1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,800 --> 00:00:10,239 Speaker 2: Okay, let's talk about Barclays outward numbers this morning. Group 3 00:00:10,280 --> 00:00:14,760 Speaker 2: pre tax profit two point zero eight billion, that slightly 4 00:00:14,800 --> 00:00:18,720 Speaker 2: beats estimates. This morning, the bank is setting a sign 5 00:00:18,720 --> 00:00:21,480 Speaker 2: three hundred and twenty five million in terms of compensating 6 00:00:21,480 --> 00:00:24,840 Speaker 2: customers impacted by the UK motor finance scandal. It looks 7 00:00:24,880 --> 00:00:27,600 Speaker 2: like there's going to be some pushback there. The bank 8 00:00:27,640 --> 00:00:29,840 Speaker 2: is going to launch a five one hundred million stock 9 00:00:29,920 --> 00:00:33,400 Speaker 2: repurchase scheme. So let's talk about the details and exactly 10 00:00:33,479 --> 00:00:36,120 Speaker 2: what has happened here. Cs fencaategch Christian and CEO of 11 00:00:36,159 --> 00:00:38,760 Speaker 2: Barclays joins us. Now, thank that great to see you. 12 00:00:38,800 --> 00:00:41,800 Speaker 2: Thanks for the time. We always appreciate it. In terms 13 00:00:41,800 --> 00:00:43,839 Speaker 2: of what stands out here, what are we looking at. 14 00:00:44,080 --> 00:00:48,199 Speaker 2: I'm looking at trading being fairly mixed, I'm looking at 15 00:00:48,240 --> 00:00:51,400 Speaker 2: a pushback when it comes to the motor finance story, 16 00:00:51,960 --> 00:00:54,800 Speaker 2: and I'm looking at a raising of the net interest 17 00:00:54,840 --> 00:00:57,400 Speaker 2: story going forward. Which one of those three things do 18 00:00:57,400 --> 00:00:59,440 Speaker 2: you think investors should be focusing on this morning? 19 00:01:01,560 --> 00:01:03,560 Speaker 3: Well, I think they should be focusing on the broad 20 00:01:03,560 --> 00:01:06,280 Speaker 3: performance of Barclays. We had a top line beat of 21 00:01:06,360 --> 00:01:09,240 Speaker 3: eleven percent growth year over year to seven point two billion. 22 00:01:09,240 --> 00:01:12,800 Speaker 3: On the top line, we've had nine percent consecutive quarters 23 00:01:12,800 --> 00:01:16,240 Speaker 3: of tangible net asset value growth. Importantly, as you said, 24 00:01:16,280 --> 00:01:20,520 Speaker 3: we've increased our guidance for ANII from twelve point five 25 00:01:20,560 --> 00:01:23,480 Speaker 3: to greater than twelve point six billion pounds, increased our 26 00:01:23,600 --> 00:01:27,319 Speaker 3: rote estimates to twenty twenty five to greater than eleven percent. 27 00:01:27,400 --> 00:01:31,680 Speaker 3: We're accelerating uh our ship share buyback program by announcing 28 00:01:31,720 --> 00:01:34,520 Speaker 3: five hundred million pounds this quarter and moving to a 29 00:01:34,600 --> 00:01:39,960 Speaker 3: quarterly cadence. And then importantly, you know, we we continue 30 00:01:40,400 --> 00:01:42,319 Speaker 3: we we've announced that we're going to come back to 31 00:01:42,360 --> 00:01:46,119 Speaker 3: our shareholders one year ahead of schedule and then give 32 00:01:46,160 --> 00:01:50,680 Speaker 3: them and talk about our new set of financial targets 33 00:01:51,080 --> 00:01:54,160 Speaker 3: UH in February from twenty six through twenty eight. So 34 00:01:54,560 --> 00:01:57,440 Speaker 3: I think it represents the broad good performance we've had 35 00:01:58,000 --> 00:01:58,960 Speaker 3: for many many quarters. 36 00:01:59,000 --> 00:02:01,880 Speaker 2: Now, yep, okay, let'stick into the details of what is 37 00:02:01,920 --> 00:02:04,800 Speaker 2: happening here and talk about what's happening with trading. Fake 38 00:02:04,840 --> 00:02:07,880 Speaker 2: looks pretty solid and certainly ahead of estimates. But I'm 39 00:02:07,920 --> 00:02:10,919 Speaker 2: understanding I think reading my notes that the estimates were 40 00:02:10,960 --> 00:02:14,080 Speaker 2: maybe a little low for what people realistically thought you 41 00:02:14,120 --> 00:02:17,400 Speaker 2: guys could deliver so fick our performance, but equities not 42 00:02:18,040 --> 00:02:21,079 Speaker 2: what happened in equities Venka. 43 00:02:21,360 --> 00:02:24,600 Speaker 3: Yeah, So I'm very broadly happy with what the Investment 44 00:02:24,639 --> 00:02:27,200 Speaker 3: Bank has been doing over seven quarters. And you know 45 00:02:27,240 --> 00:02:29,840 Speaker 3: we've had six quarters in a row of top line growth, 46 00:02:30,360 --> 00:02:34,240 Speaker 3: of earnings leverage by having what we call positive jaws 47 00:02:34,560 --> 00:02:37,440 Speaker 3: and improving profitability. You know, the Investment Bank produced greater 48 00:02:37,480 --> 00:02:40,840 Speaker 3: than ten percent rot as did all our divisions. Now 49 00:02:40,840 --> 00:02:43,600 Speaker 3: within that, I've always said we're running our own race, 50 00:02:43,639 --> 00:02:45,880 Speaker 3: and we're running our own race and producing the numbers 51 00:02:45,880 --> 00:02:48,640 Speaker 3: we wanted to. Quarter by quarter, some things will do 52 00:02:48,720 --> 00:02:51,480 Speaker 3: better and something's worse. We're obviously pleased with our fake 53 00:02:51,520 --> 00:02:54,400 Speaker 3: performance and we'd like to understand better how we can 54 00:02:54,440 --> 00:02:58,280 Speaker 3: improve inequities. But I view this over many quarters, and 55 00:02:58,680 --> 00:03:00,840 Speaker 3: so you know we're taking a long run, but you 56 00:03:00,880 --> 00:03:02,720 Speaker 3: know we will look to do better in every segment 57 00:03:02,760 --> 00:03:03,320 Speaker 3: every quarter. 58 00:03:04,520 --> 00:03:06,960 Speaker 2: What do you think the answer is in equities? If 59 00:03:07,000 --> 00:03:08,520 Speaker 2: that's the question you're asking, what do you think the 60 00:03:08,520 --> 00:03:09,120 Speaker 2: answer could be? 61 00:03:11,760 --> 00:03:14,400 Speaker 3: I think we need to continue to deepen our client franchise. 62 00:03:14,440 --> 00:03:17,200 Speaker 3: We've been working on it, and improve the breath of 63 00:03:17,200 --> 00:03:20,239 Speaker 3: our products. We've been at it. We're going to continue 64 00:03:20,320 --> 00:03:22,200 Speaker 3: and we will see the results as we've seen in 65 00:03:22,280 --> 00:03:23,600 Speaker 3: every other part of this bank. 66 00:03:25,919 --> 00:03:27,959 Speaker 4: Ben Catt, It's creedy in London. Think of your time 67 00:03:28,000 --> 00:03:30,080 Speaker 4: this morning was pivot from the equity picture to the 68 00:03:30,080 --> 00:03:33,320 Speaker 4: credit picture if we can. There's been lots of warnings 69 00:03:33,360 --> 00:03:36,000 Speaker 4: coming from the big US banks around cracks and private 70 00:03:36,040 --> 00:03:40,720 Speaker 4: credit that could ultimately have broader effects. You have been 71 00:03:40,800 --> 00:03:43,520 Speaker 4: in multiple seats at Barkley's, certainly as the chief risk officer. 72 00:03:43,560 --> 00:03:46,360 Speaker 4: What are you seeing is are those worries warranted? 73 00:03:49,520 --> 00:03:52,040 Speaker 3: Look, credit is something that you do over the cycle. 74 00:03:52,440 --> 00:03:54,480 Speaker 3: I think you have to be extremely careful at all 75 00:03:54,480 --> 00:03:58,200 Speaker 3: points in the cycle about you know who your client is, 76 00:03:58,240 --> 00:04:02,160 Speaker 3: your client selection, the terms under you lend your concentrations, 77 00:04:02,200 --> 00:04:05,320 Speaker 3: how much you lend industry sectors. We take this very seriously. 78 00:04:05,680 --> 00:04:08,440 Speaker 3: We take this over the cycle. I mean, we had 79 00:04:08,440 --> 00:04:11,840 Speaker 3: an exposure to try color. I'm obviously not happy about it. 80 00:04:11,880 --> 00:04:14,480 Speaker 3: We're looking at what lessons we learned, and we have 81 00:04:14,520 --> 00:04:17,080 Speaker 3: looked at it and applied it across our portfolio. But 82 00:04:17,200 --> 00:04:18,919 Speaker 3: I think credit is one of those things that you 83 00:04:19,000 --> 00:04:22,479 Speaker 3: take seriously. Doesn't matter whether it's so called private or credit, 84 00:04:22,520 --> 00:04:25,200 Speaker 3: and who the lender is it is a full time, 85 00:04:25,240 --> 00:04:27,720 Speaker 3: specialized job day in and day out. 86 00:04:29,360 --> 00:04:31,840 Speaker 4: But then kat is it a systematic risk or is 87 00:04:31,880 --> 00:04:34,839 Speaker 4: it still isolated? How should we be thinking about investments 88 00:04:34,839 --> 00:04:37,520 Speaker 4: in private credit when firms like the one you just 89 00:04:37,560 --> 00:04:38,960 Speaker 4: mentioned go bankrupt? 90 00:04:41,760 --> 00:04:44,760 Speaker 3: So in that particular case, there seems to have been fraud. 91 00:04:44,760 --> 00:04:47,400 Speaker 3: Now I should say that Barclay's had no exposure to 92 00:04:47,440 --> 00:04:50,840 Speaker 3: First Frands, although we were approached multiple times by them. 93 00:04:51,680 --> 00:04:54,839 Speaker 3: The thing about fraud is you wonder whether it is 94 00:04:54,920 --> 00:04:59,159 Speaker 3: one bad actor or it is some effect of circumstances 95 00:04:59,160 --> 00:05:03,000 Speaker 3: that are stretching the company's finances and making them take 96 00:05:03,080 --> 00:05:05,600 Speaker 3: risks that they otherwise should or would not do. That's 97 00:05:05,640 --> 00:05:08,080 Speaker 3: the kind of thing we look for, and that's what 98 00:05:08,120 --> 00:05:10,479 Speaker 3: I think investors should be looking for over the next 99 00:05:10,600 --> 00:05:12,200 Speaker 3: you know, months and quarters. 100 00:05:13,760 --> 00:05:17,360 Speaker 1: Thank you, good morning. It's Annah sticking with this theme 101 00:05:17,560 --> 00:05:19,120 Speaker 1: and channeling in some of the thoughts that we got 102 00:05:19,120 --> 00:05:22,080 Speaker 1: from Andrew Bailey the Bank of England just yesterday. He 103 00:05:22,160 --> 00:05:24,800 Speaker 1: and his team say that they're worried that the market 104 00:05:24,839 --> 00:05:28,160 Speaker 1: is slicing and dicing loan structures like it's pre GFC, 105 00:05:28,279 --> 00:05:30,880 Speaker 1: pre Financial crisis. Do you see similarities? 106 00:05:33,920 --> 00:05:39,080 Speaker 3: Look, I think securitization technology has been with us for decades. Obviously, 107 00:05:39,360 --> 00:05:41,240 Speaker 3: the governor and the central bank have a view of 108 00:05:41,360 --> 00:05:43,960 Speaker 3: you know where and how much, And they're talking about 109 00:05:44,000 --> 00:05:45,800 Speaker 3: a broader review, which is I think a good and 110 00:05:45,880 --> 00:05:47,480 Speaker 3: prudent thing for any central bank to do. 111 00:05:49,800 --> 00:05:51,840 Speaker 1: And they talk about alarm bells ringing. It doesn't sound 112 00:05:51,920 --> 00:05:53,919 Speaker 1: like you're hearing alarm bells, Vanka. 113 00:05:57,480 --> 00:06:00,640 Speaker 3: Look, as I said, we pay attention to credit with 114 00:06:00,720 --> 00:06:03,920 Speaker 3: what we hope is the same amount of dedication all 115 00:06:03,960 --> 00:06:06,520 Speaker 3: through the cycle. And when you do that, you try 116 00:06:06,560 --> 00:06:07,920 Speaker 3: to be very disciplined about it. 117 00:06:10,279 --> 00:06:15,080 Speaker 2: Okay, but how easy is it to be disciplined at 118 00:06:15,120 --> 00:06:17,880 Speaker 2: the moments ces you talk about the fact that that 119 00:06:17,960 --> 00:06:21,560 Speaker 2: Barclays is delivering on that. But this is a this 120 00:06:22,000 --> 00:06:24,480 Speaker 2: is an industry wide issue, and we've learnt in the 121 00:06:24,480 --> 00:06:26,839 Speaker 2: past that there can be problems in strange parts of 122 00:06:26,880 --> 00:06:29,840 Speaker 2: markets that are hard to determine and that they can 123 00:06:29,880 --> 00:06:33,880 Speaker 2: have significant ripple effects into into more mainstream banking. Are 124 00:06:33,920 --> 00:06:37,200 Speaker 2: you being extra diligent right now? We've had years in 125 00:06:37,200 --> 00:06:39,920 Speaker 2: which liquidity has been easy, We've had years in which 126 00:06:40,000 --> 00:06:43,839 Speaker 2: underwriting standards have come down. Are you paying more attention? 127 00:06:43,920 --> 00:06:46,440 Speaker 2: Are you looking at what you're doing more carefully now 128 00:06:46,760 --> 00:06:48,920 Speaker 2: as we come to the end of this process, how 129 00:06:48,960 --> 00:06:50,200 Speaker 2: much due diligence are you doing? 130 00:06:52,560 --> 00:06:54,760 Speaker 3: So we do a lot of due diligence at all 131 00:06:54,800 --> 00:06:56,640 Speaker 3: points in the cycle. And I think I would separate 132 00:06:56,680 --> 00:06:59,840 Speaker 3: two things. Every time you make a lending decision, and 133 00:07:00,120 --> 00:07:03,159 Speaker 3: you monitor those loans, whether it's in a good time 134 00:07:03,200 --> 00:07:04,719 Speaker 3: in a cycle or a bad time in a cycle, 135 00:07:04,760 --> 00:07:07,880 Speaker 3: assuming you knew it, you would always apply similar standards. 136 00:07:07,920 --> 00:07:10,280 Speaker 3: So I think the important thing is to maintain standards 137 00:07:10,560 --> 00:07:13,080 Speaker 3: through a cycle. And then if there are periods when 138 00:07:13,120 --> 00:07:16,760 Speaker 3: you're worried more, then you may increase the frequency of 139 00:07:16,800 --> 00:07:20,560 Speaker 3: your diligence and start looking at signs that you might 140 00:07:20,640 --> 00:07:23,520 Speaker 3: otherwise have thought were normal. And so, as I said, 141 00:07:23,600 --> 00:07:26,360 Speaker 3: what you're looking for at this point is our business 142 00:07:26,360 --> 00:07:30,000 Speaker 3: model stretched. And you know what are the quality of 143 00:07:30,040 --> 00:07:33,240 Speaker 3: financial controls and companies and the independence of financial controls. 144 00:07:33,560 --> 00:07:35,560 Speaker 3: These are the things you worry about all the time 145 00:07:35,600 --> 00:07:39,320 Speaker 3: and you pay extra attention to in periods of heightened concern. 146 00:07:39,400 --> 00:07:43,160 Speaker 4: Let's sayin kin, I feel like every time we have 147 00:07:43,280 --> 00:07:45,280 Speaker 4: you on the program, we always have to ask you 148 00:07:45,280 --> 00:07:47,240 Speaker 4: about the IPO market in London. I'll do it again 149 00:07:47,280 --> 00:07:49,160 Speaker 4: this time, but perhaps with a little bit of a 150 00:07:49,200 --> 00:07:51,400 Speaker 4: twist connecting it to the private credit space. We're seeing 151 00:07:51,480 --> 00:07:53,880 Speaker 4: deal making, We're seeing m and a activity start to 152 00:07:53,920 --> 00:07:55,520 Speaker 4: pick up in the States. We're not seeing that same 153 00:07:55,600 --> 00:07:58,400 Speaker 4: enthusiasm on this side of the pond, but we are 154 00:07:58,440 --> 00:08:01,440 Speaker 4: seeing more mobilization when it come to private credit because 155 00:08:01,480 --> 00:08:04,680 Speaker 4: it feels like the IPO route isn't one that's available 156 00:08:04,720 --> 00:08:08,000 Speaker 4: to everyone. Does that make Europe more vulnerable to a 157 00:08:08,120 --> 00:08:14,200 Speaker 4: risk in the private space than the public one. 158 00:08:14,400 --> 00:08:16,480 Speaker 3: Well, I think the amount of private credit is of 159 00:08:16,480 --> 00:08:19,120 Speaker 3: course much creator in the United States because it's a 160 00:08:19,120 --> 00:08:21,600 Speaker 3: more advanced industry and developed there. But I want to 161 00:08:21,840 --> 00:08:25,960 Speaker 3: sort of not talk about private versus credit. Public credit 162 00:08:26,080 --> 00:08:28,320 Speaker 3: is credit is credit. I think as far as the 163 00:08:28,360 --> 00:08:31,960 Speaker 3: IPO market goes, we on this desk behind us took 164 00:08:32,040 --> 00:08:35,400 Speaker 3: part in an IPO yesterday of a UK bank Showbrook. 165 00:08:36,480 --> 00:08:39,840 Speaker 3: I think you've seen some signs. It's obviously not as 166 00:08:39,880 --> 00:08:42,520 Speaker 3: strong as it is in the US, and I do 167 00:08:42,559 --> 00:08:45,240 Speaker 3: think in Europe as in the UK, and in fact 168 00:08:45,240 --> 00:08:47,400 Speaker 3: the Governor mentioned this yesterday in the House of Lords, 169 00:08:48,480 --> 00:08:51,079 Speaker 3: there has to be a continued growth in the equity 170 00:08:51,160 --> 00:08:53,640 Speaker 3: risk culture of the country and hopefully with that you'll 171 00:08:53,679 --> 00:08:54,480 Speaker 3: see more IPOs. 172 00:08:55,280 --> 00:08:56,840 Speaker 1: Thank you very much. Thank you for joining us the 173 00:08:56,840 --> 00:09:00,079 Speaker 1: Buntley CEOCSN categoration and with us to talk about the 174 00:09:00,160 --> 00:09:03,400 Speaker 1: numbers and the credit market. Yes, really interesting to get 175 00:09:03,400 --> 00:09:05,920 Speaker 1: his take on things we've heard from the US banking sector, 176 00:09:05,960 --> 00:09:08,080 Speaker 1: an Indy from the Bank of England governor, his concerns 177 00:09:08,120 --> 00:09:11,880 Speaker 1: around AI of course, and certainly yesterday talking about credit markets.