And we expect a normalization of that. But you need to remember as well that in our case, we have been working to stabilize, grow the franchise, recover some market share, so what we are pleased to see is that underneath that sort of outperformance in the market environment that we have been in, we have seen really good franchise stabilization traction , client engagement, improvement in clients. We think that bodes well for the future. You are expecting slightly higher revenue for the full year. Not too conservative now given what we have seen in the first half . It it would be james would be a normalization but i think an improvement on last years second half. Again, especially in our businesses, where a year ago, we were going through a restructuring and there was some uncertainty around our people and franchise, so with that now behind us, we see momentum in the core business, and we would like to see a secondhalf performance well ahead of last years second half, but we will see how the condition evolve. In a period of real uncertainty and while that has led to revenue opportunities, it can also lead to more muted markets. Year,you look at the full again, you have come out with a Second Quarter pretext in net profit, and the First Quarter has been profitable as well. You said in the past that it is going to be more difficult to achieve the target for a pretax profit in the full year. Now, after the Second Quarter, have you become more confident that this target is still achievable . Every day that goes by, we are working to preserve what had been our objective of a pretax profit. Remember that we are going through a restructuring. There is a drag on our profitability from the capital release unit. So what we are seeing now, two quarters in a row, is quite strong year on year performance in the corpbanca, so you see real improvements in core Bank Profitability offset by those drags. We work towards and we will continue to do that in terms of our management of the company in the third and Fourth Quarters to try and remain breakeven despite all of the pressures that we have been going through. But of course, it depends on some things that are out of our control, notably the revenue environment, as we were talking about. The intent to remain disciplined as we have proven over a number of quarters on expenses. We arein, remember, still incurring relatively significant restructuring and severance charges as we did this quarter. So this could still mean that you are not going to reach a target. James i dont want to make any bold statements but i would reiterate we are continuing to work towards a pretax rake even year as we have proved two quarters in a row and despite the challenges the coronavirus environment has thrown up. It remains our objective and we are controlling all the things within our control while, and i think this is important, continuing to advance our agenda in terms of the transformation steps we are taking, so we are not sort of slowing down transformation. We are not going down the deleveraging that the capital release unit is doing for us. We are managing through against all of our milestones and targets, notwithstanding the challenges of this environment, but of course, the Investment Bank outperformance in the first half essentially finance the corona related impact, notably the provisions for loan losses which are elevated compared to what we came into the year thinking. Have we seen the pico stats the peak of stats . James you will see the numbers 760 million in the quarter, pretty close to the 800 million we guided four. We guided that expectation of the Second Quarter would be the high point in the year, and we reaffirmed our guidance for credit lossclps, provisions. We think we are on track to that guidance. We do think a degree of normalization within that. Naturally, in a credit cycle, you will see more socalled stage iii events, so Loan Loss Provisions associated with actual default, and that is natural, and again, entirely in line with the expectations we have had for this year. James von moltke, the cfo of deutsche bank, speaking to bloombergs germany euro chief, daniel schaefer. 800bank setting aside Million Euros, 760 Million Euros for bad loans. Barclays coming out now with more than twice that in Loan Loss Provisions. 1. 6 2 billion euros, over 2 billion for bad loans. Annmarie those barclays Second Quarter provisions are coming in bigger than what the market estimated for barclays. They see the secondhalf impairment below the first half, and of course, we will be speaking to jes staley about all of this. Staying with the banking sector, we want to get to santander. They report a huge quarterly loss after taking a 12. 6 billion euro impairment charge. Several of its global businesses, because of the pandemic. Joining us now for his first interview of the day is the santander cfo. This impairment drove earnings to a huge quarterly loss. Santander has the highest provisions of any European Bank, even before the pandemic. Have they peaked in the Second Quarter and do you now have better visibility Going Forward . Jose good morning and thank you for having me. Impairment is a noncapital, noncash accounting charge. We have to review our acquisitions for the year due to the pandemic and longer rates and higher volatility. We decided to make the impairment. The underlying profitability in the quarter was really strong. We were able to extend Financial Support to our customers with a strong operating performance the highly challenging environment. More importantly, the more we are into this pandemic, we cannot confirm our expectation for cost of risk in the region of 1. 4 to 1. 5 are confirmed. Important point in the quarter is for capital that went up significantly, reaching 11 to 12 ering targets. The underlying performance in the quarter was really strong given the pandemic and the impact of the macroeconomic impact of the covid. Matt nonetheless, you are basically looking at a 13 billion loss in the quarter. Not,lying performance or the headline figure is shockingly large. In march, you estimated that the virus would shave about 5 off of your yearend earnings. You can see these impairments have been supercharged by the coronavirus. Do you continue to have that outlook that this is going to, by the yearend, only shave 5 off of earnings . Jose again, this is a noncash, noncapital accounting charge. Historical investments. So i think the important thing is to look at the underlying profits. In the first half, we almost made 2 billion of underlying profits, so we would expect to a pretty decent return, a good return on equity for the year as a whole. Definitely. Annmarie the ecb yesterday coming out, urging banks to halt dividends for the rest of the year. Whatou going to respect the ecb is asking for, and did you think other banks will do so as well . Jose of course. We have made two announcements. Following our quarterly results. One is that the board will propose a script dividend in october. Accruing in our capital six basis points of capital for future Dividend Payments because the ecb is basically holding Dividend Payments until january 1 of next year. Given the underlying performance of our business, we are quite confident that it will be these numbers that are confirmed for the year as a whole following regulatory recommendations. We will be able to pay a dividend next year on the profits. Pay awill you be able to bonus next year on this years profits . The ecb request was for bonuses paid out. The payments of this year, not for the 2020 bonuses paid out next year. Do you think you are going to take a more conservative approach to bonuses to be paid out next year as a consequence of the ecbs request . Jose i was referring to dividends. Bonuses come already, the bank announced at the beginning of the pandemic that the chair and foregoing bonus payments for the year, and the Remunerations Committee will analyze what to do for the rest of management. This is a decision to be taken by the end of the year. Obviously, we always follow regulatory recommendations to be these timese so at with regards to distributions. Annmarie spain is back in the headlines when it comes to the resurgence of covid19, even prompting the u. K. Government to tell british travelers when you arrive back from spain, you have to selfisolate. How painful do you think this will be for spains Tourism Industry . Jose i am not an epidemiologist, but it seems that when confinement was lifted, it was foreseeable there could be an increasing in cases. However, spain remains very safe for tourism. Regionsits more popular are doing much better than some european countries. For instance, just to give you cases, in in terms of the last 14 days, out of 100,000 inhabitants, these are the most touristic areas of spain. Compared with the u. K. Of 13, france up 12, portugal, up 33. Spain remains a very safe place for tourists to come. Matt i just spent a week there last week. There were only one or two infections in the entire region. I wonder about how much cost cutting and unloading of assets you are going to be able to do, jose garcia, after this virus. Units opened your eyes to you think you can divest . Jose i think the pandemic clearly is making everybody not only us banks but all companies to rethink their business and operating loans. I think we are at that evaluation phase. One could imagine there will be changes in the operating models and business models. Right now, obviously, our focus is to help witnesses and families, which is what we did. Almost 20 billion euros. And smes. Families definitely, we think that as the economies recover, we can continue operating and keeping profitability at the levels that we had. Previously, we think we could get back to the 13 to 15 in the medium term. Annmarie jose Garcia Jose Garcia cantera, thank you so much for joining a spare up next, which assets will suffer without said help fed help . This is bloomberg. Matt welcome back to Bloomberg Markets european open. We are about 44 minutes away from the start of cash trading and we see a little bit of a mixed picture in terms of futures. Dax futures down. 5 . Cap futures trading cac futures treading water right now. Struggling for direction as we saw in asia as investors await the conclusion of the fomc meeting after the fed extended seven of its nine emergency lending programs by three months to the end of the year in its latest effort to boost the economy or at least keep it on track for the kind of recovery it wants to see. Joining us now is kristine aquino. Markets struggling again today for direction. What do you expect to tip the balance . Kristine certainly, the fed today would be a good panelist. That is what everyone is waiting for today. It seems we are pretty directionless and markets. Investors ares waiting for an indication of what they are going to be doing impact help mitigate the of the crisis. Another catalyst that investors are waiting on would be on the fiscal side of things and the conclusion of the u. S. Stimulus stocks. I know we reached a dividend impasse yesterday between the gop and democrats, so key is resolution. The important thing to stress is it is not just Central Banks that matter anymore for investors. They are looking for more in fiscal solutions. That would be the added bonus here for most investors. I am wondering today if powell at any moment will try to nudge forward those discussions in d. C. What should we watch . Which assets will suffer without the fed help . Kristine the short answer is all of them. On the say probably riskier side of the spectrum, i would say stocks and credit would be particularly vulnerable, just because of the level of valuations we have seen in those markets and the rally we have seen, despite the fact that, for instance, in credit, we are seeing a slew of downgrades, and there is still an expected wave of bankruptcies to come which would very adversely affect credit spreads in just the index levels there. Story as we all know, the has been really high valuations with not much in the way of fundamentals supporting that. These assets in particular would probably be vulnerable if for whatever reason theres some indication that the fed may be anding its hand and waiting seeing before it makes its decisive move. These assets would be particularly vulnerable in that case just because of how much valuations have risen in the meantime. Matt thanks very much for joining us. Kristine aquino leads our mliv team in europe. You can get her work on the work of her colleagues by typing mliv on your bloomberg terminal. Stay with bloomberg tv today for full coverage of that fed decision. We have a special report at 7 00 p. M. London time, so definitely, tune in for that. 1. 6 2t, barclays books billion pounds of Loan Loss Provisions for the quarter. That was slightly more than anticipated. We will talk earnings, next, with the ceo of barclays, jes staley. This is bloomberg. Matt welcome back to bloomberg daybreak europe. We are looking at 37 minutes to go until the start of cash equity trading across europe and in the u. K. You can see a mixed picture with dax futures down. 4 , and cac 40 futuresres cac at 1 . Missing analyst estimates just slightly more than had been anticipated. Nothing compared to the hit that santander took. We are joined by the ceo of barclays, jes staley come out of london. Thank you for your time. Talk to me first about the Loan Loss Provisions and the hit that you have taken due to covid for the quarter. You know, first, our preprovision profits were 5 billion pounds, which is 27 over what we earned last year. As you look at the economic response to the covid19 pandemic, clearly, theres been an extraordinary Economic Contraction globally. Inticularly in the u. S. And the u. K. , our two principal markets. We have taken a sizable impairment reserve, three point 6 billion pounds for the first half, including the 1. 6 billion pounds in the Second Quarter. The vast majority of that are derived by our risk models where we put Economic Forecasts into those models. Future unemployment rates, future gdp rates, spend growth, etc. Those models produce those impairment numbers. We think we have been conservative. Proper impairment reserves. Lets see how the economies, particularly in the u. K. And the u. S. , unfold in the next couple of quarters. We like the comfort of having strong impairment numbers. Yet at the same time, maintaining profitability for the bank. Annmarie good morning. I am looking at your Investment Banking business. Absolute massive beats across the board. Fixed income up 60 . The estimate was 30 . Estimate was 3 . The question is, could barclays keep it up . Had iou know, we have think very good performance in our markets business over the last couple of years, including the last couple of quarters. I think like all the banks that have reported thus far, the volatility in the first two quarters were quite exceptional this year. Athink people are expecting degree of normalization. But as you mentioned, with our fixed Income Credit and currencies trading up 60 for the Second Quarter and up 80 for the first half here overall, i think we are getting market share. We want to stay open and clients forr our insurance companies, Pension Funds, that underscore the capital market, but i also say that i think what we are seeing of a lott the result of regulatory changes over the last decade. If you go back to the crisis of 20082 thousand nine, it was based on Bank Balance Sheets getting into trouble. They have really moved the focus of financing Economic Growth from banks to the Capital Markets, to Companies Issuing to petroluity and funds and buying those securities. That is really the story i think of the first and Second Quarter is the resurgence of the Capital Markets led by massive amounts of liquidity provided by Central Banks. I think that has proved to be a fairly constructive response to the pandemic and the consequential economic crisis. Claudiawas talking with last week from the fsb. They put together the too big to fail recommendations. At least in one sense, they have saved the Global Financial system because you do not see the weakness this time that you did a decade ago. That, which i think is especially amazing, with most of your employees working from home, how is that going . You hand in these incredible Investment Bank results with a lot of your women and men working from home. How is that going and how long will that continue . If you can do this well with everyone working from home, you may as well sell that office. Jes first, let me say, to your point about the strength of banks, and barclays in particular, to your point, given the adjustments that the financial industry has made since the crisis and the strength of the positions we had coming into this crisis, we printed the highest level of capital to riskweighted assets by the end of june in the history of the bank. That enables someone like barclays to become a firewall in this crisis of 2020 as opposed to part of the problem 10 years ago. In terms of people working from home, it is extraordinary. We have some 60,000 people working from their kitchen tables. We have the technology, the systems, the controls, the compliance to do all that. It is quite something. Should also add we have 20,000 people in the u. K. And they are actually working from offices, working from our branches, call centers, and we expect and want to get, in a prudent time scheduled, taking care