IAP.L Share News (IAP)

The speech delivered by the RBS boss at this year's Merrill Lynch banking conference, in London, was far more upbeat than the one delivered by his predecessor Fred Goodwin, in 2008, during the start of the last financial crisis. At the end of that day, six years ago now, the share price dropped by two-fifths. This time around the lender's current chief, Ross McEwan, highlighted how its 'bad bank' was not as faring as poorly as had been feared.Fine, however, investors seemed to have missed the fact that revenues in corporate and institutional banking were coming through weaker than expected. With a return on equity (RoE) of just 2.7% that segment is precisely the bank's 'Achilles heel' when compared with RBS' long-term RoE target of 12% for the entire outfit, or the current RoE of 7%. It also eats up a third of risk-weighted assets, which means the unit should be sporting a RoE of 10%. Hence, talk of dividends is premature. The good news will only come when that division is cut back and the rest of the partly state-owned lender put into good shape, writes the Financial Times' Lex column.The pick-up in volatility in foreign exchange and interest rate derivative markets is a natural enough development given the divergence in monetary policy between the States and in the Eurozone. However, Michael Spencer, the boss at inter-dealer broker Icap has been caught out before when trying to flag a return to historically more normal levels.That explains why he was more cautious this time around despite the improvement in revenues, which were off by 15% in the first half instead of the 19% fall seen in the first quarter. Stock in the company, selling at 11.5 times earnings, has performed well over the past month or so. Yet it still looks to be early days when thinking about whether to take a position or not. "Best avoided except by serious optimists," says The Times's Tempus.