>> manus cranny sits with the rockets beat estimates. >> a very solid quarter in which they have been performing profitably, and we achieve a 13.2%.ne of the ratio of >> a deal is near for credit suisse. the bank is said to be in talks of $1 billion. >> arising death toll. the unrest intensifies.

the grip on the east continues to slide. >> we will tell how you can indulge in retail araby with the help of #. -- and told in retail therapy with the help of a hashtag. hello, welcome. >> it just come 6:00. bloomberg reporters are standing .y >> david tweed is in berlin with numbers from adidas today. >> ubs reported profits that surpassed estimates.

profit rose 6.7% from a year earlier. our markets editor manus cranny is over there in zürich. run us through the numbers. what is the number going to be focusing on? >> i think they are going to focus more on three keywords. return on equity? target.king to the we are on the way to the promised land. reducing --d assets moving the target on risk weighted assets in the businesses they don't want to be in down to 40 billion. management brought in new money at 11 million swiss francs. profits up 24%. the investment bank dropped by

56%, but it is those three issues in terms of return on equity, cost, risk weighted assets. issues take you into discussing capital and return. there is one number that is going to be on every analyst's mind. $.25. that is the number being returned to shareholders. some of that is going to be delayed. no longer going after the headline number of 10,000 employees to lose their jobs. this is about cost cuts. it's time to look at banking slightly differently.

241 credit suisse looks like it is on the cusp of -- going for a guilty plea. they have a department of justice where they aided american citizens to avoid paying tax. we understand they could be close to signing a deal for financials. that there is a possibility of a guilty plea. what they have also done is created international advisors. in many ways people are saying this is a vehicle to help credit frome protect them selves

any guilty pleas. so far they have satisfied 620 million swiss francs. $700,000 in provisions. we understand is around $1 billion. the journal quotes one billion. nothing confirmed yet. there you go. that's a big day here in zürich. than 15 minutes we will hear from manus cranny's interview with the ceo. stay with us for that. >> casualties are threatening to .ndermine insurgents killed for government troops. killed 20 forces rebels and dozens of civilians were wounded in fighting according to the russian news agency. ryan hasl go --

details. >> just to give you an idea, if you take a look at the map of ukraine, i'm going to start in the southwest. country's third-largest city. odessa says they are sending a special forces unit to keep the peace after the storming of a police station on sunday and ony tragic clashes we saw friday. odessa very much in play. the capital has been quiet for a long time, yet they are setting up 10 checkpoints on the outskirts of the city. they say they are concerned about victory day. bordere moldova and looks pretty far from everything. a 700 mile border with ukraine. this is just dirty miles from odessa. they are concerned they brought

the border to high alert. most of the trouble has been in the far east of the country. is when ukraine goes to hold its presidential election on may 25. the central government is concerned they may not be able to hold the election and those eastern regions. if they aren't, that would give russia a reason to doubt the legitimacy of the election. we have seen most of the fighting in a place -- really heavy fighting in the last several hours. we have seen fighting on both sides. the rebels telling us 20 of their fighters have been killed. for government troops. a helicopter shot down as well. very difficult to guarantee casualties. the region is intending to hold referendums just like this

sunday where they would ask people to vote whether they wanted to secede from ukraine. >> shopping just got easier. amazon and twitter have signed a deal that would allow customers to shop on amazon by retweeting twitter posts. get my headme around this. how would it work? do this yount to basket,y with #amazon to it would automatically go purchase. >> the other involves restrictions since selling the stock. expires, so what are

we expecting to see there? >> they need 400 million shares to be eligible for trading. that is more than four times out tending shares right now. now.tstanding shares right it's going to flood the market. the other factor is a lot of existing investors have decided to hold on to their stakes. some of the earliest investors have decided to hold up their shares.

>> this is a company under pressure. a lot of people think they might not be able to make their targets on sales. they have really stiff competition coming from nike. just so much one shareholder recently said he thought it was atomprehensible the ceo times management extended to 2013. >> we will hear from the interview plus -- >> plus paul jones says macroeconomic investors want the viagra to stop being so boring. when will the central bank move

rates? we will discuss.

>> time for today's company news. general electric said it welcomed input from the french government after officials asked for improvement of its did.

-- bid. the minister said he suggested he would prefer a plan that would swap some of the rare assets for energy business. plans to cover the cost of expanding upscale markets -- upscale models out of existing funds without having to sell existing units. they would lay out the strategy. they plan to send 9 billion euros to add higher-priced models. a maserati sports car and an expanded jeep brand. removela plans to hydrogenated vegetable oil from its drinks by the end of this year. is used as a stabilizer to prevent ingredients from separating. the ingredient has been targeted by food activist.

they removed it from gatorade last year. >> i am mark barton. >> ubs is up from a year earlier. our markets editor sat down with the ceo, sergio monti. >> most importantly, we have been profitable in every region, and we achieved major milestones during the quarter. ambitionsrough our 30%, and we announced creation of a company, which is a major milestone in making us eligible for retention of further capital. >> you are sticking to 15%. when is that deliverable? >> we continue to believe our

with the removal of additional operation that we have in q3 of last year, it's an achievable target. see most likely it will only happen in 2016, but we believe our business mix and further reduction of balance sheet will for us totally eligible this kind of returns. >> you talk about reduction of risk weighted assets. you said in your target it is 40 billion. does that mean we can expect you --take much bigger offers losses in 2015? >> not necessarily. we always say we want to do a trade-off in terms of capital consumptionversus

by the investment bank. >> you have indicated the equity division is doing quite nicely, but the variable compensation is rising. is there a risk now that this is and expensive engagement program you are on? isi think our a compensation accruing based on performance. our performance has increased. our compensation cost is coming down, reflecting our diminished performance. we always say we will keep that we are not under time pressure to do that and that we're taking advantage of opportunities, and the fact that many people are looking at ubs as and attractive place to be, because we have a clear and defined strategy of where we want to go, and now we are going to do it. >> i want to wrap up the ukrainian question.

wrap up. to the ukrainian question changes. are you concerned about doing business? >> i don't think there are any risks that are big enough to make anybody very worried about what is going on. what is more worrying is the convergence of many of those coming together at a certain point in time. that the level of complacency that you are seeing in financial markets when you look at a situation like one in ukraine and russia and what the repercussions could thbe for worldwide economies, it's something we should pay attention to. >> i want to break numbers. the biggest vitamin maker had first-quarter earnings slightly below estimates, but the company has maintained profit for 2014.

i will be speaking to the cfo in a matter of minutes. >> we are going to take a short break. one we come back we will talk about what is coming up on the agenda. we will talk about all the macro items on the agenda for your week ahead. stay with us on countdown. ♪

>> we have got numbers from an

beat us. -- from adidas. it is a shade below the estimate. , 204ng at net income million euros. they are talking about sales increases in nearly all regions, highlights from the fact that you take into account what is happening there have been some negatives. we will have further analysis a little later. >> central banks keeping interest rates low for a long time is apparently too boring. the billionaire investors need to pop some viagra to keep macro investing interesting. to european bank is going pick that up. joining us is jeremy. >> this is a tricky one.

anyhey certainly didn't pop viagra this morning. quite fighting how markets determine where they will go from here. -- i thing how the market determine where they will go from here. i think there is a case to be .ade the currency is overvalued. the market should continue to push back rate hike further. when you look at things like the trade numbers, which were a little on the soft side because of weakening prices overnight, i think that does open the opportunity to see a weaker aussie. >> it's a completely different situation in the euro zone, and a deed as -- adidas is

reporting this morning. any relief from the central bank in terms of china trying to talk down the currency? >> it's interesting. we are seeing the strength of the euro playing us. it is going to have an effect. of course the currency is a relevant point for the monetary conditions. aggressively try to talk down the euro is a moot point, but i think it's relevant. implying the economy is on track, but i think it is a very fragile recovery. i think that this went to be the as dense. i think we are probably going to see some more action. i think we need to see the update of the forecast and using that as justification for these people can actually consider additional policy. the viagra bottles will or may not open this week. shut in theto be

u.k.. rates could be higher on the cards beginning of next year. members come, members leave, and that's when it becomes more interesting, doesn't it? >> i think we should recognize it's not just about the monetary policy. we need to consider financial policy considerations. in terms of the housing market i think that's going to be a relevant point. in terms ofght improvements, and we have seen that in terms of broader macro dynamics, then i think the market will continue to look at the timing of that rate hike. i think the markets will continue to try to bring that forward, maybe as soon as later this year. it's unlikely to happen, but i think the market may try to interpret that. when you look at

the m&a backdrop going to pfizer and viagra, that divides an underpinning and gives a sense of the exaggerated levels. >> very exaggerated. does that continue? >> the fundamental story is good. withu overlay that potential m&a, that is well supported. i think if we see that being hit in terms of sterling against the dollar, the question is would you necessarily want to be buying it there? i think you would. i think it's a better place to look at some of the process. sterlingllar, is better.nk that >> david tweed will join us to tackle numbers. robe will talk with the cfo

d trichet. coming up in a few minutes time. us. with we will take a short break. ♪

>> welcome back. let's head out to jonathan ferro for the fx check. >> i am looking at the norwegian krone. you can see the swiss trying to .eaken b in an hour we will get numbers out of sweden. thanction much better analysts predicted. next week seen as key for the

next move. inflation fails to rebound significantly. a rate cut is likely. hard to disagree with that analysis. >> these are the top headlines today. the fighting in ukraine has intensified as government troops tried to regain rounds from rogue russian militants. -- pro-russian militants. 20 rebels were killed in one city. special security forces have been sent to odette said. has reported earnings that beat estimates. it is also speaking of its 50% return on equity markets. ubs will create a holding company that will allow the bank to return more earnings to shareholders. >> from now on we will start to two shareholders.

us creation will allow supplemental capital return in the form of a payout of $.25 per share. >> a person says the penalty could include a guilty plea and a fine of more than $1 billion. prosecutors can't decide whether to charge the entire bank or just its u.s. subsidiary formed last year. back. those are the top stories. let's talk about a deed as -- adidas. i have quite a few challenges. they talked about the foreign exchange impact and what it's

doing to their business. have they found the back of the net with these numbers? >> on a couple of levels. it too quick to go through the numbers. the ones i am going to pick out our sales on the quarter. net profit coming in at 204 versus 218.8. the main thing the prophet forecast for the year, i would imagine this would put quite a bit of skepticism into the markets about whether they could make their goals. one of those is an operating profit margin of 11%. a bit of ando quite increase for this year. the top end is nine percent. that could be an issue for them. have difficulties in the

russian market, which is only deteriorating as the situation in ukraine deteriorates as well. euro netsay they made increases and in particular very stiff competition from nike. >> where is nike attacking the hardest? soccer please, soccer leisure wear, everything to do with soccer. let me give you an example. mikey is dressing nine teams -- nike is dressing nine teams. .hey came out earlier this year they can see nike is grabbing

market share not only in europe but germany as well. ofbmw, the biggest maker luxury cars just crossing the terminal. earnings with the tax of 2.0 9 billion euros. revenue has come in and ahead of estimates. the company said it made a strong start to the year. it has reaffirmed its targets. for a significant gain in profit this year. models like the hatchback are set to propel sales. bmw sales earnings eating estimates. the company has made a strong start to the year. let's change focus for a moment. royal dsm reporting earnings as well. for more on the numbers and the

company's strategy, we are joined by the cfo. good morning, sir. thank you for joining us today. >> good morning. >> how has the performance been in the clusters better health, nutrition, and materials? at nutritionk first, nutrition has performed according to expectations. headwinds out of q4, which impacted q1 also strongly. to be behind us. the most difficult impact we see at the moment is currencies against the strong euro. there was a good start to the year with good volume growth. still aimed to negate the impacts of strong currencies

or fluctuating currencies by an increase in earnings before depreciation? you were targeting growth in the earnings target of six percent. is that still the case? >> the six percent growth target for this year would be compensate.o today we confirmed they accepted that outlook statement. our target is to compensate for by impact of movement growing underlying performance by six percent. >> what do you think the european central bank should do to push the euro lower? they have often talked about the euro in recent months, but no action has been undertaken. the ecb meets this week.

would you like the ecb to take action to weaken the euro? >> that would help us. only a year ago many people talked about the euro would disappear. today we see the euro as the strongest currency. this impact of the law. anything that could help us in that direction would be beneficial to our company. >> your focus is on organic growth and cost reduction. there is one acquisition you are looking at. are in talks to expand your footprint in the global vitamin c market. how are those talks going? when might we get an official offer for that chinese company? >> to be honest we do not discuss these processes while

they are ongoing. that it was inrm the market, but as the processes continue, we will not comment, so i'm sorry you have to wait until we make an official announcement. >> can you comment on how you see the chinese economy developing? rose is certainly slowing. assessment of china's economy right now? >> right now it is in fact weakening. the growth rates are not what we chinese and also what government expected. in the medium term long run we continue to believe china will grow. china has to put some things in order like environmental pollution, but this will help growth. i would consider that to be a temporary topic. >> very quickly.

your division has been talked about. i know you want to get rid of part of the business. can you update us? are you still planning to sell it? who is interested? what can you tell us? statement as on the acquisition target. we generally do not comment on processes while they are going on. we have made a clear statement you won't reduce our exposure to the emerging markets. casas is like this art so difficult to predict. readyatement before it is is not wise to do. >> we look forward to talking to you. when you are able to elaborate on the potential deal in china. thank you for joining us today. >> 6:40 here in london.

we will take a short break. when we come back we will have analysis on bmw. those numbers coming ahead of estimates. it made ay said strong start to 2014. we will have announcements next.

>> welcome back. >> time in london is 6:43. bmw revenue beat estimates. joins us from berlin with more. 2.0 nine. in at the expectation was for 2.0 4 billion. a clear win there. it looks like revenues were down just a little bit. mean you saw a strong profit margin. the expectation was for a percent to 10%. it looks like they may be on the upper end of that. we want to focus on that margin. we saw they looked good. theyanalysts decided and began tanking. we have seen bmw is out front to

be the number one auto sales. they are ahead of audi, ahead of mercedes. they have done this on the strength of their crossover models, the suv's everybody in the emerging markets seems to want to buy. take a look at some of the numbers from their numb -- from their models. the x three is a little bit smaller. and then the x one is more of a hybrid. that is up 15%. the suv take a look at number, you see why there is such a focus on all the auto companies. it's right around 37% of the market. in a few years it will be 40% of the market. the question is will those be luxury suvs or the kind you and

i drive. >> thank you very much. new convertibles. >> we need a bit of glamour. australia i am told is without peer. a study in media exploding with pictures of australia's wealthiest man fighting in the streets. dan peter is ringside in sydney. what is going on? to you.ry good morning it is basically one of those stories which helps keep the country alive. australia's richest man arriving home to be greeted by his best friend and best man at his most recent wedding. they engaged in a medley on australia's most famous tourism strip. they decided to sort out a few personal differences. news corporation, the rupert

murdoch owned company -- you can see they took the footage and paid over $200,000 for it just to sell some newspapers, but the footage was filmed on sunday afternoon. it was believed mr. packard took exception to a channel nine vehicle by has house, and he let mr. digitalglobe. ginglel know. one thing led to another, and they decided to let it go on the streets. they did provide some entertainment. >> aside from bruised egos, is there going to be any fallout from this episode or not? .> he has come out he seems to be ok. it depends whether or not mr. take a diment will

view on his pugilistic efforts. it's not a great look when you see two leaders of highly esteemed companies in australia carrying on in that manner. it will be a great historical note. >> that's a great story. >> it is. if this is how france behaved, who knows? cup a month until the world ticks off in brazil. is headquartered in germany. the sportswear brand is the official partner of the tournament. we find out what goes into .aking an iconic tournament >> for fans and players they are very personal. it is the symbol of the event. theofficial match ball of 2014 world cup. tested ball.t

we tested with over 600 players in 10 countries with 26 different teams. the ball is six panels. when the ball is flying, it has a consistent rotation. we do a variety of test. we want to make sure the ball keeps its shape, that the rebound is consistent over the course of the game. one of the most important things is subjective player feedback. how do they feel about it? the comments we received back were very consistent, very predictable, very playable. the method we use to create the ball is thermal bonding. it's something we have perfected. it allows the ball to have a low water uptake.

for him the first minute to the 90th minute the ball is consistent. t has very good shape. every player touches it. it doesn't win or lose. >> i love the name. the brazuca. .> passion and emotion something that will be displayed during the world cup. will it he or lose? that will be determined. coming up we will have more. ♪

>> welcome back. >> we're an hour away from the start of the european equities session. what more can you want? .> and alarmist headline forced the of my five has been warning british business of -- the mi5 has been warning business about that. businesses have been protecting people in an external way. people.been warning foreign agencies are already

talking to i.t. professionals within companies. snowden remains he was not recruited by anyone. the thing is they can be quite junior. >> who knows? >> maybe they have an ulterior agenda. this is something they are going to have to take a look at. >> my i.t. skills will not put me in the frame. >> you did call i.t.. you were very calm. >> really? that can be stressful. game -- was a guest to who gave quite a rebuff argument. that man will be disappointed. we could see the first trillion are within the next 25 years. credit suisse says within two generations we could have 11 trillion errors.

bill gates is the front-runner. it's a lot of money. it's not bad. >> impressive. >> he does give a lot away. >> he does. >> this is the story that caught my attention. researching our world health emergency. there was a plan established in 1988 to wipe out polio. since that was established they had such success to bring down polio rates by 99%. in 125 from being countries to just three in 2012. since then we have seen a resurgence of this entirely preventable virus in various parts of the world including asia and africa. various parts of the world sailing. it struck me as sad.

>> it speaks to wealth inequality. >> it's usually preventable. most a lighter note, people blown away. liverpool needed to win last night to sustain their hopes of winning the lead. they were three no up after 55 minutes. the fans were singing. minutes wideight gayle scored two goals. ofy are points ahead manchester city. manchester city has two games. liverpool has one game to play. is the title over? >> i know how they felt last same thing did the back in 2005. >> they did. a very happyy dad man. >> did you shed tears that night? >> i was crying like a baby.

>> he's not ashamed to admit it. nextdown continues in the hour. we will be breaking more earnings. we will have barclays at the top of the hour as the company releases its numbers ahead of its strategy update. more when we return. ♪

makes a very solid quarter in which all our businesses have been performing profitably. most importantly achieving a of 13%.e he asked the swiss bank is in talks to pay over $1 million to resolve a u.s. tax probe. >> barclays with a strategy at date. we will not have to wait that long for the first quarter

numbers. those numbers are crossing now. hello and welcome. well -- ina.m. in london. waiting for those numbers to come through from barclays. said to be a bit smaller than it was. beents around -- we have monitoring their banking business. a lot of focus on the numbers and the strategy update later. we will wait for those. and supporting first-quarter numbers that supported analyst estimates. menace cranny joins us now from zürich.

it is the number in the strategy day for u.s. -- for ubs. what will the markets focus on? >> i have the strong feeling it is all about the strategy. here in thee discussions we had with our print division along with analysts in the market, three issues return. equity, capital, and capital returning to shareholders. there is no doubt about it. the ceo would began talking to on a regular basis 18 months ago is focused and determined in terms of delivery. a return on equity. continue to believe that our 15% target with the removal of additional operational risks that we have is an achievable target. last untilill only

2016. with our business mix and further reduction in assets and the balance sheet we -- it will make us totally legible for these kind of returns. >> we will see how the analyst reacted. skepticism about the ability to keep that 15%. setting a new target on risk weighted assets and $.25 returnable to shareholders. the issue is this, will they cut costs more aggressively? newly 4 billion will flow through by the end of 2015. no longer talking about blockbuster numbers. 10,000 jobs to go. a much different story. it is about the quality of cost cuts. they have broken through the magical level of 13%. some will say we are on the way

to the promised land which is return of capital or dividend. whatever you want to call it. that is the number one priority in terms of language that was used. >> thank you. just getting those numbers from barclays. if we start with the adjusted ones, 1.69 3 billion pounds. that is down five percent. giving us the details about their investment banking business saying income is down by 28%. thatwe look at the numbers strategy has improved 18%. continue to be cautious. we are going to get a strategy update from the business later on this week. we will see what

that amounts to. just on the net numbers. q1 net is 65 million power -- pounds. they have beaten estimates on the net level at least. >> they have lost three big executives in asia before that strategy announcement. the big name was skate mckay that added -- headed up the american vision. his bonus was more than twice the size of [inaudible] esteem he waswhat held. will the investment bank be 7.5 thousandny as jobs could be cut. as bloomberg has said, barclays intuitnveil the bad bank -- and it will throw another units which were previously assigned to the exit quadrant. they include some of the rate

trading derivatives and other fixed income assets. according to the people that bloomberg has spoken to. thursday is the biggest day and barclays has a lot of questions. >> more on that as we go through the week. the surgeon casualties are threatening to undermine the crane's offensive to regain ground from pro-russian separatist. insurgents killed for government troops and down -- downed a military helicopter. dozens of civilians were wounded in fighting. this conflict is definitely spreading. to give you a sense of the geographic of it. we brought the map out. that is where we found those .lashes

sending an elite unit to keep the peace in the city and they fired the police chief on the back of those events. -- the moldovans have alert.ir troops on high they are concerned about this spilling over to moldova which is an independent country. here in kiev since all the events, the interior ministry saying they are setting up checkpoints on the outskirts of the city. they are concerned about what they called provocations on may 9. that is this friday, victory day. as we were saying the majority of the fighting has been in the far east in the luhansk region region.tsk heavy fighting over the last 24 hours. we spoke with some of the rebels and they killed four ukrainian

troops and downs one helicopter. at least 20 oh of their own were lost. civilians increasingly mixed up among the casualties. that risk alienating the central government as it pushes on with its military offensive from the people in the east. two events to pay attention to. they intend to hold on this sunday. thereill ask their people whether to secede from ukraine. the question is will there be an election in those regions on may 25? if the election does not happen russia can say that part of the country does not actually fall subordinate in a political sense to the government. back to you. estimatesting according to the chief

executive. hans nichols joins us from berlin with more. what was the take away? and wenumbers are good can dig into those. still on is the mw top. they are doing it on the strength of the suv. this is where all the action is in the auto market when you look at the luxury space. it is on the suv and these vehicles that are popular in the emerging world, the emerging markets but also domestically in europe and the states. 2.6% estimate. coming in at 2.09. about 50 million higher. 12% increase on their global luxury sales, that puts them ahead of volkswagen's audi and daimler. demand was led by suv's.

x-3.imbed and here is something from the ceo of bmw. making a strong start to the financial year with first quarter figures. in a statement this morning. look at global demand for suv's. go back five years ago to 2009. it is 26% of the market. last year it was 37% and by 2019 it will be 40% of the market. of every 10 out vehicles will be in suv. remarkable when you think about where it has come in 10 years. one of the reasons that porsche may be revamping their bottle. coming out with a new cayenne its big will have report later today. we will be breaking those numbers down overnight and first thing tomorrow morning. explaining -- are

planning to expand the alfa romeo brand. what is going on there? >> they need the cash for it. this is according to our fiat reporter. cashwant to raise the internally. they do not want to do any big offerings. they can spin it out and have more models and revamp this iconic rant. the challenge as always is how do you get the funding and how do you find the demand especially in europe where things have remained flat on the improve, improving a little bit but it seems like at this point they are in a battle for market share. that is when it comes down to the designers. maybe we will visit them in turin and see what they have cooking. >> thank you. estimates with its latest profit numbers. the next guest says the future of this was breaking -- swiss banking industry is in question.

>> time for today's company news. ge says it welcomes input from the french government after officials asked for improvement to the bid for the energy

business. ge was responding to comments from french political leaders. twitter signed a deal to let users shop directly from posts on its microblogging service. part of a push to add e-commerce to advertisers. u.s. customers can add the items to their amazon cart by responding to the post with #amazon cart. twitter will not get a cut of sales. in --10 buying a stake tencent eying a stake in navi mpro. welcome back. this is "countdown." >> ubs reported its latest earnings in the half or so. let's take a look at the future. not a bright one.

thank you for joining us. ubs is very focused on rebuilding return on at footie for their -- return on equity for their is this. are they generally on the right path? >> definitely. after many years of crisis beginning with the subprime loan crisis and exposure to the irs tax dispute and other big andes, ubs is come on unsustainable pass. they have the right governance and the announcement that they are thinking of [inaudible] which will reduce risk of another bailout is a positive sign and it is definitely the right step. >> there are doubts that ubs can hit that 15% return on equity target by 2016 just to put it in perspective.

the figure was 8.7% in the first quarter. do you share those doubts, can it meet that target? is it --sonal opinion investors should not only look at share performance and the return on equity because it is a .ood sign they are currents earned about a sustainable path, sustainable development and risk management rather than driving profitability like you did in the past. this target at 15% -- 50% is nice. i do have doubts but at the same time i am optimistic that in the long run, ubs has a sustainable and competitive decision in the swiss banking sector and beyond. youhen you say that, i know believe for the sector as a whole that it has a tough job to repeat successes of the past.

this is the sector that flourished under swiss inking secrecy rules. maintain itssector selling point. >> there is no -- for the small banks their liking scale and lacking proprietary research. we will see a continuation and there will be a few winners which will be ubs and some other banks. the big ones who really have their roots within switzerland and focusing on the domestic sector.

in the private banking sector, wealth management, we will be seeing a huge consolidation. >> one inc. you did not mention was credit suisse. we are hearing a report according to a person familiar with the matter that it is close to striking a deal with u.s. prosecutors and that deal could involve a $1 billion fine and could involve a guilty plea. what is your early thinking on this? $1 billion is below some estimates. the guilty plea has got me thinking. be that mean that it will affected on a reputational side? >> definitely. not stand fordoes swiss banking in the traditional sense anymore which means solidity, predictability. it is focusing on investment banking which is highly risky. we're are showing that this strategy has huge problems and it is far behind ubs in the

sense that it is opposed to the u.s. government, the iris in this tax dispute. the settlement and the fine and maybe criminal charges will distract the management from repositioning itself in this dynamically changing global environment. the outlook for credit suisse in comparison is much more gloomy. >> thank you for joining us today. >> david tweed will join us to tackle acid numbers. -- asset numbers. ♪

>> welcome back. >> it is 7:23 a.m. estimates, the world's biggest sporting goods maker. david has the details. >> this is a company that has been under pressure for some time. share prices down 17% and now they have had earnings come in and they have missed on expectations on a couple of levels. ,ooking very quickly, sales $3.53 billion under the

estimated 2.61. net profit under the 219 estimate. they have maintained profit forecasts. they expect to see some improvement later this year. they are having a lot of difficulties. --s is the third big it's biggest market, russia. they talked about the strength of the euro. they are worried about the strength of the euro against the ruble and the u.s. dollar. they have had difficulties with their big competition which is coming from nike. so much so that one of their biggest shareholders, this is union investment. findut a note saying they it incomprehensible that isrbert heiner had h management contract extended through 2017. they came back on the defensive. theynote was one-sided,

said. you can see the intense pressure herbert heiner is under. >> what is the plan? fatefullan is the world cup. i will read to you some part of the statement from today has earnings announcement. herbert heiner saying later this month we will unleash our largest football offensive ever ahead of the world cup. the energy and intensity of our campaign and product concepts will be a clear statement and sides of things to come from our group. for most of europe, germany in particular are important to herbert hainer. what they are planning to do when it comes down to their new product on jews. there new product

entries. up ande is a lot coming will regain their sales momentum with the advertising offensive in these new products. >> thanks, david. europe editor david tweed. o excited are you about the world cup, naught to ten? nine by the time the tournament starts. we will take a short break. we will be breaking down the banking news, plenty of it out this morning from that sector. and we from barclays will dig down into those when we returned. . ♪

>> welcome back. let's get out to jonathan ferro for th e fx check. at sterling.ok this is a big day for the data. expect a reading. 67.8. one tick higher from the previous month. the reading that matters given that the service sector makes up three quarters of the u.k. economy.

ahead of a key central bank meeting. no one expects the rate hike in the first six months. could it be in the next 12 months western mark we get beat on that number. that debate a little bit higher. >> and trying to regain ground from rebels. special security forces have also been sent to the black sea city of odessa. and ubs reports income that beat analyst expectations, sticking to its return on equity targets. says ubs executive will create a holding company that will allow the bank to return more than of its -- more of its earnings to shareholders. >> we can start to return at least 50% of profit to shareholders. holdingtion of this

structure will allow us to add supplementary capital return in $.25 per payout of share. rex credit suisse is near a deal against u.s.case prosecutors for allegedly helping americans evade taxes. the penalty could include a guilty plea and a fine of more than $1 billion. prosecutors must decide whether to charge the entire bank or just its u.s. subsidiary formed last year. just heard the earnings from barclays half an hour ago. thank you for coming in to talk to us. first quarter profit declining. people have expected -- is this

where people have expected to see it? over 40%, they have managed to cut costs but they have not been able to cut costs as much as revenue is shrinking. are paying 46% rather than 41% of revenues. they cannot cut quick enough. -- he was the big figure in the americas division. he left last week and did other top figures. aremuch is a problem parting executives? the environment is difficult but you need to retain tough. >> that is not -- the problem,

they are not retaining staff enough to stop it from shrinking? >> you need to pay key people. you need to deliver because the revenues are shrinking. big day.ay a strategy update, bad bank, that seems to be the headline we have uncovered. looking forts are runoff. >> what is that quadrant called? rex the exit quadrant. there were banks in 2008, 2009, talking about shrinking their

investment banking businesses and going back to the nuts and bolts of retail banking. -- thisin mind you have is relatively new. we knew that the shift was coming. the question is how late they could push it through. any toa good a time as take your medicine and refocus the bank. fairly brutal. >> it is. be acrossat may retailers as well. to say.t certainly not pretty. >> what would the [inaudible] going into a bad bank? thee are looking at environment versus bad debts and profitability. they have their internal targets. the fixedto make --

income business is not going to cut it at the moment. rex this is the chance to use an bad newsn, get all the out there. they will be given a certain amount of time. is this a real opportunity to get all the bad news out there? >> you have to look at it that way. we have been waiting for your to now. because the environment has changed. rates are stable for longer. >> we are witnessing in the yuki economy. -- from the economy. >> margins and deposit costs are falling. so the u.k. banking space is not

a bad place to be at the moment but clearly very competitive. >> still, shareholders and regulators, litigation, that is at the general banking sector is having to deal with. it is not the ideal environment. >> especially for bank like barclays. it has been involved in libor which is where the problems with shanking trade. king trade.n >> thank you. that approach seems likely to change. sam grobart explains. >> there are people who wonder, why has no bank and brought up on criminal charges? indicting a bank is a tricky thing. if the government was to label him a jewel -- a major financial

institution a criminal enterprise there could be a run on that causing greater damage to the economy more than whatever malfeasance was conducted. a federal prosecutor to do? government lawyers have avoided this doomsday scenario by brokering settlements called deferred prosecution agreements. in 2012, the u.s. department of hsbc ofaccused bank stemming failures related to money laundering. instead of going to court they admitted to the violations and agreed to forfeit $1.3 billion. two big banks are under the federal microscope today. credit suisse is facing indictment over helping americans debate taxes. france's largest bank bnb paribas has been accused of processing transactions from

blacklisted countries. there have not been any in criminal -- any terminal indictments yet. >> no individual or company nomad or how large or how profitable is above the law. >> the prevailing argument especially in the financial community is that any criminal prosecution could result in a bank losing its charter. which could set off a panic in the market and cause general financial havoc. the u.s. attorney for the southern district of new york thinks that argument is just a scare tactic. calling it a gaping liability loophole that blameworthy companies are only too willing to exploit. the question is whether it is just that or if banks are too big to jail. reading on thea u.k. manufacturing later today and pmi numbers are released. we will look ahead of that. 7:39 a.m. in london.

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>> the company is struggling with the euro and the drop in

revenue. fell by a double-digit percentage. and the narrowing its losses. stock compensation worth $68 million. and the firm or -- former or burberry ceo [inaudible] >> it is 7:43 a.m. -- do not talk about sweden every day but maybe we should. >> a lot of people looking at the data more closely to see how this pans out. yesterday we got some bad industrial production data.

today we got a really good pmi services number from them. 57.8. paul krugman has been very aggressive in his analysis of central-bank policy in sweden. he has referred to them as those who have an aversion to low rates. the reason i talk about this is when you have this inflation obsession you can overlook financial stability. in sweden they delivered some good growth numbers and they are experiencing somewhat of a housing bubble. you get u.k. services also expected to be very good. the debate around the bank of england is not just when the thet high comes but when financial committee steps in and does something about the housing market. even though inflation is low you have the housing market that in some people's eyes is bubbling away. >> the mpc is the thing we talk about in relation to the timetable for to medications.

rates have not moved for a long time. >> becoming increasingly important. if someone will come from the policy committee first, will that be enough? [indiscernible] do. things they can't moved tos the market the point where they cannot reserve what has happened and the blunt instrument of rate hikes they do not want to use. that has left them with no choice in the end. will continue to be at topic of conversation. luxury hotel spans 29 floors. out the view.ck

>> it is five-star luxury like london has never seen. this is the first foray into the u.k. and the capital's only high-rise hotel. >> the lowest room is about an hundred 30 meters in the air. and the highest room is going to be almost 108 meters in the air. >> the project is a year behind schedule and ended up costing more than $67 million. it has been a challenging but ultimately necessary process for the hong kong-based company. >> we are moving into different anas. traditionally we are asian-based hotel company. we are very proud of that. coming to a city like london it increases our global appeal. >> in the is this where first impressions count, this is a lasting one. floor-to-ceiling windows in every room make sure you never perchedhere you are, high above london's skyline. >> we are very excited about the

goal which will be at the top of the section. it is the highest in western europe. >> views like this you'll have to pay for. rooms start at $760 a night. topping 5.5 -- five and a half grand. not for those wary of heights. >> the picture at the end of very pretty. as did the package. you can't do much about the weather. you might have rain falling on that panorama. >> what is the tallest hotel you have in in? , i cannotabu dhabi remember what it was called. >> this is the tallest are in europe. coming up, the uk rockets open after a long weekend.

7:47 a.m. in london. ♪

>> welcome back. is 7:50 a.m. let's look ahead to the open. will look at some of the stocks to watch and the overall market. the u.k. back in the fray.

>> last year we have formed a base around 6500. it does seem every time we get to we get to that area suddenly we hear something out of ukraine . >> we are in the last of the bull cycle. how long might this final phase last? >> it depends on how events take place but the general theory is that if you think of it like a bell curve and just the expansion and the contraction in the market cycle, you could say that we have been through the

first phase. i am thinking perhaps we are into the second phase now. what makes me think that is that just the way the market has been rotating into different sectors. and so we have [indiscernible] and the selloff and we have energy type stocks. starting to be more prominent and outperform and that tells you where you are in this curve. normally this top would be utilities. they are out before -- the best performers. this has something to do with this unusual rate environment we have left. people have in investing in bank stocks. >> let's talk about banks because we have had numbers out from barclays today. we have a strategy update later on this week. what did they say this morning that impressed you?

>> i have not had a chance to look through the full results. tar allal i do tend to banks with the same brush. i am concerned there is another moment coming from any number of these banks because there does seem to be note problems -- no problems we are involved with. what do we know, that tends to be the off-balance sheet items and my concern is for the banks in general. rightclays is doing the saying. they're looking to resolve some of these.

>> you have talked about the bell curve and where we are. >> i am not sure if statistically it plays out. the m&a does land -- point to the end of the cycle. >> this is something that points to the end of the cycle in the bull market and the trouble is that they were outperforming earlier in the cycle. it is slightly perverted how that health care sector normally does. if we see this explosion in m&a activity, this pfizer deal comes together, what is deemed to be a

be aive things ♪, that might positive thing. politicsthere is some involved in m&a. we have got some news, the french president saying that ge's bid is insufficient. >> what i'm thinking at the moment is that yes, the fed is still tapering. is tapering. ofle there is still wanted easing taking place i am thinking there is for the room to go in the stock market. for joining us. we appreciate it. a.m.55

have numbers out from barclays. we are looking at the m&a story. that will do it for "countdown." see you tomorrow. ♪

welcome to "on the move." i'm francine lacqua at bloomberg's european headquarters here in london. everything team has covered from companies to currencies. here with me now is jonathan ferro and ryan chilcote. our markets editor manus cranny joins us as well. course, we had a down day across most of europe. london is back online. we should see volumes pick up as well.

key dates around the u.k. today. ahead of course is the ecb on thursday. numbers -- iter is two-for-one today, strategy and numbers. dividends and capital shareholders are key. $.25 on the table for shareholders. criticismhe big before got on the plane from the analyst community. we see the stock trading anywhere from down one percent to up one percent. sticking to the target of 15% return on equity, the holy grail. back to you. >> we'll have to see how ubs opens in just a couple of minutes. staying with the banking