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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. We're joined by Bill

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Speaker 1: Winter's the chief executive officers Standard Charger. Bill, as always

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Speaker 1: your Davis regular, Thank you so much for joining us.

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Speaker 1: There's a lot going on. I'm sure you get stopped

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Speaker 1: in the corridor saying what will Trump do? What's it

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Speaker 1: mean for the economy? What do you answer?

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Speaker 2: Well, what we know so far is that the animal

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Speaker 2: spirits have been unleashed, so so people are looking at

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Speaker 2: ways so they can invest around the themes that they

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Speaker 2: think the US is migrating towards. No surprise in his

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Speaker 2: early actions so far. But the big questions on the

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Speaker 2: economy are where are we going to come out on dariffs,

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Speaker 2: and where we're going to come out in terms of

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Speaker 2: the engagement between the US and China and what's that

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Speaker 2: mean for the rest of the world. And those questions

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Speaker 2: are still are still doing.

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Speaker 1: How do you see US China playing out? Actually for

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Speaker 1: the banks, especially as we're expecting the swave of deregulation

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Speaker 1: in the US.

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Speaker 2: Look, I live in hope, and that the hope in

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Speaker 2: which we live is that there can be an on

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Speaker 2: to I don't think we're going to see some sort

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Speaker 2: of a big rough ROUCHEMMP between the US and China.

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Speaker 2: But I think there can be an understanding about how

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Speaker 2: we can cooperate together to get some really important things

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Speaker 2: done in the world. There's some really obvious ones, like

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Speaker 2: climate change, which is unlikely to be the natural point

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Speaker 2: of engagement between the Trump administration and China. But the

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Speaker 2: system for global trade is a second. And yeah, we

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Speaker 2: all know the world in aggregate is better off if

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Speaker 2: we have free and fair trade, but we also know

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Speaker 2: that people have been left behind. And Trump's been very

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Speaker 2: very straightforward in his determination to change the rules. We'll see.

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Speaker 1: But when you hear Donald Trump actually say Ervice's favorite

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Speaker 1: word in English dictionary, do you believe him at face value?

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Speaker 1: Or is everything a negotiating tactic and a starting point?

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Speaker 2: Well? I think ultimately everything is a negotiating tactic kind

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Speaker 2: of for everyone when you're trying to change the statusquoa.

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Speaker 2: And how deep is his conviction and how much does

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Speaker 2: he really believe things need to change and how much

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Speaker 2: can things change? There's a limit to how much flex

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Speaker 2: either side has in a negotiation. It really is an

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Speaker 2: open question, and I think the market is as un

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Speaker 2: clear on that question as has ever.

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Speaker 1: Been okay, how does it change how you want to

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Speaker 1: run the bank.

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Speaker 2: So we've we've run the bank for our clients as

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Speaker 2: a practical matter, and our clients have been diversifying their

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Speaker 2: supply chains for the past eight years. So obviously there

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Speaker 2: was the first round of Trump, although the tensions between

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Speaker 2: the China and the US have been going on from

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Speaker 2: before then. We know they carried on with Biden very

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Speaker 2: very strongly. So diversifying supply chains. COVID actually through a

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Speaker 2: different obviously through a different spanner in the works in

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Speaker 2: terms of security of supply. But we've also got many

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Speaker 2: countries around the world who have developed outstanding manufacturing bases

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Speaker 2: of their own. You think about a place like Vietnam

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Speaker 2: or or increasing the India. So that's been ongoing and

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Speaker 2: our job is to help them get from where they

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Speaker 2: are to where they're going in a seamless and effective way.

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Speaker 2: And I say, so far, that's that's going well.

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Speaker 1: So do you want to increase your presence in the

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Speaker 1: US be there for your clients.

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Speaker 2: You know, we've got a good presence in the US.

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Speaker 2: We've got a very good presence with our corporate clients

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Speaker 2: and financial institutions US. Most of whom are operating back

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Speaker 2: in Asian Middle East and Africa, which is which are

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Speaker 2: our our home markets. But you know, it's it's a

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Speaker 2: it's a big market in the US and lots of

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Speaker 2: opportunity for us to engage in terms that makes sense

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Speaker 2: for us and for them.

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Speaker 1: Your share price it's going in the in the right

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Speaker 1: direction direction you want it. Yes, Is this a landmark point?

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Speaker 2: I don't know. I'm I think we've got a lot

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Speaker 2: further to go. I mean, our share price has gone

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Speaker 2: up because we're making more money, and you know, our

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Speaker 2: earnings are improving. Earnings are improving because we're we've got

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Speaker 2: some really good strategic positioning. Everything is everything's cross border,

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Speaker 2: especially if there's an Asian Middle East, Africa anchor, and

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Speaker 2: then serving the affluent and the aspiring affluent. And this

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Speaker 2: is kind of what's a little bit different about our

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Speaker 2: our private banking and affluent banking effort is that you know,

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Speaker 2: if you go into into India or even into Korea

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Speaker 2: or Indonesia, we've got people who say, like, I'm not

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Speaker 2: really rich yet, but I want to be rich and

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Speaker 2: and and I want to find a way to manage

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Speaker 2: my money so that I can grow and become wealthy

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Speaker 2: and re hire comfortably and lead something to my children.

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Speaker 2: And those are the people that are attracted to center chargersion.

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Speaker 2: And yet we're kind of we're on top of that one.

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Speaker 2: It's going well.

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Speaker 1: So how much do you think your share price can

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Speaker 1: rise by?

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Speaker 2: I wish I could answer that question. We're trading below

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Speaker 2: book value. We're still trading blowbook value, which doesn't make

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Speaker 2: any sense to me given the returns that we're generating.

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Speaker 1: But you know, okay, so what's the winter's target? You

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Speaker 1: must have a target? And this was like you've reached

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Speaker 1: where you wanted it to be.

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Speaker 2: So far, we're return on tangible approaching thirty percent? Is

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Speaker 2: the actual guidance that we give in twenty twenty six.

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Speaker 2: You know, we'll announce our all full year earnings in

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Speaker 2: a few weeks, and you've seen the US banks have

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Speaker 2: reported they be very strong. We're participating in the same markets.

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Speaker 2: So I feel very good about our prospects and I

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Speaker 2: see that playing out for some time, and I think

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Speaker 2: if we make more money and if we do a

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Speaker 2: good job for our shareholders, our share price will vote.

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Speaker 1: Okay, do you have new targets that you'll announce?

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Speaker 2: We will announce new targets when we announce new targets.

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Speaker 2: But no, as you our friends, no doubt, I'll be

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Speaker 2: in your studio and look talking about that in February.

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Speaker 1: Okay, talk to me a bit about your fit for

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Speaker 1: Growth strategy? Right again? Are you there? Are you going

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Speaker 1: to do more?

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Speaker 2: Like?

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Speaker 1: What's is this mission accomplished? For? No? Ends are like

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Speaker 1: seventy five percent?

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Speaker 2: There no mission? No? So I Fit for Growth is

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Speaker 2: so I've been in Center Charter for ten years now.

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Speaker 2: For the first seven years, our expenses were basically ten

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Speaker 2: billion dollars. It's flat. We had to pick up a

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Speaker 2: round inflation, and because performance was improving, we told the

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Speaker 2: market we're going to cap our expenses in twenty twenty

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Speaker 2: six at twelve billion dollars. Right, and that's going to

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Speaker 2: require us to do some some ongoing productivity, which we

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Speaker 2: do every year. In any case, Fit for Growth is

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Speaker 2: a great opportunity to be a little bit more strategic

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Speaker 2: about it and really change the way we do business.

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Speaker 2: So far, so good.

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Speaker 1: Okay, what's one thing that you worry about in this year? Actually,

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Speaker 1: in the next twelve months.

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Speaker 2: I worry about all sorts of things. I worry about

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Speaker 2: the US economy overheating and getting an inflationary thrust which

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Speaker 2: drags everything back. We all know that a higher US

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Speaker 2: interst rates and wrong yost economy, meaning also a stronger dollar,

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Speaker 2: which is tough for emerging markets. So you know, we've

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Speaker 2: seen we were seeing the beginnings of meaningful capital inflow

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Speaker 2: back into emerging markets. That's pulled back now. So I

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Speaker 2: do worry about about that US economy overheating. Of course,

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Speaker 2: the geopolitical intentions are always are always with us. But

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Speaker 2: you know, I think for the moment, it's maybe because

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Speaker 2: we're a doubles, we can be hopeful that there's the

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Speaker 2: prospect of peace in the Middle East, right there's we

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Speaker 2: can imagine the prospect for peace in Europe, and but

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Speaker 2: that would require an on topped between the US and China.

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Speaker 2: That could also happen. So while we're fantasizing, let's let's ye.

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Speaker 1: But so it just it just feels like it could

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Speaker 1: be very volatile year on all fronts.

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Speaker 2: It be a very volatile year. And I think that

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Speaker 2: the economy is going through a transition. The US is

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Speaker 2: clearly at full employment, but still with a very large

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Speaker 2: budget deficit. So we'll see volatility and interest rates. We'll

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Speaker 2: see volatility and therefore in form exchange rates.

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Speaker 1: Is that good for banks? Is that good?

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Speaker 2: It's very good for us, And it's good for us

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Speaker 2: up until the point where it really hurts our clients.

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Speaker 2: Once the clients are feeling pain, of course, and we

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Speaker 2: feel some pain as well. And the volatility so far

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Speaker 2: has been okay. I think his secular increase in US

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Speaker 2: interest rates, or a failure to decrease, would begin to

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Speaker 2: really hurt clients in the US and in the rest

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Speaker 2: of the world.

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Speaker 1: A lot of banks are thinking about succession. How do

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Speaker 1: you think about that?

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Speaker 2: I think about it all the time, and thankfully I've

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Speaker 2: got a really good group of direct reports, you know,

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Speaker 2: running our corporate bank, running our retail bank. We have

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Speaker 2: a CFO that joined us a year ago, and any

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Speaker 2: of those people could run the center charter. So if

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Speaker 2: I fall off that edge tomorrow, the center charter will

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Speaker 2: be fine. We also go through the ordinary course of

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Speaker 2: chairman succession, and our chairman has he joined just after me,

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Speaker 2: so he will hit his nine year point over the

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Speaker 2: course of this year. Thankfully, we've got deep, a deep

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Speaker 2: bench on the board. We've got a deep bench in management.

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Speaker 2: But it's the job of the chairman and the CEO

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Speaker 2: to make sure that succession is provided for. I think

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Speaker 2: we've done a pretty job.

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Speaker 1: Okay, Bill, thanks so much, and you're not falling anywhere.

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Speaker 1: We'll make sure you get safely off the chair. With

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Speaker 1: all Bill wagers, of course, the chief executive standard charger