00:00Let's talk about the buyback. Last quarter you indicated that things would improve this quarter.
00:07We were expecting an update, we were expecting a positive update. That was the signal to the market.
00:11This time round you haven't delivered that. There's a number of different reasons behind that decision
00:16and you've basically punted it until the next quarter, Q2.
00:19One of the reasons appears to be around the capital requirements story that is currently now starting its journey through
00:26Parliament.
00:28Are we really going to have enough clarity next quarter for you to be able to give us an update
00:32on what's happening with the buyback?
00:34Yeah, well actually we are giving an update this quarter by saying that we believe we're going to complete the
00:423 billion buyback by the end, by Q2 results.
00:47So by the end of July, which is clearly a change compared to what we said before, which was we
00:54would do 2 billion.
00:54So I think that in that sense what has changed is that there are two or three conditions on how
01:01to manage capital returns.
01:03One is progress on integration, which we tick the box with the migration of the Credit Suisse clients into our
01:09Suisse platform.
01:11Number two, the financial performance. You saw the strong results in the first quarter.
01:15And our ability to maintain a capital level at around 14%. We are at 14.7%.
01:23So I do believe that we delivered on some things.
01:26The uncertainty around the regulation is something that is going to take time.
01:30Yes.
01:31And may, it definitely will influence our capital return plans, but it's not the only conditions.
01:39Okay. Do you expect any clarity by next quarter on that front?
01:45Not a lot of clarity. I think that, you know, if you look at the political processes starting early next
01:51month, so in a week time, and, you know, I think that it's going to take time.
01:56This is a complex matter. It took two years of discussions.
02:01I think we cannot really pretend that the parliament jumps into conclusions very quickly, so we are happy to be
02:06able to contribute.
02:07The parliament, you're going to contribute. Okay. We'll maybe come to that thought in just a moment.
02:11Parliament normally waters things down. Do you expect it to water this down, the foreign subsidiary, 100% rule?
02:19Do you think that gets watered down by parliament?
02:21I honestly, I don't think I'm hopeful. I don't expect anything. I'm hopeful.
02:26Okay.
02:27There's a big difference between being hopeful and expecting anything.
02:29What do you want out of it? What would be an acceptable... You're lobbying hard.
02:32What do you... What's the end point that you want to get to with this lobbying effort?
02:37What would be...
02:38We are not lobbying hard. We are just representing the interest of...
02:43It's our duty and right to basically highlight what are the consequences to our shareholders, to our clients, and also
02:50to the employees in Switzerland.
02:51I mean, we have 30,000 people, so we are just trying to contribute to a fact-based discussion.
02:58Okay.
02:58And, you know, which was not always the case.
03:01So what we expect, I mean, we are not asking for anything other than having something that is internationally aligned.
03:10Okay.
03:11And allow us to compete out of Switzerland in a fair way.
03:15But it's also very important because the issue is that what needs to be done, the true lessons learned from
03:22the Credit Suisse crisis,
03:24really understanding the root causes of what happened, is very important because without the concessions that were granted to Credit
03:31Suisse,
03:31Credit Suisse would have not gone down in this way.
03:35All of that, I'm sure, is correct, but the government is looking at 100% foreign subsidiary capital requirement.
03:46You've never said what the number is you want.
03:49You've never said you want to contribute, but you've never indicated publicly what would be an acceptable outcome.
03:55We must be getting to the point...
03:56Okay, we're not in a negotiation.
03:58We are a receiver here.
03:59Okay.
03:59So, I mean, it's not like by saying what we want that we're going to get what we want.
04:04Okay.
04:05So I think that we want...
04:06There are plenty of options.
04:07But you've never said what you would take.
04:09You've never said what would be an acceptable number.
04:11What we are trying to show is what are the international standards, what are the...
04:15So what are the international standards?
04:17What is an acceptable international standard?
04:18The outcome of this proposal will translate on us having 30, 40, 50%.
04:24I mean, depending on how you calculate, an external amount of excess capital that is going to be totally unproductive
04:31and that is not capital that you can use to give loans to serve clients or to do acquisition, to
04:44return capital to shareholders.
04:45So it's basically dormant and unutilized capital.
04:50So we want to, you know, we want to be able to compete while also protecting taxpayers, right?
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