BANKING
SABB to buy Alawwal Bank
HSBC Holding PLC’s Saudi Arabia unit offered to pay a 29 percent premium to acquire Royal Bank of Scotland Group PLC’s (RBS) local venture in a US$5 billion stock deal. In the preliminary agreement between RBS-backed Alawwal Bank and Saudi British Bank (SABB), Alawwal shareholders are to receive 0.485 SABB shares per Alawwal share. The deal values Alawwal’s existing share capital at about 18.6 billion riyals (US$4.96 billion). A merger would be Saudi Arabia’s first bank combination in almost 20 years and would make SABB the kingdom’s third-biggest lender with assets of about US$73 billion.
BANKING
PNB shares plummet 12%
Shares in fraud-hit Punjab National Bank (PNB) yesterday plunged more than 12 percent after it posted the largest-ever quarterly loss for an Indian lender. PNB, India’s second-biggest state-run bank, on Tuesday said it had incurred a record 134.17 billion rupee (US$1.98 billion) net loss for the January-to-March quarter. The bank has been reeling since announcing in February that it had been the victim of a 135 billion rupee scam involving celebrity jeweler Nirav Modi. PNB has accused Modi and his uncle and business partner Mehul Choksi of defrauding it of 2.8 billion rupees, which was just part of its total losses.
INVESTMENT
Son working on new fund
Masayoshi Son, the founder and CEO of Softbank Group Corp, is already thinking about his next US$100 billion venture — a version 2.0 of the world’s biggest technology fund, people familiar with the matter said. The Japanese entrepreneur has held preliminary discussions with investors about committing to a second fund as early as next year, the people said, adding that the planned fund would likely draw a wider pool of investors than the first one. A representative for Softbank declined to comment.
TAXES
Seattle to impose ‘head tax’
Seattle’s largest businesses, such as Amazon.com Inc and Starbucks Corp, would have to pay a new tax to help fund homeless services and affordable housing under a measure approved by city leaders. The Seattle City Council on Monday unanimously passed a compromise plan that taxes businesses making at least US$20 million in gross revenue about US$275 per full-time worker each year — less than the US$500 per worker initially proposed. The so-called “head tax” would raise about US$48 million per year to build new affordable housing units and provide emergency homeless services. Amazon, Starbucks and business groups sharply criticized the council’s decision after Monday’s vote, calling it a tax on jobs and questioning whether city officials were spending current resources effectively.
FINANCE
GFG plans global expansion
Tycoon Sanjeev Gupta’s GFG Alliance is planning an expansion of its financial services business outside of Europe, targeting opportunities to provide lending and insurance to mid-sized businesses. “All industries go through this turnaround where new blood is required, and certainly in financial services,” GFG executive chairman Gupta told Bloomberg Television in an interview yesterday. “Whether it’s in banking, in insurance, whether it’s other forms of finance, we see a great opportunity serving the middle market.” GFG is to expand its banking and insurance arm into Australia, targeting business with companies in the US$50 million to US$500 million range, Gupta said.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by