BANKING
RBS hurt by provisioning
The Royal Bank of Scotland (RBS) yesterday reported a net loss of £466 million (US$723 million) for the second quarter as it set aside £310 million to cover the costs of a computer crash and compensation for mis-selling products to customers. RBS, which is 82 percent owned by British taxpayers, said it had made a £125 million provision to pay the costs of a computer breakdown, which caused havoc with customer accounts in June. It also set aside £50 million for compensating loan customers who were mis-sold complex interest rate swaps. It also made an additional provision of £135 million to compensate customers who bought payment protection insurance that they didn’t need, raising the total provision for insurance mis-selling to £1.3 billion. The loss for the three months ending June 30 was down from a loss of £897 million a year earlier. Operating profit fell 22 percent to £650 million and revenue fell 5.4 percent to £6.4 billion.
EUROZONE
Private PMI shrank in July
Eurozone private sector activity contracted last month for the 10th time in 11 months, with data now consistently showing the downturn becoming “entrenched” in Germany, a key survey showed yesterday. The purchasing managers’ index (PMI) compiled by business research firm Markit was stuck at 46.5 last month according to a final reading, indicating another month of contraction in activity. “The final PMI data for July confirm the message from the earlier flash estimate that the eurozone continued to contract at a quarterly rate of approximately 0.6 percent in July, suggesting the region looks set for a second consecutive quarterly decline,” Markit said. The readings showed manufacturing activity at a three-year low last month, with Germany and France posting three-year-high rates of decline.
INTERNET
LinkedIn profit falls 38%
LinkedIn Corp’s net income fell in the latest quarter as the professional networking site spent more money to grow its business. However, revenue grew faster than expected, and the company raised its forecast for the year. LinkedIn’s stock increased after the results came out on Thursday, a reprieve after tepid news from other newly public Internet companies — namely Facebook and Zynga. LinkedIn, which went public more than a year ago, is among the best-performing stocks of the bunch. LinkedIn earned US$2.8 million, or US$0.03 per share, in the second quarter. That’s down 38 percent from US$4.5 million, or US$0.04 per share, a year earlier. Adjusted earnings, which exclude stock compensation expenses and other items, were US$18.1 million, or US$0.16 cents per share, matching analysts’ expectations. Last year, LinkedIn had adjusted earnings of US$10.8 million, or US0.10 per share.
MINING
BHP writes down assets
BHP Billiton yesterday wrote down the value of its US shale gas assets by US$2.84 billion, prompting CEO Marius Kloppers, who was reportedly paid more than US$15 million last year, to forgo his annual bonus. Mike Yeager, BHP’s head of petroleum division, will also not be paid any extra for the past fiscal year after the massive impairment charge on the assets bought last year. The company also cut the value of its Australian nickel division by US$450 million, with the price of the commodity down and costs rising. Plunging US gas prices forced the global mining giant to book a writedown on the value of the Fayetteville shale gas assets in Arkansas.
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