BANKING
RBS sees tough Q4
Royal Bank of Scotland (RBS) expects difficult market conditions in the fourth quarter, with banks around the world hit by Europe’s debt crisis. RBS yesterday said it had made a third-quarter net profit of about £1.2 billion (US$1.9 billion), but the partly-nationalized lender added it had taken more writedowns on its Greek exposure. RBS followed the likes of Barclays and Morgan Stanley in benefiting from a debt accounting gain, which boosted its earnings by £2.36 billion and helped offset lower profits at its GBM investment banking division. RBS added, however, that it had taken a further impairment loss of £142 million on its exposure to Greece during the third quarter.
AIRLINES
IAG agrees to buy bmi
British Airways owner IAG has agreed to buy Lufthansa’s British unit bmi to boost growth prospects at its London Heathrow hub, it said yesterday, as it reported results showing the pressure airlines were under from higher fuel costs. IAG reported a 31 percent fall in third-quarter profit, better than expected and outperforming its peers, but highlighting the need for airlines to seek growth where they can. IAG chief executive Willie Walsh told reporters that IAG did not yet have exclusivity on any deal, but believed its offer was more attractive than others Lufthansa had received. Rival UK carrier Virgin Atlantic said it had made a bid for bmi and was still “working with Lufthansa.” Analysts believe a deal would be worth about £300 million. With 9 percent of the takeoff and landing slots, bmi is the second-largest carrier at Heathrow, Europe’s busiest airport.
AUSTRALIA
RBA cuts economic forecast
The Reserve Bank of Australia (RBA) yesterday warned that financial turmoil in Europe could drag the country’s resource-led economy lower, as it cut forecasts for domestic growth and inflation. In a monetary policy statement finalized on Thursday, the central bank lowered its average economic growth forecast for the 2011-2012 fiscal year to 3.25 percent from 4 percent. The new estimate was officially released yesterday. The change came as Greece’s prime minister on Thursday backed away from his controversial plan for a national vote on a eurozone rescue package, which included a massive bailout for the debt-ridden nation. The RBA also lowered its inflation forecast to about 2.5 percent next year, 50 basis points lower than the bank’s August forecast.
ELECTRONICS
S&P puts Sony on watch
Standard & Poor’s (S&P) yesterday put Sony Corp on a negative credit watch after the Japanese electronics giant warned it expected to slide to its fourth straight annual loss. The US ratings agency placed its “A-” long-term corporate credit and senior unsecured debt ratings on Sony on watch with negative implications. “The likelihood of Sony’s weak earnings persisting has increased, as there are no signs of a halt to the deterioration in the earnings of the company’s core flat panel TV business,” S&P said. “In addition, Sony’s financial burden is likely to increase in tandem with the company’s making Sony Ericsson a wholly owned subsidiary,” it said. “We need to review the prospects for Sony’s operating and financial performance.” On Wednesday, Sony projected an annual net loss of ¥90 billion (US$1.15 billion), reversing a July forecast of a ¥60 billion net profit, after the company slumped into the red during the first half.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last