WEBVTT - Citi UK CEO Tina Lee Talks London's Financial Hub Standing

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<v Speaker 1>Tina. As always, thank you so much for giving us

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<v Speaker 1>a little bit of your busy schedule. Now, the government

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<v Speaker 1>has this Global Investment Summit on Monday here in the UK.

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<v Speaker 1>It will be one of the first times that international

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<v Speaker 1>investors really get to know this new administration. Do you

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<v Speaker 1>think they've done enough to try and attract investment to

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<v Speaker 1>the UK.

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<v Speaker 2>No, it's early days. I think they've absolutely set up

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<v Speaker 2>their stall and it's right that they have put investment

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<v Speaker 2>and growth at the heart of their strategy. The question

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<v Speaker 2>is how do they do it and what is the

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<v Speaker 2>role of government in terms of really unlocking private capital,

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<v Speaker 2>and that's both international capital and domestic capital. So having

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<v Speaker 2>the opportunity to have this Global Investment Summit next week,

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<v Speaker 2>I think is a great opportunity really for the government

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<v Speaker 2>to set out its stall and really put a little

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<v Speaker 2>bit more flesh on some of the ideas around, for example,

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<v Speaker 2>the National Wealth Fund, and particularly the role of the

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<v Speaker 2>UK Infrastructure Bank and the British Business Bank in terms

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<v Speaker 2>of working with the private sector to de risk some

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<v Speaker 2>of these sort of longer term investments that are so

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<v Speaker 2>needly needed in the UK.

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<v Speaker 1>Are you optimistic about the prospects of the UK economy,

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<v Speaker 1>but also you know, outside investment, I.

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<v Speaker 2>Am actually I mean, look, this year, we do expect

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<v Speaker 2>there to be quite sluggish growth in the UK economy.

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<v Speaker 2>We've only had one into straight cut so far this year,

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<v Speaker 2>even though we're expecting another one later on in the year.

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<v Speaker 2>But we do expect the pace of those cuts to

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<v Speaker 2>accelerate into twenty twenty five, so that does create a

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<v Speaker 2>positive backdrop for growth. And at the same time, really

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<v Speaker 2>what we're hearing from clients, and this is both international

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<v Speaker 2>and domestic, is what they really value is the political

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<v Speaker 2>stability that has been brought to the UK after the

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<v Speaker 2>general election, but most importantly wanting to see predictability and

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<v Speaker 2>policy stability to allow them to invest in long dated opportunities.

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<v Speaker 1>So you know, do you think that you know, the

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<v Speaker 1>October thirtieth budget is a really big test for the

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<v Speaker 1>government as again the labor probably hasn't been in power

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<v Speaker 1>for a long time. So what I'm hearing from big

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<v Speaker 1>international investors is that they want to see really what

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<v Speaker 1>it's about, and it's the first time we get a

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<v Speaker 1>properate test.

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<v Speaker 2>That's absolutely right. So all attention is really focused on

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<v Speaker 2>October thirty and we've already seen there's quite a lot

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<v Speaker 2>of speculation with regard to what is going to be

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<v Speaker 2>in the budget. You know, we have seen guilt yields rise,

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<v Speaker 2>you know, over the last week as there have been

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<v Speaker 2>some concerns around increased investment spending. But certainly I think

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<v Speaker 2>the government has done the right thing in terms of

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<v Speaker 2>just setting out their intention around the right guardrails, the

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<v Speaker 2>fact that that investment is not going to come all

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<v Speaker 2>in one go, it's going to be phased across the

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<v Speaker 2>electoral cycle, and most importantly that they intend on working

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<v Speaker 2>closely with both the OBR and the National Debt Office

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<v Speaker 2>or the National Audit Office, because that will reassure both

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<v Speaker 2>domestic and international investors.

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<v Speaker 1>What are you most excited about in the UK? I

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<v Speaker 1>know there, you know, there needs to be more apos

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<v Speaker 1>at some point hopefully. Is London the right place for that?

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<v Speaker 2>I think so. I mean, for me, the UK is

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<v Speaker 2>the gateway to the world. And actually when we look

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<v Speaker 2>at the IPO market here in London, it has actually

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<v Speaker 2>performed pretty well compared to previous years. So we have

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<v Speaker 2>seen a significant increase in IPOs, admittedly from a low base,

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<v Speaker 2>it's up about fifty percent so far this year, but

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<v Speaker 2>most importantly, those IPOs have performed very well, So I

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<v Speaker 2>think there is a backdrop with the rising foot seat

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<v Speaker 2>and the interstrate environment. That actually means the backdrop in

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<v Speaker 2>terms of the macro environment is actually looking broadly positive

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<v Speaker 2>for twenty twenty five. And certainly when we speak to

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<v Speaker 2>the C suite and to our corporate clients, they continue

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<v Speaker 2>to look for opportunities to invest, so that is key.

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<v Speaker 2>So corporate balance sheets are strong. There's been a lot

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<v Speaker 2>of financing which has gone in the deck capital markets,

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<v Speaker 2>both for M and a financing hybrid capital refise, liability

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<v Speaker 2>management exercises, so that means that we don't see much

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<v Speaker 2>stress in the system, which I think is also important.

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<v Speaker 1>You've been in charge of ze Group UKIT for a year?

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<v Speaker 1>Has it been? I mean there's been a lot going

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<v Speaker 1>on at the bank.

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<v Speaker 2>There has There's always a lot going on at City,

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<v Speaker 2>but the year has flown by and I really remain

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<v Speaker 2>so excited about the opportunity in the UK. You know,

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<v Speaker 2>where I've really been focused on is really taking advantage

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<v Speaker 2>of cities global network. We're in ninety six different countries,

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<v Speaker 2>but really focusing on those key trade corridors for US.

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<v Speaker 2>So we're looking to grow business between London and New York.

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<v Speaker 2>Of course the US is our home market, but also

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<v Speaker 2>in fast growing regions such as the Middle East and

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<v Speaker 2>in countries such as India. So for me, it's not

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<v Speaker 2>just about our banking business, but it is also about

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<v Speaker 2>how can we deliver one city through our markets, our

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<v Speaker 2>wealth and of course our world class services franchise.

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<v Speaker 1>We are basically one year on from the biggest reorganization

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<v Speaker 1>of City Group, with the chief executive Jane Fraser, putting

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<v Speaker 1>a number of things in place, and you were talking

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<v Speaker 1>about how you're also taking advantage of some of the

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<v Speaker 1>unique challenges but opportunities that you have. What's been the

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<v Speaker 1>biggest difference, So we have.

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<v Speaker 2>Really simplified our management structures. It sounds very mundane, but

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<v Speaker 2>things like fewer committees, fewer meetings, fewer management layers. We've

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<v Speaker 2>reduced management layers in some cases down to twelve from

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<v Speaker 2>fifteen sixteen seventeen, you know, so that means we're able

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<v Speaker 2>to really speed up decision making much better and drive accountability.

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<v Speaker 2>So that really has been I think the biggest change.

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<v Speaker 1>Will you hire people in the UK now that you've

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<v Speaker 1>kind of do have it where you want it? To

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<v Speaker 1>be eaten.

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<v Speaker 2>We're pretty much at the right size. We will continue

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<v Speaker 2>to hire selectively as we always have done. So we've

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<v Speaker 2>recently had our new head of our commercial bank for

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<v Speaker 2>the UK join he joined last week James Morris, and

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<v Speaker 2>of course at our most senior levels we've been able

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<v Speaker 2>to hire some really world class talent with this Ragavan

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<v Speaker 2>joining as head of Banking Tim Ryan in terms of technology,

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<v Speaker 2>so it is less about actually hiring significantly. We will

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<v Speaker 2>always be strategic around needing to fill fill roles, but

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<v Speaker 2>at the same time we have a deep bench at cities,

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<v Speaker 2>so it's also around giving people within our own organization

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<v Speaker 2>the ability to step up.

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<v Speaker 1>Do you know when you look at Europe, I mean

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<v Speaker 1>the banking world was like with speculation and then I

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<v Speaker 1>guess almost confirmation that there could be a merger although

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<v Speaker 1>the Germans don't want it. But between Commerce Bank and UniCredit,

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<v Speaker 1>how does that change the banking landscape and you your world?

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<v Speaker 2>So, I mean the European banking sector has been highly

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<v Speaker 2>fragmented forever and there has been lots of discussion over

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<v Speaker 2>the years around the need for banking union, capital markets union.

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<v Speaker 2>So certainly from our perspective, I mean we have a

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<v Speaker 2>significant presence in Europe in many different countries. So for us,

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<v Speaker 2>really any developments that require or actually allow for a

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<v Speaker 2>greater free flow of capital across the region we would

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<v Speaker 2>welcome because that allows us to deliver our cross border

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<v Speaker 2>capabilities more effectively. So we look on with interest.

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<v Speaker 1>But is it a litmus test of whether there's you know,

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<v Speaker 1>appetite for a political banking consolidation.

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<v Speaker 2>I think it's certainly going to be an important moment

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<v Speaker 2>for European banks, and I think it's interesting both. You know,

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<v Speaker 2>some of the comments that have come out from Mario

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<v Speaker 2>Draghi in his most recent report around competitiveness in the EU,

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<v Speaker 2>around regulation and again the need to drive capital markets union,

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<v Speaker 2>I think all plays into I think this next phase.

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<v Speaker 1>Do you know when you look at you know, I

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<v Speaker 1>guess the banking landscape here in London. I know you're

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<v Speaker 1>committed to Canary Wharf, but also maybe looking at other places,

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<v Speaker 1>what do you think happens to Canary Wharf?

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<v Speaker 2>Well, as you know, Francine, we are committed to Canary

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<v Speaker 2>Wolf are in the middle of a significant renovation of

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<v Speaker 2>our iconic city tower that's going to be completed in

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<v Speaker 2>the middle of twenty six. So when that's done, we

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<v Speaker 2>will have ten thousand people in London, the majority of

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<v Speaker 2>which will be at the wharf. So I think it's

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<v Speaker 2>a great environment to work in and I think what

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<v Speaker 2>Showby is doing with regard to that mixed use, I

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<v Speaker 2>think is to be welcomed. We also have four thousand

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<v Speaker 2>people in Belfast, so that has grown from the low

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<v Speaker 2>two hundreds twenty years ago. So again that is a

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<v Speaker 2>region that we are very committed to.

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<v Speaker 1>Tina, thanks so much as always for coming on, Tina Lee.

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<v Speaker 1>They're chief executive of City Group UK. Now coming up

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<v Speaker 1>as