we've got john cryan, jes staley.brexit, dividends, negative rates, low rates, for him isn't about -- it is about getting clients to shift. there are warning flags in the numbers. net new money missed on the target. investment bank profitability down 48%. margins dropped ever so slightly. i think the challenges and the headwinds are the same for everybody. the others have to develop a plan. eye of thein the storm. aboutne: what did he say brexit? this is one of the concerns. it is difficult for ceo's to talk about because we haven't trigger article 50, but it is one thing that will really suffer in london. manus: absolutely. the critical issue is two-sided. one is for the business and one is for the client. passporting writes are critical. were there any opportunities? take a listen. >> there's always opportunity, but we need more clarity about what kind of form this brexit vote will take, and then people will be able to evaluate where there are opportunities. there are also challenges. foronly for the u.k., but the e

the stock is down some 30% or so since staley took over. more lines coming through. in 2017 noncore costs as 400 million to 500 million pounds. this is a company that split itself into. isporate and international one part of the business. the other part is barclays u.k. that was created to comply with the new british laws requiring the separation of consumer and investment banking businesses. also looking for the gain they've made on visa europe, commercial real estate. profit, 2.3 6 billion pounds. we will be speaking to the ceo of barclays, jes staley, about these numbers. industrye onto another where we are getting numbers coming through, the aviation sector. getting numbers from iag. they tell us operating profit is 550 million pounds for the second quarter. profit, 709perating million. the outlook, they say free cash flow in the 1.5 million euros range. 74% of their expected third-quarter revenue. a number of headaches. the brexit story posing a number of headaches for the sector. on the day after the brexit vote, we heard from the com

our colleagues in new york caught up with the berkeley ceo, jeff staley.ortant passport and rights into the eu. are investment banking franchise across europe is important to us and it's part of our core vision and strategy and we will continue to prosecute that vision and strategy. following the brexit vote we did one of the first euro bond issues was actually for a railroad company in germany. we did the first take ipo coming , privatization in italy. berkeley's presence in europe is important for berkeley but also for europe. i would add in this exit discussion, as recently as last month we had to completely reengineer the legal constitution of our business in the united states. had to execute our banking business in the u.s.. we're currently in the process of completely reengineering our banking presence in the united kingdom in order -- in order to meet the rules, we have to create an entirely new bank called barclays u.k.. isusting our legal construct something we are getting pretty practiced at. wrecks it will be another issue that requires to adjus

staley --ceo jeff staley, youo jes will hear from him later in the hour.nt and investment banking generated less profit, still, ubs earnings beat estimates. ermotti made it a priority. francine, you're sticking with ubs. francine: we are. the u.k.'sout decision to leave the eu, brexit, if you have a large presence in london, is not a good news. always there are opportunities, but we need more clarity about what kind of form take, and vote will then people will be able to evaluate where there are opportunities. there are also a lot of challenges, not only for the u.k., but for the entire european system. is thekey thing for you past sporting -- passporting rights. sergio: it is a risk in terms of finding other options of how to operate. we have a high degree of flexibility. we have strong local presence in europe, so we would be able to adapt and really apply resources should they be necessary. but the outcome could really be that the u.k. retains access to europe. francine: that is the ceo of ubs, sergio ermotti. by -- growing is hurting banks, trading is

you can't tell me that joe staley and elizabeth warren -- joe stiglitz and elizabeth warren cannot developat we can all agree on to bring that cash home. why can't that happen? if we have enough of a majority of the senate, in the house, we can do it. this is a no-brainer. enough there can be pressure from the american people to get a large fraction of republicans to support it. our current tax system encourages corporations to keep their money abroad, opens up a vast loophole through what is called transfer pricing system, that allows them not only to keep their money abroad, but to effectively escape taxation. not to pay their fair share. here we have the largest corporation, not only in america, but in the world. bigger than when gm was at its peak. and claiming that most of its profits originate from about a few 100 people working in ireland. is obviouslyt deficient and encourages american firms to keep jobs abroad, is wrong. get a consensus in america to get that changed. tom: you and i have talked one million times whether it is a fanciness of davos, or the grittiness of your work. y

and , just staley who runs our klees has said he plans to keep his people in london and it will remainancial hub. where is the bulk of the business going to go? i think the odds are out between frankfurt, paris and dublin, because dublin is english-speaking. i think the major parts are help by frank for an paris to get a lot of the clearing business for derivatives. dublin also has much lower taxes. bankers don't like to get ripped off i the man and you are realng at high taxes and difficulty hiring and firing people. but inthat is correct the end, you need a place where you can do euro settlement and theon will be out after brexit negotiations, so business has to move. them -- it is an open question. joe: we keep hearing this term about pass porting rights and how the u.k. would lose those. explain what that is talkfically and when you about the business london will lose, is it conceivable in the negotiations that they could create summary -- some relation where they keep those rights? guest: no. that is a nitty gritty legal thing. research shows -- you mentioned the five u.s. investm

those are the nikes dawn staley wore when she won the olympic medal in athens. >>> if you're a tennis player you can tell how she serves. >> reporter: there are shoes from around the world. >> these are egyptian burial sandals. chinese lotus shoes used in foot binding. victorian sandals considered quite naughty at the turn of the century. like these enormous shoes made for a woman with giantism. temple podiatry school is located at 8th and race streets. tours are wednesday and friday, by appointment only, but they are free. go to 6abc.com/loves the arts. for 6abc loves the artsfor 6abcm karen rogers. >> welcome back on this sunday, the day before the dnc, it is 12, 22, 90 degrees a little bit better out there today, a little less humidity, sky6 live hd taking a live look at cape may. get ready for tomorrow, it could feel like 107 or 108 degrees. the federal government is suing to stop two major health insurance mergers. the department of justice said the combination of human in a and signa would hurt competition. analysts say the companies are profitable without the mergers. >>> a bab

francine: jeff daly, the barclays ceo, jes staley. banks are trying to figure out their path forward. italian government has been given the go-ahead by the european commission to apply 150 billion euros in liquidity. ceocredit appointed a new after seeing its stock slump 68% this year. let's get morerom the head -- are italianhy banks so frail? mentioned, there is a big problem in terms of nonperforming loans. 1/6 of the credit extended is nonperforming. a huge amount. and, obviously, our legal system is slow. if you want to work out these huge piles of bad debt, it takes a lot of time. this is something that ecb is not tolerating. they are very worried. they are putting pressure to sell those bonds to international investors mainly. if you have the pressure from the regulator to sell quick, bids are very low. and so, we have to find the right balance between the approach of the ecb, which is sell the debt as quick as possible, and a decent price. otherwise, apart from the losses that italian banks have on the balance sheet, you will

here is staley talking about the health of european banks more widely. >> the european banker sectorif you look at the top 12 banks across europe, that's not healthy for the financial system, that's not healthy for the european economy. >> overall european banks are getting some surprise reprieve today ahead of stress test results, they are due at 4:00 p.m. eastern time. guys? >> all right, wilfred, thanks. other stocks to watch back here that we're looking at, in line quarter for ups, earning 1.43, matching revenue slightly above forecast. company says one significant drag on revenue growth came from lower surcharge rates on fuel. abbvie, 6 cents above wall street revenue and raised its full year guidance, results driven by 17% jump in sales of humira rheumatoid arthritis drug. >> let's talk a little politics. the political events are now behind us and debates are a few weeks away as we begin to ask which candidate is best for the u.s. economy. the business round table warns ceo members are concerned that neerng candidate shares views on trade. john engler, good morning to you. >> g

we have seen a lot of changes with jes staley coming on board and bill windsor at standard chartered.d has been really and i think that has positioned the u.k. banks really well. tom: christopher wheeler's breaking -- speaking with jon ferro yesterday, and john was saying it was pretty gloomy with the staff of the banks. intoe in the summer, we go autumn, and bonus time is february or whatever. will there be bodies next -- left standing next year to accept the bonuses? chris: a quote from the investment bank of ubs says, we quite -- cut enough. the problem with that is that things change. we probably could have said that two years ago, but there are not a lot of places for people to go. top playmakers can always find somewhere to go but the vast majority of people are sitting there happy they have a job and are hoping for an upturn in the markets. the we will talk about italian banks and overnight, all sorts of talk about how they will recapitalize. in our next hour, komal sri-kumar, a more cautious view on the american economy. futures up 10, this is bloomberg. ♪ francine: i am franc