Indepth interview with intesa sanpaolos ceo, the head of italys secondlargest bank. He is on the hunt for acquisitions. Now i asked him about his potential partner. Carlo if you want to top the asian margin tap the asian market, you need a good brand. That is the reason why i am looking a possible acquisition of an International Brand. I am growing in such a way that i tonight not need to, an extra engine for my growth, but the strategic target could be to have an International Brand in order to tap International Diversification. Francine basically a brand name more than operations. How big does it have to be . Is it something everyone recognizes . Carlo there is a point on the total amount of Market Capital for the possible target, because the reality, you can have a wellrecognized brand that has a market cap that could be higher than all of my prior breaking Division Banking division. I want to have the control of this entity so the target should be in the range, my Banking Division could make the valuation between 10 billion and 50 billion. So the target, if you want to maintain control, should be in that range of valuation or lower. Well have absolute control. I have nothing on the table today, but from a Strategic Point of view this could be the second step of the road for my Banking Division. And also for Asset Management. This is another kind of discussion weekend also have with Asset Management. Francine are you concerned about valuations or volatility . Carlo no. If you look at the management activity, what is important is to have an asset you can exchange. So, valuation of the target would be the driver for your valuation. If you use your own shares because there are they are discounted. Wealth Management Companies compare only to Wealth Management. I will measure all this because my first commitment is to create value for my shareholders. Francine this is something you promised that your hitting targets above what you promised. Is there a chance the dividend goes up . Carlo the point now i am confirming the two dividends. You have to consider we are above 13 of common equity. We are in a unique position to use net income to give a dividend to our shareholders. The promise is to billion euros. We are in a good position to confirm two billion. We will see a the end of the year what will be the final results. So we decide what would be the real dividend policy. Francine you can see more of the interview later on on the pulse. Guy right, lets talk about what we just heard. Lets go to bloomberg in milan. Elisa the big question i guess is listening to Carlo Messina is yes he wants to make some acquisitions. Are there any obvious targets for him to look at . Elisa it is hard to pick out any individual name, but what is clear is that postfinancial crisis europes banks are still in flux. Many ares still figuring out what they want to be. That is creating opportunities which we saw earlier this year when rbs put itss International Unit up for sale. Its strongly capitalized. A wellrecognized bank in italy. As far as International Banks it would be in addition to their platform. Francine of course, Banco Santander is not the only one trying to grow in Wealth Management. Deutsche bank is trying to do it and we understand that Credit Suisse is also looking into it. How much can this industry grow . Elisa going back to intesa they are relatively new in the space, and they are growing internationally. You have one of the more established global players. They would have to look to ai sia. For intesa that growth could come closer to home. It would still diversify their geographic reach. There are margins and competition is finding marshes. Margins. Regulatory compliance is increasing costs. The wealth and Asset Management parts of banking are grappling with from syntec. Which is going to be playing into future earnings. Guy thank you very much indeed. Joining us from milan. Francine earlier, greeces finance ministers spoke to an economics conference in athens. What we need is investment and we need to rebuild the system of credit in this country. It is quite preposterous that we have potentially exportoriented companies that have no access to credit. That needs to be fixed. We also need to reform the states reform the Pension System reform our system of tax administration. We need reform everything. Francine we spoke to the intesa ceo about the linkage between greece and what he sees as one of the main issues in the Banking Sector. He says if there was a negative event default, then theres q. E. Guy nice for mario draghi to do whatever it takes once again. The question is how much further can make go . People talk this being a lehman moment. No one actually knows. The ripple through the Banking Sector is hard to catholic. Hard to calculate. Francine maybe the International Creditors will sit up and say it is time to write that check. Guy a budy sy day in the telecom sector. Business in spain continues to improve. Tall talk. Saw adjusted net income despite 5 revenue growth. Francine itv has been expectations with strong results. The company which airs downtown abbey saw 14 growth. Guy the ceo of an italian oil and gas company has told bloomberg that oil prices are set for a gradual rise. They reckon increased demand could see prices reach 70 before 2016. Eni our view for 2016, we are thinking about, we can stay a bout 55, 60 average. It is still our view. There is a positive trend by the end of the year. That is not the main text. 72 or 68. There is a positive trend because demand is increasing and supplies are reducing. Francine the head of Qatar Airways has struck back at criticism that Gulf Airlines has an unfair financial advantage, saying efforts to block the carrier from american airports coming from greedy u. S. Competitors. Baker says he would never forget comments made by the delta ceo that appears to associate the biggest gulf carriers and the 9 11 attacks. Baker i will never forget because we are not a nation of terrorists. As a matter of fact we are in alliance of its United States to fight against the terrorists. And what he has said will never be forgotten by me. Guy that brings us to our twitter question of the day. We want to know which region has the best airlines . The gulf, europe, or america . Tweet us. Francine up next, how will downtown abbey help itvs revenue surge . Francine welcome back to the pulse. Now telefonica has reported earnings this morning. They beat analysts on the top and bottom line. Lets go to madrid. How did telefonica perform in spain . Rodrigo ok in spain. There are two different reads. Their read and the read some people are the street are hearing here. The other read is that their financial numbers in spain do not yet reflect that growth. While thye arey are better than other quarters, they are not as good as many were expecting. Guy what about the rest of that business . How did that do . Rodrigo pretty ok, especially brazil. Germany reported last week. We saw especially in brazil, we thought increase in average revenue per user which is a measure used in the telco industry. It shows telefonicas strategy to offer higherlevel products may be working. Francine profit seem to the overestimated. What is that down to, low estimates . Rodrigo they did not do that much better than expected. There are a few things that helped, but it was not over the estimates in the sense it blew everybodys head away. Guy ig guess the big question the sector has had so much m a. What happens next . Does the repositioning of this business continue . Do they like what they have . How much more is yet to come . Rodrigo some of their latest deals have to do it two things. One is convergence that is happening with spain with the acquisition of a pay tv broadcaster which gives them a huge control over the market, 85 of the market in spain. Convergence happening in brazil. The question is what will they do in germany . They need another strategy in germany. And the big question is mexico, where they have some problems. It is the only big problem where they big market where they have these issues. Francine thanks so much. Guy lets talk another company with earnings. Uks largest commercial broadcaster itv posted strong advertising revenue for the start of the year. The stock is trading lower. Why . Caroline perhaps a little bit was too much faster in. Perhaps there are a few concerns coming out in the numbers, but lets look at the Positive Side of things. Broadcast raven eisen advertising revenue up. Coronation street has been running for decades and the runaway success of downtown abbey. In the First Quarter they had a few one offs that helped. One of them is the rugby. An early easter helped as well. Many an analyst called it. Morgan stanley saying that itv is on the track from bumper year in advertising to up 12 . We have gone to quickly there because also we have got the overall area of concern perhaps is going to be the share of viewing falling 3 . This is what itv is struggling with it less people are watching the main channel. It is going to be helped. They have exclusive rights to the rugby world cup. But audiences have been following. Been falling. The company is talking strong. Thingsey are saying rebalancing. Suddenly itv is all about content. And want to avoid from being so dependent on the advertisers. Moving into online and digital. That is reaping rewards, up 31 onlyine pay. Itv studious. Sales up 17 . They want to start making their own content. The runaway success is on it six series and none other than downtown abbey is not made by itv. It is made by carnival films. They want to start making these runaway successes themselves. They have been an acquisition spree. Buying the weinstein brothers tv unit. That means marco polo and project runway. And the maker of the voice. And the likes of real housewives. Owning content, that reaps you rewards. The benefit toare to come. We are factory and the fact that this is a company that is having falling audiences been trying to diversify itself. Content is where it is at for the chief executive. Perhaps the shares are coming down because they have been at alltime highs. If you look at the shares year to date, up 20 . In april, he hit a record high not only because of the trajectory of letter advertising but, also, maybe it is an acquisition. Maybe it is an m a target. That is what many an analyst has been saying. A little bit of profit taking as we see the numbers of the First Quarter showing growth. One area that could be concerned, but not much overlong, is the 200 workers will be striking today of all days. It is out of 3000. Not that many on strike today. Guy they very much, indeed. Itv. Thank you very much indeed. Francine why the Qatar Airways boss thinks the u. S. Competitors are being greedy. Guy welcome back. Youre watching the pulse. We are on the radio and streaming on your tablet, your phone, and bloomberg. Com europe. Now, the ceo of Qatar Airways has hit back at claims made by americas main airline that the gulf competitors have an unfair advantage. United continental claim they are being undercut. The american firms are attempted to limit the presence of the Gulf Airlines in the u. S. , but an interview with the qatars chief mr. Albaker promised a proper response. Albaker we need some time to look at and study the allegations the american carriers have made against us. We have not had insight to all the information. Once we have them, yes, we will respond to everything every single allegation which is absolutely unfounded in my opinion. Guy kari lungren. This has been going on for a while. Tim clark has been in fall. He has been outspoken about this. Qatar getting involved as well. Where is this going . Kair ri the Obama Administration is looking into it. The u. S. Airlines in the meantime have asked can there be a suspension of expansion by the gulf carriers . The gulf carriers are denying these allegations. They are saying this report that came up in january, it took two years to put together. Theyre asking for two years to put together their own report and denial of these allegations, saying that they should be allowed to expand. Francine we are seeing so much growth from gulf carriers. Is there going to be more pressure from the european once . Kairri it is interested to see the european reaction. You see the diversions of opinion. Air framcnce and lufthansa are more concerned but are asking their own governments, saying, maybe since Airport Charges in dubai are less than europe, can you look at trimming Airport Charges in europe. But there has been a diversions of opinion. Willy walsh the ceo of iag hes in favor of the expansion of the middle eastern carriers. Now qatar owns a piece of iag. Iag actually stopped being a member of the association of european airlines. And they said that is because they did not agree with some of the other members. So they are vocally saying, you know what . If you cannot beat them, join them. Guy presumably this is going to dominate. Kari it does seem likely. It is interesting to put the gulf in context. 60 of the World Population or the flying population lives within six flying hours of the gulf. This is a dilemma that is here to stay. You can see why the American Airlines are so concerned about this. The hub model the gulf has created and what they are doing is incredibly innovative. It is totally new. Who was the last group of airlines that did this . The low cost carriers. Now ryanair, easyjet, southwest are eating the legacy lunch. Francine thank you so much. That brings us to todays twitter question. We want to know which region has the best airlines. [baseball crowd noise] [x1 chime] [crowd cheers] oh i cant believe it [cheering] hi, grandma francine welcome back to the pulse. Guy these are the top headlines. Francine honda is recalling 4. 8 million vehicles due to faulty airbags. Now it brings the total tally for recall shy of 20 million vehicles. Guy toyota plans to boost after profit surged to a record high. The carmaker will pay an average of 58,000 458,000 to its executives. Net income jumped 19 . Francine the amtrak trail that you read train inthat derailed in philadelphia was traveling double the speed limit. Seven people were killed, and 200 were injured on tuesday night. Now, this week, john kerry met with russian president Vladimir Putin for their first talks in two years. Overhanging, the meeting with ukraine and sanctions but how have so factor those factors affected russia . We are joined by the cfo of the moscow exchange. Thank you for joining us. You reported figures today. You have really taken advantage of the volatility we have seen in the markets. What is the trend . As volatility declines, how much will you be affected . Thank you for the question. We just had a report that the sixth record quarter in a row with eps going up 124 . Going forward, we will have a normalization of our income. But the key thing which will affect revenues will be the normalization of Interest Rates in russia and Capital Markets coming back to normal. What we started to see with new bonds issuance a weak year. Guy what is the longterm effects of sanctions and the overall effect on economyt on the economy . Evgeny what we see is localization of local Capital Markets. All companies coming back to russia. We see High Quality Companies raising capital locally. That is what we see in the First Quarter this year. Rosol raising capital domestically. This is the key effect on us as a company. Francine that is how you think you will make money . Evgeny i apologize. I do not hear the question. Francine as volatility since sides, how important is it that you attract new ipos . Is there anything that is in your power to deal with the falling volatility to make sure that profits do not go down . Evgeny i think it is one common misperception. We dont normally make more money with volatility. There is some affect, but if you look at the mediumterm trends we make more money in the bull markets. As for the new issuances, this is one of one the Biggest Challenges for us as a company. To get more companies to come to moscow. And actually to get more companies more local companies to lease to list. Guy how are you going to persuade local companies to list on the market given the difficulty surrounding the russian economy . Is there any reason for a company want to want to come to market in this environment . Evgency we created our infrastructure. We created a world class infrastructure. It is much more easier and more efficient to list locally. Global investors can invest anywhere. We have shown that with our own example. In 2013 when we listed are shares only in russia. We have had a successful ipo. We demonstrate that to our clients. We had several cases for that afterwards. This is not a shortterm that can be solved in one shot. But we work to convince our clients that we are the exchange of choice for them. Francine we are seeing so much consolidation within your industry. Is it something that you want to be part of . Can that only happen when we see less sanctions . Evgency y our view is that we will stay in the Regional Exchange without, we dont have an appetite for consolidation. We look at the m a opportunities across the we want to expand our capabilitie