00:00Thanks so much for being with us exclusively here at the Diao Yutai State Guest House.
00:05What stood out to you?
00:06Obviously, there's a lot of concern about the excess capacity being exported abroad
00:11and some of the trade surplus issues, $1.2 trillion, which Li Chang addressed.
00:18But at the front of everybody's mind is the stresses that are being caused in the Middle East.
00:23Exactly.
00:23So I think that, well, this is basically the biggest topic we have been discussing lately.
00:30Of course, the good developments of China are somehow on the side for the second.
00:36But, you know, when I go back to that, I do believe that China will continue to have a pretty
00:42good growth
00:42driven by innovation and the desire really to address also the topics of climate through innovations.
00:52And so, but in a sense, you know, that kind of growth may be derailed by what's going on right
00:58now in Iran.
01:01Energy prices are likely to stay high for the foreseeable future, putting some inflation pressure
01:09and also some pressure on the delivery chain or on the supply chain.
01:16And in that sense, the situation is a little bit unstable.
01:21We're into the fourth week of this war with no end in sight, really.
01:26There's ultimatums out there.
01:27There are surely mitigation plans being put in place by businesses.
01:32What do you see as the direct cost to your business and your clients right now?
01:37And with no end in sight, how does that translate to mitigation advice?
01:41But we saw clients already diversifying their portfolios earlier on this year.
01:47You saw much more dispersion in the way they were looking at maybe shifting away from more
01:53the AI technology to a more diversified portfolio.
01:56That was a good move considering what we see in the last few weeks.
02:01At this stage, clients are still, broadly speaking, calm.
02:06We don't see any major shift in asset allocation.
02:09But of course, this pressure that I mentioned before on the economy will start to wade into
02:16the markets.
02:17What are your clients directly telling you?
02:19I mean, they're worried about the length of this.
02:21Everyone I've talked to here, they don't know how long this uncertainty is going to last.
02:26And we don't know where oil prices are going to end up at the end of the day.
02:30Well, the topic I would say is not only how long it's going to go, but really to fully
02:34understand how long it's going to take to digest the shock somehow, the surprise of
02:41this crisis, particularly for the Middle East.
02:43I mean, the fact that the entire region has been destabilized in that way will take some
02:50time to be digested by investors and by the market.
02:54So I would say that I think it's much more important to understand the second part, the
03:02digestions, rather than how quickly this will end.
03:05I don't know how long it's going to go.
03:08But for sure, I don't think that we can have a situation like that going on for too long.
03:14How cautious does it make you and your expansion plans?
03:18I know you just got the designation changed in the United States with your chartered bank
03:23there.
03:24That's a positive development.
03:25Last year, you got full ownership of the securities business here in China.
03:29I mean, does it affect your M&A outlook and how you plan to grow the business going forward?
03:35Well, no.
03:36I mean, it's not something because we don't really run the business on a stop and go kind
03:42of fact.
03:43So I think that we may tactically have to slow down certain investments.
03:47But of course, the direction of growth in the US, in Asia and across the globe is there.
03:54So I think that we need to continue to invest in capabilities, in artificial intelligence to
04:00make our processes more efficient.
04:02We need to invest in order to make our client advisor more efficient in the way they serve
04:11clients, so this cannot change.
04:14Any contingency plans you can reveal to us for your employees?
04:17You have a sizable presence in Dubai.
04:18You also have another presence in Abu Dhabi.
04:20What are you doing there?
04:21No, we have been helping people to relocate with their families when it was necessary for
04:28personal reasons or for security reasons.
04:30At this stage, we are able to operate with contingency planning, both in the locations where we are
04:38based or with the support of outside colleagues that live maybe in Europe or in this side of
04:48the world.
04:49Can you update your position right now?
04:51Any change that you've seen from the Swiss government on the capital requirements?
04:54That deadline's coming up next month very quickly.
04:56I assume your position has not changed at all as far as the proposals for those big boost
05:02in capital requirements by the Swiss government.
05:04Have you seen any conciliatory tone at all for any of the other suggestions?
05:09No, there are no news.
05:10We do expect a formal decision by the federal council, our government, to be done by the end
05:17of April, or the early part of May.
05:22I don't know exactly the date.
05:23We don't know the date, but no major changes, and we are waiting to see the final outcome.
05:29As it stands right now, unacceptable to you, right?
05:32This is not going to work for us, and therefore, but we wait and see now.
05:36There is a democratic process.
05:37We contributed with our views on this process, and now we will see what is the final decision.
05:42Now, in the last couple of months, we did see some news from you guys saying that you
05:46might stay on until 2027, next year, as CEO.
05:51Then there's some reports as well that the board is thinking they want you to stay longer
05:56because of the uncertainty, because of these capital requirements.
05:58Is that something that is being discussed right now, that you would stay on beyond 2027?
06:04Look, we always say that I'm going to stay at least until 2027, April 2027.
06:10Right now, we are very focused on finalizing the integration of Credit Suisse.
06:16It's almost done.
06:17It's not, you know, and therefore, this is my focus, and then we will take it from there.
06:23I did see your Asia-Pacific head, Iqbal Khan, here.
06:27Obviously, Rob Karofsky is your U.S. head.
06:30How is that possible positioning coming up as far as the successor?
06:34I have to ask you whether that is even getting a clear focus as far as who might take over
06:41as CEO.
06:42Well, look, you know, I think that we are lucky that we have a range of candidates internally,
06:46but right now, we need to stay very focused on executing on our current integration strategy
06:52and staying close to clients, navigating this environment.
06:55So, succession is not a topic for the moment.
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