Transcripts For BLOOMBERG Countdown 20160728

The cfo tells us everything is going to plan. Committed. Eel we are executing. Things are under control. Anna and sums up for facebook, as the social media giant has mobile revenue surging. A very warm welcome to countdown. I am an edwards. Manus i am manus cranny. Anna we had Credit Suisse numbers earlier. Bmp reporting secondquarter q k n÷numbers, secondquarter nt profit at 2. 56 billion, ahead of the 2. 1 billion estimates. They had again from selling a stake in visa europe. We know now they wont put that in the books, 597 million pretax gains from that sale. A business trying to get back to return on equity of 10 this year, taking additional steps to cut cost, bolster capital. A simple turnaround story, than others you can mention in the banking sector. What many analysts have been saying, because this diversity and breath of activity they take in the stock. Around 16 yeartodate compared to 27 , that is the one year share price youre looking at there. To bloomberg. Ke you see like you saw the First Quarter, you can never be protected from uncertainties. Uncertainties that can stem from any angle. It can be regulatory, geopolitical, many things. What you see is that again, one can rebound on these activities. , and particularly that is a mp was so diversified between retail and international retail. And diversified between Corporate Banking and the like, we feel confident in the overall evolution, that the bank will deliver on its overall directory. Anna so emphasizing the diversity of the business within Investment Banking and between Investment Banking and other parts of the business. He also gave his thoughts on brexit. We are very happy to be in the u. K. And we will stay there. The main element, what is longerterm impact . I think it is too early to say and to guide what will be. Anna the ceo, a slightly simpler turnaround. Manus this is credit squeeze, delivering a secondquarter net profit down by 84 , i grant you from a year ago, one billion swiss francs. Coming in at 170, loss was 178. I think what is fascinating year is this is the First Time Since he took over that all geographies actually delivered the numbers. Asian Pacific Investment and wealth management, ore, this is a great demonstration. Have a look at this. The strategy, his performance on the stock chart here, back in 2015, down she went, 45 of the market cap disappeared. Equity default the Second Quarter, a lot of volatility. The buffer of capital, here er, accelerating the program in march of this year. Were just beginning to see an uptick. Profits falling by 84 . Capital 11. 8 in the First Quarter, 11. 1 . Pretax markets, that was down from 391 million. We have of course these results live on top life go, and of course the ceo has been on twitter executing strategy, with significant and difficult progress. We can hear more from the ceo himself on the program. You can catch that interview right here on countdown, at 6 50 u. K. Time. Francine is sitting down as we speak with the man himself. Let us get the first word news with haslinda amin. Haslinda Barack Obama Says america must reject the message of fear and division being delivered by donald trump, and philadelphia, saying that clinton has the vision and discipline to move u. S. Forward. President obama even in the midst of crisis, she listens to people and she keeps her cool. And he treats everybody with respect. And no matter how daunting the odds, no matter how much people tried to knock her down, she never ever quits. Angela merkel is breaking up her vacation to defend herself against renewed criticism on the refugee policy, following a rash of Violent Attacks in germany. The german chancellor, who it planned to remain out of public viewing during the summer break, will answer questions this afternoon for the first time assaults left 13 dead. Three of the assaults were committed by a asylum seekers. U. K. Consumer confidence plummeting to the lowest level in three years, and more households believe they will be worse off as result of the brexit referendum results. A Sentiment Index dropping the lowest since july 2012, most worried about Property Values and consumer finances. A report that signals a growing concern about wealth. Billion takeover of sab miller has been thrown into disarray after the Public Company suspended integration of the two brewers. That follows a balance of shareholders, who say they have not been compensated enough for the pound postbrexit plunge. The ceo told staff in an internal memo that there should be no contact with ab inbev, with immediate effect. They declined to comment on the memo reviewed. For bankers and eu have helped to contain excessive risktaking, focusing on shortterm results. Thaty be too burdensome, is according to a European Commission document obtained by bloomberg. The brusselsbased organization plans to carry of an Impact Assessment on possible adjustment, as part of a broader review of capital rules planned for the end of the year. Facebook shares jumped in late trading after the Company Reported secondquarter revenue that beat rejections. Help and instagram ads sales climbed 39 to 6. 4 billion, 64 of all advertising revenue came from mobile. Facebook now has 1. 7 billion monthly users. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. You can find more stories on the bloomberg at top. I am haslinda amin. Much. Thanks very let us check on the markets in the asian session. Juliette has this from hong kong. The market suggesting with the fed it had to say and the impact that is having on the dollar and the yen. Absolutely, and a and we have seen the yen come back from the pretty big fall. And that is weighing on the nikkei, down by over 1 in the Late Afternoon session. We have just seen one report fiscalthrough that abes stability plan that surprised the market this time yesterday could include around a ¥7 trillion and spending alone. About a quarter of that stimulus package. It certainly seeing a lot of those export players in japan under pressure today. And most of the markets in the region are weaker as well. We had an uptick in singapore unemployment, the seventh time, down 1 . And we have more weakness coming through on the asian market today. Of course there is concern there could be more regulation and crubs into the wealth product sector. There has been quite a bit of downward pressure on a lot of the financial stocks in hong kong. We are seeing a weakness in a lot of the Energy Players with thee, falling at threemonth low. But property stocks looking quite well supported. In australia, a very different story. We do have this resurgence in safe havens in the yen and gold. Gold doing very well. Upt is supporting the 200, for 10th of 1 . Up arounde gold miner 8 . Similar to what youre seeing in nintendo coming through after the bell yesterday. Firstquarter loss was wider than with the market was looking for. That does not include any effects of pokemon go. Nintendo down 5 . Electric, a pretty dismal looking report. But better than what the market was looking for. Very well supported there. And samsung of course coming through in korea, the impact of galaxy s7 looking better. And the Share Buyback. But we are seeing weakness on a stock. Again, i down day. Awaiting the bank of japans policy decision tomorrow. Manus and anna, the ball very much in the bank of japans Court Following that stiglitz package. Manus that is for sure. Juliette with the latest. Fed officials have upgraded the assessment of the economy. And it taken a step towards rates. Interest but they stopped short of the signaling that a move could come as soon as september. Bloombergs mike mckee has more from washington. Mike no hint of when the change may come. But for market talks, there was this inserted into the second paragraph, a statement noting that nearterm risks to the Economic Outlook have diminished. That suggest that members may feel conditions for a rate increase are growing more favorable, and may be read by investors as suggesting that september could be a live meeting. Certainly in the economic assessment, the fed noted that the labor market has strengthened, taking note of the strong job gains in june, and noting other payroll in labor market indicators point to what the statement calls some increase in labor market utilization in recent months. Economic activity has been expanding at a moderate pace, the statement says. Although there was concern expressed about the business spending. That was similar to what they said in june. No change in the inflation outlook. Running below their 2 target, partly reflecting early declines in Energy Prices and imports. Exactly the phrase they used in the past. We are back to the same kansas supportingr george raising rates by a quarter of a percentage point. We will see what other members say as we move towards the september meeting. Michael mckee, anna bloomberg, washington. Joining us now to discuss, ing chief international economist, great to see you this morning. Rob, what you make of the fed . On the one hand, they were pretty upbeat on the state of the u. S. Economy. But then as you watch the dollar trade sort of through the market realization of what the fed was really saying, they said also that rates were not going up anytime soon. Rob yeah, but i think if you look over the markets have been, the fed is not going to raise rates ever. That is an exaggeration. What that is trying to do is a look, sooner than you think. You have to realize this. They are going to be looking to raise rates, perhaps not this year but perhaps next year. The markets are way off. You need to drag them in line. The last thing they want to do a surprise anybody. That is what they think september is really there. And make a brilliant economic case for doing it. But the market is not there, and the stock market come down, oh, we made a mess. Anna this doesnt drag the market anywhere. Look at the world function on the bloomberg. Still talking 45 chance by the into the year. Rob i was actually quite surprised, tapping my notes out last night, having a look at with the market was doing on the bloomberg screen. Well, it has done nothing. Item gone down, bounced up little bit. It is a dreary response. Should have been more to this. But it is going to happen. And we have fed a speakers over the coming days that if the messages that taken by the market, they will go out and ram down peoples throats, reiterating that i think they are gearing up for something. Manus but they need some kind of evidence to help in the long term. This is the financial condition, btb. Hashtag you want to go to. They have been progressively Getting Better throughout the year. We are just getting into this release. What more does the fed want to see . Inflation expectations, which are under pressure, what more than he to see . Rob there are three things really they will be looking at. And one is the financial condition, we have our own indications, financial indications, no constraints on fed policy. It is better than it was prebrexit. So, that is out of the way. The activity data, throw the labor market data, that is fine. Inflation, we know all about it. It is lowenergy. But you have some of the things they talk about, the Market Measures Inflation Expectations, actually moving higher the last couple weeks. That is the relatively low. What they have in moving the right direction. A have not acknowledged that. Not according to that explicitly. Manus Inflation Expectations, and that is actually little bit worrying a bit, because that is what that is saying. You are seeing Inflation Expectations dipping again. That is probably what is worrying the market the most. Rob yeah, i think that is an indication people get really worked up about expectations. And the reality is that Inflation Expectations are a coincident indicator of what is going on with headline inflation, which has not gone anywhere yet. In a few months. If we do not get continuous negative energy price shocks, it is going up. Give it a few months. Another reason why september is a bit early, they want to hold and try and drag the markets, they can use that as an excuse. I think they want to move in the direction. I think december is more likely. Were actually forecasting First Quarter of next year. Give you a fewxd months, i might be shifting. Anna do you think you say they want to be shifting. Are they in line with some of the stocks . We heard in recent days about unintended consequences, many people criticizing overall low Interest Rate environment the world is operating under right now, talking about the big negatives. Rob there is a case to be made for low positive Interest Rates around the world. It is very clear that large parts of the world do not like very, very low or negative Interest Rate. Japan is a great example of this, where Something Like 65 of the population think Interest Rates are too low. They are net savers and rely on this income. It does not help pension funds, if you have bond yields, so there is a whole realm of things that way not just on households but corporates. Anna the dollar is drifting lower. Is the playbook the fed is quite content with your it yesterday with the normalized and get that message. Only one dissenter last night, after george. But softer dollar is not such a bad story for them. Rob they do not mind if they can get to where they want to go with of the dollar sort of exploding with strength. They will be very happy with this. So, it is a slow, steady process. They have to dribble it out. That will take a little while. Anna the dollar living and dying by rate hike expectations, one headline i, saw yesterday. One of our charts of the bloomberg is that really was moving the dollar at the moment . Rob i think it is a bunch of stuff going on right now, in terms of what the dollar is going. Obviously, said policy is headed, one of the clearest factors, but plenty of Central Banks playing the game on the other side of the cross, the ecb, bank of japan. Anna we have a look at them as well. Anna we will talk about the other side of the dollaryen crosses the moment. Rob, thank you for your thoughts. Rob carnell stays with us. Manus , first up german employment data. That is 8 55 u. K. Time. Heroon, Angela Merkel holds press conference. She is s cutting her vacation shor, coming under fire falling the attacks in germany. Anna and we get german inflation numbers, and summer earnings to watch for today. Ford, out of that, amazon reporting. Before we get that, plenty of corporate earnings coming through from europe. We will hear in particular from the oil sector. Coming up on the program, size and scope. What will japans Prime Minister deliver in his much anticipated stimulus package . Anna we speak to the ceo of the Worlds Largest outdoor activity. Exclusive conversation at 6 30 u. K. Time. Anna and we speak it was a lead to the ceo of bt group, Gavin Patterson on open reach. This is bloomberg. 2 21 in tokyo. Looking at a beautiful shot of the emperors palace. Dollaryen strength, 104. 83. All ahead on the bank of japans decision tomorrow. Secondbiggest traded currency, 1. 3 . Talking volatility, that is it. There was a daily, of news reports all over the size of Prime Minister abes fiscal stimulus package. Anna still with us is rob carnell, during the break we were having a fascinating conversation, which we should let viewers in on, around helicopter money. Whether that will be something that the boj will do. Some people sit in a chair and say they are already doing helicopter money, because if youre going to issue debt and invest in something, than the bank of japan will buy up such a significant portion of that, that a significant portion of helicopter money already. Rob it is helicopter money light. The crucial difference is that their issuing debt, adding to the deficit, adding to the debt. Helicopter money does not do that. When you have a massive pile of government debt, like japan has, running a large deficit every single year, helicopter money does that make it worse. Anna and the reason is because you never have to pay back. Rob it is magic. The central bank would just go banks will use our bonds, which are perpetual and carry no Interest Rates, we will put them in a cupboard over here and forget about them. You just carry on spending the money. Come, manus but not this time. If history is anything to go by. Dollaryen,cally the reason i got into the discussion was the volatility yesterday. 1. 3 in two hours. That is the kind of volatility has reference before. But after every bank of japan meeting, yen and strengthened. Do you expect them to really be at the weekenaken yen. Rob no. How can they deliver something that will meet the enormity of market expectations. We are talking helicopter money. They will not deliver that. Will beters, people disappointed. They do not have much scope to expand have the policies they want to. Yes, they can expand asset purchasing because the government will be issuing a ton of debt, which they can though by a. Qe, that ran out of power years ago. No impact on the currency. The other thing they can look at, they can expand purchasing of corporate debt, the risk , aet, might have a bit of fact. The markets are small a big effect on the individual market but the overall effect on the economy is pretty pretty anna negative. If theyre looking to weaken, are going to put the rates up . Rob chief of coordination, yet. Manus what i have for you is the Balance Sheet. The blue line. And you know, you can talk about an accelerated pace and the bank of japan. We are just off the size of the fed. Are we running into buffers, in terms of what the bank of japan is prepared to do . And with the markets and the rating agencies are prepared to accept on the Balance Sheet side . Rob im not sure there are buffers in terms of what they repaired do. I think they are prepared to try anything, frankly expand the scope and the rules, whatever is needed. Theyre running out of stuff to guy. That is part of the issue. What can we buy next . Manus they have 55 of the market. What you going to do . T rob it is becoming difficulto keep these sorts of things going. Unless you actually kickstart the issue, which is not going to happen overnight, it does become awkward to keep relying on the sorts of policies. And the Central Banks have to understand there is a finite amount of bonds they can buy if they want to understand the policies. Anna we are joking about the lack of g7, g20, whatever operation. The imf has said the recent yen surge take a closer to fair value. Does that suggest it will be difficult for the japanese to get weakening currency . That is what they tried to do with the monetary policy. Rob if we take a backup further stage, is weakening the currency the right thing to do for the bank of japan . The fact that the economy is growing so slowly, or is it more very, that they have a aging population and productivity growth is very slow. The trend rate of growth probably is far off zero. And this is what you would expect. You cannot just keep making it better by trying to weaken the currency. You can do that forever. Anna thank you very much. Thank for joining us, rob carnell, ing, chief international it cometh. A double onxt, trump. Obama makes his case for clinton, rejecting the republican candidates message of fear. We cross the philadelphia, next. This is bloomberg. Anna welcome back. A shot of hong kong, beautiful this morning. Or this afternoon. 1 30 in hong kong. Back here in the u k, we are focused on european earnings. Theave numbers from bloomberg now. First half recurring operating income coming in at 1. 4 8 billion, a touchpad of the estimate of 1. 43. Confirming the targets. Giving the Second Quarter sales figure of 4. 1 , above the estimate of 3. 7 . Investments are wondering how the tough comparisons in china, both seen as negatives, see how that would impact in business. It seems to be the conclusion there from the very decent numbers that the strategy, remember to improve the Dairy Products to revive sales. After years of sluggish consumption in europe. There have been stocking ups on , food organics buying white food, doubling the size of the u. S. Business. Anna all about getting healthy. Let us talk about danone. Firsthalf profit beat 1. 5 4 billion. The market had estimate of 1. 4 billion. That rises for last year. Renault. Or they reiterate the forecast for 2016. And it will rise at a Constant Exchange rate. Operating margins were also improved. The company will generate positive automotive operational cash, positive cash flow. A beat on the headline, revenue coming in your market was looking at 24. 9. First half registrations hit a record of 1. 57. They have new models. That is getting traction. They have the capacity to do up to 200,000. A nice set of numbers coming from renault. That comes from peugot. Anna a new edition of daybreak is now available on bloomberg and your mobile. Let us take a look at some of the top stories that have made this mornings addition. The great cover graphic. Crushed, debtholders, specifically ab inbev. Bondholders were the first to suffer after sab miller suspended all integration work with its acquirer, six months after investors fault to get a slice of what was the largest Corporate Bond offering in history. Ab inbev debt now tumbling on concerns it will be redeemed. One portion trading as high as 101. 8 is now closer to it seems that deal on pause right now. Manus lets talk about markets postfed. That is the slow, slow momentum, improving but almost crawling toward a rate hike. You saw movement in a 30year government bond, really do not believe there was when to be inflation targets. You are also seeing the dollar, that slumped, the fed has the patience that seems to be the word coming through. The u. S. Rate increase is still not certain, according to those we had a conversation with. Certainly did not seem that was on the agenda. Facebook . Thumbsup. Big a big like. Smiley face. Other emoticons. Smashing as was acrosstheboard, some of the highest projections on surging mobile ads. ,he ability to really hold gain ground make the most of the move towards mobile in the ad space. Second order sales and 59 , adjusted earnings per share of . 97, beating forecasts of . 15. Very Strong Performance. Numbers out of decaus. We should talk a little bit about that. Manus yes, adjusted revenue rose 10. 8 , in line with estimates. It is the Worlds Largest Outdoor Advertising company. Also a Strong Performance across the business. Yawning us now is the ceo, coceo, jeanfrancois decaux. Great to have you with us. A big set of numbers. Let us talk about what you are seeing postbrexit. The u. K. Is your secondbiggest market. Tell us this. Have we really seem to slow down. What can you give us in terms of insight about Companies Spending post the 24th of june . Jeanfrancois good morning. Well, the u. K. Has been very strong, with 18 growth. Driven by the Worlds Largest contract, which we won last year in london. And we are currently digitizing the key locations across all of the places in london. You may have seen them on the street, now 100 of our panels are digital. And with synchronized content on the block by block basis. The business is very strong in the u. K. We have a bit of a slowdown in q3. Q4 looks pretty strong for the time being. We are getting momentum through the conversion of digital, which will represent about 50 of sales by the end of next year. We are by far the most digitized Outdoor Media company in the u. K. So we benefit from that. Having said that, we expect a slowdown in the economy, probably next year. And this will have an impact on the u. K. Emerging market. And as a result of that, we are reviewing Capital Investment options for next year. That leaves very nice and my question. You said you are reviewing or investments. You saide the vote, you have to reconsider u. K. Investment with a brexit. Give us size and scope around that, what kind of consideration, a pullback in investment . Jeanfrancois, not sure . Can you hearing . I was asking what size and scope to take on in the u. K. . What level of pullback could we see . Jeanfrancois it is too early to tell, anna. Obviously, we have ongoing conversations with clients and agencies. We do not see a major reduction q4 of this in q3 or year. We will start discussions of next year in september, october. And that is when we really see whether the brexit has a real impact on our business. And this is when we will be able to adjust our Capital Investment for next year. Manus so, that review come next year. A bit curious only talk about ceos, this destruction in the value of the pound. You talk about reviewing capital expenditure. Does the drop in the value of the pound great opportunity when you look in the Digital Space . Is there a better option for you to buy . Dropping the pound presenting opportunities for you . Jeanfrancois unfortunately, not. Because our screens are screens that we are currently deploying in london, currently we have about 250 up and running. And our manufacturing growth, so when we obviously buy them in sterling, obviously they are more expensive. Anna but are you interested in buying any businesses, because the pound is cheaper . Jeanfrancois sorry, the connection is bad. I will try again. Are you interested in buying any u. K. Business because of the weak pound . Nope . Maybe not. Looks like we are having feed. I do apologize. Jeanfrancois, thank you for joining us here on countdown. Manus president obama has urged voters to reject the message of fear being delivered to the republican donald trump. And a standing behind Hillary Clinton. Anna giving the closing address on the third night of the Democratic Convention in philadelphia, he called for delegates to join him in electing hillary as the next president of the United States. President obama there has never been a man or a woman, not me, not a bill, nobody, more qualified than Hillary Clinton to serve as president of the United States of america. Manus we are joined now by our politics reporter, kevin, at the national convention. Kevin, what were the big takeaways from obamas speech . I know it is all sort of for the cameras. But they generally look like a decent rapprochement. President obama try to unify the party. He delivered eight years ago a message of hope and change. Tonight, he found himself facing a nation that is really trying to find its predecessor, but during a Campaign Season has been fueled by anger and frustration at the pace of economic recovery, he really did sell Hillary Clinton. He said that he worked with her not only on economic issues, but also on foreignpolicy issues. Republicans of course hammering Hillary Clinton for her time at the state department. President obama speaking directly about what he says are the successes of his foreignpolicy agenda. They appear on stage together. Something of a surprise. What can we expect tomorrow . Tomorrow night, Hillary Clinton will address the convention hall. She is of course the first female nominee for either major already. Earlier tonight we heard from Vice President joe biden as well as a running mate, tim kaine. He speaks spanish, gave portions of his speech in spanish, clearly trying to win over the allimportant hispanic vote within the american electorate. But there were also some disgruntled Bernie Sanders supporters. Many of them are upset that president obama is still pushing for the transpacific partnership. That is something that Hillary Clinton at some point has also supported. Now, donald trump opposes tpp. They held up signs during president obamas speech saying no tpp. But all of the major figures tonight, including president obama, did give congratulations and the shout out to senator sanders. This is still a very much Democratic Party trying to unify. Look for Hillary Clinton the party unify the party and went over moderate and independent voters tomorrow night. Manus kevin, thank you very much. Our politics reporter at the Democratic National convention in philadelphia. The twoth shell, Biggest Oil Companies following disappointing companies from statoil. And bp, reporting a larger than expected decline in profits. Ryan chilcote joins us now in london. Good morning. Let us take things off with shell. What are we expecting . Ryan theyre looking for 2. 1 5 billion and adjusted profit down from 3. 8 billion last year. The logic there, we assume the Oil Price Fall from low 70s on average year ago, to the mid 40s, high 40s the last quarter. Declineknow, a profit of about 45 is understandable. What is interesting is what shell at the same of the future. I sat down with ben in the beginning of june. The oil price was 50 a barrel. He was already talking about how cap is under pressure. People want to hear more about that. But i think what is most interesting now, bp surprising us on the downstream. Manus the downstream side, were lot ofat debate comes, a the refiners had that nice boost. Is that we focus on . We look at cap x . Ryan because we got a surprise and refining side, everybody went in there knowing the refining margins were going to be weak. But not as weak as they were. What is different now from say a quarter or two ago, the refining margins are weak across the board. Now exposure to the u. S. , is not like that. We did see shell fall on the back of that announcement, from bp, the day before yesterday. So, investors many have priced some of the andriy of the analysts will have to see. Anna not the buffer they once were for those in the production arena. Take us on. Story. Uch the same manus pointed out cost cutting is important. We will be looking at costcutting at totale, because oil is about 43 a barrel right now. Theyefiners in europe, have the most capacity. The most exposure to this problem. And in addition to the low margin right now in refining, they have strikes in france. In some cases, they were not even able to capture those low margins cause the refineries were not working. And outside of france in a couple of places, they had some of those refineries down for maintenance. Look out for trouble on the refining side at total. Manus yesterday, our guest said at the very end, we are going to get back to 50. I just wonder, is it all talking the book . Or supply depending on the state . Ryan i dont think anyone really knows. Ben he does not know. That was a month and a half ago. We heard jeff curry from Goldman Sachs say it is anyones guest. As far as Goldman Sachs is concerned, look at the last month and a half, oil has been following the dollar. Moving inversely. So if you really want to know where the Oil Prices Going to go, i guess you should watch the anna fed. Ryan chilcote on the oil sector. Up next . Manus were going to talk to tiane. We have our interview with the ceo of credit squeeze. And we speak exclusively to the ceo of bt group, Gavin Patterson. Anna and finally, crumbling crude. Second quarter falling price. We speak to the ceo, first. That is coming up in the next hour. This is bloomberg. Manus you are looking at a live shot of new york. 1 48 in the city that never sleeps. 7 48 in zurich. Welcome back. This is countdown. Let us talk about those credit suites results. You have a bloomberg on top like go. Profits dropped by 84 . But the point is, secret word, they made a profit. That is the important thing. All of the regions, all geographies have delivered to the numbers. Credit suisse, 100 million swiss francs. Anna the functional the bloomberg, tliv go. They haveew minutes, gone into the question and answer with journalists on the management conference call. You get all the details coming up. This is a business that has faced a massive task in scaling back the investment bank, trying to free up capital to go after wealth management. That is a turnaround that is in the business. But not alone in the european banking space, this big turnaround profit. Deutsche bank yesterday having to up the pace of the turnaround thered this is the Credit Suisse. Manus one of the things that jumped out to me was the amount of buffer. 11. 8 . Is that good or bad . Bang in line with Goldman Sachs. Fourth place out of the eight biggest banks. The most in michigan thing is a turnaround story. And all areas have posted a contribution since thiam the governor anna Francine Lacqua spoke to thiam. We will bring the interview to you now. Tidjane i think there are indications. If you look at the flows, which are very important for the market, they are up 60 . So i consider that a good effort. And im actually very proud of the banking teams, in a really challenging period, because a believe we really can produce that type of results against the currency backed up. A sense of the power of the franchise, and connection to the clients you really have supported us, helping us go forward restructuring. Francine youre confident this will continue in the second half . Tidjane there are a lot of uncertainties,al nobody really knows how britain will play out. We have the u. S. Election. The me have a french election. The we have a german election. What we are confident in is that we remain disciplined, continuing to execute on our priorities. Taking down risk, and growing selectively. As i mentioned, our International Wealth by influenced by is 10. 8 billion this year. Francine we dont really know how brexit will play out, does that mean we could even see Credit Suisse out of london or just trading . Tidjane more of the latter. Brexit,no impact from as the government has said, the negotiations have not even started. So it is going to take a while. Whileis going to take a before we know what direction things are taking. But that uncertainty is going to weigh on decision. Francine what is the worstcase scenario for brexit . Tidjane i dont want to speak to it, but i think it is an outcome if the Financial Services outcome are not resolved, given the weight in the u. K. Currently, that will be a bad outcome. Not only for the u. K. , but the rest of europe. So you have a community that is more market dependent. Global markets, very good job coming back to profit. Q1, but it was shorter, faster, and stronger. I was determined to doing the rightsizing quick. Six months we said we would hit 60 billion by the end of 2016. The Global Market wasnt 52 billion. Way below target. Six months ahead of time. Now the teams can focus on serving the clients and doing what we do best, which is to help our clients. We had a phenomenal quarter in Investment Banking. We have substantially more markets. Manus francine also spoke to , and about Capital Gains the federal reserve. Tidjane we have been very consistent in saying that we do not need to raise capital. We have been very clear. We raised 6 billion. We have the highest ratio we have ever had a little. 8 . We showed that we had to pull many levers to pull that ford. That is not even coming to the ratio, so look, you never want to be on the safe side, but within a reasonable range of outcomes, we are in a perfectly adequate position. Francine the swiss unit ipo, this will be according to plan in the second half of 2017 . Tidjane we have not wanted to be that markets permitting. Ipo is always dependent on markets. But it is again a deep strategic move. We love the crown jewel. We think it is a phenomenal asset. Alone. An millions in q2 what we want to do with the ipo is to get the market to fully recognize the value of the assets, which is a very good bank, in the wealthiest economy in the world. So, it is a powerful ipo, which 80 ofelieve will drive ownership and keep control of one of our best assets. Ifncine on janet yellen, she raises rates than expected, is that good news for banks . Yousef overall, yes. We have had to address the very unfavorable environment, lower for longer. And we are producing global results that we discussed in a very hostile environment for us. So any change in either direction will definitely be good for us. Anna that was the Credit Suisse speaking to Francine Lacqua. She joins us from zurich. He would be happy with higher Interest Rates then, and sounds. Thiam surprising profits with the bank . Anna, i think, when you speak to the ceo, he did not want to play victory. He said markets are going to be tough, tougher from now on. But if you look at the sheer priceperformance, one of the clear lines. So much i guess questions about his strategy and the execution of that strategy, i got a sense my speaking to him that this is a first step. That the bad things may not be over. A lot more market volatility. He thinks this means his strategy will work. And that they can focus on growth, manus instead of just restructuring. It is interesting. When you go to top live go, is see the amount of capital he has his bank. The same is Goldman Sachs. Do you think this takes pressure off him from the institutional shareholders . Francine a little bit. At least that is the sense i got from him when i asked. Remember manus, he has been on the job just over a year. 2 months into the job3 it decided to raise huge capital. He did a massive restructuring overall. I think it is sometimes Shareholders Meeting to understand what he is about, and whether the strategy could be executed in a short time. He had bounced along the road, more towards announcing more writedowns. And this was a sign of relief from the ceo, as he seems to suggest that this is the future, that the strategy is working. Anna we look forward to news on the Swiss Banking ipo. We love the swiss banks. Francine lacqua in europe. We speak exquisitely to the ceo of bt. Next. Patterson joins us, . C sv manus president obama urges america to reject Donald Trumps message of fear and says Hillary Clinton is the person the nation needs. There has never been a man or a woman, not me, not bill, nobody, more qualified than Hillary Clinton to serve as president of the United States of america. [applause] upgradeed officials their assessment of the u. K. Economy. Is september live . The turnaround. It is upbeat for Credit Suisse. The ceo says the bank has operated profitably in a volatile market. Bnp paribas sees secondquarter revenue rise as the cfo tells bloomberg everything is going to plan. We feel committed. We have a plan. So far, things are under control. Manus thumbs up for facebook as the social media giant tops user estimates and mobile ad revenue surges. Good morning. Welcome to countdown. Anna welcome back to the program. Zbnjust on 7 00 in london. We are getting Corporate News from various parts of the continent. Lets get numbers out of the oil sector. Total, seems to be a beat. Net profits, 2. 2 billion. This is a company that seems to be beating at the net level. They say they are going to exceed their 2016 costcutting target, taking more cost out of the business. Update oniving us an the first half. Organic investments, 8. 7 million. For the full year, they see 18 billion to 19 billion. Strikes had been disrupting the refineries part of the business. This is a company with a big refining art of the business. As we discussed with ryan, not necessarily the boost with the protector it had been to emp operations in previous quarters. Getting numbers out of shell as well manus before you do that, were group ceo. T we have a change at the top. Keith cochrane will step down as the ceo. John Stratton John stanton, excuse me, is to replace him as the ceo. Inare having a conversation just under 20 minutes time. First half performance ahead of estimates. These are the boys to watch. Anna Keith Cochrane is going to join us. Lets talk about oil more. Shell, secondquarter adjusted net income, 1. 05 billion. They are giving us various detail about the secondquarter adjusted upstream loss, adjusted downstream profit. By contrast, something we talked about with ryan. The extent to which the refining business is protecting the explorers really thrown into the spotlight by what we heard out of 80 this week. Lloyds,eaking news on one of the first major u. K. Banks to. Firsthalf underlying pretax profit comes in at 4. 1 6 billion. More restructuring to come. Billion to cut 1. 4 pounds worth of expenses. Go in thisobs are to costcutting program. 200 more branches are to close as the program. They will reduce the expense reduction target has been lifted, so theyve added to their target by one billion pounds. In return on equity, 8. 3 . Income, 5. 8 billion. Pretax profit on lloyds. ¥46. 8 billion, well ahead of an estimate. They beat on q1 net income and they are planning a Share Buyback at the japanese bank. Lets talk about another u. K. Corporate. Bt group giving us their numbers today, saying they are on track to deliver their fullyear outlook, confirming their fullyear outlook. Q1 revenue, 5. 775 billion pounds. Lets get to a man who knows these numbers, Gavin Patterson. Great to have you in the studio with us. Give us your thoughts on how the business is performing. Clearly you are confirming your outlook. You must be happy with what youve achieved. Gavin it is a good start to the year. Weve delivered across the board. We are pleased with the start. A couple of highlights, broad hand and fiber continues to be very strong. Over 333,000 fiber adds in the quarter. A strong start on mobile. The First Quarter weve integrated. Pleased with the start. We are reiterating our confidence going forward. Manus that is a fairly confident statement. The investors will be happy. In terms of the u. K. , 82 of your revenue comes from the united kingdom. Everybody is talking about brexit. Services are lower. From your perspective, what is the risk from brexit . Slow down, recession, can you give us any insight . Gavin i think it is too early to draw too many conclusions. What weve seen in the past is consumer businesses are pretty resilient to recession. Broadband is that critical to peoples lives. The Small Business part of our business can be a little sensitive to recession. We have exposure outside of the u. K. Our Global Service business is growing. Brexit change the way you operate at all . Gavin i think it is too early to say. Until article 50 is triggered, we will continue to operate in the eu, under eu framework. Weve got a lot of big customers. What ive been pleased to see over this quite volatile, weve signed a number of big contracts. Michelin supplying 240 locations worldwide were pretty soon signed after the brexit date. It has been difficult, but weve come through. There are some weighty expectations in terms of what youve got to deliver. Sharon white said that coverage will improve. Engineers will turn up on time. Rivals will bring Broadband Service into customers homes. How do you execute one such lofty demands . Probably aink it is sensible set of recommendations. Not to say there arent issues that we still need to resolve, but we are optimistic and we will work over the next few weeks and months to get a conclusion. I think ultimately weve got to ensure that it is a balanced view at the u. K. Against any of the key benchmarks, coverage, speed, take up, price, we are at the top of the charts. Significantly better than the u. S. I hear that people want more coverage, more speed. Will step up to that. But it has to be balanced. The u. K. Has for well has performed well. Extent was it what the pensions wanted for bt . Was this the the issue . Gavin it is a significant issue. We carry a big pension deficit. We can provide a covenant to that. The business is strong. As you can see in todays release, the deficit is about 7 billion. That ismore money into not necessarily the right thing to do. Anna that got worse with the gilt yields going down as a result of the brexit vote. Gavin it could be worse. Theres no question about that. I dont want to speculate too much. The trustees are comfortable because the business is strong. Theres strength in the free cash flow. That provides a good covenant. Rather than putting dead money into the pension, we can invest in the network. Manus you mentioned as one of your highlights the addition of the mobile users. There is of course this is all within perspective. The most complained about broadband provider in the country, are you going to spend more money . How are you going to build integration . Gavin the broadband business did receive a high level of complaints. We are absolutely focused on that and i am confident it will come down over time. The consumer mobile business was one of the lowest complained about in the country, i think second only to one another. Weve demonstrated we can focus on service. Anna what are the discussions about . What are the details . Open reach Board Members wont have ties to the team. Is that something you will fight on . Gavin i wont go into specifics. That however is not one we are in disagreement about. Theres a lot in the agreement. It is hundreds of pages. Im cautiously optimistic that we can work through it. Anna do you fear that break up could still be on the cards in the future . Gavin i hope it doesnt come to that. Break up will not be good ultimately for the country. I think it will create a weaker company. It wont be easy to fund the sort of investment the country needs. It is no coincidence that nobody has successfully broken up a Telecoms Company anywhere around the world. There is no Success Model that says separating the network from the downstream business is the right thing to do. Manus give us your perspective on global telecoms. Theres been a huge amount of action and move. How do you see the world of telecoms . Is the drop in sterling a threat . Does that leave you a little a company withf a lower currency . Gavin we are focused on our own business. Weve got a lot to do. It is a big acquisition, 12. 5 alien. We are very confident india position. In the acquisition. Manus are you looking to do more deals . Gavin i dont know a ceo who isnt. At the moment, theres nothing that is catching our eyes. Anna thank you very much, gavin. Gavin patterson, bts ceo. Lets stick with u. K. Telecoms and media. Manus bskyb have released their numbers. Cfo, andrewthe griffin. Thank you so much for joining us, andrew. Looking at the business, you report 12 rise in profit. Give us perspective on what is happening in the u. K. Theres things everybody was focused on and give us your take on the u. K. At the moment. Andrew weve a broad inquiry strong set of result in all of our territories are rolling. Revenues are up 7 . Profits are up 12 . Youve got to set that against a longterm context. Weve posted Revenue Growth around 7 and Profit Growth around 9 . This isnt just today. R getting the basics right. We are adding more customers, pushing into markets that have had room for customer growth. They are loving the content. We continue to just innovate and get better every day. You do that over a year, over many years, and you see the results weve posted. Anna lets explore the way brexit index your business. Are you seeing any signs of changing Consumer Behavior . Weve not seen anything in todays results. It is early days. We basically operating individual market. They are pretty selfcontained. We wouldnt expect a major direct impact. We operate in the wider economy. The evidence of the last downturn is that when customers feel less confident, they stay closer to home. They get more value out of the product we offer. You can get tv service from sky for as little as 9. 99. Sky continues to grow revenues and profits. Im broadly positive about our ability to do that. Is aboutdrew, that resilience. We heard the same message from Gavin Patterson. In the last recession, talk to us about this, will you have to do more incentives to stand still as it were . Weve seen the consumer under pressure. Retail sales dropping. Are you going to have to more incentives . Andrew i think we continue to do now. We offer great value to every household. Householdsind more for every part of the income spectrum. They can grow with us. With things like greater value service, payasyougo tv, a lot of it is about broadening out. If people do stayathome, and if sky offers great value for money, less than the price of a cup of coffee, less than the price of going to the cinema, customers get more value for their subscription. They and their family can enjoy sky service in a. I think we are pretty well placed. Anna andrew. Andrew we keep making it better. Anna one of the innovations through strategically i guess was to turn yourself into a more european business. Then we see the brexit vote. European strategy . Andrew not particularly. Weve got individual local operations. They are quite individually contained. They are growing really strongly. Our Fourth Quarter saw almost record levels of growth in italy and germany. Ofy are feeling the benefit being part of the sky. Plansof innovations and we can now drop into those markets and help them grow even faster. I dont think theres a direct impact. Weve got a strong Balance Sheet. Plans are unaffected. We operate in the Wider Consumer economy. Reach hasrew, open , orbeen separated from bt they are going through that process. What does that mean to you . Think it goes far enough . Comrew i think the pf proposals are a small step when the u. K. Needed a big step. Theres not enough investment going into fiber. We are being overtaken by other advanced economies. They are investing into bringing fiber into customers homes. Theres not many other parts where people like open reach are investing the same amount today as they were 10 years ago. Theres not enough new investment going in. I think theres a lot to be present. M at dragging their heels. We want to be very alert to make sure that doesnt happen. We see the benefits in things Like Customer Service and the level of new investment that ofcom have promised us. Weve all got to be vigilant. This is too important for the u. K. Of their the sharp end underinvestment in service. Weve got to be vigilant. We should make the most of the small step, but keep firmly open the option of more radical action if that doesnt deliver the benefits the u. K. Is crying out for. Anna thank you for joining us, andrew grififth, talking us through the numbers. Manus breaking news on china. China said to plan to legalize ridesharing starting in november. They will legalize uber and 80 right services. That is the market. We saw what it did for apple. That is a bit of breaking news. Anna another bit of breaking news, the fact that the were group ceo is stepping down. That news came as the company left year guidance unchanged. The ceo has served 10 years. He joins us now. Great to have you on the program. Lets start with the personal and then spread out to the bigger story. Tell us what is next for you. Why stepping away from this business . Keith ive been thinking about succession for quite some time. Chief executives have finite lifespans. After 10 years on the board, seven years as chief executive, having navigated some tough environment, now is the right time to step down. Business look at your and we wish you well with that next move. 103 Million Pounds in terms of operating profit, down 13 . What the market really wants to know is whether this is a continuation or whether things are getting marginally better. Were not getting great flow of news from bp or statoil. Give us your perspective on the market. Keith i think what these results demonstrate is the robustness and resilience of our performance in what happened in challenging markets. In the context of our mining business, you will notice that our profits are up year on year. The same with our flow control business. Byare significantly impacted what is happening in oil and gas. Even there, we are starting to see some stabilization in the marketplace. We have seen north american pick up ever so slightly over the past few weeks. None of us can call out the timing of that recovery. The market is on a path to rebalancing. The big question becomes, when done that translate into increased activity . Is it q4 or next year . Anna you mentioned the rig count in the u. S. Drilling activity has risen june. Are you seeing a pickup in customer demand, customer interest, as a result of that . Keith the initial increase happened is too early to translate into increased activity in terms of our own businesses. The market is not getting any worse. Lets put it like that. Think q3 is dont going to be much better than q2. But if that momentum continues, we would expect a modest pickup in activity and improvement in profitability. Manus talk to us about the fracking business in the u. S. What are you seeing there . Can you give us any insight to what is going on . Keith i think this is an industry that has been significantly impacted by the downturn in activity. It is an industry that has reduced its cost significantly. I think it is really well positioned for the upturn in terms of cost reduction, ability to react very quickly, and there was a recent report that suggested 60 of the worlds oil reserves that were costeffective at 60 a barrel were in north america and linked to shale. I think it is in a great place. Anna can i ask about her exit and how this about brexit and how this impacts on the business . Im interested as to how brexit would impact you. Think brexit is not something that we had hoped for, but equally on the back of that, in financial terms, there is a translational benefit because of the depreciation of sterling. Revenues are out by the u. K. What it does mean is there are u. K. Manufacturing plants that are more competitive. I would guess between 5 to 7 more competitive when we take into account the increase in import cost alongside the benefit for exports. It does put us in a good place. Our teams in the u. K. Are focused on turning that into an opportunity as we move forward against the european and north american peers. Then in terms of scottish referendum, we need to wait and see. I think we are still a very early stage of development with a lack of clarity around what shape any brexit will take. Did also creates opportunities for the u. K. And we all need to turn our minds collectively to seek to try and translate those opportunities into reality. Anna anna manus most of your revenue, a large portion of business, is done in america. Access to the Single Market is something we are asking every ceo about. How critical is that . Keith it is important for our european business. Unit, almost combined one so the ability to move people around from the trading perspective, in terms of there being no barriers to trade, i think in the mediumterm, having Free Movement of people and products is important for our business and it is something we will certainly be making that point the government on. Anna thank you very much for joining us and good luck with steering weir for the time being and whatever you do next. Keith cochrane, ceo of weir group joining us on bloomberg. Looking at the function on what management has delivered. 2009,s since february 40. 8 . Manus weve had earnings on the banking side. Bnp paribas, a nice beat. Credit suisse is a surprise profit. Thiam saying the worstcase scenario would be losing the passporting writes. This is perhaps just an indication that his turnaround strategy might just begin to be showing some benefits. Anna giving some clues as to the timing of the ipo of the Swiss Banking business. Manus which they love. Anna also talking positively about the capital that the business has. Top live if you want to follow the ongoing Credit Suisse story, it is there. That will do it for countdown. On the move is next. This is bloomberg. [hip hop beat] olympics 2016, let me get you on my level. So you never miss a moment, miss a minute, miss a medal. Why settle when you can have it all . Soccer to wrestling. Track and field to basketball. Fencing to cycling. Diving to balance beam. All you have to sa is, show me, and boom its on the screen from the bottom of the mat, to the couch where you at . Show me the latest medal count xfinitys where its at. Welcome to it all. Comcast nbcuniversal is proud to bring you coverage of the rio olympic games. Manus you are welcome. This is on the move. We are counting down to the open. Im manus cranny. Alongside me is Caroline Hyde in berlin. We are watching the surprise profit from Credit Suisse. The income falls into percent that it stays positive. Shellshocked. Net income at europes Biggest Oil Company misses by over 1 billion. Profits for 72