21/02/2017 BBC Business Live

This is Business Live from BBC News with Rachel Horne and Sally Bundock.

Europe's biggest bank sees profits take a dramatic dive.

HSBC says it's been facing volatile market conditions.

Live from London, that's our top story on Tuesday February 21st.

Annual profits for HSBC collapsed by more than 60%.

Our economics editor Kamal Ahmed will talk us through what this

means for the bank - and the sector as a whole.

YouTube scraps those 30 second ads it's impossible to skip through.

Good news for viewers, maybe - but what will it mean

And investors are grappling with the latest results

from several key companies - we talk you through the good,

This is how Europe's markets outside jesting them at the moment.

And we'll be meeting the only living person who has invented and been

implanted with a medical device to cure their own chronic

It's called the Vibrant Soundbridge, and has given Geoffrey

Workers in Australia's tax office have refused bosses' pleas

to extend their working day from 4:51pm to 5pm.

What could you achieve if you spent an extra nine minutes a day at work?

Just use the hastag BBC Biz live And wherever you are -

It is amazing what you can do in a whole nine minutes! Send in your

comments on that and other stories we are covering today, it is a

packed agenda. Full year results for banking giant

HSBC has come in quite a bit below Pre-tax profit fell 62%

from the previous year, with the bank calling it a period

remembered for its largely unexpected economic

and political events. The net profit of $7.1 billion

compared with $18.87 billion recorded in 2015, and group chairman

Douglas Flint says geopolitical changes contributed to volatile

financial market conditions. Last year HSBC agreed to pay

$1.6 billion dollars to end a class action lawsuit over its involvement

in the US sub-prime mortgage scandal That is just one element that has

been going on. It's also facing pressure

to tighten up safeguards US regulators have said HSBC

has made some progress And all this comes as the bank

closes an additional 62 branches in the UK on top of the 55 announced

last year and tries to recover from the reputational damage caused

by being found guilty of taking part That is like many of its peers.

Rachel, over to you. Our economics editor

Kamal Ahmed is with me. Thank you for coming in. Sally has

run through some of the issues, that drop in profits as much larger than

expected, but overall, what has been the reaction? Overall the share

price has come off a little bit, down almost 5%, but lots of that is

to do with profit-taking, HSBC shares have gone up by over 50%

since the referendum in the UK last summer. It said it would execute a

$1 billion share buy-back. That was a little disappointing to some

shareholders who said it would be around $3 billion, so shares have

been a bit softer because of that. It shows two things, firstly it is

very hard to make money in banking in this low interest rates, low

inflation world we still inhabit. Secondly, global shots for a global

bank, things like Brexit, the election victory of Donald Trump, me

that trading tends to slightly softened, revenue is slightly

softened and profits soften slightly. In overall terms, HSBC is

robust, it revealed that its capital ratio, its core capital is now above

13%, well above target, so it is a very robust balance sheet. What

shareholders want to see is what is HSBC going to do without money, it

has been selling assets in dealing with reputational damage that Sally

spoke about, what would it do to reinvigorate growth and rebuild its

business in Asia? Donald Trump Brexit, they were issues the global

finance and trade, and perhaps the rising protectionism for a bank like

HSBC, a global bank which gets a lot of business from global trade. Going

forward, what impact will it have on the bank? Is two thirds of HSBC's

profit comes from Asia and there is a trade war between and China, which

President Trump has threatened at least, not gone through with yet but

threatens, that could be damaging to trade around the world. HSBC is one

of the biggest banks in trading so that could be something on its

profits. At the moment there is a sense that this might be the dock

before the sunlight, we have these big fiscal boosts possibly coming

for America, cutting corporation tax, the release of animal spirits

in the US economy, that would be very good for HSBC. What about in

terms of who was running the bank in the future? Douglas Flint is

expected to retire and we do not know who will succeed him, Richard

Gulliver is expected to move on in the next few years? HSBC was always

a business promoted from within, it has never had an external Chief

Executive or Chairman, some shareholders are pushing for outside

blood. No real detail on how that is going, there is a process and

Douglas Flint and Stuart Gulliver are due to move on. There are 2

megabits candidacy would look at, both Portuguese, there is the head

of UK and European HSBC and the chief executive of Lloyds bank, one

of the other big banks in the UK commerce and big candidates. There

are not that many people Houara chelated in the right way with the

right skill set to run a massive global bank. There is only a handful

of people, there could be an internal candidate, it could be

external, shareholders are most at -- are more focused on whether

bankers going to do Stuart Gulliver rather than what will happen next. I

am sure you will be putting this on the website? May well be! Is that an

order?! Some other stories, it is an extremely busy day.

The world's biggest miner, BHP Billiton, reports

a near eight-fold rise in underlying first-half net profit

to $3.24 billion from $412 million a year earlier.

And shareholders received a bigger than expected dividend

of 40 cents a share, signalling its growing

confidence amid a resurgence in commodity prices.

Good news for Intercontinental Group shareholders -

the hotel group reveals it is to issue a special

$400 million dividend for shareholders and an 11% increase

This comes as the UK-listed owner of Holiday Inn reports a 9.5%

increase in underlying profit to $702 million for 2016.

And YouTube is to scrap unskippable 30-second advertisements from 2018.

Google has confirmed that it will focus on formats that work well

for both users and advertisers, and says long unskippable adverts

on the video-streaming service are seen as a nuisance by many

I can hear you all cheering as I read that out loud!

Let's look at what is on the tablet and sticking with HSBC, all those

banking stories making the headlines. The plunger natures BC

shares, lots of other banks are reporting this week as well. -- the

plunge in HSBC shares. We chatted to Kamal before we came on air and we

talk about how the falls on the FTSE, he believes they are more

profit-taking, people selling of shares they bought in anticipation

of a larger buy-back scheme. They announced the share buy-back of

$1 billion, they expected it to be larger than that, it has done a

previous one of $2.5 billion. As Kamal Ahmed mentioned, profits are

up 50% since the June referendum. Always lots of layers in these

figures. Troubled Japanese technology giant

Toshiba wants to raise $8.8 billion from the sale of most

or all of its flash chip business. Tell us some more about this story?

Toshiba's microchips are mostly used on mobiles and tablets and it is one

of the conglomerate's most valuable businesses, if reports are accurate

they are considering a sell-off of majority stake to raise up to $8

billion, a much bigger slice of the business than the 19.9% they

previously said they would sell. Why some of the Crown Jewels? Toshiba is

trying to plug a big hole in finances due to a write-off of its

US nuclear division. One credit ratings agency said that the rating

might be smashed as a result, bad news for investors, said they were

not enthusiastic about the sale today. Toshiba stocks rose almost 2%

in early trading but closed about 1.39% lower. Thank you. That is one

of the shares on the move in Asia, another stock on the move was HSBC,

it is listed in Hong Kong as well as London, its shares in Hong Kong were

head quite badly when the results came out, shares down on the Hang

Seng something like 3.5%. That is ready's close for the States, it was

President's Day on Monday so no action on Wall Street yesterday,

they will reopen after a nice long bank holiday weekend.

Let's look at Europe, BHP Billiton shares are doing nicely if we can

move on to the European markets. And Anglo-American as well came out with

results very similar to BHP, a real turnaround, losses last year, big

profits this year, commodity prices have been on the way up. In

particular, metals. Not enough to boost the FTSE. HSBC is lower,

mining stocks higher, the FTSE down by almost 0.4%, the European markets

are headed lower. Back to Rachel. Mike Amey, managing director

and portfolio manager Thank you for coming in. I will bore

you with banking, we started with HSBC, lots of the banking stocks are

down this morning, on the FTSE. Lloyds are down 1%, RBS 1.3%,

Barclays 1.45%, Standard Chartered 2%. The banking sector has done very

well, posed Brexit, a big bounce, HSBC up 50%, so a bit of

nervousness. The other thing that is going on is in the HSBC commentary,

basically the amount of money they make on their day-to-day business

looks like it is coming in lower than expected. Roughly speaking,

they take deposits offers and land them on mortgages to us or others,

the differential between those is how they make money, when interest

rates are low, that squeezes profits. Is that why did the dens

are so important right now, another way of getting money in when

interest rates are so low? -- is that why dividends are so important?

Intercontinental hotels, Anglo-American and BHP are saying

the dividends are there, they are upping them? We are all looking for

ways to get income, frankly, with low interest rates. Sustaining the

dividend is very important. Prices because people look at other ways.

Bank deposits, they say they will not get income so if there are other

ways to do it safely they will, so the message about keeping the

dividend is trying to reinforce that.

Aside from banking stocks reporting we have minutes from the latest

Federal Reserve meeting coming out on Wednesday, what are we looking

for? Not everybody is at superlow interest rates and staying there,

the Federal Reserve has raised interest rates already and the

question is how quickly. They raised rates in December, these minutes

will be all about March or June. Our best guess is probably June rather

than March, if they have a decent couple of months worth of data

perhaps Marge, rates are going up somewhere, not all bad news.

You are coming back to do the papers, see you later.

We will find out how much might can do in terms of productivity in nine

minutes. He is thinking about that now.

Using wearable tech to tackle disability.

We'll meet the man whose revolutionary hearing implant

You're with Business Live from BBC News.

British house-builder Galliford Try has just announced a 19% rise

in pre-tax profits in its latest half year results.

The firm has set new house-building targets of 5000

Theo Leggett has been crunching the numbers.

would seem for these kind of house-builders that they are doing

extremely well? They are, good times for the house-builders because there

is so much demand for residential property in this country. According

to the Government's house-building white paper, that will continue, so

Gulliver try is pinning its hopes on that. The press release says they

are strengthening their foundations to support strategy for growth, the

worst plan of the day, in my opinion, but looking at the three

areas of their business, Linden homes, probably the most

recognisable brand, their main residential property building on,

that has very good rotted margins at the moment, it currently builds

around 1500 houses a year and wants to increase that to more than 5000.

It also has its partnership and regeneration division working with

local authorities to build affordable housing, that is all

doing rather well, expanding with reasonable profit margins. There is

another area that is business that generates big revenue but poor

margins, its infrastructure and construction business. That is wafer

thin margins at the moment. The picture overall is very good,

revenues increase profit margins are very good, but that part of the

business is looking comparatively weak.

It is hard to gauge where things will go next. There are a loft

elements that are good and strong. But we were talking to the boss of

Redrow after that White Paper was released. If you read the statement

that Galliford Try put out this morning, they state we continue to

monitor market conditions and consumer confidence closely and are

mindful of the uncertainty in the economic environment. Who would not

be right now? There is so much uncertainty out there. They say as

emphasised by the housing White Paper, the Government remains

committed to increasing housing supply. They say the market

continues to enjoy good mortgage availability along with low interest

rates and the stimulus of Help To Buy. The outlook seems good for

them. They are taking advantage and they are planning to expand.

You see how much Theo Leggett can do in less than nine minutes. We thank

you for your time. You're watching Business Live.

Our top story: Europe's biggest bank

sees its annual profits HSBC says volatile market

conditions are to blame. A quick look at how

the markets are faring. We have had results from many

companies. Take a look at the Business Live page. It will detail

it all for you and also talk you through the various winners and

losers. The innovators behind tech companies

often have extraordinary stories. But few can match the experience

of the next person we're featuring in our week long

Disability Works series. Geoffrey Ball is the chief

technology officer of Med-El, which is a global company

researching the field of hearing loss and making

implantable hearing systems. Geoffrey developed hearing loss

as a child, but later became frustrated by traditional hearing

aids, so searched After completing a biomedical

degree, he worked in the field of neuroscience, biomedical

and auditory research. This lead him to develop

and personally test a middle ear implant, known as the Vibrant

Soundbridge. His situation is unusual

because he is both inventor and patient of the medical device

aimed at curing a chronic Geoffrey Ball is Chief Technology

Officer at MED-EL and joins us. Good to see you. Welcome to the

programme. Thank you. Just tell us the story from the beginning. We do

hear of people struggling with hearing loss or profound deafness,

but you don't hear of them fixing the problem themselves. It is very

unusual. Yes, well, I lost my hearing as a toddler. I had a high

fever and after that I could no longer hear. I wore hearing aids for

a long time. I grew up in Silicon Valley, California and I got help

from special educators and from speech pathologists and I was quite

lucky. But hearing aids never worked for me. They just made everything

louder, but they didn't make everything clearer. So I decided

well, I'm going to come up with something I want, an implant that's

going to fix it because you have to go into the ear. I asked my doctors

at Stamford University when is the implant coming? They said next year.

After several years of that, I finally graduated from university

and I said maybe I can come to the lab and help you out. So I spent

years working in the lab. I didn't have an epiphany. I worked out how

to make an implant that would work and I started the company and that's

how we went. In terms of your eureka moment, building that device that

worked. For many inventors, that's going to bring a certain level of

pleasure and satisfaction, but for you, it wasn't that achievement, it

was going to improve your life? It was going to improve my life, but it

was a sense of relief because I built hundreds of devices that

didn't work, and to come up with the one that did work was a great day

and then, of course, the real challenge happened. This happened in

my garage in Silicon Valley which is located around the corner from Steve

Jobs' garage who started this fruit company called Apple! I hope he did

OK with that! And today, that's probably the last medical device

that will come out of a garage like that! Just tell us, you created the

device. You then had to raise funding to launch it, start a

company and then tell us about the day you tried to launch? Well, when,

first I had to get the device implanted and having your own device

implanted and having it work was really, like I was so happy and that

was great. You could hear things that I never heard before like

birds. I never heard wind blowing through the trees, but then we went

to launch the product and we did trials in Europe and we got approved

here and we were doing very well as a company and then we launched the

company. I had about 150 employees, I had my doctors, at a conference in

the United States and we launched it on the worst day in history to

launch a company which was 11th September 2001. After that, it was

really hard for us to even talk about elective implants for people.

So, inventors and the leaders in the field of cock lard implants bought

my company and moved me to Austria my company and moved me to Austria

and I have been working there for 15 years and we have tens of thousands

people now implanted with the devices and we have a family of

hearing products for different types of hearing loss. You talk about how,

you know, if somebody has eyesight problems, they go to an optician and

there are lots of different options and you would go and a hearing aid

was the only option? You've revolutionised that right now? It

was just a hearing aid. I didn't want those. They don't work very

well for all people. Hearing aids have got much better. They work well

for mild and moderate hearing loss. There are several companies that now

sell them. But for what is so cool is today for kids with profound

hearing loss and severe hearing loss, they have so many options that

I never had. And they have cock lard implants which use lick theatrical

stimulation, we have the sound bridge which uses the middle ear and

what the positions have done is so amazing, and also we implanted some

of our first devices here at St Tom's right here in London so it is

good to be here. Geoffrey, it is fascinating to hear

your story. Thank you for coming in and tell us about it. I'm really

glad that you were determined. It changed thousands of people's lives.

Geoffrey Ball Chief Medical Officer at MED-EL.

You can find out more about the weeks coverage

at bbc.co.uk/disability and on social media search

It is a theme we're following. The challenges of disability in the

workplace. In a moment we'll take a look

through the business pages, but first here's a quick reminder

of how to get in touch with us. The Business Live page

is where you can stay ahead with all the day's

breaking business news. We will keep you up-to-date

with all the latest details, with insight and analysis

from the BBC's team of editors Get involved on the BBC business

live web page: bbc.com/business, on Twitter @BBCBusiness and you can

find us on Facebook Business Live on TV and online,

whenever you need to know. What did you achieve in your nine

minutes? The story is an Australian story about one of the Government

agencies trying to extend the working day at the moment. It

finishes at 4.51 and the hope was to get it to 5pm which was, which the

employees stuck with 4.51, that extra nine minutes is really what

the Government was trying to get out of their employees. They were

pushing it, saying it would increase productivity. What do you guys think

you can do in nine minutes. Mason says make a cup of tea. Relax.

Regain used energy. Somebody else said they could close a sale in nine

minutes. Yes! , "Just pay them more if you want them to work for it. You

get nothing for nothing." They were offering a slight pay rise, but the

nine minutes added up to... Five days a year. There are various ways

you could do that. You could put it as a perk. If you do an extra nine

minutes, you get five days off extra holiday! Talking about the cost of

moving or having Americans make the stuff that many are making in

factories in Asia? There is the challenge with where production is

located and trade particularly under the new US presidency and it looks

as if this one is about whatever happens, it will be much cheaper to

make it in China. We'll keep an eye on that. It is a big issue at the

moment. There will be more business news

throughout the day on the BBC Live webpage and on World Business

Report. Hello. In some parts of the British

Isles Monday turned out to be a glorious day. Our Weather Watchers

were out and about capturing the best of it and the temperatures

caught the eye as well. Widely well on into the teens across the British