Morning business round-up: HSBC sets aside $2bn

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

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HSBC has put aside $2bn (£1.3bn) to cover potential mis-selling claims and money-laundering fines as it announces a sharp rise in first-half profits.

The bank is setting aside $1.3bn to cover UK mis-selling compensation and $700m for any US fines following the money laundering accusations.

Chief executive Stuart Gulliver described the bank's failure of anti-money laundering controls as "shameful" and "embarrassing".

Pre-tax profit for the first six months of 2012 was $12.7bn, up 11% on the $11.5bn the bank made a year ago. But that figure was boosted by $4.3bn of asset sales in the US.

Investors concerns about Italy and Spain seem to have eased, as comments from European leaders suggest authorities are preparing measures to help the debt-laden countries.

Business headlines

Yields on Spain's 10-year bonds, which indicate its cost of borrowing, dropped to 6.5% in open market trading from last week's record high of 7.5%. A higher interest rate, or yield, indicates greater investor nervousness.

Italy meanwhile sold 5.48bn euros (£4.2bn) at a lower interest rate than in June. Five-year bonds were sold with an interest rate of 5.29%, compared with 5.84% in June, and 10-year bonds at 5.96%, significantly below June's 6.19%.

There were results from two of Europe's biggest airlines, Air France-KLM and Ryanair.

Losses widened at Air France-KLM to 895m euros ($1.1bn, £700m) in the three months to June, against a 197m euro loss a year earlier.

It took a one-off charge of 368m euros to cover redundancy payments as part of plans to cut 10% of its workforce.

Revenues rose 4.5% in the quarter to 6.5bn euros, with the number of passengers up by 2.4%.

However, the carrier saw a drop in its freight business due to the weak economic backdrop in Europe.

Fuel costs hit Ryanair's profits, knocking 29% off net profit for the three months to the end of June.

Ne profit was 99m euros ($122m; £77m), down from the 139m euros the company made a year earlier.

The Irish airline said traffic growth and an increase in average air fares helped to increase revenue by 11% to 1.28bn euros.

In Asia, Japanese output fell for the third straight month, prompting renewed fears the economy is losing steam.

Factory output dipped 0.1% in June, compared to the previous month. It follows a 3.4% decline in May.

The fall was mainly due to lower output in the machinery, iron and steel sectors, data showed.

Looking ahead, two of the world's biggest technology firms , Samsung and Apple, will face each other in court in California later in one of the biggest trials of its kind.

The tech firms have accused each other of intellectual property infringement.

Billions of dollars of payments could be triggered from one business to the other and sales bans imposed if the jury finds one or both parties guilty.

Submitted documents and testimony are also likely to throw fresh light on decision making processes and deals made by the two tech firms with others.

Today's Business Daily programme from the BBC World Service looks at the climate change policies of America's biggest oil company, Exxon Mobil.

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    06:02: Matthew West Business Reporter

    Morning. We should also be getting details of who the East Coast Mainline is being sold to this morning too. According to the Mirror newspaper, the government has decided upon a French consortium which includes Kelios - ultimately owned by French state rail operator SNCF. Will bring you that announcement when it happens. As always get in touch via email at bizlivepage@bbc.co.uk or on Twitter @bbcbusiness.

     
  2.  
    06:00: Joe Miller Business Reporter

    Good morning. A cross-party report is understood to have recommended giving the Scottish Parliament new powers to set income tax and control some welfare payments. The report was commissioned after David Cameron, Ed Miliband and Nick Clegg promised shortly before the independence referendum that Holyrood would be given new powers, if people voted to stay in the UK. Stay tuned for more details.

     

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