:00:07. > :00:09.This is Business Live from BBC News, with Sally Bundock and Ben Thompson.
:00:10. > :00:16.HSBC splashes the cash on a share buyback as profits soar.
:00:17. > :00:39.Live from London, that's our top story on Monday 31st July.
:00:40. > :00:54.It looks like a towering success across the business but with Brexit
:00:55. > :00:57.on the horizon and change at the top of HSBC can it
:00:58. > :01:02.Apple is criticised for helping China censor the internet after it
:01:03. > :01:05.It says it was just sticking to the rules.
:01:06. > :01:13.We will be live in Shanghai. And we'll be talking to the winners and
:01:14. > :01:19.losers. And who would you trust with your bank account. We will need one
:01:20. > :01:23.London digital bank that promises a new way of managing your money. We
:01:24. > :01:29.ask what would be the one thing you change about the bank you use,
:01:30. > :01:34.cheaper loans, better interest rates, faster service?
:01:35. > :01:48.Good to have you with us. Banking is dominating the programme today, get
:01:49. > :01:50.in touch with your thoughts. We are talking about Europe's biggest bank,
:01:51. > :01:52.HSBC. One of the world's biggest banks,
:01:53. > :01:55.HSBC, has reported its latest set of earnings and if
:01:56. > :01:57.you're a shareholder you are going to be very pleased
:01:58. > :02:15.with what they have to say today. The bank made a pre-tax
:02:16. > :02:25.profit of $5.28 billion in the second quarter of the year -
:02:26. > :02:30.that's more than the $4.6 HSBC announced a share
:02:31. > :02:41.buyback of up to $2 billion as it looks to make the most
:02:42. > :02:44.of its huge cash pile. The move will effectively restrict
:02:45. > :02:46.the supply of shares in the market and should lead
:02:47. > :02:49.to the company's value rising. In the last 12 months
:02:50. > :02:52.the bank has had a good run with its stock price almost doubling
:02:53. > :02:55.in value as you can see here. Peter Hahn is a Professor of Banking
:02:56. > :03:01.at The London Institute So many things to discuss when it
:03:02. > :03:02.comes to things like HSBC. The results are better-than-expected,
:03:03. > :03:06.beating pretty modest expectations. Yes, most banks have delivered a
:03:07. > :03:13.message that they could beat so the banks have generally all exceeded
:03:14. > :03:17.expectations, that is good news. We said managing expectations, didn't
:03:18. > :03:25.they set the bar pretty low? I think they set it pretty low. There's some
:03:26. > :03:29.good news in HSBC 's results. Its business mix is hitting more
:03:30. > :03:32.across-the-board. It was more concentrated on one business before
:03:33. > :03:36.so some of their weaker businesses have come back. The results also
:03:37. > :03:41.show a greater dependence. They were stating that they were going more
:03:42. > :03:47.towards Asia. Asia is more of the real money for Aegis PC. A lot of
:03:48. > :03:52.change underway for the banks, we know it has been cutting costs, it
:03:53. > :03:56.also has to split the retail and the investment is required by changes in
:03:57. > :04:04.regulation. That has cost it quite a lot of money to put into place. Yes,
:04:05. > :04:10.in the UK, in the statement they put out, they spent ?400 million, and
:04:11. > :04:14.they had millions of people involved, when you mention splitting
:04:15. > :04:22.their retail from their corporate business, it's a UK phenomena. I
:04:23. > :04:24.think it is still an integrated bank and other places but the UK has
:04:25. > :04:32.decided to take this route to separate. It solves some issues yet
:04:33. > :04:35.probably creates more than it solves! Also management changes will
:04:36. > :04:44.figure in this over the coming years. We've got some confirmed,
:04:45. > :04:51.some not confirmed. Talk us through it. A new chairman is coming in,
:04:52. > :04:59.Douglas Flint was the finance director before, and new chairman
:05:00. > :05:05.has been named, his experience, significant in Asia, he was in Asian
:05:06. > :05:14.insurance and for a short time had been finance director for HSBC. That
:05:15. > :05:18.is telling about the focus of the bank. The Seoul government is
:05:19. > :05:24.retiring so we'll see a change of chairman and CEO. The real question
:05:25. > :05:33.for HSBC as they tried to determine the next CEO, Wilkie focus more
:05:34. > :05:40.internally -- will he focus more internally or with the focus on
:05:41. > :05:46.Asia, try to develop new business? If we look at many bank statements,
:05:47. > :05:52.HSBC is not different from many. There's a lot of revenue growth in
:05:53. > :05:56.this business, it is about control. Something we will be talking about
:05:57. > :06:05.in future, I am sure, thank you, Peter. HSBC shares in London, one of
:06:06. > :06:11.the leading winners on the FTSE this morning. Let's look at some other
:06:12. > :06:15.stories making the news. The Chancellor, Philip Hammond,
:06:16. > :06:21.suggested that the UK will not cut taxes and regulation after Brexit to
:06:22. > :06:25.try to undercut European rivals. His interview with a French newspaper
:06:26. > :06:30.contradicts what he said with a German newspaper earlier this year.
:06:31. > :06:35.Shopper in the largest economy in the Eurozone, Germany, helped it to
:06:36. > :06:40.see the biggest increase in retail sales last year, month by month
:06:41. > :06:43.those retail sales rose by 1.1% all adding to the positive momentum
:06:44. > :06:47.that's leading to a robust end to the second quarter of the year.
:06:48. > :06:53.Official data from the Chinese government suggests
:06:54. > :06:57.that the country's manufacturing sector, still the backbone
:06:58. > :07:01.It is still growing though, propped up by a government-led
:07:02. > :07:02.infrastructure push that's keeping construction humming
:07:03. > :07:08.and propping up the world's second-largest economy.
:07:09. > :07:15.Let's stay in China because Apple has been criticised after removing
:07:16. > :07:19.some software from its app store in China that allows users to get
:07:20. > :07:23.around tough restrictions on Internet access. The change comes
:07:24. > :07:25.after the Chinese government announced a crackdown on what it
:07:26. > :07:47.calls Virtual Private networks. What is a Virtual Private network,
:07:48. > :07:50.it punches a tunnel from your iPod or your phone and allows you to see
:07:51. > :07:55.what happens on the web. It is crucial in China because the
:07:56. > :07:59.regulatory environment is so tough with so many filters and bands put
:08:00. > :08:07.in place by the government on what you can see so if you want to look
:08:08. > :08:11.at Gmail or Facebook you need a VPN. The government announced tougher
:08:12. > :08:17.restrictions will come in next year so VPN providers will need licenses.
:08:18. > :08:23.Apple which sells most VPN Dexter in China has moved quickly to remove
:08:24. > :08:28.the VPN apps that don't have a license ready. Tim Cook, the CEO of
:08:29. > :08:36.Apple, says he wants to continue to grow and invest in China. Apple gets
:08:37. > :08:41.50 billion US dollars from China so China is very important to it.
:08:42. > :08:47.Speaking to the rules it seems even more important. Interesting to see
:08:48. > :08:51.how these relationships develop. Thank you, Robin.
:08:52. > :08:57.A quick look at how markets are faring.
:08:58. > :09:04.This is the Dow Jones on Friday. In general we have teams which we will
:09:05. > :09:11.discuss in detail in a moment, if we look at the European markets, we
:09:12. > :09:15.have commodities in general edging up, mining stocks are doing well and
:09:16. > :09:20.so our energy stocks and that will boost the FTSE 100. A lot of those
:09:21. > :09:25.are listed in London. Also among the winners HSBC. Rolls-Royce is the
:09:26. > :09:28.biggest loser on the FTSE 100 today, coming up with their results
:09:29. > :09:32.tomorrow. Let's keep an eye on them. We'll talk about their results
:09:33. > :09:36.tomorrow. Heineken saw their sales rising in the first half by almost
:09:37. > :09:39.6% so a lot of earnings coming through, we'll try to keep you up
:09:40. > :09:54.with all of that, now looking ahead to
:09:55. > :09:57.Wall Street with Michelle. Stocks are trading near record highs, will
:09:58. > :09:59.the corporate earnings this week help to keep prices aloft? We are
:10:00. > :10:01.more than halfway through reporting season, good results so far,
:10:02. > :10:03.companies listed on track to increase earnings by more than 10%.
:10:04. > :10:06.There's also some positive economic data last week pointing to faster
:10:07. > :10:10.growth in the second quarter. Which names should we look forward to
:10:11. > :10:15.keeping the momentum going this week? Perhaps the biggest is Apple,
:10:16. > :10:19.which reports on Tuesday. The tech giant is expected to turn in a rise
:10:20. > :10:23.in revenue for the third quarter thanks to stronger sales of its
:10:24. > :10:28.iPhone seven and seven plus smartphone. Apple often releases its
:10:29. > :10:34.latest iPhone in September but this year there has been speculation that
:10:35. > :10:36.it might be until October. So investors will be looking for more
:10:37. > :10:42.guidance from the company on this issue. Tesla, Pfizer and Craft of
:10:43. > :10:52.the other companies do to turn in report cards this week.
:10:53. > :10:58.Joining us is Lawrence Gosling, editor-in-chief of Investment Week.
:10:59. > :11:07.I'm interested in the parent company of Snapchat,. Senior executives said
:11:08. > :11:10.they would not sell any shares in the company floated on the US market
:11:11. > :11:16.but now they can. How much stock do they sell if any. We had a rise in
:11:17. > :11:20.the snap price when it floated and now it's drifting back down. Looking
:11:21. > :11:25.like one of those classics were everyone asks, how do they make
:11:26. > :11:29.money. This is when we seek a look at its true value, who is selling it
:11:30. > :11:35.and who is buying, who is investing. It's kind of an artificial period.
:11:36. > :11:40.When executives sell its a good indicator of how much they believe
:11:41. > :11:43.in the future, so normally people like to take some money off the
:11:44. > :11:47.table to pay their mortgages or school fees, I suspect we will not
:11:48. > :11:53.see as much as we might if the price was higher. The oil price is heading
:11:54. > :12:00.up the game, various issues on the market. Sanctions against Russia
:12:01. > :12:04.announced by the US. And political unrest in Venezuela. Valenzuela has
:12:05. > :12:09.the most oil in the world, more than Saudi Arabia. -- Venezuela. We
:12:10. > :12:13.talked about Chinese growth figures, they are probably slightly better
:12:14. > :12:18.than people thought, and the spending on infrastructure shows
:12:19. > :12:22.more demand for oil. This is about supply and demand, demand is
:12:23. > :12:26.slightly higher and supply slightly tighter. Opec keeping a close eye
:12:27. > :12:32.because they are figuring out how to get used to the new normal. Trying
:12:33. > :12:36.to keep an almost artificial price of $50 on the price of a barrel of
:12:37. > :12:42.oil, it could go lower if all the supply came into the market. We love
:12:43. > :12:48.giving them fancy names to make them more exciting, Thursday is Super
:12:49. > :12:53.Thursday! It's a big Bank of England meeting. I'm not sure why it is
:12:54. > :12:59.super, it is a quiet Thursday in August! The focus will be on whether
:13:00. > :13:03.there will be an interest rate rise. Three economists out of 80 expected
:13:04. > :13:10.a rise. Probably not that super by the time we get to lunchtime! Damp
:13:11. > :13:15.is good Thursday! What is the one thing you would change about your
:13:16. > :13:19.bank if you could. I went temporarily overdrawn through paying
:13:20. > :13:23.some direct debits, I would like them to tell me that, because the
:13:24. > :13:27.end of the month cash flow issue we get, get paid on one day and direct
:13:28. > :13:30.debits go out a couple of days before, your banks know when your
:13:31. > :13:34.money is coming in so if they could signal it and give you a couple of
:13:35. > :13:40.days grace without charging the full's interest I would be very
:13:41. > :13:43.happy. Good suggestion. Good to see you, Lawrence.
:13:44. > :13:57.But would you trust Apple, Google and Facebook
:13:58. > :13:59.Or do you rely on the age-old institutions?
:14:00. > :14:10.You're with Business Live from BBC News.
:14:11. > :14:22.In the UK, the Financial Conduct Authority has said
:14:23. > :14:24.unauthorised overdrafts may be regulated.
:14:25. > :14:26.It said charges for the overdraft were complex
:14:27. > :14:27.and hard for customers to understand.
:14:28. > :14:34.Theo Leggett is in our business newsroom
:14:35. > :14:42.Theo, talk is through this. They might ban unauthorised overdrafts,
:14:43. > :14:45.these can be very costly. In fact according to the FSA they can be
:14:46. > :14:48.more costly than payday loans which are already regulated because they
:14:49. > :14:53.were proving to be too expensive. Today they have said about
:14:54. > :14:57.unauthorised overdrafts, "Based on the evidence we have to date, we
:14:58. > :15:01.believe there is a case to consider the fundamental form of an arranged
:15:02. > :15:05.overdrafts and whether they should have a place in any modern banking
:15:06. > :15:09.market. We have significant doubts about whether any and arranged
:15:10. > :15:13.overdrafts in their current form can continue in a well functioning
:15:14. > :15:16.market." That leaves two options which can be consulted on,
:15:17. > :15:23.potentially banning them or tightening the rules considerably.
:15:24. > :15:27.What did they say of payday loans? Remember they've been capped for the
:15:28. > :15:32.last two is because they were generating headlines about sky-high
:15:33. > :15:35.interest rates trapping people in a vicious cycle of payday borrowing
:15:36. > :15:39.we'll had to borrow one month to make it to the end of the month and
:15:40. > :15:43.there was a lot of interest charges loaded onto next month you had to
:15:44. > :15:47.borrow more and so on. Well, nowadays, they are capped so that
:15:48. > :15:51.the total in terms of fees and interest charges you can end up
:15:52. > :15:55.paying is equal to the value of the loan so you never pay more than the
:15:56. > :16:02.value of the original loan plus that again. They say that this cap is
:16:03. > :16:07.working. The FSA says the 760,000 borrowers are saving a total of ?150
:16:08. > :16:10.million a year. Firms are less likely to lend to customers who
:16:11. > :16:16.can't afford to repay. They will keep the cap in place until 2020 and
:16:17. > :16:20.review it again. Thank you, Theo. More about that on our Business Live
:16:21. > :16:32.page. Sales are down at Trinity Mirror. It
:16:33. > :16:40.is a familiar tale. Pre-tax profits were down 11%. It is advertising
:16:41. > :16:48.that's the problem for the print organisations.
:16:49. > :16:54.You're watching Business Live. Our top story:
:16:55. > :17:01.Shares in HSBC are up significantly in London on the news, it has seen a
:17:02. > :17:07.big rise in profits in the second quarter and it has announced a about
:17:08. > :17:12.billion share buy back. HSBC is boosting the FTSE 100. A
:17:13. > :17:16.similar picture across Europe. Interesting times ahead. We were
:17:17. > :17:19.discussing with Lawrence earlier about potential discussions of
:17:20. > :17:23.interest rate rises and whether we will get one in the UK on Thursday.
:17:24. > :17:34.The chances are it's not going to happen again.
:17:35. > :17:37.Let's discuss the bank account you have got or the bank account you use
:17:38. > :17:39.to do your money matters. When is the last time
:17:40. > :17:41.you changed your bank account? Chances are you're still with
:17:42. > :17:44.the same one you've had for years. And chances are it's one
:17:45. > :17:46.of the big old institutions. So, the lack of competition
:17:47. > :17:53.amongst banks has forced the government in
:17:54. > :17:54.the UK into action. In 2015, UK authorities
:17:55. > :17:56.launched an investigation It found that the four biggest banks
:17:57. > :18:00.dominated the market with over It means few of us bother
:18:01. > :18:09.to switch to a rival bank. A new breed of so-called challenger
:18:10. > :18:12.banks have emerged as a result of the investigation,
:18:13. > :18:14.many of these don't have high-street branches,
:18:15. > :18:17.but use call centres Earlier this year it
:18:18. > :18:23.received its full banking license meaning that it can now offer
:18:24. > :18:25.conventional current accounts. Tom Blomfield is the Chief
:18:26. > :18:35.Executive of Monzo Bank. Good morning Tom. Good morning. So
:18:36. > :18:38.much to talk about when it comes to the changes in banking. It's
:18:39. > :18:45.something we talked about before, but that idea of just shaking up the
:18:46. > :18:47.entire market. We're reliant on the big old institutions that have
:18:48. > :18:51.headquarters in the city and branches on the high street and
:18:52. > :18:56.you're doing it differently? We are an app only smartphone bank. We
:18:57. > :19:00.offer current accounts via an iPhone app or an android app. It strikes me
:19:01. > :19:07.that you have got to be tech savvy to do that? It started out really
:19:08. > :19:16.very focussed. 31-year-old males in Shoreditch. It has broadened out...
:19:17. > :19:23.You're describing Ben. I don't live in Shoreditch. Most tend to be 20
:19:24. > :19:27.and 40. We talk about the shape up in banking and there is some big
:19:28. > :19:30.changes on the way. It is called open banking, it is part of the EU
:19:31. > :19:33.directive that would allow the information that we have at our
:19:34. > :19:36.banks to be freed up. So, actually, there may come a day and we said
:19:37. > :19:41.this earlier, that the likes of Apple or Facebook or Google could
:19:42. > :19:44.create an app that encompasses all our bank accounts so we don't have
:19:45. > :19:48.to go into each individual one and that could be a big shift? That's
:19:49. > :19:57.right. So in January of next year, this piece of regulation called PSD
:19:58. > :20:02.2, it requires any bank offering a payment account to open up the data.
:20:03. > :20:06.It is a message that says look, this data in your bank accounts could be
:20:07. > :20:11.very, very valuable, but the banks are sitting on it and not doing
:20:12. > :20:15.anything. It forces them to make that data available to their
:20:16. > :20:19.customers. If you were a customer of HSBC or Barclays and you want to
:20:20. > :20:24.take that data and share it with a third party, you will be able to do
:20:25. > :20:29.so from January of next year. There is the need out there, the desire
:20:30. > :20:35.for change. But given what happened in 2008, and you know the collapse
:20:36. > :20:40.of Lehman Brothers and the run on the bank at Northern Rock, the fear
:20:41. > :20:42.factor kicked in and suddenly you like the old-fashioned bank that's
:20:43. > :20:45.been there for hundreds of years because you believe it will get
:20:46. > :20:51.bailed out by governments if things go wrong and your savings will be
:20:52. > :20:54.OK. But Monzo Bank maybe not? Well, the changes that were introduced as
:20:55. > :20:59.a result of those two big to fail banks RBS and Lloyds, which cost the
:21:00. > :21:03.taxpayer tens of billions of pounds in bail outs. The Government
:21:04. > :21:07.responded by saying actually we want more banks with more competition so
:21:08. > :21:11.if one or two fail, that's OK. That's a sign of a well functioning
:21:12. > :21:16.market and the way we will protect consumers is the Financial Services
:21:17. > :21:20.Compensation Scheme. So your deposits are guaranteed up to
:21:21. > :21:24.?85,000. That's the hassle though. It is easier if you're bailed out by
:21:25. > :21:30.the Government and your savings is not touched? I'm not sure as an
:21:31. > :21:35.economy we can afford another ?47 billion bail out. I'm not suggesting
:21:36. > :21:41.we go that way. We talked a lot about the UK and clearly with Europe
:21:42. > :21:46.PDS 2 will change how we bank. What plans elsewhere? Is this being
:21:47. > :21:50.repeated around the world or is it a European issue? It is very much
:21:51. > :21:53.European for now. The FSA and the Bank of England are leading the
:21:54. > :21:58.world, I think, in terms of pushing innovation and regulation to try and
:21:59. > :22:01.drive competition and ultimately improvout comes for customers, so we
:22:02. > :22:04.are at the fore front, but other countries will follow. Tom, it is
:22:05. > :22:16.really nice to see you. Thank you for coming in. Best of luck. Keep us
:22:17. > :22:20.posted. Ask Here is a tip from one of the
:22:21. > :22:23.Chief Executives that we have been grilling.
:22:24. > :22:25.Sukhinder Singh is the head of the Whisky Exchange,
:22:26. > :22:28.one of the UK's largest online retailers of spirits and wines.
:22:29. > :22:31.There can be nothing better than taking your
:22:32. > :22:45.hobby or your interest and turning it into a business.
:22:46. > :22:49.My brother and myself we grew up in the business
:22:50. > :22:51.just surrounded by these interesting coloured bottles
:22:52. > :23:05.and spirits and I guess it caught our imagination.
:23:06. > :23:07.When your business is your passion, there is nothing more satisfying
:23:08. > :23:10.than coming into work every day and living and breathing
:23:11. > :23:16.Your staff can see, you know, the passion and the interest in you.
:23:17. > :23:18.You still need an element of business acumen and a
:23:19. > :23:23.You can't let your heart take over your mind.
:23:24. > :23:26.I mean a business at the end of the day is there to make
:23:27. > :23:29.money to, pay the bills, to pay for the staff.
:23:30. > :23:48.We asked you what's the one thing you want to change about your bank?
:23:49. > :23:54.One viewer said lower credit card interest rates. Adam, "Maintenance
:23:55. > :23:59.of internet banking and early closing hours." These are the things
:24:00. > :24:07.that annoy Adam. I have to agree the closing hours, the opening hours, I
:24:08. > :24:13.guess that's a high street bank. Harry, I agree you, as a teenager,
:24:14. > :24:17.watching teens, language to aid financial literacy. I don't know why
:24:18. > :24:20.we don't teach more financial literacy in schools.
:24:21. > :24:39.So the Financial Times, what's going on? MUFG is Japan's biggest bank and
:24:40. > :24:43.it has decided to move its investment banking business, but set
:24:44. > :24:47.up a new base in Amsterdam, it is part of the idea of City
:24:48. > :24:49.institutions relocating out of the city of the London on to the
:24:50. > :24:54.Continent in preparation for Britain leaving the European Union. What's
:24:55. > :24:59.the competition? So Frankfurt, Paris, Amsterdam? The big winner has
:25:00. > :25:03.been Frankfurt and Dublin. They have gone to Frankfurt and Dublin.
:25:04. > :25:07.Luxembourg has done well for fund managers and Lloyds of London
:25:08. > :25:10.surprised people by going to Brussels. Who is going to Berlin?
:25:11. > :25:16.There is one going to Berlin, ush' right. The picture is of dispassion.
:25:17. > :25:19.It is not that Frankfurt is suddenly overtaking the City of London or
:25:20. > :25:23.Paris, some banks are going to Paris. Different companies are
:25:24. > :25:27.choosing different locations, the idea that we were going to have a
:25:28. > :25:31.new financial centre of Europe growing up to replace London doesn't
:25:32. > :25:36.look to be true. How worried is the City of London? We don't know. It is
:25:37. > :25:39.all around all this stuff, we don't know what the final trading
:25:40. > :25:43.relationship between the UK and the EU will be. Once we know that,
:25:44. > :25:47.that's when we will know how worried we have to be. Happy Monday. Enjoy.
:25:48. > :25:50.We're back tomorrow. Are you back tomorrow? Yes. I'm back tomorrow.
:25:51. > :26:13.Tune in. Bye-bye. Good morning.
:26:14. > :26:20.It's the last day of July, but for some summer is temporarily on hold.
:26:21. > :26:21.An unsettled week ahead summed up as sunshine and showers. Warm in