Citigroup Inc and Bank of America Corp said first-quarter profit rose as the lowest interest rates in 40 years enabled the two biggest US banks by market value to borrow more cheaply.
Shares of both banks fell, with Citigroup dropping to a six-week low as the company missed profit forecasts after excluding the sale of shares in an insurance unit and increased Argentina and Enron Corp write-offs. Profit growth may slow as the Federal Reserve starts raising the target for overnight bank loans from 1.75 percent, after 11 rate cuts last year, investors said.
PHOTO: CHIANG YING-YING, TAIPEI TIMES
"If rates rise, it's a negative," said David Uhryniak, who helps manage Federated Investment Management's US$180 billion in assets, which include Bank of America and Citigroup shares.
Citigroup net income climbed 37 percent from the first quarter of 2001 to US$4.84 billion, helped by US$1.06 billion raised from the sale of a stake in Travelers Property Casualty Corp.
Excluding that gain, Citigroup's profit rose 4 percent, missing forecasts for the first time since the 1998 merger of Citicorp and Travelers Group Inc. Bank of America had a 17 percent rise in net income to US$2.18 billion, beating analysts' forecasts, as lending to consumers grew. Citigroup CEO Sanford Weill, who has pushed to expand consumer lending, and Bank of America CEO Kenneth Lewis, who depends on retail and commercial banking for almost two- thirds of revenue, cut the cost of lending by about a third in the first quarter after the Fed pushed down benchmark interest rates to spur the economy.
"The big surprise is that the banks did a good job of lowering deposit costs without losing customers," said Wayne Bopp, an analyst at Fifth Third Investment Advisers, which owns 1.5 million Citigroup shares. "With their cost of money lower, their interest margins did better."
Citigroup earned US$0.93 a share, up from US$3.54 billion, or US$0.69 a share, in the same period a year earlier, according to results published on the bank's Web site.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained