WEBVTT - Nigel Farage Talks Coutts & Apple Plays AI Catch Up

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<v Speaker 1>Good morning. It's Thursday, the twentieth of July in London.

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<v Speaker 1>This is the Blueberg daybreakurate podcast. I'm Caroline Hepga. Coming

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<v Speaker 1>up today, Nigel Farage speaks to us about the KOTS

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<v Speaker 1>decision to close his accounts, profits tumble at Goldman, as

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<v Speaker 1>pressure on Solomon grows, and Apple plays catch up on

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<v Speaker 1>Generative AI. Let's start with a roundup of our top stories.

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<v Speaker 1>Prime Minister Ishi Sunak says that the British government will

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<v Speaker 1>crack down on banks who deny services based on their clients' views.

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<v Speaker 1>The UK leader was responding to Kotz's decision to close

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<v Speaker 1>politician Nigel Farage's account. We spoke to Farrage on this program.

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<v Speaker 1>He is calling for bosses at the parent bank RBS

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<v Speaker 1>to face questions from MPs.

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<v Speaker 2>I think the bosses of the RBS group should appear

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<v Speaker 2>before a parliamentary committee to explain why they now make

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<v Speaker 2>political and moral judgments on customers of THEIRS who meet

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<v Speaker 2>their financial requirements and you give opinions that are entirely

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<v Speaker 2>within the law and our majority views in this country.

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<v Speaker 1>Responding to our interview with Nigel Faraja spokesperson said quote

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<v Speaker 1>decisions to close an account are not taken lightly and

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<v Speaker 1>involve a number of factors, including commercial viability, reputational considerations,

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<v Speaker 1>and legal and regulatory requirements. We'll have more of the

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<v Speaker 1>interview with Nigel Farage and the response from Coots in

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<v Speaker 1>a few minutes. Moving on to earnings now. Tesla shares

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<v Speaker 1>fell in late trading after profitability shrank, showing the ev

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<v Speaker 1>maker's industry leading margins are being squeezed by months of

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<v Speaker 1>price cuts. The company reaffirmed production guidance of one point

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<v Speaker 1>eight million units this year. Elon Musk said earlier that

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<v Speaker 1>the car maker had a shot at producing two million vehicles.

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<v Speaker 3>I think it makes it does make sense for sacrifice

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<v Speaker 3>margins in favor of making more vehicles because we think

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<v Speaker 3>in the nautics in the future have a dramatic valuation increase.

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<v Speaker 3>I think the test the fleet value increase at the

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<v Speaker 3>point which prea can upload full full self driving and

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<v Speaker 3>it's approved by regulators will be the single biggest step

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<v Speaker 3>change in asset value maybe in history.

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<v Speaker 1>That was the TESTA CEO Elon Musk, who also said

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<v Speaker 1>that the company will probably keep slashing prices of electric

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<v Speaker 1>vehicles if interest rates continue to rise, production lines will

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<v Speaker 1>be paused briefly in the third quarter full factory upgrades.

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<v Speaker 1>Netflix also slumped eight point three percent after market after

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<v Speaker 1>its third quarter revenue outlook missed estimates. That story now

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<v Speaker 1>from Bloomberg's Charlie Pellett.

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<v Speaker 4>It suggests a crackdown on password sharing and a new

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<v Speaker 4>advertising strategy are not yet delivering the sales growth that

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<v Speaker 4>analysts anticipated. Netflix's second quarter sales rose two point seven

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<v Speaker 4>percent to eight point one to nine billion dollars, coming

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<v Speaker 4>in slightly below analyst projections that was I do you,

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<v Speaker 4>in part to foreign exchange rates and to price cuts

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<v Speaker 4>in some markets. The company's forecast for third quarter revenue

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<v Speaker 4>of eight point five to two billion dollars was also

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<v Speaker 4>shy of Wall Street estimates, which average eight point sixty

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<v Speaker 4>seven billion in New York. Charlie Pellett, Bloomberg Daybreak Europe.

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<v Speaker 1>Goldman Sachs saw profits plunge in the second quarter, in

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<v Speaker 1>yet more bad news for the banks in battled CEO

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<v Speaker 1>David Solomon, second quarter earnings fell fifty eight percent on

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<v Speaker 1>an investment banking slump, real estate markdowns, and a good

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<v Speaker 1>will write down in its consumer business. Return on equity,

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<v Speaker 1>which is a key measure of profitability also slid to

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<v Speaker 1>four percent, that is the worst among the top US banks,

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<v Speaker 1>But David Solomon says that he is positioning the firm

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<v Speaker 1>for the future.

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<v Speaker 5>You're making tough decisions that are driving a strategic evolution

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<v Speaker 5>of firm. Given both these factors, that should come as

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<v Speaker 5>no surprise that we're going to a period of lower results.

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<v Speaker 5>I remain fully confident that we will deliver on our

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<v Speaker 5>through the cycle targets of mid teen's returns and create

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<v Speaker 5>significant value for shareolers.

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<v Speaker 1>Solomon spoke to investors on the bank's earning call there

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<v Speaker 1>after the lender had actively tamped down expectations heading into

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<v Speaker 1>the report, prompting analysts to slash their estimates for quarterly

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<v Speaker 1>profit by almost half since June. For Goldman Sachs and

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<v Speaker 1>just finally, Apple is working on artificial intelligence tools that

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<v Speaker 1>could challenge those of Open AI and others. According to

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<v Speaker 1>people with knowledge of these efforts, the iPhone makers built

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<v Speaker 1>its own framework to create large language models, known as AJAX.

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<v Speaker 1>Blomberg's Mark German broke that story.

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<v Speaker 6>Apple is going all in on LM's, or large language models.

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<v Speaker 6>That's the heart of the AI technology that powers chat GPT,

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<v Speaker 6>Microsoft Being AI, Google Bard and all of these fancy

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<v Speaker 6>new AI tools we've been hearing about. So they've developed

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<v Speaker 6>their own underlying framework at Apple called ajax to power

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<v Speaker 6>its own next generation MS. And it's also built an

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<v Speaker 6>internal chat GBT like tool for use among its employees

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<v Speaker 6>that operates very similar to the tools we're seeing from others.

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<v Speaker 1>Today, Bloomberg's Mark German there. He also reports that the

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<v Speaker 1>company has yet to devise a clear strategy for releasing

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<v Speaker 1>the technology to consumers. So that news on Apple in

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<v Speaker 1>our top stories for you this morning. Now I want

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<v Speaker 1>to move on to an important interview that we've done.

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<v Speaker 1>The former leader of the UK Independence and Brexit Party,

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<v Speaker 1>Nigel Farage, has called for a parliamentary inquiry into why

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<v Speaker 1>Coots closed his bank account last month. So the pro

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<v Speaker 1>exit politicians, speaking of Bloomberg Radio, says that the internal

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<v Speaker 1>documents from the bank, a unit of nat West, show

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<v Speaker 1>that his account was closed because of his views. Farage

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<v Speaker 1>published a forty page report from Coots yesterday. Is not

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<v Speaker 1>limited to Farage's financial position, it also includes analysis of

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<v Speaker 1>his public comments and media coverage. And I'm sure you know,

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<v Speaker 1>but this issue has created a media storm which has

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<v Speaker 1>drawn in the Prime Minister Johnny Now in studio as

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<v Speaker 1>Bloomberg's finance reporter Will Share Will good morning, Good morning.

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<v Speaker 1>We've been tracking this story and we interviewed Nigel Farage

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<v Speaker 1>together yesterday. How did first of all this route actually

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<v Speaker 1>all start.

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<v Speaker 7>So a few weeks ago, Coots, which is a banker

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<v Speaker 7>to the wealthy, including the Royal family, closed down his

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<v Speaker 7>bank account. Now, at the time, people familiar with that

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<v Speaker 7>decision indicated that that was because he hadn't deposited enough

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<v Speaker 7>money with the firm. Similar stories round in the BBC

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<v Speaker 7>and The Financial Times. Nigel Farage, however, had put in

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<v Speaker 7>a subject access request to Coots, asking documents that would

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<v Speaker 7>indicate why the decision was made. Now, these documents appear

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<v Speaker 7>to suggest that they considered his political views and made

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<v Speaker 7>an assessment that his values didn't to Kutz's wider commitment

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<v Speaker 7>to inclusion. In particular, these documents apparently mentioned perceptions of

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<v Speaker 7>him as being xenophobic and racist, and even describe him

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<v Speaker 7>or even mention a perception that he's a disingenuous grifter.

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<v Speaker 7>So whatever you think about Nigel Farage and his opinions,

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<v Speaker 7>those are very strong words.

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<v Speaker 1>Yeah, no, absolutely, well, will you and I spoke to

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<v Speaker 1>the politician and broadcast in Nigel Farag I want us

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<v Speaker 1>to listen to that extensive interview. Have a listen now.

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<v Speaker 2>Well, it's pretty clear, isn't it that when that decision

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<v Speaker 2>was taken, it was because I do not fit with

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<v Speaker 2>their agenda. I do not fit with their policies apparently

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<v Speaker 2>of diversity and inclusion. I do not represent their values.

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<v Speaker 2>I am a very very bad person because I happen

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<v Speaker 2>to hold views which are legal and our majority views

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<v Speaker 2>in the country that the upper class, upper middle class

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<v Speaker 2>types than habit coots don't share. It's pretty clear if

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<v Speaker 2>you look at the seventeenth of November, it's pretty nija

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<v Speaker 2>that decision was.

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<v Speaker 1>Made, Nigel. Have they lied then?

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<v Speaker 2>They've lied about the They've lied about the initial reason

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<v Speaker 2>for closing the account. Yes, I mean what they would

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<v Speaker 2>say in their defense is that since November twenty twenty two,

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<v Speaker 2>there was a big draw down on the account, a

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<v Speaker 2>temporary draw down on the account, but it's now back

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<v Speaker 2>up to the levels that they themselves described as commercially barble.

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<v Speaker 2>So look, you know they've been absolutely dishonest about this

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<v Speaker 2>all the way through in.

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<v Speaker 7>This document it says that at one point it says

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<v Speaker 7>it's clear that you project cenophobic, chauvinist, stick and racist views,

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<v Speaker 7>although you've done it within the law. And there's also

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<v Speaker 7>they also say there's a perception of you as a

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<v Speaker 7>disingenuous grifter. Do you have any plans to sue the bank?

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<v Speaker 7>Or is it your view that anyone NatWest or Coots

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<v Speaker 7>ought to resign over this?

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<v Speaker 2>It is bile, it is poison. It is written with venom.

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<v Speaker 2>It is prejudiced in a most extraordinary way that only

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<v Speaker 2>the upper middle classes who live in central London postcodes

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<v Speaker 2>could possibly do. And I think this is why airing

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<v Speaker 2>it in public is causing them such a panic.

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<v Speaker 7>Look should somebody do you think that someone ought to

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<v Speaker 7>resign over it? And if so, who want to think?

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<v Speaker 8>I do any want to think should happen?

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<v Speaker 2>I think the bosses of the RBS group should appear

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<v Speaker 2>before a parliamentary committee to explain why they now make

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<v Speaker 2>political and moral judgments on customers of THEIRS who meet

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<v Speaker 2>their financial requirements and who give opinions that are entirely

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<v Speaker 2>within the law and our majority views.

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<v Speaker 8>In this country.

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<v Speaker 1>In terms of the timing. Then that was the other

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<v Speaker 1>question I was going to ask you. Obviously, you were

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<v Speaker 1>leader of u KIT between two thousand and six, two

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<v Speaker 1>thousand and nine, Brexit Party leader twenty ten to twenty sixteen.

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<v Speaker 1>Why do you think the bank made the decision now?

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<v Speaker 2>I think it's the whole RBS group. I think that

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<v Speaker 2>the boss of the group now, Alison Rose, has taken

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<v Speaker 2>coots and taken that west into territory that I think

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<v Speaker 2>is highly political. I think it's been a shift in

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<v Speaker 2>the way these banks view the world and view their customers.

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<v Speaker 8>And that is my best guess as to the timing

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<v Speaker 8>of it.

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<v Speaker 2>There's nothing I've said or done there's any different to

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<v Speaker 2>what I've said and done for the previous twenty years.

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<v Speaker 1>In terms of Alison Rose, you think that she has

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<v Speaker 1>questions to answer personally for this situation.

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<v Speaker 2>I think she's going to be questioned by I think

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<v Speaker 2>mainstream media as we speak are asking those questions. You know,

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<v Speaker 2>what have you done? What have you done to this

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<v Speaker 2>banking group? What direction are you taking it in? Aren't

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<v Speaker 2>you beginning to behave to behave a bit more like

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<v Speaker 2>a political organization that a bank. Is that a bank

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<v Speaker 2>group that is forty percent owned by the taxpayer so yeah, look,

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<v Speaker 2>I just hope by coming out in public, I sponsor

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<v Speaker 2>a very very big debate about what banks are for

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<v Speaker 2>and ultimately, ultimately what I want is for everybody to

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<v Speaker 2>have the right to a bank account, the right to

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<v Speaker 2>their own business account. This used to exist in our

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<v Speaker 2>country before the privatization of the post office. It still

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<v Speaker 2>exists in commonable countries like France and Germany, and I

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<v Speaker 2>think it's a very very important and fundamental issue because

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<v Speaker 2>as we move towards a more and more digitized society,

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<v Speaker 2>whether we like it or not, without a bank account,

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<v Speaker 2>you simply can't exist.

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<v Speaker 8>I mean, you've virtually become a non person.

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<v Speaker 1>So that was the politician and broadcaster Nigel Farage talking

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<v Speaker 1>about the contents of that report. Why Coots made the

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<v Speaker 1>decision now. In response to Farage's comments, a spokesperson for

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<v Speaker 1>Coots has given us this statement. It's being read here

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<v Speaker 1>in full by Ablinberg journalist.

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<v Speaker 9>We recognize the substantial interest in this case. We cannot

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<v Speaker 9>comment on the detail given our customer confidentiality obligations. However,

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<v Speaker 9>it is not Koutz's policy to close customer accounts solely

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<v Speaker 9>on the basis of legally held political and personal views.

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<v Speaker 9>Decisions to close an account are not taken lightly and

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<v Speaker 9>involve a number of factors, including commercial viability, reputational considerations,

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<v Speaker 9>and legal and regulatory requirements. We recognize the critical importance

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<v Speaker 9>of access to banking. When it became clear that our

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<v Speaker 9>client was unable to secure banking facilities elsewhere, and as

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<v Speaker 9>he has confirmed publicly, he was offered alternative banking facilities

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<v Speaker 9>with that west, that offer stands. We understand the public

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<v Speaker 9>concern that the process for ending a customer relationship and

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<v Speaker 9>how that is communicated are not sufficiently transparent. We welcome the

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<v Speaker 9>anticipated HM Treasury recommendations in this area, alongside the ask

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<v Speaker 9>to prioritize the review of the regulatory rules related to

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<v Speaker 9>politically exposed persons. We look forward to working with the government,

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<v Speaker 9>the regulator, and the wider industry to ensure that universal

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<v Speaker 9>access to banking is maintained.

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<v Speaker 1>Okay, So that is the COOTS response then to Nigel

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<v Speaker 1>Farage's comments there in full, Bluebig's finance reporter Will Shaw

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<v Speaker 1>is still with me, just really go through this story.

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<v Speaker 1>How significant an issue actually is this idea of closing

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<v Speaker 1>bank accounts for customers.

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<v Speaker 7>I think it would be easy to say, oh, this

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<v Speaker 7>is just Nigel Farage, this is just something that affects

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<v Speaker 7>one person. Obviously, he has a very unique political standing

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<v Speaker 7>in UK life. Despite his sort of class war rhetoric,

0:13:36.679 --> 0:13:38.959
<v Speaker 7>he is for a wealthy background. He's a former trader

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<v Speaker 7>until very recently he even had an account with Coots. However,

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<v Speaker 7>like there is concern that this might well set a

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<v Speaker 7>wider precedent. As you heard in warning there there are

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<v Speaker 7>lots of people that share Nigel Farage's views, as he

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<v Speaker 7>would be he would be quick to point out, and

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<v Speaker 7>as the Brexit vote demonstrated in twenty sixteen, so he

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<v Speaker 7>would argue that if he can be targets on his

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<v Speaker 7>political values, all kinds of people can be targeted in

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<v Speaker 7>the same way.

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<v Speaker 1>And speaking of which it has drawn in quite a

0:14:13.480 --> 0:14:16.000
<v Speaker 1>number of politicians. You know, we heard it discussed in

0:14:16.040 --> 0:14:18.360
<v Speaker 1>Parliament yesterday and in fact the Prime Minister made some

0:14:18.400 --> 0:14:20.560
<v Speaker 1>comments too. Have listened to what he said.

0:14:22.400 --> 0:14:25.640
<v Speaker 10>It wouldn't be right if financial services were being denied

0:14:25.640 --> 0:14:29.360
<v Speaker 10>to anyone exercising their right to lawful free speech. Our

0:14:29.400 --> 0:14:32.560
<v Speaker 10>new Financial Service and Markets Act puts in place new

0:14:32.640 --> 0:14:36.120
<v Speaker 10>measures to ensure that politically exposed persons are being treated

0:14:36.160 --> 0:14:40.000
<v Speaker 10>in an appropriate and proportionate manner, and having consulted on

0:14:40.040 --> 0:14:43.320
<v Speaker 10>the Payment Services regulations, we are in the process of

0:14:43.360 --> 0:14:46.840
<v Speaker 10>cracking down on this practice by tightening the rules around

0:14:46.840 --> 0:14:47.720
<v Speaker 10>account closures.

0:14:48.680 --> 0:14:51.680
<v Speaker 1>So Rishie Sunak there speaking yesterday, So what do you

0:14:51.680 --> 0:14:54.240
<v Speaker 1>think will could actually result from all of this?

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<v Speaker 7>So Nigel Farraje obviously is called for a parliamentary inquiry.

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<v Speaker 7>Now a lot of the criticism that we were hearing

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<v Speaker 7>in Parliament yesterday is from what you might call ideological

0:15:06.600 --> 0:15:12.080
<v Speaker 7>bedfellows of Nigel Farage. What I would say is it

0:15:12.120 --> 0:15:14.760
<v Speaker 7>seems to have this incident seems to have raised eyebrows

0:15:14.760 --> 0:15:18.200
<v Speaker 7>at the Financial Conduct Authority, which is probably a little

0:15:18.240 --> 0:15:22.320
<v Speaker 7>bit more concerning for Coots in that west. So Nikil Rati,

0:15:22.360 --> 0:15:25.640
<v Speaker 7>who's head of the Financial Conducts Authority, was speaking to yesterday,

0:15:25.840 --> 0:15:29.080
<v Speaker 7>he said he'd spoken to Coots. He was talking at

0:15:29.120 --> 0:15:35.160
<v Speaker 7>Parliament's Treasury Select Committee. He discussed UK and European Union

0:15:35.800 --> 0:15:39.600
<v Speaker 7>regulation and he said that essentially the financial firms are

0:15:39.640 --> 0:15:43.680
<v Speaker 7>not able to discriminate on the political views of their customers.

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<v Speaker 1>Okay, So just lastly a final thought on what it

0:15:47.920 --> 0:15:50.960
<v Speaker 1>might mean for Cootsnatwez CEO Alison Rose.

0:15:51.920 --> 0:15:54.920
<v Speaker 7>I mean, we've heard very little of them from them

0:15:55.000 --> 0:15:58.160
<v Speaker 7>so far, particularly from Nat West, who appeared to be

0:15:58.240 --> 0:16:01.400
<v Speaker 7>letting Coots do do the most of the talking on this.

0:16:02.080 --> 0:16:07.000
<v Speaker 7>Nowwest obviously is still largely stay owned. It doesn't look

0:16:07.080 --> 0:16:09.920
<v Speaker 7>like the headlines are going to fade on this anytime soon.

0:16:10.640 --> 0:16:12.600
<v Speaker 7>I would anticipate further pressure.

0:16:13.840 --> 0:16:16.400
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