The country out unless there is a commitment to debt relief. Welcome to the pulse live from bloombergs European Headquarters in london. Manus coming up, we are speaking live with a ceo. That is at 10 10. Make sure you stay tuned for that. Francine bnp paribas has published its biggest quarterly profit in more than three years. Manus the beat comes after frances largest bank announced they are considering changes to the securities union. The overhaul which could bring the deepest cost cuts since the financial crisis is a response to tougher capital rules. As a consequence of this, the cib teams are working on a plan to crystallize all these accelerations. First is to further improve efficiencies and returns. At the other hand and at the same time, to continue to invest in order to capture further market share. Thats what we are doing. That takes time. Francine the cfo there speaking to Caroline Connan. She joins us from paris. What can you tell us . Caroline he did confirm that hes still reviewing the Investment Bank unit. However, he did not confirm that the cost measures could reach as much as 20 as we reported yesterday. He said this is not a costcutting exercise. This is an efficiency exercise. How to make more profitable the cib business. He didnt want to confirm whether there will be job cuts in the plan. There are 3600 traders at bnp paribas. We dont know yet what the plan will be for these traders. The cfo of bnp paribas did tell me that we will know more buy the full year results. That is not until february 2016. Manus lets talk about the broader earnings. Theyve had the highest quarterly profit in more than three years. Theres more to this bank then just the corporate and Investment Bank. Isnt there . Caroline absolutely. It is a very different story from just a year ago. Thats when they had published 4. 2 billion euros loss after this huge fine from u. S. Authorities for breaking the embargo with some countries. Today they are reporting the highest quarterly profit in more than three years. Net income is around 2. 6 billion euros. Revenues are up 16 , to more than 11 billion euros. There are mainly three reasons for that. First is the good performance of the cib business. The pretax profit of the Investment Bank is up 26 . Second, they posted one gain following the sale. Finally, that is perhaps the most interesting, they are seeing the european recovery. I asked the cfo how sustainable this is. For us, as a Eurozone Bank when we look at domestic markets, we indeed see those green shoots. Credit demand has gone up 1. 5 . We also see that in the cost of risk going down. We see in total the bottom line going up by 40 . We see the first progress. Caroline of course uncertaintuiesies remain. If you look at the french retail bank, we are down. Italy also down. But the cost of risk is going down. Manus caroline thank you very much. Caroline connan in paris. Francine heres a look at what else is on our radar. The slump in Energy Prices has hit e. G. Group hard. Bg group hard. The company has reported a 60 drop in secondquarter profits. Net income fell from a year earlier. It still beat analyst estimates. Manus airbus has beaten secondquarter estimates, reporting earnings of 1. 23 billion euros. The Aerospace Company has benefited from demand for new, more fuelefficient jets as Airlines Seek to protect themselves from fuel cost volatility. Francine Lloyds Banking group says it will continue paying dividends and share buybacks after firsthalf profit climbed to 1. 2 billion pounds. Britains biggest Mortgage Lender will pay a dividend of 0. 75 pence a share even though it has taken a 1. 4 billion pound charge for improperly sold loan insurance. Manus chinas stock has fallen again, the biggest monthly drop since august 2009. The index tumbled almost 15 this month, the worst loss among 93 Global Benchmark gauges tracked by bloomberg. Francine meeting greek cabinet ministers since syriza swept to power in january. The finance minister has welcomed representatives this morning. It comes after the imf iterated that it wont support a bailout for the country without an explicit commitment from the euro area to ease greeces debt burden. Manus the city for the 2022 Winter Olympics will be announced shortly in kuala lumpur. Beijing has been a front runner with kazakhstans capital the outsider. A lack of natural snow could melt beijings chances. Youve just seen some live pictures from that particular discussion. Now, keeping it real is seen as a dig. Human Rights Groups say neither city deserves to host the games. Francine another busy week of earnings coming to an end. Our next guest says equities remain a good buy. He is manish singh. Give us a sense of what you are looking for. We have the fed. We are looking for a rate hike. We have a slow burning need to navigate exchange markets. This is across the board. What is driving europe . Manish lets look at the financials of bnp. In terms of fed, as i mentioned in my notes as well, it is not about whether the fed is going to raise rates. But should it be zero or not zero . To me, i think the fed is going to raise the rates in september. All the data we are seeing is more how soon are they going to raise the second one. Manus one or two people have said why are you complaining about people raising rates . It is good news. The u. S. Is in recovery mode. Europe is not on its knees. You should be happy the u. K. And the fed are getting ready to go up with rates. Would you agree . Manish i would agree that rates should go above zero. The personal consumption number is higher. If you really want the recovery to pick up from the consumer side, you should see the rates a little bit higher. Francine when you look at the consumer growth and the banking industry, a lot of people are chasing the asian consumer. That is where there is going to be a lot of growth. With the fed possibly hiking sooner than expected, we are going to see capital outflows. How do you combine them . Manish i am underweight emerging markets. There will be some sensitive sectors. I dont think germany will do very well. It is more italy and france. When you do european stock locations, dont just buy all the german stocks because that is not going to help. Emerging markets are underweight. It is going to hurt emerging markets. Japan is all about earnings for the region. For me, these two, u. K. And u. S. Are going slightly higher. Financials is a different play. Manus what about the commodities . Commodities down nearly 10 in china, the worst performance since 2011. The whole commodity complex, theres two ways to look at this. One is on the input sidet. Two is the threat to dividends. How do you create a portfolio for 2016 . Manish look at the oils. If you think that nobodys cutting down production, then you will get the business from that. Look in the sector, but dont buy the whole sector. Even if you see the correlation based on the chart i sent yesterday, the correlation is down. You are not going to buy the market and get the return. You have to choose your market and choose your sector. The energy and miners didnt do very well. Francine thank you so much. Manish singh stays with us and we will be talking oil next. We are just getting a headline. Mr. Tsipras. Manus the Prime Minister of greece says he has given the order to yanis varoufakis, the emergency plan which we made such a big deal of yesterday setting up a plan b if greece was bounced out of the euro. Francine the varoufakis plan was shed the light, or the light was shed on it when he was explaining it to Hedge Fund Managers on the phone. What he was trying to do was tap into a parallel currency by tapping into manus it was the tax system for greece. Francine and through that, trying to get money back if they were to exit the euro. We now understand that mr. Tsipras gave the order to varoufakis. Manus many people have said it would have been surreal. Had they not been working on some kind of a plan b. A little more clarity day by day. Francine it is the stuff hollywood writes about. Up next, bg group hit by falling Energy Prices. Manus welcome back to the pulse. We are live on bloomberg tv and radio. Weve had a little breaking news. This is the greek Prime Minister, Alexis Tsipras speaking to lawmakers in athens. He says the greek government had prepared contingency plans in case talks with creditors failed. Tsipras says he never planned to leave the greeks out of the euro and he gave varoufakis his finance minister at the time, approval to do so, giving the order to look for an emergency plan. Hans nichols joins us. This is putting some clarity around the situation to a certain extent. Hans this is both a denial and a confirmation, a denial that mr. Tsipras had plans to leave the country out of the euro, confirmation that they did have a contingency plan. Now the question becomes what sort of insight did mr. Tsipras have into the specifics of the varoufakis plan b . Did he know they were planning on hacking into the Computer System . Did he know they wanted this parallel liquidity system . Seems like hes giving varoufakis a little political cover. Mr. Varoufakis was concerned that he may be facing treason charges. Mr. Tsipras is saying it was authorized. That may give mr. Varoufakis a get out of jail free card. It may not. No charges have been brought. It is clearly an effort by mr. Tsipras to keep mr. Varoufakis within the syriza tent saying i authorized this, it wasnt a plan to take the country out of the euro. If you look down the line of it theres going to be a big reckoning within the syriza party. Mr. Tsipras has done a uturn. He is accepting everything the troika is demanding. He is using the truck as arguments for his own internal argument. Yes he staved off and bought himself a little time yesterday. There wont be a sunday vote within syriza on this plan to go forward. There will be something in september. Mr. Tsipras could be looking towards september to make sure mr. Varoufakis stays within his camp. Varoufakis voted no on that first bailout package and yes on the second one. Maybe an attempt to keep mr. Varoufakis a little closer. Francine this also allows mr. Tsipras to hang on to the rebels a little more. Hes saying, im with you, we tried this. This is something i actually thought about. We decided not to do it. It kind of makes him a little more that gray area within the rebels. Hans we will see to what extent opposition lawmakers focus on the past and demand that mr. Tsipras come clean on what he knew and when he knew it and how first he was in this plan. Mr. Varoufakis has indicated he wasnt. Going forward, it looks like mr. Tsipras does recognize that hes got a challenge within his party. He also has to stay within the center. Hes going to need opposition votes. Hes going to need other Party Support to get this passed through parliament. Manus hans, thank you very much. Lets bring in manish singh. You are still with us. It is interesting here. Tsipras reaching out to what is it, and all of branch to varoufakis but at the same time, challenging the rebels. Manish i think the fact that they dont have a meeting going on in september indicates that there is no real crisis in greece. Every sovereign crisis have been solved by default and then restructuring the economy. We had a greek crisis in 2010. Five years on, theres hardly any money going into the economy. That is the question you have to answer. Anybody who thinks greece is going to come out like ireland is wrong. The two economies are very different. Ireland is an open economy. Ireland gets five or 10 times more fdi than italy, greece, or spain. It is not about austerity. It is the economy. Francine lets say the right off is possibly a done deal. Would you be concerned by a snap election . Tsipras is the most popular politician in europe. Manish i think he will win. To me, greece is the world of europe now and they will decide what to do. Francine thank you so much. Stay there. We will be talking oil next. Bg group is hit by falling Energy Prices. Francine welcome back to the pulse live on bloomberg tv and radio. Bg group which is being acquired by Royal Dutch Shell for more than 70 billion as reported a drop in secondquarter profit. The company Beat Estimates, but net income fell to 429 million from 1. 2 billion a year earlier. Bgs chief executive told bloomberg the result is related to the slump in oil prices. We have a very volatile situation. We have seen that demand has increased but the supply side is stronger right now. I think partly because saudi arabia is gaining market share and perhaps because the u. S. Has more than we planned. We have to assume that this industry will face volatile pricing moving forward. Manus manish singh is still with us. He is listening to that from bg. In terms of and we also have philipp. Welcome. Let me come to you first. This deal, is it a deal worth doing at any price . Philipp you can say somehow. It is all about lng liquefied natural gas, the fuel of the future. It is much less emission intensive. If china replaces its Power Generation with gas, you will have a huge demand growth rate. Francine does it mean that even if they overpaid this is such a great asset that it means shell will be leagues ahead of everyone else . Philipp that is correct. If this deal goes through, the combined company will be the Biggest Energy producer in the world and it will be difficult for its peers to catch up. Francine and lng is the future . Manish i think it is. When you talk about energy, it is the demand side. If you see the u. S. , we had 1. 3 in 2012 2. 6 in 2013. The growth is stagnating. These sectors im not a holder of oil majors, but when the time is right, we go back into oil majors as well. Anybody that says chinese growth is going to decelerate a lot, we are not talking about china getting rid of bus rides. Manus ok, thank you very much for coming in and going through all of that. Great conversation with you both. Francine weve covered oil quite a lot. The difference ceos had different predictions. Up next, how the micro crisis is playing into the Eu Referendum argument in britain. Francine welcome back to the pulse live from bloombergs European Headquarters in london. Manus lets get you some of our top headlines. Bnp paribas swung to its highest quarterly profit in three years. Its trading revenue rose and frances biggest bank benefited from oneoff gains. Revenue gained 16 . Francine the slump in oil prices has hit bg group hard. The company which agreed to be acquired by Royal Dutch Shell for 70 billion as reported a 65 drop in secondquarter profits. Net income fell to 429 million. Thats still beat analyst estimates. Manus David Cameron is to chair an emergency meeting today in response to the calle migrant prices. It comes after he was accused of stoking fears by saying that a swarm of migrants was coming across the mediterranean, seeking a better life in britain. Lets have a conversation about this and get more on the situation in calais. We are joined now by our u. K. Political correspondent, rob hutton, and reporter Tom Mackenzie who spent a day in the camp yesterday. Rob, why is it that necessary that these migrants want to come to the u. K. More so than staying in france or italy . Rob tom has been talking to them but the straightforward answer is theat a lot of them will be english speaking. We have a lot of places where you can come and work. This is slightly selffulfilling. Your brother or cousin is working on a building site. He can get you a job on a building site too. Britain is an obvious destination. Francine tom, you spent a day at one of the main camps in calais. I guess you are asking a lot of people why they were there. The answer was . Tom the answer was, for many of them a lot of them have friends or family here. A lot of them know the economy is doing ok. And the language is a big issue. I was surprised by the number of people who said they want to stay in france. Whether that was that they were cautious about telling me, and english turn english journalist, im not sure. The majority seemed to be wanting to get to england. Manus rob this is turning into a minefield of rhetoric. Cameron has been berated for his use of language last night. At the same time, hes fighting this the two areas are becoming very muddy, arent they . Rob minefield is the right word. Cameron has to appear to be sort of on the ball. One of the rules of british politics is you dont say britain does not have a refugee crisis. Jordan has a refugee crisis. That is a crisis. 4000, 5000 people is not a crisis. But you cant say that if you are a politician. You have to feel peoples pain. A lot of people are trying to get on holiday. They are upset because they cant get through the tunnels. We have a meeting of the crisis committee. There isnt actually a huge amount you can do. A lot of people are very determined. There is also the distinction between migrants in calais coming illegally or to claim asylum and legal migrants coming from poland or bulgaria or whatever to work. In most peoples minds, the distinction between these things is very fluid. There is a feeling in the country that we have had an awful lot of immigration in the last 10 years and people would like it to slow down. Manus the resentment in the refugee story. Francine so the main message from David Cameron has to be the u. K. Is not a safe haven. Rob exactly. He has to push back at the margins. They are doing things to make it more difficult to employ or render house to illegal immigrants. Clearly, some people are always going to come. Manus tom, you got some footage. We will see that early next week. Give us a sense of the cap. How is it set up . Tom there was about 2500 migrants there now according to the people i spoke to. That is down from 3000 about six weeks ago. It is a sprawling camp. It is very open. They have very few facilities. What they do have theyve used to quite ingenious affect. Theres a number of restaurants. Theres a number of shops. Theres a nightclub. Theres a church. Theres a mosque. These