Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Michael Mayo – Deutsche Bank
Michael Mayo – Deutsche Bank
On capital you’re at 3.8% annual common equity, its still below your 5% target, does your 5% target still hold and how do you think about that ratio.
Todd Gibbons
I would say we deemphasized the 5% last quarter given the global government emphasis on Tier 1 and the 3.8% you also have to think about it in terms of how rating agencies think about it and as detailed in the numbers the S&P and Moody’s think about it as including some of the TARP money as well so the rating agencies would think of it as something north of 4%.
Michael Mayo – Deutsche Bank
Your non-interest bearing deposits up one-half, where does that come from, why does it go to you and how sticky are you with those deposits.
Todd Gibbons
Its really coming from all of our businesses. We saw a fair amount when you saw interest rate cuts and the yield in treasury funds decline pretty dramatically we saw a fair amount of clients just parking those funds with us. So I think this is part of the flight to quality where you seen funds come into either money market funds, treasury funds, or sitting on our balance sheet.
But its really across the board, its no one single business. We’re seeing it in corporate trust, we’re seeing it in custody, we’re seeing it in our broker dealer services business, we’re seeing it in our treasury services businesses. Its all client money.
Gerald Hassell
In terms of its stickiness we continue to operate at pretty high levels of interest free deposits even though the markets up until today had calmed down a little bit.
Michael Mayo – Deutsche Bank
[inaudible] where is it coming from, which type of [inaudible]
Karen Peetz
Just specific to corporate trust which is a big driver, a lot of it relates to, its bondholder money waiting to be paid out and so save haven and safe harbor is particularly important so that’s a big driver in the issuer services sector.
Gerald Hassell
We don’t expect it to stay here forever that’s for sure and that’s why we’ve got it in such incredibly liquid, and a lot of it just sitting in the account at the Fed. Some of it may come for example with redemptions. We may see a decline in the first few quarters here.
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