Business

AMMAN — Arab Bank Group reported solid results for the first quarter of 2024, with 17 per cent increase in net income after tax reaching $252.8 million as compared with $216.3 million for the same period last year. 

The Group maintained its strong capital base with a total equity of $11.3 billion.

At constant currency the Group’s loans grew by 7 per cent to reach $37.1 billion, and deposits grew by 6 per cent to reach $49.8 billion.

Chairman of the Board of Directors Sabih Masri stated that Arab Bank’s first quarter 2024 performance was strong despite the challenging environment for banks globally and regionally, according to a statement by the Arab Bank.  

He also added that the results reflect the bank’s resilience and ability to deliver sustainable growth from multiple markets mainly from the GCC region. 

Masri expressed his confidence in the bank’s ability to continue to grow based on its sound strategy, while maintaining the strength of its balance sheet.

Chief Executive Officer Randa Sadik stated that Arab Bank delivered robust results during the first quarter 2024, where the bank’s net operating profit grew by 10 per cent driven by increase in core banking income across various sectors and markets, with a clear focus on enhancing non-interest income contribution and revenue diversification.

Sadik added that the Group’s liquidity and asset quality remain solid where loan-to-deposit ratio stood at 74.5 per cent and credit provisions held against non-performing loans continue to exceed 100 per cent. 

Arab Bank Group maintains a strong capital base that is predominantly composed of common equity with a capital adequacy ratio of 17.8 per cent.

Sadik emphasised on the bank’s commitment towards innovation and digital transformation, highlighting the bank’s ongoing investment in technology and its strategic focus on customer-centric innovations offering seamless banking experiences to customers across various sectors. 

FRANKFURT, Germany — Thyssenkrupp said recenetly it had agreed to sell a stake in its steel business to a group owned by Czech billionaire Daniel Kretinsky, as the German conglomerate seeks to overhaul the long-troubled unit.

Kretinsky's EP Corporate Group (EPCG) will initially acquire 20 per cent of Thyssenkrupp Steel Europe, in a deal expected to close in the current financial year, the companies said in a statement.

Talks are ongoing for EPCG to take a further 30 per cent stake at a later point with the aim of eventually reaching a 50-50 joint venture.

No financial details were disclosed.

Thyssenkrupp has long sought a solution for its underperforming steel unit, which has been hammered in recent years by cheap competition from Asia and high energy prices, while facing costly investments as part of an industry-wide shift towards greener production processes.

"Together, we want to create a high-performance, profitable and future-oriented steel company that reduces the costs of decarbonisation to a more competitive level and thus accelerates the green transformation of the steel industry," said Thyssenkrupp CEO Miguel Lopez.

Kretinsky said he was convinced that "this joint venture concept will establish a more resilient position for Thyssenkrupp Steel", which he described as "one of the traditional pillars of the German economy".

Shares in Thyssenkrupp soared by more than 10 per cent on news of the deal in early morning trading in Frankfurt.

Thyssenkrupp said earlier this month it would cut jobs and reduce production at its key steel plant in Duisburg because of the difficult market environment.

The exact number of job losses had not yet been decided, it added. Thyssenkrupp Steel employs about 27,000 people overall, around 13,000 of them at the Duisburg site in western Germany.

Steel production at the plant would fall from 11.5 million tonnes a year to 9-9.5 million tonnes, it said.

Thyssenkrupp added that it planned to step up efforts to produce steel with lower carbon emissions in line with tighter environmental restrictions at Duisburg. Last year it received approval for 1.45 billion euros ($1.55 billion) in state aid for the shift to cleaner steel.

WASHINGTON — The ongoing tensions in the Middle East threaten to halt — or even reverse — some of the recent progress made in tackling global inflation, the World Bank said on Thursday. 

Israel's ongoing military campaign in Gaza has caused tensions to rise across the region and pushed up oil prices. 

"Heightened tensions in the Middle East have been exerting upward pressure on prices for key commodities, notably oil and gold," the World Bank announced in its outlook for global commodity markets. 

"Disinflationary tailwinds from moderating commodity prices appear essentially over," it added. 

A worst-case scenario shock to oil prices meanwhile could raise global inflation. 

Israel's retaliatory military offensive has killed at least 34,262 people in Gaza, mostly women and children, according to the Hamas-run territory's health ministry. 

Disinflation 'hit a wall' 

"A key force for disinflation — falling commodity prices — has essentially hit a wall," World Bank Chief Economist Indermit Gill said in a statement. 

"That means interest rates could remain higher than currently expected this year and next," he continued. 

"The world is at a vulnerable moment: A major energy shock could undermine much of the progress in reducing inflation over the past two years," he added. 

The World Bank estimated that a "moderate conflict-related supply disruption" could raise the average cost of a barrel of Brent crude oil to $92 per barrel, while a "severe disruption" could push it above $100. 

That worst-case scenario would have the impact of raising global inflation by nearly 1 percentage point this year, the World Bank said. 

As well as delaying interest rate cuts, it could also cause an increase to food insecurity, which had already "worsened markedly last year reflecting armed conflicts and elevated food prices", the Bank added. 

FRANKFURT, Germany — The German government slightly increased its 2024 growth forecast on Wednesday, saying there were signs Europe's beleaguered top economy was at a "turning point" after battling through a period of weakness.

Output is expected to expand 0.3 per cent this year, the economy ministry said, up from a prediction of 0.2 per cent in February.

The slightly rosier picture comes after improvements in key indicators — from factory output to business activity — boosted hopes a recovery may be getting under way.

The German economy shrank slightly last year, hit by soaring inflation, a manufacturing slowdown and weakness in trading partners, and has acted as a major drag on the 20-nation eurozone.

But releasing its latest projections, the economy ministry said in a statement there were growing indications of a "turning point".

"Signs of an economic upturn have increased significantly, especially in recent weeks," Economy Minister Robert Habeck said at a press conference.

The ministry also cut its forecast for inflation this year to 2.4 per cent, from a previous prediction of 2.8 per cent, and sees the figure falling below two per cent next year.

"The fall in inflation will lead to consumer demand — people have more money in their wallets again, and will spend this money," said Habeck.

"So purchasing power is increasing, real wages are rising and this will contribute to a domestic economic recovery."

Energy prices — which surged after Russia's 2022 invasion of Ukraine — had also fallen and supply chain woes had eased, he added.

Several months ago there had been expectations of a strong rebound in 2024, with forecasts of growth above 1 per cent, but these were dialled back at the start of the year as the economy continued to languish.

'Germany has fallen behind'

But improving signs have fuelled hopes the lumbering economy — while not about to break into a sprint — may at least be getting back on its feet.

On Wednesday a closely-watched survey from the Ifo institute showed business sentiment rising for a third consecutive month in April, and more strongly than expected.

A key purchasing managers' index survey this week showed that business activity in Germany had picked up.

And last week the central bank, the Bundesbank, forecast the economy would expand slightly in the first quarter, dodging a recession, after earlier predicting a contraction.

Despite the economy's improving prospects, growth of 0.3 per cent is still slower than other developed economies and below past rates, and officials fret it is unlikely to pick up fast in the years ahead.

Habeck has repeatedly stressed solutions are needed for deep-rooted problems facing Germany, from an ageing population to labour shortages and a transition towards greener industries that is moving too slowly.

"Germany has fallen behind other countries in terms of competitiveness," he said. "We still have a lot to do — we have to roll up our sleeves."

Already facing turbulence from pandemic-related supply chain woes, the German economy's problems deepened dramatically when Russia invaded Ukraine and slashed supplies of gas, hitting the country's crucial manufacturers hard.

While the energy shock has faded, continued weakness in trading partners such as China, widespread strikes in recent months and higher eurozone interest rates have all prolonged the pain.

The European Central Bank has signalled it could start cutting borrowing costs in June, which would boost the eurozone.

But Habeck stressed that care was still needed as, despite the expectations of imminent easing, "tight monetary policy has not yet been lifted".

In addition, disagreements in Chancellor Olaf Scholz's three-party ruling coalition are hindering efforts to reignite growth, critics say.

This week the pro-business FDP Party, a coalition partner, faced an angry backlash from Scholz's SPD when it presented a 12-point plan for an "economic turnaround", including deep cuts to state benefits. Christian Lindner, the fiscally hawkish FDP finance minister, welcomed signs of "stabilisation" in the economic forecasts but stressed that projected medium-term growth was "too low to sustainably finance our state".

"There are no arguments for postponing the economic turnaround," he added.

NEW YORK — General Motors (GM) reported higher profits Tuesday thanks to continued strength in North America that offset a loss in its China business, enabling the car maker to lift its forecast.

GM, which has benefited from consistently strong demand from US consumers for pickup trucks and other larger vehicles, increased its range for 2024 net income by $300 million to between $10.1 and $11.5 billion.

"The team is executing well and making progress across the board," GM Chief Executive Mary Barra said in a letter to shareholders.

Net profits in the first quarter rose 24 per cent to $3 billion on a 7.6 per cent rise in revenues.

US auto deliveries were down slightly in terms of volume, but North American earnings climbed on "consistent" pricing and lower costs, the company said in a presentation.

"Our consumer has been remarkably resilient in this period of higher interest rates," Chief Financial Officer Paul Jacobson said in a conference call with reporters.

Jacobson said pricing was "essentially flat" compared with the prior quarter. The company still expects pricing power to erode slightly in 2024, although it has yet to see a decline surface in the market.

Vehicle inventories at GM dealers in the United States have risen to 534,000, well above the level seen in 2023. Inventories have been lower than industry targets in recent years due to COVID-19 outages and supply chain issues.

The current inventory translates into about 63 days of supply, which GM considers "pretty good" given that spring is a seasonally strong period for car sales, Jacobson said.

GM's strength in its home market helped offset an operating loss of about $100 million in GM's China operation.

"We expect things to normalise a little bit and turn back to profit," Jacobson said of China, pointing to upcoming vehicle launches.

COPENHAGEN — The Danish Energy Agency on Monday launched its biggest tender for the construction of offshore wind farms, aimed at producing six gigawatts by 2030 — more than double Denmark's current capacity.

Offshore wind is one of the major sources of green energy that Europe is counting on to decarbonise electricity production and reach its 2050 target of net zero carbon production, but it remains far off the pace needed to hit its targets.

Denmark's offshore wind parks currently generate 2.7 gigawatts of electricity, with another one GW due in 2027.

The tender covers six sites in four zones in Danish waters: North Sea I, Kattegat, Kriegers Flak II and Hesselo.

"We are pleased that we can now offer the largest offshore wind tender in Denmark to date. This is a massive investment in the green transition," Kristoffer Bottzauw, head of the Danish Energy Agency, said in a statement.

Investment in offshore wind plummeted in Europe in 2022 due to supply chain problems, high interest rates and a jump in prices of raw materials, before bouncing back in 2023.

A record 4.2 gigawatts was installed in Europe last year, when a record 30 billion euros in new projects were approved, the trade association WindEurope said in January.

It said it was optimistic about the future of offshore wind in Europe, expecting new offshore wind capacity of around five gigawatts per year for the next three years.

However, it noted that that was still far short of what is needed if Europe wants to hit its 2030 target of 111 gigawatts of offshore wind installed capacity, with less than 20 gigawatts installed at the end of 2023.