HSBC profits plummet, US tax-code row, and signs of Alzheimer’s
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It’s been a bad day for Britain’s HSBC. Shares fell more than 6 per cent as it announced that profits were down 62 per cent year on year to $7.1bn due to one-off costs and multibillion-dollar writedowns. The London-based lender also extended its share buyback programme by an additional $1bn, missing analysts’ expectations of a share buy-back of $2.5bn-$3bn. The bank said “largely unexpected economic and political events” also contributed to the plunge.
Compounding the news, Stuart Gulliver, HSBC’s chief executive, told reporters that the bank was subject to a so-called Section 166 review by the UK’s Financial Conduct Authority over money-laundering controls. The inquiry is the latest in a long list of regulatory burdens for the bank, which paid $1.9bn to US authorities in 2012 to settle a litany of money-laundering breaches. (FT, CNBC)
In the news
US tax code overhaul US corporate heavyweights have warned that Washington may not have another opportunity to revamp its tax code for 30 years if it misses out on a chance to do it now amid uproar over a proposed import tax. The import tax is the linchpin of a radical plan from Republicans in the House of Representatives to overhaul the tax code for the first time since 1986. But President Donald Trump has yet to say whether he will embrace it to fulfil his promise of tax reform. (FT)
Israeli soldier sentenced Elor Azaria, an Israeli soldier who shot and killed a wounded Palestinian, was sentenced to 18 months for manslaughter. The case has caused an uproar in Israel, with military chiefs condemning his actions, but many Jewish Israelis insisting he was acting in self-defence. The incident was filmed by peace activists and showed Azaria firing at the head of Abdul Fatah al-Sharif, who was lying on the ground after being shot. (BBC)
McMaster named US national security adviser Donald Trump picked respected military strategist Herbert Raymond McMaster, after his first choice resigned just 24 days in the job because of alleged improper contact with Russia and his second pick declined the post. The appointment has reassured many in the national security world, who regard it as an upgrade. (FT, Atlantic)
Uber’s harassment problem The US car-booking service has hired former US attorney-general Eric Holder to lead an investigation over its handling of a sexual harassment complaint. (FT)
Famine looms The day after a famine was declared in parts of South Sudan, the UN has warned that famine is also looming in northern Nigeria, Somalia and Yemen. As in South Sudan, the crises are driven by conflict. (Jazeera)
It’s a big day for
Mark Carney The Bank of England governor will testify before parliament’s Treasury committee after the central bank upgraded its economic forecast while leaving its inflation forecast and interest-rate policy on hold. Here’s the FT’s Wolfgang Münchau on how central bank independence is losing its lustre. (FT)
Emmanuel Macron More than 3,000 French voters are set to pack out a venue in London as the centrist outsider, seen as a leading contender in France’s presidential race, brings his campaign to London. (Guardian)
Keep up with the important business, economic and political stories in the coming days with the FT’s Week Ahead.
Food for thought
The west’s authoritarian wave After the fall of the Berlin Wall, there was a “democratic wave”. Now it is the reverse, writes the FT’s Gideon Rachman: “The resurgence of authoritarian attitudes and practices that first manifested themselves in young democracies, such as Russia, Thailand and the Philippines, has spread into western politics.” (FT)
Australia’s populist resurgence “She wants to take [the country] back to the 1950s. She wants a white, protectionist, illiberal nation.” A big read on the resurgence of Pauline Hanson — Australia’s answer to Marine Le Pen and Donald Trump — as debate over immigration, race and Islam moves into the spotlight. (FT)
Long-winded link to Alzheimer’s Long-winded, rambling speech could be an early sign of Alzheimer’s disease, according to a study. It cites the vocabulary in Iris Murdoch’s later works as showing signs of the disease years before her diagnosis. (Guardian)
Japan’s wig market thins The rapid ageing of society and women’s social advancement were expected to be a tailwind for the companies that dominate the industry. Instead, new competitors and the growing number of Japanese TV personalities with shaved heads or very short hair have had the opposite effect. (NAR)
Sinking city Mexico City is sinking faster and faster in a vicious cycle. Always short of water, it keeps drilling deeper for more, weakening the ancient clay lake beds on which the Aztecs first built much of the city. (NYT)
Video of the day
Why Kraft Heinz dropped Unilever bid Consumer products group Kraft Heinz has abandoned its $143bn takeover of competitor Unilever. The FT’s Rob Armstrong and Jonathan Guthrie analyse the likely reasons. (FT)
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