1
00:00:00,120 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:09,640 --> 00:00:12,120
Speaker 2: This is the BlueBag Day, baq At podcast. Good morning,

3
00:00:12,119 --> 00:00:14,960
Speaker 2: It's Wednesday, the thirtieth of July. I'm Caroline Hepkee here

4
00:00:14,960 --> 00:00:15,960
Speaker 2: in London and.

5
00:00:15,960 --> 00:00:17,400
Speaker 1: I'm Stephen Carolin Brussels.

6
00:00:17,440 --> 00:00:21,279
Speaker 3: Coming up today, HSBC announces a three billion dollars share

7
00:00:21,360 --> 00:00:25,240
Speaker 3: buyback even as profits fall short, while UBS beats and

8
00:00:25,360 --> 00:00:27,720
Speaker 3: Santander meets expectations.

9
00:00:28,120 --> 00:00:33,160
Speaker 2: A powerful earthquake triggers tsunami warnings from Japan to California

10
00:00:33,240 --> 00:00:35,360
Speaker 2: as authorities prepare for waves.

11
00:00:36,080 --> 00:00:40,480
Speaker 3: Plus more steel than one hundred and sixteen Empire State buildings.

12
00:00:40,680 --> 00:00:44,320
Speaker 3: Why China's one hundred and sixty seven billion dollar megadam

13
00:00:44,360 --> 00:00:48,560
Speaker 3: in Tibet is a legacy defining gamble for president cheating Ping.

14
00:00:48,880 --> 00:00:51,160
Speaker 2: Let's start with a roundup of our top stories.

15
00:00:51,680 --> 00:00:55,200
Speaker 3: HSBC's profits have fallen short of expectations after the lender

16
00:00:55,240 --> 00:00:58,280
Speaker 3: posted a rise and expenses and took a charge on

17
00:00:58,320 --> 00:01:01,160
Speaker 3: its holdings in a Chinese bank. But despite the miss,

18
00:01:01,160 --> 00:01:03,640
Speaker 3: Europe's biggest bank announced a new share buyback of up

19
00:01:03,640 --> 00:01:05,760
Speaker 3: to three billion dollars with Moore.

20
00:01:05,760 --> 00:01:07,640
Speaker 1: Here's Boomberg's cresspass.

21
00:01:07,680 --> 00:01:10,920
Speaker 4: Second quarter earnings that the London headquartered bank came in

22
00:01:10,959 --> 00:01:14,840
Speaker 4: at six point three billion dollars versus the forecast of

23
00:01:15,040 --> 00:01:18,759
Speaker 4: just below seven billion dollars. The lender recorded a two

24
00:01:18,800 --> 00:01:23,160
Speaker 4: point one billion dollar impairment linked to its holding of BOCOM,

25
00:01:23,560 --> 00:01:27,520
Speaker 4: while expenses jumped ten percent to eight point nine billion dollars.

26
00:01:27,760 --> 00:01:32,280
Speaker 4: That increasing cost was related to restructuring expenses, as CEO

27
00:01:32,400 --> 00:01:36,080
Speaker 4: George el Hedri continues to deliver his plan for a

28
00:01:36,120 --> 00:01:40,600
Speaker 4: broad overhaul of HSBC's global operations as part of what

29
00:01:40,680 --> 00:01:44,600
Speaker 4: he has called a simplification of the bank's global network.

30
00:01:45,000 --> 00:01:47,760
Speaker 4: In London, Chris Pitt Bloomberg Radio.

31
00:01:48,080 --> 00:01:51,360
Speaker 2: UBS has reported hard an expected profit in the second

32
00:01:51,520 --> 00:01:55,440
Speaker 2: quarter of two point four billion dollars. The outperformance was

33
00:01:55,520 --> 00:01:59,720
Speaker 2: driven mainly by technical factors, including a slight profit in

34
00:01:59,760 --> 00:02:03,440
Speaker 2: the US unit that's winding down former credit Swiss assets.

35
00:02:03,800 --> 00:02:07,240
Speaker 2: Pre tax profit at the Swisslanders wealth management unit was

36
00:02:07,320 --> 00:02:11,840
Speaker 2: below estimates, while the investment bank performance broadly as expected.

37
00:02:12,120 --> 00:02:15,679
Speaker 2: UBS also signaled that the prospect of cooling trade tensions

38
00:02:15,680 --> 00:02:18,560
Speaker 2: should provide a boost later in the year, saying that

39
00:02:18,600 --> 00:02:22,079
Speaker 2: they're seeing quote a high level of readiness among investors

40
00:02:22,120 --> 00:02:24,359
Speaker 2: and corporates to deploy capital.

41
00:02:25,040 --> 00:02:27,360
Speaker 3: I mean, while santanderra Is reported net inc over the

42
00:02:27,400 --> 00:02:30,560
Speaker 3: second quarter of three point four to three billion euros,

43
00:02:30,639 --> 00:02:33,920
Speaker 3: meeting the average analyst estimate. The Spanish lender will start

44
00:02:34,040 --> 00:02:36,800
Speaker 3: a share by back of about one point seven billion euros.

45
00:02:37,040 --> 00:02:39,920
Speaker 3: The bank's capital deployment strategy has been a key focus

46
00:02:39,960 --> 00:02:43,080
Speaker 3: following its cash offer for TSB and the UK and

47
00:02:43,120 --> 00:02:45,160
Speaker 3: the sale of at stake in its Polish unit.

48
00:02:46,520 --> 00:02:50,480
Speaker 2: The US, Japan, the Philippines and other countries are bracing

49
00:02:50,560 --> 00:02:55,240
Speaker 2: for tsunamis after a powerful Russian earthquake. Warnings are in

50
00:02:55,280 --> 00:02:58,519
Speaker 2: place on the west coast of North America and Hawaii,

51
00:02:58,720 --> 00:03:02,440
Speaker 2: according to the USU Nami Warning System. Speaking during a

52
00:03:02,520 --> 00:03:07,240
Speaker 2: press conference, Rick Blangyardi, the Mayor of Honolulu, set a

53
00:03:07,320 --> 00:03:09,359
Speaker 2: stern warning for residents.

54
00:03:10,000 --> 00:03:10,600
Speaker 5: Pay attention.

55
00:03:10,760 --> 00:03:13,800
Speaker 6: This is real and it's more serious, and they happen

56
00:03:13,880 --> 00:03:14,520
Speaker 6: to be watching.

57
00:03:15,919 --> 00:03:17,880
Speaker 5: We don't have these events very often, but when we.

58
00:03:17,840 --> 00:03:19,880
Speaker 6: Do, they are they're real in the sirius. So we're

59
00:03:19,919 --> 00:03:21,720
Speaker 6: just asking to pay attention, to do what you've been

60
00:03:21,760 --> 00:03:23,600
Speaker 6: asked to do, and we're all going to hold for

61
00:03:23,600 --> 00:03:24,000
Speaker 6: the best.

62
00:03:25,360 --> 00:03:28,520
Speaker 2: That was the Mayor of Honolulu speaking. There waves between

63
00:03:28,600 --> 00:03:32,320
Speaker 2: one and three meters in Hawaii are expected to arrive

64
00:03:32,560 --> 00:03:36,360
Speaker 2: just after seven local times six am in the UK.

65
00:03:37,040 --> 00:03:39,520
Speaker 2: In Japan, some regions could get waves as high as

66
00:03:39,560 --> 00:03:43,440
Speaker 2: three meters within hours, according to the nation's weather agency.

67
00:03:44,640 --> 00:03:46,920
Speaker 3: The US president is expected to make a final call

68
00:03:47,000 --> 00:03:50,360
Speaker 3: on maintaining the ninety day tariff truce with China before

69
00:03:50,400 --> 00:03:53,680
Speaker 3: it expires in two weeks time. US Treasury secutaries got

70
00:03:53,720 --> 00:03:57,280
Speaker 3: best and told CNBC the recent talks with Chinese negotiators

71
00:03:57,280 --> 00:03:59,200
Speaker 3: in Stockholm had been constructive.

72
00:04:00,160 --> 00:04:04,640
Speaker 6: Now Here, you have the two largest economies in negotiation,

73
00:04:05,320 --> 00:04:08,360
Speaker 6: and as I've said before and we reiterated to them,

74
00:04:08,720 --> 00:04:11,400
Speaker 6: we don't want a decouple. We just need to de

75
00:04:11,600 --> 00:04:14,880
Speaker 6: risk with certain strategic industries.

76
00:04:16,000 --> 00:04:18,520
Speaker 3: Scott Bessemer, speaking to the NBC there as, he said

77
00:04:18,839 --> 00:04:21,719
Speaker 3: President Trump would make a final decision on whether to

78
00:04:21,800 --> 00:04:25,120
Speaker 3: extend the pause, with quote a couple of technical details

79
00:04:25,120 --> 00:04:28,559
Speaker 3: to work out. Meanwhile, Donald Trump told reporters that another

80
00:04:28,640 --> 00:04:32,000
Speaker 3: key agent trading partner, India, could be hit with tariffs

81
00:04:32,000 --> 00:04:33,960
Speaker 3: of twenty to twenty five percent.

82
00:04:35,440 --> 00:04:38,159
Speaker 2: The Federal Reserve in the US is widely expected to

83
00:04:38,160 --> 00:04:41,200
Speaker 2: hold into at rates study for a fifth consecutive meeting

84
00:04:41,279 --> 00:04:45,560
Speaker 2: later today. However, dissents from one or more officials could

85
00:04:45,560 --> 00:04:48,680
Speaker 2: send the message that some policymakers would like to see

86
00:04:48,680 --> 00:04:52,240
Speaker 2: a cut to borrowing costs sooner rather than later. Wendy

87
00:04:52,560 --> 00:04:56,760
Speaker 2: Edelberg is senior Fellow in Economic Studies at Brookings.

88
00:04:57,320 --> 00:05:00,599
Speaker 7: Inflation is only running moderately above the Fence target, But

89
00:05:01,120 --> 00:05:04,200
Speaker 7: unlike in twenty twenty four, when all the factors were

90
00:05:04,240 --> 00:05:08,440
Speaker 7: pointing to moderating inflation, which was great news, now we

91
00:05:08,520 --> 00:05:11,720
Speaker 7: have this major factor, tariffs, that we know is going

92
00:05:11,760 --> 00:05:14,719
Speaker 7: to push up inflation, and so that's got to be

93
00:05:14,800 --> 00:05:16,360
Speaker 7: on the Fed's mind. I know it is, of.

94
00:05:16,320 --> 00:05:16,920
Speaker 1: Course it is.

95
00:05:17,000 --> 00:05:20,640
Speaker 7: Powell has said it is, and that is one of

96
00:05:20,680 --> 00:05:24,160
Speaker 7: the best reasons I think that they'll have for standing

97
00:05:24,240 --> 00:05:25,599
Speaker 7: pat at the next meeting.

98
00:05:26,880 --> 00:05:30,200
Speaker 2: So that was Wendy Edelberg speaking there as President Trump

99
00:05:30,240 --> 00:05:33,160
Speaker 2: continues to pressure share your own power to cut rates,

100
00:05:33,200 --> 00:05:36,359
Speaker 2: whilst insisting he has no plans to fire the FED chief.

101
00:05:36,680 --> 00:05:36,840
Speaker 8: Now.

102
00:05:36,920 --> 00:05:40,120
Speaker 2: Bond yields have edged lower over the past week, with

103
00:05:40,400 --> 00:05:42,839
Speaker 2: traders pricing in a roughly sixty percent chance of a

104
00:05:42,880 --> 00:05:46,600
Speaker 2: twenty five basis point cut in September. We will have

105
00:05:46,720 --> 00:05:49,640
Speaker 2: live coverage of the Fed's rate decision today on Bloomberg

106
00:05:49,720 --> 00:05:52,360
Speaker 2: Radio at seven pm. London time, as well as your

107
00:05:52,400 --> 00:05:57,080
Speaker 2: own pals press post meeting press conference thirty minutes later.

108
00:05:57,880 --> 00:05:59,960
Speaker 3: Those are your top stories on the markets this more.

109
00:06:00,200 --> 00:06:03,320
Speaker 3: We're looking at the MSCIS Pacific Index four tenths higher,

110
00:06:03,640 --> 00:06:06,400
Speaker 3: the MSCI China Index is down by two tenths of

111
00:06:06,480 --> 00:06:08,680
Speaker 3: one percent, the cside three hundred up six tenths. Are

112
00:06:08,680 --> 00:06:12,960
Speaker 3: watching for marketrec reaction to those a potential extension of

113
00:06:13,000 --> 00:06:15,680
Speaker 3: the US China trade trues. Eurostox fifty features are up

114
00:06:15,680 --> 00:06:18,520
Speaker 3: by three tenths of one percent. We're watching shares in

115
00:06:18,560 --> 00:06:22,000
Speaker 3: Hong Kong for HSBC down three point two percent. That's

116
00:06:22,040 --> 00:06:24,880
Speaker 3: the first share price reaction to the results from that bank.

117
00:06:25,000 --> 00:06:27,720
Speaker 3: And a couple more earnings headlines crossing the terminal from

118
00:06:27,760 --> 00:06:31,159
Speaker 3: Mercedes Benz restating its guidance reinstating its guidance at a

119
00:06:31,160 --> 00:06:34,240
Speaker 3: lower level due to pressure from the tariffs, that they're

120
00:06:34,240 --> 00:06:36,599
Speaker 3: expecting a car making margin of as low as four

121
00:06:36,640 --> 00:06:39,160
Speaker 3: percent this year. That's lower than they previously said. And

122
00:06:39,240 --> 00:06:41,520
Speaker 3: news out of the French payments provider Worldline as well,

123
00:06:41,520 --> 00:06:44,920
Speaker 3: booking a four point one billion euro impairment tied to

124
00:06:44,960 --> 00:06:48,000
Speaker 3: its merchant services business. That's as it reports earning for

125
00:06:48,080 --> 00:06:51,640
Speaker 3: the first time since facing allegations the company ignored warnings

126
00:06:51,720 --> 00:06:52,680
Speaker 3: of fraud.

127
00:06:52,880 --> 00:06:53,719
Speaker 1: Those are your markets.

128
00:06:54,600 --> 00:06:54,760
Speaker 6: Well.

129
00:06:54,800 --> 00:06:57,000
Speaker 2: In a moment, we'll dig into the latest earnings then

130
00:06:57,080 --> 00:06:59,960
Speaker 2: from Europe's biggest banks. Plus we'll also take a close

131
00:07:00,360 --> 00:07:04,760
Speaker 2: look at China's incredible one hundred and sixty seven billion

132
00:07:04,920 --> 00:07:09,200
Speaker 2: dollar mega dam project. But there is another story that

133
00:07:09,240 --> 00:07:12,400
Speaker 2: we've been thinking about and is worth highlighting this morning.

134
00:07:12,640 --> 00:07:15,560
Speaker 2: This is the account of what happened during the shooting

135
00:07:15,640 --> 00:07:20,600
Speaker 2: in Manhattan on Monday at that office building on Park Avenue.

136
00:07:21,160 --> 00:07:23,720
Speaker 3: The building where a gunman killed four people was home

137
00:07:23,760 --> 00:07:26,240
Speaker 3: to some major firms, including Blackstone, and our reporters have

138
00:07:26,280 --> 00:07:29,240
Speaker 3: been speaking to those working there about their experiences, and

139
00:07:29,240 --> 00:07:32,160
Speaker 3: that includes John Gray, who's the president of Blackstone who

140
00:07:32,200 --> 00:07:34,920
Speaker 3: works in that office, who described in a tearful interview

141
00:07:34,920 --> 00:07:37,440
Speaker 3: how his phone lit up with security alerts and calls

142
00:07:37,840 --> 00:07:40,480
Speaker 3: as the first news emerged of the gunfire, and how

143
00:07:40,520 --> 00:07:44,000
Speaker 3: colleagues were alerting each other on Microsoft teams chats about

144
00:07:44,280 --> 00:07:46,560
Speaker 3: the shots heard in the building as well. Now we

145
00:07:46,640 --> 00:07:49,040
Speaker 3: now know that one of the four people who was

146
00:07:49,160 --> 00:07:52,960
Speaker 3: killed was one of the asset manager's brightest stars, Wesley

147
00:07:53,000 --> 00:07:54,960
Speaker 3: la Patner. She was shot in the lobby of the

148
00:07:54,960 --> 00:07:56,480
Speaker 3: building as she was about to leave to meet a

149
00:07:56,480 --> 00:07:57,320
Speaker 3: colleague for a drink.

150
00:07:58,200 --> 00:08:00,800
Speaker 2: Yeah, there were three others who were also a police

151
00:08:00,840 --> 00:08:04,000
Speaker 2: officer who is guarding the lobby, a private security guard,

152
00:08:04,080 --> 00:08:07,240
Speaker 2: and also an associate and a real estate management company.

153
00:08:07,640 --> 00:08:10,480
Speaker 2: And our colleagues have been writing about how that really

154
00:08:10,680 --> 00:08:13,280
Speaker 2: did seem to sort of all of those people came

155
00:08:13,320 --> 00:08:16,320
Speaker 2: from different walks of life in New York. It took

156
00:08:16,720 --> 00:08:19,800
Speaker 2: many hours to then clear the building after the incident,

157
00:08:20,200 --> 00:08:24,040
Speaker 2: some as late as eleven PM. It is a compelling read.

158
00:08:24,120 --> 00:08:26,640
Speaker 2: You will find it on Bloomberg dot com on the

159
00:08:26,680 --> 00:08:29,440
Speaker 2: Bloomberg terminal, and we will also put a link to

160
00:08:29,560 --> 00:08:31,239
Speaker 2: that article in our show notes.

161
00:08:32,200 --> 00:08:33,840
Speaker 3: Well, that's bringing more details now and some of the

162
00:08:33,840 --> 00:08:34,880
Speaker 3: big earning stories.

163
00:08:34,960 --> 00:08:36,559
Speaker 1: This morning, we've been hearing from.

164
00:08:36,400 --> 00:08:40,840
Speaker 3: Three major European banks, HSBC, Santander, and UBS, with slightly

165
00:08:40,840 --> 00:08:43,360
Speaker 3: different stories from each of them. Our earnings reporter Chloe

166
00:08:43,440 --> 00:08:46,120
Speaker 3: Mela is with us for more on that. Chloe, let's

167
00:08:46,120 --> 00:08:48,719
Speaker 3: start with HSBC. Then big share buy back but a

168
00:08:48,760 --> 00:08:49,600
Speaker 3: miss on profits.

169
00:08:50,160 --> 00:08:53,640
Speaker 8: Yeah, absolutely so, fairly sizable buyback of three billion dollars

170
00:08:53,679 --> 00:08:56,160
Speaker 8: and that's maybe to kind of soften the blow of

171
00:08:56,240 --> 00:09:01,440
Speaker 8: otherwise quite disappointing numbers. So we've got the main one

172
00:09:01,480 --> 00:09:04,160
Speaker 8: is a miss on profit and that's due to kind

173
00:09:04,160 --> 00:09:07,000
Speaker 8: of two main things. We've got us upon increasing costs

174
00:09:07,520 --> 00:09:10,480
Speaker 8: and that's related to the restructuring that was started by

175
00:09:10,520 --> 00:09:13,839
Speaker 8: the new CEO, Jeorgia Ledi, who took over, took over

176
00:09:13,960 --> 00:09:17,240
Speaker 8: last September and made a range of different changes to

177
00:09:17,480 --> 00:09:20,680
Speaker 8: the bank, and those restructuring costs are now kind of

178
00:09:20,679 --> 00:09:23,120
Speaker 8: showing up in the numbers. And then we also have

179
00:09:23,320 --> 00:09:26,920
Speaker 8: a two to one billion dollar charge on HSBC's holdings

180
00:09:26,920 --> 00:09:30,200
Speaker 8: in Bank of Communications, which is a Chinese bank, and

181
00:09:30,240 --> 00:09:35,040
Speaker 8: then the impairment is higher than was guided for last quarter,

182
00:09:35,160 --> 00:09:38,400
Speaker 8: so that's also a little bit of a disappointment. China's

183
00:09:38,400 --> 00:09:42,120
Speaker 8: Finance Ministry had recapitalized at this bank earlier this year,

184
00:09:42,120 --> 00:09:45,439
Speaker 8: and that's because there's a slowdown in the real estate

185
00:09:45,480 --> 00:09:48,800
Speaker 8: market in China and that's in ton affecting banks which

186
00:09:48,840 --> 00:09:50,920
Speaker 8: are kind of dealing with that bad debt from the

187
00:09:50,960 --> 00:09:56,520
Speaker 8: property market. HSBC also said that with credit losses more generally,

188
00:09:57,160 --> 00:10:00,640
Speaker 8: it doesn't really look that reassuring, so it expects credit

189
00:10:00,679 --> 00:10:04,640
Speaker 8: losses around forty basis points of average gross loans which

190
00:10:04,679 --> 00:10:07,720
Speaker 8: is at the top end of the range the guidance

191
00:10:07,800 --> 00:10:10,800
Speaker 8: range that it had provided last quarter as well, and

192
00:10:10,840 --> 00:10:13,960
Speaker 8: that's due to Hong Kong commercial real estate, which is

193
00:10:14,000 --> 00:10:17,120
Speaker 8: also in a bit of trouble. If there's one bright spot,

194
00:10:17,160 --> 00:10:19,920
Speaker 8: the wealth business is doing quite well. But overall we

195
00:10:20,000 --> 00:10:22,920
Speaker 8: are seeing quite disappointing numbers for HSBC this morning.

196
00:10:23,559 --> 00:10:26,880
Speaker 2: Okay, so disappointment there, but actually the developing story out

197
00:10:26,880 --> 00:10:31,600
Speaker 2: of Santander. Net income at the Spanish lender was in

198
00:10:31,640 --> 00:10:34,600
Speaker 2: line with estimates, but then a record second quarter in

199
00:10:34,679 --> 00:10:38,480
Speaker 2: terms of profit and another announcement on a share buyback

200
00:10:38,520 --> 00:10:39,600
Speaker 2: from banker Santander.

201
00:10:40,040 --> 00:10:43,440
Speaker 8: Yeah, so quite quite resilient numbers today from Santander. As

202
00:10:43,440 --> 00:10:46,679
Speaker 8: you mentioned that strongest first half on record, the fifth

203
00:10:46,679 --> 00:10:50,360
Speaker 8: consecutive quarter of record profit. It said that that was

204
00:10:50,440 --> 00:10:53,080
Speaker 8: driven by a three different things, so really good net

205
00:10:53,080 --> 00:10:57,079
Speaker 8: interest income, record net fee income, and then lower costs

206
00:10:57,120 --> 00:11:00,880
Speaker 8: and provisions. So credit quality actually improved and the cost

207
00:11:00,880 --> 00:11:04,240
Speaker 8: of risk was lower. We expected to mention maybe some

208
00:11:04,320 --> 00:11:06,520
Speaker 8: pressures in the US and Brazil with regards to that

209
00:11:06,600 --> 00:11:09,920
Speaker 8: credit quality, but nothing that I could see in the statement.

210
00:11:09,920 --> 00:11:13,120
Speaker 8: Maybe we'll hear more about that on the earnings call.

211
00:11:13,440 --> 00:11:15,520
Speaker 8: And also that new share buy a back of one

212
00:11:15,520 --> 00:11:19,440
Speaker 8: point seven billion euros and also reaffirmed guidance, so seems

213
00:11:19,440 --> 00:11:21,960
Speaker 8: to be on a pretty good track. It also said

214
00:11:22,000 --> 00:11:25,600
Speaker 8: that it's an acquisition of Chirsby in the UK as

215
00:11:25,679 --> 00:11:29,040
Speaker 8: expected to deliver a return on investment above twenty percent

216
00:11:29,400 --> 00:11:32,800
Speaker 8: and a four percent increased in EPs by twenty twenty eight.

217
00:11:32,840 --> 00:11:37,600
Speaker 8: So overall, pretty resilient set of results this morning from

218
00:11:37,640 --> 00:11:38,360
Speaker 8: the Spanish bank.

219
00:11:38,800 --> 00:11:40,640
Speaker 3: Okay, and no time for you to draw wrath, Chloe,

220
00:11:40,640 --> 00:11:42,760
Speaker 3: because we've also asked you to look at UBS results

221
00:11:42,760 --> 00:11:45,000
Speaker 3: this morning too. And dare I say it a bit

222
00:11:45,000 --> 00:11:47,400
Speaker 3: of a friendly ghost of credits waste returning in their

223
00:11:47,440 --> 00:11:48,160
Speaker 3: results today?

224
00:11:48,679 --> 00:11:48,839
Speaker 1: Yeah?

225
00:11:48,880 --> 00:11:53,120
Speaker 8: Absolutely, Well, UBS had a pretty good second quarter overall.

226
00:11:53,120 --> 00:11:56,160
Speaker 8: So we had a second quarter pretext profit and net

227
00:11:56,160 --> 00:12:00,000
Speaker 8: income exceeding analysts expectations. As you mentioned that kind of

228
00:12:00,000 --> 00:12:03,120
Speaker 8: ghost of credit spees, but also pretty good performance in

229
00:12:03,160 --> 00:12:06,520
Speaker 8: the investment bank. That's kind of mirroring what we've seen

230
00:12:06,760 --> 00:12:11,079
Speaker 8: from different banks across Europe with that market volatility kind

231
00:12:11,120 --> 00:12:15,760
Speaker 8: of helping to boost those trading activity. One of the

232
00:12:15,800 --> 00:12:18,840
Speaker 8: key units have is wealth management and that actually missed

233
00:12:19,120 --> 00:12:22,840
Speaker 8: expectations if we look closer at kind of why that

234
00:12:23,000 --> 00:12:25,280
Speaker 8: was due mostly to kind of low interest rate environment

235
00:12:25,400 --> 00:12:29,080
Speaker 8: and the weaker US dollar, and without those kind of

236
00:12:29,160 --> 00:12:31,320
Speaker 8: that kind of drag, it would have actually had quite

237
00:12:31,320 --> 00:12:34,440
Speaker 8: a satisfying quarter. But this is going to be something

238
00:12:34,480 --> 00:12:37,679
Speaker 8: that investors will probably be looking at, given how important

239
00:12:37,760 --> 00:12:41,480
Speaker 8: it is to UBS. It also struck quite a positive

240
00:12:41,640 --> 00:12:45,000
Speaker 8: turn about the kind of calming of trade tensions around

241
00:12:45,000 --> 00:12:47,760
Speaker 8: the world with those new trade deals being announced, and

242
00:12:47,760 --> 00:12:51,200
Speaker 8: it said that would support investor activity and hopefully support

243
00:12:51,240 --> 00:12:55,000
Speaker 8: results going forward. So we'll see how shares react to that.

244
00:12:55,320 --> 00:12:57,640
Speaker 2: Okay, Chloe, thank you so much for that round up,

245
00:12:57,720 --> 00:13:00,560
Speaker 2: powering us through all we need to know our earnings

246
00:13:00,600 --> 00:13:04,520
Speaker 2: REPORTA Chloe Malay, thank you so much, HSBC, Santander and UBS.

247
00:13:04,520 --> 00:13:08,000
Speaker 3: This morning, China has begun construction one of the biggest

248
00:13:08,000 --> 00:13:11,640
Speaker 3: infrastructure projects in history, the hydro Power Mega Dam and

249
00:13:11,679 --> 00:13:14,840
Speaker 3: Tibet will use sixty times the cement of the Hoover Dam,

250
00:13:15,000 --> 00:13:18,560
Speaker 3: more steel than one hundred and sixteen Empire State buildings,

251
00:13:18,720 --> 00:13:20,680
Speaker 3: and it's set to cost some one hundred and sixty

252
00:13:20,720 --> 00:13:24,120
Speaker 3: seven billion dollars. It's a legacy defining gamble for present

253
00:13:24,240 --> 00:13:26,920
Speaker 3: cheating ping and our reporter Dan Martad joins us from

254
00:13:27,040 --> 00:13:29,760
Speaker 3: Beijing for more on this story, Dan a couple of

255
00:13:29,760 --> 00:13:31,880
Speaker 3: really big numbers there, but give us an idea of

256
00:13:31,960 --> 00:13:33,520
Speaker 3: the scale of this project.

257
00:13:34,520 --> 00:13:37,440
Speaker 5: It Simply put, it's one of the costliest infrastructure projects

258
00:13:37,440 --> 00:13:40,240
Speaker 5: in human history, and when it's finished, it will be

259
00:13:40,280 --> 00:13:42,880
Speaker 5: able to produce triple the electricity of the Three Gorgeous Dam,

260
00:13:42,920 --> 00:13:45,880
Speaker 5: which is currently the world's largest power plant. But this

261
00:13:45,920 --> 00:13:49,000
Speaker 5: isn't just you know, building a traditional dam. This is

262
00:13:49,040 --> 00:13:52,439
Speaker 5: more like hercules bending the river to clean the Aegean stables.

263
00:13:52,640 --> 00:13:55,240
Speaker 5: Though the Urlink Songbo is this river through Tibet. It

264
00:13:55,240 --> 00:13:58,120
Speaker 5: flows from the Himalaya mountains and then it takes a

265
00:13:58,200 --> 00:14:01,319
Speaker 5: sharp u turn where ben about one hundred eighty degrees

266
00:14:01,320 --> 00:14:04,000
Speaker 5: and drops more than two thousand meters in elevation over

267
00:14:04,080 --> 00:14:06,360
Speaker 5: just a fifty klometer stretch. What they want to do

268
00:14:06,440 --> 00:14:08,360
Speaker 5: is they want to drill tunnels from the top of

269
00:14:08,360 --> 00:14:11,440
Speaker 5: that bend down to the bottom, creating these long, straight

270
00:14:11,559 --> 00:14:15,040
Speaker 5: shoots where water will build up velocity and spin through

271
00:14:15,040 --> 00:14:18,480
Speaker 5: a series of turbines and generate electricity before popping out

272
00:14:18,480 --> 00:14:21,440
Speaker 5: of that tunnel and rejoining the river at its original course.

273
00:14:22,560 --> 00:14:25,880
Speaker 2: Yes, but this is also one of the highest points

274
00:14:25,960 --> 00:14:29,080
Speaker 2: in the world. This is thousands of meters above sea level.

275
00:14:30,040 --> 00:14:34,800
Speaker 2: What does China, what does Shijingping want to achieve with this,

276
00:14:34,920 --> 00:14:36,480
Speaker 2: I mean enormous project.

277
00:14:37,680 --> 00:14:40,160
Speaker 5: They have a couple of things in mind. The two

278
00:14:40,280 --> 00:14:44,040
Speaker 5: main ones are economic stimulus and clean power, and I

279
00:14:44,040 --> 00:14:47,200
Speaker 5: think in that order. On the economic front, there is

280
00:14:47,240 --> 00:14:49,640
Speaker 5: this is going to create two hundred thousand jobs. It's

281
00:14:49,640 --> 00:14:52,200
Speaker 5: going to we demand for construction materials like steal and

282
00:14:52,280 --> 00:14:54,040
Speaker 5: cement that have been hurt by the fall of the

283
00:14:54,360 --> 00:14:57,800
Speaker 5: property boom. It could boost annual GDP growth by point

284
00:14:57,840 --> 00:15:00,880
Speaker 5: one or point two percentage points a year all by itself.

285
00:15:01,160 --> 00:15:04,160
Speaker 5: From an energy perspective, I mean this could be about

286
00:15:04,200 --> 00:15:07,320
Speaker 5: seventy gigawatts of power. It could replace enough coal to

287
00:15:07,360 --> 00:15:10,240
Speaker 5: reduce emissions by three hundred million tons a year. And

288
00:15:10,280 --> 00:15:12,680
Speaker 5: while China has done a lot with wind and solar,

289
00:15:13,000 --> 00:15:15,120
Speaker 5: you know, they're struggling a little bit with some of

290
00:15:15,120 --> 00:15:18,160
Speaker 5: the intermittency of that, and this hydropower is going to

291
00:15:18,160 --> 00:15:21,360
Speaker 5: be a lot more steady and manageable than those. There's

292
00:15:21,360 --> 00:15:23,600
Speaker 5: also a political aspect of this. You know, Tibet has

293
00:15:23,640 --> 00:15:26,080
Speaker 5: been a problem region for the Communist Party ever since

294
00:15:26,120 --> 00:15:29,320
Speaker 5: the country's revolution back in the nineteen forties. This could

295
00:15:29,320 --> 00:15:32,440
Speaker 5: bring economic development, more Han workers to the area and

296
00:15:32,520 --> 00:15:35,760
Speaker 5: may help the Beijing get a little bit more control

297
00:15:36,040 --> 00:15:38,640
Speaker 5: over what a region that's been a bit of a

298
00:15:39,080 --> 00:15:40,400
Speaker 5: sticking point for them.

299
00:15:41,240 --> 00:15:43,760
Speaker 3: What are the risks though, with such a major project,

300
00:15:43,840 --> 00:15:46,120
Speaker 3: given that there's so much riding on this for the

301
00:15:46,240 --> 00:15:47,760
Speaker 3: Chinese president, done for China.

302
00:15:48,520 --> 00:15:51,560
Speaker 5: Yeah, there's a bunch of risks, I think, you know,

303
00:15:51,640 --> 00:15:54,760
Speaker 5: the simplest one is just this is such a remote region.

304
00:15:55,280 --> 00:15:58,200
Speaker 5: It's up in the mountains, it's high in elevation, it's

305
00:15:58,360 --> 00:16:01,240
Speaker 5: very few roads or railways to get so getting all

306
00:16:01,280 --> 00:16:04,480
Speaker 5: the materials the manpower to this, there's tons of risks

307
00:16:04,480 --> 00:16:07,640
Speaker 5: of delays and cost overruns for what will already be

308
00:16:07,920 --> 00:16:11,600
Speaker 5: a relatively high priced project. But more than that, this

309
00:16:11,680 --> 00:16:14,640
Speaker 5: is a really seismically active area. You know, the the

310
00:16:14,680 --> 00:16:17,400
Speaker 5: Himalayas were formed by these plates grinding up against each other,

311
00:16:17,560 --> 00:16:19,600
Speaker 5: and there's still active earthquakes there now. And so now

312
00:16:19,600 --> 00:16:23,720
Speaker 5: you're bringing heavy construction equipment, you're drilling bores through this area,

313
00:16:23,920 --> 00:16:26,800
Speaker 5: so you know, who knows what will happen there. And

314
00:16:26,840 --> 00:16:30,560
Speaker 5: then there are ecological risks this is you know, this

315
00:16:30,800 --> 00:16:33,960
Speaker 5: drop in elevation creates this really really unique area where

316
00:16:33,960 --> 00:16:36,720
Speaker 5: you have this dry, cool Himalayan air meeting with this

317
00:16:36,800 --> 00:16:39,480
Speaker 5: like warm moist air from the Indian Ocean. It's a

318
00:16:39,840 --> 00:16:41,880
Speaker 5: rich zone of biodiversity. It's home to more than one

319
00:16:41,920 --> 00:16:44,960
Speaker 5: hundred and fifty native species of fish. There's snow leopards,

320
00:16:44,960 --> 00:16:49,080
Speaker 5: there's red pandas, and you know, as much as the

321
00:16:49,200 --> 00:16:51,000
Speaker 5: government and the companies say they're going to do their

322
00:16:51,000 --> 00:16:54,200
Speaker 5: best to protect the environment, you know that human beings

323
00:16:54,200 --> 00:16:57,320
Speaker 5: have a poor record when it comes to being able

324
00:16:57,360 --> 00:17:00,520
Speaker 5: to avoid trampling on nature when there's money to be made.

325
00:17:01,360 --> 00:17:01,680
Speaker 4: Yeah.

326
00:17:01,720 --> 00:17:05,280
Speaker 2: Absolutely, And you've got some really interesting photographs of the

327
00:17:05,560 --> 00:17:08,639
Speaker 2: It's just it looks beautiful on the photographs of the valley,

328
00:17:08,960 --> 00:17:12,040
Speaker 2: and you also have some nice maps explaining exactly what

329
00:17:12,080 --> 00:17:17,359
Speaker 2: the construction looks like. What about the geopolitical consequences, you know,

330
00:17:17,720 --> 00:17:18,919
Speaker 2: neighboring countries.

331
00:17:20,040 --> 00:17:20,280
Speaker 1: Yeah.

332
00:17:20,359 --> 00:17:24,240
Speaker 5: The Young Tsangpo River eventually leaves China and runs through

333
00:17:24,359 --> 00:17:27,040
Speaker 5: India and Bangladesh before it empties out into the Bay

334
00:17:27,040 --> 00:17:29,840
Speaker 5: of Bengal and Indian Bangladesh are both sort of raised

335
00:17:29,840 --> 00:17:32,920
Speaker 5: concerns about it. India's Foreign Ministry has called for more

336
00:17:32,920 --> 00:17:37,240
Speaker 5: transparency and consultation with downstream countries. They're worried that, you know,

337
00:17:37,480 --> 00:17:40,439
Speaker 5: a big release of water could cause flooding in some

338
00:17:40,520 --> 00:17:43,120
Speaker 5: of their areas. That there has been some talk where

339
00:17:43,160 --> 00:17:47,160
Speaker 5: the you know, the countries, although they have especially China

340
00:17:47,200 --> 00:17:50,920
Speaker 5: and India, sorry I have a recent, very tense history,

341
00:17:50,800 --> 00:17:54,920
Speaker 5: there have been they have worked together on flood issues

342
00:17:54,960 --> 00:17:57,720
Speaker 5: in the past. There was a twenty eighteen flood warning

343
00:17:57,720 --> 00:17:59,720
Speaker 5: that China gave India when they saw that water a

344
00:17:59,800 --> 00:18:02,679
Speaker 5: level on this river were high. So there is a

345
00:18:02,960 --> 00:18:05,880
Speaker 5: chance that they could cooperate and work together, but there's

346
00:18:05,920 --> 00:18:07,720
Speaker 5: definitely some concern and we're gonna have to see that

347
00:18:07,760 --> 00:18:08,800
Speaker 5: one play out your time.

348
00:18:09,000 --> 00:18:11,720
Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the

349
00:18:11,800 --> 00:18:14,840
Speaker 3: stories making news from London to Wall Street and beyond.

350
00:18:15,119 --> 00:18:19,120
Speaker 2: Look for us on your podcast feed every morning, on Apple, Spotify,

351
00:18:19,200 --> 00:18:21,119
Speaker 2: and anywhere else you get your podcasts.

352
00:18:21,200 --> 00:18:24,200
Speaker 3: You can also listen live each morning on London DAB Radio,

353
00:18:24,240 --> 00:18:26,960
Speaker 3: the Bloomberg Business app, and Bloomberg dot Com.

354
00:18:27,000 --> 00:18:29,760
Speaker 2: Our flagship New York station, is also available on your

355
00:18:29,800 --> 00:18:34,520
Speaker 2: Amazon Alexa devices. Just say Alexa play Bloomberg eleven thirty.

356
00:18:34,760 --> 00:18:36,040
Speaker 2: I'm Caroline Hepka and.

357
00:18:36,000 --> 00:18:38,200
Speaker 1: I'm Stephen Carroll. Join us again. Tomorrow morning.

358
00:18:38,240 --> 00:18:40,480
Speaker 3: For all the news you need to start your day

359
00:18:40,640 --> 00:18:42,160
Speaker 3: right here on Bloomberg day Break.

360
00:18:42,160 --> 00:18:46,680
Speaker 1: Europe