Transcripts For BLOOMBERG Countdown 20150227

Chemical maker, facing corporate casualties in russia. Welcome to countdown. Coming up, nigel garage speaks to bloomberg. We will tell you what he has been talking about immigration and the upcoming general election. 6 00 in london and we are getting breaking news from airbus. Right now it gets two thirds of its sale from making airliners. 2014 sales came in at 60. 7 billion euros, a touch ahead of the estimate. The dividend has come in at 1. 20 euro per share. And estimates they are looking at a slight increase. They are proposing a riaseaise of 1 euro per share. They say they will live the family production rate to 50 from 2017 and increase against previous rates of production. The order intake that measure of how quickly the orders come in 1. 667 billion euros. We are getting various metrics coming through. Their monthly production rate for the a330 will be six per month. The a320 up. The a380 is still a target and that is one of the areas of question around this particular business. How committed are they to that superjumbo project . That is a question that has been raised. Various updates coming through about their production rates. Interesting to look at the overall profitability of the business. 4. 70 billion euros, ahead of the estimate. Those are the headlines so far. This is a story we will be following throughout the day. Airbus tossed chief Strategy Officer will be joining us for his first interview. A little later, we will speak to bloomberg, so dont miss that. Basf, the worlds biggest chemical maker be there earning estimates. Sales beating. This Company Matters on a number of fronts because of that but its revenues come from oil and gas, and it expects an average of between 60 and 70. Hans nichols is in berlin. Talk us through the numbers. Your early assessment . The 5270 is the most interesting part that is what they expect the average price to be. They expect a lot less revenue, or a lot lower price. Another important thing we will be looking at is what the company cost exposure to russia is. The fact that they had such a good quarter could indicate it is in that high. Last night, this big Chemical Association in germany forecast for 2015 that chemical sales will decrease. Three months ago they were talking about an increase. It is just a slight increase, but on the chemical front, not expecting a whole lot of profit. On the oil friend looks like they are expecting the price of oil to stave low to stay low. That is what the ceo had said was a good breakeven point. We will be looking into these numbers a little more and what their war in exchange to russia is. Anything on the charge for that proposed asset swap . It fell through in december over what it called a difficult political environment in ukraine. I will be looking for that here in two seconds the estimate was for 300 Million Euros. This is the unit that in 2013 had sales of 12 billion euros. It is a joint venture right now so they will have some revenue coming in. But we want to get a precise number on what the charge was weather greater or less. Are international correspondent, hans nichols. A vote on the bailout extension in the German Parliament. It is expected to pass, but not without some dissenters. Lawmakers want approval that comes with the expectation that greece will meet its commitments. President obama front swing thean economic commissioner says that while they elected and antiausterity government the Economic Situation is under control. My conviction since the beginning it is always that when you face elections, and there is a democratic choice the choice must be heard and respected. It is normal that there will be some changes. If the changes are how to fight the social crisis, if these changes are about better administration, better rule of law, a stronger fight against tax evasion and fraud, a fairer tax system everybody showed and im sure will agree. We know that reforms have to be free funded and they have to be respected. This is what the discussions will be about. We went through a possible crisis and avoided that. We now have a Common Ground of discussion and lets move on. My only plan since the beginning is greece in the eurozone. I refuse to consider other solutions or other issues. It is our common interest. I think everyone in the eurozone knows that and the greek government knows that, too. It will be difficult for a lot of ground to pursue together, but we must do it. You dont like speculating. Why would anyone have money in a good bank in a greek bank . I am not a speculator. Again, we want a strong greece. We want a greece that is capable of creating growth, creating jobs a country on which everyone can rely. I have a lot of people that ask me will greece need a third bailout. They say what do you think of the solution for the longer term because we are not talking about debt neutralization. What would you tell them . Well we are going to discuss those in order to define the next step, the newer arrangement. Some call it a new program, a new contract. We have got time to do that. But we know how to do that. The difference with the previous period is that now that it is stable and solid, it resists any kind of shock. We must in four months i dont have to answer that but i know where we are going. We will be covering this story throughout the morning. Another interviewed you wont want to miss is john santosclaude trichet. Lets turn to japan. Inflation rose less than inspected than expected last month. We are joined from hong kong. Good morning. Some of these numbers are disappointing. How significant is that . Good morning. We are talking about the inflation heading really high. We also got the weaker yen hurting consumers in terms of those rising import prices driving the inflation down. Consumer prices came at 2. 2 compared to a year ago. Core inflation came in at 0. 2 of far cry from what they are aiming for. But he stood his ground keeping the confidence held that they will make it to the 2 inflation goal. He reiterated what he said, that further measures are not needed at this time. He says the effect of the oil prices will eventually fade away. The good side is the exporters doing very well. Industrial output rose the most in more than three years, up 4 . That may flow through the economy there, a good driver for growth. Economists surveyed said added stimulus could be happening by the end of october. What does all of this mean for the outlook for domestic consumption . Weakness in the yen may be helping some exporters, but is it helping consumers . How do wages play in . It hasnt looked too good. Household spending fell 5 nine months through january. That really missed estimates partly due to inflation and partly due to the sales tax increase. We are not seeing a japanese economy on track for that solid growth. Take a look at the economy 60 of gdp comes from that consumer spending. We are not going to see the effect of better wages and better exports. It is going to be hard to see the growth the government is hoping for, achieving that 2 inflation target could be very difficult. Trouble on the horizon for the prime minister. Thank you very much. The top story on bloomberg at this hour a spot in the British Parliament in the general election. We are going to win seats. How many . I dont think anyone knows. Be sure to cash aprils edition of bloomberg markets. Farage will be speaking to Stephanie Baker, who wrote the story, later in the show. These are the main parties. These are the main parties who will be contesting that may 7 election. We will be talking to all these parties in the coming months. The chances of britain leaving the eu at 17 . The open Europe Research group created a gauge based on the potential makeup of the next u. K. Government the likelihood of a referendum. The bank of england is pushing for transparency after being dragged into manipulation scandals in the Foreign Exchange market. Central bank announced it will strengthen policies on how Market Information is handled and will set up a new market and Fellowships Division to manage the changes. One of the most vocal critics of the Federal Reserve richard fisher, spoke in london last night, playing for his british audience, saying policy has created market distortion. We are in the fourth fact of a shakespearean drama. We are not sure if it is a tragedy or comedy. Comedies and in marriage. In our case it would require the marriage of good fiscal policy and Monetary Policy so i am skeptical. Join the conversation on twitter, we are all there. I popped out a couple of bloomberg. Com stories. The stage is set for another crisis in the bonds market, where the banks no longer hold the risky assets. I tweeted something about the worlds biggest chemical maker, expecting average oil between 60 and 70. We will take a short break. Coming up, concerns over greece. Investors fearing a new crisis flareup in the eurozone. We hear more from the eu economic commissioner, coming up. There is no problem with the economy of greece lets not try to raise concerns which have nothing to do with the present situation. Nobody fears that. Everybody knows that, feels that we are looking for solution, doing it in a calm way, doing it strongly. I see no movement at all of panic during this. That is the eu commissioner saying there is fundamentally no economic problem with greece, no reason for markets to panic. At the markets are listening. To bring in our next guest, the director of research at ibm. Great to have you with us. The europeans are developing firewalls but markets have not really been overly rattled by greece. I think there is a sense that a deal will be done by the politicians, that they love the drama, they love to get a lastminute deal. That the end of the day, the greeks and europeans dont want the euro to break up. They dont want greece to exit. The next couple of months, well see various mini dramas but the end story will be that they will get a third bailout. That is the market expectation and they are looking at the feds and the ecb. Any reasons to worry about greek liquidity . I dont think there are major worries. There is some technical reaching they need to do. They probably need to raise some more money to pay for some payments, but for the market the focus is elsewhere. Elsewhere in the bond markets its negative through seven years. How long before we see negative for 10 years . Where is this taking us . I dont think you will see negative persisting. The ecb press conferences next weekend they will have a constructive story. They will revise their growth forecasts, close to 2 . We dont need qe . [laughter] we just need the promise of it. We do need qe, however there is a more positive background than the dark days of winter. Youve got low oil prices, the low euro, and some effects from qe. 2 growth for europe is pretty reasonable. You look at germany, we are already seeing signs that oil prices are filtering through. If you look at the european numbers, they have looked a bit better in recent months. It is not all doom. I think bond yields in europe are too low, even with qe. Once we see a shift of economic expectation, we could see yields lifting a little bit. About the u. K. We are gearing up for a chaotic poll, which puts the u. K. Leaving at a one in six chance. Is the market positioned for this chaos . Kno. What is happening is because there is so much focus on greece and the fed, the markets havent really looked at the u. K. Election. It is going to be like the scottish referendum. A few weeks before people say wait a minute, we have an election and the outcome doesnt look clear. Various permutations dont look appetizing. I think you will see a u. K. Asset selloff sterling and other u. K. Assets in april. It is going to come on like a bit of a storm. Corporate bond markets you are concerned. Generally, if you look at the way quantitive easing has pushed a search for yield, is that are saying this you have a real profession of yields. People chasing risk. Corporate bonds have gone into highyield. When the music stops, are you going to see a lifting yields . Wed like to see a portfolio shake off. We could see a magnifying effect for even thank you very much for joining us. Coming up what happens when bloomberg sat down with the ceo of ge. Welcome back. Caroline hyde has been talking i am about to go out. 85,000 people descending of barcelona. We got to speak to one of the key players. The chief executive. We talked all things consolidation, expansion investment we heard from him that reducing competition, staying in the negative are misplaced. Consolidation can unleash investment. I am confident that with the integration that we will be able to create this even better mobile and fixed infrastructure here in the u. K. Here is someone saying, by having fewer players, you can push out the investment and networks, and have more competition by having more wholesale agreement. Will have a short break. You are watching countdown. Exchange markets are trading the dollar is running, up for a straight months. This is yesterdays. I think whats interesting is that the market was all positioned for fairly muted conserver pricing. Consumer pricing. It came in at. 2 , which rocked the market and took the dollar higher. Today we will get the Fourth Quarter gdp numbers and that is where the market is going to wait. They are all beginning to talk slightly more hawkish lee. Hawkishly. Williams saying the market cant wait for 2 inflation the voices from the fed are beginning. I want to show you the chinese yuan. This is the weakest in almost two years. You can see that rising, the the yuan over the. All through last year. Another weakening to calm. Thats whats on the cards. Thanks. Top stories on bloomberg india posts stock market will remain open when the finance minister posts the 20152016 to parliament. It is the first full year budget from Narendra Modis government. They have driven the benchmark up nearly 20 since he took office. The u. S. Federal Communications Commission has voted in favor of new rules that they burnett neutrality. The u. S. Regulator voted to approve the measure that prohibits companies from blocking or slowing online traffic or offering Faster Services in return for payment. It brings wireless internet under the law. The American Pharmaceuticals company is avoiding billions of dollars in taxes by booking profits overseas. The Company Reported foreign income of over 8. 2 billion since 2014, more than reported in sales. That is the latest example of tax planning by american multinationals. You can find more details on bloomberg. Com. The whistleblower at the locks leak tax scandal faces up to five years in jail. They triggered an International Scandal and he spoke to top mckenzie. Taught mckenzie. You could end up in jail. You are preparing yourself that it could be an eventuality. I smoke for my health. He may not strike you as a renegade, but in 2010 this client account and copied thousands of documents containing confidential tax agreements. I dont have any idea what are didnt have any idea what i would do but i knew it was important. They expose secretive deals between luxembourg and multinational corporations. Deals which allow those firms to cut their tax bills, sometimes to as little as 1 . It became known as the lux leak scandal. They pay taxes and why shouldnt corporations do the same . What surprised people was the sheer scale of what was happening. More than 300 multinationals set up subsidiaries and luxembourg a country with a population of just over half a million. Luxembourg is not overly industrial. But there are lots of companies. Trillions of euros are not taxed. Sometimes below 1 . They funneled hundreds of billions of dollars into the country, saving billions in tax. It is great to have this information out there. To quentin is a barrister. We can say this is obviously due to something we can do. This pressure on policymakers to say that these competitors are not taxed it is not really competitors. Its luxembourg has done its best to make itself replace make itself a place to avoid tax. Luxembourgs government refused to comment but has set the system is being reformed. We set out to find some of the subsidiaries central to this allegation. The brandnew offices, a huge complex and overhear one of these is this Office Service agencies, home to dozens of subsidiary companies. Many multinationals based themselves here, almost in name only. Look at this list. This was home to dozens of subsidiaries. Meanwhile, on another street across town this is a. This is disneys home and luxembourg. There is no sign outside. Disney is one of a number of Companies Often based out of a single office. We are looking for apples luxembourg subsidiary. Itunes, this is it. Not really shouting out their presence. The grand duchy is under pressure to reform and the European Parliament is set to investigate the deals. The scandal has cast a shadow over the president of the european commission, jeanclaude juncker. Most of the deals were done when he was luxembourgs prime minister. Back on the streets of the city he insists his actions were justified. The fact that the European Parliament created a special committee proves that there is displeasure. That hasnt stopped him being charged with that and violations of business secret. It is found guilty, he faces up to five years kind bars. How are you feeling . Happy tried walking toward the courthouse . Last time i came here it was to get my papers. He doesnt know when or even if his case will come to trial. But he remains convinced he did the right thing. You can join the conversation on twitter and let us that what you think of this show. We have had a few tweets today. The u. K. Election is going to come upon us like a storm and right now investors arent too worried about they will be. Im tweeting out a story about swiss watches finally making a smart watch. Coming up is the uks Economic Growth in jeopardy . By fixing the productivity problem should be a top priority, according to our next guest. These are the Bloomberg Top stories. The deputy head of markets is part of the global probe to currency rigging allegations, according to two people with knowledge of the matter. He was put on leave earlier this month at the u. S. Department of justice, investigating potential manipulation of the emerging market currencies. Sarah murdoch is the head of the corporate foreignexchange sales. Apples next big thing the company is sending invitations to a press event where they will unveil details about the release of the apple watch, according to a person with knowledge of the matter. The events will take place on march 9 in san francisco. Air asia posted a net loss of almost 119 million in the Fourth Quarter. The ceo told bloomberg that business is looking strong for 2015. Associates are doing much better. Pan am is blooming. Indonesia, despite what happened sales have gone ahead of where we were. Is obviously a tough. Period for all of us but we have held up well. Business looks quite strong for 2015. Raising Living Standards depends on raising productivity according to the latest economic survey. At how does the u. K. Address productivity gaps . Our next guest has some ideas. Some of your thoughts. We work harder if we think this is my favorite. We work harder with people we like. That is what has been getting me down. [laughter] like you think i invited octavius onto the program . [laughter] if we like the people we work with we work harder. Many of us feel we have to bend ourselves out of shape to fit in at work. 45 percent of white heterosexual men feel they have to bend themselves out of shape to fit in at work. When we have to bend ourselves out of shape we will be stressed and more focused on other things. Creating an environment where we feel we fit in is tremendously important. Your business specializes in teaching people how to manage people better. What are the typical failings of management teams that you have come across . Typical failure is not to understand the psychology of human behavior. Had a life form good relationships with people that i manage . We either end up to colluding or too distant. For example, we know that you give feedback based on strengths you get 30 up. Most feedback ends up being about what is wrong with somebody. Emphasize the positive. And dont leave it to the annual performance review. Is like managing your marriage on your anniversary. [laughter] i also hopped onto your website five ways to nourish and innovation. Anna found this quite interesting encourage people i love this encourage your staff to be 1 braver, 1 more ambitious than whatever they do in the cumulative effect is great. By allowing people to try Something Else get a little improvement over time, we start to see a whole collection of improvements. People often draw analogies between sport and business but the two are different. In sports you spend your preparation time on one event. Business is lots of small changes by lots of people. Each person who does that 1 improvement is how you get enormous change. How important is it and how much denial is a when you approach Companies Technology is expensive and takes a long time and is very uncertain. The answer is psychology it is shortterm and it costs far less. Stanford to the study on people doing front lines with check out they did it with 5 million data points. Each person had four supervisors the year. Swapping a poor manager for a good one increased output by 12 . Adding a new person to the team increase it by 11 . There is strong evidence that says swapping a good manager gives you a 23 uptick. People turn to technology . It is much more immediate than that. You talk of businesses talking about human capital. That desire is to have a big project that you can capitalize. Actual business gets a far greater return by looking at human behavior. The biggest cost is usually the employees. The accounting treatment is something that might influence how you choose to invest. The wording that we used to talk about our work calling it a calling or a job there is research around this and how people perceive their jobs and how productive they are. There is a study on looking at whether allocating a hundred points hospitals and doctors and janitors. The ratio across the three was the same. A third of people think it is a calling whatever you do. This so what is that those who are happy with their Work Life Balance are happier with their life. That sense of seeing purpose that my work matters, makes enormous difference. Do you feel happier with your colleagues . [laughter] i look at his face in the morning and its all worth it. Thank you so much for joining us. Coming up, we talked to airlines after a rebuff from the Irish Government. We look ahead to iag group earnings. Welcome back. Iag reports earning in 10 minutes the details on what to look out for in less than 10 minutes. What are we expecting . The operating profit should be in the range of 1. 32 billion. More interesting will be there outlook for 2015. Will they be tweaking it . It will be interesting. Then, their thoughts on fuel. That was only three days ago i asked you this exact question in relationship to aer lingus will anything be said about the iag interest . Will iag say anything about aer lingus . You start to wonder if he is going to keep the focus on iag. You have to wonder that there is so much going on in the background they are still reviewing the books. We understand it will take the the end of next week. They still have to decide whether to make a formal offer. Right now it is still backandforth, preemptory stuff. On the political side, the Irish Labour Party is meeting this weekend. Will they want to say anything before that . We will have to see. They have made a number of improved three in the sequence so far is that what he is holding back on doing . That there be another offer . Is it about money or is it about promises . Promising to protect for five years, promising local chambers of commerce. The Irish Government raise the bar on tuesday, saying five years is not enough. They put their foot down on that and they also put their foot down on jobs. They were more of a guarantee. At the same time we have a finance office who said the deal is still a possibility. He seemed fairly positive about it. It seems like will he sweeten his offer . Will he make adjustments . Will you consider may be buying it and leaving the government with the stake . These are all things im sure hes thinking very carefully about and will want to get right. You just wonder what conversations are taking place. No doubt that will be newsworthy. Thank you very much. Shelley talk about our shall we talk about our picks . Another crisis in the bond market brewing. She is citing ubs, saying that the stage is set for another crisis to unravel this period of kong. Of calm. G says it is because pricing in the bond markets are swinging and the plunge and nations like venezuela and nigeria. Invesco says that the probability of an accident increases the overall environment for risky upset, and that credit is deteriorating. She says another reason for that is the fundamental structure of the bond market changing in a way that makes it difficult for regulators to gauge exactly where risks are building. It is a very good piece. Michael valli was saying interesting things about the Corporate Bond market. This wes have finally started making luxury smart watches, apparently. They have plans to come up with something to compete with the apple watch, now we are hearing from mmt and a Swiss Watch Company they will launch various companies. They include gold and diamonds. Just how smart are they as one of the questions. You have no digital display at all and you still need to use a Smartphone App to get functionality. I have a market story. If you dont know who baker hughes is you surely do know. Now. Society possible gambit, that is the title. We have seen oil rigs dropped by 37 . Standard and chartered say that u. S. Oil reduction will cease to be positive on a month by month basis as of april. Countdown continues in the next hour. My only plan since the beginning is grace in the eurozone. I refuse to consider other solutions. Mark those were the words of the eu economics commissioner. We will bring you that interview as german lawmakers get set to give their seal of approval to greeces bailout extension. Manus kuroda under pressure. Japanese inflation rose less than expected. Anna breaking now, lloyds earnings wrap up a week of banking results. Will the countrys largest Mortgage Lender announce its worst dividend its first dividend since 2008 . Mark iag looking for comments on how fuel hedges will hit guidance and comments on that aer lingus offer. Hello and welcome to countdown. Manus also coming up on countdown nigel farage speaks to bloomberg. We will tell you what he has to say about immigration and the issues around the upcoming general election. Mark breaking news, lloyds is reporting earnings. Do we have anything yet caroline question yet anything yet, caroline . Caroline not yet. Just a token to the investor base. We could also be seeing potentially more writedowns more impairment charges. We could see about 500 Million Pounds worth as they pay out to those that were missold insurance. But that is meant to be lower than in the past. This is a company that is rejuvenating itself. Here we have the numbers. They are indeed paying a dividend. 0. 75. Not quite a penny, but still. The first time in six years. Are they going to be on a paying a dividend trajectory . That is what investors want to see. Also, an improved ratio. Manus that is what gives them the ability to pay a dividend. Caroline exactly. They are trying to cut costs in the next three years. They are selling branches cutting jobs. We are seeing a 12. 8 core capital ratio a statutory pretax profit of 1. 8 billion pounds. Significantly higher than this time last year. They had a full year net income of 1. 5 billion pounds versus an 800 Million Pound loss. Estimates have been for 1. 8 billion pounds in terms of net income. Slightly shy. Could be to do with some of the money they are setting aside. The interest margin, Net Interest Margin is improving expected to the around 2. 55 . That is the difference between the income and the lending they are making. Overall, it is a mess in terms of fullyear net income, but they are paying a dividend. They say income will be broadly stable for 2015. Anna thanks, caroline. We are getting breaking news from iag. Their numbers are not breaking robert levels, coming just ahead of estimates. 1. 3 9 billion euros. They are saying that iberia had a 50 million euro operating profit. That is one of the headlines coming through. The sales have come in at 20. 2 billion euros. That is ahead of the numbers penciled in by the analysts. It seems as if theyve, in ahead of estimates. They say their 2015 operating profit will be in excess of 2. 2 billion euros. That is the first hint of an outlook coming from a company that is trying to get it hands on aer lingus. They were suggesting before these numbers came out that the focus would be on the performance of the company itself. They are in negotiations with the government. They are still trying to get what kind of commitments they will have to make in order to make that offer palatable to the government. So thats International Airlines group for the moment. Manus weve just had bank of ireland numbers. Underlying pretax profit for the fullyear returning to profit. Bad loans are down by nearly 50 . 542 Million Euros versus over one billion bad loans. Defaults also declining, but lending also declined as well. Lets talk about these numbers. The ceo joins me now on the phone from dublin. Great to have you with us this morning. At first flash, this is good news to the market. Without getting bogged down in the money shot, ive done the detail of the numbers how sustainable is this improvement . Youve turned profit. How sustainable is this profitability . Guest first of all, within the numbers, there are some provision right backs. We did some gains. The trajectory in the business is very strong. Our new lending last year was up from the previous year. The last quarters Net Interest Margin was 2. 22 . There has been good cost contained. Obviously, a significant feature for us and for a number of banks has been the reduction in nonperforming loans. We have seen debt positioning continue to improve. Being at appropriate new lending at appropriate margins and nonperforming loans coming down. We have diversified our business. About 40 of them are outside ireland. There is also good diversification in our assets and earnings. We are in two growing economies. Manus we just had caroline announcing lloyds doing a token 0. 75 pence dividend. You havent paid a dividend since 2008. How confident are you at the beginning of 2015 that you will be announcing a dividend . Is that a fair timeline to shareholders . Guest as you correctly identified, the priority is regenerating capital. We have a Strong Capital position as assessed by the comprehensive assessment. The priority is to complete the repayment of the government in 2013. From then, weve been looking to have capacity. The prospects for the business are good. We are making sure that we have capital to invest in the business and meeting regulatory requirements. Manus richie, lets talk about the perennial issue, the value of ones home. Dublin house prices up 22 . National house prices up 16 . You have a fairly tough mass trick metric in terms of where the price will go. Can we expect you to be more generous in your evaluation . I think you have it at 55 . Have you changed that detail . Guest we have brought that down a little bit. What we look at is the cso index, which is for both dublin and for the rest of the country. We haircut that by about 10 and there are other factors we take into consideration, the cost to carry and discounts you might have to do. Manus taking all that away, people watching this will think, what language is manus speaking . And then they will think, what language is the ceo speaking . Are you confident on the irish Property Market . Have we troughed . Is this rising trajectory in a short trend . Guest i think we will continue to see some increase in house prices in ireland. That is coming from the fundamentals of the economy. We are anticipating gdp will be up 4 in 2015. The number of people employed is up by about 2 . Theres more people working. The economy is improving. There are some supply factors in the irish market, which is another feature. We anticipate further improvement. Manus richie, you won the lobbying. You got the Central Banks to backpedal and allow the banks to lend more to firsttime buyers so you get a mortgage now, you get 90 of that mortgage from you guys. What does it mean at the bottom line . What are you giving to new prospective homeowners in ireland . Guest i dont think we won the lobbying of the central bank. It makes up its own line on these issues. Our mortgage lending in ireland last year was up 40 to approximately 1. 2 billion. We are anticipating further growth in mortgage lending in the coming year, which will be on the back of our propositions, the relationships we have with our customers. Firsttime buyers is a very important market for us. That comes from the relationships we established. We opened 120,000 new accounts last year. Manus richie, you mentioned it earlier. The u. K. Is an important business for you. How do you build that business . How do you allocate capital . Is that what the focus is going to be . Guest we will be looking to keep a diversification in our business. I would anticipate maybe three or four years down, then the Balance Sheet will have broadly the same diversification as it has today, roughly about 55 in ireland and outside of ireland, we have a Leveraged Finance business based in new york london, but the primary growth outside of the u. K. Im sorry, outside of ireland, will be the u. K. Particularly the strong relationship we have with the post office. We doubled our mortgage lending last year. We have over one third of the consumer foreignexchange. We have the largest atm fleet. We gather good retail deposits. It is a very strong distribution with our partner who is very keen on financial services. Manus we have to draw a line. Very quickly, before i let you go, give us a price for ireland and england on sunday. Give us your call. Guest ireland by three. Manus good man. Thank you very much for taking the time to speak to us on bloomberg tv. Mark im tweeting that out, but i disagree. My mother is irish. Sorry, mom. Greeces big weekends today with a vote on its bailout extension expected to pass. But not without some dissent. Lawmakers warn the approval comes with the expectation that greece will meet its commitment. Francine lacqua caught up with a key official, pierre muscovy see, and the eu economic commissioner says that while greece voted in an antiausterity government, the Economic Situation is under control. My convictions since the beginning have been that when you face elections the democratic choice must be heard and respected. It is normal that this government wants some changes. If those changes are about better Public Administration as a rule of law, stronger fight against tax evasion everybody should, and im sure will agree, but for the rest of it, we know that reforms had to be fully funded and that the commitments taken with europe had to be respected. This is what the discussions four months from now will be about. We went through a possible crisis. We avoided that. Lets move on. My only plan since the beginning is greece in the eurozone. I refuse to consider other solutions because it is our common interest. I think everybody in the eurozone knows that. It will be difficult. We still have a lot of ground to pursue together, but while we do it, we must do it. Friend bank you dont like speculating. Tell me this, does anyone have money in the greek bank . Im not a speculator. Again, we want a strong greece. We want a greece capable of creating growth, creating jobs a country on which everybody can rely. I have a lot of people that ask me, will greece need a third bailout . We are not talking about debt neutralization anymore. I dont know the answers to that. What would you tell them . We are going to discuss that in order to define the next step. The new arrangements, some call it a new contract. We have time to do that. We know how to do that. The difference with the previous period is now the euro area is stable and solid and has tools to resist any kind of a shock. We must be very confident. It is in four months. It is not tomorrow. I know where we are going. Mark we will be covering this story through the morning. Another interview you wont want to miss, john clutch reshape joins us for an exclusive interview in just a couple hours. You remember him. He used to be the ecb president. Manus are they going to update next week . That is all on jon ferros show. Join us on twitter. Mark ive been tweeting out your interview with richie. It is his last comment that got me, ireland will beat england by three points. Manus youve just got to look at the form. Beating france, beating italy. We will talk politics. Theres an argument brewing. The upcoming may election the most open in centuries. We will bring you and interview with nigel farage when we return. Stay tuned. Manus the u. K. Independence party leader is kicking off his campaign for a spot in the British Parliament on may the seventh. Nigel farage outlined what he said are the great twin threats to the British Culture and economy. Immigration and the european union. The argument about immigration is, should we be in control or not . We have the latest immigration figures showing a year on year increase of 300,000 people. The biggest ever. This government was elected committing to cut it to tens of thousands. The point is, our government arent doing anything. We in ukip are for an australian style system where we can choose the quantity and quality of who comes through. Mark lets bring bloombergs Stephanie Baker in. Hi stephanie. Im think he failed each time. Will he get lucky . Guest i think hes poised to win this time. Theres a poll that came out which put him at 39 , well ahead of his conservative rival. His conservative rival is ironically a former member of ukip and a fellow eurosceptic. There is not much difference between them. It is interesting because he has pulled ahead and taken the lead in the past few months because polls back in november put him in the put him neck and neck. Anna we know a lot about his views on the eu and emigration. We know thats about the views on the economy and any kind of economic plan. What are we likely to learn about their economic plan . Guest ukip has traditionally been classic freemarket libertarian. In the past six months, they have moved toward slightly more populous policies in a bid to win labor voters. I think they felt they had maxed out in terms of tory voters and they had to go for the labor hartline and try to steal disaffected labor voters. When i was in ramsgate at one of his Campaign Meetings i sat next to a couple voters that said they would not vote labor. It was the first time they had heard him speak. They seemed quite enamored with him. I think his broader economic policies, he says that he wants to cut the deficit faster than the tory party, but as a whole, his economic plan doesnt really add up. He says will save 8 billion by getting out of the eu. He wants to cut 9 billion from the foreign aid budget but with all that, he wants to fund a massive tax cut and a popular 3 billion pound cash injection into the nhs. Manus im thinking sarah palin. Is that what you are comparing it to . Ukip, sarah palin, tea Party Nigel Farage . Guest there are some parallels. The tea party is part of the republican party. It is not a separate party. He makes a point about it. He said the tea party wont succeed unless it breaks off from the republican party. Ukip is like the tea party with a charismatic leader. I think as a result he is having an influence on the political landscape. Mark what is he like in person . Guest i interviewed him in january. I was expecting the sort ofp pub loving, pine in hand he was much more serious than i was expecting. He is on top of his numbers. He is a very effective campaigner and has a very seductive, simplistic message, that i think is resonating with voters. Mark stephanie, thanks a lot. Stephanie has written a very good piece in bloomberg markets. The election is taking place may 7. These are the main parties that will be taking part. Anna this weekend, 80,000 people will descend upon barcelona for the biggest tech show in europe. Caroline hyde will be there. She has had a sitdown interview with u. K. s biggest mobile provider. Caroline joins us now. This is somebody who knows a thing or two about consolidation. Caroline he does indeed. He is such a charismatic man. Ee and bts acquisition has lit a fire underneath the already tentative consolidation that was going on in the united kingdom. You got sky going, weve got to get into mobile too. You have hutchinson went though Hutchison Whampoa creating the number one mobile brand. Suddenly, you got so much action going on. We did speak at length about consolidation. He says, this shouldnt be a worry for competition. Does it make sense . Will it hurt consumers . Suddenly, you have four network riders becoming three. If you have 02 joining hutchison whoamampoa, will we lose out . He is saying no. Ee has already spent one point 5 billion pounds upping the ante with 4g. We need connectivity everywhere now. He is powering money into it so that we can make phone calls using wifi not having to have a signal at all. He is talking about drones, about balloons as well. He feels consolidation is a force of good. The eu in general has felt we need consolidation to provide a better digital marketplace. Anna what about his business . Any idea on what bt and ee together are going to get up to . Caroline they basically got a year. I want to see where he sees the brand going. Will they remain tw france . Oas of yet, he can see whether it will be one brand or two. It could be an international player. Ee could go global. Ee and bt together have an opportunity. Bt is already quite international. You never know. A British Telecommunications champion can potentially compete on a global level. Caroline that is interesting. It could become a european player. Also notably, he wants you to be looking for perhaps youre connected home, your security maybe even connected ovens. Manus caroline, thank you very much. Up next, more on the general elections. Manus you are watching countdown. Lets see how the fx market is looking. At risk at the moment. This is the dollar index. We are going through the eighth straight month of rising dollar index. In many ways, [indiscernible] you have a cpi number yesterday, plus 0. 2 . That is what drove the u. S. Dollar market higher. Overnight, you heard from Federal Reserve governors. We heard from a variety of governors. We cant wait until 2 is hit. June could be a viable option in terms of moving on the rates. That is what is driving the market. The market is being driven by the data rather than the voices. The market is just coming back from that nice spike higher. Today, you will get the gdp figures from the united states. Will they be revised lower . That seems to be the consensus estimate. Have a look at the yuan. It is at a twoyear low, the weakest level since 2012. You can see the dollar rising, rimini falling. Standard poors lowered the growth forecast for china overnight. 6. 9 from 7. 1 . The central bank is cutting what they call the reform right. What you are seeing is a little bit of a move on interest rates. Yuan at a twoyear low. Lets see what happens next for china. Anna manus, thank you. Indias stock markets will remain open tomorrow when the indian finance minister presents the 201516 budget for parliament. It is the first full year budget from Narendra Modis government. Speculations that his policies will boost growth have driven the benchmark up nearly 20 since he took office. The u. S. Federal Communications Commission has voted in favor of new rules for what is called the neutrality. The u. S. Regulator approved the measures that prohibits companies from blocking or slowing online traffic or offering Faster Service in return for payment. It also brings wireless internet under the rules. One grexit barometer puts the chances of britain leaving the eu at 17 . A Research Group created the gauge based on the potential makeup of the next u. K. Government and the likelihood of a referendum. is a the bank of england is pushing for transparency after being dragged into manipulation scandals. The central bank announced that it will strengthen policies on how Market Information is handled and will set up a new Market Intelligence division. You can find more on all of the stories at bloomberg. Com. Mark the ukip leader is kicking off his campaign for a spot in the British Parliament. Nigel farage outlined what he says are the twin threats to British Culture. The economy, immigration, and the eu. The argument of immigration is, should we be in control or not . We have the latest immigration figures showing a year on increase year on year increase net of 300,000 people the biggest ever, and yet this government was elected to cut it to tens of thousands of year. The point is, our government can do that. Our government cant do that. We are not against immigration. We are for a system where we can reduce the quantity. Mark 68 days to go until voters head to the polls. How uncertain is the outcome . I am joined by the ubs head of investment. Good to have you in town. Risk premiums. We had one guest saying there doesnt seem to be any jitters in the market. The ftse 100 at records. The bond markets rising. Where is the risk . Guest sterling had a fairly soft end to the gear. The economy is looking to accelerate. There is also the sense of risk down in markets as well. Given the experience with the scottish referendum, it is almost inevitable we will see a pickup in volatility. The futures markets are picking up some of that already. Anna a lot of people were saying the markets would be terribly frightened by the prospect of coalition. The world hasnt fallen apart and we have had Coalition Governments that have stayed the course. Are we in danger of being too fearful of coalition or minority government . Guest the context is important. Britain has a solid growth record something just below 3 . What the markets want to see is a program of government that is sustainable. Twoway, threemy coalition, or single party government. The key things the markets are looking for our austerity and what is likely to happen with the brexit decision. The backdrop is still the growing economy and consumers are participating in that. Manus we had a poll overnight which put the reference rate at just 17 , a 16 possibility. They gathered all the possible combinations of politics. You are not prepared to make a call on the election. I think thats we will see how that evolves. What is our biggest risk . What would that mean for sterling . How should we position for double minority . Guest clearly, the Sterling Exchange rate is the key transmission mechanism. That is where risk premium will be reflected. It is difficult to see the gilt market independently of that. I dont think the ratings agencies will come down on it. On the equity story, weve removed [indiscernible] i think the story is the midcap versus the ftse 100. The key focus is still going to be on sterling. We are looking at this in terms of our views. Even with the strong fundamentals, the one to watch is still predominantly the key indicator. Mark even though theres uncertainty. Does that change the potential path of u. K. Interest rates . Guest it does in the sense that if there is a recommitment to austerity it will inevitably have an influence in terms of presenting a fiscal drag. It would have an impact on the path upwards of u. K. Interest rates. And consequently an impact on sterling. Anna you mentioned some of the different sectors that could be impacted by whatever shade of government we end up with. Give us some details. There are some differences in policy around utilities, tobacco, the housing market. Guest there are differences. The key thing is talking about the stories. It is basically the extent to which demand is picking up. Only about 25 of capacity is dominated by domestic sales. There is a midcap story here. The markets will look at the program of government. You get the various large Party Programs being diluted in coalition form. There are areas capturing attention. Income tax etc. That increases. As with the referendum we wont have a clear picture of the markets until we get this program of government. Manus devolution. You break it out very nicely. The Scottish National party could be the rainmakers in this. Devolution, i thought anna had spent enough time in scotland but it could be that that raises its specter again. Guest we are talking about ukip but there is support in scotland. You look at the situation. How far do we go beyond the current recommendations related to scottish devolution . Clearly, this idea that how does that influence financing the budget anna i will be back at edinburgh. That was the word. Mark join the conversation on twitter. Anna this is where you will find us. Coming up on the program, airbus proves to be earnings. The ceo is going to be talking to us a little bit later on. Hes talking about the companys earnings as we speak. Bloomberg is going to be live on the ground. We will have more on this story when we come back. Mark time for todays barth char bart chart. Lets start with equities. This is the msci all country world index. It is the chop chart, the white line. It includes developed and developing markets. In february, it jumped 5. 5 . It touched an intraday high on thursday. Through wednesday, it rose 10 consecutive days, longest winning streak in a year. The bestperforming stock market in the world in february, in local currency terms greece followed by russia. The worst, the venezuela stock market index. Currencies the orange line, the bloomberg spot index. In february, it has risen by 0. 3 thanks in large part to a 0. 5 gain on thursday, the 26th after u. S. Inflation data revived rate high talks. February will be the eighth consecutive month of the increase. The bestperforming currency against the dollar in february was the russian ruble, which had its best month ever. The worst, ukraine, which sank through this morning. Commodities the third one bloomberg commodities index is the green line. This tracks 22 commodities. After falling for seven consecutive months, it is on track for a 1. 5 monthly gain. The worst, coffee. Last but not least, within the fixed income space, ive gone for the u. S. Treasury bond index. As of now, friday morning, it has dropped 2 in february. Its worst month ever. Greece was the bestperforming sovereign bond market in february. It returned 14 . Global equities, the best asset class to the in on an individual basis. Buying greek debt and the russian ruble would have given you returns of double digits. Anna hes on a roll. Imagine if he drank coffee. Manus no stone left unturned on countdown. Lets give you top stories at this hour. Rbs suspended its deputy head of markets as part of a global probe into rigging currency allegations. Jason richardson was put on leave earlier this month as the u. S. Department of justice investigates potential manipulation of emerging markets currencies. The countdown has begun for apples next big thing. The company is sending out invitations to an event in march which will unveil details about the release of the apple watch. That is according to a person with knowledge of the matter. Air asia posted a net loss of almost 119 million. Nevertheless, the ceo told bloomberg that business is looking strong for 2015. Associates are doing much better. Thailand is booming. Indonesia, despite what happened in the last three or four days sales have gone ahead of where we were this time last year. It is obviously a very tough period for all of us emotionally, but the team have held up well and business looks quite strong for 2015. Anna 7 46 here in london. Lets stick with the aviation theme. The airbus ceo is speaking about the companys results. Guy johnson is on the ground for us. Good morning to you. What are the takeaways from the results this morning . Good morning. The ceo just running through the numbers for 2014. The take away is that airbus delivered a beat. I think that probably is the headline. What they are doing below the numbers is switching around some of the aircraft production orders. They are upgrading the idea that we are going to be seeing more a320s coming through. They are upgrading the amount they are going to make to around 50. Not quite as high as boeing, but they are going to downgrade the number of a330s before they switch to the neo. There are some Big Questions that need to be answered. When are they going to put some engines on the a3680 . Will lower fuel costs mean that airlines can be far orders because they can make their current aircraft work a little bit harder for a little bit longer . And whether or not this fight that seems to be emerging by u. S. Carriers and gulf carriers will mean anything significant for his business. A number of questions still to be answered. Anna plenty of questions. What about that defense unit . They took a charge in the latest results. What is the bottom line . They are restructuring that unit. The big question that is hanging over the defense side of airbus is, can it continue . They dont have the kind of Critical Mass in that space that others have. I think the biggest question surrounding the defense unit is ultimately, are they walking that business to the door . Are they going to get out of defense . Is this something that airbus still needs to do and should do . The big question hanging over that is, will governments around europe allow airbus to exit the defense side of the business considering it provides so many jobs and has a lot of Technology Associated with it . The bigger question is can airbus continue to do this . They are taking a long hard look at it, and a lot of people are beginning to wonder whether airbus is heading for the exit in the defense side of the business. We are putting all of these questions to the airbus executive throughout the morning. Tom anders is speaking to us at 12 45 london time. A lot of questions to ask him. Before that, we are speaking to the chief Strategy Officer. He is talking to us in about an hour. We will be talking about the big picture story. Some great interviews coming from munich later. Back to you. Anna thank you very much, guy johnson. Mark you are looking at a live shot of the city of london. Futures indicating stocks will open mixed to lower today. After the break, we will be taking a look at what will drive todays trading and take a look at the banking index. Mark lets get to work with the head of european banks for corey group. Lets cut to the chase. Lloyds Banking Group profit yes, weve had the first one in five years, but it is a mess. Weve got a dividend, so what should we focus on . The prophet, the miss, or the dividend . Guest [inaudible] that was the key part of this. Also, revenue was a little bit light. Where they did deliver it was provision right back in terms of the runoff book. That is not a sustainable picture. I think the good news is twofold. One is theyve started a dividend. It wasnt as good as people were expecting, but it is a start. I guess thats something that will encourage people. Secondly, their outlook. In particular, talking about margins expanding into 2015. They are talking about a 255 basis point margin. That is a contrast to what we were hearing from royal bank yesterday which was that we would see pressure in the business. That will be an interesting thing to find out during the meeting. My suspicion is that it is a mix. Mark i would like to talk about rbs, edward. It reported shares up 4 . Seventh consecutive annual loss. When is this business going to normalize . It is way down by restructuring costs, fines for past misconduct. When can we expect it to normalize . Guest i think royal bank is just an extraordinary story. We are now talking about 2019 as a year when we are going to reach a normalize level. This is a business where it all went horribly wrong back in 20072008. We are talking more than 10 years to turn this around. I think the key problem was at the time of the crisis the business was insolvent. They are now using earnings to work through that. Each time we think we are getting there, we are pushed out another three or four years. Mark in 20 seconds, is bill winters the right man to turn around Standard Chartered . Guest he is certainly very highly regarded by the markets. Hes got a very good track record with jpmorgan. I think the only question is that hes obviously an Investment Banker and i suspect that could be seen as good news in terms of turning the Investment Bank around. What he does in mark see you on monday. Warm welcome to on the move. Moments away from the start of european friday trading. Wrapping up what has been a recordbreaking week for equity markets and bond markets alike area alike. Britains largest Mortgage Lender will pay its first dividend since 2008. Japan industrial output drops the most in three years but inflation slips. Strip out the sales tax hike and call inflation 0. 2 . The German Parliament is expected to vote on the greek bailout extension this morning. In 30 minutes we will speak to the former ecb president jeanclaude trouche. That is something you dont want to mess miss. European futures up by a couple points, dax futures up by 12 points. Can we extend the highs . Manus record after record the question is, is my pension fund fully invested . Global stocks at an alltime high. 10 straight games. The u. K. Is still the laggard and has always been the laggard. The unwanted child in terms of the new records and tallies