UBS, Jonathan Thais, Bloomberg Marcus discussed on Bloomberg Daybreak: Europe
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Global news twenty four hours a day on and talk on Twitter, powered by more than twenty seven hundred journalists and analysts symbol, the one hundred and twenty countries. This is Bloomberg Marcus. Thank you very much. Indeed, leeann now, we're going to focus in on the. The European banking sector next in a surprise move. Santander has appointed Andrea or sell head of investment banking at UBS as its new CEO, the Spanish lend Disney boss made his reputation as a dealmaker who helped to build empires in the pre crash era. Joining us now is Jonathan Thais senior banks analyst at the Bloomberg intelligence. Thank you so much indeed for being here, Jonathan so he's known as a dealmaker will he make deals at Santan dare, I mean, the there's a lot of chatter around that issue as we speak moaning. I'm I think you will as you say tons where we set why game by deals, but if you look at Santander at the moment, it's not overly capitalizes for the lower end of the sectors replete with capital for details. And the thing they need to focus on continues to be cost cutting. So the one thing we know he did a good job at UBS was refocused the Bank and cut costs costs impair. And I think in terms of sort of a refocus if you look at what's Anton there is about a third of its businesses the revenues and bottom line, come from Brazil, Mexico. The UK is about a third of its balance sheet is the merging markets UK domestic Bank pretty much retail focused. It needs to build out its asset management wealth management local banks do fee income and again coming from UBS where he oversaw that shift. He should certainly bring a lot of the party there. But are we going to say huge term? I would be very surprised. Bloomberg intelligence put out, of course, some research. I just to quote directly international experience should also helped the banking group. Breed focus on its asset management business was which was what you just pointed out gain that's crucial scale after the failed JV with with Oni gr- credit. I mean, what kind of growth is really possible here. And how does that again compare to its peers? Well, I think I mean what's driving growth for them in the moment. It's still lat timeless Brazil, and they're pushing and payroll lending that sort of thing the UK abbey. National profit mainly alliance and LeicesteR portfolios is flat lining domestic Spain popula tidying up, but there's not a lot of guys apart from AM. So we do expect you're going to see more asset management deals. You're going to see more people swapping you've seen the Texas Credit Agricole of the biggest global asset management plays. I'm not something for a Bank of Santander side that definitely underweight there. So I wouldn't be surprised see piecemeal deals but to start with. It's all the by the cost because if you got a flat top line, and we know the credit conditions. Can't get any better. Supervisions can't get any lower. The one lever that management have is costs. And that's why we're talking about Emma in laws Kelly may because that's one of these easiest ways to take our large swathe of costs. What does this mean for UBS? Well, I think I mean if you look at what he's delivery Bs he's completely refocused the investment Bank. They are now more asset manager wealth manager IB which was not the case of few years ago. They're doing a good job on costs. And then now capital return story. So you can understand why he would want to move on. I guess I mean, the problem with the investment banking franchise and sizes you still at the mercy of the markets. We know three usually be no great Jamie with told us that we know the Americans continue to eat the Europeans lunch. And we know the Asia which everybody pivoted towards for wealth, and that's a management is incredibly competitive. So more of the same Phoebe S's well-capitalised the talking about buying bags. They've got limited growth they need to defend their private banking margin. Primary. I think more of his Amen, and you are sort of behest of the markets as much as you all your instructors Jonathan so great insights there. Thank you very much for stopping by Jonathan. He's a senior banks analyst at Bloomberg intelligence make out make sure you check out the more comprehensive research, not just put out Marcus absolutely straight ahead here on Bloomberg daybreak Europe. I will be speaking to James nightly. I g chief economist he's going to be joining us next. We'll talk about the Federal Reserve, of course, where warming up to what is expected to be a rate.