:00:02. > :00:06.next year - and the Olympic Games. Those are the latest headlines from
:00:06. > :00:16.BBC World News. Now for the latest financial news with Sally Bundock
:00:16. > :00:23.
:00:23. > :00:29.Its reputation battered after a money-laundering scandal, HSBC
:00:29. > :00:39.reports profits later this morning. Another damaging strike for Iberia
:00:39. > :00:39.
:00:39. > :00:44.but the firm says it will not back down over job cuts. You'll with
:00:44. > :00:50.World Business Report. I'm Sally Bundock. -- your wit. Also China's
:00:50. > :01:00.taking action to burst a potential property bubble. But in a few hours
:01:00. > :01:00.
:01:00. > :01:06.Agers the sea will release its full year results. -- HSBC. They had a
:01:06. > :01:15.massive fine imposed for laundering money from Iran and Mexico. How
:01:15. > :01:19.much of an impact is it having on The full scale of the money
:01:19. > :01:25.laundering came to light as the police started cracking down on
:01:25. > :01:29.narcotics gangs in Mexico. A US Senate hearing concluded HSBC and
:01:29. > :01:33.Mexico was a conduit for the kingpins of the drugs trade to
:01:33. > :01:38.siphoned billions of dollars across the border. Money-laundering
:01:38. > :01:42.cheques were inadequate. HSBC managers say the episode has
:01:42. > :01:46.crushed its reputation. A few clients have so far with from their
:01:46. > :01:52.business in discuss. People in France and Germany aren't going to
:01:52. > :01:57.be bothered about what goes on in Mexico -- in disgust. The customers
:01:57. > :02:02.won't see these alleged incidences of mismanagement and Miss control
:02:02. > :02:07.at HSBC as being representative of the culture of HSBC in general.
:02:07. > :02:11.decade or so ago from its base here in London HSBC set out to make
:02:11. > :02:16.itself the world's local bank, snapping up subsidiaries in almost
:02:16. > :02:21.every country on every continent. But in the past three years it has
:02:21. > :02:27.sold off for a dozen of its foreign businesses and shared thousands of
:02:27. > :02:31.foreign staff -- four doesn't. -- shed. That has brought it $3
:02:31. > :02:41.billion a year in savings -- 4 doesn't. But what is its strategy
:02:41. > :02:42.
:02:43. > :02:50.now? We are focused on Asia but then growing to be a global bank.
:02:50. > :02:58.The heart is beating heart. Really it is kind of returning to that
:02:58. > :03:01.Corps Business. HSBC is scaling back -- core business. It's hoping
:03:01. > :03:11.also to live down the damage done in Mexico to its worldwide
:03:11. > :03:16.reputation. As soon as we get those earnings we
:03:16. > :03:21.will tell you. Ground and five staff at Iberia has begun another
:03:21. > :03:26.five-day strike. The Air Line have cancelled 1,400 flights -- flight
:03:26. > :03:31.staff. Unions are protesting at the plan to cut 4,000 jobs and
:03:31. > :03:36.reorganise services. Despite the industrial action, the parent
:03:36. > :03:46.company, IAG, which also owns British Airways, say it will
:03:46. > :03:49.
:03:49. > :03:53.continue with their cost-cutting plans. Douglas McNeill is an
:03:53. > :03:58.investment expert at Charles Stanley. This strike is hot on the
:03:58. > :04:03.heels of another one a few weeks ago. How effective are they? There
:04:03. > :04:08.were plenty of strikes last year and the union is struggling here.
:04:08. > :04:12.Iberia is in pretty decent financial strengths so far as cash
:04:12. > :04:15.reserves are concerned. When it comes to a strike, a union has to
:04:15. > :04:19.put serious pressure on the company's cashflow, the heartbeat
:04:19. > :04:23.of a business, and it's not doing their at. Despite all the
:04:23. > :04:29.destruction, the cancelled flights and the painted passengers, it's
:04:29. > :04:34.not really having an effect? -- not doing that. They have EUR500
:04:34. > :04:38.million in the bank. They are being cost a few million euros every day.
:04:38. > :04:43.It is painful but it is not something they need to be seriously
:04:43. > :04:49.worried about. The inconvenience to passengers is not only an issue --
:04:49. > :04:53.certainly. But management has enough cash to ride out this issue.
:04:54. > :04:58.How will this play out? Will we get to the point where politically the
:04:58. > :05:01.Spanish government will get involved? Is that a no-no
:05:01. > :05:06.considering where the Spanish government is at the moment. They
:05:06. > :05:10.are clearly concerned about the situation. We have seen huge scale
:05:10. > :05:14.redundancies. So far it has confined itself to making worried
:05:14. > :05:18.comments and it has not sought to get involved. It does have some
:05:18. > :05:26.influence because it controls Anglia, the troubled bank, and that
:05:26. > :05:32.has a 12% stake in IAG, but 12% only gets you so far. So basically
:05:32. > :05:36.the management, IAG, will get its way in the end? I think so. They
:05:36. > :05:40.are very well prepared in terms of cash and contingency planning. They
:05:40. > :05:45.are very committed to their restructuring plans. Those plans
:05:45. > :05:48.are being put into effect at the moment and they are going to be
:05:48. > :05:54.pushed through. Thank you for joining us. Again it is a story we
:05:54. > :05:58.are keeping an eye on. Switzerland has voted in favour of reining in
:05:58. > :06:03.executive pay. A referendum saw Swiss voters approve a package of
:06:03. > :06:09.measures including a greater say for shareholders in setting pay and
:06:09. > :06:15.a ban on arrival and departure bonuses. There was anger at a plan
:06:15. > :06:19.for a company, Novartis, to give its departing chairman $76 million.
:06:19. > :06:24.Finance ministers from the 17 nations that make up the euro will
:06:24. > :06:28.meet in Brussels today to discuss a bail-out for Cyprus. They have been
:06:28. > :06:31.negotiating to solve their financial crisis. Italy will be an
:06:31. > :06:36.discussion, especially after last week's election, which did not
:06:36. > :06:40.produce a clear winner. Arsenal says its two biggest shareholders
:06:40. > :06:45.are not interested in selling their stakes to investors from the Middle
:06:46. > :06:50.East. A report at the weekend said a bid worth $2.3 billion has been
:06:50. > :06:55.put together backed by firms from Qatar and the UAE. They are
:06:55. > :07:03.currently controlled by the American Stan Kroenke. Jack the
:07:03. > :07:08.America over the weekend. The Warner Brothers movie costs $200
:07:08. > :07:11.million and it took $28 million this weekend. The Chinese
:07:11. > :07:16.government wants to curb rising home prices and that has hit the
:07:16. > :07:20.stock market today, property shares are down a lot. We can speak to
:07:20. > :07:26.Rico Hizon in Singapore. Always nice to see you. Tell us more about
:07:26. > :07:31.the impact. A big impact, especially on the Shanghai Stock
:07:31. > :07:36.Exchange, which is currently sliding by about 3%. The property
:07:36. > :07:41.index tumbling close to 9%. You have the likes of Chris Banksy, a
:07:41. > :07:45.property giant, Beijing Capital Development, and other property
:07:46. > :07:51.related companies down by 10%. You have Hong Kong property shares
:07:51. > :07:56.being affected. China Resources are down between three to 5%. This
:07:56. > :08:00.comes after the government said that homeowners who sell their
:08:00. > :08:04.homes will be tax to 20% on the profit they make. The state council
:08:04. > :08:10.also said they will allow banks to charge higher interest rates on
:08:10. > :08:17.mortgages. -- taxed. The loss in the Chinese property sector is
:08:17. > :08:24.damaging the stock markets. The retail sector is a major
:08:24. > :08:27.contributor to China's economic growth, directly contributing to
:08:27. > :08:31.10% of the gross domestic product. Tightening the sector has brought
:08:31. > :08:37.in some major concerns on the country's recovery efforts. Apart
:08:37. > :08:40.from the property sector, Sally, all eyes are on the National
:08:40. > :08:45.People's Congress which starts tomorrow. This is where Xi Jinping
:08:45. > :08:50.is expected to be confirmed as president. All eyes on the China
:08:50. > :08:58.market and Chinese politics. Sally. Thank you for joining us. Let's
:08:58. > :09:03.mentioned in Shanghai and in Hong Kong, we are seeing some losses as
:09:03. > :09:10.a consequence of that story. The Hang Seng is down by 1.6%. Another
:09:10. > :09:16.story affecting markets as well, this company, the nominee of Shinzo
:09:16. > :09:21.Abe, the Japanese Prime Minister. - - this man. He is likely to become
:09:21. > :09:25.the new Bank of Japan governor. He said he will do whatever is needed
:09:25. > :09:30.to end 15 years of deflation. He has been talking about his plans.
:09:30. > :09:35.He said Open ended asset purchases could start sooner than next year.
:09:35. > :09:41.It means they are basically going to flush more money into the
:09:41. > :09:45.economy through similar measures to quantitative easing, to try to