning into auto?
We are. Yeah. Properly structured. It's funny, if you take a look at PNC over the years, we don't make auto loans when everybody's making auto loans, and we make auto loans when everybody's not making auto loans. That's just sort of how we go about it. If the return's there and the structure's there, we'll do some more. That's where we are currently.
Okay. What about commercial real estate?
Yeah. Popular topic. Yeah.
Yes. Right. How are you thinking about that? And it's interesting because the H.8 data has CRE growing. Lots of reasons why. And how are you thinking about that book?
Well, when you talk about commercial real estate, everybody quickly goes to the office component, which we should talk about a little bit. But outside of the office, multifamily, there's some stress around the higher-rate environment, but we're fine there from a credit perspective. There's some geographic hotspots, but we feel good about that book. And we could conceivably see that grow. Hotels are doing well, as you know. So outside of office, CRE is fine. Office is where the pressure is. And inside of that, and we've talked about this, and this hasn't changed, it's the multi-tenant office piece for us where we see the most pressure and where we're seeing the losses that have occurred and where we expect charge-offs to continue. It's just under a $5 billion exposure, so not large in terms of percentages. And we're working through that.
Importantly, we're adequately reserved is the right framework, about 14.5% against that book. So a lot of that has been recognized upfront. We reserved against the criticized portion of the book, which is about 20%-26% of it, even though they haven't yet hit non-performing and not yet gone to charge-off. So we expect that to happen. But again, we think we front-loaded a lot of that. We get asked a lot in terms of, "Hey, how's it going? How you're working through it? And is there any insight in it?" And I would just say, "Asked what inning are we in, we say we're probably about a third of the way through the game." The maturities that we've seen, about half of the maturities that we've seen have actually been fine. They've either repaid the loan or refinanced because they qualified and extended it.
The other half is where the work is. Probably three-quarters of that gets worked out into some new deal where there's some more support, more collateral, or some principal curtailment. Then the balance is NPL and probably charge-off. That's been sort of the case. There's wide variance in terms of outcomes, in terms of what the properties are worth, because it's not a highly granular. There's wide disparity in terms of the different projects and all. We continue to work through that and feel like the reserves are sufficient.
The principal curtailment, that would show up as a net charge-off?
Yeah. That's right. Yeah. That's right.
Okay. I believe you have quite a bit of office maturing in the next 12 months.
Yeah. Right.
42%?
Yeah. That's right.
Can you give us an update on the conversation with the sponsors there and the strategy you have for that next 12 months outward?
Yeah. Well, it's pretty much the same. So what I just described there is what we're seeing and what we're expecting. We've got a lot to work through. As I mentioned, NPLs will go up. But again, that's working on. We reserve off a bigger bucket than that.
Right.
And charge-offs where it will occur. And we'll work through it.
Why does something move into criticized if it's not non-performing?
Well, that's part of being an OCC Bank. You can move into a criticized position simply if they've just lost a tenant or something material has happened, even if they're perfectly current on their principal and interest payments.
So anything?
So it's a forward-looking measure that's conservative. And that's okay. That's the way that we operate. So the reason that I keep mentioning it is because some people say, "Oh, your NPLs are going up. It must be getting worse." And in reality, we reserved off that bigger bucket, and that bigger bucket is feeding that bucket.
Right. Okay. Right. Once it's criticized, you have more degrees of freedom around the reserving.
Yeah. That's right. Well, or you reserve against that, which is a more conservative approach rather than waiting for it to go to non-performing and then reserving it.
Right. Okay. And then the other question I just had on this is you own a business that services commercial real estate?
Yes. Right.
Right? Special servicing or no?
Midland. Yeah.
You have a lot of great information.
We do.
On the health.
We've watched that. Yes. So Midland is a commercial service or commercial loan, commercial mortgages, and special servicing, which is euphemistic for trouble.
Yes.
We've watched that clearly because that is a leading indicator in terms of where the market is and what's happening. Their volumes have gone up, but not up as much as we had thought. A lot of deals are still getting taken out. But as you mentioned, we still have a lot of maturities to go, particularly in CMBS here in the next year or so. So we're likely to see an increase. So we'll keep you posted in terms of what we say.
Okay. All right. Very good. Yes. Because Bill mentioned, I think, office values being down between 30%-40% in some cases. I'm assuming that's coming from the Midland.
Well, yeah. In some of our own book, I think what he was saying in that regard is sort of what I was saying earlier, which is there's just big variance. Everybody says, "Hey, what's the loan to value? What's the number that applies uniformly to everybody?" And that's not available in this instance.
Got it. Okay. But your reserve is adequate even with that price action.
Yeah. That's right.
Okay. Due to the quality of your book or?
That's right. Yeah. And in our case, we've got 100 properties that so it's not thousands that are on the criticized list. We work them every day. We look at them every day and reserve accordingly. So it's real-time. It's not just some big portfolio estimation.
Excellent.
Yeah.
Okay. So then turning to net charge-off rates. Which portfolios would you say are running at normalized? And where are we?
Oh, charge-offs?
Yeah. Where are we in the process of still normalizing?
Yeah. I would say so for us, throughout the cycles, because we occupy the prime space, both commercial and consumer, our charge-offs tend to be less than everybody's through the cycle. And you know that. You write that up in your own pieces. On the consumer side, we've seen some increases in delinquency. Charge-offs are up a little bit, but not a lot. And again, I think that's reflective of the prime nature of the borrowers, particularly in card, where we're essentially all prime. On the commercial side, we've been running below our sort of what we underwrite to. So we underwrite to a 30 basis point sort of charge-off. And these are estimates. And we've been doing 10 basis points. So we'll go up a little bit, particularly as the office rolls through in terms of some of those charge-offs.
But the real question is, is where are we seeing pressure or anything sort of on the horizon that is problematic? The answer is no. Things look pretty good. Outside of CRE, we see some pressure in the healthcare segment. Nothing new there, just in terms of the tight labor issue. Some consumer goods manufacturers, as a consumer, has moved to services. That's not new. And then maybe a little bit on transportation, reflecting some of the inflationary effects. But no big pocket or portfolio that's blinking anything beyond that.
Okay. Very good. Yeah. I keep on looking for when NCO losses are going to normalize. And I've modeled it in by year-end, but so far, the quarter's coming in better than my expectation.
Yeah. Yeah. That's a good thing.
Okay. Yeah. Adds to capital.
Adds to capital. Yeah.
Let's turn to fees and.
I thought you were going to turn to capital.
Oh. No. No.
No. No. We can get there.
We can get there.
Sorry.
We'll do fees and expenses.
Fees and expenses. Okay. You got it.
Chomping at the bit to get to capital.
Yeah. No. Just when you said capital, I thought that's where you were going.
So on fees, you have several pockets, or I should say businesses that you're running: capital markets advisory, asset management brokerage, Treasury Management, mortgage services. Can you help us understand where is the driver for you in fee growth, most importantly? And how are you expecting that each of these business lines can ramp up?
Yeah. So fees are pretty good. We've got great fee businesses. They're big businesses. They all have sizable opportunities in our new Southwest markets as part of the BBVA USA purchase. Our largest and probably most important is our Treasury Management business, which we talked about the operating services. Great business. PNC is generally recognized as a leader, if not the leader, in that product and service. And that's an essential piece to justifying the credit extensions that we make. But it's also typically how we initiate a new relationship with a corporation that becomes a commercial customer. We have very appealing product services, and it's easy to start with us in that regard. So that's first top of mind. But if you go through sort of the fee businesses as we report them, asset management's a very attractive business. Everybody wants in the asset management business.
We're a large provider. There's several hundred billion in assets under management. Unlike our other businesses, asset management was not a big business at BBVA USA. So unlike our other businesses, we didn't buy a whole lot when we bought BBVA USA. So the game plan there was to staff out the various markets. We've done that. We're growing. We've got asset inflows. So feel great about that. Capital markets and advisory, our largest driver there is our Harris Williams M&A advisory share, which is doing well, is poised. Our capital markets, as part of our full-year guide, is up 20% year-over-year. That's due in large part to the falloff that Harris Williams had last year in the second and third quarter as the world transitioned from zero interest rates in the buy and sell game. That was when buyers wanted yesterday's or sellers wanted yesterday's prices.
Buyers wanted tomorrow's prices. There was a two-quarter timeout there as everybody kind of got to the same planet. So that's occurred. Harris Williams had a good first quarter. Their pipelines are really record pipelines. So we'll see growth here in the second and third quarter, whereas last year it was a decline. So that's why you have a big percentage increase. We talked about Treasury Management card. We talked about we've got some new products there. So that feels good. The only soft area is residential mortgage in line with what we expected. Not a lot of volume there given the rate environment. But one day that'll come back, and we'll be ready to go there too.
Corporate services?
That's part of Treasury Management, card and cash management.
Okay. Got it. Yeah. Bill mentioned Treasury Management has grown significantly with high margins.
Yeah. Yeah.
Is that high margin a function of the rate environment? Does that margin?
No. No. It's more just so you go back to our roots, PNC in Pittsburgh, serving the Fortune 500 company way back when I started in the 1980s. So our roots were providing corporate services to the Fortune 500. So it's a multi-year build over our businesses that we've invested in over the years that gets a pretty high barrier to entry in terms of being able to get into the Treasury Management business if you're not in the Treasury Management business in the way that we do it. And that's what leads to steadier and less competed margins.
Okay. More scale, better plan, of course.
Yeah. That's right. Over multiple years.
Okay. All right. Well, let's turn to expenses then. You have a history of track record of delivering continuous improvements.
Well, thank you for saying that.
The CIP savings this year is expected to be $425 million. Right? It's at the full-year expectation.
Yeah.
You're going to be fully reinvesting that. Is that right?
Yeah. That's right.
Okay. So expenses flat year-over-year.
Yeah. That's right. Which is good. So a couple of things there. The Continuous Improvement Program is something that we've had in place for a number of years, as you know. And the whole function of that is when we go through our annual budgeting cycle, every area of the bank has a Continuous Improvement idea to be able to just be more efficient. And when you're spending north of $13 billion a year, you ought to be able to do that. We've got that as part of our muscle in terms of how we manage our business. We take those savings and apply those to the investments that we want to make, the majority of which are in technology spread across the bank, as you would expect. And that's how we stay stable.
You've got an investment in branch network too though now, right?
Yeah. Well, I can address that.
A billion?
But that's still all part of a billion. And that's still all part of our guidance and our plan and everything that we have. What I was going to say was last year, we did do a work restructuring program, which was unusual for us. When we hit the fall of last year, it was clear to us that positive operating leverage wasn't going to be possible in 2024 because of the rate dynamic. So what we needed to ensure was that our expenses would be stable year-over-year. So we did that. And then you add the Continuous Improvement Program. It's close to $750 million of expense actions that have occurred. So it's very dynamic to get this stable.
Okay. Then the efficiency ratio in 2023 for the whole organization, 61.5%. Is there room for that?
Yeah. So our whole mindset and the way we want to manage is positive operating leverage, which we've generated, as you mentioned, for the better part of 10 years. You and I have been doing this maybe a little bit longer. Not so much the ratio because obviously some of the fee businesses have higher expenses, and we want to do more fees. So I always say if nothing happened to PNC today other than Harris Williams getting a mandate, our efficiency ratio just went up. But that's a good thing. So that's why we don't get caught in that. We're very disciplined around expenses. We're stable this year. Last year, we were only up 1%. So we're showing that. And that will continue.
So in our 2 minutes left, capital.
Okay. Capital. Okay. Yeah. Yeah. Okay. Sure.
Your CET1 is 10.1%.
Yes. A little north of that. Right.
Right? Basel III rules as currently proposed, 8.3. How do you think about allocating capital? You're allocating it under current rules?
Yeah. Sure. Yeah. Sure.
And then you've got that Visa gain.
Yeah. So that's true. So two things. One on the capital and I don't want to run over on the clock here. One on the capital is so the Basel III proposal is still out there. It's not finalized. They're in a rewrite position. We'll see how it impacts us. We're fairly certain that AOCI will be incorporated into it. So that 10.1, as you say, goes down to about 8.5. Not so sure in terms of what the RWA calculations are or what they will be and what the impact on us will be, other than we don't expect a lot. Even as they were proposed in their original form, our RWA only went up 3% or 4%. So presumably in the new form, they'll be less, but we don't know. So we'd need to wait that out and see what that is.
The good news is PNC's balance sheet's in very good shape. We've got lots of capital. We've got lots of liquidity.
Why should investors get excited about PNC here?
Oh. So I think there's a lot to be excited about at PNC. I mean, we talked about in terms of looking into 2025 in terms of the P&L, the inflection in terms of the rates, the repricing of the fixed-rate assets. So the revenue component from NII looks pretty strong. The fee businesses we talked about, they're well-positioned to continue to grow. Expenses are under control and credits manageable. That's the number side of things. The practical side of things is we're in the best growth markets maybe in the world, certainly the United States. We do well in our legacy markets. We are benefiting from the advantages that scale and increased scale provides. We'll look to continue to do that. And we like the hand that we have.
Super, Rob. Thanks so much for joining us.
Hey. Thank you, Betsy. Thanks for taking the time.