Australia’s Westpac Banking Corp said yesterday it would increase annual investment in technology and simplifying operations by 20 percent as it seeks to boost efficiency and cut costs.
Annual investment is to rise to A$1.3 billion (US$900 million) starting next year, resulting in savings that should reduce its expense-to-income ratio to below 40 percent within three years from the current 42.5 percent, chief executive officer Brian Hartzer said in a strategy update.
Hartzer, who took over as chief executive officer in February, faces slower revenue growth and regulatory requirements for more capital.
Westpac’s profit for the six months ending March 31 missed expectations, prompting calls from analysts at Citigroup Inc and Macquarie Group Ltd for the lender to cut costs and close some branches.
“When you do not have revenue growth the focus shifts to cost reduction,” T.S. Lim, a Sydney-based analyst at Bell Potter Securities Ltd, said by telephone.
“If achieved, targets for cost-to-expense ratio and return on equity will offset some of the pressure the lender faces,” he said.
Australia’s four biggest banks — Australia and New Zealand Banking Group Ltd, Commonwealth Bank of Australia, National Australia Bank Ltd and Westpac — are amassing capital to meet stricter regulation partially aimed at sheltering them from any downturn in the nation’s booming housing market.
The lenders have revealed plans to raise A$16 billion. Westpac, which yesterday reiterated a return on equity target of above 15 percent, has the lowest Tier 1 ratio among the four and might need about A$6.5 billion, according to a survey of five analysts last month by Bloomberg.
The planned investment would result in a single technology platform across brands, automate head office processes and remove duplication, according to the statement.
About 55 percent of branches are getting a makeover, Westpac said. The lender also aims to add 1 million new customers by 2017, according to the statement.
The lender is to increase its focus on wealth management, lending to small and medium enterprises and Asia, it said.
“The measures we have outlined today will deliver a step change in the service we provide to customers, while at the same time improving our efficiency and productivity,” Hartzer said in the statement.
“We have set ambitious targets and we have a clear road map to get there,” he added.
Westpac shares rose 0.8 percent to A$30.19 at 10:09am in Sydney, paring this year’s losses to 9.1 percent, the least among the four largest Australian lenders.
The benchmark S&P/ASX 200 index has fallen 6.8 percent this year.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
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],”