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Speaker 1: But let's get back to the earning story right now.

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Speaker 1: Joining us is I'm pleased to say the Standard Chart

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Speaker 1: CEO Bill Winters, thanks for being with me.

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Speaker 2: Bill, ready to be here.

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Speaker 1: So you've had pre tax profits beating estimates for the

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Speaker 1: second quarter, You've raised your full year income forecast. You're

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Speaker 1: starting a billion dollar buyback imminently. Can we assume that

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Speaker 1: no more job cuts are to come?

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Speaker 3: First of all, we're so happy with the results, right,

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Speaker 3: and things are going quite well for Standard Charters. You know,

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Speaker 3: the Asian markets where we operate are doing relatively well.

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Speaker 3: We hear about the slowness in China, which is true.

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Speaker 3: I mean the recovery has been sporadic, but fundamentally the

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Speaker 3: region's opening up. Economic growth is strong, and like that's

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Speaker 3: the backdrop for all of our colleagues. Got We have

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Speaker 3: added thousands of people over the course of the past year.

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Speaker 3: We're also aggressively digitizing our business, so of course that

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Speaker 3: means if people are going and people are coming.

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Speaker 2: All the time. But net this is a growth story.

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Speaker 1: Let's just hone in on those Asian market. It's of

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Speaker 1: course hugely important for you. You say it's positive. Your CFO

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Speaker 1: said last month that China's property market isn't getting materially

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Speaker 1: better since then, of course, there's been lots of public

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Speaker 1: support for the private sector. So are you saying that

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Speaker 1: there is no further paid in Chinese commercial real estate

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Speaker 1: to come? You are seeing improvement.

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Speaker 3: We took a little bit more pain in the second quarter,

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Speaker 3: so we took some impairments against China real estate. We

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Speaker 3: still have quite a substantial overlay as well, which is

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Speaker 3: sort of saying we've taken a provision against risks that

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Speaker 3: haven't materialized yet but that we fear might. So we

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Speaker 3: feel very well provided against a little bit further down downside.

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Speaker 3: But basically it feels like things are stabilized, albeit at

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Speaker 3: a lower level. The public support, the government support is

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Speaker 3: picking up. That's encouraging, but it hasn't really lifted the

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Speaker 3: market yet, so we'll see. It'll probably take another six

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Speaker 3: or twelve months before we can say, yeah, this mark

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Speaker 3: is backc OnTrack.

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Speaker 1: And of course, the other thing that rumbled your sector

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Speaker 1: is the credit suite takeover by UBS. How much are

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Speaker 1: you benefiting in terms of wealth management?

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Speaker 3: We had really good influence in terms of new money

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Speaker 3: in the first half of the year and in the

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Speaker 3: second quarter. Some of that came from credit suitee. Some

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Speaker 3: of that is the organic growth that we've been experiencing

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Speaker 3: for years now. Of course, wealth is rising across the Asian,

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Speaker 3: Middle East and African markets where we operate, so there's

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Speaker 3: a natural growth and I think we're picking up a

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Speaker 3: bit of market share. Of Course, you always have to

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Speaker 3: see how when things settle out, whether we're really picking

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Speaker 3: up share, but it feels like we are. So the

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Speaker 3: combination of some of the credit suite money diversifying away

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Speaker 3: from now they combine into ebs, some ongoing Chinese and

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Speaker 3: other Asian investors just accumulating wealth and wanting to invest

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Speaker 3: it in high quality international product, and then the general

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Speaker 3: underlying economic trends are all voting well for that business.

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Speaker 1: Of course, we've had lots of discussions about central banks

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Speaker 1: this morning, we look ahead to the Bank of England

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Speaker 1: decision next week. What are you expecting quarter point hike?

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Speaker 2: Yeah, it looks like it.

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Speaker 3: Inflation, well, it's come off the peaks is still quite high,

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Speaker 3: and there will be debate for some time the degree

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Speaker 3: to which this is structural and the degree to will

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Speaker 3: which will rotate off as energy price to stabilize et Ceterathough,

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Speaker 3: we note that the oil prices are going back up again.

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Speaker 2: So I think it's each of the central backs.

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Speaker 3: We saw the FED, the ECB, I expected bojor the

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Speaker 3: Bank of England as well. We'll say we've got to

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Speaker 3: nail this inflation problem. We've got to do it now,

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Speaker 3: so let's make sure that we take the steps now

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Speaker 3: necessary to indicate our firmness.

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Speaker 1: They're going to nail it now, why not go for

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Speaker 1: a half point?

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Speaker 3: I think at the same time, there's a bit of caution,

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Speaker 3: right the underlying economic growth looks good, but they don't

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Speaker 3: want to kill what is what looks to be quite

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Speaker 3: a resilient, ongoing recovery in the face of higher interest rates.

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Speaker 2: So they're going to calibrate things as they always have.

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Speaker 1: So are you positioning for a UK recession?

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Speaker 2: We don't have too much exposure to the UK. As

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Speaker 2: a practical matter, I.

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Speaker 3: Would say if we went back a year ago, looked

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Speaker 3: across the west so Europe US UK, we would have

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Speaker 3: said the likelihood of a recession was higher more than likely.

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Speaker 3: Seems a little bit less so today, and let's say

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Speaker 3: a recession is avoidable, so down in growth is not

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Speaker 3: I don't think we can get inflation under control without

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Speaker 3: growthing materially. Maybe we can avoid that actual recession definition.

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Speaker 1: And you mentioned the ECB in the FED further out,

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Speaker 1: do you see the ECB cutting before the Fed?

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Speaker 2: Well, the ECB has some way to go to catch

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Speaker 2: up to the FED.

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Speaker 3: In the first place, the inflation dynamic is a little

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Speaker 3: bit different in Europe, so they make it to the

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Speaker 3: point where they can pause earlier and keep a structurally

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Speaker 3: lower level of rates. But to cut before the FED

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Speaker 3: would be a bit surprising given the structural nature of

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Speaker 3: inflation in Europe as well.

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Speaker 1: And what do you make of all of this boj

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Speaker 1: news this morning? Of course, we're still waiting for the

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Speaker 1: press conference.

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Speaker 3: I think central banks are really struggling with this last

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Speaker 3: phase of the inflationary period and the beginning of a

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Speaker 3: disinflationary period. But while inflation is still quite high, Japan,

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Speaker 3: of course, is very particular in terms of needing to

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Speaker 3: overcome decades of embedded inflation expectations or disinflation expectations. So

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Speaker 3: I think we'll have to see how the market settles

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Speaker 3: out on this one.

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Speaker 1: Of Course, earlier here in the UK in the week

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Speaker 1: we saw Alison Rose stepping down as CEO of Matt

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Speaker 1: West over the issues about Nigel Farages Bank. I know

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Speaker 1: that you don't have a retail arm here in the UK,

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Speaker 1: but you do have a large international retail presence. Would

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Speaker 1: you ever drop a customer over their political views?

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Speaker 2: No, no, no, we wouldn't. You know, we followed the law.

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Speaker 3: And I can tell you that the laws and the

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Speaker 3: compliance regulations around customers that you can bank and that

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Speaker 3: you can bank are very complicated and they vary from

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Speaker 3: market to market. We start with the plethora of sanctions

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Speaker 3: that are flying all over the place between the US, Europe, UK,

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Speaker 3: China and back again.

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Speaker 2: Now that's enough to navigate.

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Speaker 3: We don't need to wait into to the software or

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Speaker 3: certainly not to the views of a politician or somebody.

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Speaker 2: With political views. Now, so a very clear answer from

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Speaker 2: you there.

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Speaker 1: Have you actually checked that there is an overreach from

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Speaker 1: your staff, from your team which AOK.

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Speaker 3: Regularly to make sure that our whole reputation risk process

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Speaker 3: is consistent with best practice. Yeah, but I mean we've

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Speaker 3: got millions of customers and we've got thousands of customers

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Speaker 3: that are coming in and out every day.

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Speaker 2: We've never seen.

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Speaker 3: Any sign that there's been overreach in terms of our

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Speaker 3: handling of customers, and when it comes time to exit

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Speaker 3: a customer, usually because they've been sanctioned, that would be

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Speaker 3: the thing that would trigger an action. We're very careful

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Speaker 3: in terms of the way that we do that and

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Speaker 3: the way that we help the client within the confines

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Speaker 3: of the laws that we operate within.

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Speaker 1: Of course, the UK government's had a role in this

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Speaker 1: and been very proud of its response to the situation

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Speaker 1: at nut West. How do you think it affects international

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Speaker 1: perceptions of UK banking?

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Speaker 2: FRUS started the.

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Speaker 3: Network was part of the owned by the government and

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Speaker 3: until recently majority owned by the government, so it's a

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Speaker 3: bit of a different animal. I think as a practical matter,

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Speaker 3: it's a semi political beast.

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Speaker 2: To begin with. In terms of international perception.

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Speaker 3: I don't think it's material one way or the other,

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Speaker 3: and I think people appreciate the fact that there's now

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Speaker 3: clarity around how.

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Speaker 2: Banks are expected to behaviors with your customers. I think

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Speaker 2: it's a domestic thing.

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Speaker 1: But of course you were on the UK's Vickers Commission.

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Speaker 1: You know you haven't had a very big rule in

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Speaker 1: banking reform here in the UK. Do you think the

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Speaker 1: UK's response on d banking has been timely, timely reforms

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Speaker 1: or is this really an exceptional campaign by Nigel Farade.

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Speaker 3: Well, I'm not sure that. I'm not sure how much

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Speaker 3: reform was needed. I know there was the one off incident.

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Speaker 3: I know that that Allison Rose apologized for the incident,

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Speaker 3: and I know that that Peter Flabel was the head

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Speaker 3: of COOTS, also apologized and they both resigned. So I'm

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Speaker 3: going to chalk it up to some errors of judgment

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Speaker 3: along the way apologies delivered. It would be nice if

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Speaker 3: apologies were accepted and we could move on, but obviously

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Speaker 3: not my call.

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Speaker 1: All Right, Standard Charted CEO Bill Winter, is really great

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Speaker 1: to have you on the program after those earnings from

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Speaker 1: Standard Chartered this morning,