good news for lloyd's and bnp paribas. reported a 38% rise in first-half profits while france's biggest lender swung to its highest quarterly profits. the banks are the biggest contributor of gains in european quarterly earnings. for a closer look, we are joined by the managing director of cycle. great to have you on the program. it seems earnings here in europe aren't doing too bad in banks but we are still a far way off from the u.s. >> in terms of returns on equity and things like that, i think you are right that the european banks have improved nicely. there are legacy issues like lloyd's. there is still a big one-off charge or several one-off charges diminishing statutory results. the core earnings are starting to come through strongly for many european banks. once you look at the operating results and returns on equity and things like that, i don't think they are far off anymore. manus: otto, we've seen a lot of change, a lot of restructuring. corporate investment banking did quite nicely today. of the banks engaged

we heard from bnp paribas this morning. french lender reports earnings tomorrow, but we've got a scoop. they are, we understand, to announce a massive revamping. caroline connan is standing by in paris. caroline: that is a bloomberg exclusive. to three people with knowledge of the matter, bnp paribas is looking at reviewing its securities unit. they are looking to make the fixed income activities more efficient, more cost-effective. according to our sources, the target for cost-cutting in the cid business may be as much as 20% by 2019. if you base this on 2014 expenses, that may represent as much as 1.2 billion euros. that would come on top of what we've already seen at bnp paribas. they've already done about one billion euros of savings between 2010 and 2013. this is due to the increasing capital requirements, the tougher capital rules. especially in fixed income and equities. other banks in europe are doing the same. we've seen barclays also looking at this. if you look at the share price of bnp paribas, it has increased

bnp paribas reporting earnings tomorrow.n a bloomberg scoop, they are said to be in the biggest investment bank revamp since the crisis. caroline connan is in paris with the story. caroline: this is a bloomberg exclusive information. according to people with knowledge of the matter, they are reorganizing their securities unit. what they are looking at is to make this business more profitable, more efficient especially the fixed income activities. according to the bloomberg sources, the target for cost-cutting may be as much as 20%. if you look at 2014 expenses that may represent as much as 1.2 billion euros. we will be speaking with the cfo of bnp paribas tomorrow morning. you can tune in at 6:00 a.m. london time to hear more on that. jon: that is your banking wrap. we haven't forgotten about the federal reserve. the path of least commitment. ♪ jon: good morning and welcome back to bloomberg -- bloomberg tv. the ftse 100 is back in the green for 2015. up 1.5%. rbs with a big shell and some big job cuts. the two biggest gaine

the ceo of bnp paribas north america in a "fox business exclusive". we're 40 minutes away.illary clinton's campaign having released the state department emails but are they worried more about joe biden and of vice president if he jumps into the race? the panel will break it down. whereas american farrell ben? the first time since the triple crown but where has of course, ben cents? where they slope out of the gate? why is it anti-on a weedy spocks? here to talk forces stay tuned next. countdown. when a moment spontaneously turns romantic, why pause to take a pill? and why stop what you're doing to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not

bnp paribas says, buy brokerages.'m not sure anybody is taking advice to buy anything in this market. jonathan: stephen engle in hong kong, thank you for joining us. we are back with ramin nakita. it is not my job to make trade suggestions. why would you want to buy chinese brokerages? ramin: some of the stocks look cheap and fundamentally valued. i think they are all kind of a hopeless basket case. but i think we keep away from that market. there are better opportunities elsewhere. we think europe is good and japan is good. the amount of risk you take for the reward you get would not be worthwhile. jonathan: final question on china. we wrote a lovely piece on bloomberg.com yesterday, and the chart on it shows the market cap of the shanghai composite. we are talking about over 10 times greece's gdp. going forward, this situation in china, when does it become risk off for global markets? jonathan: i -- ramin: i think it is fairly self-contained. i think the causality will go the other way. i think greece will probably

if you look the share price of the npp airbus -- bnp paribas it has increased.[indiscernible] we don't know if job cuts can be ruled out. we know that the union represents 28,000 people. we also know they've already merged one unit together. that's led to 100 job cuts. we don't know if there will be more. that will be one of the questions i will be asking the cfo of bnp paribas when i talked to him tomorrow morning. that's on at 6:30 a.m. on bloomberg television. anna: we look for to that conversation. boy have we had a lot to deal with. jon ferro has been pouring over the details all morning. what have you got for us? jonathan: i do not envy you. over 70 companies on the stoxx 600 reporting earnings. i tried to pick up a theme. i tried to the got -- exposing the lights of shell, centrica. we are good to see big job cuts from those two companies. six and a half thousand coming from shell. we will wrap up that delay segment for you. we'll talk about diageo earnings. ivan menendez joining us. their forecast for a return to sales growth. what is happening in the u.

so did bnp paribas shares. let's also bring you stateside.eing indices stateside somewhat into negative territory , or at least the dow jones industrial average on the s&p 500 this hour. the nasdaq is holding onto some slight gains, as you can see right there. let's talk you through some of the earnings that have dominated this session and some of the reasons why we are seeing shares trading lower over on wall street. america's biggest oil companies have posted their worst cooler -- worst quarterly performance for years. profits at exxon mobil and chevron were down 50 percent and a 90% respectively, suffering -- both countries say they are getting ready for a prolonged period of lower oil prices and are doing so by cutting cost to the proposed takeover of a dutch company by fedex is coming under scrutiny. the european commission says it is opening a probe into the $4.9 billion deal. the commission says it wants to make sure that the takeover would not impede competition in the package delivery market in europe. and sliding sales in china weig

jonathan: that was bloomberg tv's caroline connan talking to the bnp paribas cfo.usy week for banks. a busy week for social media earnings as well. twitter, facebook, linkedin, all beating expectations but the stocks falling in expectations. nejra, give us the details on linkedin. nejra: second quarter sales were a beat. the forecast beat estimates. linkedin's shares did rise initially, but they fell after the conference call. this is because the company attributed the bump in its annual revenue forecast to the acquisition of the education website lynda.com. what that did was raised concerns that growth is slowing in the main business. we saw that initial pop and then the shares fall in after-hours. jonathan: talk to me about the main concern for these companies. facebook, seems like a $4 billion revenue number wasn't enough for investors. nejra: with linkedin, the main concern is that the jobsite is perhaps not enough for users. with facebook, spending climbed 82% in the second quarter. that was more than double the rate of sales growth. it was a strong sales numb

you have holdings in bnp paribas , and a few other banks. >> what has happened inyou havee when thiss erupted was people took it out on the financial sector believing that if greece defaulted, the balance sheets would be quite hard. a lot has happened in five years. basically all the greek debt, that was on name ballots sheets, has migrated to somewhere else. basically the european central bank, imf, etc.. when you see is a fairly cleansed european financial system, but the market does not understand that. the market seems to think every time greece is in the headlines, the knee-jerk reaction is to hit european financials. is up: the euro stoxx year to date, so maybe not the right time to buy in. look at valuations, more importantly, price to earnings, dividend yields, which is companies are trading at, they are extremely attractive, especially as we start to enter an economic recovery cycle in europe. this is a really good time to be looking at european financials, given low valuations and where we are in earning cycle. ok, maybe these european banks are not complete the susceptible

and bnp paribas at 3%. alexis tsipras says the deal keeps resources in europe but re session father. >> we have created the conditions for being able in germany to recommend to the german bundis to create a program for greece. on the one hand we have solidarity of the member states on the other hand the country which we help has shown a willingness and a readiness to carry out reforms. >> let's bring if julia charterly who has been live in brussels speaking to various leaders. and a dramatic change in tone from european leaders over the past 12 hours, julia. >> let's make it 22 seema, in fact because we saw every single one of them you're absolutely right. i think alexis tsipras said right there this was a battle to keep it within the eurozone and now they will remain so. and it's going to unlock talks for that bailout deal. we're talking 86 billion euros, a huge rack of money, in addition to what has already been provided to greece. so that of course is going to come with conditions. if you total up all th

france's biggest lender by ses t asse assets, bnp paribas. let's get out to stephane who has been speaking to the cfo. >> the bank posted much stronger than expected earnings in the second quarter. a loss of 4 billion euros last year when the bang had to pay a settlement to the u.s. department of justice. the revenue declined. all businesses per fomed well with almost a 16% rise of the revenue at the cib division. bnpparibas improved by 30 basis points. operating expenses remained under control with an 11% rise in terms of outlook, the bang believes that to the cost of risk will remain stable in the second half of this year. this is what the cfo told me. >> we'll refrain from giving forward looking outlooks. we do see that we have to see if they materialize further going forward. for the rest, we're focused on executing our industrial plan. which is very well on track, as you saw from the second quarter results. >> how do you see the evolution of cost of risk? >> i think cost of risk if you look at it today, it's basically stable. it's in --

but you have this rationale for hsbc, credit suisse, bnp paribas that are caught doing tax evasion, moneyraud, whatever it is -- somehow this class of defendants, we can allow them to pay their way out of trouble while his other group of people has to go behind bars. we cannot have that. that system is inappropriate. as much as eric holder wants to hold himself up as a civil rights leader, and has been good things does dichotomy is a huge problem. juan: and the issue of him returning to covington and burling, can you talk about its role in the washington scene and also what are the limitations on appointed officials in terms of what they leave -- once they leave office what they can and can not do, and in the obama administration put restrictions on their employees? matt: there is a two-year cooling-off period, they call it meaning they have to wait two years before they can interact with the justice department again. i'm sure he will sit and be compensated during that time. juan: advise the lawyers that do direct interaction. matt: exactly. they will figure out a way where it is superfic

richard is the chief emerging markets economist at bnp paribas. three works -- weeks that were, last week was a bit calmer. are we going to see further calm? >> i think that's right. slightly better news out of greece and china. i don't think the problems in either of those situations are necessarily fixed for good, but i think we have seen risk truncated. that's the key dynamic that the markets are trading off. the mix index, the measure of -- the vix index fell to its lowest level this year on a friday, under 12. that's consistent with greater risk appetite in markets and more of renewed focus back on the u.s. and the u.s.'s superior fundamentals. rishaad: not that much in the way of data from the u.s. >> we think we will get liftoff this year by the federal reserve. i think that was the key message from fed chair janet yellen in last week's testimony on capitol hill. the date remains uncertain. i think our take is now that the anway for the fed tofor september hike is maybe a little too short. probably december now. rishaad: i'm going to put it

on friday, bnp paribas. francine: a lot of people at the top leaving. as wti trades in a bear market we get updates from the oil majors. bp reports on wednesday, total on wednesday, and shell on thursday. manus: finally, rounds two from the titans of tech. we get earnings from twitter and facebook on tuesday and wednesday. will they continue to run disappointing news that we saw from apple, microsoft, and yahoo! last week? stay tuned to bloomberg. we have all those reports, the earnings, the analysis, and we will break it all down right here. ♪ francine: welcome back to "the pulse." we are live on bloomberg tv and radio. manus: switzerland's largest bank, ubs, eclipsed estimates. francine: net income climbed to 1.2 billion swiss francs, up from 792 million the previous year. the result was published day earlier after the wrong figure was leaked in a newspaper over the weekend. manus: the chief executive told bloomberg that despite working in challenging environments he's optimistic about the future. >> we have been in asia for 50 years. our strategy in

rishaad: getting back to trade ata out of china, with me is senior investor at bnp paribas. expected here. good news for the global economy. guest: good news more for the chinese economy. are becauseumbers of the strength of the u.s. expectdo not really significant improvement going forward. rishaad: strength of the economy peter and out? guest: the are seeing it peaking. rishaad: that will cause some head scratching at the fed. guest: there is some debate over whether they should hike rates at the end of the year. the greece issue is still in the air. china is weak. the global environment is on people ground except the u.s. expect chinese export growth to stabilize, but imports will remain at moderate levels. rishaad: growth will be key this week. reflect, if you believe the number? guest: the numbers tell something. they do tell growth in china is weak. wednesday will be slightly below 7%, reflective of the past week. but i think q2 in terms of growth, second half of the year, we are looking at improvement in growth because of the filtering effect of past easing measures g

case -- i see you have big allington bnp, the french bank -- big holdings in e&p pair of the -- bnp paribasoyds. david: people believe this greece defaulted the balance sheet would be hit hard. a lot has happened. all of the greek debt that was on some of the balance sheets has migrated to somewhere else -- basically the european central bank, the imf, etc.. really what you see is a fairly cleansed european financial system, but the market is not understand that. the market seems to think every time greece is in the headlines the first knee-jerk reaction is to hit european financials. olivia: you say that, but the euro stocks is up 50% year to date, so maybe it is not the right time to buy in. david: if you look at valuations, the price to book value, the dividend yields which these companies are trading at they are extremely attractive, especially as we start to enter an economic cycle in europe. i hope this is a really good time to look at european financials given low valuations and where we are in the earning cycle. stephanie: where are you seeing the recovery? maybe the european banks

neil joins us this morning and harry challenger at bnp paribas. what is different about the decline of oil this time versus what we saw in february and march? harry: the difference this time is in the supply segment. earlier decline in january-february was a reaction to opec maintaining production point at the levels they were producing. this time around they are focusing on u.s. supply, and the fact that it is not declining despite the huge decline in count that we had. it is a question of how much oil we have and where is it. that is with the market is focused here in -- where the market is focused. brendan: is it a natural floor, the rebound? harry: 50 will be difficult to break on the downside. brent is looking at the global factors, large increases that in iraq are shifting the imbalance. people are worried about the return of a ram that will not happen until next year. saudi production is at an all-time high, and iraq is increasing and boosting its production. tom: what will russia do? we saw the panic and 70, and i am not saying they should

derivative basis, if this thing falls apart, there has to be in effect on bnp sarah about -- on bnp paribascgen, deutsche bank? brad: we have seen the stress test on this, and presumably of the banks have gotten enough down. it is not going to be a major hit to the banking side. i do not think i would like to be invested in the banks is greece breaks out at this point, but that is a different issue. tom: have you been called by barclays to take over jenkins? brad: waiting for bobbie diamond to come back. tom: breaking news on bloomberg -- brad hintz says diamond should return. confusing. brendan: tsipras is having his own battle with the greek parliament and his own coalition. can he hold onto it? we will find out. this is "bloomberg surveillance" on bloomberg television. good morning. ♪ tom: good morning, everyone. "bloomberg surveillance." oil $51.14 a barrel. here is vonnie quinn to tell you why. vonnie: a breakthrough that promises to end a 12-year standoff that has crippled iran's economy. in vienna, diplomats have agreed to a limit on iran's their program. economic sanctions on iran w

tom: bnp paribas in the news today, one of your great and powerful phrases, if it is too big to fail,is deutsche bank too big to fail? nouriel: officially now it should be winding down orderly. i believe that if another financial crisis were to occur it will be easier said than done to wind down another major institution. then we have examined do we want to bail them out or no? many of them are too big to fail because they have been massive consolidation. for example, united hates of the banking system. some of the larger banks took over smaller banks. two big even to jail as we have learned. brendan: i find this fascinating. finance ministers can make all their plans they want, but when it comes down to it, democracy has a way of saying nope. tom: policy has a real economic effect feared with a thank you to nouriel roubini. his book is "crisis economics. " our twitter question --is today the moment of truth for the u.s. economy? stay with us. ♪ tom: good morning, everyone. gold down eight dollars. not near critical support, but none the less self. brendan: tom brady cannot escape the