RBS Shares Soar on Doubled Profits, Deep Cost Cuts

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July 25 (Bloomberg) -- Bloomberg’s Jonathan Tyce examines first-half results from RBS which saw the bank double profit and forecast cost cuts of over 1 billion pounds in 2014. He speaks on “The Pulse.”

First half of the year.

Jonathan tice is a report with bloomberg news and joins us now.

This feels a bit left field.

The market has been caught by supplies.

What has happened that has generated these numbers?

It is interesting your last interview, this is about bad debt and driven by commercial real estate.

Two things -- in the third quarter, rbs settled a bad bank.

A bit late, some people thought.

The acceleration for the work after the runoff from the bad debt there.

They said on the call that in the first half of this year, the runoff has already released $2 billion in capital to rbs.

It is it is 70 ratio --it increased its sovereignty ratio, basel iii.

In the yucata n ireland, -- in the u.k. and ireland, conditions are better.

The question going forward, is the 40 to 50 basis points they have guided to sensible or will that be lower?

The run rate is lower at the moment.

Is this a legacy?

Difficult to say.

The bad bank is what has accelerated the work through.

Clearly it is working.

The biggest driver is the fact of the american private equity hedge funds are swooping over europe, spain, u.k., ireland, buying assets.

They were mentioned on the call.

They said there are people looking to buy these for good prices.

Does this change the relationship -- if this carries on, there is a sense that it is going to carry on, does this change the british government's relationship with rbs?

Or does it bring for the ending?

It has to accelerate it.

If they get about 11% or 12% and profitability returns more quickly, it is easier to sell the shares.

The shares are approaching the end price.

Thank you very much indeed.

We will take a break and will be

This text has been automatically generated. It may not be 100% accurate.

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