:00:00. > :00:00.The company says it has complied with orders.
:00:00. > :00:07.Those are the latest headlines from BBC World News.
:00:08. > :00:09.Now for the latest financial news with Sally
:00:10. > :00:24.Profits slide at Europe's biggest bank HSBC as it faces serious
:00:25. > :00:28.challenges in Europe and China - so what is the outlook for this banking
:00:29. > :00:39.With an election expected in a few months' time, will it be
:00:40. > :00:46.Economic reforms from tax to pensions are key election issues.
:00:47. > :00:52.The Brexit debate - what do those who run small
:00:53. > :01:01.We will hear from one business leader in a moment.
:01:02. > :01:04.But first, global banking powerhouse HSBC has just released
:01:05. > :01:17.It made $6.1 billion, the pre-tax profits figure. That is an over 20%
:01:18. > :01:24.fall compared to the before. It made just under $7.1 billion. 2016 has
:01:25. > :01:30.been a tough year from banks from the big players in the US to date
:01:31. > :01:40.European rivals. -- to their European rivals. It is also banking
:01:41. > :01:43.on growth in China, so is it exposing itself to more pain in the
:01:44. > :01:44.future? With me is Christopher Wheeler,
:01:45. > :01:55.bank analyst at Atlantic Equities. Nice to see you again. Last time we
:01:56. > :01:59.spoke it was all of the big US names reporting, and it was bad news after
:02:00. > :02:06.bad news. What you make of the HSBC numbers? Similar problems in many
:02:07. > :02:12.ways. Their strong this business is commercial banking, and investment
:02:13. > :02:18.banking. Investment banking has been hit ID trading issues we have seen
:02:19. > :02:26.from the US banks. A big focus on Asia in commercial banking where has
:02:27. > :02:29.been so down. -- slowdown. And it's personal banking businesses in the
:02:30. > :02:35.UK and Hong Kong have been hit by the environment. Interesting for
:02:36. > :02:38.HSBC, because it may be an announcement it is keeping its
:02:39. > :02:46.headquarters in the UK, it is still focused on Asia. History is a part
:02:47. > :02:48.of that. And China especially. Yet especially we have seen extreme
:02:49. > :02:55.volatility in markets globally hitting investment bank profits. But
:02:56. > :03:00.for HSBC, it is exposed to China in a different way to its rivals. Is
:03:01. > :03:04.that a good or bad thing? For the last six years, the CEO has been
:03:05. > :03:10.slimming back businesses to improve performance. But the whole premises
:03:11. > :03:14.of this bank is it is such a big player in Asia, especially China. It
:03:15. > :03:20.will continue to focus on China. This has been a difficult time for
:03:21. > :03:24.them. As someone said on one of your TV shows, if Asia is going 5% a
:03:25. > :03:29.year, that is the size of the Belgian economy. He still sees the
:03:30. > :03:34.benefits of being incumbent in that market. HSBC has cut back on jobs
:03:35. > :03:39.and investment in parts of the business. Many rivals doing the
:03:40. > :03:46.same. What is the outlook for ages busy and banks in general for the
:03:47. > :03:53.rest of the year -- ages busy? -- ages busy. Energy companies are
:03:54. > :03:59.still struggling. But in Latin America where the bank has a big
:04:00. > :04:04.footprint, it is trying to reduce it. The low interest rate is still
:04:05. > :04:09.hurting in the UK and Hong Kong retail banking businesses. This is
:04:10. > :04:13.part of the problem, the fact that central banks are keeping rates
:04:14. > :04:20.extremely low or even negative? That's right. It is exacerbated by
:04:21. > :04:25.the fact that HSBC has proffered it can't deploy. It is a nice luxury to
:04:26. > :04:29.have and makes it a strong bag, but another head wind to its
:04:30. > :04:35.profitability. Thank you for your time. The HSBC results literally
:04:36. > :04:40.just. We will look at how the Hang Seng is trading later in the show.
:04:41. > :04:43.When it comes to the EU referendum, the business vote in the UK won't
:04:44. > :04:46.come from the City's boardrooms, but from small enterprises.
:04:47. > :04:48.The majority of UK companies are considered small
:04:49. > :04:51.The BBC's business unit has been scouring the county to hear
:04:52. > :05:04.My name is Bethany. The company and what it's like to run
:05:05. > :05:09.My name is Bethany. The company breeds and distributes medicinal
:05:10. > :05:15.leeches to hospitals run the world. Primarily, they are used in post
:05:16. > :05:19.reconstructive surgery. If you are reiterating a limb or digit SIGGRAPH
:05:20. > :05:25.is or tissue transfer. -- skin graft. Because wages have been used
:05:26. > :05:32.for so long in medicine, we are able to supply them without hassle --
:05:33. > :05:38.leeches. There is a definite move towards more and more you
:05:39. > :05:41.regulation. There are several medicinal directives coming out in
:05:42. > :05:48.the pipeline. The longer we stay in the EU, the more, located it could
:05:49. > :05:53.get for us. It would mean we potentially face massive amount of
:05:54. > :05:57.paperwork to comply with EU medical device regulations, and that is a
:05:58. > :05:58.considerable cost. It is a considerable addition to your
:05:59. > :06:00.overheads. You can find more from
:06:01. > :06:03.our series EU: Business Talks at We'll find out the state of
:06:04. > :06:12.Australia's finances later today. It's widely expected that
:06:13. > :06:16.the country will go to the polls in less than two months, so economic
:06:17. > :06:19.reforms ranging from tax to pensions Last year's budget deficit swelled
:06:20. > :06:27.to $29 billion That may put
:06:28. > :06:33.its triple-A credit rating at risk. Moody's has warned it could lose
:06:34. > :06:36.that coveted status So how will
:06:37. > :06:49.the government balance the books? Let's go to Rico Hizon. We have
:06:50. > :06:58.missed you. I know where you've been. Tell us more about Australia.
:06:59. > :07:01.According to many economists we have spoken to, definitely the Australian
:07:02. > :07:07.government cannot balance the books with this current budget. When the
:07:08. > :07:11.government makes its announcements, they are saying this budget is all
:07:12. > :07:16.about jobs, growth and living within our means. Scott Morrison, the
:07:17. > :07:20.treasurer, announcing the details later today, which will also double
:07:21. > :07:24.as the unofficial start of an election campaign. What will likely
:07:25. > :07:28.be part of the package are small tax cuts and spending on health,
:07:29. > :07:33.infrastructure and education, and the cost of these will likely be
:07:34. > :07:37.offset by pension changes and closing tax loopholes for modern
:07:38. > :07:41.national companies. The budget is expected to form the backbone of the
:07:42. > :07:46.Liberal coalition manifesto for an election. If Prime Minister Malcolm
:07:47. > :07:55.Turnbull, saying that he will dissolve both Houses of Parliament,
:07:56. > :07:58.calls the election. As both houses are waiting for the budget
:07:59. > :08:03.announcement from the treasurer, minutes ago, the central bank of
:08:04. > :08:07.Australia made an announcement and they have cut interest rates to an
:08:08. > :08:13.all-time low of 1.75%, hoping to head off falling prices after a very
:08:14. > :08:21.low inflation rates during the January -March quarter. This is some
:08:22. > :08:24.development that investors in Australia will be thinking about
:08:25. > :08:29.before the market closes today. So the central bank cutting interest
:08:30. > :08:32.rates to 1.75%. It is all happening today. Thank you.
:08:33. > :08:36.Puerto Rico has defaulted on a $422 million debt payment that
:08:37. > :08:38.was due on Monday, but it won breathing space from some
:08:39. > :08:41.The US territory's governor warned on Sunday
:08:42. > :08:44.the island's financial crisis meant it could not meet the deadline.
:08:45. > :08:46.Puerto Rico has $70 billion of debts.
:08:47. > :08:49.Creditors have agreed to 30 days of talks and hold off
:08:50. > :09:01.Ferrari said it was on course for a record 2016
:09:02. > :09:05.after posting a rise in profits and sales for the first three months.
:09:06. > :09:07.The Italian maker of sports cars, spun off from
:09:08. > :09:10.Fiat Chrysler Automobiles last year, sold 1,882 cars in the first
:09:11. > :09:32.Let's look at the markets. Those HSBC numbers came in during the
:09:33. > :09:39.lunchtime break in trading. The Hang Seng opened today and is doubt
:09:40. > :09:43.1.13%. HSBC's numbers were below expectations, so we will see how
:09:44. > :09:48.that affects things. This is not the main market but one of those in
:09:49. > :09:53.Australia. As Rico Hizon engine, the central bank cutting interest rates
:09:54. > :09:56.in a surprise move down to 1.75% -- mentioned. The price of oil is
:09:57. > :10:03.heading up. I will see you soon. Thousands of parents across England
:10:04. > :10:05.are expected to keep their children home from school
:10:06. > :10:09.today in a protest about national