BANKING
BNP Q2 profit barely dips
French bank BNP Paribas SA weathered the COVID-19 storm in the second quarter with only a small dip in net profits to 2.3 billion euros (US$2.72 billion) thanks to a surge in investment banking. The 6.9 percent drop in net profit came as provisions for bad loans more than doubled to hit 1.4 billion euros at the end of last month. The volatility in markets during the second quarter has been a boon for BNP Paribas, with its corporate and investment banking division recording a 30 percent jump in revenue. Overall, revenues were up 4.0 percent to 11.7 billion euros at the eurozone’s biggest bank by market capitalization.
AIRLINES
IAG sees 3.8bn euros HY loss
International Airlines Group (IAG), the owner of British Airways PLC, yesterday posted a first-half net loss of 3.8 billion euros due to the “devastating” effects of COVID-19. The group, which last year posted a net profit of 806 million euros, also unveiled plans for a capital increase of up to 2.75 billion euros in a results statement, as it seeks to navigate fallout from the virus crisis. IAG swung to a pre-tax loss of 4.2 billion euros, which contrasted with profit of 1.0 billion euros a year earlier. Revenues tanked 56 percent to 5.3 billion euros in the reporting period.
AUTOMAKERS
AI stake takes Ford to black
Ford Motor Co on Thursday posted results that were not as grim as expected for a second quarter that saw its US factories shuttered for half of the period to combat the spread of COVID-19 and potential buyers sheltering in place. Ford reported a US$1.12 billion second-quarter net profit, pushed into the black by a US$3.5 billion gain on the value of its stake in the Argo artificial intelligence (AI) autonomous vehicle operation. Without the one-time gain, the company lost US$1.9 billion, or US$0.35 per share. A year ago, Ford posted a US$148 million net profit. The automaker’s second-quarter revenue was down by about half from a year ago to US$19.37 billion.
CHINA
Chip stocking amid HK fears
Importers of computer chips are ramping up their purchases of equipment through Hong Kong, in the expectation that US sanctions on the territory would soon make trading much harder. For buyers like Huawei Technologies Co (華為), Xiaomi Corp (小米) or Lenovo Group Inc (聯想), a worst-case scenario would entail severe supply bottlenecks. Re-exports of semiconductors through Hong Kong to China jumped 11 percent annually in the first half of this year, almost double the increase in total chip purchases, Bloomberg calculations showed. Re-exports rose by 21 percent last month alone.
AUTOMAKERS
Scania to cut 5,000 jobs
Truck maker Scania, part of Volkswagen AG’s Traton SE group, yesterday said that it would cut 5,000 jobs globally due to the economic effects of the COVID-19 pandemic. “To ensure a continued profitable Scania that can contribute to driving the shift toward a sustainable transport system, intensive and comprehensive work is also underway to adapt Scania’s cost structure longer term,” Scania president and CEO Henrik Henriksson said in a statement. “We now face the tough measure of reducing the organization by about 5,000 employees globally,” he added.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure