Ep.128: J.P. Morgan, BlackRock, Citi and Wells Fargo's Earnings Explained

Hey, welcome back to The Trading Floor, the Friday segment of The Market Maker podcast. And we have just had the first of the big major financial institutions, namely BlackRock, JP Morgan, Citi, and Wells Fargo, kick off, um, the earnings season. And so what I wanted to do in this episode was to do a couple things. We're not equity research analysts, we'll leave that to Silvia to trawl through the numbers. But what we can do is try to look at this in a way that I think will be beneficial for everyone, which is we can highlight a couple of interesting points, I think, from the different, uh, companies. We have seen BlackRock, who are down in pre-market activity ahead of the opening bell on Wall Street immediately after the results, whereas the others are up. So a little bit of reasons of why, and maybe we could touch on each individual one for the benefit of people applying to these banks. I know it's very much assessment center season right now, but then also wanted to just step back a bit from this specific quarter and just talk about the kind of categorizations of different banks, because we're going to see the likes of Goldman Sachs and Morgan Stanley next week, who are a little bit more— I'd say GS probably the most pure play, more investment banking. But they couldn't be a world away from what a Wells Fargo looks like, um, or indeed how a BlackRock makes money. So wanted to kind of talk a little bit about that as well. So Piers, where do you want to go to first? Any particular name you want to touch on?

Well, now that you've been saying that intro, I was thinking actually, is it worth starting off— well, actually, what is earnings season. Ah, yeah, if you want to go, if you want to strip it all the way back.

Yeah, that's a good point. Uh, okay, yeah, I can, I can, I can, uh, give a quick— tell me. Okay, so, um, we are now on the 13th of October, the day that these earnings have come out. So with any public listed company, they need to declare their quarterly earnings. So this is looking back to third quarter performance. So looking back over the past 3 months now, one thing to be aware of, I guess, from an equity sector perspective is there's a very uniform way of which these different sectors release this information. And typically it unofficially is kicked off with the big banks, and it's pretty much always the same 4: JP Morgan, BlackRock, Citi, Wells Fargo. We then get the likes of Bank of America, MS Goldman's next week, and then you start to get the floodgates open. When you think about the S&P 500, 500 companies, and then they all start coming out. Um, we then start to see the likes of tech within that batch, and it's normally bookended with energy. So Exxon, Chevron, those types of names. Now, a couple of important things to take away. The reason why we're talking about this today, and a lot of the press will talk about it, is because the first company of a sector typically sets the precedent and will define then probably the health of that sector. And therefore the market impact is always much more sizable on the first company to report. Now that can extrapolate into different products, if you like. So chipmakers, for example, you don't necessarily need to be the biggest, but when you operate in a very small space with only a handful of players, however one is performing typically is indicative of the rest. So you can have these slight intricacies amongst different pockets in the market. But yeah, that typically is how it works.

But it also, like an extension to that last point, like chipmakers often, so when they announce their results, like with looking at revenues and obviously then profitability and stuff, but for chipmakers, particularly their revenues. Well, that's a good sign of how many chips Apple are buying, for example, which is then actually a really key measure. Well, how many Apple iPhones were produced? And the number they're producing is obviously a function of their forecasted sales. So you can start to extrapolate, extrapolate, and extrapolate. And from a chipmaker announcing their numbers, you can actually draw a line to make a clear estimate as to what Apple's iPhone sales may well be like. And so you can start to get, um, stock price movements in, yeah, in, in companies that are several orders removed from the one that's announcing.

I remember I once had to create a research document for, for traders like you, Piers, back in the day. And basically I had this, um, you know, when like a graphic designer would take an iPhone in a kind of pencil drawing and that we kind of tasked the team with going away and finding out the complete kind of makeup of an iPhone from its manufacturing, all the different contributors towards what make the screen, the glass, the plastics, the chips, every single piece. And there was, there was like, I don't know, 20 different companies involved. Yeah. And you'd basically do exactly what you said. So what the traders were demanding of us was How can we front run basically future Apple movement on the back of better understanding information flow, as you said, several order dimensions away from the company in itself. So yeah, that's definitely an undertaking, I would say, from a research perspective, but that's where you get the edge, I guess, from an information perspective.

Yeah. And this is where like some of the biggest hedge funds You know, like Citadel, for example. So famously in 2022, Citadel delivered the biggest annual profit in hedge fund history. And a big chunk of that, one of their key strategies, in fact, their most successful strategy of that year was actually trading earnings releases. So it was trading the quarterly earnings reports. And Citadel hire these kind of geniuses and throw a load of them into their quant research division. And so these geniuses are kind of creating highly complex mathematical models to try and better predict what Apple's earnings are going to be and try and predict it better than everyone else can. And so it's building complex, a little bit like you were describing, you were using, you described it as a pencil drawing, but I guess these days it's like using complex Python code to build a mathematical model with about, I don't know how many inputs, but probably thousands of inputs that then spits out ultimately what they think Apple's results are going to be. And then their traders will then trade the differential between what the Street consensus expectations are. So before each earnings report, there's an official earnings estimate, right? There's a forecasted figure. What was their revenue in Q3? What was their profit? So on and so on. And that's the average, essentially the average of all of the research analysts on the street. Okay, and that becomes the consensus. So Citadel will say, well, our researchers are providing more accurate forecasts than the average. So let's just say that the Citadel researcher thinks that Apple's profit is going to be better than the average forecasted expectation, then they'll go into that earnings report long Apple. And then they make their profits, you know, through their edge, which is that their researchers have got better models than anyone else.

Well, let's see if they can continue that. That's the game you play though, isn't it? Like, the market evolves, um, those calculations are fluid because when you are looking at it on every level You know, I remember looking at copper production and monitoring output out of individual mines at one point going like, you're literally taking it so far back down the pipe. It reminds me of, what was it, Ray Dalio in his book, and he was saying how when one of his first kind of investment ideas, and he actually went back to the farm and spent weeks observing the chickens to see how they ate to then define the type of volume of food that they ate and the composition of that food to then look at the manufacturing process behind the food. And you're like, well, no wonder it takes a genius to work this stuff out. I think they need a genius level of patience to, uh, but there's other examples that I remember now actually.

It's all kind of coming back. I remember like things like the Caterpillar earnings report.

Yeah.

Used to be what, what we would describe as like a bellwether report, right? And that, you know, Caterpillar, the manufacturing— they manufacture big industrial-scale diggers and stuff like that, right? And so how well they're doing is then a, you know, really good lead indicator as to how the building industry, you know, across the planet is doing. And that all feeds into the kind of, you know, great sort of macroeconomic litmus test is Caterpillar's earnings. And if Caterpillar's earnings are really strong and much better than expected, then actually economists would draw straight lines to say actually economic growth is, is faster than actually we had thought.

Um, so yeah, and then there's other— yeah, UPS was similar, however that's probably technologically changed or shifted a bit with Amazon. Yeah, um, there was airliners that you can monitor as well for different, um, kind of consumer appetite and these sorts of things for holiday making. But yeah, it goes on and on and on. I mean, this is why this is a profession in itself, a designated specific role within an investment bank.

Yep.

To look at this stuff.

And, and then ultimately for, for investors, you know, if you, if you're buying and selling stocks and you own stocks, then, you know, you only ever get You only ever get once every 3 months is the frequency at which you get real, real-time data from the company in terms of how they're getting on. In between these earnings reports, well, fine, you've got the share price which is going up and down, and you can start to second-guess, you know, macro developments and, right, how's that Like a classic being interest rates going up, right? So interest rates are rising and rising, and we're going to talk about banks in a minute, but interest rates going up, right? The Fed hikes rates. Okay, well, actually, what does that mean for banks who are lending money? And is this a good thing for them? And then you start to estimate how good it might be, and you start to estimate their net interest income revenue increases. But it's all estimating. Right. You're all, you know, at the end of the day, you're just forecasting. So it's only every 3 months you get bang, line in the sand. This is actually how they perform. This is actually how that company's been benefiting or not from this macro scenario. So it's an incredibly important moment once every 3 months. And yeah, as you say, there's a huge industry around the whole thing with all of these equity research analysts. Across the planet, basically trying to assess and analyze and predict how these companies are getting on.

Right. And you mentioned their net interest income. So perhaps we could start there because I, I guess that's the kind of, uh, the linchpin that brings all of this together in some respects. And another record by JP Morgan, but as you would expect Yeah, I mean, JP Morgan are smashing it.

I mean, what a year. But I guess you mentioned that kind of banks are the first sort of main major kind of sector to report earnings during an earnings season. So here we are today, then it's like, bang, let's go. Quarter 3 earnings start. Here are the big banks. And then it's going to take 4 or 5 weeks for us to get through all of the S&P 500. Earnings. But yeah, the banks go first. And I say banks, well, it's actually not just banks because BlackRock were today, and BlackRock are not a bank. Um, but maybe we can talk about— let's just, just put BlackRock aside for a second. So the big banks reporting today were JP Morgan, Wells Fargo, and Citigroup. Okay, so, you know, what are these banks? How are they generating revenue? And you mentioned Goldman's and Morgan Stanley next week, and I guess it's worth just saying that they're not the same types of companies. You know, ultimately, when you think of a bank, well, I don't know, depends who you are, I guess. When I think of a bank, or when your average person on the street thinks of a bank, well, they think about, well, the high street bank. That's where I put my money. That's where my salary gets wired into every month. That's maybe where I've got a credit card. Maybe I've got a mortgage with one of these banks. You know, you are, most people in any country will only associate a bank with their direct interactions with it. Okay, so retail banks is what we call it. I would say banks typically, I would, I'm simplifying, but would have kind of 3 areas. If you are what's called a universal bank, that means you're a bank that does everything. So JP Morgan, in fact, all JP Morgan being the biggest universal bank. Okay, so I would simplify it into 3 areas: retail, or sometimes called consumer banking. Okay, so that's your person on the street, your deposit accounts, your credit cards, your mortgages. Then you've got commercial banking. So that's companies. So companies, of course, well, they need bank accounts and they need, well, they need credit cards and they need, you know, financing and overdrafts and revolving credit facilities and you know, banks helping them to manage what's called their working capital. You know, a company needs working capital. That means you've got to have cash, you know, liquid cash to every month pay salaries, for example, or pay your rent or pay your suppliers or whatever, right? So bank, commercial banks will help companies with their working capital. Okay, so that's the commercial side. And then you've got the investment bank. Broadly, there's two sides to the investment bank, and one is the investment banking division, IBD. That's your M&A and your IPOs and all that kind of stuff. And then you've got your kind of capital markets side of the bank, which is trading, and that's your kind of sales and trading and facilitating trades for financial institution clients. So, yeah, you kind of got these three big areas. Now, JP Morgan have all three in spades. All right, they're massive, um, and indeed the biggest bank in the world, um, and they've had a fantastic year. And so if we talk about universal banks that have that loan book, then we can talk about this thing called net interest income, which is the most important metric for kind of judging how a, um, a bank that deals in consumer and commercial side, how are they performing? So the net interest income, put very simply, is all the loans they're providing to their customers, be they consumers or companies. How much interest are they earning on those loans? So remember, a bank quite simply will take deposits. So again, that's your consumer and your companies depositing money in their bank account. Right? Now, that's the bank's asset. We talk about balance sheet, we talk about assets and liabilities. And so A bank will take that and they'll take those deposits and then they'll lend that money and generate a return on those loans. And so a key measure is their net interest income, which overall on their loan book, how much are they making each month? Now interest rates have gone up, as we know, a lot. And this enables banks to make more money on their loan book because the interest rate on loans go up. Now, you could argue though that they pay their depositors an interest. So shouldn't it be that their net interest income— or shouldn't it just stay fixed? Doesn't matter if interest rates are going up. They might be making more on their loan book, but they're paying more for their deposits. But the thing about banks is they'll be very quick to lift the interest rate on their loans, and they'll be very slow to give their depositors extra interest. So the margin, the kind of spread between the two, widens, and ultimately banks make more money. And so, yeah, JP Morgan, to put some numbers on it, their net interest income, $22.7 billion, um, in, in 3 months, um, was 30% up on the same quarter last year. So that's pure, straight out. Interest rates have gone up, number one, that's the main reason. Number two, the big boys have attracted more deposits this year as a function of the Silicon Valley Bank crisis, where the smaller banks were seen as dodgy and risky. So quick, I'm going to pull my money out of those smaller risky ones, I'm going to park it in the big boys like JP Morgan. So more deposit flow coming in and then more lending going out as a result, and ultimately happy days for your, your JPMorgans.

From an investor's point of view then, is it a case of, um, this, that, that's not sustainable if it is just a formula of tracking interest rates, which we know now have broadly peaked and will now be going south from this, from this point?

Have they peaked? Now you might say Jamie Dimon's talking his own book, but he's been banging on. And by the way, he is, you know, we're not messing around. When he talks, people listen. He's one of the most prominent figures in the whole of the United States, I would say. And so, um, you know, he's been the head of the biggest bank for a decade plus. He was ahead— he was the head of that bank through the financial crisis. You know, he's seen it all. And he's come out on top and that's why people respect him. Now he's been banging on throughout the whole summer. He's saying the Fed are going to— there's a reasonable chance the Fed are going to hike rates to 7%. Now of course he would love that. Well, would he? Because hang on a sec. On the one hand, he might love that because that would be good for the net interest income. Except there is another part to this story. And actually the headlines around JPMorgan's earnings 35% jump in profits. Great, well done. Where's that come from? Higher interest rates, so more net interest income. And there's a second part to it, lower than expected loan losses. So remember, interest rates have gone up, right? And so it's supposed to be that people can't afford this very high interest rate anymore and they'll start defaulting on their loans. Okay, that has not happened. This whole story around the US economy being super resilient, way more resilient than anybody thought. We had a payrolls number last week that was through the roof. The economy's actually decent and everyone's going, wow, how's that happened? One of the functions of all of that is that loan losses have been much lower than banks themselves had predicted. And have prepared for. So you've got more interest income and less losses on loans at the same time. That's a double positive, right? But if Jamie Dimon's right and rates do carry on going up, well, I mean, there's only so much pain people can take before it's like the straw that breaks the camel's back. If rates went to 7%, then you're going to have to see loan defaults start to really ramp up and then loan losses start to ramp up, which of course means that's negative for banks. And then ultimately when rates are so high, people stop lending money. Sorry, wrong way around. People stop borrowing money. So in the end, a bank can have all the deposits they want, but they can only lend it and make net interest income if there's demand for loan, if people want to borrow, you know, ultimately that's out of their control. So when rates go too high, and 7% would definitely be too high, then actually that would be a probably net-net overall negative for a bank like JP Morgan.

I was just looking at and just thinking about the composition of the bank. You said the commercial bank has many tentacles, if you like, and you would think Okay, so that's good. There's diversification of risk. However, you were mentioning what, $20 billion? I mean, their IB revenues are $1 billion. Yeah, $1.6 billion. So it goes to show how important that consumer is.

It does. You've got to factor in— it's— you can't— so the figure on the net interest income was $22.7 billion, right? And you think, wow, okay, why is the IBD division of JP Morgan— it's not even— it's negligible, right? But you've got to factor in margins, profit margins. So your profit margin on your net interest income will be a lot worse than profit margins on IBD fees. That's just one thing to say. But IBDs had a shocking year. So I don't know what those numbers are, actually. You might not have them to hand, but what was JPMorgan's IBD revenue in 2021 when fees hit a record? I don't know how many times more than the $1.6 billion that they've clocked in this quarter. But just as the loan book is record-breaking Happy days. At the same time, the IBD side of the bank is performing at its worst. But if you're a universal bank like JP, then that's fine because yeah, you're more diverse and so you can roll with the punches. Next week we're going to get Goldman's report, their earnings. They've tried to become a universal bank. They, they never were. Goldman's were just an investment bank and a sort of capital markets, right? So they were just an investment bank, and they've, over the years, they've tried to diversify and become a commercial bank and can become a consumer bank. They've failed in that strategy, certainly on the consumer side. Spectacular fail. So really, they're left with a much less diverse set of revenue streams compared to JP Morgan. So when you're in a you know, um, an M&A sort of, um, desert like we're in at the moment, then that's going to have a way bigger negative impact overall on Goldman Sachs than it is on JP Morgan.

Yeah. And interestingly, Goldman spoke yesterday, so pretty much a week to the day ahead of their earnings, right? And what, what do you reckon they were saying?

They were probably saying things haven't been going well, guys, just heads up, it's gonna be ugly next week. But, you know, we're working on it and we got this plan and we got this plan and we got this strategy.

Lucky you, you're the inside man. But yeah, and in particular, they were warning about a hit to Q3 due to the sale of the fintech platform GreenSky.

Yeah. But they sold that, didn't they sell that in like March, didn't they? Or, yeah, I'm not sure about how they've, how they've, they're accounting for that loss. Yeah, yeah, they got, they'll be spreading that over.

Exactly, spreading that puppy over as long a period as possible.

That puppy, that big dog, that'll get spread over a few decades if they could.

But yeah, um, well, look, let's move on to, to BlackRock then, and let's talk a little bit about them. You said that they're different, they're not a bank. So how do they make their money?

Yeah, well, we talk about more terminology, and hopefully a lot of people listening to this podcast will know this already because you'll have done one of our simulations. But we often talk about the buy side and the sell side of the financial industry, um, and what we mean by that is, so JP Morgan would be the sell side. Okay, and BlackRock, well, they're the buy side. BlackRock are an asset manager or an asset management firm, not a bank. Um, in fact, BlackRock is a client of JP Morgan's. Okay, so one on the sell side. So at JP Morgan, within their investment bank, they have a capital markets division. Okay, so kind of pack— the investment bank has two sides, as I said at the start. You got your IBD, your M&A stuff and your IPO stuff, and fees are way down. Nightmare year. Okay, you then got your capital markets desks, that's the trading floor, and their, their job in JP Morgan, their job is to provide services for buy-side financial institutions, asset management, hedge funds, and the rest of them, right? Services being many, many different services, but one of the core ones is helping them facilitate their trades. So we talk about trade flow, okay? And this, this generates revenue for the investment bank, okay? Um, and trade flow has been— when, when markets are volatile, this is good news for investment banks because the trade volumes increase. More volumes means more money, okay? Now, on the buy side though, well, what's that? Well, that is the side of the industry where they're investing their clients' money. They're taking risk. They're taking a view on a market. They're buying stocks and hoping stocks are going to go up. And if they do, great, we're going to make money. And they charge fees as well. But their customers are individuals, for example, like high net worth individuals who will give their money or deposit their money with BlackRock and buy one of their ETF products, for example. Okay, and BlackRock will charge a fee for the individual customer to do that. Um, so BlackRock is an asset management firm. They sit on the buy side. The main way an asset management firm generates revenue, the main way a buy side firm generates revenue, is fees on assets under management. So management fees, and they charge a percentage of the assets they have under management. So for Asset management firms, it's all about AUM, assets under management, and how much money do you manage. So BlackRock are the biggest, and actually, uh, yes, their, their latest figure as of this quarter, and one of the— well, BlackRock's down 1% in, in trade after their earnings, but their latest figure is $9.1 trillion. That's the amount of assets under management. Okay. The key thing that's dropped. So that's dropped from Q2. In Q2, it was $9.43 trillion. Now, there's one key reason why the assets under management has dropped, and it's kind of out of their control. It's dropped because, well, you might have read the stories a couple of weeks ago. As September was drawing to a close, as Q3 was drawing to a close, lots of headlines in the FT and so on. The S&P has its first down quarter for over 12 months. So look, share prices have gone down. So that means the value of the assets on the books has gone down just because the share prices have gone down. So it just means then that BlackRock generate less fees, less management fees, because it's a function of the value of these assets that they own. Okay, so that's the kind of negative story about BlackRock with their earnings. Um, it's a significant drop in like net inflows, and ultimately the AUM figures dropped. And so yeah, that's the kind of bad news. And Larry Fink Anthony Cheung, who is the CEO. He's actually, actually I was just looking, he's actually the chairman and the CEO.

Yeah, there you go.

Basically he's king and emperor and president and prime minister and basically does what he wants. His comment was, I'm quoting here, for the first time in nearly two decades, clients are earning a real return in cash. And can wait for more policy and market certainty before re-risking. This dynamic weighed, this dynamic weighed on industry and BlackRock's third quarter flows. To simplify, rates have gone up. You can get more interest on your cash than you used to be able to. People perceive there being some risk economically. So I'm going to sell my S&P ETF. Thanks, BlackRock. I'll have that cash back. So that's outflows, right? And then with the cash, well, they'll buy a money market fund that's generating 5% yield. And then he's talking about, then they're going to wait before rates come back down, before re-risking, before then going, right, okay, I'll take my cash out of that high-interest account now and I'm going to buy the ETFs again. And give it back to BlackRock. So he's saying that really it's a function of the macro headwinds that's ultimately driving that.

Yeah, and the, the two kind of headlines summarizing that were that clients pulled a net $13 billion in long-term investment funds. So that was the first outflow since the onset of the pandemic, but clients added 15 billion to the firm's separate business, which is cash management and money market funds.

Okay. Yeah. Right. So they do, they do have their own.

Basically, if we own the whole ecosystem, it's just a bit of cash moving from one part of the business to the other.

Yeah.

With a slight $2 billion top-up.

Yeah.

But he's right. So, so Fink is right. I mean, so when you read the headlines in the FT and they're kind of bringing the drama to the outflows, comparing it to the pandemic, I mean, that's just sensational, right? It's not— yeah, what he's saying is correct. What's happening and how you explain what Jamie Dimon's saying is like correct. I mean, it's not— is this earnings season just the, the financial media is just trying to drum up a bit of interest here, and actually it's pretty in line with expectations as an overall summary?

I would say, having bigged up this moment, earnings season, the only time every 3 months we get information from companies, and having like really amped it up, this earnings season is probably the least sort of, um, anticipated earnings season for a while because we can't, you know, the macro story— well, I was gonna say hasn't changed, but It hasn't changed in a few aspects. It hasn't changed. We're still where, like the Fed, we're still in the situation where the US economy is resilient. We had some labor market data like less than a week ago showing that inflation, we had key inflation data yesterday that, all right, was a bit mixed. But I guess you can say the core inflation number came down. There's some shelter cost inflation figures that jumped up, which could be a bit concerning. But broadly, the Fed are at the, the top, and they're going to stay at the top, right? For like the next quarter, they're going to stay at the top. For quarter one, halfway through next year, they're probably still where they are, right? So basically nothing's changing. Now, you could— the reason why I hesitated when I started this section was, you know, obviously we've had an escalation in certain things, like the geopolitical situation has suddenly quite dramatically escalated. So that's, that's something that could start to play into people's thinking. Um, but, but of course, these earnings season— these earnings seasons, that it's all about behind what's happened in the past. So when We're not expecting too much, too many surprises, I wouldn't say. What we're more interested in probably is their view on the future, their forecasting for the quarter ahead. But of course, this geopolitical situation has happened so recently, it's unlikely any of these quarterly earnings forecasts are going to contain any kind of elements factoring that geopolitical thing in. I think this earnings season's, yeah, probably will pass fairly, um, without too much sort of surprise and attention. That would be my guess.

I think it's a good job that you, uh, kept people hanging on for a good 25 minutes before you dropped that bombshell.

We can talk— let's talk about just finishing on BlackRock, because we talked about the fact they're an asset management firm and talking very top-level terms. Um, and fine, assets under management are down. But one thing, like many, many sectors, one thing about BlackRock is their technology services revenue. So like technology disrupting all sectors, it's disrupting asset management. And actually it's starting to become the kind of bigger and bigger, uh, portion of BlackRock's revenues. It's still quite small in the grand scheme of things. I was looking— so, um, BlackRock, what do they call it? Their technology services revenue was $407 million for the quarter, which was up 20%. So it's the fastest growing part of its business. All right, it's still relatively small. Um, just trying to find what was the total revenue figure. Um, Uh, I've got their EPS $10.91.

Yeah, total revenues of $4.52 billion.

Okay, fine. So $4.5— okay, fine. Yeah, so for— on, on $4.52 billion, you've got $407 million, which is your technology services revenue. But that, that's like the jewel in their crown. That's the fastest growing. It's a bit like, um A comparison would be Microsoft and their Azure cloud computing business, right? That's the fastest growing part of their business. And so with BlackRock, we're always tracking that. And again, it seems to be performing really well. And look, it's still small, but the point is that at its relatively faster growth rate, it's going to become a bigger and a bigger and a bigger part of the pie.

It seems like a nice hedge against the AUM because Yeah. If markets were to severely fall, hurting one side, the demand for technology and access to information increases. Yeah. Doesn't decrease whether the market goes up or down. People, even at the further extension of that volatility, the higher the demand is for information flow and services pertaining to that.

Yeah. And maybe a little bit of insight. So one of their key products within that part of their business, the technology services part of their business. The key product is called Aladdin. I learned two things about Aladdin this week that I didn't know. Number one, the year it was introduced.

Oh, it must be 1993 then.

1990.

Okay. Because Aladdin came out in 1993, I think.

Oh, well, okay. I've got a different, I've got it as they introduced it in 1990. Anyway, let's just say early '90s, which kind of shocks me a bit because it's like, wow, okay, you only really start, you've only started to hear about Aladdin in recent years. And I guess it's been super small as a kind of revenue thing and now it's becoming something meaningful. But I mean, what does Aladdin do? Well, it's a product and a service that they kind of sell and license out to investment management firms. Okay, so other firms that are running money and that are investing money. And it's a technology platform that enables investment managers. So it's got like risk management capability. So it provides comprehensive risk analytics that allows portfolio managers and risk professionals to see their exposures across various factors and scenarios. There's portfolio management services in there where you can get— basically fund managers have a kind of comprehensive view of their portfolios and there's lots of analytical tools. There's trading services through Aladdin. So I mean, like order execution and things like that. And then there's an operational side to the platform. There's a compliance part. There's lots of data. There's a community of users. All of these, loads of these different elements elements. And obviously the, the, the bigger it grows, the more people use it, well then the more valuable the data and the community becomes as part of that offering as well. So yeah, it's probably something that people don't realize if you're not that familiar with BlackRock. You might know about broadly asset managers and what they do, but yeah, the likes of the BlackRocks of this world are working on a what is becoming a more and more significant, you know, great diverse diversifier for their kind of revenue streams.

Cool. Well, look, we'll look to, we'll look to wrap it up there. So hopefully if you are applying to BlackRock, you've learned a little bit more about the technology part there just to end, but also about just generally the— I think it's combination if you are going into interview situation of understanding from a commercial awareness point of view, the macro backdrop, which hopefully Piers has covered, which is the kind of the interest rate impact that it's having on these banks and their composition. And then forward-looking, how that evolving will then impact the bank going forward, uh, as much as some of these other elements discussed. So yeah, any questions at all, feel free to reach out. Obviously we post this on our social channels, so just drop us a message, or you can leave a question on Spotify if you wish to. Otherwise, Piers, always a pleasure. Have a great weekend.

Have a great weekend.