Speaker 1: Good morning. It's Thursday, the twentieth of July in London.
Speaker 1: This is the Blueberg daybreakurate podcast. I'm Caroline Hepga. Coming
Speaker 1: up today, Nigel Farage speaks to us about the KOTS
Speaker 1: decision to close his accounts, profits tumble at Goldman, as
Speaker 1: pressure on Solomon grows, and Apple plays catch up on
Speaker 1: Generative AI. Let's start with a roundup of our top stories.
Speaker 1: Prime Minister Ishi Sunak says that the British government will
Speaker 1: crack down on banks who deny services based on their clients' views.
Speaker 1: The UK leader was responding to Kotz's decision to close
Speaker 1: politician Nigel Farage's account. We spoke to Farrage on this program.
Speaker 1: He is calling for bosses at the parent bank RBS
Speaker 1: to face questions from MPs.
Speaker 2: I think the bosses of the RBS group should appear
Speaker 2: before a parliamentary committee to explain why they now make
Speaker 2: political and moral judgments on customers of THEIRS who meet
Speaker 2: their financial requirements and you give opinions that are entirely
Speaker 2: within the law and our majority views in this country.
Speaker 1: Responding to our interview with Nigel Faraja spokesperson said quote
Speaker 1: decisions to close an account are not taken lightly and
Speaker 1: involve a number of factors, including commercial viability, reputational considerations,
Speaker 1: and legal and regulatory requirements. We'll have more of the
Speaker 1: interview with Nigel Farage and the response from Coots in
Speaker 1: a few minutes. Moving on to earnings now. Tesla shares
Speaker 1: fell in late trading after profitability shrank, showing the ev
Speaker 1: maker's industry leading margins are being squeezed by months of
Speaker 1: price cuts. The company reaffirmed production guidance of one point
Speaker 1: eight million units this year. Elon Musk said earlier that
Speaker 1: the car maker had a shot at producing two million vehicles.
Speaker 3: I think it makes it does make sense for sacrifice
Speaker 3: margins in favor of making more vehicles because we think
Speaker 3: in the nautics in the future have a dramatic valuation increase.
Speaker 3: I think the test the fleet value increase at the
Speaker 3: point which prea can upload full full self driving and
Speaker 3: it's approved by regulators will be the single biggest step
Speaker 3: change in asset value maybe in history.
Speaker 1: That was the TESTA CEO Elon Musk, who also said
Speaker 1: that the company will probably keep slashing prices of electric
Speaker 1: vehicles if interest rates continue to rise, production lines will
Speaker 1: be paused briefly in the third quarter full factory upgrades.
Speaker 1: Netflix also slumped eight point three percent after market after
Speaker 1: its third quarter revenue outlook missed estimates. That story now
Speaker 1: from Bloomberg's Charlie Pellett.
Speaker 4: It suggests a crackdown on password sharing and a new
Speaker 4: advertising strategy are not yet delivering the sales growth that
Speaker 4: analysts anticipated. Netflix's second quarter sales rose two point seven
Speaker 4: percent to eight point one to nine billion dollars, coming
Speaker 4: in slightly below analyst projections that was I do you,
Speaker 4: in part to foreign exchange rates and to price cuts
Speaker 4: in some markets. The company's forecast for third quarter revenue
Speaker 4: of eight point five to two billion dollars was also
Speaker 4: shy of Wall Street estimates, which average eight point sixty
Speaker 4: seven billion in New York. Charlie Pellett, Bloomberg Daybreak Europe.
Speaker 1: Goldman Sachs saw profits plunge in the second quarter, in
Speaker 1: yet more bad news for the banks in battled CEO
Speaker 1: David Solomon, second quarter earnings fell fifty eight percent on
Speaker 1: an investment banking slump, real estate markdowns, and a good
Speaker 1: will write down in its consumer business. Return on equity,
Speaker 1: which is a key measure of profitability also slid to
Speaker 1: four percent, that is the worst among the top US banks,
Speaker 1: But David Solomon says that he is positioning the firm
Speaker 1: for the future.
Speaker 5: You're making tough decisions that are driving a strategic evolution
Speaker 5: of firm. Given both these factors, that should come as
Speaker 5: no surprise that we're going to a period of lower results.
Speaker 5: I remain fully confident that we will deliver on our
Speaker 5: through the cycle targets of mid teen's returns and create
Speaker 5: significant value for shareolers.
Speaker 1: Solomon spoke to investors on the bank's earning call there
Speaker 1: after the lender had actively tamped down expectations heading into
Speaker 1: the report, prompting analysts to slash their estimates for quarterly
Speaker 1: profit by almost half since June. For Goldman Sachs and
Speaker 1: just finally, Apple is working on artificial intelligence tools that
Speaker 1: could challenge those of Open AI and others. According to
Speaker 1: people with knowledge of these efforts, the iPhone makers built
Speaker 1: its own framework to create large language models, known as AJAX.
Speaker 1: Blomberg's Mark German broke that story.
Speaker 6: Apple is going all in on LM's, or large language models.
Speaker 6: That's the heart of the AI technology that powers chat GPT,
Speaker 6: Microsoft Being AI, Google Bard and all of these fancy
Speaker 6: new AI tools we've been hearing about. So they've developed
Speaker 6: their own underlying framework at Apple called ajax to power
Speaker 6: its own next generation MS. And it's also built an
Speaker 6: internal chat GBT like tool for use among its employees
Speaker 6: that operates very similar to the tools we're seeing from others.
Speaker 1: Today, Bloomberg's Mark German there. He also reports that the
Speaker 1: company has yet to devise a clear strategy for releasing
Speaker 1: the technology to consumers. So that news on Apple in
Speaker 1: our top stories for you this morning. Now I want
Speaker 1: to move on to an important interview that we've done.
Speaker 1: The former leader of the UK Independence and Brexit Party,
Speaker 1: Nigel Farage, has called for a parliamentary inquiry into why
Speaker 1: Coots closed his bank account last month. So the pro
Speaker 1: exit politicians, speaking of Bloomberg Radio, says that the internal
Speaker 1: documents from the bank, a unit of nat West, show
Speaker 1: that his account was closed because of his views. Farage
Speaker 1: published a forty page report from Coots yesterday. Is not
Speaker 1: limited to Farage's financial position, it also includes analysis of
Speaker 1: his public comments and media coverage. And I'm sure you know,
Speaker 1: but this issue has created a media storm which has
Speaker 1: drawn in the Prime Minister Johnny Now in studio as
Speaker 1: Bloomberg's finance reporter Will Share Will good morning, Good morning.
Speaker 1: We've been tracking this story and we interviewed Nigel Farage
Speaker 1: together yesterday. How did first of all this route actually
Speaker 1: all start.
Speaker 7: So a few weeks ago, Coots, which is a banker
Speaker 7: to the wealthy, including the Royal family, closed down his
Speaker 7: bank account. Now, at the time, people familiar with that
Speaker 7: decision indicated that that was because he hadn't deposited enough
Speaker 7: money with the firm. Similar stories round in the BBC
Speaker 7: and The Financial Times. Nigel Farage, however, had put in
Speaker 7: a subject access request to Coots, asking documents that would
Speaker 7: indicate why the decision was made. Now, these documents appear
Speaker 7: to suggest that they considered his political views and made
Speaker 7: an assessment that his values didn't to Kutz's wider commitment
Speaker 7: to inclusion. In particular, these documents apparently mentioned perceptions of
Speaker 7: him as being xenophobic and racist, and even describe him
Speaker 7: or even mention a perception that he's a disingenuous grifter.
Speaker 7: So whatever you think about Nigel Farage and his opinions,
Speaker 7: those are very strong words.
Speaker 1: Yeah, no, absolutely, well, will you and I spoke to
Speaker 1: the politician and broadcast in Nigel Farag I want us
Speaker 1: to listen to that extensive interview. Have a listen now.
Speaker 2: Well, it's pretty clear, isn't it that when that decision
Speaker 2: was taken, it was because I do not fit with
Speaker 2: their agenda. I do not fit with their policies apparently
Speaker 2: of diversity and inclusion. I do not represent their values.
Speaker 2: I am a very very bad person because I happen
Speaker 2: to hold views which are legal and our majority views
Speaker 2: in the country that the upper class, upper middle class
Speaker 2: types than habit coots don't share. It's pretty clear if
Speaker 2: you look at the seventeenth of November, it's pretty nija
Speaker 2: that decision was.
Speaker 1: Made, Nigel. Have they lied then?
Speaker 2: They've lied about the They've lied about the initial reason
Speaker 2: for closing the account. Yes, I mean what they would
Speaker 2: say in their defense is that since November twenty twenty two,
Speaker 2: there was a big draw down on the account, a
Speaker 2: temporary draw down on the account, but it's now back
Speaker 2: up to the levels that they themselves described as commercially barble.
Speaker 2: So look, you know they've been absolutely dishonest about this
Speaker 2: all the way through in.
Speaker 7: This document it says that at one point it says
Speaker 7: it's clear that you project cenophobic, chauvinist, stick and racist views,
Speaker 7: although you've done it within the law. And there's also
Speaker 7: they also say there's a perception of you as a
Speaker 7: disingenuous grifter. Do you have any plans to sue the bank?
Speaker 7: Or is it your view that anyone NatWest or Coots
Speaker 7: ought to resign over this?
Speaker 2: It is bile, it is poison. It is written with venom.
Speaker 2: It is prejudiced in a most extraordinary way that only
Speaker 2: the upper middle classes who live in central London postcodes
Speaker 2: could possibly do. And I think this is why airing
Speaker 2: it in public is causing them such a panic.
Speaker 7: Look should somebody do you think that someone ought to
Speaker 7: resign over it? And if so, who want to think?
Speaker 8: I do any want to think should happen?
Speaker 2: I think the bosses of the RBS group should appear
Speaker 2: before a parliamentary committee to explain why they now make
Speaker 2: political and moral judgments on customers of THEIRS who meet
Speaker 2: their financial requirements and who give opinions that are entirely
Speaker 2: within the law and our majority views.
Speaker 8: In this country.
Speaker 1: In terms of the timing. Then that was the other
Speaker 1: question I was going to ask you. Obviously, you were
Speaker 1: leader of u KIT between two thousand and six, two
Speaker 1: thousand and nine, Brexit Party leader twenty ten to twenty sixteen.
Speaker 1: Why do you think the bank made the decision now?
Speaker 2: I think it's the whole RBS group. I think that
Speaker 2: the boss of the group now, Alison Rose, has taken
Speaker 2: coots and taken that west into territory that I think
Speaker 2: is highly political. I think it's been a shift in
Speaker 2: the way these banks view the world and view their customers.
Speaker 8: And that is my best guess as to the timing
Speaker 8: of it.
Speaker 2: There's nothing I've said or done there's any different to
Speaker 2: what I've said and done for the previous twenty years.
Speaker 1: In terms of Alison Rose, you think that she has
Speaker 1: questions to answer personally for this situation.
Speaker 2: I think she's going to be questioned by I think
Speaker 2: mainstream media as we speak are asking those questions. You know,
Speaker 2: what have you done? What have you done to this
Speaker 2: banking group? What direction are you taking it in? Aren't
Speaker 2: you beginning to behave to behave a bit more like
Speaker 2: a political organization that a bank. Is that a bank
Speaker 2: group that is forty percent owned by the taxpayer so yeah, look,
Speaker 2: I just hope by coming out in public, I sponsor
Speaker 2: a very very big debate about what banks are for
Speaker 2: and ultimately, ultimately what I want is for everybody to
Speaker 2: have the right to a bank account, the right to
Speaker 2: their own business account. This used to exist in our
Speaker 2: country before the privatization of the post office. It still
Speaker 2: exists in commonable countries like France and Germany, and I
Speaker 2: think it's a very very important and fundamental issue because
Speaker 2: as we move towards a more and more digitized society,
Speaker 2: whether we like it or not, without a bank account,
Speaker 2: you simply can't exist.
Speaker 8: I mean, you've virtually become a non person.
Speaker 1: So that was the politician and broadcaster Nigel Farage talking
Speaker 1: about the contents of that report. Why Coots made the
Speaker 1: decision now. In response to Farage's comments, a spokesperson for
Speaker 1: Coots has given us this statement. It's being read here
Speaker 1: in full by Ablinberg journalist.
Speaker 9: We recognize the substantial interest in this case. We cannot
Speaker 9: comment on the detail given our customer confidentiality obligations. However,
Speaker 9: it is not Koutz's policy to close customer accounts solely
Speaker 9: on the basis of legally held political and personal views.
Speaker 9: Decisions to close an account are not taken lightly and
Speaker 9: involve a number of factors, including commercial viability, reputational considerations,
Speaker 9: and legal and regulatory requirements. We recognize the critical importance
Speaker 9: of access to banking. When it became clear that our
Speaker 9: client was unable to secure banking facilities elsewhere, and as
Speaker 9: he has confirmed publicly, he was offered alternative banking facilities
Speaker 9: with that west, that offer stands. We understand the public
Speaker 9: concern that the process for ending a customer relationship and
Speaker 9: how that is communicated are not sufficiently transparent. We welcome the
Speaker 9: anticipated HM Treasury recommendations in this area, alongside the ask
Speaker 9: to prioritize the review of the regulatory rules related to
Speaker 9: politically exposed persons. We look forward to working with the government,
Speaker 9: the regulator, and the wider industry to ensure that universal
Speaker 9: access to banking is maintained.
Speaker 1: Okay, So that is the COOTS response then to Nigel
Speaker 1: Farage's comments there in full, Bluebig's finance reporter Will Shaw
Speaker 1: is still with me, just really go through this story.
Speaker 1: How significant an issue actually is this idea of closing
Speaker 1: bank accounts for customers.
Speaker 7: I think it would be easy to say, oh, this
Speaker 7: is just Nigel Farage, this is just something that affects
Speaker 7: one person. Obviously, he has a very unique political standing
Speaker 7: in UK life. Despite his sort of class war rhetoric,
Speaker 7: he is for a wealthy background. He's a former trader
Speaker 7: until very recently he even had an account with Coots. However,
Speaker 7: like there is concern that this might well set a
Speaker 7: wider precedent. As you heard in warning there there are
Speaker 7: lots of people that share Nigel Farage's views, as he
Speaker 7: would be he would be quick to point out, and
Speaker 7: as the Brexit vote demonstrated in twenty sixteen, so he
Speaker 7: would argue that if he can be targets on his
Speaker 7: political values, all kinds of people can be targeted in
Speaker 7: the same way.
Speaker 1: And speaking of which it has drawn in quite a
Speaker 1: number of politicians. You know, we heard it discussed in
Speaker 1: Parliament yesterday and in fact the Prime Minister made some
Speaker 1: comments too. Have listened to what he said.
Speaker 10: It wouldn't be right if financial services were being denied
Speaker 10: to anyone exercising their right to lawful free speech. Our
Speaker 10: new Financial Service and Markets Act puts in place new
Speaker 10: measures to ensure that politically exposed persons are being treated
Speaker 10: in an appropriate and proportionate manner, and having consulted on
Speaker 10: the Payment Services regulations, we are in the process of
Speaker 10: cracking down on this practice by tightening the rules around
Speaker 10: account closures.
Speaker 1: So Rishie Sunak there speaking yesterday, So what do you
Speaker 1: think will could actually result from all of this?
Speaker 7: So Nigel Farraje obviously is called for a parliamentary inquiry.
Speaker 7: Now a lot of the criticism that we were hearing
Speaker 7: in Parliament yesterday is from what you might call ideological
Speaker 7: bedfellows of Nigel Farage. What I would say is it
Speaker 7: seems to have this incident seems to have raised eyebrows
Speaker 7: at the Financial Conduct Authority, which is probably a little
Speaker 7: bit more concerning for Coots in that west. So Nikil Rati,
Speaker 7: who's head of the Financial Conducts Authority, was speaking to yesterday,
Speaker 7: he said he'd spoken to Coots. He was talking at
Speaker 7: Parliament's Treasury Select Committee. He discussed UK and European Union
Speaker 7: regulation and he said that essentially the financial firms are
Speaker 7: not able to discriminate on the political views of their customers.
Speaker 1: Okay, So just lastly a final thought on what it
Speaker 1: might mean for Cootsnatwez CEO Alison Rose.
Speaker 7: I mean, we've heard very little of them from them
Speaker 7: so far, particularly from Nat West, who appeared to be
Speaker 7: letting Coots do do the most of the talking on this.
Speaker 7: Nowwest obviously is still largely stay owned. It doesn't look
Speaker 7: like the headlines are going to fade on this anytime soon.
Speaker 7: I would anticipate further pressure.
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