Bloomberg Audio Studios, Podcasts, radio News. We're joined by Bill Winter's the chief executive officers Standard Charger. Bill, as always your Davis regular, Thank you so much for joining us. There's a lot going on. I'm sure you get stopped in the corridor saying what will Trump do? What's it mean for the economy? What do you answer?
Well, what we know so far is that the animal spirits have been unleashed, so so people are looking at ways so they can invest around the themes that they think the US is migrating towards. No surprise in his early actions so far. But the big questions on the economy are where are we going to come out on dariffs, and where we're going to come out in terms of the engagement between the US and China and what's that mean for the rest of the world. And those questions are still are still doing.
How do you see US China playing out? Actually for the banks, especially as we're expecting the swave of deregulation in the US.
Look, I live in hope, and that the hope in which we live is that there can be an on to I don't think we're going to see some sort of a big rough ROUCHEMMP between the US and China. But I think there can be an understanding about how we can cooperate together to get some really important things done in the world. There's some really obvious ones, like climate change, which is unlikely to be the natural point of engagement between the Trump administration and China. But the
system for global trade is a second. And yeah, we all know the world in aggregate is better off if we have free and fair trade, but we also know that people have been left behind. And Trump's been very very straightforward in his determination to change the rules. We'll see.
But when you hear Donald Trump actually say Ervice's favorite word in English dictionary, do you believe him at face value? Or is everything a negotiating tactic and a starting point?
Well? I think ultimately everything is a negotiating tactic kind of for everyone when you're trying to change the statusquoa. And how deep is his conviction and how much does he really believe things need to change and how much can things change? There's a limit to how much flex either side has in a negotiation. It really is an open question, and I think the market is as un clear on that question as has ever.
Been okay, how does it change how you want to run the bank.
So we've we've run the bank for our clients as a practical matter, and our clients have been diversifying their supply chains for the past eight years. So obviously there was the first round of Trump, although the tensions between the China and the US have been going on from before then. We know they carried on with Biden very very strongly. So diversifying supply chains. COVID actually through a different obviously through a different spanner in the works in
terms of security of supply. But we've also got many countries around the world who have developed outstanding manufacturing bases of their own. You think about a place like Vietnam or or increasing the India. So that's been ongoing and our job is to help them get from where they are to where they're going in a seamless and effective way. And I say, so far, that's that's going well.
So do you want to increase your presence in the US be there for your clients.
You know, we've got a good presence in the US. We've got a very good presence with our corporate clients and financial institutions US. Most of whom are operating back in Asian Middle East and Africa, which is which are our our home markets. But you know, it's it's a it's a big market in the US and lots of opportunity for us to engage in terms that makes sense for us and for them.
Your share price it's going in the in the right direction direction you want it. Yes, Is this a landmark point?
I don't know. I'm I think we've got a lot further to go. I mean, our share price has gone up because we're making more money, and you know, our earnings are improving. Earnings are improving because we're we've got some really good strategic positioning. Everything is everything's cross border, especially if there's an Asian Middle East, Africa anchor, and
then serving the affluent and the aspiring affluent. And this is kind of what's a little bit different about our our private banking and affluent banking effort is that you know, if you go into into India or even into Korea or Indonesia, we've got people who say, like, I'm not really rich yet, but I want to be rich and and and I want to find a way to manage my money so that I can grow and become wealthy and re hire comfortably and lead something to my children.
And those are the people that are attracted to center chargersion. And yet we're kind of we're on top of that one. It's going well.
So how much do you think your share price can rise by?
I wish I could answer that question. We're trading below book value. We're still trading blowbook value, which doesn't make any sense to me given the returns that we're generating.
But you know, okay, so what's the winter's target? You must have a target? And this was like you've reached where you wanted it to be.
So far, we're return on tangible approaching thirty percent? Is the actual guidance that we give in twenty twenty six. You know, we'll announce our all full year earnings in a few weeks, and you've seen the US banks have reported they be very strong. We're participating in the same markets. So I feel very good about our prospects and I see that playing out for some time, and I think if we make more money and if we do a good job for our shareholders, our share price will vote.
Okay, do you have new targets that you'll announce?
We will announce new targets when we announce new targets. But no, as you our friends, no doubt, I'll be in your studio and look talking about that in February.
Okay, talk to me a bit about your fit for Growth strategy? Right again? Are you there? Are you going to do more?
Like?
What's is this mission accomplished? For? No? Ends are like seventy five percent?
There no mission? No? So I Fit for Growth is so I've been in Center Charter for ten years now. For the first seven years, our expenses were basically ten billion dollars. It's flat. We had to pick up a round inflation, and because performance was improving, we told the market we're going to cap our expenses in twenty twenty six at twelve billion dollars. Right, and that's going to require us to do some some ongoing productivity, which we
do every year. In any case, Fit for Growth is a great opportunity to be a little bit more strategic about it and really change the way we do business. So far, so good.
Okay, what's one thing that you worry about in this year? Actually, in the next twelve months.
I worry about all sorts of things. I worry about the US economy overheating and getting an inflationary thrust which drags everything back. We all know that a higher US interst rates and wrong yost economy, meaning also a stronger dollar, which is tough for emerging markets. So you know, we've seen we were seeing the beginnings of meaningful capital inflow back into emerging markets. That's pulled back now. So I do worry about about that US economy overheating. Of course,
the geopolitical intentions are always are always with us. But you know, I think for the moment, it's maybe because we're a doubles, we can be hopeful that there's the prospect of peace in the Middle East, right there's we can imagine the prospect for peace in Europe, and but that would require an on topped between the US and China. That could also happen. So while we're fantasizing, let's let's ye.
But so it just it just feels like it could be very volatile year on all fronts.
It be a very volatile year. And I think that the economy is going through a transition. The US is clearly at full employment, but still with a very large budget deficit. So we'll see volatility and interest rates. We'll see volatility and therefore in form exchange rates.
Is that good for banks? Is that good?
It's very good for us, And it's good for us up until the point where it really hurts our clients. Once the clients are feeling pain, of course, and we feel some pain as well. And the volatility so far has been okay. I think his secular increase in US interest rates, or a failure to decrease, would begin to really hurt clients in the US and in the rest of the world.
A lot of banks are thinking about succession. How do you think about that?
I think about it all the time, and thankfully I've got a really good group of direct reports, you know, running our corporate bank, running our retail bank. We have a CFO that joined us a year ago, and any of those people could run the center charter. So if I fall off that edge tomorrow, the center charter will be fine. We also go through the ordinary course of chairman succession, and our chairman has he joined just after me, so he will hit his nine year point over the
course of this year. Thankfully, we've got deep, a deep bench on the board. We've got a deep bench in management. But it's the job of the chairman and the CEO to make sure that succession is provided for. I think we've done a pretty job.
Okay, Bill, thanks so much, and you're not falling anywhere. We'll make sure you get safely off the chair. With all Bill wagers, of course, the chief executive standard charger