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.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is