Martin Flanagan: Painful it may be for the victims but retrenchment is good for RBS

• Despite the job-loss agony, the City was pleased with RBS's announcement

Yes, when job losses were part of corporate costcutting, analysts said yesterday, it was always "regrettable", "unfortunate" etc. The City is not hypocritical in this. City operators mean it when they say it. Contrary to the myth, they do retain some uncynical, non-reptilian qualities.

But they are paid to make money, get returns on their investment decisions. And, as such, once the sympathy is expressed, analysts and fund managers segue into the business case for "efficiencies". The profit melody goes on.

As such, costsavings are virtually always deemed A Good Thing by investors. They see there are two main ways to boost the bottom line.

One is better trading, the other is fewer overheads. And better profitability means bigger, (or restored, in RBS's case) dividends.

City institutions also want the taxpayer out of RBS, last week if possible, because the 83 per cent holding is an enervating overhang on the shares.

The reasoning is that the faster RBS chief executive Stephen Hester achieves his restructuring of the bank, which involves a big retrenchment of operations, then the faster the government will authorise UK Financial Investments to sell down the stake. The Royal's boss has put a three-to-five year time-frame on the return of the group to independent health.

The latest job cuts at the bank, overwhelmingly in business services and IT and skewed very much to site closures in England, from Leeds and Liverpool to north London, bring the number of staff cut globally by the bank since 2009 to 23,100 (17,100 of them in the UK).

The institutions see this as evidence that Hester is delivering on his strategy. That is for RBS to manage its way out of non-core businesses and rationalise the core businesses it remains in, cherry-picking the best bits.

So far the main asset disposals have been the European Union-enforced sale of a few hundred branches to Santander of Spain (a Brussels slap for the taxpayer bailout), the Sempra metals, oil and European energy business (to JP Morgan), the Bank of China stake, Linea Directa in Spain, the GMS payment processing business, and retail branches from Taiwan and Hong Kong to India, Kazakhstan and Indonesia.

RBS has also been ordered to dispose of its UK insurance arm (another slap for the bailout), but it is unclear if this will be via a trade sale or flotation.

Job losses will always have a greater pull on the emotions than the sale of businesses. But, not any consolation to the latest RBS casualties, the City will always look at the wider shape of things. Its conclusion? The Royal's painful retrenchment is on track, and painful retrenchment is good - for making money - in the longer term.

World Cup boost may not be enough to fight off Best Buy

THE football World Cup, like an annoying party guest who doesn't notice you have switched the music off and headed to bed, proved good for electricals retailers and bad for internet poker firms.

For every internet poker business such as 888 saying its punters deserted it for the thrill of betting on the football, there has been an electrical retailer, like DSG International yesterday, saying the footie sparked a surge in TVs.

DSG, owner of Currys and PC World in Britain, also said it was doing a brisk business in iPads, the must-have but seldom-seen new electronic epiphany from Apple.

Sceptics would say DSG needs all the golden apples it can find as it faces the burgeoning threat of American electricals giant Best Buy, via its joint venture with Carphone Warehouse, in Britain and mainland Europe.

Best Buy has opened three electrical goods megastores in Britain and says it could open a chain of up to 100 shops to challenge the indigenous British players. But DSG boss John Browett implied yesterday that his group's destiny was in its own hands rather than being supine before the threat of the Americans and the pale trading backdrop.

He said it depended more on the success of the company's turnaround plan. That is two years old and involves selling underperforming units, cutting overheads, refurbishing existing stores, opening larger stores and sharpening up its act on customer service.

The business still has problems with its UniEuro brand in Italy and Elkjop in the Nordic countries. DSG's stock touching a one-year low of 23.1p yesterday. Until there is clearer evidence that Browett's blueprint is bearing fruit, rather than first-quarter profits just meeting expectations and positive noises, it is probably worth staying unplugged from the shares.