>> this is not accustomed cutting exercise. this is an acceleration of our payments plan. we will look at efficiencies, mainly on the cost to serve. anna: bnp cfo says the banks biggest revamp since the financial crisis is not just about slashing costs. we bring you earnings numbers from france's biggest bank. plus, figures from airbus breaking this hour. the choices in athens to hold its first meeting as prime minister tsipras tries to quell rebellion within his own party. but the imf reiterates it won't a lot grace out without debt restructuring.

deutsche bank has lost records of electronic chats linked to the interest probe. now the biggest bank is trying to recover the messages which it says it yelled archive. -- it failed to archive. welcome to the program. it's friday and you are watching "countdown," live from london. it's 6:00 and let's get to some breaking news. we will start with the aviation sector. airbus. njera: hi, anna. we have the first half revenue number -- 48 billion euros. airbus has also confirmed its first half guidance. we gave an update on the a400m deliveries -- they have resumed, 290 million euro charge.

we are waiting still for more numbers to come out. dividend per share is to increase in 2015. the big challenge for airbus overall is that it has a lot to deliver in termsand it seems like the first half guidance is coming as normal. with the a400 there was that crash of the military aircraft. the ceo did say back in may that that would jeopardize the earnings goals, and today we have heard that the deliveries have resumed. another headline -- they are on track to hit 2015 targets. we might see it move a little higher, given that they say it will hit its targets. back to you. anna: thank you. nerja with the latest out of

airbus. that's good to breaking numbers from bnp. france's largest bank is swinging to the highest quarterly profit in more than three years as trading revenues rise. let's get the details with caroline connan who joins us from paris. caroline? caroline: it is a very different situation from just a year ago, when they published a 4.2 billion euro loss following the embargo. today they are among the highest quarterly profits in more than three years. net income is at 2.6 billion euros, revenue was up 16%. that's beating estimates. we can explain this good set of results by three things -- first, the good performance of the advancement bank pretax

profit is up 26% to one billion euros. they also booked of 420 million euros gain from the disposal intake. finally, they are seeing the european economy that has the most interesting. i asked the cfo. have a listen. >> for us as a eurozone bank, when we look at all domestic markets we indeed see those green shoots. credit demand has gone up 1.5%. we also see that going down, risk going down in italy. in total, the bottom line is going up 14%. we see the first progressive evolution on those green shoots. caroline: in italy you were mentioning the cost of risk going down -- does that mean you are reducing provisions faster

than expected? lars: what we see is the cost of risk going down. there is of course the entry and nonperforming loans, which is slowing down. that is on the back of all the repositioning that we have done in the recent years. of course, the overall economic environment in italy is in better shape than it was over the last couple years. all these things together lead to this. caroline: and france, your main to mystic markets -- revenues are still slightly down, 2% in the second quarter. france's underperforming? lars: no. as we said, in france the current inactivity is declining. we observed that the it is impacted by the rates environment which has to do with several things, and

basically the bank is oriented to also offer declines and we see that the commissions are picking up well. caroline: of course, some uncertainties remain in the european economy. revenues were slightly down for france, about 2%. also for italy, 2.7%. the cost of risk is going down. and following the bloomberg exclusive information we had yesterday regarding the cib reorganization -- bnp is indeed confirming that it is reviewing it, trying to make it more efficient. however, he will give us more details about the plans by the full-year results in february. back to you. anna: thank you. caroline conan in paris. the trio of creditors meets in athens today. alexis tsipras is trying to

stamp out the opposition in order to secure a bailout. meanwhile in washington the imf reiterated its stance in the greek crisis -- no debt restructuring, no bailout. let's get to hans nichols in berlin. hans, good morning. what has tsipras been up against? hans: well, he faces a rebellion in his own party. he stared them down t draedared them to challenge him. here is what he said -- "whoever thinks another government and another prime minister could do better should spoke up." no one spoke up. here's the important thing -- they are going to have a party conference in september, to vote or have some conversation about the 86 billion, what we think will be an 86 billion euro package. the important thing about the september meeting is after this

bailout package, likely would be renegotiated. that means it will be a yes or no vote. mr. tsipras can always go back to the wobbly center to 251 members that supported him last time. another crucial thing about these meetings today, the finance minister is meeting with the troika. the first meeting between the troika and the finance minister. we will see how much progress he's made on that front. anna: hans, what about the role of the imf? they are just reiterating something they've already said -- but the more times they say it the more times we have to consider what it means for the bailout. hans: the more difficult it will be for germany to get the parliament on board here without the imf. that has always been a criteria -- to vote in the bundestag you need the imf. it doesn't look like they will be on board unless there is clear debt reduction. on top of that there is a report in the financial times that says

the staff member recommendation to the board of the imf that they not go ahead with the third bailout package. the board can always overrule and the imf. you taking place in the troika. the interesting thing about the story is that it could delay any sort of imf participation. sometimes later in the fall, after the bundestag vote. there is -- one of them makes it likely that you will have a vote. then you have this imf doubt. it's not certain that they will participate in the third bailout. anna: hans, thank you very much. hans nichols from berlin. let's get over to asia now. july has shaped up to be another troublesome month for the chinese stock markets. despite all the volatility christine lagarde and others are bullish on chinese equities. juliette saly is in hong kong.

juliette? juliette: we certainly heard those comments from christine lagarde earlier in the week, saying the chinese economy is resilient. let's have a look at how it hasn't been resilient over this past 30 days. this is the 30 day chart, the july chart for the shanghai composite, down by 14%, its worst monthly decline since 2009. as you would expect, the world's worst performing index for the month of july. we have been seeing wild swings coming through since the intervention by the government on july 8 and those pitfalls we saw on monday and tuesday. at the moment, the shanghai composite is down by around .8%, hong kong coming down. it has been a brighter day in the asian region switch is still on track for a monthly loss but we have seen the third day of gains, supported by good

buying coming through in australia. a lot of earnings are out in japan, and they've been mixed. new zealand, jakarta malaysia -- the more weaker spots. disappointing bank earnings sending the index down by 1%. samsung came out with its numbers weighing on the overall cost of the index. everyone is watching the shanghai composite to see what it will do in the final couple hours of trade. that is when we have seen all that volatility, normally in the last 90 minutes of trade. we have two hours left in china, in most investors are hoping for july to and into wrap up and see all this volatility close up for the month. anna: juliette, tell us a little bit about the japanese inflation story. the government is really trying with those inflation numbers.

they are seeing some tentative signs, but it is very slow process. juliette: it is an incredibly slow process. every effort the japanese government has tried to push it to the economy to try and get the inflation toward 2% doesn't appear to be where the government wants. but today's number was a little bit more on the positive side. we haven't seen too much movement coming through in terms of market reaction, but that's because there have been so many companies coming out with earnings. we have a number of other companies come through and the fact that a lot of them have missed expectations -- fujifilm japan airlines coming through weighing on the overall index. but certainly that 2% inflation target is looking a little bit unlikely at this stage. anna: thank you. juliette saly from hong kong. let's stick with the inflation

-- inflation figures were out this morning. we will also get data out later from the eurozone, and from italy. both those inflation figures at 10:00 u.k. time, 11:00 if you are in italy. we will bring you those numbers as they break here on bloomberg. as we had to break, we want to know your answer to this question our twitter question of the day -- with the european progress outstripping those of the u.s. for the first time since 2008, how positive are you on global growth? you can tweet me #countdown. the strength of the european earnings through those airbus numbers, the second largest spanish bank reporting better than estimates. we got the numbers from bnp, highest since 2012 and the steel sector is also beating estimates not dropping guidance

as some people feared they might. a strong start to the earnings season just atoday. get in touch. we will take a short break. coming up, the target continues as deutsche bank scrambles to recover old chat logs that were disposed during the probe. we will bring you that story and ask whether it could reopen that conversation. ♪

anna: welcome back to "countdown." it's a 17 minutes past 6:00 in london. here are the stories you need to know this morning. the troika is set to be the greek cabinet minister for the first time since he swept power. he will welcome representatives of the eu, imf, and ecb. this comes as the imf has

reiterated that it won't support a third bailout for the country without an explicit, concrete commitment from the euro area to ease greece's desperateebt burden. the/crash -- he has spent the last three months in jail. his appeal is set to go before a london court in august. deutsche bank is trying to recover internal electronic chat transcripts left out of disclosures to regulators during a probe into interest rates according to people briefed on the matter. a software glitch caused one of its chat systems to fail to archive files, as far back as 2005. let's get more on that story out of germany. hans nichols has been pouring over the details in berlin. hans, more problems with the new ceo. hans: yeah.

presumably mr. crane do about it because the disclosures are made in may. he had a great day with better-than-expected earnings but today is not such a good day, in part because that $2.5 billion settlement over the libel probe could be in doubt because of these missing chats. that's according to a person familiar with the matter. one of them is investigating the new york department of financial services. still, his new shop has always been the hardest regulators. the european banks -- here is how a deutsche bank spokesman put it yesterday. "after we discovered this software defect, we reported it to regulators and are presently working with them to rectify it." at least one person familiar with the matter said that the chats you have been recovered so far don't fundamentally alter the agreement.

they don't have to do with the libor scandal. however there is a danger that some chats will be permanently lost, and that could be a big problem. anna: hans, thank you very much. hans nichols in berlin. as weak as early's from oil and gas is today bg group is up for a look at the shell takeover and how profits could be hit i fall in crude prices. phillip, thank you for joining us. is this going to reduce the share of coal in a global energy mix? is that has significant the steelers? -- this deal is? phillip: it looks like the companies are really getting serious trying to reduce emissions and self products and this is gas rather than coal. bg is one of the biggest companies however it looks like

this deal is something of a single thing, because there are not that many other gas companies that are for sale on the scale of bg. nobody will buy gas from other big gas companies. looks like it will be a single thing. anna: he was saying yesterday that this was the big deal in the industry that made sense. we asked whether he was surprised that the low oil prices have incurred -- haven't encouraged more business, and he thought that maybe this was the big deal. are there any bg assets that shall might want to sell? anything they are going to inherit? philipp: one big asset in that category is egypt. egypt turned from a net exporter into a net importer, because the

domestic demand has been very high in the production has come down. the excess supply in egypt went down a lot. things are changing in egypt now, but it's just a question of how patient show will be with his egyptian assets. it could be that before things improve shell might want to put its priorities somewhere else, and that could be something. anna: will the deal turn shell into an undisputed leader in lng? is that their goal? philipp: right now it looks like shell has a very strong head start. it is becoming the biggest lng producer in the world. let's see if total or exxon are bp will be able to catch up or else chevron. it may be with organic projects, so there is a lot of new lng product being developed now. but with acquisitions, it

doesn't look like it. anna: how was the fall oil price affecting a businesslike bp? we will hear from them at the top of the hour. how do they manage in this environment? we have a lot from the oil majors about doing the benefits of a diverse business, refining and marketing alongside production. how does a businesslike bg cope? philipp: the gas prices are links to the oil price with a couple of months lag. it's not like refining where you have a hedge against oil price. it will also affect bg's business, just later. anna: ok. philipp, thank you very much. stay with "countdown." we will bring you bg group group's earnings as they break at the top of the hour. that will be followed by a exclusive interview with the company's ceo.

he will be speaking to us a little bit later. a reminder that later in the day we will also hear from the american energy giant exxon and chevron, at 1:00 and 1:30 u.k. time. a real focus on energy businesses early in today's trading session. let's turn our attention back to some of the earnings we've had out this week. linkedin shares fell after the social network attributed above that its revenue forecast to its es acquisition of a new website. some are concerned that growth is slowing and its main business. stay with the social scene but in a different region. saudis are the biggest consumers of you to per capita and they are also big producers of content. in a country where censorship is common, bloomberg caught up with the ceo of youturn one of the biggest producers of youtube videos.

>> youturn is an online entertainment network. we started in 2010. the whole idea was we wanted to create content. it's actually what people in the saudi streets are talking about. it is what's written on newspapers, that you can't say on national television. you get to see a female on a show where she talks about female related issues. she says the most important mail and a saudi females life is the driver. we have 1.6 billion views so far. we have about 30 million followers, subscribers through different social c platforms.

we have 35 shows. ♪ since we started, we try to be balanced. we are aware of where we are in this part of the world, we are aware of what's happening around us. we know what we can do. that does not mean we don't do it safely, but we tried to be edgy -- not too edgy. unfortunately, most advertisers are convinced that tv works. some are still skeptical, that every day there is one more that converts. you have more people committed to being transparent. you have the number of views of

cnn. anna: edgy, but not too edgy. european earnings season continues -- we will be back after a couple minutes. ♪

the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise

to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. anna: welcome back, you are watching "countdown." it's 6:30 here in london. we are just getting news from the french chain, two to report its numbers this hour -- let's get to nerja. she has the details, or at least the preview. nerja: it's a preview at the moment -- we haven't got the second quarter numbers yet. the estimate for second-quarter sales are 21.3 billion euros. in the first quarter, we were looking at sales coming in just above prediction because growth at home and in brazil compensated for weakness in

china. this has been a bit of a weak spot, because we did get some numbers earlier this month. this is france's biggest retailer were talking about, car for reported slowing sales growth earlier this month that business that chinese stores were weighed down by week consumption. it will be interesting to see what they say about china. interestingly, our quiz said that 25th -- barclays said it would be a big question. anna: nerja, we will see. thank you. here are the stories you need to know this morning. the fitness chain known for its feel-good indoor cycling files for an initial public offering. the company is one of the more high-profile players in the health craze sweeping america. planet fitness, the maker of skinny pop popcorn, are also

expected to price their ipo's next week. a u.s. official says that a part number that washed ashore in the french island shows that it was from a bowlingeing 777 the same as mh 370. it is now on its way to france where it will be examined further. david cameron is to chair an emergency meeting this morning in response to the calais migrant crisis. i comes after he was accused of soaking fears by saying that a "swarm of migrants" were coming across the mediterranean seeking a better life in britain. consumer price gains in japan from a little more than zero in june, challenging the central bank's efforts to spur inflation. james is in tokyo with the latest. james give us the details -- nationally, it rose .1% while it

fell in tokyo. what of the main factors behind it? james: the four-year energy prices that we are seeing is a bear market and that is why gas prices have been falling. natural gas prices fell in tokyo to almost 9% in the month of july and that is cutting people's utility bills and costs for transportation. it is pulling that inflation. this has been the case for the last year. initially the boj was a successful and boosting inflation but they have cut the rug out from under them. the national inflation rate was predicted to go to zero -- they didn't do that but we aren't seeing any strong inflationary gains no matter what the bank of japan has been saying. anna: i guess if you strip out

the food and the energy prices maybe you get a slightly more positive picture. having said that, consumption unexpectedly dropped and is now down 14 of the last 15 months -- why so weak? james: there is some more inflation, if you strip out the food and energy prices, which are very volatile. the inflation was at 0.8% which is a little bit better. but even with this, households aren't spending, and we saw that they cut spending in june. the reason they cut spending was the loss of sales and clothing but looking back month over month what you are really seeing in the household spending data is that people are just not confident about the economy, about whether their wages will be growing.

they are just holding back on spending as much as they can. the household consumption has fallen in 14 of the last 15 months, and that is really going to undercut second quarter gdp numbers, due out in a couple weeks. it will be a very weak gdp data because consumers are not confident and not spending. anna: considering all of that data from the second quarter -- we've got a lot of that -- and we will get the gdp number shortly. what is that going to look like? james: right. the growth in the first quarter was 2.9% and their prediction is for growth to be about a fifth of that in the second quarter, so 0/8.8%, which is a week number considering japan was in a recession last year. domestic consumption is lacking,

industrial production is falling off, partly due to the slowing domestic economies. those factors combined are spurring a little bit of growth but not strong. anna: thank you. james majgar. japan wasn't the only asian economy in focus this week. shanghai composite swung between gains and losses despite the government's previous efforts to prop the equity market. bloomberg caught up with one economist and got his thoughts on china. >> china's economy is slowing down sharply, even the financial system intervention is a form of money manipulation. anna: and typically gloomy take on things. let's continue our conversation on the asian equity story. we are joined by gabriel -- great to have you on the program.

a lot of asian moving parts this week -- we have the japanese inflation story, the chinese market. we are picking up on the japanese inflation story -- we heard a gloomy picture about inflation. i got the charge us next to me. inflation out of japan, excluding food and energy. perhaps that tells a slightly more positive picture. it has been higher, the. gabriel: it is a little bit better -- 0.6%. even though the bank of japan has a 2% inflation target, which was initially supposed to be reached this year and will be reaching next year the main thing for them is to avoid deflation. looking at this core measure, which is similar to core measures and other countries in the world, they are at least managing to avoid that. we have previously said that they would increase their quantitive easing in the autumn.

we aren't quite so sure anymore because in spite of the gloomy reports we've heard you into jane's discussing we think there are some signs of an upturn in domestic activity. but there is certainly not getting to 2% and that in itself is less than fantastic. anna: what is the downside of doing more qe if you are the central bank in the government thinking about how much you've put behind this plan? gabriel: ultimately you are already the dominant earner of japanese government bonds. you become eventually, the owner of a majority, or i daresay all jgb's out. and what do you do then? in my view, what they should do is try to buy assets that belonged to the non-bank private sector to boost people's money holdings.

in other words, you had the financial asset and we are giving your money because we want you to spend it. that might work better. the danger is ultimately if you keep buying more and more and very little or nothing happens you lose credibility. but we are a long way away from. anna: what you make of it more generally? the famed three arrows some people describing the third around all kinds of reform as a little bit disappointing. gabriel: there have been a few moves, talking about increasing female labor force participation but so far it still looks as if the third arrow broke before was pulled out of the quiver. anna: let's talk about china. we referred to it there with that clip about what the chinese government has been doing to prop up the equity market. will you sit back and look at that raft of measures they have

introduced to try and pop up the equity market -- are you surprised? gabriel: no not really. the chinese equity market is still fairly tight of the controlled. the free float is quite limited compared to other countries. for only amazing progress that china has made let's be aware that this is still a totalitarian dictatorship. but it is still freer and it is still a dictatorship. this is an economy where the authorities aren't really happy to give free rein to market forces. we think they are going to do more, but let me make another point. remember, we saw a couple weeks ago in second-quarter gdp numbers -- it came in at 7% exactly the same as the first quarter, exactly the same as the government's growth target.

even the chinese authorities acknowledge that chinese gdp data is unreliable at best. there was a lot of questioning, and we questioned it, as did a lot of others -- you must ask yourself, if the economy is really growing at 7%, why is there such an increased emphasis on easing monetary and fiscal policy? and i'm not talking just about trying to boost the stock market i having big investors go in -- anna: the cuts in interest rates. gabriel: why not allow fluctuation and so on? it was just confirmed that everyone who is questioning the numbers was right, and they are considerably lower. anna: but is that because of something that the chinese economy is doing under its own steam or is it because the government has engineered at lower because they are trying to bring about structural change? they come from a period where the growth is all about heavy

industry. they are trying to drive something more for the consumer and egg knowledge that would mean weaker growth in the short-term. gabriel: it would, indeed, and not just in the short term -- our forecast is that chinese growth will drop to 5.5% over the next four years. but it does seem that the current investment slowdown in china goes deeper than that. it has not yet been balanced been offset by stronger consumer spending, which is the flipside of what they are trying to achieve. anna: gabriel, thank you very much. that's an interesting take on the asian growth story right now. it leads us nicely into our twitter question. gabriel stays with us. as we had to break, we wanted to get your thoughts on twitter today on this subject -- with profits at european companies outstripping the u.s. for the first time since 2008, how

positive argue about global growth? we have a number of european companies expressing concerns about china. how confident are you about the global growth story? #hashtag countdown. still to come this week the fed hinted it could be closer to hiking rates, the wages are still high between september and december, so what are the experts saying? a wrapup from the market heavyweights and when they see the fed liftoff, coming up. ♪

anna: welcome back. it 6:46 in london. here are the stories you need to know. the troika is set to meet a greek cabinet minister for the first time. the finance minister will

welcome representatives of the eu, imf, and ecb. it comes with the imf reiterating that it won't support a third bailout for the country without an explicit concrete commitment from the euro area to ease greece's debt burden. the fitness chain known for its feel-good indoor cycling glasses has filed for an initial public offering. the company is one of the more high profile players in the health crisis sweeping america. planet fitness and amplify brands are also expected to price their ideas next week. the city for the 2022 winter olympics will be announced later today in kuala lumpur. beijing is seen as the front runner. however, a lack of natural slow could melt beijing's chances. the slogan "keeping it real" is seen as a dig at the chinese who use artificial snow.

this week, the fed hinted it could be closing hiking rates, but that's our between september and december -- what are the experts saying and when are we going to see the fed move? here are a few clips from some of bloomberg's top interviews. >> if you are looking at the real economy, growth and unemployment, job creation, we are close to the point at which a rate hike should occur. >> if the data were to be a lot stronger over the next few weeks then everyone is expecting, i think you could get september. >> barring any craziness in august, i'm still going with september. >> not really that much hinges unless you are a bond trader on whether the first rate hike is in september on december. a lot hinges on what rates are going to do between now and the end of 2016. >> the second part is that the recovery is confident but inflation is under 2%. >> inflation has been quite low

recently, either moving downward because of lower commodity prices, and even if you strip out the volatile sectors it has still been below the fed's target of 2%. >> the dollar strengthening, oil prices are falling, commodity prices are falling, wage inflation is not accelerating. >> concerns about china going forward, commodity prices in general has been lower than they have been. that puts downward pressure. >> the fed has suggested that i wouldn't be confident about september. >> it might make the fed delay and not move in september. >> it looks like the bar is low for a hike in september. >> probably will be a jump. >> to me, december is the more likely outcome. anna: there you go. i hope that made things clearer for you. that stock to gabriel stein. he's still with us. and hey clearer?

gabriel: september. the offense clearly -- let's go back from the beginning. our current interest rate levels, the fed clearly disagrees. that means that some states want to normalize, and they are clearly itching to do it. and if they can't do it when the economy is growing at a reasonable speed, and the numbers we got out yesterday -- 2.6%, lower than expected but still about trend -- if they can raise interest rates then, when can they do it? we are talking about taking rates from nil to 4%, we are talking about meals a 25 basis points, and probably to 50 basis points later. anna: so you think the fact that it will be more of a callout than a sprint matters. gabriel: absolutely. and they have made it clear. unless you believe that we really need zero interest rates forever, you have to normalize. anna: what about the inflation

picture? everything you said makes sense in terms of the jobs picture. the fed is focused, clearly, but what about the inflation picture? do they not need more inflation to justify it? gabriel: the core deflator -- it's about 1.5% if i'm not wrong. historically, the real said on's rate averages between 1% in 2%, so we should have a transfer rate of close to 3%. even if they go to 1% we will still have negative fund rates, that is by no stretch of the imagination a tight monetary policy. anna: one of the most recent notes has an intriguing title -- "return to normalcy," which you assure me is a word. warren g. harding. "normalcy." gabriel: that's about a

precedent. anna: the point is that current interest rates are not thate new normal. gabriel: absolutely not. there are people -- larry summers is talking about secular stagnation. if you believe that we are in secular stagnation, that the economy will never grow again unless we raise interest rates. what i did in this piece is i looked at the so-called financial balances, the imbalances in the u.s. economy. these were at a record high in 2008 and 2010. they are now almost at a record low, and that implies that what we have seen is a balance sheet recession. that is to say, people and companies were overleveraged, and had to deleverage before they could stop spending. but we are getting back to that. the symptoms are the same as the stec it or stagnation -- as the secular stagnation but it

passes. deleveraging is now very much done. we are slowly getting back to normal. is the new normal going to be like the old normal? no. companies are not going to borrow as much as they did, but they are borrowing. credit is growing, and interest rates take a long time to feed through the economy. the move back to normality on interest rates is also warranted. anna: when we do see the fed move for the worst time since 2006, will that cause confusion in the market? will everybody stop and panic for a moment? how will this be digested by investors? gabriel: exactly. logically, the reaction should be -- oh, well, that's fine they did it, we get on with it. the fed has done absolutely everything to say we are going to raise rates, you're going to do it slowly, but we are going to raise rates.

the problem is the markets, partly because of what we've seen the past five or six years, with this idea of forward guidance, banks telling you well in advance -- markets are able to marshall their defense. that's what happened in the temper tantrum in 2013. ben bernanke said, maybe we might consider thinking that we should do something about perhaps -- [laughter] anna: not even moving on interest rates. gabriel: and markets crashed. there is still a strong feeling, know, they can do it, and if we show we are nervous they won't do it. they will and it will happen. anna: we all need to man up. thank you. let's bring in tim coulter from bloomberg.com. gas guzzling european motorists are not benefiting from the oil crash.

it's all to do with higher taxation rates. this is something different. tim: we can blame the americans. [laughter] anna: you said it, not me. tim: it's not in this story, but americans are driving more than ever before. record miles. but it is a thing. anna: and this is driving season, isn't it? the story talks about how fuel is being imported by the u.s. recovery, and leaving supplies. gabriel: there's an excessive supply of oil. maybe not petrol, but there is a supply of oil. tim: it's true, but there's also an issue with the refining system. is not delivering as much petrol as it should be. anna: seems to have dropped a bit. what about the economics of running an art gallery?

and i mean in the sense of selling art rather than displaying. why do so many art galleries lose money? tim: the economics are actually incredibly grim. they have done research about what's wrong with the art world. it's interesting because you see all of these stories of people buying art prices going through the roof, montet selling for this. most galleries are actually losing money. they are in very fashionable neighborhoods selling the same thing. somebody actually studied what's wrong with the art world. anna: interesting. we also have a story about the u.k. election. i thought we left this one well behind us, but you take us back to may. tim: what's interesting in the context of the labour party, who will become the labor leader -- this is a story about the blogger who beat the pollsters. he published some research ahead of the election and said

the conservatives will win, and they did. anna: i tweeted out all of those stories -- if you're interested,. tim coulter, thank you very much. gabriel stays with us. ♪

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♪ >> this is not a cost-cutting exercise. also on the management. anna: bnp cfo tells bloomberg that it is not just about slashing costs. the largest lender also swings to its highest profits since 2012. athens holds ists first meeting. the imf reiterates it won't bail greece out without debt restructuring. deutsche bank isn't a lost a

record related to a probe. now it is trying to recover the messages which they said it failed to archive. ♪ anna: welcome to "countdown." some breaking news we're just getting numbers iag, it operates in iberia and british airways. the operating profit is come in at 530 million pounds. as always, keeping and i and how this is done is the key focus for this company how was the earnings revival going? a business that is cut thousands of jobs trying to revive the iberian operation.

just how clsoe are they to sealing the deal? on the forecast for the coming year, how bullish are they? they see 2015 operating profit above 2.2 billion. back in february, we heard from the company and they expected profit to come in at 2.2 billion. talking about that operating profit coming in. revenues just a touch above estimates. the operating profit at 530 million pounds. it looks to be an upbeat set of numbers. they have the government of ireland on board.

they have the eu onboard because they won antitrust approvals. she has some breaking news for us. >> i am looking at lloyd britain's biggest mortgage lender. it arises 15% to 4.4 billion pounds. up 30% to 1.2 billion pounds. i had to take a provision as well. lloyds does say it expects other income to be stable in 2015. the aim for the ceo is cutting assets, and thousands of jobs. anna: thanks very much. briefly, at itv this u.k.

broadcaster has liberty global upping their stake. they say they do not intend to make an offer to buy itv. they are amending their hedging transaction. raising their stake, but no plan to make a bid. we got numbers from them a little bit earlier this week. we will dig into that further should it more and it. let's talk about the energy sector. we duck about business, let's talk about bg group. this is a business in the process of being bought by shell. the numbers are talking about raising full year production

guidelines to the upper half of the range. the upstream earnings before interest tax down 39%. that is $1.21 billion the previous year. let's get an update from the companies themselves and talk to the ceo who joined us exclusively. thank you. once again, just run us through what you are reporting. explain the thinking behind that. helge: good morning. we have a good stock, we have doubled our production. are we created some key projects that is indicating that we will

deliver production in the upper part of the range. anna: whereabouts is this outperformance coming from in terms of the amount of production that you are getting? i was looking at queensland, brazil, norway, which part of the operation are delivering ahead is agile -- ahead of schedule? helge: core assets in australia and brazil. train two in the facility and australia. we delivered that a few weeks back. and in brazil also going according to plan. those are the key reasons on the guiding for 2015. anna: we spent a lot of time talking to big oil companies about how they managed to offset some of the weaknesses in oil price by being more diverse of

five and integrating refining and operations. how does a business like bg managed to take action to make itself more efficient at a time when oil prices are falling? heklglge: we have two core businesses. the attack the cost efficiency base very out of a couple years back. you can see our numbers are lower than the comparable quarter last year. we also initiated a significant efficiency program that started in 2014 and went year-round in 2015. we are delivering the u.s. dollar savings program for 2015. the idea behind these programs is not only to weather the current storm, but is to come

out as a stronger company once we have a better development. anna: can you update us on your talks with shell? they are buying a business. he said that regulatory clearances were going swimmingly. things were ahead of schedule. helge: we are progressing well and according to plan. that is to satisfy the regulatory approvals. the second part is to plan the integration process. more companies have put together a team to plan integration. that process is also going very well. the estimates of the deal will

close early in 2016. anna:what will you be doing once this deal has closed? your focus is getting this deal done but what are your future plans include? you probably expected longer as ceo than you will get to. helge: my focus is only on one thing, to make sure we operate efficiently and safely and deliver our business commitments, and plan integration process. i will come back to your question at a later time. anna: any thoughts on what your future might be in norway international business something to the different? helge: as i said, i spend all of my time and energy to work with our people to deliver the

demanding task that we have for the time being. also keeping the company together in a good way in the context of integration. anna: let's talk about pricing. with energy prices as weak as they are, how is this affecting the type of deals you were doing? are you seeing more deals with customers, or term contracts? how is the nature of the business changing? helge: clearly, on the oil market side, we have a very volatile it -- situation. the demand has increased, but the supply side is stronger. partly because saudi arabia is gaining market share, and the

u.s. unconventional is more salient than planned. we have to assume this industry will be this price moving forward. the key focus we have is make sure we have focus on what we can control. we make sure we can run a profitable company at all price levels. anna: you mentioned at bg the company has a tax call early. they were being aggressive with costs. you think other places have an slumber to recognize a lower oil price? we had these words from shell yesterday about how low the oil price would stay. have they been slow to recognize how things have changed? helge: my view is clearly that

profitability is not only related to the following or declining oil prices. ui t -- i think we're been it. recently where we have seen significantly higher efficiencies. this has been a visible force for years. typically for these industries, we have been slashing costs when prices are low, then we go back to do things when the prices gain momentum. this time we have to attack it in a different way. look at the business to make sure we can fundamentally run our companies more efficiently. so we can be profitable to

generate cash. anna: do you think as we get closer to the closure of this deal with shell, do you think other assets at bg that dont ma ke sense for shell to own that they may spin off? helge: we are running them as totally independent companies at this time. i have no insight on the plans that shell has. our focus is to run our assets as efficiently as possible. anna: thank you very much for joining us. let's carry on our conversation about the acquisition and the comments from the bg ceo. we are joing by philip and

gabriel. anything interesting coming from that conversation? they are talking about raising production guidance that was something the market was positioned for. >> it is in line with their peers, what they have been saying recently. they were able to reduce their capital spending and at the same time increase guidance. this is on the one hand focusing on their main projects and also negotiating the contracts and terms with their service suppliers. but then also, a lot of people asking did the oil price have to fall by this much for the

companies to become cost-efficient? anna: he thought bg was quick to react. he said the company before he took over was cutting costs. i ask him whether there are assets shell might want to sell. do you think there are assets that once shell gets its hands on it, it will say it does not fit. phillipp: they have shares in egypt right now. because of the high domestic demand, there is not enough gas in egypt to be exported. domestic production is also going down. the situation right now is changing the egyptian government is renegotiating to get better gas prices.

so it could be that shell might not be patient enough to wait to see how the situation improves. anna: we were talking about the impact of lower prices. how low and for how long will oil prices stay, what is your expectation? with a bounce up again or be here for a while? gabriel: our forecast used to be that oil prices would edge up some into the 60's over the course of the next 18 months. recent movements make us doubt that. i think we are shifting towards a lower forecast. what that means is that the winners and losers, it will continue to boost incomes in

areas like the united states and euro zone and china. on the whole it is good for the world economy. i'm surprised that just like norway, and russia, are th -- the big losers here. anna: thank you both. it is 70 minutes past seven and we will take a short break. we heard early from the british airline donor. they beat estimates. ♪

♪ anna: welcome back to "countdown ." here are the stories you need to

know this morning. they have swung to the highest quarterly profit in more than three years. trading revenue rose. it rose 60% beating estimates -- 16% beating estimates. bg agreed to be acquired by royal dutch shell has a drop in profits. net profit fell from 1.2 billion a year earlier. airbus has beaten estimates. sales are up compared to a year ago. the company says it is on track to reach its target. deutsche bank is trying to find

chat logs left out to regulators. they told them that a software glitch cause an archive failure going back as 2005. british airways and i. -- we take a close look at the numbers. just to correct they have not upgraded guidance. they're sticking to the guidance and operating profit. it was going to be in excess. >> they have. they have shown a good first half as well. profits have risen 40% a

fantastic performance. they are up 141% which is remarkable. they are seeing boosts at british airways and iberia. they slip slightlyin the profits for that. overall, a really good second q uarter for them. anna: what is the outlook for what could be a difficult winter? ben: winter is definitely coming if i can refer to "game of thrones." we have nhad predictors have a slip and declining yields which

is already the back burner of their operation. that is the result of increased capacity. matching them with the drop in fares we will see what happens. anna: we see that yield figure across the atlantic. it is getting more of a handle on the market. ben katz joining us with the latest on the air line industry. a meeting in athens as alexis tsipras tries to stamp out opposition. the imf says that no debt restructuring would mean that there can be no bailout. let's get the huns the goals wh -- hans nichols who has been following this whole saga. what has alexis tsipras been up against? hans: in the most recent past is

the meeting yesterday in downtown athens. he won some breathing room. he dared those that oppose him to come up with a better plan. i think this wuo -- quote is indicative of how far he is gone. whoever thinks another government and prime minister would do better should speak up. his main challengers balked and decided not to have an internal vote on sunday. what they will have now was a full on party conference in september. at that point they will make a decision to support the bailout package that alexis tsipras hopefully have done. the important thing about the timing if they have a meeting

in september that will be after it will be agreed to. to make it to the imf question. if it will not participate in an actual package it is difficult to see how you will get up to $86 billion for that the imf. they need substantial debt relief. anna: the are reiterating that. thanks so much for that. final thoughts from athens with gabriel stein who has been with us. how long is this that on the back burner? the real: -- gabriel: it will come back in the fall. i would love to continue on the game of thrones simile, but i can't figure out who is the queen. my concern, our concern, is that

even if everyone has the best will in the world, the greeks are not able to fulfill their commitments. but the latest package says you have to do something else. anna: thank you. ♪

♪ anna: welcome back you are watching "countdown." here are the stories you need to know this morning. a number on a wing component that came on shore shows it was from a boeing 737. that is the same model as the malaysian airlines flight that vanished in 2015. -- 2014. david cameron will chair emergency meeting this morning in response to the migrant crisis. it comes after he was accused by saying a swarm of migrants are

seeking a better life in britain. the us with a 2022 winter olympics will be announced today. beijing is seen as the front runner. however, a lack of natural snow could melt of their chances. human rights groups say that neither city deserves to host the games. we are just a half an hour away from the start of european trading. >> if we are looking ahead to the open of the stock market, we could see a full day of gains. they are pointing higher at the moment. the benchmark is on track for its best monthly gain since february.

this week has been really about the earnings and all about m&a. growth in europe is outpacing that in the u.s. for the first time since 2008. we are on track for a record third quarter in terms of deal making. it tracks the year in equity market and that is actually dropped this month heading for a record month. it looks like we could finish the week or the month on a note of optimism. we have had so many earnings, stocks to watch for, you want to look at lloyds. they will continue paying special dividends and share buybacks. highest quarterly product since 2012. we also have earnings profit increases from airbus a lot to keep an eye on. it looks like we are set to end the week on a high.

now with a look at the markets. we heard from bg that it was a beat for the largest banquet swung to the largest quarterly profit in over three years. caroline connan is standing by. a good result this morning. caroline: yes, and a very different story from just a year ago. they had reported less because of doing business with embargoed countries. today they are reporting the highest quarterly profits. net income stand that 2.6 billion euros. revenues are up at 11% and are reaching more than 11 billion euros. that beats estimates.

these sets of earnings can be explained by three things, they have one of from the sale 400 20 million euros gaining this quarter. there was also the recovery of the european economy. there seeing green shoots these are more sustainable than they were earlier in the year. finally, remember yesterday we had this exclusive information on bloomberg about the investment bank, how they are planning to reorganize this investment bank. this quarter they are putting 26% increases in profits in the business. however, they are impacted by tougher rules. i asked how he was planning to deal with that. and how he was planning to reorganize. >> as a consequence, the teams

are working on a plan to crystallize all of these accelerations. then they access and a further reprove the efficiencies. through things like industrialization or the further optimization of the balance sheet. on the other hand, to continue to invest in other means to capture the market share. that is what we are doing. we give an update on that when we publish our full results. caroline: they are telling me that he is still reviewing the securities. he did not want to confirm the cost cuttings may reach as much as 20%. anna: thank you very much. caroline conan with a look at the french banking sector. now let's look at a different

angle, switzerland's national bank released its statements to the rebuilding of first-half loss. the bank is holding deposit rates at -0.75%. we are joined now by zoe. great to see you. what does that mean? zoe: this is primarily a book loss. they have to give the outage result every quarter and it is a snapshot of what it's holdings were worth why this is important because the swiss national bank once a year makes a payout to the government which typically is one billion francs. if the central bank has a huge loss this payout might not be

made. this year is an election year. the swiss national bank having abolished the cap in january has been under criticism already. politicians might use this loss to try to make the -- attacked the central bank. anna: they dropped its cap against the euro at the start of this year. how much of a hit was this to these was economy -- to the swiss economy? zoe: the central bank, this was economy fell into recession in the first half. the first quarter was already negative. the second quarter beget the numbers and in august economists predicted also was a

contraction. it looks like it will probably be short-lived. economists predict that the third quarter -- that the economy grew weakly. still, that means it was ashort recession. anna: thank you very much for joining us. let's continue our conversation about earnings. my next guest manages 2 million pounds thank you very much for joining us. you have been pleasantly surprisede of what you saw so far. >> in the runup to this earnings season, expectations were not overly high for the earnings season. we are seem pleasing results from the u.s. if you dig the

energy sector from one side and in europe results have been quite strong. even stronger than in the u.s. which helps to underpin that gains are to be made in europe. anna: i've heard this from a number of commentators. it is after the beginning of the year. they're talking about buying european assets. that strategy was thrown into question. there was a positive. -- there was a pasuse: lothar: with the u.s. having to very strong years in europe and not, yet ask yourself where are the gains to be made? it is from a dislike of fixed incomes which is part of our

strategic benchmarks which we very much dislike of the current yield levels. they will not be great performers. we have got something we have to do something with if we shift away from equities. cash gives you no return equities gives you a positive return but you're exposed to more volatility. that is what we want to focus on. anna: you expect them to continue doing well? lothar: to do better than fixed income for sure. but volatility will continue, rate rise environment are ongoing. i might not want to be caught when we get to it. anna: if it is given by a better picture of the u.s. economy, does that mean we would expect less of a tangible equity markets? lothar: that is rational

thinking, but markets are often times emotional. it was the end of qe these things can happen. if there is any whiff that the rate rise may be premature you can still expect volatility. anna: what might you be buying? what kind of things catch your eye? lothar: the consumer is still driving this economy. banks are still valuable, they are not my favorite, but for a bounceback they may be an interesting investment. banks are my favorite because of the margins with these low interest rates are not interesting enough for banks to be long-term. anna: thank you very much.

capital investment management chief investment officer. and take a short break on the program. coming up on "countdown." the saga continues as deutsche bank struggles to recover. we will bring you the full story. ♪

♪ anna: welcome back to "countdown ." here are teh stories you need to know this morning. the energy crisis has hit the bg group hard. the company said to be acquired by shell has reported a 65% drop in second-quarter profits. net income fell but that still beat analysts estimates. they beat second-quarter estimates before interest and

tax. sales are also up compared to a year ago. deutsche bank is trying to overcome chat log transcripts of left out of regulators while looking into the libor rate. the lenders told regulators that a software glitch caused one of its chat systems to fail to archive files as far back as 2005. let's get more on that with hans nichols. more problems this relatively new ceo. hans: it is his 31st day on the job. the problem predates him. he will still be responsible for cleaning up. $2.5 billion settlement that deutsche bank reached on the libor scandal could be in peril

because some of these chat room conversations may have been lost. we don't know for certain if it will be an entire reopening of the settlement. it is a benjamin lusk is -- this is what deutsche bank is saying after we discovered the software in one of our internal messaging systems, we reported it to regulators and are working with them to rectify it. in the chats so far, they don't appear to be related to the libor back and forth. it is unclear at there will be directly related. however, not all of the chats may be recovered. they may be permanently lost. and that case, you don't know if they were discussing libor. anna: hans nichols with the

details there. also joining us bloomberg's a stocks editor. let's kick things off, what is been the key driver of the european stock story so far? >> they finally got to focus on fundamentals again. it has been all about earnings and deals and concern about greece and china seems to be subsiding. volatility have's -- has slumped. anna: that is amazing isn't it? given the tensions we saw a run the greek story. how has the corporate earnings season been shaking up? it feels as though it is been impressive. namitha: there have been many beats and some misses.

you saw ibs posting a profit. nokia, investors reacted very well. anna: what are the underlying trends we're watching? namithal: banks are doing well and are expected to drive growth this year. europeans are out growing the u.s. for the first time since 2008. it is just about 1%, banks have done really well and industrial firms are doing really well. we have earnings from siemens, some of the beverage companies have not done so well. they missed estimates. anna: what about the weeks ahead? it is a heavy agenda of

reporting, but there will be more next week. namitha: we are done with about half the companies. there are still some big bank earnings coming your way. we have seen some earnings from carmakers we are keen to know if the china's slowdown has affected them. global sales forecasts were cut because of china's concerns. bmw and continental coming up. anna: we heard from many european carmakers about china. lothar, let's bring you into the conversation. is that where your focus is? when you look to get exposure you are looking

for companies being driven by the european consumer. is that the story for you? lothar: that is the story. the second half of the year may be the story of the periphery of the consumers of domestic consumers in the euro zone. china's demand has slowed, that might hurt the german exports machine. we may not see quite the same results that we saw in the first half. 8 anna: we talk about greece, and we were telling about how earnings are front and center and on degrees and china. how long does that last? do the market start to pick up on these themes? lothar: i think greece has quieted down.

the can has been kicked, they seem to be getting what they need to make progress. no doubt, in the fall the imf demand will pick up. for the time being it will be more economic information rather than turmoil that will be in the headlines. anna: looking at the u.s. growth story we have gdp numbers yesterday, they seemed be settling in to a trot other than the gallup. how does that play out? lothar: the u.s. has had a very good run. we are sat -- saying it is still the anchor to the global economy.

generally, we believe the u.s. is still continuing to do well, let's take the oil and gas industry to one side. anna: we talked about the earning story, in the pharma sector and elsewhere where is this having an impact? >> there considering really we are seeing a lot of things globally in july alone. if we continue with this, we could very well see a record third quarter. anna: thank you very much.

here in london minutes ago into the start of the trade. jonathan ferro is here. jonathan: three big themes to get into. japanese consumer prices a little above zero not really impressive. household spending dropped. we get our teeth into what is happening in japan, and how long people can have faith in that idea. that is one of the big things and others a busy earnings morning once again across europe. we recap some of the key companies. big oil beats, bg group down from a year earlier but was another beat. the only automaker the missed estimates was bp. is greece back on the radar?

the imf remaining defiant. they want debt relief before they commit to a bailout program. are we in for another game and back-and-forth? we will break it all down. anna: thank you. that will do it for "countdown." a quick look at futures before we headed to the break. vaguely positive start to the european trading dead this friday morning. airbus, we have had numbers out of those businesses. all of those businesses, stay with bloomberg. ♪

>> good morning, and welcome to "on the move." let's wrap up the week and get straight to your morning brief. the ceo tells bloomberg tv the industry must reduce costs more effectively. the imf reiterates it wants to bail greece out. household spending falls.

eurozone inflation data is due this morning. ahead of the open, ftse futures lower by three points. let's get straight to friday's trading session. >> futures were pointing higher. it looked like we were heading to a fourth day of games. it looks like the majority of markets are pointing higher. you can see ftse 100 up about 2/10 of a percent. the cac 40 is up by 3/10 of a percent. we are still waiting for them to open. i will take you to some of the main stocks.