BBC News

Morning business round-up: HSBC pays to fix wrongs

media captionBiz Heads

What's making the business news in Asia and Europe this morning? Here's our daily business round-up:

HSBC paid out $4.2bn (£2.8bn) last year to cover the cost of past wrongdoing.

As well as $1.9bn in fines for money laundering, the bank also set aside another $2.3bn for mis-selling financial products in the UK.

The figures came as HSBC reported rising underlying profitability and revenue in 2012, and an overall profit before tax of $20.6bn.

Chief executive Stuart Gulliver's total remuneration for 2012 was some $7m, compared with $6.7m the year before.

At the same time, Bank of Ireland has recorded a loss of 1.8bn euros ($2.3bn) for 2012.

The lender saw little respite in the rate at which it had to write off bad loans due to the property crash.

The bank took 1.7bn euros in impairment charges mostly on construction and property loans and mortgages, versus charges of 1.9bn euros in 2011.

These charges dragged the 15%-state-owned bank into the red for the year. In 2011 it turned a 40m-euro profit thanks to a debt write-off.

Elsewhere in Europe, Swiss businesses are digesting the implications of a referendum in which proposals to impose some of the world's strictest controls on executive pay were overwhelmingly backed.

Nearly 68% of the voters supported plans to give shareholders a veto on compensation and ban big payouts for new and departing managers.

Business groups argued the proposals would damage Swiss competitiveness.

But analysts say ordinary Swiss are concerned about a growing economic divide in the country.

The vote on Sunday came just days after the EU approved measures to cap bankers' bonuses.

Latvia has formally applied to join the euro in 2014, in a move which could see it become the 18th member of the bloc.

The move had been expected and comes after the small Baltic state met the required financial criteria.

Latvia suffered a deep recession in the wake of the financial crisis that saw it receive an international bailout.

PM Valdis Dombrovskis imposed big public spending cuts that helped the recovery. Latvia is now one of the fastest-growing economies in the EU.

In Japan, Haruhiko Kuroda, nominated to be the next central bank chief, has promised aggressive steps to raise inflation to 2%, sending Japanese shares higher.

He said the Bank of Japan had not bought enough assets and should buy longer-term government bonds.

Picked by Prime Minister Shinzo Abe, Mr Kuroda needs approval from parliament.

Japan's economy has struggled with deflation for many years, seen as a challenge to sustainable growth.

In UK news, the number of loans being offered by banks has continued to fall in spite of the Funding for Lending Scheme (FLS).

The scheme, which began in August last year, was designed to encourage banks to lend more money, both to individuals and businesses.

But the Bank of England has announced that net lending fell by more than £2.4bn in the final quarter of last year.

However, UK banks have taken up nearly £14bn since the scheme started.

And one of the country's biggest department stores, Debenhams, has seen its share price fall 10% after it said bad weather in January would dent its profits for the first half of 2013.

The firm said trading was "severely disrupted" by the snow that fell across the UK in mid to late January.

Although like-for-like sales in the 26 weeks to 2 March rose about 3% year-on-year, there was a 10% sales fall in the period from 14 to 27 January, it added.

It now thinks first-half profits will be about £120m, less than hoped.

For an in-depth examination of the business issues behind the headlines, listen to the latest Business Daily podcast from the BBC World Service. Today, the programme turns the spotlight on the Kenyan economy as voters go to the polls to elect a new government.

Around the BBC

  • Market data