We have State Street. From State Street, we have EVP and CFO, John Woods. So John, thank you so much for joining us.
Pleasure to be here.
As promised to Liz, I think this is the last time you're gonna be asked this question. But just, I mean-
I want to hear what this is.
Yeah. But still, relatively early days for you in terms of moving from Citizens, a r egional bank to State. Just talk to us in terms of the first few months, like the early learnings, and even for you, in terms of what's been different and what's been the same, relatively prior role.
Yeah, really good question. I mean, I think the... You know, before I joined State Street, I think what I was thinking about has been confirmed really here in the first, I guess I'm in the second full quarter of being on the platform. But first and foremost, scaled, interconnected businesses around the world, it's just exceptional.
There are 100+ locations around the world, very different than a, than a U.S.-based, you know, kind of regional bank. But, you know, it's been really impressive to understand, you know, the scale and reach of the businesses at State Street, and it's just been really helpful to basically dig in there. You know, basically, the other point that I would say, and that's one, I guess, of the key differences. The other point that's pretty similar is a significant focus on a portfolio of distinctive strategic initiatives to really drive performance over time.
And so when you list out the handful of things that we've launched and that we're driving, whether it's private markets, digital assets, you know, the work we're doing in wealth, more broadly in Alpha CRD, you know, this is a platform that's driving distinctive growth-oriented initiatives, and I think that's frankly very pretty similar to where I've been. And then the other point I'll throw out is significant opportunity from a transformation standpoint. And I was thinking about that on the transition in, and it's been confirmed that that there's a huge amount of opportunity in that space.
And then you wrap it all together, you know, the opportunity to grow, you know, margins and returns over time is significant. So I mean, I think those are some of the early learnings. You know, certainly was expecting that to be the case, but, you know, when you get here, you're confirming that all of those things are true, and it's been really fun to do that in the first quarter or two.
Got it. So maybe you could start there in terms of the transformation. And as you mentioned, again, State Street is a storied franchise, but complex, global. When you think about the transformation opportunity, just talk to us in terms of how do you kind of condense that into actionable items that you can execute on?
Yeah. I mean, I guess I'd put it in maybe three overall categories, maybe a fourth with an asterisk. But the first one that I think about is the technology platform itself. You know, and what we're working on there is rationalizing our applications, you know, in a migration to a hybrid cloud strategy. That's been a multi-year process.
There's also been a multi-year process on you know, reducing our data center footprint. But the likelihood of our ability to accelerate that in the coming years is really right in front of us, and that's part of the plan is to accelerate all of those actions to create a much more efficient technology platform. And I think where you'll see it is articulating you know, the reduction you know, in both applications and data centers as some of the tangible benefits you'll see on the technology side, which we'll be able to you know, communicate down the line. The second big category maybe is basically artificial intelligence, and you hear that everywhere, right?
But I think from that standpoint, we're gonna be, you know, scaling our agentic capabilities significantly in 2026. So we're launching an internal foundational ability to drive agents into the platform. So as you get into the second half of 2026, you know, the proliferation of agents across the platform is going to really ramp. So that's the second big category, and we'll start talking about, you know, what that means in terms of delivery and efficiency.
But you put all that together, and the third big category is our operating model. And you know, with a technology platform and, you know, the capabilities and accelerant that AI brings, you know, I think what we're putting that together in, in, you know, transforming the way we work. And so that means becoming fully agile in terms of agile ways of working, but doing it in a hybrid human agentic way. And you know, that increases the speed of releases, features, and functionality for consumers and for our customers that we serve. So those are the three big categories, and it simplifies our client delivery, and that's kind of how we put it all together. I'm putting an asterisk on a fourth category.
It's just kind of you know, we not necessarily transformation, but recurring productivity will nevertheless continue to contribute as well whether it's simplifying your organizational processes, your business processes, third-party spend, all of that. I kind of think of it as a fourth category that still contributes, but the first three are really about transformation.
Got it. And just talk to us about the agentic AI, and it's, it's one thing for a software company or a startup to bring in AI and use agentic AI to sort of do processes. It's very different, my sense is, when you bring it into a large, complex, regulated bank.
Yeah.
Like, how easy is it from, like, the concept to implementation that you, is it a one-year process? Is it a three-year process? Just how do you think about that?
Yeah, I mean, it's not a three-year process. It's something that you know, with the right foundation and controls in place, and guardrails, it's something that could be done in a matter of months. You can create agents from that perspective, and so that's so we see agents... We've already launched agents, you know, this year. It's just, you know, how can we ramp them and do it at scale? I think that's what we're talking about. And, you know, I think you can do. You have guardrails and controls, but they need to be treated as, as, you know, as employees.
You know, that means, you know, supervision, controls, human-in-the-loop type things, that you know, and you adopt it as part of a workforce. If you have an agile team, that's operating all humans, what we're talking about is basically replacing some of the humans with agents. So, that allows the humans to basically level up and focus on, you know, kind of higher value-added activities, while repetitive, you know, type stuff gets handled by the agents.
Got it. And do we have enough visibility around what an agent costs, or is that still a work in progress? And I think it's not a state question, industry-wide. I'm just wondering, is there enough visibility to know what it costs to have an agent?
Yeah, I think that's to come, but I will say the marginal cost of an agent is gonna be low. It's just, you know, the fully loaded cost of the foundational investments. You know, you've got to get that, and get that adopted and delivered. Marginal cost is low.
Understood. Got it. I guess maybe just pivoting to revenue growth and sort of the business outlook there. Just talk to us in terms of... obviously, you gave us an update last month, but when we think about fee revenue growth or within investment services, you'll talk about the wins. Just what's the momentum in the business feel like? What's the headwind versus tailwind to growing that revenue stream?
Yeah, I mean, we're actually feeling very good about investment services growth. Organic growth has been strong. I think it was around 2% in 2025. Organic, we had a lot of lift from a markets perspective as well, but organic growth was strong in 2025. We expect organic growth again in 2026. Pipelines look good. I think the sales culture pivot about three years ago was really important, and so we've been driving north of $300 million of sales over the last three years. We expect to do that again in 2026, where we have a target of $350 million-$400 million.
And that's really important. I mean, not just the size, you know, and quantity of sales is important, but also the mix. And so the quality of that sales, you know, activity is very good. It's. It leans heavily to the back office space, which tends to install a little faster. And there's a huge chunk of private markets business that's in there as well, which tends to be a bit more profitable and higher growth. So, we really like the quantity and the quality of what we're seeing on the servicing side. And, you know, just broadly, you know, what underpins all of that is the multi-year strategic initiatives that I talked about earlier you know, in the private market space.
You know, and what we're doing with Alpha CRD, and you know, and even in the wealth services space. So, lots to like about that, and you know, I would be, you know, neglectful if I didn't add digital as one of the tailwinds that I see on a multi-year basis going forward in the investment services space.
What gets us to... So you mentioned the $350 million-$400 million on a quarterly basis. Like, what gets us stair-step higher to that level, to that $400 million? Is it just... Can you see that in terms of the pipeline, whether that's coming through, or, like, what is needed to rebase higher?
Yeah, I mean, I think it's the maturation of strategic initiatives.
Right.
So, I mean, when you look at the higher growth aspects of the investment services business, I'd focus in privates, and in digital, and in wealth services. I think that's where you would see higher growth. And as our mix shifts into those higher growth platforms, that would be one of the ways that you could see that, sales activity picking up. But for now, focused on 2026 where our outlook is $350 million-$400 million.
Got it. And when you look through those three verticals you mentioned, do you need more investments in headcount or the right people or technology in order to sort of realize your goals?
Yeah, well, I mean, maybe just using, not necessarily headcount. I'd say, I'd say capabilities, but increasing in those capabilities can come digitally or will come through agents. I mean, private markets happens to be a place where we're gonna be investing in agents to support some of that growth. Maybe just picking up on digital, we launched our digital asset platform recently. Very excited about that. Creates, you know, a digitally native, foundational approach to supporting digital assets, custody and fund accounting, and administration going forward. And, you know, that's not as much, really focused on an army of people.
It's basically creating the technology platform that allows us to launch products. And those products, you know, as we you know, we're looking towards the first products coming off of that being tokenized money funds, as an example, and the ability to interact with our clients with digital cash. Whether you know, moving back and forth between fiat and stablecoin or and as you know, and down the line, tokenized deposits as well. So, I mean, you put all that together, and that is one of the underpinnings of the bullishness on the investment services business over the medium term, is the higher growth aspects of what we're gonna be doing in digital.
Got it.
The higher growth aspects and higher profitability that we have in private markets, not necessarily investing in armies of people. It's more about technological capability.
Understood. Maybe, if you don't mind, John, just spend time on the digital piece and tokenization.
Okay.
Where there's a healthy debate in terms of what, what are we trying to solve? Like, what is a tokenized money market solve for? Just give us... Because obviously, you all have done a lot of work here, so what does it solve for the client, and kind of how much more can this technology spread into beyond just money market funds?
Yeah, and I mean, you think about the customers in this space, and we're following customer demand here. The demand early on seems to be in tokenized money fund capabilities with interoperability, you know, with stablecoin and fiat. So that's really gonna be the first launch here. And I think what we're trying to solve on behalf of the customer, which would be, you know, a fund complex or a fund itself is the ability to facilitate distribution to digitally native customer segments. So if you can operate in the DeFi world, and you can offer an on-chain product, there are customers there that will engage with your product.
So we're facilitating the customer's expansion of distribution, first and foremost, by providing this digital asset capability. I mean, I think secondly, why tokenized money funds is, if you wanna deliver those products and you're in stablecoin, the ability to go from stablecoin back into tokenized money funds provides very efficient collateralization opportunities if they need collateral, a good collateral that can be posted.
It also maximizes earnings, right? Stablecoins, I, I think we're still working on this. Do they pay interest? D o they pay rewards? What happens? You know, I know that we've got the GENIUS Act, but if you can move seamlessly from stablecoin into tokenized money funds, tokenized money funds will have interest. And so, first and foremost, we're facilitating distribution expansion to opening up more ultimate clients for our customers, and then making it very efficient for them to maximize yield while they're operating, you know, in stablecoin and in the digital asset space. That's really the high-level use case that we're starting with.
And last question on this, but you mentioned stablecoins. Do you care if it's a stablecoin or a tokenized deposit?
Yeah.
Are those interchangeable or?
Yeah, it's our, you know, in talking to clients, it seems the demand is really in the stablecoin space.
It is. Okay.
We will... And that's where we're going. But, you know, tokenized deposits is on the product roadmap as well, and we'll, you know, down the line, we'll be offering that as an opportunity as well. It's our, it's our vision that we'll be able to move seamlessly in digital cash across all three: fiat, stablecoin, and tokenized deposits. And we'll go where our customers want to go. Early on, stablecoin, you know, and fiat seems to be the demand, with a fast follower on tokenized deposits.
How important is the market infrastructure bill that's being debated in Congress? Like, passage of that to your strategy, does it impact it or does it-
You know, I think GENIUS was the, was the was the most important thing to get going.
Okay.
I know that there's conversations there, but I don't think that the bill will have a huge impact on the ultimate, you know, direction of travel here on digital assets that we can see.
Got it. Maybe, I guess, just pivoting to the investment management business.
Yeah.
Just talk to us in terms of when you think about asset growth there, like, what are the drivers? What needs to be done to accelerate that growth even more?
Yeah, I mean, we're really excited about the investment management business as well. So this is two incredible businesses with global scale, right? And so, what's been nice to see another theme here is in the last three years, investment management has had a net new asset growth of over 3%.
Yep.
That's been great to see. So the momentum there has been really good. I think what's nice about investment management, extremely well positioned for, you know, global trends. I mean, I think the migration into the passive space and ETFs in general, we're a huge, you know, leader in the ETF space, and so we've been benefiting from that. We have also great capabilities in the institutional retirement space and in cash products broadly. So, I mean, that has been, you know, a scale business that's been growing extremely well over the last three years, that's well positioned for the trends that you see unfolding over time.
And then just here, in the here and now, just in the fourth quarter, I mean, I think what drives this is innovation and product development, and we launched 37 new products in the fourth quarter alone.
Hmm.
So the momentum there is good. We have very strong partnerships that are driving the private markets capabilities, so the trend and democratization of private markets, which gives, you know, broader access, which was previously only available to, you know, sort of high net worth individuals, is getting, you know, much broader access, and we're right at the forefront of that. You know, and finally, just geographic expansion around the world in Asia-Pacific and in the Middle East, which has been very successful. And I think that's where the growth continues to come from.
We're positioned well for mega trends that are unfolding, the big wealth transfers and the ETF space, but also innovation in terms of our products, and then just being where, you know, growth seems to be taking off in certain geographies as well. So I put all that together-
Right.
Pretty bullish on investment management also.
Understood.
And before I let that go. I just covered the top two, you know, fee generators for-
Yep
For State Street. And it just occurs to me that, you know, when you think about that and you take a step back, I think we mentioned, and, you know, when I think about 2026, we mentioned our 4%-6% range for fees. You know, just the power of those two franchises, you know, if you just look at where markets are at the end of January, and even if markets stay flat for the rest of the year, we'll be at the upper end of that 4%-6% range. I think just kind of making sure it's clear what those sensitivities produce.
So it's really encouraging to see, you know, those tailwinds in investment servicing and investment management, and just how we benefit, not just from our organic growth but also what's happening in the marketplace. Upper end of 4%-6% is, you know, with markets flat from the end of January, is a pretty good place to be.
It is a good place to be. So, all right. That's a nice little update. Thank you. So the fee growth is trending well. Maybe, I guess, let's just talk about the other component of revenue growth on the net interest income or the spread revenue side. Just one, I think maybe talk about the balance sheet. I think you've talked about sort of balance sheet optimization. Just what are you thinking on the optimization front, and then just how do you think about deposit growth?
Yeah, I mean, I think a couple of things relate to balance sheet optimization. First, I wanna basically you know, make it clear that our objective here is that balance sheet optimization is consistent with net interest income growth, both now and in the future. So we grew net interest income, net interest income and NII, we grew that in 2025, primarily balance sheet-led. We're planning to grow that again in 2026, primarily net interest margin-led.
I see.
You know, when you get out into, you know, 27, you know, maybe looking for opportunities for each of them to contribute and maybe have some compounding you know, effects when you get out, you know, past 2026, which is more of a transition year from that standpoint. But nevertheless, our objective is to grow NII. We took some actions in the fourth quarter, which were able to, you know, kind of create, you know, immediate, you know, inflection, if you will, in net interest margin and have nice NII growth in that quarter. The full year effect of that will play through into 2026.
But, I think it's just good hygiene to focus on every component of the balance sheet, be highly disciplined with respect to what gets on the balance sheet, and ensure that it's efficient. And when you go around the horn, in terms of the components, the ones that pop out, that we think about, you know, and getting the best bang for your buck is the loan portfolio. Making sure that when we have credit capital that's been extended, that it's extended to really strong and deep customer relationships.
And, to the extent that if any customer relationships, you know, are not strong and deep, and so, you know, the virtual majority, virtually all of them are, but to the extent that any of them aren't we look at that as opportunities to pull back the capital, and we know what to do with that capital. We can use it to fund other clients' needs, or we can use it to fund buybacks, right?
So we, we wanna be very focused on having a high bar on what capital ends up on the balance sheet versus what's available for buybacks. And then, you know, as we mentioned, you know, we want to ensure that the mix of the balance sheet is, is really strong and that deposits are a bigger percentage of funding going forward than they have been in the past. And, you mentioned deposit growth.
Right.
You know, I think that, you know, it is certainly our objective. And when you think about a lot of our strategic initiatives and investment services to grow AUCA, that'll be consistent with a tailwind to try to grow customer deposits over time. And, that, that's the objective. I think there's, you know, some carryover effect from some surge deposits in 2025 that are normalizing in 2026, which drove that outlook for 2026.
Right.
But, you know, over the medium term, there are a number of tailwinds that we're more excited about that will allow us to see deposit growth when you look out on a multi-year basis.
By when do you expect those deposits to normalize?
Yeah, I mentioned that, you know, we're broadly stable in 2026, so that's basically early 2026 is when we see that, and then I think we'll start seeing some, you know, maybe as you get out into 2027, you start, you know, seeing the opportunity to grow deposits, you know, at that point.
A nd you see deposit growth just from a medium standpoint, consistent with just overall AUC growth, like is-
Well, it's a combination of things. I would say that you have, you know, if you have a healthy economy, you know, you start off with nominal GDP being consistent with, you know directionally, high correlation with deposit growth, as long as the Fed's not messing around with the balance sheet, to-
I was gonna ask about that.
- do significantly. You know, I mean, I think the fact that quantitative tightening seems to have ended, we'll see where that goes with the new Fed chair. But, you know, the lack of a headwind is, you know-
Right
If you can think of as sort of a tailwind. And you know, when you know, as quantitative tightening kind of ending kind of takes that off the table as a headwind, and then you can let the economy see deposit formation. You know, at the system level, the you know, bank deposits were flattish in 2025. But you know, you could imagine that overall banking deposits growing in 2026 and beyond, if the economy continues to you know, chug along.
Yep.
If the Fed's balance sheet is not being wound down too quickly. As we continue to grow AUCA, you start seeing a lot of those forces building as you get into the end of 2026, and that would be consistent with deposit growth over the medium term.
The pricing environment on deposits, how would you characterize that?
I think it's competitive, but fair. Nothing, you know, kind of extreme that I'm seeing. I mean, I think it's more consistent with bundled, you know, the bundled products being provided-
Right
with our customers and clients, and nothing exceptional that I'm seeing on the pricing side.
You mentioned the Fed balance sheet. I guess the Fed nominee, Kevin Warsh, has plans to potentially shrink the Fed balance sheet.
Yeah.
What does that mean for you? Like, would that create more growth, deposit growth, or like, does that balance sheet come, sort of, to the private sector and banks and the trust? I'm just wondering, how do you think about it?
Yeah, I mean, I think it's just one of the many factors to consider.
Right.
I mean, I think you know, we've lived through a period of quantitative tightening in the last year or two. So we know what that's like. And it tends to have a even with positive GDP and, you know-
Right
It tends to basically, you know, kind of have a be an offset to bank deposit growth, which would otherwise be growing. So, you know, we'll see where it comes out, but rates falling, quantitative tightening either not happening at all or happening at a lower pace. And, you know, strong GDP and growing AUCA are all things that can come into the mix. And like I said, I think the, you know, 2026 is a year where our NII is net interest margin-led. I would see, you know, 2027 and beyond being, you know, an opportunity for both balance sheet and ongoing net interest margin contributions to the NII construct in 2027 and beyond.
And just remind us, John, is there much left from an asset side when we think about just back book repricing or is that kind of?
No, there's several years left on that. I mean, I think we've got, you know, you've got the multi-year effect of asset repricing. And, there's also, you know, terminated hedges that are running off for us as well. So you've got two items that you know click along on a quarter-by-quarter basis and it's multi-year in nature. And you know, that's a nice underpinning to the net interest margin, along with just ensuring that we have good hygiene related to deposit pricing and downward betas when and if the Fed cuts rates, and deploying that profitably on the asset side of the balance sheet. So, you know, I do think there's some opportunity to continue to grow net interest margin, as I mentioned. You know, again, and we'll put all that together in a medium-term kind of way, you know, as I mentioned in January.
Got it. Just switching to, on the expense side. W hen we think about, you've been getting a lot of savings, which have been used to fund the business as we look forward. When we think about, so you talked about the revenue side, the digital platform, et cetera, where you think there are productivity opportunities. But when we think about the absolute cost save opportunities, is there a lot of low-hanging fruit as you sort of go through the bank, and, like, how meaningful could that be?
Yeah. I mean, the way we try to frame that is, that, in 2026, we're growing-- we've articulated that we would grow expenses 3%-4%. But underneath, there's a lot of moving parts underneath that.
Good.
Within that 3%-4%, round numbers, about 5 percentage points of savings from a productivity standpoint that are expected to be delivered in 2026. And so what that allows us to do is to accomplish two very important goals. One is to fund this distinctive strategic portfolio that we have, which is very exciting, and is really the source of where a lot of the upsize opportunities for growth will be, again, over the medium term. And at the same time, achieve our goal to be delivering positive operating leverage of at or above, or actually above 100 basis points. So it's a combination of the two. And we've been doing that, you know, over the last couple of years. We've been able to generate $500 million or so a year. I think connecting it back, it's essential to our, you know, to basically-...
It's connected to transformation. As transformation begins to accelerate and deliver on the areas I mentioned before, which is accelerating on the technology side, scaling agentic and, you know, kind of transforming our operating model and the ways that we work. We'll see, as we're getting in the end of 2026, more and more of it coming from those things than more of the traditional sources and levers that we've pulled over the last couple of years. And so that solidifies that productivity and has an opportunity to grow that productivity for multiple years down the line, so that we can continue to invest in strategic initiatives and continue to drive positive operating leverage.
So I guess, I'm gonna put words in your mouth, but I think you talked about providing a, maybe an update on strategic targets at some point later in the year. But it feels like you're optimizing the balance sheet. Margin expansion should be good, just when we think about from a return profile, productivity initiatives, all of that. Like, how should we think about just the... or early days, but how do you think about the profitability of the franchise when we think about the pre-tax margin, et cetera?
Yeah.
I don't want you to front load your own update, but yeah.
Yeah. No, I think it's an important point. I mean, I think. So, you know, last couple of years, we've grown pre-tax margin, you know, into 2024. From 2023 to 2024. We grew pre-tax margin again from 24%-25%. Our guide, you know, for 2026 implies that we're gonna grow pre-tax margin again in 2026. So it's a multi-year growth in pre-tax margin, and so the trends are there, you know, and a nice pivot a few years ago from that standpoint. And so we think there is significant opportunity to communicate what we believe the potential of this platform really is. And we think there's meaningful opportunity to grow pre-tax margin and returns on equity and ROE as you get out over the medium term.
And I think it's a natural evolution of the franchise to get to the point where I think in the second half of 2025, we delivered 30% margin or a little better. And again, the 2026 implies that. That's a good, you know, starting point. You know, in terms of the 30. And I think what you'll, what you'll see us do, reasonably soon, is that, is that you'll end up with, seeing that 30%, you know, pre-tax margin, and seeing what the, what the significant increase could be off of that, you know, out over the medium term. So, you know, likely to be, likely to be something that you'll hear about, you know, call it... You know, I think it would probably be pretty consistent with, our, our typical, strategy planning cycle, which happens middle of the year, around July.
Got it. It's helpful. I guess maybe one last question around capital deployment and just capital management priorities. But actually, before I get to that, from a regulatory standpoint, I think there's an expectation we'll get some more proposals out of the Fed over the coming months. When you think about State Street, are there aspects to the liquidity rules that could be changed or altered, particularly for the trust banks, that would actually have an impact on the business? Like, is there or-
Yeah, it doesn't appear nothing that appears to be worrisome from a liquidity standpoint that I can see. I mean, I think-
I meant more in terms of something that could be positive.
Yeah. I mean, you know, I don't, we don't feel, you know, significantly constrained currently. And from what I can tell, the direction of travel is pretty consistent with how we're trying to run... Whether it's liquidity or capital, there's, you know, there's nothing that's overly worrisome.
Got it.
I mean, I think that, you know, we have exceptionally strong liquidity and capital, and what seems to be coming down the regulatory pike wouldn't have a meaningful impact on us one way or the other.
Got it. And I guess just lastly, from a capital deployment standpoint, as you look through all of this, just give us your thoughts around buybacks, buybacks related to stock valuation. How do you think about all of that?
Sure. Yeah, I mean, I think we have, you know, I think I go back to what I said at the beginning, which was, you know, we've got, you know, an exceptional opportunity to deliver against a strategic, you know, initiative portfolio that's very distinctive, plus I'm very excited about transformation. You put it together with a medium-term outlook that we're, that we believe is gonna be very attractive. And that, you know, we, you know, you put that together, and I think that the, you know, you've got an attractive valuation in the stock, right? And so we're, we've been buyers of our stock, from that standpoint, and we will continue to be.
And I think what we tend to try to balance is being very capital disciplined, and ensuring that the hurdle rates and the expectations, both strategically and financially, are done in the context of how attractive the stock is, right? So from that standpoint. And so, you know, we have the plan and the outlook for 2026 is to be around 80% of earnings. That other 20% is really allocated to the expectation to be able to deploy RWA with, you know, and consistent with the strategic initiatives we've been talking about, and the big one there is private markets. So serving our private markets clients and those that, where we are from a bundled standpoint, bringing both credit products as well as, you know, fee-based products to bear. With respect to our private markets clients, their returns from a financial standpoint typically justify. You know-
Right.
Basically, you know, deploying that organically, and strategically, it's right on where we want it to be. So, that's where we are for now, to the extent that, you know, as we get throughout the year, if some of those opportunities don't hurdle or if some of those opportunities don't seem quite as attractive, then you, you know, we would adjust that 80%, you know, as applicable.
Yeah.
And, we'll stay flexible on that front.
What I was trying to figure out is, in a world where you're optimizing the balance sheet you are gonna reduce the RWA to some extent?
Well, I think that you're gonna see RWA grow in 2026.
Okay.
But it's not gonna grow by as much as it otherwise would, had we not been optimizing.
Yeah.
So, for example, if we're gonna basically pull back some RWA, if it's basically not being deployed well, and we're gonna help fund some of that front book so that we're being efficient. But nevertheless, net, net, we're gonna grow our, you know, our plan is to grow RWA in 2026.
Just one last one in terms of capital deployment. When you think about inorganic and you talked through a lot of great opportunities that State Street has, like, are there aspects where you could do something inorganic that would accelerate sort of product growth or revenue growth in a certain area?
Yeah. I mean, I think that our waterfall is, you know, support a growing and strong dividend, organic RWA growth, which I just articulated which is directly focused on private markets, so highly strategic. I think there are, you know, bolt-on, you know, acquisitions, small-ish are kind of to accelerate strategic capabilities is something we think about. But again, high bar, and anything beyond that, exceptionally high bar, for deployment of capital. But, I mean, I think the word that we wanna leave you with is, you know, extremely focused on capital discipline, and where it's not being deployed profitably, we're gonna give it back to the shareholders.
Capital discipline and updated strategic targets. All right.
Coming soon.
With that note, thank you so much.
Yeah. Thank you.