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Okay, let's talk about Barclays outward numbers this morning. Group pre tax profit two point zero eight billion, that slightly beats estimates. This morning, the bank is setting a sign three hundred and twenty five million in terms of compensating customers impacted by the UK motor finance scandal. It looks like there's going to be some pushback there. The bank is going to launch a five one hundred million stock repurchase scheme. So let's talk about the details and exactly
what has happened here. Cs fencaategch Christian and CEO of Barclays joins us. Now, thank that great to see you. Thanks for the time. We always appreciate it. In terms of what stands out here, what are we looking at. I'm looking at trading being fairly mixed, I'm looking at a pushback when it comes to the motor finance story, and I'm looking at a raising of the net interest story going forward. Which one of those three things do you think investors should be focusing on this morning?
Well, I think they should be focusing on the broad performance of Barclays. We had a top line beat of eleven percent growth year over year to seven point two billion. On the top line, we've had nine percent consecutive quarters of tangible net asset value growth. Importantly, as you said, we've increased our guidance for ANII from twelve point five to greater than twelve point six billion pounds, increased our rote estimates to twenty twenty five to greater than eleven percent.
We're accelerating uh our ship share buyback program by announcing five hundred million pounds this quarter and moving to a quarterly cadence. And then importantly, you know, we we continue we we've announced that we're going to come back to our shareholders one year ahead of schedule and then give them and talk about our new set of financial targets UH in February from twenty six through twenty eight. So I think it represents the broad good performance we've had for many many quarters.
Now, yep, okay, let'stick into the details of what is happening here and talk about what's happening with trading. Fake looks pretty solid and certainly ahead of estimates. But I'm understanding I think reading my notes that the estimates were maybe a little low for what people realistically thought you guys could deliver so fick our performance, but equities not what happened in equities Venka.
Yeah, So I'm very broadly happy with what the Investment Bank has been doing over seven quarters. And you know we've had six quarters in a row of top line growth, of earnings leverage by having what we call positive jaws and improving profitability. You know, the Investment Bank produced greater than ten percent rot as did all our divisions. Now within that, I've always said we're running our own race, and we're running our own race and producing the numbers
we wanted to. Quarter by quarter, some things will do better and something's worse. We're obviously pleased with our fake performance and we'd like to understand better how we can improve inequities. But I view this over many quarters, and so you know we're taking a long run, but you know we will look to do better in every segment every quarter.
What do you think the answer is in equities? If that's the question you're asking, what do you think the answer could be?
I think we need to continue to deepen our client franchise. We've been working on it, and improve the breath of our products. 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 bank.
Ben Catt, It's creedy in London. Think of your time this morning was pivot from the equity picture to the credit picture if we can. There's been lots of warnings coming from the big US banks around cracks and private credit that could ultimately have broader effects. You have been in multiple seats at Barkley's, certainly as the chief risk officer. What are you seeing is are those worries warranted?
Look, credit is something that you do over the cycle. I think you have to be extremely careful at all points in the cycle about you know who your client is, your client selection, the terms under you lend your concentrations, how much you lend industry sectors. We take this very seriously. We take this over the cycle. I mean, we had an exposure to try color. I'm obviously not happy about it. We're looking at what lessons we learned, and we have
looked at it and applied it across our portfolio. But I think credit is one of those things that you take seriously. Doesn't matter whether it's so called private or credit, and who the lender is it is a full time, specialized job day in and day out.
But then kat is it a systematic risk or is it still isolated? How should we be thinking about investments in private credit when firms like the one you just mentioned go bankrupt?
So in that particular case, there seems to have been fraud. Now I should say that Barclay's had no exposure to First Frands, although we were approached multiple times by them. The thing about fraud is you wonder whether it is one bad actor or it is some effect of circumstances that are stretching the company's finances and making them take
risks that they otherwise should or would 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, months and quarters.
Thank you, good morning. It's Annah sticking with this theme and channeling in some of the thoughts that we got from Andrew Bailey the Bank of England just yesterday. He and his team say that they're worried that the market is slicing and dicing loan structures like it's pre GFC, pre Financial crisis. Do you see similarities?
Look, I think securitization technology has been with us for decades. Obviously, the governor and the central bank have a view of you know where and how much, And they're talking about a broader review, which is I think a good and prudent thing for any central bank to do.
And they talk about alarm bells ringing. It doesn't sound like you're hearing alarm bells, Vanka.
Look, as I said, we pay attention to credit with what we hope is the same amount of dedication all through the cycle. And when you do that, you try to be very disciplined about it.
Okay, but how easy is it to be disciplined at the moments ces you talk about the fact that that Barclays is delivering on that. But this is a this is an industry wide issue, and we've learnt 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. Are you being extra diligent right now? We've had years in which liquidity has been easy, We've had years in which
underwriting standards have come down. Are you paying more attention? Are you looking at what you're doing more carefully now as we come to the end of this process, how much due diligence are you doing?
So we do a lot of due diligence at all points in the cycle. And I think I would separate two things. Every time you make a lending decision, and you monitor those loans, whether it's in a good time in a cycle or a bad time in a cycle, assuming you knew it, you would always apply similar standards. So I think the important thing is to maintain standards
through a cycle. And then if there are periods when you're worried more, then you may increase the frequency of your diligence and start looking at signs that you might otherwise have thought were normal. And so, as I said, what you're looking for at this point is our business model stretched. And you know what are the quality of financial controls and companies and the independence of financial controls.
These are the things you worry about all the time and you pay extra attention to in periods of heightened concern.
Let's sayin kin, I feel like every time we have you on the program, we always have to ask you about the IPO market in London. I'll do it again this time, but perhaps with a little bit of a twist connecting it to the private credit space. We're seeing deal making, We're seeing m and a activity start to
pick up in the States. We're not seeing that same enthusiasm on this side of the pond, but we are seeing more mobilization when it come to private credit because it feels like the IPO route isn't one that's available to everyone. Does that make Europe more vulnerable to a risk in the private space than the public one.
Well, I think the amount of private credit is of course much creator in the United States because it's a more advanced industry and developed there. But I want to sort of not talk about private versus credit. Public credit is credit is credit. I think as far as the IPO market goes, we on this desk behind us took part in an IPO yesterday of a UK bank Showbrook.
I think you've seen some signs. It's obviously not as strong as it is in the US, and I do think in Europe as in the UK, and in fact the Governor mentioned this yesterday in the House of Lords, there has to be a continued growth in the equity risk culture of the country and hopefully with that you'll see more IPOs.
Thank you very much. Thank you for joining us the Buntley CEOCSN categoration and with us to talk about the numbers and the credit market. Yes, really interesting to get his take on things we've heard from the US banking sector, an Indy from the Bank of England governor, his concerns around AI of course, and certainly yesterday talking about credit markets.