Hello, i am mark barton. This is countdown. I am anna edwards. We are getting numbers from frances largest lender, bnp breaking earnings right now. Lets get straight to that. A surprise drop in fourthquarter profits. 1. 1 billionide tied to a review of payments to parties subject to u. S. Economic sanctions. 76 to 127falling by million euros. The lowest Quarterly Results since the Fourth Quarter of 2008. It is a mess, missing the one billion euro average estimated by analysts at bloomberg. Decision after it paid to settle u. S. Allegations carried out in proper transactions with countries such as iran. The company also announcing today that it intends to increase return on equity which is a measure of profitability to 10 or more by 2016. Return on equity stood at 7. 7 last year. It will present its threeyear of element plan to investors next month. Frances largest bank because of this legal provision in the u. S. Missing fourthquarter earnings estimates. The cfo spoke to bloomberg in paris. He said the retail bank was resilient but the risks and italy had recently increased. What we have seen this year is that the demand for credit was somewhat subdued. There was relative stabilization at the top line which has reduced cost and we are quite proud about our cost of risk. We have been able to stabilize the result at what we consider a high level. I think some people see a glimmer of hope. There are some plans that have been announced. We will watch closely how it unfolds. In italy are you worried about political instability . Are your provisions stabilizing their . There has been a continuation. In the last quarter, we have seen a slight pickup in our cost of risk. Adapt oure to configuration. It is one of the elements of our plan where we believe that we have all elements in place adapting our positioning further , the capturing of synergies by with beyond activities several activities and italy. Rio tinto, the worlds secondbiggest Mining Company just reporting results. Jonathan ferro is here to crunch of the numbers. It is a beat. Estimate was, the for 9. 6 billion. That is a healthy beat. My eye is on the dividend story. It comes in a 15 increase in the fullyear dividend. Analysts expect around 1. 70. It is going to be one of a . 92 per share. It has been no different one 1. 92. The shareholders want them to go out and stop doing that expanding on m a. That is what theyre getting this morning, a 15 increase in fullyear dividend. Theyre going to get a fullyear dividend of 1. 92. Capital investment, we have a guest later from Sanford Bernstein talking about just that. Those are the dynamics find the sector. We are still looking at emerging markets clues for where the Mining Sector is heading. We are looking towards china specifically. A big chunk of this company, 40 of revenue. If you are looking towards china, they can see 60 of global iron ore output. What we are seeing in reality is demand from china being quite resilient on the year, taking higher if anything. The cost of iron ore has started to trend lower but the concern abated by demand in china remaining strong. 2014 globalg for output as 100 million tons on a global basis. Investors are going to be quite happy with that increase in the dividend. More cash to come maybe from rio tinto as they cut back on capital expenditure. Stay with bloomberg for more on rio. The u. S. Cable giant comcast is said to have agreed to by Time Warner Cable in a deal worth 44 billion. This is according to four people familiar with the situation. Here with more is manus cranny. How does the deal stack up . Cash, all stock. It looks like comcast is going it alone. It is the end of eight months of wrangling over Time Warner Cable. It was suggested charter and comcast would get together. It looks like comcast has gone alone. This is about scale, content and pricing. You just think about where comcast is. That deal with nbc, they agree to certain terms with nbc. That is the challenge putting comcast and time warner together. This is going to be a key factor, regulation. What impact are we expecting this to have on customers . Some customer groups in the United States object to this. They may object and there is a cracking piece on bloomberg view, if the cable business had a soundtrack, that soundtrack would be jaws. Content Companies Need access to the cable. And customers. The bagel the Cable Company you are, the more control you have over the customers. Therefore you can push the pricing higher. It looks like the longerterm impact will be higher prices to the end customer. This is about people. It is about the ceo of time warner and brian at comcast. It is suggested they have a little bit of an inside track on this. Brian roberts was communicating with robert markets from sochi over the last couple of days. Ultimately Brian Roberts and Robert Marcus seem to have more in common than john malone. He has a big stake in charter. Who was also interested in buying. Three times they came knocking on the door. Hey, we really want to do it. The last time it was like they wanted 160. If we come in on this deal of 159, it is going to be just shy of what they wanted to go back to the board with. I think that john malone can still pick up customers. They might have to sell some assets. Comcast might have to sell assets to meet regulator requirements. Comcast cant have any more than 30 of the cable market so they might have to divest about 3 million customers. We will see how it all turns out. It is about scale, content and pricing. The italian Prime Minister is fighting off a challenge within his own party. Yesterday he presented a new economic plan. Today he will learn whether matteo renzi will move to replace them. For the latest, lets cross over to hans nichols live in rome. Tell us what happens today. Is Matteo Renzis move. Jawsust said that should be the soundtrack to american Cable Companies. The same holds true with italian politics. What randy has to decide is, will he challenge letta this afternoon or way to make a bid later . He is the mayor of florence, the head of the Democratic Party. There isals are pd and a play on that in one of this mornings papers which are dominated by this. It says that really gets at what is happening inside the party which could lead to the collapse of this government. Yesterday it was renzi who called the meeting with letta, fairly rare for a mayor to summon a Prime Minister. After the meeting, letta sounded like a premier who was open to the idea that he may have to leave office. I lived every day as if it was my last one, Broad Coalition change after just two or three months. I had to follow the development of the situation stepbystep. Said afterwards he still didnt know if he had the support of his own party. This would be the fourth government to fall in just two years. A propose tolett renzi . We dont know the exact details. Therwards, letta goes to cameras and gives his new economic proposal. Here is what he is talking about, a payroll tax cut, budget reductions and ways to strengthen the legal system. One final note, investors dont seem to be worried. Bond levels are at historic lows even with public debt at around 133 of gdp. Youth unemployment at 40 . What enrico lettas argument is, is that he is the best person to stay the course and get the economy back on track. Thanks, hans nichols live in rome. A bloomberg exclusive, the french finance minister is currently in the United States with president hollande. He told our chief washington correspondent peter cook that france is open for business. This country, our country, is back on track. We are in the innovative creative country and we are open to business, to foreign business. I say, welcome to american investment. Already, two companies from the u. S. Hiring about 500 people in france 500,000 people in france. We have got 60 billion euros between france and the u. S. Are reforming, leading structural reform, being more open to business, wanting to have a Simple Administration, better regulation. That is what we are doing in france. The climate of this visit i think is positive for business between the u. S. And france. Will bring you more from our exclusive interview with the french finance minister later on in the program. U. S. Treasury secretary jack lew is urging china to stop cyber theft if it wants more influence in global decisionmaking. He made those comments on the charlie rose show. Cyber security and cyber theft are somewhat different issues. The issue that we have raised with china is the protection of intellectual property. Is theft ofre there intellectual property are unacceptable for a country thats once to sit at the table. China sees itself as a country that should have a voice in making the rules for the next generation. They cant have it both ways. Be sure to watch the entire interview on charlie rose tonight. It airs on bloomberg tv at 10 00 p. M. U. K. Time. Just ahead, we dig into mining in light of rio tintos latest earnings. Our next guest says the sector breaking news from nestle, the worlds Biggest Food Company. Those numbers just coming in right now. Fullyear organic sales is is mine in line with estimates. 4. 6 growth, that is what analysts have been expecting. Ofy are proposing a dividend 2. 15 swiss francs, in line with what analysts were expecting. In terms of the look ahead, they say they see a challenging year. They see organic growth of about 5 in 2014 which will no doubt be of interest. Many structural questions surrounding this business, longerterm questions. What are they going to do with the proceeds of recent asset sales . What are they interested in expanding into . We have ryan covering the story for us later today. We will discuss that further as we go through the morning. They also say they see 2014 performance similar as 2013. Edmund. Ing in a Global Equity funds manager. Thanks for coming in. Lets talk about nestle as a whole. The numbers look to the inline with what the market was expecting. You like this company, do you . It is a very well run solid global company. It is a Swiss Company so what do you expect . There seems to be better performance than some of its counterparts Like Unilever who have struggled with emerging markets slowdown. They seem to have managed it better at nestle. That is to some extent due to the mix of different businesses. Chocolate demand is very strong in emerging markets. Coffee demand is very strong everywhere. From my point of view, they are managing that well. The real question will be held emergingmarket currency is hitting them. Secondly, what are they going to do with the money from loreal . What do you think they will do . Are they going to go out and buy more Skincare Companies . Are they going to go into chocolate more . I have seen analysts mentioning all kinds of companies as targets. You need to make a big acquisition to make a difference. Tra want to move into new nutricuticals there just arent many countries around to be bought. The worstcase scenario would be another share buyback. They are growing their dividend. That is less exciting. I prefer the Acquisition Strategy if at all possible. Another company increasing the dividend, rio tinto. It is in your top 10, earnings up by 10 . Returns toct greater shareholders in years to come . I think so. Dont forget that back in the late 90s rio tinto yielded as much as 6 . The dividend yield today is nowhere near those levels. Cost cutting has been dramatic within the industry. Rio tinto has been at the forefront of those efforts. The industrial metal prices have stabilized. I do think we should see returns on equity improving. That should allow them to continue to steadily build the dividend. Paint a picture for the entire sector. 600,year on the stoxx materials, the worst performing sector. This year, the bestperforming sector. Paint a picture for the industry in 2014. I think the picture will be very much a question of emergingmarket demand. My personal feeling is that people are perhaps a little too as a mystic on china. That growth may pick up in china. That is the key to the sector in general. In terms of demand, in terms of supply, we know they have cut a capex and i think that balance should lead to better profitability. , talk to us about commerzbank the Banking Sector very active this week. Next 10 onis in your the watchlist. What would you like about this . It is very cheap. You look at the european Banking Sector, it is that the very cheap end. There is a big restructuring story. They are selling off noncore assets. Youish real estate loans, dont want these things but they have got bucket loads of them. Even if the spanish Housing Market starts to pick up . They are commercial real estate loans. They are not in the right sector. I do not believe the residential spanish sector is picking up yet. I think the evidence is very much not proven. Commerzbank, i am looking at how quickly they can get rid of these problem asset. Shipping is picking up so the recovery rate on those loans could be better. They are cutting costs dramatically, shrinking the global footprint of their Investment Banking business back to just germany. Edmund will be back in just a second. The industries he likes, u. S. Tech, mining, edmunds thoughts next. Welcome back. This is countdown. We are back with edmund shing of bcs asset management. Lets talk to you about assets. We have seen this comcasttime warner people familiar with the story are telling us this deal will be announced today. Any thoughts on consolidation in the sector . It is a broader theme and it is something that has happened for instance, u. S. Companies have been consolidating in europe. Within the u. S. It sounds like the reinvigoration with the telecom companies. With some arbel being broken up into Component Companies and am and they brought the Companies Back together again. What is interesting about the cable sector is you are not seeing any topline probe. Topline growth. Comcast has seen a decline of subscribers over time. You merge come you cut costs, you have economies of scale. That is all this story is about. Quick comment on bnp, profit fell because of this legal provision in the u. S. When are we going to be done with litigation cost within the european Banking Industry . When the regulators give up. There is no sign that u. S. Or european banking regulators are ready to give up. It is money at the moment. The whole sector is rocking and reeling. If you look at hsbc, morgan stanley, rbs, barclays, it is a litany of banks who have had legal problems in europe or the u. S. Or most likely both. Bnp is just the latest one to have the same problem. Thank you very much for joining us. Coming up next, nestle just reporting earnings. The worlds Biggest Food Company says it sees a challenging year ahead. Nestles push into new products after the break. These are the Bloomberg Top headlines. Ecb president mario draghi says europe should have a single resolution done within five years. He says it will take an additional five years to reach his target level. He also expressed support of the european stability mechanism to safeguard the fund. We believe a Single Resolution Fund needs a solid public backstop. An ability to temporarily borrow, market backed by guarantees from participating Member States or access to a credit line potentially from the european stability mechanist. Thatere are early signs tourists are returning to egypt. The 2011 revolution caused a collapse in numbers when the government issued warnings to travelers. Since then, airlines are once again looking to reopen routes. Guy johnson spoke to the countrys tourism minister. [indiscernible] indication that they have a positive feeling about the future of egypt. More rain and dangerous wind is sleeping sweeping across britain. Many houses have already been hit by the worst floods in 250 years. The u. K. Environment agency says the risk of flooding is likely to increase in the next few days as the river thames approaches peak level. Service thatonline helps people rent out their homes is waiting phase for customers affected by the floods. This is countdown. I am mark barton. I am anna edwards. We are getting a host of earnings. I will give you publici first. Fullyear numbers. Net 2013 profit up by 11. 5 . Revenue is up by 5. 2 . These are all fullyear numbers. Earnings by share is up by 9 . In terms of breakdown, the digital account, the ceo is saying that digital accounts now account for 38. 4 of revenue. The biggest picture is all to do with its merger, its planned merger with omnicom. That has been delayed. It was expected to take place in the first quarter. That was pushed to june 30. Now people are watching to see whether this will be pushed back any further. No comment so far from publicis on that one. We heard from omnicom, saying this was delayed by waiting for competition. In china. Focusg ahead, a lot of for this kind of business. The sector as a whole is talking about organic sales growth in 2013. G 3 to 4 we will see how publicis falls into that. We will have the best insight into these results by the chief executive. Breaking earnings from ult,olds, france rena france s biggest automaker. There is an earnings beat. Pushing delivery growth, the automaker is reducing cost as well. Revenue andast that operating profit this year will rise and the Automotive Division will achieve a positive free cash flow. The company owns 43 of the japanese carmaker nissan. It is pushing into emerging markets to make up for this sixyear plunge and european demand to a two decade low. Earlier this month outlined plans to double its market share in india. Approvaled received to build its first plant in china. The