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CNBC Transcript: Bill Winters, CEO, Standard Chartered Bank

Below is the transcript of an interview with Bill Winters, CEO, Standard Chartered Bank. The interview will play out in CNBC's latest episode of Managing Asia on 16 November 2018, 6.30PM SG/HK (in APAC) and 11.00PM BST time (in EMEA). If you choose to use anything, please attribute to CNBC and Christine Tan.

Christine Tan(Christine): Bill, you appointed to be CEO of Standard Chartered in 2015. It's been more than three years. How does it feel to be parachuted from outside to revive the fortunes of the British lender?

Bill Winters(Bill): It feels pretty good. I knew what I was getting into my assessment at the time was that this was a really good strong bank with a fantastic client franchise with good people, with a good reputation, with good product and services that had made a bunch of mistakes. And that's exactly what we found. We made some mistakes and none of them terminal or I would stop short of saying catastrophic because I think we made some pretty big mistakes, but we've been able to clean that up pretty quickly, worked through it. We're back to good solid earnings growth. We know we have a lot more to go. But yeah, the whole parachute thing is an interesting phenomenon.

Christine: At the same time as CEO you've had to deal with all these issues around increasing regulation not to mention Iran sanctions probe, have these external challenges made your job a lot tougher?

Bill: Well, it was always going to be that way. So the Iran sanctions probe that brought anti-money laundering and sanctions compliance challenges that we had were very well flagged before I arrived. I think our team has done a fantastic job of steadily improving and fixing the things that were inadequate before 2012. Thankfully, that has been recognized by the various commentaries that have come from the Department of Justice or the DFS. We know that it's ongoing, so much, much more work to do there. But that was a well-flagged issue. The regulation, I'm very familiar with in part of my time between my last banking job and Standard Chartered. I worked pretty actively on the regulatory side of the equation and had a good understanding of how challenging the regulatory environment was, and I can confirm now having lived it for three and half years that it is! This is a cost of doing business. They are the obligations that come along with being a bank, and fundamentally, I believe being a bank is still a good thing. At some point, we'll talk about financial technology and e-commerce platforms and all of that, and is it really good to be a bank anymore? I'm quite sure that the answer is yes. But with that right to take deposits and engage with payment systems and the like come obligations around regulation which you just simply have to meet.

Christine: Your three-year turnaround plan involves getting out of risky businesses and cutting your exposure to bad loans. Are you happy with the progress you're making to improve the credit quality of the bank?

Bill: Yeah. The credit quality of the bank is not an issue at all right now. So when I first arrived, there were big questions about whether we had a big hole in our balance sheet and whether their credit disciplines were up to snuff. We took some very aggressive action right up front. We identified a bunch of assets to be sold. We worked out a bunch of others. We significantly tightened our risk underwriting standards, and the result has been a dramatic decrease in all of the things that plagued us as recently as three years ago. I think we're in very, very good shape in terms of credit quality which is probably just in time because obviously there are some bumpy waters in the macro economy that we're navigating right now, and I feel very good about our position and our ability to withstand those bumps.

Christine: You've made some progress but your target of 8 percent return on equity still remains pretty elusive.

Bill: Not too elusive. It's a bit elusive.

Christine: Are you frustrated that it's taking such a long time to get there?

Bill: No. Although I'm always frustrated because I know we can do better. But what we said back in 2015 was that by the end of 2018, we're not quite there yet, that in any particular scenario which we laid out, we would hit an 8 percent ROE. Unfortunately, that macroeconomic scenario hasn't quite played out. So, interest rates have not risen as quickly as we anticipated. If we remember back in 2016, the RMB went through its devaluation, the revaluation has obviously had a subsequent devaluation.

Christine: These are things you can't control.

Bill: These are the things... we fight them very clearly upfront. We can't control these things. We're going to plan for an environment which looks something like this. If things are a little bit better, we'll get there faster. If things are a little bit worse, we'll get there slower. So, we were at around 6 percent return on equity in the first part of this year. Obviously, we still have the fourth quarter to report, we're not going to talk about that but we're clearly on track not just to get to 8 percent but 8 percent and beyond. 8 percent isn't our end state. Our end state is to clear our cost of capital and then some. We will talk in February about the next generation of steps that we're taking to make sure that the really good progress that we've made over the past three years extends for the next several years.

Christine: Let's talk about that next generation of steps. A lot of people are calling it a so-called refreshed strategy. What would that strategy entail? More job cuts, more job layoffs?

Bill: Well first of all, we set out a pretty dramatic shift in three years ago. It was exactly three years ago. So, it feels natural to say at the end of three years, when we've accomplished virtually everything that we said we were going to do back three years ago, to say, "Okay. Well, what's next?" Of course, we've given guidance to the market in the meantime. Last year, we indicated that we thought that we could grow our top line by 5 to 7 percent. We indicated that we thought we could keep our costs at around the level of inflation, which obviously was going to improve our operating margin et cetera et cetera; that we could do that with less capital intensity than our existing business. So these are the things that financially and mathematically will drive an improved return. We've talked specifically about what we would do in our corporate business and in our retail business in very detailed sessions that we had with investors and obviously, our public. As we get to February, I'm not going to forecast everything that we'll cover there but we'll be talking in more detail about the markets that we focus on. We'll be talking about how we manage our expense base, and we'll be talking about how the very substantial progress we've made in digitizing our bank plays out to the next level, that we'll be able to give a status report on the degree to which we are digitizing our retail business. So we're super excited right now to be live in five markets in Africa with a digital bank that we initially rolled out in Cote d'Ivoire where we have no retail presence at all, or we had none previously. We are now live in testing in Ghana, Tanzania, Uganda and Kenya. This is very exciting, but it's obviously just the beginning as well. So, to be updating on how that transforms the nature of our financials as we have an increasingly digital business that are less dependent on some of the traditional and more expensive means of delivering our product and services to retail clients.

Christine Tan: Will this new strategy of yours involve more cost cuts?

Bill: We've cut almost $ 3 billion of expenses in the last three years. This is part and parcel of the ongoing process of improving the returns of a bank. Now we've also increased our investments by $3 billion. So, our aggregate expense has been basically flat over three years. So, we will continuously be becoming more efficient and more productive and everything that we do which will involve cost cuts continuously. But we're also continuing to step up our investments.

Christine: This refresh strategy will definitely bring you closer beyond the 8 percent target that you're talking about?

Bill: That's the plan. Well, I'm very confident. And of course the 8 percent was never the end state. What we initially said was that we would like to be at 8 percent by 2018 and 10 percent by 2020.

Christine: That's really ambitious.

Bill: Well, we can have debates about what our actual cost of capital is but 10 percent is the right zip code to be in, in terms of generating returns that are sustainably above our cost of capital which is what this franchise should be delivering.

Christine: A lot of analysts have been calling for you to exit your non-performing parts of your retail asset finance business as well as your 45 percent stake in Indonesia's PT Bank Permata, are these areas you are looking to exit?

Bill: We flagged very clearly in each of those cases that we would do regular review. So, Permata has had a tough run. So when I think about that process that Standard Chartered went through, we came in in 2015, did a pretty thorough assessment of the challenges that we faced with the quality of the asset portfolio, took action and announced in November of 2015, and raised capital to make sure that we stayed in a very strong position. We only had the same sort of full realization of the magnitude of the challenge we had with Permata a year later. By virtue of the nature of the governance of having a 45 percent stake rather than controlling it outright, we spent the last year and a half aggressively cleaning up that bank. The management team there has done a fantastic job and demonstrated that it's a good bank, a good profitable bank. But when you go through a change like that, you want to take some time and say, "Well, what is that bank now?" Now that we've gone through the cleanup process, is that the same bank that we thought it was three years ago or four years ago? And we're working very closely with Astra right now. Astra is our partner in Permata to understand what the best course of action for that bank is respectively.

Christine: So, what are the options you're considering for Permata?

Bill: Buy, sell or hold.

Christine: That's pretty much doing everything.

Bill: Those are the options. Buy, sell or hold. And if we buy, we buy. If we sell, we sell. And then if we hold, we have a plan for how we can continue to make that a good bank. But that's something we're working on together with Astra. And I think it's well-flagged, and I don't know whether we'll have anything concrete to say about that in February because of course, it is a joint effort with us with our partners. But then the other things you mentioned, I think we're continuously assessing our countries that are not on track to earn a good, sustainable, profitable return in excess of cost of capital. We have some small ones which we haven't hesitated to either restructure or exit over the past three years. We have some bigger ones where the really good news is we've made great progress. So when I look at a market like Korea which was the biggest drag on our returns three years ago, it's now solidly accretive to our overall performance. It's earning about $200 million of operating profit. This is a great turnaround from a substantial loss before. China also, where parts of that business, in particular retail, were really challenged two years ago, is back to profit. India, which has been challenged, is back to profit. So, this is good progress, but none of those markets are yet accretive to our overall returns

Christine: And when do you expect them to be?

Bill: Exactly the kind of work that we're doing and that we will be prepared to share with the market in February. So, that we can get some clear guidance whether we think the existing strategy, as it's playing out right now, will get us there on a timely basis, or whether we actually need to do something different. And if we conclude that we need to do something different, we'll talk about what that is.

Christine: Let's talk about growth because like many western banks, Standard Chartered is seizing opportunities arising from China's Belt and Road Initiative. Can you give us a sort of progress report of the sort of financial deals that are linked to the Belt and Road Initiative?

Bill: There's a fantastic flow of capital clearly from China through the Belt and Road Initiative, but also from other markets. So, most specifically in this region from Korea and Japan into the developing world and the capital is also flowing into infrastructure projects, particularly into power and into things that are facilitating global trade. So, we work together with contractors or builders in these countries with export credit agencies, with multi laterals like the AIIB or the AIDB or the African Development Bank or the World Bank and the IFC. We have very, very active engagements with all of these in addition to credit insurers and others, to get the capital from where it's looking for a return. While there's some sort of political or strategic objective, as clearly there is with the Belt and Road initiative, in some cases, we're getting capital into where it's desperately needed. And we have to do that in a way where the highest standards, not just financing standards, but also ethical standards are being met. It's been very interesting to watch how the Belt and Road Initiative has evolved over the past five or six years, from being one that was dominated by state-to-state flows where the deals tended to be a little bit more opaque and had a little bit less commercial rigor than what's been increasingly happening which is deals that have a strong element of market support. And so, the market doesn't just bring money, it also brings governance and standards, testing of economic viability. And obviously, banks like Standard Chartered or others or capital markets investors have perfectly high ethical standards. Not to mention their focus on sustainability and other things that are so critical to our broad stakeholders. So, I hold that very high hope for the ongoing growth in the developing world that will come from this appropriate flow of capital from the world's savers into the world's creditors.

Christine: Let's talk about the Shanghai-London Connect. How do you see it benefitting Standard Chartered?

Bill: I think we have to look at the Shanghai-London connect in the same way that we're looking at China opening more broadly. So China, I think inexorably, is opening up, even despite the trade tensions that we're seeing with the U.S. It's not a straight line. And we've seen that they've opened and then pulled a little bit back, opened and pulled it back. But clearly, China intends to be part of the global economy. Connecting the Shanghai capital market to the London capital Market is one further important piece of that. We play a very active role in Hong Kong-Shanghai Connect and hope to play an important role in the London counterpart, both supporting our investors, our European or other investors, who are looking to invest into China or vice versa - the underlying operational support that that kind of an infrastructure needs, whether it's custody or funds moving or payments. So this is part of our core strategy of positioning ourselves around the ongoing opening up of China where we've been extremely successful - a leading bank in the international investment into the Chinese corporate bond market. We were the first bank to get a local fund custody license in China, in addition to being the leading cross-border payments bank, these are the critical elements of the opening up of China, and Standard Chartered is featuring very prominently in all of them.

Christine: Standard Chartered generates a lot of its revenues and profits from emerging markets, a big chunk of that comes from financing trade deals in Asia, Africa and the rest of the world. Are you worried about this escalating trade war between the US and China?

Bill: We are. We are. What we've called out publicly is that we have very little exposure to trade between the United States and China specifically. It's a couple of percent of our income. If the trade war is limited to the U.S. and China for us, it won't be a huge deal. I think there will be an implication for global growth because that inevitably will have some impact on Chinese growth and some impact on U.S. growth. There will be a material reconfiguring of supply chains. Now, how that supply chain reconfiguring plays out for us is an interesting question. To the extent that Chinese goods or Chinese value added in their production process moved to other markets where we're very active which is what's likely to happen: Vietnam for some of the intermediate goods, Korea for some of the higher spec goods, Indonesia, Thailand, all these countries will benefit from this migration and that's going to be a good thing for us. To the extent that intra-Asian trade growth, which we think is likely, in fact I think it's inevitable, in any case, that's a good thing for us because the bulk of our trade business is within our markets, between Asia, the Middle East and Africa, between the countries there. So in the medium to long term, and I'm not going to say that a trade war is a good thing for Standard Chartered because it's not a good thing for the world, but in the medium to long term, we'll be fine, maybe even better off financially.

Christine: So net-net, no impact on your bottom line in the short term?

Bill: In the short term, no. We've not experienced anything yet. In the end, I think if the trade war escalates, we could expect a slowdown in economic growth which would impact us in various first order and second order ways. I think we could expect disruptions in supply chains. You'd expect some credit problems with people who have been disrupted. We could expect a reaction from the Chinese which could be supportive for our business in some ways, to the extent that they might impede capital flows and in other ways that could be hurtful to our business. So it's a mixed bag, and clearly that the best outcome for the world is for the U.S. and China to resolve their differences. And I believe that there is a willingness on both sides to do that, and we'll see whether they can actually close the gap.

Christine: As CEO of one of the world's largest trade finance banks with a lot of business in Asia Africa and the Middle East, where do you see global growth?

Bill: Well, we see global growth in our markets across Asia. Of course, growth is moderating as the economies become much bigger. But still, the bulk of the world's global growth viewed over any reasonable period of time will come from Asia and South Asia. The Middle East and Africa had been more volatile, but we also see those as real growth drivers over the medium to long term. Right now, the U.S. is growing very healthily and probably a bit above potential. The U.S. will continue to be an important growth driver. A big part of our client growth has been with American clients who operate in the rest of the world, operate in the rest of our markets. We'd like to continue to grow with that and to grow with those American companies.

Christine: Is there anything out there that worries you?

Bill: There are tons that worry me.

Christine: Like what?

Bill: Well, the trade war that you just mentioned could escalate to the extent that extends beyond the U.S. and China. So the U.S. either targeting other Asian countries, obviously there there's been good progress with Korea, good progress with Europe, good progress with Japan, but until that's completely settled, there's still some risks. And there's a risk that other populist tendencies in other parts of the world reignite parts of the trade war. So far, Europe's been very responsible, but we know that there are political tensions in Europe as well. That could creep in and undermine some of the really good progress that we've made with global trade over the past several years. I'm feeling a little bit better about the geopolitical hotspots. I mean, it's obviously helpful that the turmoil in the Korean peninsula is receding, although we fully recognize that the issues aren't resolved there. But I was with our board in Seoul last week. People are very positive about the inevitably long but nevertheless good process of reconciliation on the peninsula. The Middle East also seems to be finding some sort of equilibrium. I think we'd all breathe an enormous sigh of relief if the humanitarian disaster in Yemen was resolved. That clearly is part of a broader regional conflict that I think the world has an opportunity to address right now. So those things are we're feeling better about it. But I fully recognize that we're also in the late stage of what's been a very long recovery led by the U.S. and the idea that we could have an economic slowdown driven by some sort of recessionary pressures in the U.S. or Europe is real. We have to recognize that. I suspect that in my time at Standard Chartered, we will have a recession. It doesn't feel like it's today, but that's something to do to keep in the back of our minds after 10 years of reasonably steady growth.

Christine: When you say during your time at Standard Chartered, there will be a recession, what sort of timeframe are you looking at?

Bill: It's going to be over the next several years. It's almost impossible that we wouldn't have some sort of a slowdown.

Christine: How do you prepare for something like that?

Bill: You start with having a very strong capital position, which we do. We start by having a very good set of credit underwriting and credit management centers, which we have introduced and are maintaining. We like to have a business that's diversified, but we don't diversify for the sake of diversity. The fact is, we have a business that's very dispersed so we're not too exposed to any one area of economic vulnerability. And you try to have a client franchise where the clients will stick with you, and in fact come to you when they're having a tough time themselves. And I think those are the investments that we're making.

Christine: So this is the message you're sending out to all your senior managers to absolutely that something is coming, and please be prepared, and watch out for the signs?

Bill: Yeah. I haven't had to send a message out because the cleanup work that we've done to get ourselves so fully fit, proper and in fighting shape has been the right thing to do to prepare for a more difficult time as well.

Christine: Standard Chartered is making this big shift to go digital, and you've tied up with Alibaba's Ant Financial and Chinese tech giant Huawei to really strengthen your digital footprint. How will these partnerships help you build up a compelling digital banking business?

Bill: Yeah, well, we're taking a lot of different approaches. Our efforts in Africa have been to create the pre-eminent digital bank across our African markets. We'll roll that out through the Middle East and South Asia as well. We have applied along with some other banks to be in the first round of digital or virtual banks in Hong Kong which is a very exciting project where we're working extensively...

Christine: You're first global bank to do so.

Bill: Well, we were the first to apply. I don't know if we'll be the first to receive the license. I hope so. But obviously, that's in the hands of the HKMA but we're working very hard to be ready as soon as we possibly can after we get a license to launch what we hope to be really one of the best digital banks in the world. And we're working extensively with FinTech partners and other external partners to complement our own capabilities to make sure that what we're building is the best. And when it's the best, of course then we intend to roll that out to different markets as well. But it's fascinating to note a few things, one is we're highly desirable partner.

Christine: You're a highly desirable partner?

Bill: We're a highly desirable partner because we have a meaningful market presence in Hong Kong and other Asian markets. So in this super-fast and very attractive market we've got very strong technical competence. So the FinTech partners like Ant Financial like to work with Standard Chartered because we can get things done and we speak the language. I think we're quite innovative as a team and we're focusing on becoming more so.

Christine: So, how much exactly are you investing in digital banking altogether? How much will you invest?

Bill: Our total investments are $1.7 billion per year. That's about triple where we were three years ago. The bulk of that is going into technology and the bulk of the technology investments are going into digitization of one form or other.

Christine: Will that investment include acquisitions at some stage?

Bill: We haven't needed to make acquisitions so far, but in a way, when we talk about this virtual bank that we're building in Hong Kong, we're partnering with key service or product providers which aren't acquisitions because we're not buying the company, but we are buying their capabilities and they're becoming part of our offering which I think is really the way of the future. You don't need to own things in order to drive through the benefit to your clients. We just need to make sure that we own the content that we're delivering to the clients.

Christine: These investments that you're making to roll out your digital network, does it take away the need to expand your expensive branch rollout?

Bill: It does. While our overall number of branches is reducing, we're continuing to add branches where we think that the additional branch can make a real difference. There are sub-segments of our markets where there needs to be a physical branch for customer convenience, or in some cases, for regulation. I mean, there are some things that need to be done physically and having those branches is important. So, we're not abandoning the branch model at all. In fact, I think one of our real differentiators say, for example, in India where we have an extensive branch network, it's small relative to the big local banks but it's big relative to the foreign banks. But to have that that branch network across 30 cities, complemented by a really fantastic digital offering, is a competitive advantage relative to the pure digital banks, or relative to anybody that that is still pure bricks and mortar, but there really isn't anybody in that category any longer.

Christine: Let's talk about Brexit because Standard Chartered is one of the so-called 20 banks applying for a license to operate in the Eurozone by 2019. What's the outcome? What's the latest?

Bill: We started very early. We declared early our intention to move to Frankfurt. There are still open questions that we're working through around precisely what needs to be done in Frankfurt versus what can be done in London. I think every bank is having those discussions, to be very clear which people need to move. But it's broadly understood at this point, we still hope that when March 29 2019 comes that we won't need to be fully operational in that branch in Frankfurt because there's some possibility that there will be a transition period. There is some possibility.

Christine: You're hopeful?

Bill: Well, I think we have to have a transition period. It would be very disruptive to the financial markets if we didn't have a transition period because the markets simply aren't ready for a hard Brexit for the U.K. Not just the markets, neither the U.K. nor the rest of Europe are ready for that disruption.

Christine: A lot of discussions you're going through centers around adding more staff to your Frankfurt office. In terms of cost how much is involved gearing up for the Brexit process?

Bill: We've always had a substantial presence in Frankfurt. We do our Euro clearing out of Frankfurt anyway so we have a full office there. We really just need the incremental people to manage a separate legal entity and then we've also managed our client relationships out of the Eurozone already in Frankfurt, Paris, and Stockholm. So we don't need to move a lot of salespeople. There is a question whether we need to.

Christine: But is there a price tag involved for Standard Chartered? What are you looking at?

Bill: Yeah, well, there's two elements of the price tag and we haven't given a specific number. But there's a handful of additional heads, not immaterial, and there's capital. We have to capitalize a subsidiary which is one of the things that we're working out as part of our banking license. So the impact on our financials will probably be as much coming from the incremental capital that we put in, as the incremental people that we have to move there.

Christine: But you will still be a British bank headquartered in the U.K. Nothing will change?

Bill: Well, we're a British bank based in the U.K. with a meaningful hub in Singapore, a meaningful hub in Hong Kong, and a meaningful hub in Dubai in addition to offices everywhere else. I mean nothing changes except the way that we interact with our European clients, per the ECB regulations.

Christine: As CEO of Standard Chartered, you spent the last few years turning around the bank. Are you feeling pressure from shareholders?

Bill: I feel the pressure from myself. I know that this bank can continue to improve and I know I share that view with everybody on our management team and our board that we can do better. So I think we work very hard. We're very focused on generating the results that our shareholders are entitled to. Our shareholders have been very loyal. So I have no complaints about our shareholders. We invite them in to share their views regularly with us and that's been very helpful for us in terms of sharpening our sense of what's important to them but also the steps that we should be taking to address the objectives that they have which are very aligned with ours. But yeah, of course we're a bit frustrated by the share price.

Christine: Yes, I was about to say, you think you can do better?

Bill: I know we can do better. I know we can do better, and we're dirt cheap.

Christine: When do you think investors are going to buy into your turnaround story?

Bill: I think the buy in to the turnaround... Well, first of all, I think they have, to a substantial degree. But what you really mean is, when are we going to get that stock price from the first number of beginning with a five, to the first number beginning with a one, going the right way, not the wrong way? And that of course is our objective as well. And I think the market will fully buy into our story when we've demonstrated consistent growth in profitability over a period time. And so, it won't happen overnight. I think the progress that we made in three years was very good -- the cleanup and the turnaround. And the market is as yet unconvinced that we can demonstrate the growth that we believe and I believe we can, we can generate. In fact, we are generating in big parts of our business today. I'm not frustrated by the market. I look at the market and say, "You want us to prove something? We're going to prove it."

Christine: So, do you spend every morning checking your share price as CEO?

Bill: I look at it. I don't obsess on it too much. I must admit the share price isn't something I can influence from day to day. I can influence where we allocate our capital, where we put our people. I can influence at least on the margin, how inspired people are to go out and serve their clients. So I spend my time on that and not obsessing on the share price.

Christine: You're 57 years old, you're American, spend 26 years with U.S. investment bank JP Morgan, then started an alternative asset management firm before being made CEO of Standard Chartered in 2015. How would you describe your leadership and your management style at the British bank you're now heading?

Bill: Well, my leadership style is probably somewhat particular to me. It has evolved over time. 57 sounds really old even as you say it, but I'm still learning a lot and that's part of what keeps me going and part of what I really enjoy about Standard Chartered is that there's just so much to learn about ourselves but also about our markets. But my leadership style, I try to be extremely inclusive. I think my colleagues would sometimes like me to be more directive. I like my colleagues to get to the answer themselves; I try hard to help them get there. I'm very happy to set a strategic agenda early on but then let the team execute that. I believe very strongly that individuals should be clear what they're accountable for and so we have pretty rigorous sessions around "this is what you need to do. This is how we're going to track it, and help you in ways that I can. You let me know what I can do to help." But basically having agreed what the objectives are and how we're going to measure it, it's up to you to go do it. So, I think most people would find my leadership style pretty empowering.

Christine: You know when you arrived; the bank was pretty much in bad shape. You were struggling to recover from your losses after years of aggressive growth. What are some of the important lessons the bank has learned in the process?

Bill: Well, I think we had probably understood before I arrived, a number of the obvious lessons, which were: you can never compromise on risk discipline, that growth for growth sake is not a good strategy because it leads to a lack of discipline in other ways. Growth on the back of a steady improvement in the product and services offered to customers is a good strategy, and that was a very important lesson at that time. I think we also underestimated at the time, and maybe even still do, the cost of complexity. The organization that I stepped into was extraordinarily complex. There's always going to be an element of complexity given that we operate in 70 countries on the ground, call into another 30 countries or so on top of that, and are engaged in almost every part of the financial services business. So, we're going to have an element of complexity, but we can strip that complexity out a lot and I think we had underestimated both the cost in terms of money but also the cost in terms of ability to get good things done. I think we also learned the cost of under-investing. We under-invested in some of our key businesses and in key infrastructure.

Christine: So, as CEO, what are you putting in place? What are some of the systems and processes you're putting in place to make sure that the bank does not repeat its past mistakes?

Bill: Well, we significantly streamlined the organization. We took out layers of management and we took out the vertical silos that were effectively gumming up the works. We've made some progress, have a lot more do on process improvement. So, we look at all of our customer processes end-to-end, from the moment that we have an interaction with the customer to the moment their transaction or whatever settles, and say, "Is this giving the customer the best experience, and is it the most efficient for us?". And the answer in many cases was no. We've scientifically, and it is a science, gone through to streamline those processes digitizing or automating everything that we can. And we've made really good progress in reducing client onboarding turnaround times from, in some cases, 40 or 50 days on average, to three to six days on average and these are dramatic improvements. It makes us more efficient, it also gives the customer much better sense that they're dealing with somebody that's responsive. I can tell a story that would sound super positive because I think it really is, but they say, "Yeah, but how come you're not hitting your return targets already?" And the answer is…

Christine: And it always goes back to that?

Bill: Because we're not done yet. So we we've gone from losing money to generating a 6 percent return on equity. We want to go from 6 percent to 10 percent plus. So, what we have been doing, we can do more. And of course along the way, we can refocus on the businesses that we've come to understand are really differentiated and special. And we'll focus less on businesses where we have not demonstrated that they're differentiated and special.

Christine: And finally, as CEO Standard Chartered now that you've stabilize the ship, what's next? Is it all about getting that ROE target? Is it all about looking at the share price and making sure it's where it's supposed to be?

Bill: No, actually it's all about customer satisfaction. It's all about having a group of clients who think that Standard Chartered is the bank that they want to bank with, because if we get that right, everything else will follow. I'm absolutely convinced. We'll hit the ROE targets because, we've demonstrated capital discipline, we will continue to demonstrate that. We've demonstrated that we have some key comparative advantages in our firm. And what the market wants, what I want, is that we focus increasingly on those things. There are also questions about some things that we're doing where the question is, "Look you've been at it for three years, you're not generating a decent return. What are you going to do that's different, because that strategy didn't work." And of course we have some of those as well. So these are the things that are going forward. We'll get the ROE. We'll get the stock price up.

Christine: Give me a timeframe.

Bill: We'll get the ROE up for sure. I'm not going to steal the thunder from the team in February. But we've been perfectly clear that we don't think that where we are right now is an acceptable place to even take a break, much less rest on our laurels. So, we're full speed ahead.

Christine: Bill thank you so much for talking to me.

Bill Winters: Thank you.


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