♪ anna: good morning from bloomberg's european headquarters in the city of london. i am anna edwards. manus: i am manus cranny. this is "bloomberg daybreak: europe." anna: is the iran deal dead? emmanuel macron believes president trump will pull out of the deal. the ecb gives its policy decision later today. how confident is the central banks president in the euro economy? anna: facebook flies, tech rally, giants lee's by the markets. pleased by the

markets. ♪ manus: a warm welcome to "bloomberg daybreak: europe." we are live in dubai and london. single sales growth. be the estimates -- it bea the estimates. the dislocation have to do witht takeda and shire. risk is rising and global pharmaceutical markets. you are seeing the moody space stabilizing. roche is raising their outlook for 2018. we are waiting for the deutsche

bank numbers. let's get a little bit of tech for you. we have nokia first-quarter sales, 4.9 5 billion. you are seeing a little bit of a dip in nokia. operating profit comes in at 239 million. that is a big miss on the operating side of this business. top earning side is at the .owest end of the estimates they raised their primary outlook for the network's business. you have the networks, the operational side, they are all coming through. how are you doing on the banking? anna: we are not there on the banking yet. let's look at the car sector. ,irst-quarter operating profits 681 billion, below the estimate.

, q1 sales broadly in line with the estimates. the operating profit number, we have that as well. that comes in below estimates. china, ourrom reporters suggesting china might be about to drop the import taxes on foreign cars. that could be interesting for other foreign carmakers like bmw and toyota. waiting for that from the auto sector. we are waiting for numbers from the banking sector as well. i got the risk radar.

one sector that is doing nicely. samsung coming in better than estimated. i put in nasdaq futures, up zero point 6%. that has to do with the facebook story. they are outperforming other futures. this is the upside we are expecting to see. crude in there. up 0.6%. emmanuel macron is saying he does not have insider information that trump will step away from the iran deal. that is the reaction we are seeing on nymex crude. we will speak about banking today, and the central banking, and technology as well. onhave the cfo who is taking

more responsibility. staley,numbers from what can he tell us? his activist investor who want to shake things up. the barclays ceo. guy johnson is on the ground waiting for deutsche bank numbers. let's get a bloomberg first word news update with juliette saly. juliette: french president emmanuel macron has said he thinks his u.s. counterpart will withdraw from the a ron new -- from the iran nuclear accord. he has noron said insider information on donald trump's decision. >> we are defending this agreement.

president trump is not willing to support this agreement. the u.s. supreme court looks to uphold donald trump's travel ban as to keep justices had skeptical questions for a lawyer challenging the policy. it indefinitely bars people from iran, syria, libya, and yemen from entering the country. saidawyer from hawaii trump overstepped. china is considering cheaper rates on passenger cars as part 's plan to opennt up the automobile market. the country's cabinet is weighing proposals to reduce the

levy on imported cars. the current rate is 25%. they said an announcement could be made as soon as next month. china's finance minister did not respond. the u.k., brexit banking conservatives have held private talks with the prime minister to demand she sticks with her plan for a clean break from the european union. according to two people that all your with the situation, the customs union could come to a head next month with potential tory rebels to force the government to accept staying in the trade union. hasysian prime minister talked with bloomberg that he expects a better result in his country's election this weekend than his narrow victory five years ago. he discussed the challenge, as

well as scandals. he hopes to extend the ruling coalition. opposition, they do not have much in common. in their derisive comments for decades. i do not see how they can work together. juliette: global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top . here in asia, the regional benchmark index is flat as we see a battle between gains in tech players, led by samsung, and weakness in china and hong kong tech players.

japan's nikkei index looking good. we have seen yen weakness for a seventh consecutive session. there has been a sell down in indonesian markets. indonesia could lift interest rates to defend its currency. samsung coming through, topping estimates with numbers investors really like. it did echo what it's competitors warned of a slowdown . we are seeing weakness coming probeh, this on the fbi that sanctions were violated on iran. to the upside, health scope in australia is up by 14.3%.

manus: thank you very juliette saly in singapore. is keeping its policy rate unchanged when it makes its announcement today. mario draghi will face questions about the euro area growth, which seems to be losing momentum. some of the money managers are expecting from the ecb president. the plan for unwinding the plan for unwinding stimulus, markets have gotten ahead of themselves time and time again. we do not see this differently. >> will they be synthetic to the slowdown in the economy? the surprise now is if it kicks in as a hawk. >> we think the ecb remains easy in their stance. growth globally has a toad or peaked -- growth globally has plateaud or peaked. >> we will have a sustained

area. i do not think that is necessarily dependent on whether the fed goes three or four times. >> they like optionality end two-way risk in the market. that is likely look draghi is likely to do. keep the market on its toes. now, froming us blackrock, a great voice to have on ecb date. -- ecb day. have a preview of the ecb decision, and it talks about how journalists will ask how worried are you. how worried is a draghi? theet's not overstate slowdown and the european economy. it is relevant to keep in the frame where we started from, and where we are headed. if we look at recent economic whichhas growth that 2%

is clearly not sustainable in the long-term. if we get a drop down to one and a half percent -- down to 1.5%, the economy is slowing down. i think it is unclear that this forward-looking data is actually reflected in the economy. i do not share that view around a big slowdown in the european economy. dovish guy and they are noten reflecting economic fundamentals. the trajectory of inflation will be positive. growth seems above trend and has been for some time. there are issues in some countries. dovish,nd, he will be because he is a dovish guy.

i do not subscribe to a slowdown. expansionmonths of an , expansions -- economies do not roll over. talk to me about your world which is bonds. the spread between united states and germany, the two curves are flattening in the u.s. they are the highest since january and levels since the year 2000. duties two roads continue to diverge for you? scott: in many respects, the u.s. economic situation is a more positive one in terms of economic growth potential, but also the stimulus coming from tax cuts and fiscal spending. as 10-year rates rise, we expect the same dynamic in europe. in my mind, it will be a directional play, which is to say the u.s. rates will rise faster as the market sells off

more broadly. market is reacting to stronger economic fundamentals and the monetary policy reaction by the fed. that being said, and it is important that the market consensus is broad for little change for the next several months. the first tapering of the program to the end of qe, what i worry about in terms of looking at the bond market, that is priced in, in my opinion. market has sold about half of the treasury market, i would be careful about that spread. it is directional, but if we get an economic or policy deviation from. consensus or strong consensus, the spread is subject to tightening. anna: let's delve deeper into the euro zone economy. --ave this chart which shows

you can use this chart like any other chart -- it shows european economic sentiment. there is an argument that they are losing momentum. inflation is moving higher but at a gradual pace. this is not an inflationary pressure for the central bank. they are looking at monetary policy more generally. the expectations around growth moved up weekly into what were already strong hard numbers. the real economic numbers. we are seeing a coming together of expectations relative to the real economy. when we look at it, there has been a slowdown, again, we are slowing down from what is unsustainable economic growth in the eurozone to what is more

sustainable. anna: stabilizing but not slowing? scott: stabilizing above trend. if you are the ecb, you have to be forward-looking and suggest that with the oil price increase, with the unappointed situation, the general trend of inflation, the policy response is warranted. anna: scott thiel, deputy fixed income cfo, blackrock is staying with us. deutsche bank is saying actions to reshape the corporate investment bank, that is the big headline. measures, they ib front, back, and middle office costs. they are keeping their target for adjusting cost space in 2018 below 23 billion. good morning, guy.

asian, orf reorganize the renewed focus on the structure and strategy of this business, that seems to be the headline we are getting at the moment. guy: absolutely. two statements this morning. that bit first. this is where the focus will live when there is a new ceo coming into deutsche bank. he is trying to reshape the business. the detailsing coming through, deutsche bank saying it is taking a review of global equities. there is an expectation there'll be a big focus on what is happening in the united states. what kind of bank does deutsche bank want to become? what has been tried to does not seem to be working. it is moving fairly quickly, given the fact he has only been in the job for a short time, trying to reshape the business. maybe away from that story in

the united states, refocus toward corporate finance business rather than where they have been before. deutsche bank is saying it will scale back u.s. rates, and will review global equities. there are other areas they are looking at as well, but it looks b, thet will be the ci commercial investment bank that will bear the brunt of this. he is more of a retail focus guy. it will be investing to see if this goes down in the deutsche bank community, and how key profit areas, or lack of profit areas will retain staff. it does seem as if he is trying to move fairly quickly to make these changes. they are saying they will scale back u.s. rates and review global equities. happense will see what throughout the rest of the day.

the first quarter revenue coming in. the big red headline is scaling back u.s. rates and reviewing global equities. he's the man responsible for the numbers. that is when you begin to understand the challenge ahead. let's bring back our guest from blackrock. i want to take this conversation of banks, i don't want to drag you into the deutsche bank conversation itself, but is there any evidence of a change in how business is being done in the bond markets. we are to talk to jes staley shortly about his business. give me the perspective for you in terms of the bond markets as

a result of changing infrastructure at the top. regulation is the biggest issue these banks face in terms of their businesses. at the same time, what is happening in the bond market is the ability to generate money from bid offer spreads has come out, although the has been volatility in the last month or two. look at the spread between the bid and the offer, it is compressed because of pricing of electronic trading, much better information flow. if you couple that with additional regulation, the bread and butter a brokerage businesses which is buying low and selling high gets much harder. it has worked through the treasury market, through the gilt market, over the last several years. the european bond market, even

peripheral markets are liquid. as you are assessing your ability to generate money from a bit offer in a tighter regulatory environment is a challenge. weus: stay there -- anna: are getting more information on deutsche bank. we are getting two announcements today, one is around the scaling back of u.s. rates and reviewing global equities, a strategy conversation happening. we got first-quarter net revenue coming in at 6.9 8 billion. they say the merger is making progress as planned. they are saying the ecb changesd that there are . lingering on the net revenue line coming in lower than estimates. john cryan was the ceo

previously at this business, and he has been promising a greater level of delivery of topline growth for some time. that had been a long time coming. those of the details of the numbers coming through from deutsche bank, and we will be speaking to the cfo later on. let's get a bloomberg business flash from juliette saly. has surged inbook trade after topping estimates in the first quarter, despite a series of controversies, ad sales are at records and users keep logging on. it is beating forecasts, and the social network says it has 1.5 billion daily users, but the company's cfo says sweeping european privacy laws which come into effect could hit profits. twitter rallied also in late trade after being upgraded to a buy at ubs.

.he stock had fallen twitter beat estimates in the first quarter, but says it will be tough to replicate growth rates in the second half of the year. ubs says investors should look beyond the short-term and examined trends. -- and examined trends. income came in as sales rose 20%. orders might be slowing. it is not all good news, as samsung says it is seeing stagnant sales on its flagship smartphone. it is worried about profitability in the second quarter. as trade tensions with china surmount, the white house has yet to provide details, but there are concerns that the top economic adviser larry kudlow, a

majority of products in china. it is naturally concerned about any lasting disruption to trade. that is your bloomberg business flash. manus: thank you very much, juliette saly from singapore. more breaking headlines. theyche bank is saying will significantly reduce the workforce this year, scaling back u.s. rates and reviewing the global equities business. that is what guy johnson was telling us from frankfurt. the core equity ratio stands at 13.4%. this is the reality that he has to do something dramatic. , we cover the stories time and time again,

which is replicating what was done at ubs. and what was done at the other institutions. will be big job cuts to come. they will scale back activities. trading revenue, two point -- 2.45 billion. quite a lot of detail coming through from this business. there had been a review for months around the securities union. we should not be surprised we are getting so much detail. in termst the tumult of the leadership story at deutsche bank that we have seen of late, perhaps they had some expectation we would not so much detail today. deutsche bank has reduced the workforce. tliv is the place to go. back,he bank is scaling

but is committed to europe which has more attractive returns. it has the expectation of reducing its platform. this is drastic stuff. manus: it is. ,f you go back to the top line no time is being wasted to shake up things at the investment bank. europe is where they will be. this comes down to, who are you, what are you, where can you deliver return on equity? you can no longer be all things to all people in investment banking. they will focus on corporate financing in europe. they will leave the lions share of that business to the u.s. we will keep an eye on that. lots of banking news.

we will talk to barclays later on. up next, we will talk about the technology sector. the social media giant has been resilient, shares have soared. ♪ this wi-fi is fast.

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manus: live shot of tokyo, the emperors palace. you have a little bit of difference with the dollar-yen. the bank of japan tomorrow, the whether theet's see dollar takes a bit of a break from its roller coaster bid the. i think what the market wants to know, what we you do with

lithuania, they may be thinking about withdrawing. they have a new cfo, a new head of wealth management. they are one of denmark's biggest banks. $250 billion, when comparing it to credit suisse and ubs. bank.a bank -- danske we will have a conversation with the cfo shortly. good morning. annmarie: we have pressure in china. mix stocks in asia him of that mainland and hong kong are down. we see japan rising this morning. , samsung shares higher

topping estimates. that is offsetting the declines we are seeing in financials. earnings are a big part in asia as well as europe. we await the ecb decision. how can we talk about markets without discussing the oil market after french president emmanuel macron signaling and predicting that he does not think donald trump will get on board with his new plan. he thinks domestically he will have to do this, he will accept the iran nuclear deal. you can see the end of 2015 is when the obama administration lifted those sanctions, iran able to produce one million barrels. you have the end of 2016, saudi arabia coming off the market a bit, due to the opec non-opec deal. of will make up the shares about 200,000 barrels a day if trump does not sign these waivers? saudi allow the

market to get tighter? at some point any to worry about spurring a global recession. moving on, we have to talk about deutsche bank, the big stock of the day. first quarter revenue coming in below estimates. they say they are scaling back u.s. rates and reviewing global equities. . 1% of thewn more than moving average of its peers. it is deftly under pressure from its peers. you get the consensus rating five buys compared to sells.s -- 15 anna: thank you very much.

let's talk about what is going on in technology. facebook users keep logging on. the social network be estimates. their message for investors is clear, the business is healthy and growing as at sales hit records -- as ad sales hit records.

say, a lot of the scandal broke in this quarter. absolutely, they have been resilient and have nothing drop off. in those two weeks, the campaign started to get rolling. this quarter, that is a better sense of how things are developing. obviously, the scandal that we focused on on capitol hill in terms of data breaches, how are data was used, there are shining lights within the facebook family, and one is instagram. it is on my list of things to do. i should get more aggressive with instagram. it is the shining light in the story. alex: yes, absolutely. for a lot of years we did not know instagram was a part of facebook. it is generated by the user. they are seeing user growth accelerating. the ad revenue, they are pumping

that up as well. much, alexk you very webb with the latest on facebook. tliv on bloomberg. what should you be more worried about? , asn the bond market, or one of our editors has written, you should be frightened about that two-year yield. is a spike in short-term rates a warning signal for companies. be worried. what worries you more? the six-month paper, the one your paper, or the tenure paper? scott: worry is a strong word. they are telling you different things. it is important, a lot of conversations around the u.s. 10

the because it has breached 3% yield. focusing on the front end is for the first time in a long time, investors can enjoy a fixed income like return on the front end of the treasury market. you get 2.5% yield without much interest rate risk as a result of that monetary policy changes. what that means for investors outside a fixed income is critical. it has increased the risk free rate, the rate you can expect without taking risk has gone up from 50 basis points two years ago to 2.5%. as you look at other investments outside of that risk free investment, the hurdle rate has to be higher, which suggests you have to have a wider spread, you have to have a higher yield if you're going to buy a high-yield bond. investors have to shift their

expectations because that front end rate has gone up. it is important, not only for the bond market, for the broader capital markets. manus: you put it very much in perspective. it is what the rates are telling us. news.le more breaking scott has interrupted every moment of breaking news. operating income, 3.9 billion because spain is recovering. this is a critical point. spanish revenues are up. oiba is a nice rate. we will see how the stocks , the nine-month margin coming through. anna: the earnings story

interrupting the flow of our conversations this morning. let's get back to scott thiel on the subject of u.s. markets. manus was talking about the short end of two-year treasuries. dollar, as you look ahead, what do you assume for the dollar? it was under pressure for much of the last year, seems to change the last few weeks. anywhere, caught on the wrong side of this trade. thet: what is happening is increase in long-term rates in the u.s. has moved to be from what was gradual to more accelerated. in that environment, we are seeing that interest rate differential is starting to about theestors valuation of the dollar. it is not just against developing markets, but emerging markets. we have seen a cheapening of emerging-market currencies, or , and so what is

happening is investors are keying in on the differential. our view is long-term rates will find an equilibrium. the reason for that, important yield hungrynd it investors. investors in the long end of the market have been waiting a long time to buy yields north of 4%. if you add a corporate spread, even 5%. as rates begin to rise, and the economy, there is a harmonious relationship between the federal reserve increase in interest rates and the trajectory of the u.s. economy, and even with fiscal spending and tax spending. if that stays in balance and harmony, investors can take comfort in buying longer-term assets. fits and starts, day-to-day, week to week. the value of long and interest rate products will start to become attractive.

manus: thank you very much, scott thiel. the next time you are back i will make sure the corporate earnings are insight. scott is deputy fixed income cfo, blackrock. your patience is greatly appreciated. bank talk about the danske , first quarter income came in above market expectations. 4.9 billion. let's get to the cfo, he joins anna and i. you have been with us before. talking about your new wealth management had. you are focused on wealth management. i worry that everybody is focused on wealth management, one for people to go after. how does it look and wealth

management? much for thatery question. i started in my position, i start next week and i am excited about it. this my last quarter as the cfo of the bank. there is a reason why people are focusing on it. the trends we are seeing, 4% to 5% in the nordic region. it is an exciting place to be. this is an attractive market for all of us. anna: good morning to see you again. tell me about what is going danske bank.nsk is another part of the business allowing you to do better? jacob: it has been a strong start to the year. we are pleased with the numbers in q1. it is broad-based.

i would not say it is wealth management driving it. a bit weak on the trading side. all of us in q1, a strong q1 last year. good expense control. firing, the business is on almost all cylinders. i would not say it is a specific part of the bank that is driving it. customers are doing well, and that is reflected in how we are doing as well. manus: we has spent 45 minutes blackrock,thiel at the newsreel is about the breach of 3% in the united states. this, the top line of your report says a satisfactory start

to the year despite uncertainty in financial markets, what is the biggest uncertainty that defines that top line of your report this morning? jacob: i think that is a good question. the interest rate debate is a big debate at the moment. when we look at the beginning of the year, the uncertainty we , in january and february, we did not see a lot of volatility. discussions around the rate trajectory from here, and there was geopolitical uncertainty as well. havingk the markets are a rough time at the beginning of the year, so the rate trajectory of how theine a lot trading line will look in the coming quarters. anna: we talked about your focus on wealth management. expect moneydo you to grow? what are your expectations for how you can cling onto and grasp

more wealth management pie? how big can you get and how quickly? i think that is the big question. when we look at the demographics in that -- in the nordic region, no doubt when you look at the numbers across the board, there has been a trend of in sourcing at the largest institution investors. for us, we created wealth a couple of years ago as a separate unit, combining our management and private banking franchise, it was very much to create more of a powerhouse to grab a larger share in what is an expanding market. we are excited about the capabilities of the organization , it is a big organization and gives us the leverage in terms of being able to deliver solutions to our customers. it is an exciting market.

as you say, there are many players targeting it, but we feel we have an edge there. anna: thank you, jacob aarup-andersen, cfo, danske bank . francis emmanuel macron says he expects president trump to pull out of the iran nuclear accord. we will continue to get response to the deutsche bank story. this is bloomberg. ♪

♪ there has been a lot

second quarter. billionaire has been charged by french investigators as part of the probe into the possible use of bribes in pw african countries to obtain contracts from public officials. the charges stem from the foul play when he was awarded contracts. according to a company statement, he is presumed innocent as the investigation continues. that is your bloomberg business flash. much, thank you very juliette: --juliette saly in singapore. future ofis on the the investment bank. guy johnson is on the ground in frank for. we have had the red-hot headline through the morning. there will be job cuts and a review. there is a sign of entrenchment in the united states. these are big lines on this day from the new team. : they talk about no time to lose in fixing deutsche bank.

they are already making significant announcements. we are understanding the size and shape deutsche bank is ending four. it will become a european focused institution. , this willill be become a more boring bank. in somens stability ways. it will be a commercially focused bank going forward. they are wasting no time in stamping authority on this institution. new ceo does not come from the background of investment banking. back out of the rates market in the united states and focus on equity division as well. we will see a significant focus on what is happening in the business of the investment bank.

they will be cutting back there, releasing capital. they're looking to come out of some of these businesses where they are struggling. when you look at the numbers salesgenerated, equities and trading down 21%. you understand the reasoning behind their saying what they are saying. he is looking for the 23 billion cost target. that is the focus. that is going to mean significant job cuts, particularly focused on the cib, ib element of that. there will be cost cuts coming through. anna: many people might argue the numbers were not going to be the story, but they get the platform and argument for the changes they will put through in this business.

guy johnson in frankfurt, thank you very much. guy will be speaking to the management of deutsche bank later on this morning. you get further insight into that radical evolving story at deutsche bank later on. manus: one of those questions is a 60% drop in the debt revenue, one of the big issues for deutsche bank on part of the review. president emmanuel macron says he expects president trump to pull out of the iran nuclear accord, after what he to domestic reasons. macron spent much of the three-day visit in the u.s. encouraging the president to remain in the accord. trump has described the deal as insane, and has consistently hinted at dropping it. iran says it will walk away if necessary. east bring in our middle

editor. it does not sound as if the charm offensive, winking to the house of representatives and smiling has won over donald trump. >> that is the impression emmanuel macron got. we saw they were friendly. some are calling it a bromance. macron was tried to use that to steer donald trump away from walking out of this agreement. he came up with this idea, let's stick with the agreement and let's see if we can reach a separate agreement. when we heard these comments from emmanuel macron, he is quick to point out he has no inside information on this. this is what he thinks will

happen, and we will have to wait until early next month to find out. oil prices have reacted a little bit to this. they are outweighing the other dynamics around output and stockpiles in the united states. riad: yes, that is right. on for abeen going while. it is not the first time donald trump has criticized the agreement. it was part of his election campaign. macron has pointed out that it is not that donald trump is unpredictable, he has been consistently criticizing this agreement, saying he does want to walk away from it. he has refrained from doing that. macron is hinting that for electoral reasons, he might be ready this time to take that step. the markets have apprised some of this in. you might see a reaction when he actually does it. thank you so much.

anna and myself jes staley. on bloomberg. ♪ welcome to the xfinity store.

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this is "bloomberg daybreak: europe." anna: i am anna edwards. manus: there is not a moment to lose in picking deutsche bank as the lender. is the rent deal dad? and -- rent deal dead? the ecb gives its policy decision later today. how confident is the central bank in the euro area economy?

♪ manus: it is europe's biggest oil company, delivering its numbers, the cash feast continues, cash flow comes in at $9.4 billion. market penciled in $.63, that is a beat. the dividend price share seven cents per share. and 5.3 2 billion, the market 5.2.led in over if you think about the performance of this company 23% up versus excellent -- exxon. and a host of other names in that area. we're looking at a post record in terms of cash flow. this company to vested assets in the u.k. and canadian fans and they are changing, ubs says you

want to keep and i on the downstream. market penciled in 5.2 billion. we have another big one to go at liquefied national asked. sales of lng rose 17%. barclays numbers heading, looks to be in line with estimates. if you look at the net operating income levels, that number coming in at 5.0 7 billion. the companyine with compiled estimate or a touch above. the 5.03 the company provided as they estimate. -- the estimate. revenue 2.8 billion pounds versus last year where it was 2.78. looks to be in the same ballpark as last year and the pretax which is.1 8 billion above the 790 million they

reported last time. they look forward to returning increasing amounts of capital. this was a message we got from management at barclays last time around, last quarter and this is something they are talking about. see i.b. revenue 2.8 billion versus 2.87. let's speak to jes staley. morning. good to have you on the program. talk to me about the cib business, is this good enough? jes: the profits before tax were but alsoar-over-year the return on tangible equities in our core for it investment bank was 13%, well above our costa capital. one of the most profitable quarters.

remain on your intention to pay the dividend, that will be a relief to shareholders. the kind of language we are hearing from your peer group, not a moment to lose for deutsche bank. urgencyee that sense of when you look around the business or how do you feel in terms of the achievement of change thus far in the business? a sense ofe felt urgency for the last two years and the milestone was closing the non-core bank of barclays where we reduced the risk weighted assets and investment banks by 95 billion pounds. the restructuring is over. the next big hurdle which we completed in the first quarter was putting the historical legacy and conduct issues and litigation issues behind us. it was an important milestone that we settled with respect to mortgage backed securities. issuestorical legacy

around libor and foreign exchange and commodities and residential mortgages we have had that all behind us. we can focus on generating excess returns and delivering those to our shareholders and part of that was doubling the dividend for 2018. , is: restructuring is over that a view that is shared by all of your shareholders? bramson has a stake in barclays, do you know what he wants? no, i have not heard yet what mr. branson wants. we have a meeting coming up shortly. our shareholders like the fact that we completed the restructuring of the bank. we are strategically where we want to be with the sale of the control of our position in africa being a major strategic move. doubling the dividend

shareholders and producing one of the most profitable quarters in the history of the bank in the first quarter, generating a dental -- double digit return for the group well above our costa capital. that is a sign that we are past the restructuring and back to a more normalized business operating environment for barclays. manus: the whole world will wait and see what comes out of those conversations and what news we can break out of that. a board member said it is good to listen to activists because they sometimes have a point. what is your read line as you go into that meeting with this investor, what are you prepared to say? is that your redline, defending the ib? jes: we do engage with our major shareholders and we look forward

to engaging with him. we appreciate the interest in barclays. we have a strategy we have outlined in march of 2016, it is executing well, the profitability this quarter underlines that. all of our major businesses, consumer, credit cards, the private, corporate, or investment bank generated double-digit returns in the first quarter. the numbers speak for themselves that we will engage with major shareholders and we look forward to a robust conversation. you have any if dates in mind for that conversation. ask -- answer about returning amounts of capital. j has it evolved or is it much the same? wantedt we said is we double dividend and we said we have to get the main conduct and litigation issues behind us and everyone knew the main

litigation issue we had was the department of justice around mortgage-backed securities that were sold in 2005 and 2000 seven. that was settled. we settled for 1.4 billion pounds which is in line with how the u.s. banks settled which is what we were seeking to do. now that the department of justice issue is behind us, and also we took a reserve from ppi so ppi is behind us now. we can be focused on generating double-digit returns and overtime for the first time in 20 years begin to consider returning capital to shareholders and -- through things like stock buybacks. manus: that is going to tip the investor. you think you could be a -- do a stock i back before the end of the year? not give a date to that. we have some things we want to do with our balance sheet such legacy with some of the

preferred issues that were issued during the height of the financial crisis that carry a high interest rate that we are able to call. there is some balance sheet issues we want to do. at the right time we will look beginning to return excess capital through buybacks, we will not good a time frame on that yet. manus: you said you have turned the corner, you're coming out the other side, i love a little art of a conversation about v but ubs tripled their var. how much more extra risk have you taken, have you up to the limits, anything like tripling the risk of the equity unit you sell it ubs? revenue, we were up in

dollar terms toying 1% in the first quarter, that is more than double the average of the u.s. investment banks and more than what the euro banks are. we gained market share in the markets business and all of those businesses, we are returning, generating above the cost of capital. we did it not by increasing our risk, we have not increased risk weighted assets at all, we reallocated risks. it is by the degree of our client flow, we have a new management team that has been working for about nine months and they are doing a great job. we invested quite a bit in technology, that is having a big impact in the flow. it is much more the volume of activity that is going to her -- our opposed to any desk as opposed to any market increase in var. anna: you're focused on your results today which is

understandable. we heard from deutsche bank a big review of their business going on at the moment. if we see deutsche bank andenching does that certain parts of the u.s. business, does that fight an opportunity? no, we will focus on their strategy we outlined to be a transatlantic consumer and wholesale bank. consumer business is critically important. what we are doing with card in the u.s. and digitization. the wholesale businesses are important, very profitable in the first quarter. the want to stay focused on our customers and clients and we are comfortable with them strategy the bank has today. we have been talking about 2% rates, 3%, this vocation for equity markets, you're the ceo of a pretty major bank. give us your take, please. how much time do you spend on

your bloomberg looking at when year money in the u.s., two-year money and 10 year money, what is it telling you? economicave strong growth globally. that is translated into robust equity markets. what we have been saying for the last number of months is we have the strong economic growth with a monetary policy which is more normalized. getting interest rates back to the levels we are seeing today, the 10-year north of 3% the market believes monetary policy will get to a more normalized level reflecting the economic growth we have. it is always challenging for markets when you have an adjustment or a reversal that we currently see in the bond market. we think this is very healthy. get interest rates back to more normalized levels, it will be

interesting to see the impact on the dollar. we follow markets on bloomberg and the activity we have seen in the last couple of months around interest rates is positive. anna: a bit of volatility helps perhaps. when we look at the quarter we are in, and compare it to the quarter you reported, would it get to what you reported previously because of lower volatility? february gave some opportunities to some parts of your business. jes: we had a good first quarter. we will spend a few days describing what happened for us in the first quarter. yous: she is trying to get to make one of those statements. we have to try. let's talk about the u.k.

backy seems to be stepping and rhetoric in terms of the desire to go ahead. with rate hikes. how strong is the u.k. business for you? weak, how strong is anna, how strong is the high street? an eye on thehas economic impact of the uncertainty that arises because of brexit negotiations. the u.k. economy has done quite well over the last couple of years. we look at the impairment rates in our unsecured consumer credit portfolio and they seem to be holding up well. we look at the credit quality of our corporate book and that seems to be in reasonably good shape. spending is in reasonably good shape. while there are some signs

whether it is consumer confidence, whether it is certain spending around the retail sector, there are some things that give us a little bit of concern and we are, we want to be prudent and how we manage our risk in the u.k.. we are still open for business. there are a lot of positive things going on in the u.k. right now. we are very constructive still. it is a tough call. as you come out of this time of monetary easing that the u.s. is going through and now the u.k. is going through, the market generally believes there will be a base rate rise in may or june. it will be an interesting call by the bank of england and by governor carmi -- carney. recently in terms of u.k. regulation and authorities, you recently pra aboutews from the

the on covering of a whistleblower. what is your initial reaction to what we have heard, where you relieved at the extent of their verdict or disappointed? fca and pra did a good investigation about the letters. focused on they bank and that is what we will continue to do. you very much, a full and frank conversation from you this morning. that sense of urgency for bankers is getting harder. thank you, jes staley from barclays. we have a fewnks, lines coming through from nomura. you have fourth-quarter income

at 22.7 billion yen versus ¥61.3 billion, that was a year ago but the fourth quarter revenue, 511.2 billion. jes, he wouldg to not commit on when they would go for thereby back. buyback. anna: you mentioned the numbers from one big oil player this morning. let's talk about bp. we have news on the chairmanship. succeedinghelga lund carl sandberg. lund will stand down from the other board which is where he is operating. he will be appointed as

2019.an january 1, he is also chair of novo nordisk. things evolving in the oil industry. manus: more banking. manus:you talk about evolution, the sense of harry and hurry. the ceo says he is leading to whichback virtues upon deutsche bank has been built. that, frank conley is our senior editor on the floor. let's get back to guy johnson. the bank is seeking to reduce its workforce this year, we need better business and earnings, this plays back to what you

hinted at which is going back to b for banking.d to staley reluctant [indiscernible] two years into the program. guy: the new ceo has been speaking on the call. laying out that there is no time to waste to get this in action taken at deutsche bank, the significant retracement we will see from the u.s. from asia or a refocus on asia, a focus on commercial tanking. significant cost cuts and job losses. when this tumultuous phase came to a conclusion, there was this expectations a strategy would

not change, he would accelerate the strategy that existed. i wonder that is still the case. you can argue that some of these changes may have taken place previous. there will focus on the business and generate a profit. the cost story is where i am hearing loud and clear. he is firmly focused on getting costs down at deutsche bank and 22 billion seems to be a firm focus for the management team that is being put together. a significant reduction in workforce, that is ringing around the investment banking industry this morning out and clear. anna: you have to wonder how much of this was part of clients plan.-- cryan's the review has been underway for

some time. they said they are focusing on cost cutting, taking staff out and focus on delivering the management across this bank. we're looking for size and scope on how bigs monfils changes could be. guy: follow that by listening in. you can get analysis from all of that, tliv on bloomberg. the changes will be large. as he is talking about the delivering and management protests, they will reduce the units, many had cohead's and they will go back to single heads, that will take out a layer of management and cost. a reallyis this is

excel a ration for deutsche bank, they want to make some big changes here. they are beginning to understand what kind of bank they want to be and it is not barclays, not up bank with a global footprint and a big investment banking footprint. it is more of a e&p pair above with a focus on the commercial side. thes -- if you look at numbers and break them down, you can see their trading disappointment that deutsche bank has generated. you can see that in fixed income and the equities business. in some ways we would have got to this point at some point, this is an acceleration of what we were going to get to at deutsche bank. anna: thank you, guy johnson in frankfurt speaking

great to have you with us as we digest the flurry of earnings. retrenchment is the message and it raises questions about the role of european banks and investment banking, doesn't it? guest: it is fascinating, we get -- have this regulatory environment that is making it hard to make as much money as they have made in the past and to me it is not surprising that we are seeing a conch -- company like deutsche bank refocusing on its core activities. the change of ceo has accelerated that process and i am sure they are looking at what was outlined prior to that. there is a chance to accelerate as we go through the rest of 2018. manus: when it comes to the banks, the u.s. banks have -- a banksorning to you -- the have us spending opportunity which is a higher rate. is deutsche bank's lagging here. ,s you look at banks in europe

how do you want to think about it, do you think the offer is in america and the laggards are in europe or how do you look at the landscape? chris: if you look at the u.s. banks' performance that most of them have reported, that has been stronger than what we are ieing from deutsche bank and had no choice -- chance to go through the barclays results in detail. what they are suggesting is that interest rate differential you theribed is giving opportunity for the u.s. banks and the activities of borrowing and lending which is what banks want to do on a day-to-day basis. this has been leading the conversation around earnings. we look at what is going on in asia or we look back to what is

happening in the u.s. and technology has been something that architect been worrying about. i pulled up the chart. this does not reflect her -- numbers.he after hours they clearly beat estimates on a number of levels and reassured markets. are you concerned about issues for the sector? chris: that is what the share price is telling you, results have been pretty good if you look across the technology space whether it is alphabet, twitter and now facebook last night manifestly beating consensus earnings. there was a bit of a push up in the facebook price hike that nowhere near where they were at their peak, we are a long way short of that with the revelations that came out. the problem is expectations and technology are so high that they need to not just be testaments, they need to -- beat estimates, they need to smash estimates.

anna: thank you for joining us. the programbrings to a close. worth underscoring the announcements, deutsche bank reducing investment banking on a headcount cuts, are going to be one of the messages it has heard -- that will be heard by those working at deutsche bank. lose. there is no time to let's see how the stock opens. we have the interview, it is with the deutsche bank ceo -- a cfo joining guy johnson. guy is on the ground, everything you need to know throughout the day is right here on bloomberg. how do you change a bank? this is almost deja vu. i am off for the weekend. anna: have a good weekend.

we were told the transformation is done at barclays. we will see how the share price opens as well. this is bloomberg. ♪ retail.

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bloomberg markets, the european open. i am at miller in berlin aside guy johnson and frank for it. guy: i am here covering deutsche bank. the new ceo is not wasting time in cutting costs and refocusing the bank. i will speak to the cfo later in the day. lower,e bank is called cash trade less than 30 minutes away. ♪ matt: a stitch in time. deutsche