07/05/2013 World Business Report

the weapons. -- imminent threat of.

Now it is time for the latest financial news.

French banks feel the pain as the French economy continues to

struggle. Two of the kind -- the country's top lenders report

earnings today. One in five workers know of fine

ensured misrepresentation when they work.

-- financial. Also in the programme: More central

bank action causes currencies to weaken. It is in the case of the

Australian dollar this time. First we focus on two of France's

biggest lenders. In a few hours we will hear from Societe Generale and

Credit Agricole as well. They will be thought earnings from the first

quarter of the Year. -- report. In the case of Societe Generale, most

Allah's predict they will reveal a 50% fall in net profits. -- most

analystss. The French economy has been

stalling for the past two years, now it is teetering on the brink of

recession. Large factories are threatened with closure and

thousands of jobs are threatened as well. House prices have started to

fall. All of this makes for a poor climate. People prefer to pile on

savings rather than to make more lines. This is reflected in the

housing sector. House prices, after having nicely rebounded, are

falling again. Definitely there is no appetite for mortgage lending.

survey of France's top five banks shows that revenue from pose --

personal lending declined after 20 years of continued growth. But

following the losses taken by their investment banking arms, especially

on Greeks sovereign debt, French banks are increasingly reliant on

personal lending to generate profits. Investors have to wake up

to the new normal in European banking. Banks will not be able to

make the profits that they had in the past, because they are not

doing the kind of risky business that they used to, now they are

focused on retail banking, which is more stable but has modest profits.

Investors in Society general will be looking at each house of the

Bank's cost-cutting programme. -- Societe Generale. It is thought to

total $1 billion. They have already said that branch closures will be a

key measure. Some analysts believe that across the board, French banks

could close 600 branches the sea, and shed 10,000 jobs. This will

effectively spell the end of 20 years of growth in the country's

banking sector. As soon as we hear from the two

banks, we will update you. One in five employees are aware of

financial manipulation in their own company, according to new research

released today by Ernst and Young. The survey covered at 3,000

employees in 36 countries in Europe, the Middle East, India and Africa.

It found that 42% of board directors and senior managers were

aware of irregular financial reporting. 38% believe their

companies fiddled the books to make the figures look better, and in

rapidly growing economies, almost half believe that financial

performance is deliberately misrepresented. In Western Europe,

the figure drops to 29%. I am joined by one of the authors of the

report. Quite worrying statistics that you

had put together in this report. We must note that it does not include

America or Asia. Tell us more about your findings. Clearly the results

of these are troubling. 3,000, more than 3,000 respondents, up to the

top level, if you take the sampling as it is, it is really troubling. A

lot of challenges that corporates are facing today. Why has there

been a significant increase in this kind of thing is going on within

companies? If you break the Sandling down to Middle East and

India and Africa, which is new for us, rapid growth markets, different

challenges of wire, such as corruption. -- applied. The second

is also mature economy is facing challenges. -- economies. They are

pushing the envelope a little too much. But there eye checks and

balances in place to prevent this kind of thing to happening. They

have become more stringent in recent years. You would have bought

but that this kind of manipulation, of earnings, or fiddling the books,

would have become less and less. There are probably two sides to the

story. FTSE 100 corporations... if you look at the kind of enforcement,

the statistics are higher than they had ever been. Corporations need to

continue to focus on this. That is what the employees are saying. It

would include training, education, and zero tolerance.

Companies exposing themselves to a significant risk as well as a

consequence. We want to look at what is going on

in Australia. The Australian dollar has been under pressure in

anticipation of a move by the Reserve Bank of Australia.

Have we heard from the bank yet? Just minutes ago, the Reserve Bank

of Australia came out with a key decision, and they had given the

economy a big shot in the arm. The central bank cut interest rates to

a record low of 2.75 %, and it was the first rate reduction since

December up. As the Governor said, it is the global outlook turning

more uncertain, and the domestic economy struggling with... before

the meeting, there was a lot of pressure on the Reserve Bank to cut

the cost of borrowing even further, and it soft data from China and

America. -- and it. Inflation remained at the bottom of the

central bank's 2-3% target. There was certainly scope for a rate cut.

The domestic economy remains sluggish. The retail sector is weak,

as it has been for three years, the higher Australian dollar is hurting

the manufacturing sector. Also the realisation that the resources boom

will not last for ever. But if you speak to some analysts, they say we

may not see another one to will the end of the year.

-- until. The dock workers in Hong Kong have

ended a 40-day strike that affected the world's busiest ports. 150

workers agreed to a pay increase of 9.1% after demanding a pay rise of

more than 20%. Union leaders say the deal was a success because the

pay rise was for all workers, not just those who went on strike.

Two of the US's biggest banks are being sued over the way they treat

home owners who are struggling to pay their mortgages. The New York

Attorney General says the Bank of America and Wells Fargo have broken

an agreement made last year which was supposed to improve the way

that banks have reclaimed properties from home owners.

A Danish brewing giant are among those reporting first-quarter

profits. They say it there will be a 10% rise in profits as demand

from Asia continues to grow up. As Asian countries with a vast

population grow richer, Carlsberg is seeing its sales increase. In

China, per capita consumption of beer is 39 litres per year. In the

US, it is 78 litres, so plenty of room for growth.

The markets have been focused on what is going on in Australia. Look