Business

TOKYO — Troubled Japanese industrial giant Toshiba said on Thursday that it plans to cut up to 4,000 jobs domestically as part of a restructuring programme.

The announcement follows the delisting of the firm's shares in December after being taken private by a consortium in the wake of multiple crises.

The headcount reduction will be achieved by November by offering employees aged over 50 who meet specific criteria voluntary early retirement. 

"It was a tough decision for the management to make. But we believe these measures are essential to putting Toshiba back on the trajectory of recovery and growth," a company spokeswoman told AFP without wishing to be named.

Large-scale layoffs are rare in Japan but such use of early retirement schemes or voluntary redundancy has risen sharply.

The firm also said it is targeting operating profit of 380 billion yen ($2.5 billion) and a return on sales of 10 per cent in fiscal 2026, Bloomberg News reported.

It will move also head office functions from Tokyo's Hamamatsucho area to Kawasaki outside the Japanese capital in the first half of fiscal 2025.

Toshiba traces its roots back to 1875 and evolved into a vast conglomerate in the 20th century synonymous with Japan's postwar economic revival.

The firm became a household name in Japan and beyond, making everything from early laptop computers, elevators and nuclear power stations to microchips.

But it has lurched from crisis to crisis in recent years, including a huge accounting scandal in 2015 and billions of dollars in losses from US nuclear subsidiary Westinghouse.

Pressure from activist shareholders and a takeover offer from private equity group CVC prompted aborted attempts to split the company first into three, and then into two.

Finally, Toshiba's board accepted in March 2023 the takeover bid worth around $14 billion by the consortium that included around 20 Japanese banks and other firms.

Its shares were then delisted in December after more than 70 years being traded on the Tokyo bourse.

The saga was closely watched in business circles for clues about what could become of other huge, diversified conglomerates in Japan and elsewhere.

DOHA — Qatar expects to sign more long-term natural gas supply deals this year to meet growing international demand, Energy Minister Saad Al Kaabi said on Wednesday.

The minister, who is also chief executive of QatarEnergy, said the state-owned giant had secured sales of 25 million tonnes of liquified natural gas (LNG) in the past year and expected to be "signing more this year".

"It's just agreeing on terms and conditions and pricing... but I think there's a huge demand out there, whether it's from Asia or Europe," Kaabi told the Qatar Economic Forum.

"I think even Europe is realising now they have to do something different to secure long term," he added.

Qatar is one of the world's top LNG producers alongside the United States, Australia and Russia.

Asian countries led by China, Japan and South Korea have been the main market for Qatari gas, but demand from European countries has grown since Russia's war on Ukraine threw supplies into doubt.

In February, Qatar announced plans to expand output from its North Field, saying they would boost capacity to 142 million tonnes per year before 2030.

Kaabi said there could be further expansions to the emirate's LNG production capacity.

"The technical capability of doing more in Qatar is going to be assessed in the future and, if there is more, we probably will do more," he said.

In recent months, Qatar has inked LNG deals with France's Total, Britain's Shell, India's Petronet, China's Sinopec and Italy's Eni among others.

STOCKHOLM — The leaders of Germany and Sweden expressed reservations on Tuesday about possible European tariffs on Chinese electric vehicles after Washington announced huge duties on Chinese EVs.

Swedish Prime Minister Ulf Kristersson and German Chancellor Olaf Scholz were asked at a press conference in Stockholm whether they support the EU following the United States in slapping tariffs on Chinese electric cars.

"As far as tariffs are concerned, we are in agreement that it is a bad idea to dismantle global trade," Kristersson told reporters on the second day of Scholz's visit to Sweden.

Scholz noted that half of EVs imported from China were produced by Western manufacturers.

"There are European and North American manufacturers that succeed on the Chinese market and which sell their vehicles in China, we need to remember that," he said, stressing the importance of trade between the West and China.

Earlier, Washington announced it was hiking tariffs on $18 billion worth of imports from China, targeting strategic sectors like batteries, steel, critical minerals and electric vehicles.

The tariff rate on EVs is set to quadruple to 100 per cent this year.

The European Union launched an inquiry into Chinese electric car subsidies last year, fearing that they were a threat to Europe's own vast automotive industry.

Once its probe is concluded, the EU could decide to hike tariffs on cars imported from China beyond the current 10 per cent.

"We don't yet know the results of the investigation," Scholz stressed.

EU chief Ursula von der Leyen met Chinese President Xi Jinping for talks last week in France, where she said she had "made clear that the current imbalances in market access are not sustainable and need to be addressed".

"China is currently manufacturing, with massive subsidies, more than it is selling due to its own weak domestic demand. This is leading to an oversupply of Chinese subsidised goods, such as EVs and steel, that is leading to unfair trade," she said.

"Europe cannot accept such market distorting practices that could lead to de-industrialisation in Europe."

Beijing has reacted furiously to what it calls EU "protectionism", and denied there was any problem of Chinese overcapacity.

'Don't be naive' 

The possibility of European tariffs has ruffled feathers in Germany, whose companies own many plants in China that export back to Europe.

Oliver Zipse -- CEO of BMW, which has major investments in China, the world's biggest car market, last week warned the EU it could "shoot yourself in the foot".

A recent study by the European umbrella organisation Transport & Environment (T&E) showed that around 20 per cent of all electric vehicles sold in the EU last year, or 300,000 units, was made in China.

More than half of those were made by Western brands, including Tesla, Dacia and BMW, which produce them in China for export.

Kristersson said Europe should "not be naive".

"We've learned that supply can be disrupted for a number of reasons, whether it be due to pandemics or wars. And we have good reason to demand a level playing field" on the global market, he said.

"There are good reasons to push for strong reciprocity between countries, but a trade war where we block each others' products is not the future of big industrial countries like Germany and Sweden," Kristersson said.

In 2023, Swedish carmaker Volvo Cars, owned by Chinese group Geely, sold 42 per cent of its cars in Europe and 24 per cent in China.

In the process of phasing out combustion engines in favour of electric vehicles, it has three assembly plants in China and two in Europe, with a third under construction in Slovakia.

LONDON — Global markets were in cautious mode on Monday with Wall Street marking time while major European stock markets put the brake on following a record run last week as investors wait on key US inflation data.

London, Paris and Frankfurt ended marginally down after finishing at all-time highs on Friday.

On Wall Street, the Dow was flat more than two hours into the session while the broad-based S&P 500 and the tech-heavy Nasdaq were barely in the green on the eve of inflation figures that will influence interest-rate decisions.

World markets rallied last week on optimism that the US Federal Reserve, the European Central Bank and the Bank of England will soon cut borrowing costs after raising them in efforts to contain soaring prices.

Investors will pore over two sets of US inflation data for April — the producer price index on Tuesday and the consumer price index on Wednesday — for fresh clues about the Fed's monetary policy outlook.

"This week's US inflation updates are likely to be the drivers of equity market direction," said David Morrison, senior market analyst at Trade Nation.

"If the numbers suggest that inflation is continuing to push higher, then that will decrease the probability of rate cuts this year," he said.

An uptick in inflation in recent months has dented hopes that the Fed will start cutting rates as soon as June, and odds-makers now see the possibility of it happening in September.

This week's figures "will provide substantial insights into the likely duration of elevated interest rates," said Fawad Razaqzada, analyst at City Index and Forex.com.

Briefing.com analyst Patrick O'Hare said investors will also closely track retail sales figures, due out Wednesday, and quarterly earnings from Home Depot and Walmart.

"All of that, in turn, will fold into what the market thinks it can expect from the Fed in terms of future rate cuts," O'Hare said.

US-China trade war 

In Asia, indices also fluctuated as traders absorbed weak Chinese data and news that Beijing planned to start selling the first batch of almost $140 billion of bonds to boost the stuttering economy.

The week began on a tepid note after figures showed a drop in a broad measure of credit in China that sparked worries of a further slackening in the world's number two economy.

That came as The Wall Street Journal reported that the White House is looking at almost quadrupling tariffs on Chinese electric vehicles as part of a plan that will also target batteries and solar cells.

A decision, expected on Tuesday according to reports, would come as US President Joe Biden gears up for a rematch with Donald Trump in November's presidential election.

Last month, Biden urged a tripling of tariffs on steel and aluminium as he courted blue-collar voters.

In London, meanwhile, an announcement by Australian mining giant BHP that British rival Anglo American has rejected an "improved" takeover bid worth £34 billion ($43 billion) as it aims to create a copper titan left the latter's share price off 2.4 per cent.

BHP, whose chief executive Mike Henry said a deal would prove a "win-win for BHP and Anglo American shareholders" shed 0.6 per cent.

LONDON — Britain exited recession with stronger-than-expected growth in the first quarter of 2024, official data showed Friday, in a boost to embattled Prime Minister Rishi Sunak ahead of this year's election.

Gross domestic product expanded by 0.6 per cent in the first three months of this year, the Office for National Statistics (ONS) said in a statement, beating market expectations of 0.4 per cent.

The economy had suffered two successive quarters of contraction in the second half of last year, meeting the technical definition of a recession on the back of elevated inflation and a cost-of-living crisis.

Sunak, whose governing Conservatives are trailing the main opposition Labour Party ahead of a general election, has made economic growth one of his top priorities.

"There is no doubt it has been a difficult few years, but today's growth figures are proof that the economy is returning to full health for the first time since the pandemic," said finance minister Jeremy Hunt.

"We're growing this year and have the best outlook among European G7 countries over the next six years," he added.

Friday's bright news came one day after the Bank of England kept its main interest rate at a 16-year high, but hinted at a cut over the summer as UK inflation cools further — and forecast emergence from recession.

"After two quarters of contraction, the UK economy returned to positive growth in the first three months of this year," said ONS director of economic statistics Liz McKeown.

"There was broad-based strength across the service industries with retail, public transport and haulage, and health all performing well.

"Car manufacturers also had a good quarter. These were only a little offset by another weak quarter for construction."

GDP had shrunk by 0.3 per cent in the fourth quarter of 2023 after contracting by 0.1 per cent in the prior three months.

MADRID — Spain's second-largest bank BBVA announced Thursday a hostile takeover bid for smaller rival Banco Sabadell, a move that would create a European giant but was swiftly condemned by the government.

BBVA's new bid came three days after Sabadell's board of directors rejected a merger proposal, saying it was "not in the best interest" of the bank.

The takeover proposal values Sabadell, Spain's fourth-largest banking group in terms of capitalisation, at nearly 11.5 billion euros ($12.3 billion).

"The operation will create one of the best banks in Europe," BBVA said in a statement.

The takeover would be carried out under same conditions as the initial approach — an exchange of one new BBVA share for every 4.83 Sabadell shares, a 30 per cent premium over the April 29 closing price of both banks, BBVA said.

"We are presenting to Banco Sabadell's shareholders an extraordinarily attractive offer to create a bank with greater scale in one of our most important markets," BBVA Chair Carlos Torres Vila said in the statement.

"Together we will have a greater positive impact in the geographies where we operate, with an additional EUR5 billion loan capacity per year in Spain," he said ahead of a press conference later in the day.

A takeover would create a banking powerhouse capable of competing with Santander — Spain's leading bank — as well as with European giants such as HSBC and BNP Paribas.

But Prime Minister Pedro Sanchez's leftist government swifty came out against the takeover attempt, as did the regional government of Catalonia where Sabadell was born and where it has a strong presence.

"This hostile takeover bid by BBVA is an operation contrary to the interests of our country. It would destroy many jobs, cause financial exclusion and more oligopoly," Labour Minister Yolanda Diaz wrote on the X social media platform.

The head of the regional government of Catalonia, Pere Aragones, echoed these concerns, telling Spanish public television the takoever would "affect many jobs in Catalonia".

Aragones is facing a regional election in Catalonia on Sunday, with polls showing he is trailing.

BBVA, which also has operations in Mexico, Argentina and Turkey, is Spain's second-largest banking group in terms of capitalisation and has 74.1 million customers. 

Sabadell operates in 14 countries and has nearly 20 million customers.

The bank had said on Monday that the initial offer "significantly undervalues the potential of Banco Sabadell and its standalone growth prospects".

It added that it was "highly confident in Banco Sabadell's growth strategy and its financial targets". 

Sabadell also pointed to the recent "decline and volatility in the BBVA share price" which reflected "the uncertainty around the value of the proposal". 

BBVA then informed Sabadell in a letter that it had "no room" to improve its offer, which it considered generous.

The two banks had initially announced a plan to merge in November 2020 with the aim of better weathering the economic crisis triggered by the COVID-19 pandemic. 

But it was scrapped just 10 days later, with Sabadell saying that BBVA's offer did not reflect the real value of its business.

In the ensuing months, Sabadell undertook a major restructuring plan to slash costs that resulted in 1,800 redundancies, with BBVA going through a similar process, shedding 3,000 jobs.

Both have since recovered as has the wider Spanish banking sector which posted record profits in recent months, despite an exceptional windfall tax imposed by Spain's left-wing government to help households cope with soaring consumer prices.

BBVA posted a 19 per cent rise in first-quarter net profits to 2.2 billion euros ($2.3 billion). 

Sabadell recorded first-quarter net profits of 308 million euros, its highest ever quarterly figure, up 50 per cent from a year ago.

Spain's banking sector underwent a first wave of consolidation during the 2008 financial crisis, with the collapse of provincial savings banks which were absorbed by the bigger players. 

It underwent further consolidation in 2021 when Caixabank took over Bankia, creating Spain's third largest banking group, which was followed by Unicaja's acquisition of Liberbank creating Spain's fifth biggest domestic lender.

SEOUL — South Korean tech giant Samsung said on Wednesday it will buy French artificial intelligence company Sonio to boost its cutting-edge medical diagnostic systems.

The use of AI has exploded in recent years in a wide range of disciplines and industries, including medical care, and firms around the world are investing heavily to incorporate it into their products.

The purchase of Sonio by medical equipment maker Samsung Medison, an affiliate of global chip and smartphone giant Samsung Electronics, would boost maternal care through AI-enhanced ultrasound systems, according to a company statement.

"Collaboration with Sonio will bring together best-in-class ultrasound AI technology and reporting capabilities to bring a paradigm shift in the prenatal ultrasound exam," said Yong Kwan-kim, CEO of Samsung Medison.

Samsung will acquire all Sonio's shares for 126 billion won (around $92 million), according to public financial records.

The deal is subject to regulatory approvals including from France. Once it is concluded, Sonio will remain headquartered in France.

"In addition to close collaboration with Samsung Medison, as an independent company, Sonio will continue to advance medical reporting technology and diagnostic software globally, including for underserved areas in healthcare," Sonio CEO Cecile Brosset said.

Sonio's AI tech uses machine learning to enhance the accuracy, quality and analysis of ultrasounds.

Its Sonio Detect product, approved for use in the United States, helps analyse images of a fetus, including brain and heart structures.

The acquisition marks the latest move by Samsung to strengthen its AI offerings.

Samsung Electronics is the world's biggest producer of memory chips, including versions used in top-of-the-line AI hardware from industry leaders such as Nvidia.

The firm is also one of the world's biggest smartphone makers, and the latest models it unveiled in January are powered by its own Galaxy AI tech.

ZURICH — Swiss banking giant UBS on Tuesday said first quarter net profit rose 71 per cent to nearly $1.8 billion, far exceeding expectations, after two quarters in the red due to the mammoth takeover of Credit Suisse.

Switzerland's biggest bank said its turnover increased by 46 per cent to $12.7 billion, largely thanks to its investment banking arm, which had been the key project in the mega-merger.

Investment banking revenues increased by 16 per cent, driven by a more favourable market climate and by the good performance of IPOs and mergers and acquisitions.

In March 2023, Swiss authorities strongarmed UBS into the $3.25 billion takeover to prevent Credit Suisse from going under with catastrophic consequences for the global financial system.

The results for the first three months of 2024 were a moment for the bank to review progress since the integration of Credit Suisse.

"A little over a year ago, we were asked to play a critical role in stabilising the Swiss and global financial systems through the acquisition of Credit Suisse and we are delivering on our commitments," said UBS Chief Executive Sergio Ermotti.

"This quarter marks the return to reported net profits and further capital accretion — a testament to the strength of our business and client franchises and our ability to deliver significant progress on our integration plans while actively optimising our financial resources."

Cost reductions 

UBS continued its cost reductions, making $1 billion in additional savings during the first quarter, with the cumulative figure since the merger amounting to $5 billion, or nearly 40 per cent of the $13 billion target for 2026.

By the end of the year, the group hopes to achieve another $1.5 billion in savings.

UBS posted a $785 million loss in the third quarter of 2023, and was down $279 million in the fourth quarter.

Many analysts expected UBS's results to return to positive territory following the 2024 first quarter figures published by US banks in the same league.

Analysts surveyed by the Swiss financial newswire AWP had on average expected UBS to post a net profit of $637 million.

But Switzerland's leading bank far exceeded expectations.

UBS's figures for the first quarter of 2024 are difficult to compare with those of the same period last year, which reflected its performance as a single entity before the merger was formalised in June 2023.

In the first quarter of last year, UBS had posted a net profit of just over $1 billion.

Regulation on the horizon 

Though Tuesday's first quarter figures are better than expected, investors are waiting for clarification concerning the impact on UBS of the looming tightening of rules for Switzerland's banking sector.

The merger of the two largest banks in the country created a megabank of troubling size in relation to the Swiss economy.

The Swiss government last month unveiled a project aimed at toughening the rules on banks, regarding both bonuses and the capital they must set aside to be able to face a crisis.

In the 12 months following the Credit Suisse takeover, UBS shares gained 59 per cent on the stock market.

However, since April, shares have fallen back as investors worry about the additional amounts that the bank will have to put to one side.

According to calculations by some experts, UBS may need to build an additional liquidity cushion of $15 billion to $25 billion.

In an interview with the Tages-Anzeiger newspaper, Finance Minister Karin Keller-Sutter described these figures as plausible.

Swiss investment managers Vontobel said investors would be eager to hear UBS's views on the government's proposals for new regulation on banks deemed "too big to fail".

"However, given the lack of details, it is unlikely that UBS will be able to provide any guidance," it said.

As for the outlook, UBS said that although monetary easing was expected in the eurozone, the United States and Switzerland, "the timing and magnitude of rate cuts by central banks are unclear, as inflation remains above their target range".

"In addition, the ongoing geopolitical tensions, combined with consequential elections in several major economies, continue to create uncertainty," it said.