Browse content similar to 27/04/2017. Check below for episodes and series from the same categories and more!
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This is Business Live from BBC News with Susannah Streeter | :00:00. | :00:07. | |
The US President tells Mexico and Canada he won't scrap their free | :00:08. | :00:19. | |
trade deal but will try to renegotiate it. | :00:20. | :00:22. | |
Live from London, that's our top story | :00:23. | :00:24. | |
With farmers amongst those under pressure we'll look at what keeping | :00:25. | :00:43. | |
NAFTA means for trade across North America as the Peso | :00:44. | :00:46. | |
As pharmaceutical giant Astrazeneca holds its annual meeting | :00:47. | :01:03. | |
will growing anger over boardroom pay lead to real change? | :01:04. | :01:07. | |
This is the latest situation on the markets at the moment, or down down | :01:08. | :01:18. | |
is likely because investors were disappointed by President John's | :01:19. | :01:25. | |
actions. The strike President Trump's actions. | :01:26. | :01:28. | |
Funding the enterepreneurs: We'll meet the man whose bank specialises | :01:29. | :01:30. | |
Rishi Khosla , the boss of OakNorth Bank will be here. | :01:31. | :01:34. | |
still trying to deal with the fall out from their overbooked flight, | :01:35. | :01:43. | |
will now offer up to $10,000 to give up your seat. | :01:44. | :01:45. | |
Hello and a warm welcome to Business Live. | :01:46. | :02:01. | |
We start with President Trump - because once again he's taken | :02:02. | :02:04. | |
The White House has confirmed it has told the leaders of Canada | :02:05. | :02:09. | |
and Mexico they WON'T be scrapping the North American | :02:10. | :02:11. | |
But instead they will seek to renegotiate the terms of it. | :02:12. | :02:14. | |
to pull out of the pact Bill Clinton signed in 1993. | :02:15. | :02:19. | |
In September he called it the "single worst trade deal" | :02:20. | :02:21. | |
In January he used an executive order to pull out | :02:22. | :02:28. | |
of the potentially huge Trans-Pacific Partnership | :02:29. | :02:30. | |
Financial markets were worried he was about to do | :02:31. | :02:34. | |
the same with NAFTA - with huge implications | :02:35. | :02:40. | |
for industries from agriculture to the auto sector. | :02:41. | :02:44. | |
The announcement to renogotiate rather than withdraw | :02:45. | :02:46. | |
from the North American Free Trade Agreement has sent the Canadian | :02:47. | :02:49. | |
Aaron. Good on you, Susanna. Those currencies liking that news. | :02:50. | :03:02. | |
Earlier I spoke to Marco Lopez - a former Arizona politician | :03:03. | :03:05. | |
who is now an International trade consultant advising US companies | :03:06. | :03:07. | |
I asked him whether this was a pleasant surprise. | :03:08. | :03:16. | |
Yes, a very good surprise indeed. We have been saying that, you know, | :03:17. | :03:24. | |
it's very difficult to try to go out and kill 6 million jobs that depend | :03:25. | :03:28. | |
on North American free to and that is exactly what he was proposing, | :03:29. | :03:32. | |
President Trump, throughout the campaign. So good news I think for | :03:33. | :03:37. | |
those American workers, 6 million of them that depend on trade with | :03:38. | :03:41. | |
Mexico, I think he finally figured it out in 100 days, it's much more | :03:42. | :03:46. | |
difficult to govern than it is to campaign. So this is a positive sign | :03:47. | :03:54. | |
for everyone and all those industries that you mention | :03:55. | :03:55. | |
especially the automotive industry, agricultural industry, e-commerce, | :03:56. | :04:00. | |
that depend on keeping that relationship between the US, Mexico | :04:01. | :04:08. | |
and Canada alive and well. Now I guess the focus goads towards | :04:09. | :04:12. | |
renegotiating this. I'm just wondering, does Mexico think that | :04:13. | :04:19. | |
has to be renegotiation and where will they try to renegotiate? I | :04:20. | :04:23. | |
think that after all the criticism that came from President Trump and | :04:24. | :04:31. | |
in my experience as director of the Arizona Department of commerce in | :04:32. | :04:35. | |
the state of Arizona, you know you realise that there are things that | :04:36. | :04:39. | |
occur throughout the period of 25 years that do need to be looked at | :04:40. | :04:44. | |
comic e-commerce is one, energy, trade facilitation is the second, | :04:45. | :04:49. | |
there are things in the agricultural space that might be strengthened, so | :04:50. | :04:54. | |
at least it's important to have that conversation and I think we are | :04:55. | :04:58. | |
getting to that place but I will tell you that even Congress is wary | :04:59. | :05:05. | |
of having to vote on any adjustments and after so this could be a long | :05:06. | :05:09. | |
process. We don't know exactly what shape this will take but it will not | :05:10. | :05:15. | |
be easy for sure. A long process, that should keep us busy. Lots of | :05:16. | :05:20. | |
at the moment. That's still at the moment. That's still | :05:21. | :05:22. | |
unnerving the financial markets. Let's look at something happening | :05:23. | :05:26. | |
here in London today where it's the time of year big companies | :05:27. | :05:29. | |
are holding their Annual It's their big chance | :05:30. | :05:31. | |
to face their shareholders and one of their major concerns is how much | :05:32. | :05:35. | |
the bosses get paid - Pharmaceutical giant Astrazeneca | :05:36. | :05:38. | |
holds its AGM today. The Chief Executive got a pay | :05:39. | :05:55. | |
increase of 68% last year And that's AFTER his | :05:56. | :05:58. | |
annual bonus was halved! Consumer goods maker | :05:59. | :06:04. | |
Unilever is also They will be voting on changes | :06:05. | :06:08. | |
to the way its bosses are paid - making more of it in shares | :06:09. | :06:13. | |
as a performance incentive. Unilever's CEO made 8.4 | :06:14. | :06:18. | |
million euros last year. That was down 20% on 2015 - | :06:19. | :06:30. | |
but a lot of the fall is down to the weak pound - | :06:31. | :06:33. | |
his pay is set in sterling Leon Kamhi is Head of Responsibility | :06:34. | :06:37. | |
at Hermes Investment Management. Thank you for coming onto the | :06:38. | :07:00. | |
programme. I think these systems are fundamentally broken, if you look at | :07:01. | :07:05. | |
any chart like this this tremendous scatter. Sometimes you have to pay | :07:06. | :07:10. | |
with this high performance but in other areas know. Why is this, the | :07:11. | :07:15. | |
schemes are way too complex, we have multiple schemes with multiple | :07:16. | :07:17. | |
measures and the measures that we are using, some of the measurements | :07:18. | :07:24. | |
are too short-term and not working. And thirdly, I'd say, the reason why | :07:25. | :07:29. | |
pay structures are broken is, there's way too much in variable | :07:30. | :07:36. | |
bonus and not enough in fixed bonus. And yet we're not getting bad | :07:37. | :07:40. | |
performance. You mention the short-term. -- that performance. | :07:41. | :07:48. | |
Earlier I wondered why the investors are not more aggressive, it's | :07:49. | :07:52. | |
because they are part of the system! Is there an argument that these | :07:53. | :07:58. | |
investors want these CEOs to be incentivised to hit short-term gains | :07:59. | :08:02. | |
and they benefit from them? Maybe the targets need to be changed? | :08:03. | :08:08. | |
There is a strong case to say that the system works were short-term | :08:09. | :08:11. | |
returns. Why is that? Because you have the pension funds, they ask is | :08:12. | :08:18. | |
that managers who achieve returns and monitor that on the short term | :08:19. | :08:22. | |
basis. The acid managers then took to the company is about achieving | :08:23. | :08:26. | |
returns and soon the whole system reaches out for a short term | :08:27. | :08:31. | |
returns. So there is that case. This increased stewardship, responsible | :08:32. | :08:34. | |
ownership by asset managers to think more about the longer term. And part | :08:35. | :08:39. | |
of that is how we vote at remuneration. I would suggest that | :08:40. | :08:43. | |
as an industry as a whole we don't pull our punchers when we see | :08:44. | :08:48. | |
remuneration that is not right for shareholders and we do vote against | :08:49. | :08:52. | |
it. You have seen that. You saw it with Thomas Cook this year. You've | :08:53. | :08:56. | |
seen all the pressure before the vote has come to fruition with | :08:57. | :09:04. | |
credits Wiese and GS K. When you see CEO salaries which are rear free 140 | :09:05. | :09:10. | |
times more than the average worker you do wonder what has to go. Thank | :09:11. | :09:16. | |
you for coming in to talk to us. We'll see you soon. | :09:17. | :09:19. | |
Let's take a look at some of the other stories making the news. | :09:20. | :09:22. | |
Deutsche Bank could move up to 4,000 jobs out of the UK | :09:23. | :09:25. | |
as a result of Brexit - nearly half its UK workforce. | :09:26. | :09:28. | |
The possibility was raised by the firm's chief regulatory | :09:29. | :09:30. | |
officer, and is the latest warning from a financial firm since the UK | :09:31. | :09:33. | |
Currently, UK-based companies can conduct business throughout Europe, | :09:34. | :09:36. | |
Listen to this. United airlines says it will offer passengers were | :09:37. | :09:46. | |
volunteered to give up their seats on overbooked flights up to $10,000. | :09:47. | :09:51. | |
That's in the wake of recent publicity problems, there they are | :09:52. | :09:56. | |
dragging that passenger down the aisle of the plane. The offer came | :09:57. | :10:02. | |
after rival Delta airlines outlined plans to offer $9,950 in similar | :10:03. | :10:08. | |
cases. United said it would act to reduce overbooking and improve | :10:09. | :10:09. | |
customer satisfaction. We had a quick tweet. Eric says, for | :10:10. | :10:20. | |
?10,000, I would wait for the next flight! | :10:21. | :10:26. | |
South Korean giant Samsung has reported its best quarterly | :10:27. | :10:28. | |
for three years thanks to memory chips and TVs. | :10:29. | :10:30. | |
Sharanjit Leyl is in our Asia Business Hub in Singapore. | :10:31. | :10:33. | |
It is looking good for Samsung, moving in the right direction. Yes, | :10:34. | :10:39. | |
with those results you would never guess it had battled a corruption | :10:40. | :10:43. | |
It's all due to demand for memory It's all due to demand for memory | :10:44. | :10:47. | |
chips for flat screen televisions and phones, it's given the company | :10:48. | :10:52. | |
its best quarterly profits in three years, a 48% jump in operating | :10:53. | :10:57. | |
profits to 8.8 billion for the period. It says it is relying on its | :10:58. | :11:01. | |
new Galaxy smartphones to rebuild its reputation after the Note seven | :11:02. | :11:09. | |
fiasco last year when it had to recall 2.5 million handsets after | :11:10. | :11:13. | |
some caught fire. On top of that sum is and remains mired in scandal with | :11:14. | :11:18. | |
its de facto head on trial over his alleged role in a corruption scandal | :11:19. | :11:22. | |
that brought down the president of South Korea. He denies all of those | :11:23. | :11:30. | |
charges which include bribery and embezzlement of shares in Samsung. | :11:31. | :11:35. | |
I've had a look, more than 70%. Thank you. A real difference from | :11:36. | :11:40. | |
the figures we saw from Higham day yesterday. | :11:41. | :11:47. | |
Let's check in with the financial markets now. | :11:48. | :11:49. | |
The Canadian dollar and Mexican peso bounced sharply | :11:50. | :11:51. | |
after President Trump said he would not scrap the Nafta | :11:52. | :11:54. | |
Tokyo shares fell snapping a four-day rally, taking the lead | :11:55. | :11:57. | |
from US markets after the Trump administration unveiled the outlines | :11:58. | :12:00. | |
of its tax plan which failed to inspire investors mainly due | :12:01. | :12:03. | |
How is Europe looking, slightly down following fat lead from Wall Street. | :12:04. | :12:16. | |
The rest of the news from Wall Street today. Two giants will be | :12:17. | :12:24. | |
reporting results on Thursday, alphabet and Microsoft. A big part | :12:25. | :12:30. | |
of Alphabet's revenue comes from advertising but it is looking to | :12:31. | :12:34. | |
diversify and focus on things like hardware and cloud business | :12:35. | :12:39. | |
computing. Where the company sees growth potential. Now Microsoft is a | :12:40. | :12:43. | |
clear example of a company that is benefiting from cloud computing. And | :12:44. | :12:47. | |
investors are expecting the bad part of the business will continue to | :12:48. | :12:53. | |
grow. Also reporting earnings is forward and after two straight years | :12:54. | :12:58. | |
of record sales for American's automotive industry investors are | :12:59. | :13:00. | |
bracing themselves for a dip in sales problems. And finally am as an | :13:01. | :13:07. | |
report on Thursday. The online retailer dominates e-commerce, and | :13:08. | :13:11. | |
continues to invest in data centres, warehouses and video content. -- | :13:12. | :13:18. | |
Amazon reports. Justin joins us, always good to see you. Pleasure. | :13:19. | :13:27. | |
Big problems in Italian, I think they say. Alitalia was hoping on a | :13:28. | :13:35. | |
big rescue plan from Etihad, based in Abu Dhabi, it was its model, | :13:36. | :13:39. | |
buying stakes in other airlines. It was going to put in to 8.2 million | :13:40. | :13:48. | |
dollars. The Labour union voted no, thanks to cost-cutting problems, | :13:49. | :13:53. | |
Etihad said goodbye. Remember BA and Iberia had a similar issue, huge | :13:54. | :13:58. | |
amount of change so jobs had to go and they restructured it so it is | :13:59. | :14:01. | |
now profitable and operating effectively. They had to go through | :14:02. | :14:06. | |
that pain so they are now allowed to. Alitalia has always been a | :14:07. | :14:11. | |
basket case. Not only the unions, the entire structure in Italy of the | :14:12. | :14:14. | |
state and operations and pulling them away into the private world, it | :14:15. | :14:19. | |
doesn't work that easily. Virtually any other airline would have been | :14:20. | :14:24. | |
better. Etihad will be saying, I am Ofcom and find somewhere else to | :14:25. | :14:31. | |
fly. President Trump's tax plan has disappointed investors even though | :14:32. | :14:34. | |
it's been heralded as the biggest tax change in history. It was 250 | :14:35. | :14:41. | |
words! Remember when Ronald Reagan came out with his plan, incredible | :14:42. | :14:47. | |
detail. There is no plan. It's just a concept, I thought. It's better to | :14:48. | :14:51. | |
travel than to arrive, the markets had expected a good tax boost and | :14:52. | :14:57. | |
they will no say, where, how, will that get through Congress? Because | :14:58. | :15:02. | |
people will ask, was going to pay for this. The Republicans don't do | :15:03. | :15:10. | |
borrowing. Justin, we will see related to talk about more stories | :15:11. | :15:13. | |
in the papers including united airlines and their latest offer for | :15:14. | :15:18. | |
overbooked passengers. That is still to come. | :15:19. | :15:29. | |
We will meet the man who started the bank by entrepreneurs for | :15:30. | :15:36. | |
entrepreneurs. Lloyds banking group has almost | :15:37. | :15:50. | |
doubled its pre-tax profit in the three months to March. | :15:51. | :15:56. | |
Boss Antonio Horta-Osorio, said the bank had delivered "strong | :15:57. | :15:58. | |
financial performance" after reporting profits | :15:59. | :15:59. | |
of ?1.3 billion Laith Khalaf is a senior analyst at Hargreaves | :16:00. | :16:02. | |
Good morning. This is really good news, isn't it, for Lloyds bank? It | :16:03. | :16:19. | |
certainly seems as though it has turned its fortunes around. Yet we | :16:20. | :16:25. | |
still have that 2% owned by the tax payer, which is good news for the | :16:26. | :16:29. | |
taxpayer, given the share price has gone up. | :16:30. | :16:32. | |
Absolutely. Pretty good set of results. Taxpayers still have some | :16:33. | :16:36. | |
money left in there. Taxpayers have broken even on the ?20 billion that | :16:37. | :16:40. | |
was injected during the financial crisis. Probably a good indicator | :16:41. | :16:46. | |
for the UK economy, as well. Lloyds bank is a canary in a coal mine, if | :16:47. | :16:49. | |
you think about all the things it has done. It is domestically focused | :16:50. | :16:54. | |
with mortgages and loans. The fact it has done well is probably a good | :16:55. | :16:58. | |
sign to the broader economy, as well. | :16:59. | :17:00. | |
Is it also a sign that the banking sector is moving away, once and for | :17:01. | :17:07. | |
all, from all of the crisis, the financial crisis, and abusing it | :17:08. | :17:10. | |
presented? Never say never when it comes to the | :17:11. | :17:20. | |
banks. If you look at RBS, that is still a long way from being in | :17:21. | :17:25. | |
private hands. 75% still owned by the government, still facing | :17:26. | :17:29. | |
problems. And with Lloyds bank we have PPI rearing its head again in | :17:30. | :17:33. | |
the last three months. It's probably a bit early to say we are totally | :17:34. | :17:36. | |
out of the woods but things are looking better for Deloitte and the | :17:37. | :17:39. | |
wider banking sector, as well. Low interest rates still a thorn in | :17:40. | :17:45. | |
their side, as well. -- looking better from Lloyds bank and the | :17:46. | :17:46. | |
wider banking sector, as well. In a press conference from the CEO | :17:47. | :17:57. | |
from Lloyds bank, he doesn't expect any rise in UK interest rates. Quite | :17:58. | :18:07. | |
tricky to predict. What do you do? The rest of the banking sector has | :18:08. | :18:11. | |
fallen, so that might have fed into that. Quite interesting. | :18:12. | :18:12. | |
That could be a good point. You're watching Business | :18:13. | :18:20. | |
Live - our top story: The US president, Donald Trump, he | :18:21. | :18:29. | |
has done it again, this time he has told Mexico and Canada that he wants | :18:30. | :18:34. | |
to renegotiate, not scrap, the North American Free Trade Agreement | :18:35. | :18:36. | |
despite during the entire campaign he said it was the worst trade deal | :18:37. | :18:40. | |
ever in he said it was the worst trade deal | :18:41. | :18:40. | |
ever in American history. Let's have a look at other markets | :18:41. | :18:45. | |
have been faring. There has been an impact from President Trump's tax | :18:46. | :18:50. | |
plan that he unveiled yesterday. His Treasury team did. Scant detail, | :18:51. | :18:57. | |
really come on what he is proposing. 15% corporate tax rate, but no real | :18:58. | :19:01. | |
idea on how to pay for it. Investors have reacted. | :19:02. | :19:05. | |
It takes an entrepreneur to spot an entrepreneur. | :19:06. | :19:07. | |
At least that's the philosophy of our next guest - | :19:08. | :19:10. | |
the man behind a challenger bank with a difference. | :19:11. | :19:17. | |
Rishi Khosla is a serial start-up entrepreneur, and so it's | :19:18. | :19:20. | |
perhaps only natural that he came up with the idea | :19:21. | :19:22. | |
of a bank for people who share his passion | :19:23. | :19:24. | |
So in 2015 he established a bank for entrepreneurs - | :19:25. | :19:28. | |
It's an online lender - and specialises loans to a range | :19:29. | :19:33. | |
of businesses from fast growing companies to property | :19:34. | :19:35. | |
Its loan book currently stands at around $576 million. | :19:36. | :19:40. | |
Rishi Khosla, the Founder and CEO of OakNorth Bank joins us now. | :19:41. | :19:45. | |
Thank you for joining us. How do you do this? What gave you the idea to | :19:46. | :19:55. | |
start up a bank like this? I started my previous business in 2002. I went | :19:56. | :20:02. | |
HSBC and Barclays to get a 100 K overdraft. They said they would only | :20:03. | :20:06. | |
do that by putting a mortgage on my house. After not taking a salary of | :20:07. | :20:09. | |
the two years, I was all in, I didn't want to give up my house. | :20:10. | :20:11. | |
INAUDIBLE It was a slow process. It typically | :20:12. | :20:54. | |
takes anywhere between six months for a no from a high street bank. | :20:55. | :20:59. | |
And six to nine months to actually get funding. Those timelines have | :21:00. | :21:05. | |
been extended because of Brexit. Now you have entrepreneurs who want to | :21:06. | :21:12. | |
build their businesses. The best entrepreneurs have been building in | :21:13. | :21:17. | |
this environment. Therefore we have found a good pool of strong | :21:18. | :21:21. | |
entrepreneurs coming to us. That is what has taken our loan book to over | :21:22. | :21:27. | |
half a billion today. That is since the referendum. The UK banking | :21:28. | :21:34. | |
sector needed a change. How have they looked upon... I'm wondering if | :21:35. | :21:39. | |
it is a bit of a club, a group of guys, little bit snobbish. We | :21:40. | :21:47. | |
focused on what we needed to do. We focused on helping entrepreneurs. | :21:48. | :21:50. | |
For us we don't spend time bothering about what other banks think of us. | :21:51. | :21:56. | |
We just focus on executing like any good entrepreneur does. Where do you | :21:57. | :22:03. | |
go from here? Are you hoping to expand? And how far? | :22:04. | :22:07. | |
Bricks and mortar? If you look at where we have come | :22:08. | :22:13. | |
from. We were zero 19 months ago, having that half a billion today, | :22:14. | :22:16. | |
and I think we will continue lending up to those levels. We will build a | :22:17. | :22:22. | |
book of several billion pounds over the next few years. The size of the | :22:23. | :22:27. | |
gap within the UK market is large in terms of business needs, that we | :22:28. | :22:31. | |
just want to become the go to thank for middle market growth companies | :22:32. | :22:39. | |
and house-builders. -- do go to bank. You know how important it is | :22:40. | :22:43. | |
to get the right funding at the right time. Absolutely. We will | :22:44. | :22:50. | |
continue to be over capitalised. I don't know why you are still | :22:51. | :22:54. | |
working. You invested in PayPal in 2000. These people who make money | :22:55. | :23:03. | |
always need to continue making money. Go and live on an island | :23:04. | :23:07. | |
somewhere with a boat. It is shaking up the industry. Do you think we | :23:08. | :23:11. | |
will see more of the likes... Hopefully, yes. I think the banking | :23:12. | :23:18. | |
market in the UK has been very much control for over 150 years. We need | :23:19. | :23:22. | |
better choice. We need better service for consumers and | :23:23. | :23:27. | |
businesses. Absolutely. It's good. Great to have you. Thanks very much. | :23:28. | :24:08. | |
Justin Urquhart-Stewart, Director of Seven Investment | :24:09. | :24:10. | |
10,000 grant to give up your seat. We put this out to Twitter. -- | :24:11. | :24:20. | |
10,000 grand. | :24:21. | :24:32. | |
Kimberly said she would take an upgrade any day of the week. There | :24:33. | :24:38. | |
is an incentive. I'm amazed. They always used to make offers. These to | :24:39. | :24:42. | |
say we've overbooked, we have a problem, would you like to be | :24:43. | :24:46. | |
upgraded, would you like some money? I had a great one years ago. British | :24:47. | :24:50. | |
Airways made a mess of things. They said would you mind staying the | :24:51. | :24:56. | |
Concorde? I had to think about it Concorde? I had to think about it | :24:57. | :24:59. | |
for one second. It was a treat. Fantastic. Up to ?10,000. Airlines | :25:00. | :25:08. | |
cannot afford it. It depends if you are on the seat, | :25:09. | :25:14. | |
or at the check in desk. Exactly. United are saying we won't kick you | :25:15. | :25:17. | |
out, they want you on the plane, so that is where we have this problem | :25:18. | :25:21. | |
of them trying to get you out. The whole point of it was to get logic | :25:22. | :25:25. | |
into what was going on so people understand. And if you are offered | :25:26. | :25:30. | |
money to go somewhere else, so be it, why not? It is all about damage | :25:31. | :25:34. | |
limitation. After all that has happened to them and other airlines. | :25:35. | :25:37. | |
Other stories like this will be coming out. You think so? Yeah. We | :25:38. | :25:43. | |
had the Rabbit story yesterday. The giant bunny who died. For | :25:44. | :25:49. | |
unknown reasons. It might have been the food. | :25:50. | :25:52. | |
CHUCKLES Thank you very much. | :25:53. | :26:11. | |
Good morning. Milder weather is on the | :26:12. | :26:13. |