1 00:00:00,040 --> 00:00:03,120 Speaker 1: Barclay's launching a bold three year plan for shedding casts 2 00:00:03,120 --> 00:00:05,920 Speaker 1: as well as boosting and diversifying revenue. I aimed to 3 00:00:05,960 --> 00:00:08,520 Speaker 1: return at least twelve billion dollars to shareholders by twenty 4 00:00:08,520 --> 00:00:11,719 Speaker 1: twenty six through dividends and buybacks. The bank also announcing 5 00:00:11,920 --> 00:00:15,000 Speaker 1: a wide ranging overhaul of its business into five operating 6 00:00:15,040 --> 00:00:17,880 Speaker 1: divisions from three previously. I'm pleased to say that joining 7 00:00:17,920 --> 00:00:20,880 Speaker 1: us around the table is the CEO of Barclay's cs 8 00:00:21,079 --> 00:00:23,200 Speaker 1: ven Kada Krishnan. Then, Kat, Great to see you, sir, 9 00:00:23,520 --> 00:00:25,439 Speaker 1: Very good to see you, particularly here in New York City. 10 00:00:25,480 --> 00:00:27,319 Speaker 1: The stock is done really nicely. So let's start with 11 00:00:27,360 --> 00:00:30,120 Speaker 1: some good news. We've rallied since the mid of February 12 00:00:30,160 --> 00:00:32,720 Speaker 1: pretty aggressively. I would say, up by something like twenty 13 00:00:32,760 --> 00:00:35,080 Speaker 1: percent last time I looked yesterday evening. Do you think 14 00:00:35,080 --> 00:00:37,800 Speaker 1: that's evidence the shareholders are buying into your vision. 15 00:00:38,479 --> 00:00:42,199 Speaker 2: It's the early stage of that evidence. What's most important 16 00:00:42,200 --> 00:00:45,479 Speaker 2: for us is this plan, and it's a plan to 17 00:00:45,520 --> 00:00:48,280 Speaker 2: increase our rote to twelve percent from the ten is 18 00:00:48,360 --> 00:00:51,479 Speaker 2: shitters now. It's a plan to return about ten billion 19 00:00:51,520 --> 00:00:55,520 Speaker 2: pounds to shareholders and capital distributions. And it's a plan 20 00:00:56,000 --> 00:01:00,080 Speaker 2: to have a broad, diversified bank that's a global bank 21 00:01:00,200 --> 00:01:03,360 Speaker 2: leader centered in the UK, with an investment bank that 22 00:01:03,520 --> 00:01:06,040 Speaker 2: is going to fifty percent of the bank from around 23 00:01:06,080 --> 00:01:09,800 Speaker 2: the sixty percentage now. So our job is to having 24 00:01:09,800 --> 00:01:12,600 Speaker 2: created the plans to execute it and the share price 25 00:01:12,600 --> 00:01:13,400 Speaker 2: hopefully will follow. 26 00:01:13,520 --> 00:01:15,560 Speaker 1: Can we get into the investment bank and you talk 27 00:01:15,600 --> 00:01:20,240 Speaker 1: about diversifying revenue and leaning maybe more into advisory phase. 28 00:01:20,760 --> 00:01:23,119 Speaker 1: Is the talent there on board in the investment bank 29 00:01:23,120 --> 00:01:24,920 Speaker 1: all ready to make that shift or do you need 30 00:01:24,959 --> 00:01:26,440 Speaker 1: to hire to make that happen? 31 00:01:26,920 --> 00:01:30,000 Speaker 2: It is substantially there. You know, we made some organizational 32 00:01:30,080 --> 00:01:33,160 Speaker 2: changes last year. We have new leadership in the investment bank. 33 00:01:33,440 --> 00:01:37,720 Speaker 2: We hired a bunch of very you know, very skilled 34 00:01:37,760 --> 00:01:43,120 Speaker 2: bankers in healthcare, in technology, in the energy transition, and 35 00:01:44,360 --> 00:01:47,880 Speaker 2: that has already started to have its effect. Last week 36 00:01:47,920 --> 00:01:51,720 Speaker 2: we announced eqt's sale, We advised Eqity on its sale 37 00:01:51,720 --> 00:01:56,400 Speaker 2: to ecuotrands ecotanss sale to EQT, and so we're beginning 38 00:01:56,440 --> 00:01:58,200 Speaker 2: to feel the momentum from those hires. 39 00:01:58,800 --> 00:02:01,120 Speaker 3: What do you think it is about investment banking in 40 00:02:01,160 --> 00:02:04,320 Speaker 3: and of itself that makes it a less attractive proposition 41 00:02:04,480 --> 00:02:07,720 Speaker 3: to remain at the same size versus say, advisory fees. 42 00:02:09,800 --> 00:02:11,600 Speaker 2: Well, one of the things is when you move into 43 00:02:11,600 --> 00:02:14,919 Speaker 2: advisory fees, you start getting a better return on your 44 00:02:14,919 --> 00:02:18,200 Speaker 2: capital because you're not outlaying as much capital per unit 45 00:02:18,240 --> 00:02:21,120 Speaker 2: of revenue as you do if you're purely lending. Now, 46 00:02:21,200 --> 00:02:24,120 Speaker 2: lending is an important part of what we do. We 47 00:02:24,200 --> 00:02:26,480 Speaker 2: are a very big player in the fixed income markets, 48 00:02:26,680 --> 00:02:29,240 Speaker 2: in the debt capital markets as well as fixed income trading, 49 00:02:29,639 --> 00:02:31,200 Speaker 2: so lending is a part of what we do, but 50 00:02:31,200 --> 00:02:33,320 Speaker 2: we are just trying to broaden it into more advisory 51 00:02:33,320 --> 00:02:34,840 Speaker 2: and more equity related revenues. 52 00:02:35,080 --> 00:02:37,200 Speaker 3: How much is this sort of a new model of 53 00:02:37,200 --> 00:02:40,120 Speaker 3: banking that's basically taking all of Wall Street and a 54 00:02:40,120 --> 00:02:42,400 Speaker 3: lot of the global banks too, which is trying to 55 00:02:42,400 --> 00:02:46,040 Speaker 3: cater to the whole client rather than say, go after 56 00:02:46,080 --> 00:02:49,600 Speaker 3: specific deals and be focused on, for example, being at 57 00:02:49,600 --> 00:02:50,639 Speaker 3: the top of a league table. 58 00:02:51,000 --> 00:02:53,600 Speaker 2: Yeah, I think it's an important part of the shift 59 00:02:53,680 --> 00:02:59,359 Speaker 2: that's happening. And it's happening because previously in the investment 60 00:02:59,400 --> 00:03:04,480 Speaker 2: banking set, we were working with corporations, and since then 61 00:03:04,639 --> 00:03:06,919 Speaker 2: we still work with corporations in a very big way. 62 00:03:07,240 --> 00:03:09,600 Speaker 2: But in addition to that, you've got the financial sponsors 63 00:03:09,639 --> 00:03:12,960 Speaker 2: and the sovereign wealth funds. So the growth of concentrated 64 00:03:12,960 --> 00:03:15,960 Speaker 2: pools of capital makes it important to have that full 65 00:03:16,000 --> 00:03:18,160 Speaker 2: relationship with those players. 66 00:03:17,840 --> 00:03:20,560 Speaker 1: In the market. Every time we stay across the Barclay spouse, 67 00:03:20,600 --> 00:03:22,520 Speaker 1: I think we asked the same question. I can think 68 00:03:22,520 --> 00:03:24,840 Speaker 1: of that when Bob Diamond left that morning. Then Anthony 69 00:03:24,919 --> 00:03:27,600 Speaker 1: Jenkins came in our remember it was actually at Barclay's HQ. 70 00:03:27,720 --> 00:03:29,720 Speaker 1: The morning Jenkins got fired. I was sitting down with 71 00:03:29,760 --> 00:03:31,920 Speaker 1: the chairman and we talked about the same thing, the 72 00:03:32,000 --> 00:03:34,200 Speaker 1: investment bank, the future of the investment bank. Do you 73 00:03:34,240 --> 00:03:36,400 Speaker 1: find that's more of a media obsession than it is 74 00:03:36,440 --> 00:03:39,400 Speaker 1: an obsession with investors? Where does that question come from? 75 00:03:39,880 --> 00:03:44,960 Speaker 2: It's a legitimate question, and in our investeday four weeks ago, 76 00:03:45,080 --> 00:03:47,800 Speaker 2: I tried to address it directly as well. I think, 77 00:03:48,280 --> 00:03:50,640 Speaker 2: first of all, it's important for Barclays to have an 78 00:03:50,680 --> 00:03:52,640 Speaker 2: investment bank. We are good at it. We are the 79 00:03:52,720 --> 00:03:55,240 Speaker 2: largest investment bank outside the top five in the US. 80 00:03:55,560 --> 00:03:57,840 Speaker 2: I think it's an important for the world to have 81 00:03:58,040 --> 00:04:00,880 Speaker 2: a counterparty that's not just a US bank, and they 82 00:04:00,880 --> 00:04:03,720 Speaker 2: would prefer a UK bank when they do it. It's 83 00:04:03,720 --> 00:04:05,880 Speaker 2: an important source of revenue for US, and as I said, 84 00:04:05,920 --> 00:04:06,600 Speaker 2: we are good at it. 85 00:04:07,280 --> 00:04:09,560 Speaker 1: Why is it important and why do they prefer a 86 00:04:09,640 --> 00:04:11,960 Speaker 1: UK bank? Why is it important to have a bank 87 00:04:11,960 --> 00:04:14,120 Speaker 1: outside of the US. What are the benefits of that? 88 00:04:14,600 --> 00:04:18,200 Speaker 2: Well, you're diversifying your counterparty exposure in a national way 89 00:04:18,680 --> 00:04:21,520 Speaker 2: as the world is becoming a little more deglobalized. You know, 90 00:04:21,600 --> 00:04:25,480 Speaker 2: London has been historically a great financial center and remains one, 91 00:04:25,560 --> 00:04:28,760 Speaker 2: so and it's a very important one. And then UK 92 00:04:28,880 --> 00:04:31,800 Speaker 2: law governs a lot of financial contracts. So all those 93 00:04:31,839 --> 00:04:34,240 Speaker 2: three things make it very attractive to work with a 94 00:04:34,320 --> 00:04:34,840 Speaker 2: UK bank. 95 00:04:35,000 --> 00:04:37,799 Speaker 3: Does it also make it incredibly difficult to compete outside 96 00:04:37,800 --> 00:04:39,800 Speaker 3: of the UK, or say in the US, when you've 97 00:04:39,800 --> 00:04:42,080 Speaker 3: got a JP Morgan that's dominating absolutely everything. 98 00:04:42,400 --> 00:04:45,880 Speaker 2: Well, look, there are very large banks that are in 99 00:04:45,920 --> 00:04:48,400 Speaker 2: the US. The world is big enough for all of us. 100 00:04:49,200 --> 00:04:51,560 Speaker 2: We act like a US bank when we're in the US. 101 00:04:52,440 --> 00:04:54,240 Speaker 3: Well, when you act like a US bank with a 102 00:04:54,320 --> 00:04:57,240 Speaker 3: very specific focus. You've talked about in the pillars, the 103 00:04:57,279 --> 00:05:02,360 Speaker 3: five pillars in reorganization, the importance and focusing on consumer lending, 104 00:05:02,400 --> 00:05:06,239 Speaker 3: consumer spending. Recently, you offset some risk from your credit 105 00:05:06,240 --> 00:05:10,760 Speaker 3: card portfolio. There is a real question here about where 106 00:05:10,839 --> 00:05:13,039 Speaker 3: you see an opportunity to consumer, to lend in the 107 00:05:13,040 --> 00:05:16,960 Speaker 3: consumer space at a time of uncertainty in the cycle. 108 00:05:17,760 --> 00:05:20,320 Speaker 2: So we view the consumer space in two ways. In 109 00:05:20,360 --> 00:05:23,479 Speaker 2: the US, we've got a great credit card business, but 110 00:05:23,560 --> 00:05:27,719 Speaker 2: it's very specialized on partnership cards. We've got twenty corporate partners, 111 00:05:27,839 --> 00:05:31,880 Speaker 2: very blue chip corporations, twenty million underlying customers. We're looking 112 00:05:31,920 --> 00:05:35,120 Speaker 2: to continue to grow that partnership card business in the 113 00:05:35,200 --> 00:05:38,720 Speaker 2: US in a measured way because it has great synergies 114 00:05:38,720 --> 00:05:42,560 Speaker 2: with our investment bank and it's a great overall business 115 00:05:42,560 --> 00:05:45,719 Speaker 2: for us. In the UK, we have strength across the 116 00:05:45,760 --> 00:05:50,040 Speaker 2: consumer franchise and in small business banking, in corporates and 117 00:05:50,120 --> 00:05:53,200 Speaker 2: there it's sort of you know, it's our homeland, it 118 00:05:53,320 --> 00:05:55,560 Speaker 2: is our home turf, and we are very strong and 119 00:05:55,600 --> 00:05:57,560 Speaker 2: we look to increase that strength. 120 00:05:57,560 --> 00:06:00,240 Speaker 3: Well, I guess here's a question. Is there basically more 121 00:06:00,240 --> 00:06:03,479 Speaker 3: emphasis and growing in the United Kingdom outside of the US, 122 00:06:03,760 --> 00:06:05,920 Speaker 3: and the US effort is going to be much more bespoke, 123 00:06:06,200 --> 00:06:10,120 Speaker 3: focused on very clear sort of verticals rather than the 124 00:06:10,160 --> 00:06:11,760 Speaker 3: whole picture in the same kind of way as the 125 00:06:11,839 --> 00:06:12,720 Speaker 3: UK elsewhere. 126 00:06:13,040 --> 00:06:15,680 Speaker 2: Yeah, So the way I think about it is that 127 00:06:15,760 --> 00:06:18,800 Speaker 2: we've got a complete banking presence in the UK, touching 128 00:06:18,880 --> 00:06:22,960 Speaker 2: customers from the very largest corporations down to individuals and 129 00:06:23,080 --> 00:06:25,880 Speaker 2: offering them the full range of financial services. In the 130 00:06:26,040 --> 00:06:30,440 Speaker 2: US we offer investment banking services very well trading and 131 00:06:30,480 --> 00:06:35,080 Speaker 2: for banking, and as I said, a very good specialized 132 00:06:35,160 --> 00:06:36,560 Speaker 2: partnership credit card business. 133 00:06:37,000 --> 00:06:39,200 Speaker 1: We had a right shock big time on both side 134 00:06:39,240 --> 00:06:42,240 Speaker 1: the Atlantic in the last twelve eighteen months. What we 135 00:06:42,279 --> 00:06:44,240 Speaker 1: haven't seen is the credit stress off the bank of that. 136 00:06:44,680 --> 00:06:48,240 Speaker 1: As you look across the business at the moment, corporates, consumers, 137 00:06:48,360 --> 00:06:50,680 Speaker 1: the US the UK, you see any of that emerge 138 00:06:50,960 --> 00:06:51,479 Speaker 1: at all. 139 00:06:52,680 --> 00:06:56,280 Speaker 2: You're seeing small signs of it in the consumer side, 140 00:06:57,279 --> 00:07:00,599 Speaker 2: with just a take up of delinquencies of the lows 141 00:07:00,960 --> 00:07:04,960 Speaker 2: and I think look, employment remains extremely strong or unemployment 142 00:07:05,040 --> 00:07:07,760 Speaker 2: is low. You're seeing the effects of inflation, and you're 143 00:07:07,760 --> 00:07:11,480 Speaker 2: seeing the effects of the the wearing off of the 144 00:07:11,480 --> 00:07:14,360 Speaker 2: consumer stimulus that you had during COVID, and so you're 145 00:07:14,360 --> 00:07:17,920 Speaker 2: seeing a small increase in delinquencies in the consumer business. 146 00:07:17,920 --> 00:07:19,800 Speaker 1: It's there a pocket risk that you're being super vigilant 147 00:07:19,840 --> 00:07:22,000 Speaker 1: at about at the moment that maybe you're pulling back 148 00:07:22,200 --> 00:07:24,680 Speaker 1: on lending around that particular area of the economy. 149 00:07:25,160 --> 00:07:27,679 Speaker 2: Not really, I mean I think as an overall matter, 150 00:07:28,760 --> 00:07:31,880 Speaker 2: taking the very big picture, the economy is stabilizing. It 151 00:07:31,880 --> 00:07:34,200 Speaker 2: looks like on both sides of the Atlantic you're having 152 00:07:34,560 --> 00:07:38,600 Speaker 2: a softish landing. Employment, as I said, remains strong in 153 00:07:38,640 --> 00:07:43,160 Speaker 2: overall credit statistics, and the corporates remain strong. So generally 154 00:07:43,600 --> 00:07:45,280 Speaker 2: we are constructive towards lending. 155 00:07:45,440 --> 00:07:47,560 Speaker 1: I wanted to finish on the City of London if 156 00:07:47,600 --> 00:07:50,520 Speaker 1: I can, if you'll indulge me. Barclay's and its roots 157 00:07:50,520 --> 00:07:52,080 Speaker 1: of Barclays go all the way back to the like 158 00:07:52,200 --> 00:07:56,640 Speaker 1: sixteen hundreds, early seventeen hundreds. We're talking about centuries the 159 00:07:56,680 --> 00:07:58,800 Speaker 1: City of London for a long long time. It's bit 160 00:07:58,840 --> 00:08:01,840 Speaker 1: at the epicenter of global finance. Do you see that 161 00:08:02,080 --> 00:08:04,200 Speaker 1: as under threat in any way, shape or form. Do 162 00:08:04,200 --> 00:08:06,600 Speaker 1: you think the UK has taken that for granted over 163 00:08:06,600 --> 00:08:07,559 Speaker 1: the last several years. 164 00:08:08,280 --> 00:08:10,880 Speaker 2: I don't think the UK has taken it for granted. 165 00:08:10,960 --> 00:08:13,320 Speaker 2: I think it's very important for the UK. I think 166 00:08:13,360 --> 00:08:17,360 Speaker 2: the UK understand that. I think politicians on both sides 167 00:08:17,360 --> 00:08:20,840 Speaker 2: in the UK understand that extremely well. So No, I 168 00:08:20,880 --> 00:08:22,840 Speaker 2: think there's a lot of support for the City of London. 169 00:08:23,080 --> 00:08:24,880 Speaker 3: This raises a question of where we are in the 170 00:08:24,920 --> 00:08:27,720 Speaker 3: economic cycle where it is strongest, and this week we 171 00:08:27,800 --> 00:08:30,440 Speaker 3: do get a Bank of England decision. Is it beneficial 172 00:08:30,480 --> 00:08:32,480 Speaker 3: of rate stay higher for longer or do you want 173 00:08:32,480 --> 00:08:35,520 Speaker 3: them to come down to support the economic growth and 174 00:08:35,559 --> 00:08:37,439 Speaker 3: maybe some of the engine that John was talking about. 175 00:08:37,880 --> 00:08:40,680 Speaker 2: So ultimately that's a decision they have to make. It's 176 00:08:40,760 --> 00:08:46,959 Speaker 2: very important to balance. I actually think, I actually think 177 00:08:47,360 --> 00:08:49,440 Speaker 2: a little prudence and waiting a little is not a 178 00:08:49,440 --> 00:08:49,840 Speaker 2: bad thing. 179 00:08:51,040 --> 00:08:52,599 Speaker 1: You think there is an option that's a way a 180 00:08:52,600 --> 00:08:53,959 Speaker 1: little longer than why do you think? 181 00:08:54,000 --> 00:08:54,080 Speaker 3: So? 182 00:08:54,240 --> 00:08:56,720 Speaker 1: Why is the bigger risk maybe to cut too soon 183 00:08:56,720 --> 00:08:57,680 Speaker 1: and not to hold too long. 184 00:08:59,120 --> 00:09:03,800 Speaker 2: Well, I think that the economy is stabilizing, Employment is 185 00:09:03,840 --> 00:09:08,640 Speaker 2: still robust, inflation is coming down, So I think on 186 00:09:08,720 --> 00:09:11,480 Speaker 2: the balance it might be more prudent to wait a 187 00:09:11,480 --> 00:09:14,760 Speaker 2: little longer. Now our house view and that of many others, 188 00:09:14,960 --> 00:09:16,640 Speaker 2: is for more rate cuts over this. 189 00:09:16,600 --> 00:09:19,120 Speaker 1: Year, with the same applied to the US, the same 190 00:09:19,200 --> 00:09:20,560 Speaker 1: characterization of the situation. 191 00:09:21,440 --> 00:09:22,920 Speaker 2: I think so, But. 192 00:09:23,000 --> 00:09:25,480 Speaker 3: Just would that be good for you? Are high rates 193 00:09:25,520 --> 00:09:27,320 Speaker 3: good for banks or are they bad for banks? This 194 00:09:27,360 --> 00:09:28,440 Speaker 3: has been a preennial question. 195 00:09:29,080 --> 00:09:32,439 Speaker 1: Stable rates are good for banks. Thank camp, very diplomatic. 196 00:09:32,520 --> 00:09:34,400 Speaker 1: We appreciate your time. So it's fantastic to catch up 197 00:09:34,400 --> 00:09:36,040 Speaker 1: and thank you see here in New York City, thanks 198 00:09:36,080 --> 00:09:39,040 Speaker 1: for being Thanks le Spriend, Categoration and there of Barclay's 199 00:09:39,080 --> 00:09:41,320 Speaker 1: on this situation from the United States to the UK, 200 00:09:41,520 --> 00:09:44,079 Speaker 1: the differences, the similarities, and the path forward.