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.
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