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tv   Bloomberg Daybreak Europe  Bloomberg  July 28, 2017 1:00am-2:30am EDT

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anna: exceeds expectations as a swiss bank gets the boot from rising great in the u.s. and a surging rise in activity. stop trading search, a chance rivals including deutsche bank and the trading bank. we speak with the cfl. >> -- we speak with the cfl. >> the environment you should probably let it cater a little bit longer and not step in for the changes. we will see from the ceo midway through the banks three-year strategic plan.
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a tech selloff, disappointing amazon earnings weigh on asian stock. the euro rallies against the frank for the highest level since 2050. -- 2015. ♪ everyone welcome to bloomberg daybreak: europe, our flagship morning show from london. i am anna edwards. we have so much news from the banking sector. we brought some of it to you in our headlines. let's get into samsung. we are getting numbers from this from -- from the spanish bank right now. that is the head of the estimate of 1.73. -- this is the
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business in transition at the moment. they added a portfolio that did not look as favorable as their own. this is a company moving ahead with its plans to digest the failing bank popular as the largest ranks have an working to sell 30 billion euros in real estate assets. they are trying to sell these real estate assets. they have until the end of this month to submit their offers. sale is the- the current topic of conversation --e up we are getting these cell is the current topic of conversation. we are getting these numbers in. let's stick with the banking scene. we get the numbers through from that bank of it q2 second quarter, 2.4 billion, ahead of the estimates which was for 1.9
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billion. this is because the equity and prime services revenue jumped 26% and surging demand for derivative problems while provisions for bad debt fell. at the same time as other european banks are getting out of investment banking, this is a bank that games to become france's largest lender. one of the top three trading and corporate banking players across the continent. lots to talk about in terms of bnp and the rest of the banking it let's get to the swiss banking story because ubs has reported that that the estimates. exceedingion francs, 800.3 million francs expectations. it also noted pressure on margins, stemming from low rates in switzerland and eurozone. matt miller has wrapped up an interview the ceo and here is
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what he had to say about the results. we had strong money for the first half of the year and usually in the u.s. we see some outflows in the second quarter for our clients come up paying taxes out of their asses and there is a big component for that. we have growth in our international businesses of 6.6% on a very high base and this in construct with the fact we have been reducing client advisory accounts. demonstrating weaken grow -- demonstrating we can grow, focusing on quality not quantity. are on know cost cuts track for 2017, 1 .8 lean francs of cost cuts, net cost savings.
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the 2.1 billion looks achievable. do you think you can over should that? -- overshoot that? >> i think we are confident we can achieve our target, but it is not an easy journey. we are talking about a net cost savings target, so we are absorbing a huge amount of cost coming in from a regulatory changes and technology investment that we need to do to keep our competitive edition. in order to offset that, we need to work hard on the actual cost-based. i'm confident we can get there by the end of the year. out thatre d.c. taking further 300 million? >> it's not a matter of headcount. we focus on optimizing our front
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infrastructure and announcing productivity and it's a mix of different initiatives. when you get down to them last 10%, it is about every single dollar counts and we are focusing on the best. we are also making a lot of investments. it is not about cost-cutting. cost-cutting is not something you can do forever. you cut costs in order to create more capacity to invest in the future. the: you mentioned institutional client activity slowing down. i noticed the pretax profit is down 6% in the second quarter. this is not surprising considering what we have seen out of u.s. banks. when do you think that will pick up again? when using hedge fund clients will go back in? >> we are pleased with the
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performance of the investment tank, that delivered despite the market condition, a return of 80% on its allocated capital. -- 18% on its allocated capital. institutional clients have been on the sidelines and a pickup their and volatilities, it's difficult to see a change in behaviors by our clients. we are in the middle of the summer time, which from a seasonal standpoint, not the best time. i'm confident, most important for us is to show with our investment bank, under any market conditions, we are able to perform, not only to shareholders, but to our clients. matt: let me ask you about brexit. i was fascinating to hear what
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banks are planning on doing. you are still considering madrid and amsterdam, but you have infrastructure in frankfurt. think we need to build up different infrastructure and at this stage, it's tough to make a call on what we will do. the three options on the table are the ones you mentioned and we will make a decision later, q3 early q4. the good news is we have flexibility and we do not feel when it to put pressure on the withg and find ourselves having done some kind of regrettable moves. matt: what do you think about ballpark figures? about the size of balance sheet moves they want to make and balance counts. weand the last few months,
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have been reducing the amount of options on the table. the number of headcount at the -- of the day will very on vary on how much front and back unique to move and this is a consequence of not only your legal set up in london and in the continent, but also the kind of the regulatory requirements and political solutions that will be found. that is the reason i'm talking about, not triggering regrettable moves. you start to move or not move and you find out after a few months that political solutions or regulatory solutions were found to minimize not only the banks,c consequences for but it's very important to understand what are the systemic and market distortions you may moves that areg not sustainable long-term. matt: we still have optimism for softer brexit at least as far as
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it impacts financials? >> i'm optimistic both sides will find a win-win solution or rather lose lose situation. notpe the ideology will prevail versus pragmatic solutions that takes into consideration the needs of both parties. anna: talking about the hopes for a win-win situation to come out of the brexit talks. we will see if his insight proves to be accurate. much more through the day. thell show you where you on asia equity story and other stories that have been developing overnight. fascinating stories around the currency. we will get more details in the moment from juliet. with the amazon earnings, cost of growth being an inordinate amount of investments, seems to
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be something that has taken a shine off the tech center, which has led to weakness in tech stocks, being affected in the s&p futures. we are down 3/10 of a percent south in u.s. traits. we saw a rebound in trade because of the trade. a lot of it had to do with aviation. we are seeing a hold in that and the dollar is basically flat this morning. there is news in the currency market. the euro against the swiss is the highest since january 2015 for the euro. the highest since the fnb removed its minimal rate. that crashed down will miss all the s&p remove that rate. then they climbed from one of 52 110, now 1.13. what a difference a few years make. let's get to bloomberg first
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word news with juliette saly. several key republicans said they are ready to vote for a strict down obamacare repeal -- stripped down obamacare repeal program after they received assurances from paul ryan that his chamber would not pass the measure. mitch mcconnell's skinny repeal the wood and the requirements that individuals by health tourance and suspended it 2026 that companies provided to their workers. the senate is given final approval to strengthening legislations on russia. it gives congress the power to block donald trump from lifting them. it goes to the white house, which was given mixed messages about whether the president will sign the legislation. written aaramucci has profane tirade.
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he gives an exclusive as he describes him as a paranoid schizophrenic. that he madeeeted a mistake and it will not happen again. japan's key price gauge was unchanged in june. core consumer prices, which belowe fresh food, is far the 2% target. household spending rose 2.2% from a year ago, the first gain in more than a year. japan's defense minister has quit over a cover-up involving the military report. and peacekeeping activities. the move comes as prime minister shinzo abe prepares to reshuffle his cabinet. in the u.k., please investigating the deadly grip tower fire.grenfeld
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senior investigators from the council that round the block could be interviewed under caution. organizations guilty of corporate manslaughter are liable to an unlimited fine, but individuals cannot be charged. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . this rally had to come to a breather at some point and we have seen asia equity markets retreat from that december 2007 high we saw reached yesterday. the nikkei down 6/10 of a percent of some weakness in hong kong. the cost me is leading the declines at 1.16 percent. coming off those record highs in south korea. the kospi having its biggest one-day fall since november.
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let's have a look at some of the sox in the region. samsung on the back of the tech selloff, on the back of these earnings, came through with good numbers yesterday, 4.3% drop today, dragging on the kospi. toshiba taking its weekly loss to 12%. the u.s. court is to rule on an injunction regarding the sale of a chip unit to what it digital. .13.pore up #space.ook at g we mentioned japanese cpi stall. up that is when you strip out french food. that is below the 2% target. thinking theomists
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tight labor market could start to help inflation, but we are very much off those loads of 2%. anna: thank you very much. juliette saly with latest from hong kong. 6:16 in london. we have numbers from klm second-quarter net jumping. the company sees a lower full-year unit cost in the second quarter net profits coming up. just a few of the details here. took to the helm of this company around a year ago. his mandate to increase profitability, he is trying to counter the competition. we got news of a keeper alliance involving delta, 10 eastern come up a complex web of stakeholder relationships here in the sky team alliance. in all speak to the cfo few minutes time about all of that strategy and the latest
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numbers. a quick word on what is coming up in your day ahead, you have a busy one if you are trading today. we have a policy decision from russia's central night. two hours later, second-quarter gdp out of the united states. what would that look like that of the goods number of yesterday. then saturday, elon musk lunches that tesla model three. we have heard a lot about that this week. we are looking at live pictures of the senate floor in washington where republicans are debating the health care bill. we have been running this story overnight that mitch mcconnell had been wanting to bring in a skinny repeal as momentum among republicans have been building. several key republicans were set to support that, but john mccain that is the "no" standing in the way of that
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skinny health. we will monitor that. this is bloomberg. ♪
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anna: this is bloomberg daybreak: europe. second-quarter revenue at air france helen has come in just ahead of estimates after the company's biggest shareholder said it fully supports the purchase of a 31% stake in virginia atlantic. cfo, whoak to the joins us now by phone. great to have you on the program. you have done very well in the first quarter against estimates, beating those estimates. how much does that set the cap for the rest of the year? does this strong performance continue? guest: yes, of course we know, the situation in the
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market as relatively good. first quarterhe positive, which is great for our airline and we expect that to be the case in the third quarter. also probably for the last quarter of the year. reading thisting depths of relationships you are establishing with the rest of your sky team owners with delta, the chinese airline, virgin, and others. if you are able to all merge, if authorities around the world that you come up you be doing that right now? guest: we have to go slowly. first of all, we are clearly creating a stronger link between delta, we are entering the state into virgin. we are also making the link stronger.
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airlines industry is fiction the fragmented. legislation and the rules for the traffic rights. preparation, we have announced a positive step the industry needs to be consolidated and the links we create with the partners is something positive. the are excited we have that deal. we are close to virgin. do you need to focus for emergence to fight effectively against the gulf carriers? resultsou have seen the -- theegative, 5 billion gulf carriers institution is not always easy.
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we are just looking for a fair competition, many we want the gulf carrier to apply the same rules we have accepted in europe or the u.s. and that is white we continue to advocate for little playthings everyone is expecting that is positive in the industry. anna: you set up a low-cost airline within air france klm in june. update us on where you are going to fly and whether you want to get a better deal with the pilots. you achieved it with cap increase. you want something better from the pilots? guest: i think it is great. als and one deal with unions of the cabin crew, so we are ready to launch these new projects for long-haul and medium haul into air france. it is great news. we are moving fast, we are
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changing progressively, improving year-over-year and that is what we have to do in and weo be a positive are excited to continue on that track. and to continue to move. anna: this is a lower cost brace within alm. -- klm how much d.c. projected into the future? aest: we plan to have aircraft in the medium haul and 10 aircraft in the long-haul. by 2020, the company with 20 aircraft, two thirds in the middle more, we are seeing more hype. we want to be a bit more long in
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the spirits. it's great for the cabin groups. anna: that is interesting to hear. do you think there is a risk for too much capacity in aviation? we heard this from other airlines in the sector's quarter. -- the sector this quarter. intense demand and supply. we see that when you look at the different revenue. i have indicated in the second quarter we have a positive revenue. that will be true for the third quarter. activity, but if you have a balance between demand and supply, it is more difficult during the winter and fall. this is of course one of the problems we had. it's a result of this industry.
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today's is a muscle -- modest positive. coming up on the program, we will bring you the interview. this is bloomberg. ♪
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anna: welcome back, everybody, this is bloomberg daybreak: europe. this is tokyo at 2:30 in the afternoon. move on dollar-yen of 02%. let's jump back to europe. we have news breaking out of france. , have adp specifically percent created in the second quarter. this is exactly in line with the consensus estimate. a quarter on quarter number. the year on your number coming in stronger at 1.8%. that is a stronger number than expected. the data has been stronger. bloomberg intelligence when he an expansion in business
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surveys. we are looking pretty buoyant. it should be giving the ecb more confidence in the recovery of the eurozone as a whole. see, thehat we strengthening of the gdp number. isengthening of the number more than a percent. we will see if that is indeed the case. we saw strength coming through in the consumer story in the election of emmanuel macron. that is the french story. let's stick with france but move to the corporate agenda, specifically with the auto sector. lifting their russia market forecast, saying they could grow up more than 5% in 2017. up 2.41 net profits billion -- 2.41 6 billion euros. market five 54%.
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us an upbeat data on brazil and russia just earlier this month. perhaps this is probably in line with what they have said. in terms of financial targets, they are confirming those. that is quiteness demand. the ceo reaping the benefits of a sustained coverage -- recovery in demand in the auto sector, highregistration going this year. from the euro, we will bring those up and bring the euro numbers for you. the exchange operator commitment 137.3 54 million euros, million euros of second quarter revenue. let's the french exchange story.
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we want to talk about banking. has outmatched deutsche bank. second quarter profit was 2.4 billion euros, surpassing the 1.1 9 billion euro compiled by bloomberg. to the man in paris. -- we speak to the man in paris. at the messick markets, commercial activity has been doing well in a low interest environment. international has been firing on all cylinders. we should look at civ. and willn doing well continue to grab market share spirit >> fixed -- market share. share --market guest: are civ is a tribute to our diversified approach.
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it is well capitalized. trade diversified so it has corporate banking and security services has all this activity, revenues up 5%. costs are down. it is a good result which allowed us to continue to capture market shares in this situation. >> fixed income was difficult. it's true if you look at our civ, it goes with the demand. as a moment in time there can be higher demand than others. we compared to last year weather was probably more demand. that is basically how it goes. it is linear with demand. >> revenues are slightly down 1%. when do you expect a turnaround? you expect this turnaround to be quicker, given the new government? guest: we should look at france
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activities or domestic markets, and see a positive pickup with commercial activity. france, our loans are up 8%. there is supply and demand. it is in a low interest rate environment. this will take a couple of quarters before we can check that. when it comes to france, we are supportive for continuation of the positive business momentum that has been going on for a couple quarters. what can be a cycle to the momentum of the last two quarters? guest: things that could impact it, if banks would not be able to support the economy, which is what we are doing. as long as this goes on, we are supportive of this continuation. >> keeping it from the ecb and not adding more regulation, for example. there is asee positive momentum that is continuing.
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should probably let it cater a little bit longer and not seven with footer regulation changes. you are looking at live shots from the senate floor in washington and the united states . we are watching the senate as republicans attempt to pass a so-called skinny repeal of obamacare. several republicans said they are ready to vote for the skinny repeal plan. they say they will only do so after receiving personal assurances from paul ryan his chamber will not test the measure. it's complex. the senators are given a final approval to strengthen sanctions on russia. just in the last few minutes, bloomberg has understood the senate vote on the eminent for the health care bill, skinny the senate, it seems lacks the vote on gop leaders,
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this being brought by mitch mcconnell. looks like they lack the votes. johnork times voting mccain was one of the holdouts on this, but we understood several key republicans had already given their support, such as ron johnson. it seems and enough. let's get analysis bloomberg's kathleen hunter, which runs us through the latest. this is happening at 1:37 in the morning. what you make the revenues of health care that they lack the votes to get even this skinny version through? to see.fascinating it's an interesting moment to watch the senate to -- the joke in washington is, no one wants to see how the sausage is made in terms of passing legislation, and this is certainly one of those moments. they came up with the proposal like you said, and they are trying to sell it to people by
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saying there is no way it would pass the house, which is an unusual approach. it's not enough. they have a slim margin, republicans in the senate, he can only afford to lose to republicans -- two fellow republicans, and they are not able to get enough to vote for even this. the deal here was, a couple republicans have agreed to come on board. because the got assurances from paul ryan this would go to a conference committee. what they were voting for was never going to come to pass. what was the point of it? just a way to clear the path or move the story forward? >> that's right. it's getting into the procedural militia that is not -- minutia that is not that interesting to
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the rest of the world, but significant to the individual senator. in congress, you need to have both the house and senate passed legislation to go to conference where the house and senate meet together and negotiated a compromise between the two of them. it's almost like this procedural surpass.ey need to so far they will not be able to do, but that is the argument being made, it doesn't matter what the bill says. it could be a blank sheet of paper, but it could enable us to clear this bar and go to the next level where it comes to passing legislation in the congress. anna: we are getting confirmation the senate has projected the skinny obamacare repeal despite ryan's place. it wasn't just john mccain voting against it, but other senators voting against it from the republican side. they did not get the 50 they needed. since 1:00pt them up
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in the morning. all of this in the midst of thatngs gop senators struggle will suffer holy hell if he tries to fire jeff sessions as attorney general. >> it has been quite a busy week in washington and this is one example of a time where republicans in general and the imitation specifically could use a "win". they did deal with the russia sanctions measure earlier in the evening and that actually would limit the president power unilaterally with sanctions on russia. controlepublican congress asserting its separation of powers as an equal branch of government and trying to curb the white house's ability to do things on its own. that is an interesting development. when it comes to the attorney general that has been very interesting to watch given a lot
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of republican senators have rallied behind jeff sessions because before he was attorney general, he was a senator. he has some people that support him. anna: mitch mcconnell speaking in the senate, saying this is a disappointing moment. let's listen in. mcconnell: this is a disappointment. disappointment indeed. our friends over in the house, we think them as well. -- we thank them as well. i regret our efforts were simply not enough of it this time. imagine a number of our colleagues on the other side are celebrating, probably pretty happy about all this. people arerican
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hurting and they need relief. our friends on the other side decided early on they did not want to engage with us in a serious way. a serious way. underp those suffering obamacare. they did every they could to prevent the senate for providing a better way forward as simple as reading amendments from time to time. to holding up nominations for key positions. in the administration. because they were unhappy that way to trying to find a something better. that obamacare. obamacare. so i expect they are pretty satisfied tonight. i regret to say they succeeded in that effort.
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now i think is appropriate to ask what are their ideas? it will be interesting to see. what they suggest. as the way forward. say, bailing can .ut insurance companies bailing out insurance companies with no thought of any kind of reform, not something i want to be a part of. suspect that not many folks over here that are interested. in that. it will be interesting to see what they have in mind. quadrupling down on the failures of obamacare with a single payer system.
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anna: mitch mcconnell speaking on the senate floor, saying bailing out insurance is not something he was to be part of and he is very disappointed about the rejection of the skinny health bill. once again, we are asking questions about where this leaves the trump agenda given its inability to bounce the health care bill and move on to other matters. let's stick to other things relevant to u.s. trading day. amazon has reported earnings that missed estimates and forecasts say the potential quarterly loss for the first time in two years. they boost spending on new warehouses to meet growing demand. less -- talk us through the highlights of the financial performance. jeff bezos is running this
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company the same way he did 20 years ago as he was starting out. we saw revenues in this quarter increased 25%, $30 billion. in the meantime, the income fell 37 percent. he is sending a signal to investors he is trying to run this business for the long-term. -- those mid-income numbers are a third of what analysts were looking for. for comparison, apple net margin is 21%. he is investing a lot of money into geographic expansion, new product categories, they have moved into indonesia and southeast asia this week. plans to bebitious able to expand, including new areas like cloud computing and alexa devices. anna: what is it investors are looking for? talk is the balance between revenue growth, profit growth come at the turn of that.
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what is it investors want to see here? >> for decades, investors have wanted more profits on the business model. they would love if bezos pulled back on the plan. but he is not going to. there is a balance between growth and net income. he is trying to grow as much as he can in this market, investing heavily in a lot of these new markets in southeast asia and india. he will spend $5 billion in india. they see this opportunity to fit this business model that has worked well in the united states and bring it to other geographic regions. they are moving to new product categories like with the acquisition of whole foods. anna: thank you very much, peter. joining us with the latest on amazon. he is on the technology beat for bloomberg. some numbers coming through. this is the oil business
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exporting in italy, africa. second-quarter adjusted, four 6 million euros, well above the estimate of two it is 7.9 million. 287.9 million. let's get a check on the markets right now. we will get an update on that shortly. off,e tech fell disappointing earnings from amazon among the news flow there. you can see tech stocks underperforming on the asia-pacific index pushing the benchmark down from the highest since 2000. the losses, every industry declining on the asia equity benchmark. materials down .1%, as well. another key thing that has been happening overnight this euro
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swissie. seeing the swiss franc weakening against the euro for the fourth day. a lot of questions among analysts about what is driving this. we had the head of the smb saying earlier that the swiss franc was overvalued, but in terms of the big reasons why this is happening, a lot of people asking questions. the euro swissie at its highest. january 2015. has for the room to run toward 150. looking at the dollar, we are seeing weakness in the session today. we are seeing a rebound after a 14 month low. here is the weekly relative strength index. the dollar is the most oversold since 2007. i wonder how that latest news on health care is going to play into this on the technicals and longer-term prospects.
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if you look at the rsi. i'm looking at copper. seeing softness in copper today. i'm talking about the industrial metals, but it is a good week overall, the best in five months. joining aluminium as a top performing metal. getting an update on what is happening in the united states. the senate floor still discussing this of course. mitch mcconnell has pulled the health care bill after the senate votes down his plan. we are continuing to watch this. chuck schumer is now speaking, saying it is time to turn the page on this agenda. mitch mcconnell saying it is time to move on. oft does that mean in terms the future for health care legislation? do they move on to other matters? did a skit on to the tax could end up, for example? let's worker saying
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together to improve the health care plan. when you to talk about credit suisse. that interview taking place. we have an update on the numbers. feeling good provision we think it is working. as you say, it is 18 months at a 46 and we believe in the things we have identified as key we are delivering. we have a challenge in growth. we have seen that generate 23 billion in the first half, our best performance since 2011. it is very good knowing our earnings are very good years. growth is back and profitable. profit is up 20%. -- 21%. rates, we areital now at 30.3%. .- 13.3%
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we are well ahead of our target of 18.5% from this year. double $.47 down and result in legacy. this is have the size it was taking years ago. we have been busy growing. cutting risk and dealing with is a. 18 months, we have worked very hard. .> you have been leading is there one thing you can't more difficult than the others? >> i did not do any of it a lot. it has been a joint effort. they are all difficult. , so difficultcult for any company to grow. risk andcapital, cut deal with a legacy is really what is interesting in stories
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that we have driven this is anti-. -- at the same time. .e have really done both the leverage we are creating is what is pretty probability. -- creating profitability. it is up 9% over the prior. it is very good growth. it's a very good performance. it is growing faster. revenue has grown and that's the percent. s&p, we areat the back 3.2%. we are getting market share interest. elevatespects, does it your strategy -- swiss banks, does it elevate your strategy? >> we are up over two years.
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are showing we can actually growth. it is a very attractive market. this was universal tank is very good. on every it is a good story cost is going down. that's when you will see across businesses, revenue is going up strongly. costs are going up less. in asia, same thing. revenue is going up strongly, cost is going up less. .lobal markets we said we would hit 6 billion in 2018. we hit 3.2 in the first half of 2017. there was a lot of skepticism that the global market could be turned around.
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it is profitable for the second quarter in a row. >> wealth management, the trend we are seeing, can continue? >> we are working hard for it to continue. we have something called priority solutions, which is a team of advisers who design customized solutions for our clients. is where easy transaction income going up strongly. we are able to increase the number of inflation. we are getting more fees from the assets we have. the acid-base is higher. -- asset base is higher. we helped a chinese billionaire pound tilting in london. -- ournstein in asia finance team in asia. it allows us that integrated approach to sell.
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a lot of it comes from our largest client. there is a next level of clients we have not sort it penetrate. not yet penetrated. all risk growth comes from working and quality on the clients we are in have inside the bank and penetrating them. francine, good to have you on the program. they are saying focus on wealth management is paying off. what stood out to you? >> he was trying to explain they are paying off and doing all they can to continue that trend for it i did ask him about brexit. he says the have not made up their mind. he says that is irrelevant for
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the strategy. the other thing i want to get from him is that if you look at the global market units, what does that mean when ultimately picks up -- volatility picks up? he has not seen any sign of volatility in the market picking up. of thes a sizable chunk credit he wants to be a look management. how will you shrink that? he says he is focusing once again on asia, on wealth management. that would recalibrate the overall revenue of the business. much more from francine throughout the day. more comments to come from that interview. up next, we will stick to the banking story. we will be joined by a guest. it will recover from a disbarment that we saw from the reported ins was
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the first quarter. we will speak to jes staley about this. we will talk to him about this shortly. this is bloomberg. ♪
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anna: says majority leader mitch mcconnell accepts defeat after his skinny health care plan fails in the senate. a big day for big banks. we will speak to the cfo and the barclays ceo. domestic -- disappointing amazon earning way on u.s. features. the euro rallies against the swiss franc the highest level since 2015. ♪ anna: welcome to the program
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everybody, i am anna edwards. 7:00 in london. it let's dive into the earnings reports this hour. now we get the international and otheroup operations. second quarter profit 805 million euros against an estimate of 746.7. unitues per available pricing in the second half from when you're earlier which is yearesting. - o -- one earlier which is interesting. iag, interesting to see that from the ceo. they are fighting against a local competition. a power outage hit them in may, will perhaps get an update on how much that cost the business. let's see how much that cost you, numbers from the japanese banking operation.
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yen, trading profit has slumped. 120.5,nt point -- overseas pretax profit falling a little. 16.9 billion previously. an update on how they see the movements in investment banking's, aspect management's -- asset management's and the like. what we were looking for here, this is the business. we were wondering whether the business would have been boosted by japanese investors returning to the equity market amid and economic recovery in the country. the country has been trying to -- the company has been trying to diversify to maintain a rebound. one of the challenges that face is the ceo.
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it has been dealing with a trading,in bond looking to that point that the trading -- trading profit has fallen to this point. nubbers from barclays, second quarter adjusted profit 1.4 billion pounds. , the balance sheet 13.1%. that is one of the first numbers .oming through the first quarter trading that disappointed investors last time. it did say it was in the investment banking business at barclays. they sold their stake in the africa unit. leaving very little focus on the u.k. and u.s. as tried to going transatlantic- focus, healthy returns.
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the bank has been fighting to recover the profitability level. low volatility has been something that has plagued many of the banks in this sector. we are looking for, thank you have to say. we keep watching the story and to them ofaking course. let's dip into the futures for you. i will pull those up for you on my screen and show you where we are the equity story. u.s. futures look at the week. weak.tty we get european futures suggesting we will be weaker by .4%. the respirator shows you where we have been. i like the weakness coming through. the japanese, australian, and south korean markets looking week. rising of the
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good numbers that can above estimates but that was short-lived. on the currency market, the euro against the first -- swiss franc. at its highest since january 2015 for the euro. 20 of corporate earnings to talk about. u.s. stocks hit highs. the barclays number, we have a comparison for you. second quarter adjusted profit before tax 1.4 billion against an estimate of 1.2 billion. some in banking sector is very well aware of all that is with that in mind. let's pull of the board. given those numbers for you, 16234. here's juliette starling. in the u.s., the senate has rejected the skinny repeal of obamacare that came
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despite assurances from paul ryan that his chamber would not have the measure. mitch mcconnell described the outcome as a disappointing moment. earlier the senate gave its final approval to legislation strengthening sanctions on russia. the measure also gives congress the power to block donald trump from lifting them. it now goes to the white house which has given mixed messages on whether he will sign the legislation. scaramucci has -- a profane charade. scaramucci used an expletive as a described reince as paranoid schizophrenic. he said i made a mistake interesting eight reporter helped by rising power costs, consumer prices which excluded first through -- fresh food.
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five below the bank of japan's target. rose from aending year ago, the first in more than one year. been innse minister has a cover-up regarding peacekeeping and south sudan. shinzo abe prepares to reshuffle his cabinet amid the slump in his popularity. >> in recent months, i felt the question on my responsibility is defense sisters is unavoidable. the kind has been aware of my feelings and he has now accepted my resignation. >> an opposition coalition will defy on protests ahead of a constitutional assembly. two people were killed on
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wednesday at the start of the national strike called by the opposition. he called the vote a part of a plan to rewrite the constitution which is opponents say is a power grab. police investigating the deadly tower fire. they have reasonable grounds to suspect corporate manslaughter may have been committed. they could be interviewed under caution. positions guilty are liable to unlimited fines. individuals cannot be charged. global news 24 hours a day powered by more than 2700 journalists and analysts in more , you can findries more stories on the bloomberg at top . mixed from wall street, the dow at a record high. asia is general disappointment. these rallies starting to dissipate. the nikkei closing by .6%. check out the fall on because
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kospi.late trade -- the regional index is coming off of those 2007 highs. have a look at some of the movers. samsung in hong kong, some of the biggest decliners following on the back of that downturn you saw coming through in the tech players in the u.s.. samsung, you can see how that is having a big impact coming through in the overall area eight u.s. court will rule on the injunction regarding the sale and singapore airlines doing well in singapore. this is on a return to profits for the airline following a surprise courtly loss. we're just talking about -- we saw the cpr
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nation my as well. very well off these target lines that the chicken -- the bank of japan is looking for. it is certainly seeming like there is a lot to do to try to get inflation back up. the economy headed for a sixth quarter of expansion. some economists hoping we can see a teacup in investments -- peak up in inves tments. anna: second-quarter earnings beat estimates at 37% rise. the lender is beginning to study banco popular ex-pat all -- espanol. , great to have you on the program. can graduations on the numbers. can i ask about the real estate sale? diving straight into the
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details. you are trying to sell real estate assets that you took on with banco popular. are you at? >> when we bought 30 billion of obviouslye exposure this is a good find. to have that, obviously that is not our business. we are in the process of disposing at that and looking at different alternatives. our scenario is to manage that internally and decrease exposure over the next 2-3 years. we were looking at alternatives firmsarge private equity in one go. right now we're looking at these different alternatives. there is nothing definite at this point.
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if you managed to sell it to private equity, one of the chances you make a capital gain? was going through your mind -- what is going through your mind? >> i think it is the best unlikely. -- i think it is unlikely. do,use we are trying to obviously you need more provisions to these transactions up front. we believe the impact will be relatively small, if any. obviously we will decrease exposure up front and much faster than we initially expected. it would be for a positive. anna: bloomberg was reporting that you have had interests from three private equity businesses.
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said, the time of the cycle right now is very positive in spain. they are indeed accelerating the interest for the investors into spanish real estate. clearly there is a lot of interest on this type of portfolios. status of thee situation, we are -- we're talking to them. concreteot received offers yet. if we eventually do, obviously, we will communicate that. ofin, we are in the process the different alternatives we have right now. santander, badt loan numbers now as 5.37%. what are your plans to bring that's down given that you just ?ad to consolidate
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>> excluding popular, our ratio would have been 3.5% from less than 4% in december. it decreased almost 50 basis points in the first half. popular, we are going to work very hard to bring that down to the low 4% within the next 12 months. business,he brazilian are you worried about political instability in brazil? are you preparing the ground for that? >> that instability, having very little impact on the economy in the short term. 3.5%.e seen inflation at the lowest in decades.
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following that, interest rates have been coming down. they stand below 10%. now we believe they could go as low as 8% at year end. that is very good for banking because of affordability, in brazil very strong and they will continue to be for the next few months. that stability which may have applications is having very little impact in the meantime. anna: how optimistic are you from the spanish economy? we saw interest for your capital raising. talking about it being a good time to sell estate properties. what is your expectation for the spanish economy? >> it should grow above 3%. we expected six or eight months ago. this is going to be the third year in a row where the economy will go up 3%. lowestyment figures, the
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is nine. we are below 4 million and lloyd. clearly the prospects are very positive. the ceo of santander. more about the banking sector. second-quarter adjusted profit. we will speak to the ceo. this is bloomberg. ♪
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♪ anna: berkeley reported second-quarter adjusted profit. 4.4 billion thousand -- pounds. 5.2 3the estimate of billion. joining us now from the banks headquarters, geo -- ceo. good to speak to you again. diving into some of the detail,
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looking at where you have performed well and what the story is, in terms of the rates of the trading business, how happy are you with how that is performing? what action do you want to take? >> with the investment bank overall, we are quite pleased. we had a great quarter in fact. the first half of this year was one of the best results the bank has had. in trading we did quite well. in rates and currency we still are not happy with where we are. we are down in the second quarter, we have made some recent important hires. butill get that corrected overall investment bank had a pretty good quarter. you're happy with which how you back to the bank.
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you have taken enough action to turn the performance around. have room for improvement. priest --arly very pleased with the strategy. bank, it very strong position in new york. we are the number one investment bank in the u.k. with the market share of over 10% from the second quarter. to theget his importance overall strategy being a transatlantic bank and we will continue to invest. anna: can you give us an update on the status of various investigations, the u.k. is to rmbsinto -- looking issues. what are investors telling you about these legal issues? are they proving to be a distraction when you're talking to investors about the company? >> we definitely want to put both the rmbs and the qatar
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issues behind us. discussions, beyond that i don't want to discuss those as they are open investigations. anna: they are ongoing. as your statement, you talked about 700 million in charges for ppi. is this all you're going to take or is there going to be more? >> our hope is this ends the reserves. close to 9 billion pounds related to the issues. the government has put an end date to the claims, we do hope that this recent 700 million pound reserves will bring this to a close. anna: sticking with the consumer credit program in the united with a, u.k. lenders are
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spiral of complacency. do you recognize that and has that forced you to change policies in regards to credit cards? >> we're differently focus on it. we've been in discussions with the bank of england. which we have seen is a sharp increase since the brexit vote. that has been matched by an increase in consumer credit. level where it was in 2008. unemployment stays very low. it, we arehing adjusting our standards accordingly. we want to remain a bank with one of the highest quality consumer credit loan portfolios. we are focused on unemployment which continues to be quite low.
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i think anybody should be mindful of the levels of the levels in the u.k. and the u.s. as well. car financing, is this an area you have exposure to? >> we are very small in that market. somethingar market is we watch. our exposure there is very modest. in the u.k., how much growth can you get given the focus on the level of -- consumers already have? >> the u.k. consumer story for us is really a story about technology. consumerse 5 billion through their smartphones. paymentsmartphones that are doing quite well. 30% -- 30% goes to the
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payment system every day. u.k. consumer market for us is tremendously important. we are committed to great britain. we have mri as the bank of england on where the consumer credit market is going but overall, it is doing quite well. anna: falling with interest all of the future trade deals for the u.k.. the u.k. and the u.s. missed the trade deal. troubled the that atlantic, what will you expect to see in a trade deal? which areas should be worked on? >> we have been saying for quite think brexitt we will be very complicated. london will clearly remain one of the financial centers around the world.
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the u.k. government has free-trade which is a mission we obviously support. tremendously beneficial. our course strategies of the transatlantic bank. we clearly encourage both the european union and the u.k. to come up with a trade agreement with the european union that reserves the special relationship between the united kingdom and europe. anna: thank you so much for your time. good to have you on the program. the ceo joining us there. "bloombergo it for daybreak: europe" we will stick with the banking scene and bring you and exclusive interview with the ceo at it: 30 u.k. time.
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plenty more on the spanish banking sector. we spoke to be santander manager and got the story there. health committee on these markets. this is bloomberg. ♪
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♪ anna: welcome, where we bring you the first trade of the day. alongside matt miller in is uric -- zurich. europe banks open their books for the second quarter. repeal rejected. the yuan at -- the u.s. senate voted against the obamacare repeal. can the republican fight the resuscitated --


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