State-backed Royal Bank of Scotland (RBS) is set to release £800 million (US$1.3 billion) from provisions it had set aside to cover losses on bad loans after an improvement in economic conditions, especially in Ireland.
RBS yesterday said it also expected losses from bad loans to be “significantly” lower than its previous guidance of £1 billion this year, helped by improving asset prices.
Its shares had jumped 4.2 percent to 376.5 pence by 7:05am GMT yesterday, the strongest performer in a flat European bank index.
RBS, 80 percent owned by the UK government, is selling assets from its “bad bank” quicker and at better prices than it had expected.
That means it does not need to set aside as much for the assets in its RBS Capital Resolution (RCR) unit, which was set up this year to sell off or run down about £29 billion of assets it no longer wants.
It plans to release about £500 million of the money it had set aside for RCR in the third quarter, much of it related to commercial real estate assets in Ireland.
RBS had set aside £4.5 billion to cover losses in RCR.
Its Irish unit Ulster Bank is also set to release about £300 million in provisions in the same quarter.
RBS said if market conditions remained favorable it could cut its provision pot further and accelerate the wind-down of RCR assets. It had planned to run it down by the end of 2016.
RBS said revenues in its corporate and institutional banking unit, which includes its shrunken investment bank, had been weaker than expected in the third quarter.
The bank, which is set to release third-quarter results on Oct. 31, said there remained uncertainties relating to conduct and litigation matters.
It is one of six banks holding talks with Britain’s financial regulator to settle allegations of collusion and manipulation in the foreign exchange market, sources have said.
A settlement, that might come in the fourth quarter, could see each bank having to pay more than £200 million.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to