00:00In terms of what stands out here, what are we looking at? I'm looking at trading being fairly
00:05mixed. I'm looking at a pushback when it comes to the motor finance story. And I'm looking at a
00:11raising of the net interest story going forward. Which one of those three things do you think
00:16investors should be focusing on this morning? Well, I think they should be focusing on the
00:22broad performance of Barclays. We had a top line beat of 11 percent growth year over year to 7.2
00:27billion on the top line. We've had nine percent consecutive quarters of tangible net asset value
00:32growth. Importantly, as you said, we've increased our guidance for N.I.I. from 12.5 to greater than
00:3912.6 billion pounds. Increased our R.O.T. estimates for 2025 to greater than 11 percent. We are
00:46accelerating our share buyback program by announcing 500 million pounds this quarter and moving to a
00:53quarterly cadence. And then importantly, you know, we continue. We've announced that we're going to
01:00come back to our shareholders one year ahead of schedule and then give them and talk about our new
01:08set of financial targets in February from 26 through 28. So I think it represents the broad good
01:15performance we've had for many, many quarters now. Yep. OK, let's take into the details of what is
01:20happening here and talk about what's happening with trading. FIC looks pretty solid and certainly
01:24ahead of estimates. But I'm I'm understanding, I think, reading my notes that the estimates were
01:29maybe a little low for what people realistically thought you guys could deliver. So FIC outperformance,
01:35but equities not. What happened in equities, Venka?
01:39Yeah, so I'm very broadly happy with what the investment bank has been doing over seven quarters.
01:44And, you know, we've had six quarters in a row of top line growth of earnings leverage by having what
01:51we call positive jaws and improving profitability. You know, the investment bank produced greater than
01:5610 percent ROTE, as did all our divisions. Now, within that, I've always said we're running our own
02:02race and we're running our own race and producing the numbers we wanted to. Quarter by quarter, some things
02:07will do better and some things worse. We are obviously pleased with our FIC performance and we'd like to
02:12understand better how we can improve in equities. But I view this over many quarters and so, you know, we take
02:18the long-round view. But, you know, we will look to do better in every segment, every quarter.
02:23What do you think the answer is in equities? If that's the question you're asking, what do you think the answer could be?
02:30I think we need to continue to deepen our client franchise. We've been working on it and improve the breadth of our
02:36products. We've been at it. We're going to continue and we will see the results, as we've seen in every other part of this
02:42bank. Venkat, it's Kreeti in London. Thank you for your time this morning. Let's pivot from the equity picture to the
02:48credit picture, if we can. There's been lots of warnings coming from the big U.S. banks around cracks in private
02:54credit that could ultimately have broader effects. You have been in multiple seats at Barclays, certainly as the chief
03:01risk officer. What are you seeing? Are those worries warranted?
03:05Look, credit is something that you do over the cycle. I think you have to be extremely careful at all points in the
03:14cycle about, you know, who your client is, your client selection, the terms under which you lend, your
03:20concentrations, how much you lend, industry sectors. We take this very seriously. We take this over the cycle. I mean, we had an
03:27exposure to try color. I'm obviously not happy about it. We're looking at what lessons we learned and, you know, we have
03:33looked at it and applied it across our portfolio. But I think credit is one of those things that you take seriously. It doesn't matter
03:39whether it's so-called private or credit and who the lender is. It is a full-time, specialized job day in and day out.
03:47But Venkat, is it a systematic risk or is it still isolated? How should we be thinking about investments in private credit when firms like the
03:55one you just mentioned go bankrupt? So in that particular case, there seems to have been fraud. Now, I should say that Barclays had no
04:05exposure to first brands, although we were approached multiple times by them. The thing about fraud is you wonder whether it is one bad
04:14actor or it is some effect of circumstances that are stretching the company's finances and making them take risks that they otherwise should or
04:23would not do. That's the kind of thing we look for. And that's what I think investors should be looking for over the next, you know,
04:30months and quarters.
04:32Hmm. Thank you. Good morning. It's Anna. And fixed sticking with this theme and channeling in some of the thoughts that we got from Andrew
04:38Bailey at the Bank of England just yesterday. He and his team say that they're worried that the market is slicing and dicing loan
04:44structures like it's pre GFC, pre financial crisis. Do you see similarities?
04:52Look, I think securitization technology has been with us for decades.
04:57Obviously, the governor and the central bank have a view of, you know, where and how much.
05:02And they're talking about a broader review, which is, I think, a good and prudent thing for any central bank to do.
05:06And they talk about alarm bells ringing. It doesn't sound like you're hearing alarm bells, Venkat.
05:16Look, as I said, we pay attention to credit with what we hope is the same amount of dedication all through the cycle.
05:23And when you do that, you try to be very disciplined about it.
05:26OK, but how easy is it to be disciplined at the moment, CS, you talk about the fact that the Barclays is delivering on that.
05:38But this is a this is an industry wide issue.
05:42And we've learned in the past that there can be problems in strange parts of markets that are hard to determine and that they can have significant ripple effects into into more mainstream banking.
05:51Are you being extra diligent right now?
05:55We've had years in which liquidity has been easy.
05:57We've had years in which underwriting standards have come down.
06:01Are you paying more attention?
06:02Are you looking at what you're doing more carefully now as we come to the end of this process?
06:07How much due diligence are you doing?
06:11So we do a lot of due diligence at all points in the cycle.
06:14And I think I would separate two things.
06:16Every time you make a lending decision and you monitor those loans,
06:20whether it's in a good time in a cycle or a bad time in a cycle, assuming you knew it,
06:24you would always apply similar standards.
06:26So I think the important thing is to maintain standards through a cycle.
06:30And then if there are periods when you're worried more,
06:33then you may increase the frequency of your diligence and start looking at signs that you might otherwise have thought were normal.
06:41And so, as I said, what you're looking for at this point is our business model stretched.
06:45And, you know, what are the quality of financial controls in companies and the independence of financial controls?
06:52These are the things you worry about all the time and you pay extra attention to in periods of heightened concern, let's say.
07:00Venkat, I feel like every time we have you on the program, we always have to ask you about the IPO market in London.
07:05I'll do it again this time, but perhaps with a little bit of a twist, connecting it to the private credit space.
07:09We're seeing deal making, we're seeing M&A activity start to pick up in the states.
07:13We're not seeing that same enthusiasm on this side of the pond,
07:16but we are seeing more mobilization when it comes to private credit because it feels like the IPO route isn't one that's available to everyone.
07:24Does that make Europe more vulnerable to a risk in the private space than the public one?
07:29Well, I think the amount of private credit is, of course, much greater in the United States because it's a more advanced industry and developed there.
07:39But I want to sort of not talk about private versus public. Credit is credit is credit.
07:46I think as far as the IPO market goes, we on this desk behind us took part in an IPO yesterday for a UK bank, Shawbrook.
07:54I think you're seeing some signs. It's obviously not as strong as it is in the in the U.S.
08:00And I do think in Europe, as in the UK, and in fact, the governor mentioned this yesterday in the House of Lords,
08:06there has to be a continued growth in the equity risk culture of the country.
08:11And hopefully with that, you'll see more IPOs.
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