>> the ecb could simply hand over this money to the imf is arsenal repayment on behalf of the greek government. this is money that we are owed. >> the greek finance minister saying greece is counting on the european central bank to help avert default when it runs out of money next month. we will bring you more of that interview. >> it clear it was unacceptable. we very much regret this and has damaged hsbc's reputation. >> that was the -- testifying over the tax scandal.

>> rbs reports earnings this morning. the lender looking to bounce back from the biggest tank bailout in history. in breaking now, europe's biggest phone company thought to telecom reports earnings. we'll bring you the numbers. >> hello and welcome to "countdown." also coming up today, janet yellen sparred with republican lawmakers in her testimony before the house yesterday. we will tell you what the federal reserve chair had to say in those pushing for more congressional oversight over central bank. greece has bought time of its economic bailout program. bloomberg had the opportunity to sit down with the finance minister and he detailed the

changes that greece has made in order to appease creditors and secure the country's financial future. >> the first thing that has changed and quite drastically changed is that the new deflationary measures that the previous government had promised have been unaltered. secondly the idea that this economy would exact a 3% primary surplus under the present circumstances that would have flamed the fires much further. that is gone for 2015. we have a pledge for 5-10 years beyond that that the level of the surplus will be renegotiated with a view to rescheduling and restructuring the debt.

this is a major achievement. >> that was the great finance minister. we are just getting breaking news from europe's largest phone company, reporting fourth-quarter and full-year numbers. reporting q4 sales of 17 billion euros. the estimate was 16.40 5 billion so it seems that number is better than estimates. on the cast or level 4.4 billion against an estimate of 4.6. net loss of 100 4 million euros. it says the sale number came in ahead of analyst expectations. hans nichols joins us from berlin. >> good morning, anna. it looks like the dividend will be $.50 per share. that is the outlook for next year.

it will be 18.3 billion. this is a telecom company that is thinking about growth in spending. they have planned for the next five years to spend 23.5 billion euros. that's on top of the 23 billion euros they spent in the last five years. the question becomes, does vodafone answer? they hinted they had a 19 billion pounds expansion program where they were upgrading their global network. vodafone has hinted that they don't want to go forward. it looks like they have a solid bead on all their top numbers. they still get quite a bit of revenue from the states. one quick note on deutsche telekom u.s., they are assuming a one dollar 33. that may be giving them a little more cash flow from the u.s. than if the euro stays low they could have even more.

>> what is this we here about them teaming up with airbnb? >> deutsche telekom has been partnering with a lot of tech companies. this is a way to get in line and have conversations with tech companies. they are offering the airbnb app preinstalled on the phones they sell in their store. there is a voucher accompanying that. it's a way for deutsche telekom to expand their reach and become almost a tech company in addition to a telecom company and it paves the way for airbnb to have a lot more customers prepackaged from deutsche telekom. it's more about how they are looking outward more, not just on building their network, but also on building alliance is. >> thank you very much, hans nichols with the latest on the german telecom sector and beyond from berlin. >> breaking news from elian's -- ali on's.

on a net income basis and profit basis in the fourth quarter, we have mrs. on both metrics. analysts estimating 1.40 one billion. narrow legal or last -- narrowly below last year's figure. the company aims for 10.8 billion dollars of operating profit in 2015. most of the attention is on its asset management division which includes allianz global investors and of course pimco, which suffered the worst year of withdrawal in the history of fund management last year. we all know about the departure of bill gross at the end of last year. let's focus on allianz. later we will be speaking with the cfo about the fourth order

numbers and the outlook for the company in 2015. >> let's go for a beer, it is 6:06 in the morning. the fund dividend beating estimates. organic beer volume how do you grow your business? it was pretty much in line with estimates. modelo was the big deal they did. the china beer industry is returning to growth. brazil sales growing mid to high single digits. mexican beer industry volumes will grow in 2015. so that's it on the beer market. the top british bankers were under pressure following a storm

over at the hsbc role in helping clients. taxes. chief executive stuart gulliver open his testimony to u.k. lawmakers with an apology. click said like to put on the record an apology from both myself and from douglas for the unacceptable events that took place in the mid-2000, which is clearly an apology we would like to make to you all, to our customers and shareholders and the public at large. it clearly was not acceptable. it has damaged hsbc's reputational. >> he told the u.k. select committee that the practices through which hsbc helped set up swiss bank accounts and also provided advice on how to you may taxes was firmly in the past. >> as hsbc executive struggle to contain the scandal over the swiss unit, the chief executive will forfeit one million pounds

in pay, according to reports. rbs received the biggest banking bailout in britain and the news comes two months before the u.k. election head of the company's earnings release and roughly 52 minutes. >> joining us is caroline. let's focus on the hsbc story. it was fascinating, gulliver apologized, but collectively not taking personal responsibility. >> it makes everything seem unaltered as yet. it was two hours grilling with the in p's. both sides got disgruntled and both sides remain relatively haughty at times. this was private banking unit 2005-2007, are the years they

were meant to be looking at. data was stolen from hsbc and helped criminals, arms dealers, dimon traffickers evade tax. we are now getting news that apparently untraceable wads of cash were handed over to potential clients and switzerland. what was going on? chief executive stuart gulliver saying this took place in a different era. we have cleaned up and streamlined. he wanted to try to get across the changes he has made. but trying to shift the responsibility to the swiss managers at the time to the relationship managers at the time, even though he was himself finance director of hsbc when all of this was going on. he was the man behind the actual acquisition of some of the parts that became the swiss private bank. he was still blaming others and in part blaming swiss secrecy for the reason they did not realize any of this was going on. so much of it to begin with was front and center about stuart

gulliver's own tax arrangements. this is why they dragged him in at the last minute and changed it from 45 minutes to two hours because he himself admitted on monday that he had his own swiss bank account and it was routed through panama. the question was why? he repeatedly tried to explain. have a listen. >> first of all, there was no tax advantage or purpose whatsoever to the panamanian company. as a matter fact, there was no tax purpose to it. it was a panamanian non-entity. purely to give me privacy within my own country. >> why go to panama? >> looking back on it years later clearly panama looks quite strange. it was simply a nominee injury. i didn't choose panama, it was a

nominee into tea. -- entity. >> clutching to try to describe it. at this point it was the sensible thing to be doing. we are weaving that all together with the fact that he is so ardently not domiciled, he feels is a hong kong resident. >> and the kids have gone to school here. that plays to the crowd and help sensationalize. they were clearly trying to paint a picture of a culture and a type of person that are very different from the mainstream. where does this investigation go from here? we now understand that her majesty's revenue and customs have now got clearance from the french government for the first time in five years. they have been trying since 2010 and suddenly they get clearance to give these leaked details

about the tax evasion, about the clients. it all came from an investigation and the fact that it is now in the public domain french tax authorities feel they can hand over this sort of data to other areas. not just the fact that they can hand it over to the financial conduct authority, they can give it to cbs. it's not just about pursuing tax evasion issues, it becomes about potential other allegations and they can investigate whether money-laundering was going on. we understand there's going to be a meeting between all of these authorities next week as is being reported by the financial times that this could drive the investigation forward. what we want to see now is who was to blame for this?

they are saying no matter if they were to blame, we cannot claw back their bonuses, the money is long gone. it doesn't help when you have stuart gulliver not being able to save he is a fat cat or not. have a listen. >> would you consider yourself a fat cat? >> you would have to define fat hat for me in order for me to comment more meaningfully on that. >> i thought that was a fairly sensible clarification. caroline, thank you very much. more to come on this story as we go through the morning and more on the banking sector of rbs later on. we will leave the banking story there for the moment. >> ukraine central-bank lifting a ban on foreign currency trading last night less than 24 hours after imposing the restriction.

it was the national bank of ukraine's second move this week to tighten capital control. janet yellen sparred with public and lawmakers in her testimony before the house yesterday despite congress's growing demand -- fighting income inequality. the website was hijacked after the company was criticized for pre-installing advertising software on laptops. it exposed users to hacking. according to postings on twitter, hackers group called the lizard squad was behind the breach. the search engine is unifying its two separate european halves into one unit. google said one structure will enable the company to respond better to local conditions.

the maker of the fast-growing counter drug is exploring options including a sale according to people with knowledge of the matter. the california-based drugmaker has attracted attention from the likes of novartis and johnson & johnson. it could fetch $18 billion in a sale. >> you can join the conversation on twitter and let us know about anything that's on your mind this morning. >> coming up it's all in the past. that was the message from hsbc executive stuart gulliver. caroline was just telling you about tax practices. how will the other issues play out in the coming elections? stay tuned for that. ♪

>> welcome back to "countdown." the government was just elected on anti-austerity platform. we sat down with the finance minister. he told us what the new deal means for the greek people. >> we never promised her people

would we would negotiate completely and bring it to conclusion the first two weeks. the greek people are not that gullible, and we are not that cynical. secondly, we promised the end of the troika. whenever said anything about wanting to get out of the eurozone. our pledge to our partners and to the greek people is we're going to do everything necessary to stay in the eurozone. clearly that means having a relation with our central bank. this country has been part of the process since 1944. obviously our relationship with the imf is ongoing. it must continue. and actually improving. but that is not a troika. let me take you what a truck is so the people of greece know exactly what it is you don't

have any reason to know it because you didn't suffer the indignity. what we refer to in this country as it forget is a team of technocrats dispatched to this country by these institutions to come here and impose upon the government and the people of program that was deflationary in nature, which had a fig leaf of a rp -- reform program that made a bad thing works. this is finished. we will have an -- a relationship that will be audited is something we seek. the reason why we extended the loan agreement was because we want to repudiate the condition now tease which those loans forgiven. these were not allowed to grow sufficiently to repay our debts. the idea that we promised to renegotiate austerity, that has already been attained, as we

were saying before, the prime minister's target has been waived. these are all things the people out there on the street understand. the one thing they want is not money, it's not even jobs, it is dignity. they want a government that goes to the european union summit that discusses matters with the imf and the ecb with a view to reestablishing the very simple notion that the greek people must have a say in the circumstances and the program and the measures that will get us out of this meyer. that we have given them. >> let's get back to the u.k. banking story this morning. following the storm over the hsbc role in helping clients thoughts taxes, the ceo of the banking group, stuart gulliver open his testimony with an apology. let's bring our guest into the

conversation. he's from the institute for economic affairs. mark, thanks for joining us. this was an overtly political event yesterday, was in it? >> absolutely. you can tell her getting close to election time. these issues that previously were being treated as financial are now highly political. the question of who pays what level of tax and who is going to what level to avoid which taxes is going to be one of the issues in the british election campaign, everybody paying their fair share. there is no doubt about that. i regret that a bit actually. i think it tends to velti, not light. listening to caroline hyde earlier, i think there's a couple of things that need to be parceled out. she was pointing out the disasters pale by hsbc. there is a tax evasion point. if you are actually assisting the mafia or drug dealers are

terrorist outfits in handling their money, that is a very serious issue and the authorities and people should end up in prison. if you are advising your clients on how to be tax efficient, law-abiding clients, or you yourself as the ceo of the bank are trying to put your cash in a sensible tax efficient way, i don't have any moral walls with that. >> is that a problem with the system avoiding -- creating these numerous loopholes? >> we definitely need a simplification. it's really the tax system that is to blame. we are looking at the symptoms, not the cause. the tax code is about 17000 pages long. it is impossible for one human being to actually understand the entire cool book. so people specialize in 20 pages here or chapter there. continually, despite politicians including our own chancellor,

george osborne, saying we have to have a drive to make tax much simpler. everyudget th com in there is a special tax dispensation if you want to help and assist in making children's films, that sort of thing. it suddenly becomes a mechanism for avoiding tax. we set up a rulebook that complicated, that detailed that it's hardly surprising anyone expect people to game the system. people do that at all levels whether they are fatcat ceos of major international banks are just simply looking at whether to put the next hundred pounds i o into my back pocket or into a pension. that's a sort of thing where you need tax advice or an understanding of the long to avoid tax. personally all rational people will do that. >> we have a bunch of people in parliament who have -- or a house that has taken cash for

questions and they have the audacity to turn around and call the people in front of them fat cats. it really is a double standard isn't it? >> i think this term fatcat is not particularly a useful term. it's very ill-defined. it shows how politicized the debate is getting. what is the difference between a fatcat and a highly successful businessman who has made millions and done a great job? what is the difference between those two? the scandal that absolutely rocked westminster politics in british politics the problem there was the rules were not simple. what can i claim for and what can i not claim for? but by a constituent of chocolate biscuit and a cup of coffee can i claim that as a legitimate expense, or does that come out of my pocket?

>> thank you very much for joining us good to get your thoughts, mark littlewood former head of media for the liberal democrat party. >> find out more after the break. ♪

>> you're watching "countdown." foreign exchange volatility, take a look at this. volatility is going to drop by 13.5% this week. that is the biggest decline in foreign exchange volatility since 2010. just to put it in context, look back at the start of january. volatility was at a three-year high. janet yellen talking about remaining patient. for the moment it's helping the

foreign exchange traders. have a look at the dollar index. it's virtually flat on the day. the aussie dollar is where you have seen a little more volatility. what you have here is a little more pressure on the aussie dollar. business investment in the fourth quarter contracted more than the market had anticipated. since 1983 the currency has averaged approximately 76%. the industry markets are gripping onto the possibility by another cut from the reserve bank of australia. of 48% chance that the reserve a would cut rates by .25% in the march meeting. so keep an eye on the aussie dollar. the euro virtually flat at the moment. we will look at those confidence numbers later today. >> the stake at over 2 billion

euros. the prime minister is looking to sell assets as the country grapples with that of over 2 trillion euros, one of the largest in europe. according to a person with knowledge of the matter, rbs is cutting the number of countries it operates in by two thirds. selling assets as part of a plan to retreat from global operations and return the bank to private ownership. morgan stanley will pay $2.6 billion to settle u.s. probes, that it was creating and selling mortgage backed securities. that makes it the fourth bank to settle with the authorities over the probe. jpmorgan bank of america and citigroup have settled with state and federal authorities for a total of more than $35 billion. you can find more on that story at bloomberg.com.

>> this morning president obama outlined progress on his plan or a privacy bill of rights aimed at protecting consumer privacy in the u.s. in an age of big data. what opportunities are threats does the -- does it offer in the field of big data? let's bring in david bridges. great to see you. thanks for joining us. so the privacy bill of rights as set out in the u.s., this is america's attempt to get their heads around how much consumer protection everybody needs in the era of big data. what do you make of it, this first attempt in such a big jurisdiction? >> i think it is important that we do protect consumer rights as we have done in the u.k. for many years. there are two paths one can go down. you can either be ruled by fear the big brother spying stuff, or

you can be ruled by the opportunity that big data brings saving people's lives and unlocking the secrets of the world. i would rather go down that. >> they talk about how 70% of the u.s. population is very much concerned about data storage and security and data use. so there is clearly a fear out there. what does your industry have to do to a lay the spears -- these fears? >> it's a great question. a lot of companies are looking at data as being the new oil the new natural resource, the competitive advantage across every single industry. companies like amazon that are big data company, as have google . most companies are responsible. i don't think they do use data in a way that isn't in the best interest of their consumers.

i think there are a few instances where consumer rights have been breached, but on the whole it's a huge opportunity for business. >> the same statistic showed that the public at large was more trusting of big business than they were of the intelligence agencies and law in or smith. perhaps it's not helpful for business because of the snowden affair and all the things we now know that we didn't know. big data has been caught up with big government. >> we all know that government likes to slice and dice lots of data and has been used by governments for many years to do lots of interesting things. i like to look at the health care situation and the possibility that we have this humongous database. we could discover potential cures for cancer. we could look at a cluster of

disease that would previously didn't understand. i think obama also has hired achieve data officer. hiring achieve data officer, i'm delighted that the u.s. government has done that. >> i know you said that tomorrow's lifesavers will be the number conscious and the data scientist. do we managed to persuade the public at large that there is safety and security even a healthier future in big data rather than fear? >> if you look at what is actually happening in the economy today, people get confused that big data is just about the loss of data. if you imagine a graph where you have data and storage requirements growing at 60%, but budgets are only growing at 5%, there's a big gap there. the big data movement is being

born out of this desire to store lots of data but not having the budget to do it. even the biggest companies in the world are moving to be data because their data storage requirements are growing financial he. -- growing exponentially. it's going to be used for things like saving people's lives predicting when someone will have cardiac arrest. saving people's lives in hospitals. my message would be to focus on that rather than the downsides of data. >> all these stories about backing and data breaches it's about manipulating data but also making it more secure. >> i think the global 2000 companies in particular have always stored data and understand they need to protect privacy concerns.

these companies are very involved in how you protect that data and ensure that it doesn't get into the wrong hands. in particular, i'm looking at this very carefully before they go into full production. the first companies i would have gone to eval is concerned about big data would have been companies that are actually making products like ourselves, and we were not consulted. >> david, thank you very much for joining us. >> join the conversation with the three of us on twitter. mark barton and anna edwards. the 20 fastest-growing economies this year do you want to know

who they are? >> i just tweeted out a quote. i don't think lowe's companies used data to the best interest of their consumers. up next, find out what happens when one small company took on apple and one. stay with us. ♪

>> these are the bloomberg top stories at this hour. hewlett-packard is in talks according to people with knowledge of the matter. the purchase of aruba would be the biggest in over three years. the deal could be announced as early as next week. apple has been told to pay almost $533 million after u.s. jury said it had infringed on texas-based smart class. they said it used inventions related to data storage and payment systems in its itunes software. apple says it will fight the decision. >> the landscape for the travel industry is changing yet again. demand for an increasing number of hotel reservations that are being made on mobile devices. a new app claims it makes

last-minute bookings easier than ever. joining us is jason from booking.com. do we really all book these trips at the last minute? >> 600,000 hotels, 40 million reviews, and everything you expect in advance. over the last year or so we have seen people really booking last minute. it really made us realize we have to raise the bar in terms of the customer experience. so booking now is doing just that. if i'm here today in london and i need to book a hotel but the difference is it really personalizes that service. if you want breakfast, that is what you said is your preference. if you are wanting non-smoking.

it means you can book right here right now. >> how does it learn about you? i understand the more you use it the more you book, the more he thinks it knows what you are after. what are the different parts of your life and different parts of your personality? >> it's not big brother, it starts with you decide the quality of the -- accommodation, whether you want breakfast, it will tailor your choice to where you are and show you the most relevant properties. that's what it does initially. it becomes more intuitive. it sees where you book and makes that hotel or accommodation more relevant to what you're looking for. >> who are you targeting? i used one huge websites which turned out to be a pain in the backside. it takes me to a hundred different pricing situations. i've been on two very different websites. why would i want to adopt this

now? who are you targeting? you cannot target everybody, or can you? >> i think we can in the sense that we have an enormous global reach. no one is as global as we are. we are working in over 200 countries. we are listening to customers and making our products based on what those customers really want. we do hundreds of tests on a website every year. the product is really what customers are asking for. >> sometimes the problem is too much choice, isn't it? >> please, give me one price at one place. i don't want to have to check everything. are using big data, going back to the interview you just did? >> we are always using the

opportunity to use what customers send us. when we see a positive, that we will see that that is what happens on the main website. booking now is very much a personal choice. you put in your personal preferences so what you see come up will be different than what i see come up. that is the key thing. we won't show you every single property. we will show you a selection of the most relevant robberies. >> in an air of wanting things to be quicker and easier and faster going back to the big data, is there a reluctance of consumers, will we read today when we are weary of even though we will get a better service, providing more and more information about ourselves? >> the key thing is giving people what they want. what we do see is behavior, and we can continue to innovate in that sense. that is the key thing in the accommodations sector, like it is everywhere else.

mobile is the center of everything. we are trying to develop it in a way to keep the customer at the center of everything you do. if you just produce a product because you think it is good, it doesn't necessarily solve problems. >> i would imagine the cold weather we have had lately, we talked a bit about the weakness in the euro. is the strength of the u.s. dollar do those things matter in your world? do they have a discernible impact on where people are heading, or is it more the ups and downs of the individual economies concerned? >> i think there will be some effect locally in places, but overall, as you see on priceline we expect strong results for the last quarter, which are publicly available. we are still rowing to the tune

of 800,000 room nights every night worldwide. >> jason, great to have you with us. manager for booking.com. >> coming up india has the largest rail network that carries more than 20 million passengers every day. more than 80% of the rail was built before 1950, so it's time for an upgrade. we talk about railway reform, coming up next. ♪

>> and new budget for india's state-run train service is unveiled. the nine-month-old government has made six the world's fourth largest rail network the center of his reform agenda. for more let's go to mumbai. what is the proposal? by world standards, this is one of the biggest employers in the world. this might be a pretty hefty budget. >> you've got that right. he has just started presenting his budget here in india. we are not expecting any hike as far as passenger fares go.

it will largely be used to cross subsidize passenger fares as well as reflect the global crude prices falling. a proposal to redevelop 100 stations across the country, extensive use of i.t. and applications to make it more user-friendly also it's a campaign that is close to the prime minister's heart and that is likely to be implemented across platforms going forward. also the root -- the use of renewable and solar energy is something the prime minister has been stressing since he took over nine months ago. that is likely to play a key role as part of the modernization of the rail. >> thank you very much. i'm sure we will pick that up on bloomberg.com.

>> should we talk about our picks of the.com today? we were talking about how -- about the proposal put forth by fifa. the former german player chairs the european association. he said that teams on monday should be reimbursed, christmas and new year is a big time on the football calendar. why talk about compensation he said. we are doing nothing that destroys football. we are just changing the format. this is going to run and run. they are going to cut the tournament to 28 days from 32 days. the final of the world cup could

be held on december 23rd. it could be. >> i went to get my haircut at the barber yesterday and literally the only conversation was all about the world cup. >> you are next. >> why should you invest in a vintage three series -- 1971-1975, you could have gotten one. they are still a very classic looking the m w. up by 20% in the past three w. $30,000 for a cs or csi version. $150,000. i have almost got a vintage bmw.

>> you have almost got one, what does that mean? >> i leave it open so that hopefully someone will nick it. >> confessions to the insurance industry by manus cranny. >> this is a little more straight down the line. economists surveyed by bloomberg what is going to be the biggest growing economy this year. china is at the top, knows the prize there. it just emphasizes that growth is slowing in china but it's still the fastest growing economy of more than 50 that were included, 57 countries. so it's estimated to grow at 7% this year. that's lower than 7.3% in the fourth quarter of last year, but it deal at the top of the table.

the philippines, kenya, india, and indonesia, all of those countries will grow it more than 5% in 2015, according to the poll. nigeria is in there at number six. given the security situation and the oil price, it's phenomenal that they managed top six placing in terms of global growth expectation. the fastest-growing country in europe is predictably poland growing at 3.3%, and ireland is in there as the fastest-growing eurozone country at 3.2%. countdown continues in the next hour. we talked about hsbc extensively this morning. rbs will be reporting their earnings. we will bring you those numbers as they break. the ceo says he is forfeiting

one million pounds in pay. we will have a conversation on that when we come back. return in a couple of minutes on "countdown." ♪

>> the ecb could hand over this money as partial payment to the greek government. this is money we are owed. lacks according to the -- >> greases counting on the central banks for help . >> clearly unacceptable. we regret this. it is damaged each us d.c.'s -- hsbc's reputation the red >> the

tax scandal is the product of a different era. >> rbs. earnings breaking now. coming back from the biggest bank bailout in history. welcome to "countdown." >> i am anna edwards. >> i am manus cranny. >> we will tell you what the federal reserve chair had to say to those pushing for more congressional oversights of the central bank. >> we are waiting for rbs to deliver the numbers. >>it has been seven consecutive years of losses. care line has joined us on set. we have a statement about the

ceo. >> i was less than clear about this before the break. clarify what they have said. fax he will hand back his role-based shares. he says he does not intend to take the proceeds from the 2015 allowance. the reason is, he says it is a distraction from the task of holding a great bank for customers and shareholders. he was concerned that this would take the limelight. and still awaiting the overall numbers to come through. >> we know they are going for retrenchment. tell us what that will look like. >> codenamed project brown. restructuring across the bank and read it was named phoenix.

to rise again from the ashes. they were bailed out. that seems to be the break even overall number. we seem to be awaiting these numbers coming from rbs. they are expecting a net income of 2.2 billion pounds. there will be a good well write down, we understand. the u.s. consumer unit, we are understanding will be written down. they are selling loans. hundreds of billions of yen. relatively good quality corporate loans sold off. to the japanese bank. >> wholesale. >> bloomberg broke this yesterday. reducing the numbers of countries in which rbs will operate. they will be whittling themselves down to 13 countries. exiting asia and read cutting the workforce to less than 2% of the 2008.

they had 15,000 people employed in asia in 2000 eight. now just 200. getting out of china, hong kong malaysia. they will remain in the u.k. and u.s. and singapore. small sales teams. this is a company disposing of assets. selling off. reducing their overall exposure. we are expecting the good w ill right down. -- write down. they are managing to trim. getting ahead of the curve. interestingly, in a shakeup, he is being moved to head the securities unit. he was in charge of the bank. reducing their bad bank loans. cutting costs, one .1 billion

pounds. exceeding their target. adjusting the value of citizens. a 4 billion pound charge. as we expected, he headed in 1997-2003. >> the financial services authority. he has an amazing cv. chairman of phoenix. remember, rbs is phoenix by the name. a board member of morgan stanley. led the commission on the u.k. airport capacity. he used to be within the bank of england. her majesty's treasury. he will know how to negotiate with politics. we are getting the chairman coming to the forefront.

the current chairman will step down. this is a bank that is still having to both losses because of their assets. we are getting confirmation they are wiring north american loan portfolio from rbs. >> the bonus pool is down to read that is the most contentious issue. to reconfirm, they will aim for a dividend or share buyback. hs ec. what a spectacle. >> the politics, the tension we saw. two hours. hold off in front of mps to explain themselves. what were they doing.

the revelations they were helping clients avoid taxes. criminals. they took to the helm and tried to keep home. stuart gulliver called a fat cat. having to respond saying, what is a fat cat? the key issue is, they did not take responsibility. they said it was the swiss managers. the leaders of the private bank that were to blame. we understand the revenue and customs, the tax authority, well involve the service. we will get an open investigation. >> thank you very much. >> you can get all those stories. go to bloomberg.com. the numbers, the earnings. mark, another great story to tell. >> we had earnings.

earnings missed estimates with a profit basis for the fourth quarter. pimco net outflows hit $236 billion -- 236 billion euros. good morning sir, thank you for joining us. >> good morning mark. >> as i said in my introduction, you missed estimates on and off at rating -- operating profit he says. in the fourth quarter, income declined. what was that down to? would you put that down to? >> i think there were some little operation related issues. in the pnc business. like in brazil. russia. the u.s. more important, it is a sunny morning in munich.

we delivered on all of our three promises. operating profit. the upper and of the range. net income and dividends of 59% as we improved our capital management. internal growth, double digit. i think that is a great result for a large financial institution. >> sadly, the going at pimco overshadowed the other parts of your business. they provided a quarter of your operating profit in 2014. you have said today that third-party net outflows last year were to 36 billion -- 236 billion. is the worst over? have you managed to staunch the

outflows? >> january and february are looking better than the fourth quarter. in the end pimco is going through a transition. it was a difficult year for pimco. overall, the group managed well. they are delivering highly on our promises. >> how rattled our clients? -- are clients? especially since bill gross left? >> in the end, it is all about performance as an asset manager. the pimco investment team delivered for their customers. all our performance figures are holding up well. total return have a good fourth quarter. a tremendous january, at the

nine night percentile. -- 99th percentile. morningstar realize maybe they were early with the downgrade and put us back force five stars. burks >> move fun that bill gross managed, it's wrong. -- him funder that bill gross managed, it shrunk. are we approaching a plateau for that bond fund or not? >> we are starting to see substantially less outflows in the beginning of 2015. the individual funds, that will all play out. i cannot predict single funds.

out of the vast universe of pimco. >> let's talk about the bond market. it matters to you as an insurance company. bond yields are rather negative in many countries. at record lows. how difficult and environment will that prove for the likes of yourself? what are the unintended consequences of a negative yield environment? >> in the end, we represent the savings industry. the savings industry seems to pay the bill for the quantitative easing action around the globe. we have to defend the savings of our customers. we see reduced reinvestment yield compared to 2014. when you look at the outlook number four 2015, we are keeping

the operating profit at $10.4 billion >> that includes the revised interest rate environment. >> where is the record low interest rate environment pushing you? where are you being pushed to search for higher yields? >> i think we have to be careful to write down the credit letter. we have to manage this carefully. i think we still see opportunities and large chunks real assets. we have a competitive advantage which we are leveraging. >> how much lower can peripheral european a bond yields go, given that the ecb is about to embark on a massive qe buying program?

a lot of the movement of the yields took place before they started the program. what do you think the result of the ecb program will be on the bond market and on the real economy? >> that is hard to predict. mario draghi has a real answer for this, better than me. when you look at the u.s., the announcements for the yields were a little more under pressure then when it started. if the european story follows the u.s. story, let's see. >> last question. what is your biggest worry? your biggest concern? we are at the beginning of 2015. looking ahead, what is the biggest potential dark cloud on the horizon? >> we touched on it very well.

the low yield environment. certainly that requires we are more careful in which areas we are picking our investments. i think with our very special franchise had a 10% growth in q4 we are will set in this environment. >> could to talk to you. thank you for talking to us. >> these are the top stories on bloomberg. the ukraine central bank lifted a ban on foreign currency trading. less than 24 hours after imposing the restriction. the ban was the national bank of ukraine's second move this week to tighten controls. janet yellen sparred with republicans.

the fed chair highlighted how the central bank is fighting income inequality. >> what we can do is try to assure -- ensure a generally strong labor market where it is possible for those want to work to find a jobs in a reasonable amount of time. we can determine the wages associated with those jobs -- cannot determine the wages associated with those jobs or what sectors they will appear in. but the general state of the economy and the policies we follow has an important influence on the strength of the job market. >> the pc maker lenovo has had their website hijacked less than a week after they were criticized for exposing --

and google is overhauling their european union. that is according to the financial times. the search engine giant -- this is a -- -- the maker of a fast-growing cancer drug is exploring options including sales. the california-based drugmaker has attracted attention from the likes of johnson and johnson and could fetch up to $17 billion or $18 million in a sale. a french drugmaker has one u.s. approval for their diabetes treatment. the food and drug in menstruation cleared this treatment. -- administration. cleared this treatment. it's expected to --

>> join us on twitter. i have been tweeting one-liners that mark has just done. one man who did not want to talk about pimco. he had had enough of that question. go to my twitter account. >> coming up, greece's official speaks to bloomberg. more of that interview in a couple of minutes. ♪

>> greece has time on its bailout program. but the same government that appeased creditors was elected on in and night a sturdy platform. we sat down with finance minister yanis varoufakis. >> we believe that, given the state>> we have. the state of the banking system, the fact that we have low levels of investment in this country. under those circumstances, in order to arrest this negative spiral, i think anything beyond a 1.5% surplus for the next five, 6, 7, 8 years would be

detrimental to the prospects of recovery. the only way to repay creditors is if we recover. having a sensible mix of policies as well as a structure. these equations and unknowns need to be solved. to enable us to return to independents. allow us to maximize the value. >> who among your partners shares this view? you have an agreement that the surplus will need to be 1.5% for the next 5-6 years. >> it is, and knowledge that the imf has been uneasy about the surpluses agreed to. they are uneasy about the common wisdom amongst creditors. >> it is one thing for you, the

finance minister to say, i don't kick anything beyond 1.5% is reasonable. it is another for you to win the support you need from the institutions. >> indeed. this is what we are about to do. we have not had a chance to begin the serious analysis and work on things that matter. we did establish a common ground. that was the loan extension. the principle that it's not going to be business as usual. this is arrangement with the greek government will have a sacred. text that was -- >> that was finance minister yanis varoufakis speaking class in athens. what is the reaction on the ground to the deal? >> it is kind of next. there is a feeling that this is

a capitulation. on the other hand, there is a counter argument saying, the pre-election platform was nothing the euro area would just agree to. it was always about a negotiating position. you heard in the segment the finance minister varoufakis talking to change in the base. how issues will be agreed to in the coming months. the government is casting this as a triumph. yesterday, there was a long meeting between governing parties, mps, in which they discussed this at length. there was some opposition within the party. at the end of the day, a lot of

people voiced concerns. a lot of people are rallying behind the agreement because it is just a starting point as far as they are concerned with the hard work ahead. >> what will happen at the end of four months? >> and that is what we are going to see. the deadline in february was precious. this is when the bailouts expired. greece was going to face a big funding crunch. the potential of european central bank support for its lenders being cut. they wanted an agreement in place that would give time for the negotiations. it is still going to be difficult to get the greek government on the one hand and a lot of the creditors that take a harder line on the same page. in terms of a final resolution

to the greek crisis. come june if there are not big strides made we could find ourselves in a similar position. >> thanks a lot. marcus and athens. >> 7:25. you can join any conversations. those are our handles. the 20 fastest-growing companies. we have done a survey and china comes out on top. i tweeted out the details. >> the strongest european economy? >> ireland is the fastest in the eurozone. >> you have to look across the border to home. coming up, british bankers under pressure. forfeiting a one million pound -- the bank posts it's seventh

consecutive loss. what they have to say about hate. the bonus pool down. what happens next? what is expected? ♪ .

>> you are watching "countdown." before we get into the dollar, i want to show you volatility. volatility in the ford exchange market is a highs in a three years. here we are and we will see volatility drop despite the totals within the foreign exchange market and the biggest weekly drop since 2010 because of this. janet yellen what she said

remaining patient for now is causing really a continuation in terms of reduction in volatility. let's have a look at the dollar index behind me. you see a flat presses at the moment. we wait and see how it turns out. the aussie dollar, movement and bigger investment coming in a lower. contraction in the fourth quarter of 2.2%. the estimate was 1.6%. 48% chance of a rate cut. another rate cut to come in march from the bank of australia. traders are playing at that particular focus point. keep an eye on euro. you have data coming out later today and we will get consumer confidence and german unemployment and varoufakis, what an optimistic finance

minister. you have profits on your balance sheet. want to pay the imf. mark? quick top stories. the company's biggest utility. it is stake that over 2 billion euros. mario rizzi is looking to sell as country grapples with a debt of over 2 trillion euros. hoping a financial group will buy rbs for a few billion. they are cutting the number of countries they operate in via numeral/iii. -- 2/3. morgan stanley will pay to pay off a u.s. probe. the for the bank to settle with authorities over the probe.

jpmorgan, bank of america and citigroup have with state and federal authorities for more than $35 billion. you can find more on that story at bloomberg.com. >> greece has bought time on is bailout program the economic reform have been agreed upon. the same government that was just elected on in and austerity platform. the finance minister varoufakis told us what the new deal meant. >> we never promised our people we would not negotiate completely and bring to conclusion in the first two weeks. the greek people are not a that a gullible and we are not that cynical. secondly, we promised try to has finish. -- trica has finish. we never said anything about wanting to get out of the

eurozone. do everything that is necessary to stay in the eurozone. and a means of dealing with the central-bank, the ecb. this country has been a part since 1944 and our relationship with the imf is undying and we want to continue. it is going to be continuing and actually proven. that is not the triga. the people in degrees nobody you do not know a you should know because you have not suffered it. what we refer to as the tryga is a team of technocrats the patched -- dispatched to come here and impose upon the government and people doesn't of lectionary in nature -- that was debt inflationary in nature that

never targeted the real causes and made a bad thing worse. we should have a relationship by an institution and this is something not only we want to tolerate but seek. not because we want to repay the loans because we do not want to repay the conditionality's. [indiscernible] that is gone. the idea about the promise to negotiate has already been in the sense this year as we were saying, the prime minister's target has been waived. these are things that people on investors understand. you know the one thing they want is -- not money, not even jobs, but the dignity. they want a government that goes into the eurogroup and the european summit and discusses

matters with the ecb and imf with a view a simple notion that in the greek people in the circumstances and in the program and measures to get us out of the meyer. that we have given them. >> for more on the impact of the latest greece is having on markets, we are joined by an investment strategist at sydney a wealth. -- cignia wealth. a very resilient finance minister varoufakis. equity markets have been strong. europe is up 12%. have you bought into this european story? are you a participant in at a rally? >> yes, we are. it is one of our overweight in term of qe. it is quite sizable and buying more than twice the issuance of

the peripheral countries this year in on the line the ecb will be there and the markets have been looking at and correctly predicted no matter what the government said. when they came to it, they didn't want confrontation. and if they the accidental. and the markets predicted that. >> some have suggested, christine lagarde, saying we of not had another detail what the greeks are come -- committed to. varoufakis said we were offered three but we gave up five. the market remains a bit confusing, investors should be convinced it will end well? >> the end of this is probably too far to see. this will continue to rumble on for the rest of this year. we have this form was the

deadline and another six-month deadline. this will stay with us. what we heard from yellen in the background is she watching the u.s. data and pointing to inflation and the stronger dollar and seemed a bit of weakness and not as wrong us as it could've in. therefore, the ecb, the said and the boj -- the fed a boj remain very russian in stimulus mode and the market is looking. the extent -- and a slight turn we are seeing that a positive direction of the global economy. >> global equities are at a record high. what is the case of equities to go even higher from here? >> valuations are not stretched and we have got growth that is recovering. earnings look relatively steady

and balance sheet have been rebuilt. we have easing money policies. you have to figure out what the works could be it could've been greece or the ecb, but they delivered. we have to ride with the sort of calm we have. the volatility will come and to do with potential increases later this year and that normally brings about volatility. so, i guess, the sale those are the times, the seasonal times we should watch for now. this fair wind we have seen on the act of the ecb program and the greek situation probably since with us and investors will probably get on board. the corporate story will probably sigh relief. >> germany has managed to sell for the first time ever, they sold bonds. that has never, ever happened.

30% of sovereign bond market is in negative territory. it is not really wealth that is driving that fast capital. >> absolutely. but what are you going to do? losing money in nominal terms on your bonds, you are going to go into real assets, riskier assets and pushed down. her referee bonds initially were at 150 -- periphery bonds were initially at 150. it is probably levels we are going to see. that is a bedrock for valuation. we are going to see this migration out. >> another major has to be oil prices. what did do you factor in wood oil prices go and how the -- how does the impact you? >> and access capital issue oil

is going to be in friendship by that and probably be cap by that -- an excess capital issue, oil is going to be infringed by that and probably be capped by that. again, playing also very well, a positive surprise in terms of lower interest rates and also the potential for greater consumption greater disposable income around the world. a positive story. there are pockets of the u.s. which is more affected than other economies and perhaps a brazil russia our cases in point suffered proportionately more. overall, it feels like a good story. >> you say be ready for u.s.

rate hikes that could hit equities and have the same argument for the u.k., be ready for rate hikes sooner than the market expects. throw into the mix of the u.k. elections, an interesting year for the ftse touching record high this week. >> i think the ftse and the index and so, it will be guarded by the global economy. the prospects for the currency could be interesting. overall, towards the end of the year, we are getting overly panicky about the year. polls are coming got a it is difficult to call. quite see you are not panicky? >> at this stage, it is probably too early to panic people say you don't know. >> take your time. >> when you see your pension

fund manager, you know something is up. maybe trying to give me a hint. [laughter] i am having a tough week. great to have you with us. thank you for taking us through all of those asset classes. gautam batra. >> you can join the conversation on twitter. tell us what you are following today and what you think on the show. and fascinated by the india budget. >> it is one of the highest trending topics on twitter. >> the biggest employer in the world. guess what the first and third are? anna will tell you next hour. it is a simple question -- is greece out of the danger zone? ♪

>> time for bart chart. is greece out of the danger zone? is a question worth asking. the country has won 4 more months of bailout funds. what it does a three year in 10 year bond market tell us right now? the top portion of the chart. this is the greek three-year abundant yield and since

reaching a record high right there 20 1%. a 21% record high on february 9 and the yield has dropped. it has dropped to 13.3%. it has followed by three percentage points. look at the middle screen. the 10 year. it has followed a similar path. this goes back to july last year. it peaked right there. it 11% peak. -- an 11% peak. since then, it has fallen to 8.95 percent this year alone and dropped by one percentage point. what is noticeable is the three year yield is still above the 10 year yield, meaning the yield curve to use the term "inverted" as it has been since december.

it has credit between the three-year and 10 year is 400 basis points. it was double with a three-year hit the highs on february the ninth. still and adverting yield means investors are concerned that greece will not pay its obligations in full and essentially more concern about shorter-term crises then at the long-term outlook. very quickly, the bottom charge. this measures the cost to protect against a greek default, using greek credit. this is essentially bond insurance. the pink -- spiegel was february 11, a two-year high. since then, the cost of to protect yourself has followed by 25%. nevertheless a week ago, prices were signaling a 69% charge they

will do fault in five years. that probability has come down and way below the 99% probability that in march 2012 when greece's debt was restructured. a lot to consider there. three charts, one question -- is greece out of the woods? >> a look at the german bond markets, it might tell you about how people look at the risk. we have a new records. 70 years government bonds are below zero for the first time. is it a disinflation story or fear of what is going on or actually -- to pay less than i am willing to put my money with the european central bank? that is in essence a where we are. five year bond is making a record low as they issued government sales yesterday.

>> how long before up to 10 year? >> anna has it. where are you? >> .09. >> you have to let it in for eight years to get money back. even if you lend, you still do not get three years. interesting. we will have a look at that the city of london because we can. and what is happening. >> we have a camera up there. >> we do. nothing spectacular in at the london market. stay with us on "countdown." ♪

>> welcome to "countdown." minutes away from the start of a european trading. rbs and caroline hyde been going through the details. >> seven annual loss 3.5 billion pounds. that was expected but we want to see is where the strategy? it is about slimming down and they are restructuring. eastern europe, middle east, africa and reducing their presence in asia and in united states. overall, they are going to be in 15 countries. 2/3 smaller than were they were.

they said substantial job losses. that will be a concern in the rbs offices and this morning. way down by restructuring and materially higher. they are cleaning up their act and selling assets. a $36 billion loan portfolio is being sold. >> you said 3 billion, a lot of people were concerned they would squeeze on the valuation. >> the fact they get any money out is on the upside. banks have been hit hard. a company having to slim it self down. you look at is capital, in level .2%, much higher dan the 8% we saw last year. -- 11.2%, much higher than in the 8% we saw last year. you do shareholder, make that money back.

paid dividends, share buybacks are what they are offering. but it is a company that is slimming down. >> tell us a bit about the restructuring going on and selling to a japanese bank. >> a u.s. loan portfolio being sold off for $3 billion. they have a new chairman. it has been announced. d u.k. commission -- led the u.k. commission. having to negotiate with the government. are they wooing the public? yes. no bond going to the ceo. he would not get the $1 million he could've actually taken. a treasurer coming up expecting no executive director to take a

bonus. shareholders wooed and we'll see mixed calls. >> caroline thank you. >> "on the move" is next. stay with us. ♪

>> good morning and a warm welcome to "on the move." i am jonathan ferro. your morning brief. greek optimism and the finance minister said deposits are flying back to the banking sector. an announcement of a deal. ukraine's currency chaos. a surprise reversal they lifted a ban on fx trading hours after instituting. they are losing support from the imf if the conflict continues. written -- britain's largest bank issues a 7th straight loss.

the struggle to revive her earnings and that bank continues. the things we are watching. futures a little lower. dax futures are pretty much dead flat. i can tell you, look away from equity markets. but markets am manus is all over it. >> german record. contorted are the bond of markets as described in the touchscreen moving. new record low. 0.1%. 70 year yields are indeed -- seven year yields are in deep trading at a level we have not been. we have gone below zero. by that momentum. when you cannot earn anything in the bond market, and they'll bobble, the