1 00:00:02,600 --> 00:00:07,160 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,520 --> 00:00:10,760 Speaker 2: Standard Chartered shares higher in Hong Kong after the London 3 00:00:10,800 --> 00:00:13,360 Speaker 2: based bank said that it would ramp up its multi 4 00:00:13,400 --> 00:00:16,560 Speaker 2: billion dollar share buyback program, this as it reports a 5 00:00:16,640 --> 00:00:19,919 Speaker 2: beat on second quarter pre tax profits driven by its 6 00:00:20,000 --> 00:00:22,360 Speaker 2: wealth business. And I'm pleased to say that we're joined 7 00:00:22,360 --> 00:00:25,599 Speaker 2: now by the CEO of Standard Charted, Bill Winters. 8 00:00:25,720 --> 00:00:26,880 Speaker 1: Welcome back to the program, Veil. 9 00:00:27,600 --> 00:00:30,280 Speaker 2: Let's start with that buyback one point five billion dollars, 10 00:00:30,520 --> 00:00:33,000 Speaker 2: a plan to return at least five billion dollars to 11 00:00:33,040 --> 00:00:36,199 Speaker 2: investors by twenty twenty six. Is there a times you 12 00:00:36,200 --> 00:00:39,519 Speaker 2: could go beyond that target now that you've got results 13 00:00:39,560 --> 00:00:40,240 Speaker 2: like these. Yeah. 14 00:00:40,720 --> 00:00:42,680 Speaker 3: We set a three year target of an excess of 15 00:00:42,720 --> 00:00:44,879 Speaker 3: five billion. We've done two point seven billion in the 16 00:00:45,280 --> 00:00:48,640 Speaker 3: first first year so far. So yeah, if we continue 17 00:00:48,680 --> 00:00:51,559 Speaker 3: to perform well. What we've said to shareholders is we've 18 00:00:51,560 --> 00:00:54,320 Speaker 3: got a strategy. We're pursuing the strategy. It's working quite well. 19 00:00:54,640 --> 00:00:58,640 Speaker 3: Earnings are strong. We're managering capital very very directly and 20 00:00:59,240 --> 00:01:02,040 Speaker 3: I take quite active and that's allowed us to return 21 00:01:02,040 --> 00:01:03,400 Speaker 3: any surplus to shareholders. 22 00:01:03,400 --> 00:01:06,120 Speaker 1: And we said especially giving where our stock prices, which 23 00:01:06,160 --> 00:01:07,399 Speaker 1: is not as high as we think it should be. 24 00:01:08,120 --> 00:01:08,960 Speaker 1: We will buy. 25 00:01:08,800 --> 00:01:11,440 Speaker 3: Back as many shares as we can with surplus capital. 26 00:01:11,480 --> 00:01:12,080 Speaker 1: That's what we're doing. 27 00:01:12,319 --> 00:01:14,000 Speaker 3: If we keep on performing, of course, we can keep 28 00:01:14,000 --> 00:01:14,840 Speaker 3: on buying back shares. 29 00:01:15,000 --> 00:01:15,160 Speaker 1: Yeah. 30 00:01:15,200 --> 00:01:17,319 Speaker 2: I think earlier in the A you described the stock 31 00:01:17,360 --> 00:01:21,119 Speaker 2: price performances and I quote crap. So you're not still 32 00:01:21,160 --> 00:01:21,840 Speaker 2: not happy with it. 33 00:01:22,080 --> 00:01:22,679 Speaker 1: No, of course not. 34 00:01:23,319 --> 00:01:25,520 Speaker 3: It's less crap than it was, but it's you know, 35 00:01:25,640 --> 00:01:28,160 Speaker 3: we have a long way to go, and yeah, we 36 00:01:28,200 --> 00:01:30,880 Speaker 3: have to ask a question why it certainly isn't that 37 00:01:30,880 --> 00:01:31,839 Speaker 3: we're not performing well. 38 00:01:31,920 --> 00:01:34,080 Speaker 1: So the performances we can do better. 39 00:01:34,520 --> 00:01:37,400 Speaker 3: I will always recognize that we can do better, and 40 00:01:37,440 --> 00:01:40,760 Speaker 3: we are doing better. But yeah, I think we're operating 41 00:01:40,800 --> 00:01:43,520 Speaker 3: in a somewhat difficult environment and I think we need 42 00:01:43,560 --> 00:01:46,399 Speaker 3: to be clear about just how differentiated Center Chartered is. 43 00:01:46,520 --> 00:01:49,720 Speaker 3: And at the end of the day, we serve multinational 44 00:01:49,800 --> 00:01:53,240 Speaker 3: corporations on their cross border needs and we serve affluent individuals. 45 00:01:53,360 --> 00:01:54,639 Speaker 1: We do that extremely well. 46 00:01:54,800 --> 00:01:57,640 Speaker 3: We got a fully scaled and quite a substantial position 47 00:01:57,680 --> 00:01:59,960 Speaker 3: across Asian, Middle East and Africa, but also with more 48 00:02:00,200 --> 00:02:02,640 Speaker 3: national corporations coming out of the Americas and Europe. 49 00:02:03,040 --> 00:02:03,680 Speaker 1: That's what we do. 50 00:02:03,800 --> 00:02:05,600 Speaker 3: We're doing it well, it's generating good returns. 51 00:02:05,640 --> 00:02:06,360 Speaker 1: We keep on going. 52 00:02:06,480 --> 00:02:08,560 Speaker 2: So do you have potentially a new target figure for 53 00:02:08,600 --> 00:02:09,840 Speaker 2: the buyback target. 54 00:02:10,000 --> 00:02:11,840 Speaker 3: We haven't revised our We just set the five billion 55 00:02:11,840 --> 00:02:13,919 Speaker 3: target in February. I mean, we're not going to find 56 00:02:13,919 --> 00:02:14,720 Speaker 3: tune this thing every. 57 00:02:14,800 --> 00:02:15,600 Speaker 1: Three six months. 58 00:02:15,760 --> 00:02:17,640 Speaker 3: What we said was we'll do in excess of five billion, 59 00:02:17,880 --> 00:02:21,120 Speaker 3: and we're on track to achieve that. And as I said, 60 00:02:21,280 --> 00:02:23,600 Speaker 3: we'll keep on going if we can generate the strong performance. 61 00:02:23,680 --> 00:02:25,600 Speaker 2: Okay, I want to ask how your Fit for Growth 62 00:02:25,600 --> 00:02:27,720 Speaker 2: plans going. So this is your plan to cut costs 63 00:02:27,800 --> 00:02:30,840 Speaker 2: by one point five billion dollars over the next three years. 64 00:02:31,120 --> 00:02:32,800 Speaker 2: Are you seeing much wage inflation? 65 00:02:32,880 --> 00:02:34,000 Speaker 1: For example, we have. 66 00:02:34,360 --> 00:02:36,520 Speaker 3: We obviously had a big spike in wage inflation last year. 67 00:02:36,560 --> 00:02:39,280 Speaker 3: This year is much more subdued, and that obviously is 68 00:02:39,360 --> 00:02:43,560 Speaker 3: getting back down to normal. The fIF for Growth really 69 00:02:43,600 --> 00:02:46,800 Speaker 3: is a transformation program. So we've had cost cutting programs 70 00:02:47,000 --> 00:02:48,919 Speaker 3: pretty much my whole time as Center Charter, and we'll 71 00:02:48,919 --> 00:02:51,880 Speaker 3: continue to get more efficient. We're trying to do this 72 00:02:51,919 --> 00:02:54,240 Speaker 3: one a bit different though, which is actually quite a 73 00:02:54,240 --> 00:02:56,560 Speaker 3: bit differently, which is to look at every single one 74 00:02:56,560 --> 00:02:58,320 Speaker 3: of our processes and say, how do we simplify this. 75 00:02:58,440 --> 00:03:03,480 Speaker 3: How do we replace manual processes with digital processes, automation, simplification, 76 00:03:03,560 --> 00:03:05,520 Speaker 3: et cetera. How do we make it an easier place 77 00:03:05,560 --> 00:03:08,400 Speaker 3: to get things done for ourselves, for our colleagues, for clients. 78 00:03:09,040 --> 00:03:10,120 Speaker 1: That requires investments. 79 00:03:10,240 --> 00:03:12,720 Speaker 3: So in addition to saving one point five billion a year, 80 00:03:12,760 --> 00:03:15,200 Speaker 3: we said we're going to spend one point five billion upfront. 81 00:03:15,040 --> 00:03:17,040 Speaker 1: To achieve that everything is on track. 82 00:03:17,080 --> 00:03:19,920 Speaker 3: We've got over two hundred initiatives that we're pursuing. 83 00:03:20,120 --> 00:03:21,040 Speaker 1: Each one is quite small. 84 00:03:21,040 --> 00:03:23,800 Speaker 3: I mean, these aren't a big, big marquee projects, but 85 00:03:23,880 --> 00:03:25,200 Speaker 3: collectively it makes a big difference. 86 00:03:25,360 --> 00:03:28,880 Speaker 2: Okay, there's still into these pre tax profits arise driven 87 00:03:28,919 --> 00:03:32,160 Speaker 2: by your wealth business. Where are the biggest inflows geographically? 88 00:03:32,480 --> 00:03:36,240 Speaker 3: Biggest inflows for US are everything international, so what we 89 00:03:36,280 --> 00:03:40,240 Speaker 3: call international banking, a big chunk from mainland China, investing 90 00:03:40,280 --> 00:03:42,840 Speaker 3: in Hong Kong, investing in Singapore to a lesser extent, 91 00:03:42,880 --> 00:03:46,720 Speaker 3: and investing in Dubai. But that's happening global Indians, so 92 00:03:46,800 --> 00:03:50,720 Speaker 3: that the Indian wealthy population obviously growing very quickly. Again 93 00:03:51,160 --> 00:03:54,360 Speaker 3: across Dubai, Singapore, Hong Kong are three big wealth hubs 94 00:03:54,440 --> 00:03:55,520 Speaker 3: in addition to Jersey. 95 00:03:56,040 --> 00:03:57,120 Speaker 1: But also the rest of OSI in. 96 00:03:57,440 --> 00:03:59,560 Speaker 3: I mean, the wonderful thing about our footprint is that 97 00:04:00,080 --> 00:04:03,520 Speaker 3: there's a rising upper middle class. They're saving, in many 98 00:04:03,520 --> 00:04:06,240 Speaker 3: cases for the first time in their families histories, and 99 00:04:06,360 --> 00:04:08,640 Speaker 3: people who had some wealth before, of course are becoming 100 00:04:08,920 --> 00:04:11,800 Speaker 3: wealthier as these economies grow, and it just is playing 101 00:04:11,840 --> 00:04:12,720 Speaker 3: right into our strengths. 102 00:04:12,760 --> 00:04:14,440 Speaker 2: I do want to come back to the China outlook, 103 00:04:14,480 --> 00:04:17,120 Speaker 2: but on wealth, could you hire more wealth managers? 104 00:04:17,160 --> 00:04:18,440 Speaker 1: We are hiring more wealth managers. 105 00:04:18,480 --> 00:04:20,520 Speaker 3: We've had it about We've grown the number of wealth 106 00:04:20,520 --> 00:04:22,920 Speaker 3: managers by about nine percent nine ten percent per year 107 00:04:22,920 --> 00:04:25,000 Speaker 3: for the past three years, and we'll keep on going. 108 00:04:25,520 --> 00:04:28,640 Speaker 3: We're focusing on the full spectrum, from the ultra high 109 00:04:28,640 --> 00:04:32,520 Speaker 3: networth so private banking, through to our real sweet spot, 110 00:04:32,560 --> 00:04:34,880 Speaker 3: which is the mass affluent, so you know, people that 111 00:04:34,960 --> 00:04:39,039 Speaker 3: have material savings but aren't in the family office zone. 112 00:04:39,400 --> 00:04:42,560 Speaker 3: And we're very good at it helping lift those those 113 00:04:42,560 --> 00:04:46,080 Speaker 3: individuals or families out of the states that they've been 114 00:04:46,080 --> 00:04:50,200 Speaker 3: in which have been typically not accumulating savings into investing 115 00:04:50,240 --> 00:04:51,160 Speaker 3: substantial amounts. 116 00:04:51,360 --> 00:04:53,719 Speaker 2: And you've got a target of over eighty billion dollars 117 00:04:53,720 --> 00:04:55,880 Speaker 2: of net new money for twenty twenty four to twenty 118 00:04:55,920 --> 00:04:58,400 Speaker 2: twenty six. Are you confident now that you're going to 119 00:04:58,440 --> 00:04:59,680 Speaker 2: hit or beat that target. 120 00:05:00,000 --> 00:05:00,840 Speaker 1: We're very much on track. 121 00:05:01,000 --> 00:05:04,480 Speaker 3: So the guidance that we gave just just six months ago, 122 00:05:04,760 --> 00:05:08,039 Speaker 3: we've already surpassed that. In terms of the early stages. 123 00:05:08,920 --> 00:05:11,159 Speaker 3: It's been a good market. It's not been a perfect market, 124 00:05:11,160 --> 00:05:13,400 Speaker 3: and obviously we've had challenges in some of the equity 125 00:05:13,400 --> 00:05:16,640 Speaker 3: markets around the world, and so questions about how the 126 00:05:16,680 --> 00:05:17,880 Speaker 3: tech sector will perform. 127 00:05:17,640 --> 00:05:18,240 Speaker 1: Et cetera. 128 00:05:18,440 --> 00:05:21,640 Speaker 3: But against the backdrop of a market which is i'd 129 00:05:21,640 --> 00:05:26,279 Speaker 3: say neutral in terms of attractiveness, we're outperforming. So assuming 130 00:05:26,320 --> 00:05:29,320 Speaker 3: the market stays neutral, I think we'll do very very well. 131 00:05:29,320 --> 00:05:31,159 Speaker 3: If we have a very very difficult time in the market, 132 00:05:31,279 --> 00:05:33,000 Speaker 3: it gets tough for a short period of time. But 133 00:05:33,080 --> 00:05:34,680 Speaker 3: this is a long term story, and this you know, 134 00:05:34,839 --> 00:05:37,559 Speaker 3: we've been growing it at nine ten percent for ten years, 135 00:05:37,760 --> 00:05:40,280 Speaker 3: and we we cover that, and we'll cover that in our. 136 00:05:40,160 --> 00:05:42,599 Speaker 1: Earnings presentation in just a bit. That this is a 137 00:05:42,640 --> 00:05:44,120 Speaker 1: long term, secular growth story. 138 00:05:44,520 --> 00:05:46,720 Speaker 3: It'll be volable from quarter to quarter, maybe even from 139 00:05:46,760 --> 00:05:49,440 Speaker 3: year to year, but the trajectory is very clear and 140 00:05:49,480 --> 00:05:50,800 Speaker 3: we're perfectly positioned for it. 141 00:05:51,120 --> 00:05:53,279 Speaker 2: You mentioned China Hong Kong. I wonder whether you're still 142 00:05:53,360 --> 00:05:55,719 Speaker 2: staying on the sidelines when it comes to Hong Kong. 143 00:05:55,560 --> 00:05:57,400 Speaker 1: Mortgages, so. 144 00:05:59,000 --> 00:06:02,080 Speaker 3: Tooth stories about Hong Kong mortgages versus they're very safe. 145 00:06:02,520 --> 00:06:04,960 Speaker 3: We've got very low loan to value and aggregate, so 146 00:06:05,080 --> 00:06:08,160 Speaker 3: we've got zero concerns. Even with a somewhat soft residential 147 00:06:08,160 --> 00:06:09,760 Speaker 3: property market in Hong Kong, and it is a little 148 00:06:09,800 --> 00:06:14,240 Speaker 3: bit soft, we've got no concerns about losses. But the 149 00:06:14,279 --> 00:06:17,360 Speaker 3: market is extremely competitive and Hong Kong mortgages tend to 150 00:06:17,360 --> 00:06:20,840 Speaker 3: be the thing that soaks up surplus deposits, and there 151 00:06:20,920 --> 00:06:22,920 Speaker 3: is a surplus of deposits in Hong Kong right now, 152 00:06:23,080 --> 00:06:25,520 Speaker 3: so the margins are quite are actually unattractive in Hong Kong. 153 00:06:25,520 --> 00:06:28,520 Speaker 3: Our market chair has we've taken it down deliberately, but 154 00:06:28,680 --> 00:06:31,279 Speaker 3: we're not concerned about that because the franchise for our 155 00:06:31,320 --> 00:06:33,560 Speaker 3: customers in Hong Kong, it is still extremely strong and 156 00:06:33,640 --> 00:06:36,440 Speaker 3: we're able to service any customer that looks at mortgages 157 00:06:36,480 --> 00:06:39,320 Speaker 3: as part of a broader relationship. So we continue to 158 00:06:39,320 --> 00:06:40,840 Speaker 3: be active, just not as active as we have been 159 00:06:40,839 --> 00:06:41,320 Speaker 3: in the past. 160 00:06:41,440 --> 00:06:44,039 Speaker 2: Okay, we were talking about the stock price. What do 161 00:06:44,040 --> 00:06:45,760 Speaker 2: you think it's going to take for it to be 162 00:06:45,839 --> 00:06:47,600 Speaker 2: properly re rated by the market. 163 00:06:48,000 --> 00:06:49,040 Speaker 1: Well, that's a big question. 164 00:06:49,240 --> 00:06:52,080 Speaker 3: And the first story is for us is to keep 165 00:06:52,080 --> 00:06:56,720 Speaker 3: on performing. So this performance today we'll add to that momentum. 166 00:06:56,720 --> 00:06:58,880 Speaker 3: It's been if you can draw a line through the 167 00:06:58,920 --> 00:06:59,440 Speaker 3: interest rate. 168 00:06:59,400 --> 00:07:00,880 Speaker 1: Effect of the COVID period, it's been a. 169 00:07:00,880 --> 00:07:03,400 Speaker 3: Good study performance story for five years. But obviously we 170 00:07:03,440 --> 00:07:06,039 Speaker 3: have to demonstrate to the market that is sustainable in 171 00:07:06,080 --> 00:07:08,599 Speaker 3: this kind of a rate environment. Everyone expects rates to 172 00:07:08,640 --> 00:07:11,800 Speaker 3: come down probably starting in September. That will provide or 173 00:07:11,880 --> 00:07:14,320 Speaker 3: present some sort of an interest rate headwind, but we've 174 00:07:14,360 --> 00:07:17,080 Speaker 3: still guided to increasing that interest income because we can 175 00:07:17,120 --> 00:07:20,760 Speaker 3: think we can offset the rate effect with volume growth 176 00:07:20,800 --> 00:07:22,480 Speaker 3: and with mixshifts in our portfolio. 177 00:07:22,920 --> 00:07:24,480 Speaker 1: So I think, but we need to demonstrate that. 178 00:07:25,000 --> 00:07:27,480 Speaker 3: Second, I think that the world will need to recognize 179 00:07:27,480 --> 00:07:30,520 Speaker 3: that we're not a proxy for Chinese GDP. We are 180 00:07:30,560 --> 00:07:33,280 Speaker 3: a proxy for the degree to which China opens up 181 00:07:33,480 --> 00:07:35,840 Speaker 3: to some degree. We've got a super business in China. 182 00:07:36,200 --> 00:07:39,120 Speaker 3: We're helping connect China to the rest of Asia, to 183 00:07:39,360 --> 00:07:41,560 Speaker 3: the Middle East, Africa to the rest of the world, 184 00:07:42,040 --> 00:07:44,960 Speaker 3: and vice versa. Those trade links and investment links haven't 185 00:07:44,960 --> 00:07:48,880 Speaker 3: gone away. In fact, they're extremely robust. But the market 186 00:07:48,960 --> 00:07:52,000 Speaker 3: still sees China as an economic weak spot and is. 187 00:07:51,960 --> 00:07:55,280 Speaker 1: Concerned that that could spill over to our earnings. 188 00:07:55,600 --> 00:08:00,240 Speaker 3: Empirically, we're showing it doesn't, so I'm very hopeful as 189 00:08:00,280 --> 00:08:03,040 Speaker 3: we just stick to our knitting focus on those things 190 00:08:03,080 --> 00:08:06,000 Speaker 3: where we really make a difference, will perform, will generate 191 00:08:06,040 --> 00:08:07,400 Speaker 3: the results, share price will follow. 192 00:08:07,560 --> 00:08:10,680 Speaker 2: So you're not a proxy for China GDP. You're London listed, 193 00:08:10,800 --> 00:08:14,160 Speaker 2: but the business isn't predominantly about London. I do wonder 194 00:08:14,200 --> 00:08:17,760 Speaker 2: whether you expect a lift to the valuation because of 195 00:08:18,400 --> 00:08:22,320 Speaker 2: the boost from the lack of political uncertainty. Now, given 196 00:08:22,400 --> 00:08:23,560 Speaker 2: Labor's electual. 197 00:08:23,120 --> 00:08:26,440 Speaker 3: Win, well, it's certainly good to have a stable government 198 00:08:26,560 --> 00:08:28,880 Speaker 3: in the UK. I think they've, as the Chancellor has 199 00:08:28,880 --> 00:08:32,600 Speaker 3: made clear, they've were working through some challenges fiscal and otherwise. 200 00:08:33,240 --> 00:08:36,800 Speaker 3: But certainly all of the rhetoric to this point from 201 00:08:36,840 --> 00:08:40,400 Speaker 3: this Labor government has been very supportive of a stable 202 00:08:40,440 --> 00:08:42,880 Speaker 3: business environment. Which is not to say that that there's 203 00:08:42,920 --> 00:08:44,400 Speaker 3: going to be giveaways or handouts. 204 00:08:44,440 --> 00:08:44,840 Speaker 1: There won't be. 205 00:08:44,840 --> 00:08:47,360 Speaker 3: We don't expect that at all, but predictability in and 206 00:08:47,440 --> 00:08:51,120 Speaker 3: of itself is a good thing. The last government passed 207 00:08:51,120 --> 00:08:54,760 Speaker 3: through a competitiveness objective, a secondary objective for the regulators 208 00:08:55,000 --> 00:08:57,160 Speaker 3: to focus not just on financial stability but also on 209 00:08:57,520 --> 00:08:59,040 Speaker 3: creating a competitive financial sector. 210 00:08:59,520 --> 00:09:01,520 Speaker 1: These things are working through the system, and. 211 00:09:01,600 --> 00:09:06,280 Speaker 3: Me thankly it's a highly sophisticated regulatory environment here, stable politically, 212 00:09:06,360 --> 00:09:08,199 Speaker 3: that's a good environment for us to have a headquarters. 213 00:09:08,280 --> 00:09:11,120 Speaker 2: Okay, good, And just finally, Bill, you're in your tenth 214 00:09:11,200 --> 00:09:13,800 Speaker 2: year now as CEO. You talk about the long term. 215 00:09:14,240 --> 00:09:16,520 Speaker 2: You've said before you've got no plans of going anywhere, 216 00:09:17,120 --> 00:09:19,840 Speaker 2: and I wonder whether it's your intention to see through 217 00:09:19,880 --> 00:09:22,719 Speaker 2: this cost cutting and growth plan until at least their 218 00:09:22,720 --> 00:09:24,040 Speaker 2: completion in twenty twenty six. 219 00:09:24,160 --> 00:09:25,840 Speaker 1: Yeah, i'd like to. I'd like to, but you know, 220 00:09:26,720 --> 00:09:28,560 Speaker 1: you know how these things go. You live it from 221 00:09:28,600 --> 00:09:29,080 Speaker 1: day to day. 222 00:09:29,320 --> 00:09:33,200 Speaker 3: But certainly all the actions I'm taking today are with 223 00:09:33,320 --> 00:09:35,720 Speaker 3: a medium long term view. I've always tried to be 224 00:09:35,800 --> 00:09:39,520 Speaker 3: that way. And we've got a fantastic team as Santa Charter, 225 00:09:40,040 --> 00:09:42,160 Speaker 3: with a couple of new members and a couple of 226 00:09:42,160 --> 00:09:43,560 Speaker 3: people that have been with us for a long time. 227 00:09:43,880 --> 00:09:46,440 Speaker 3: So I'm quite sure that what we build in the 228 00:09:46,480 --> 00:09:49,480 Speaker 3: coming years we can continue for some time to come. 229 00:09:49,840 --> 00:09:51,600 Speaker 1: But yeah, my hope. 230 00:09:51,400 --> 00:09:53,679 Speaker 3: Objective is to see if we can deliver the strategy well. 231 00:09:53,679 --> 00:09:55,520 Speaker 2: I hope to be discussing your ownings with you for 232 00:09:55,559 --> 00:09:58,400 Speaker 2: many years to come. Bill into CEO Sander Charted. We 233 00:09:58,440 --> 00:09:59,440 Speaker 2: thank you for joining us