Business

BEIJING — China's economic slowdown is likely to persist in the coming years as the Asian giant struggles with sagging productivity and a rapidly ageing population, the International Monetary Fund (IMF) said recently.

The world's second-largest economy last year saw some of its slowest growth in decades, as a debt crisis in the property sector added to geopolitical tensions and weakening global demand.

And an IMF report on Friday forecast growth to decline further to 3.5 per cent by 2028 "amid headwinds from weak productivity and population aging", adding that "uncertainty surrounding the outlook is high".

It previously forecast growth of 4.6 per cent for this year.

Driving the slowdown is a years-long crisis in the country's real estate market, once a key growth pillar but now mired in debts that may threaten China's financial system.

Property giant Evergrande has become a symbol of the sector's woes, racking up astronomical debts of more than $300 billion.

A court in Hong Kong this week issued an order that should kickstart the liquidation of Evergrande's overseas assets, though the company insisted the decision would not affect its domestic operations.

And the IMF report warned a continued slowdown in the property market "could further weigh on private demand and worsen confidence".

Sonali Jain-Chandra, Mission Chief for China at the IMF's Asia and Pacific Department, told a media briefing Friday that the sector was "in the midst of a multi-year transition to a smaller and more sustainable size".

"Some of this adjustment has happened, but we're still in the midst of it," she explained, adding that "more needs to be done" to prop up the ailing sector.

China's economy grew by 5.2 per cent last year, according to official statistics, beating a modest target of around five per cent.

Exports — long a key driver of growth — notched their first decline in seven years, dragged down by notable tensions with Western countries and a decline in global demand.

Chinese officials are due to release their growth target for 2024 in March.

TOKYO — China's global dominance in electric cars helped it overtake Japan as the world's biggest vehicle exporter last year, official data confirmed on Wednesday.

Japanese giants such as Toyota and Nissan have been much more cautious than their Chinese counterparts like BYD on electric vehicles (EVs), banking instead on hybrid models.

Figures released Wednesday by the Japan Automobile Manufacturers Association showed shipments of cars, trucks and buses rising 16 per cent to 4.42 million last year.

But China exported almost 500,000 more — 4.91 million vehicles in total, as reported by the China Association of Automobile Manufacturers this month.

China's customs bureau put the number even higher at 5.22 million, a huge year-on-year rise of 57 per cent, with one in three fully electric vehicles.

The country had already been shipping more vehicles than Japan on a monthly basis, but Wednesday's data confirmed that it was also number one for a whole year.

Unlike Chinese firms, Japanese automakers including Toyota — re-confirmed on Tuesday as the world's largest company by unit sales — also make huge volumes of vehicles in other countries.

In 2022, vehicle production in Japan excluding motorcycles totalled 7.84 million units, but overseas production was almost 17 million. Japanese manufacturers have long bet on hybrids that combine battery power and internal combustion engines, an area they pioneered with the likes of the Toyota Prius.

But they have vowed to up their game, with Toyota aiming to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030.

The company is also hoping to mass-produce solid-state batteries that charge faster than conventional ones and give EVs more range.

Helped by strong government support, Chinese EV firms have stolen a march on more established rivals such as General Motors, Volkswagen and Toyota. BYD in the fourth quarter of 2023 even snatched Tesla's crown for most sales of all-electric vehicles, data this month showed.

On Tuesday BYD — it stands for "Build Your Dreams" — which also sells batteries to the likes of Tesla, BMW and Mercedes, said it expects net profit for last year to reach 29-31 billion yuan ($4.1-4.4 billion).

But China's success in EVs has also landed its firms in hot water with regulators in Western markets worried about unfair competition for local automakers.

The European Commission is investigating Chinese state subsidies in a probe that could lead to the European Union imposing import duties.

To soothe concerns, BYD is planning to build more factories abroad including a $600 million plant in Brazil and another in Hungary.

"It's kind of reminiscent of what happened to Japan in the 1980s, when they started exporting a lot of automotives," said Christopher Richter, an auto analyst at CLSA.

"So the Japanese solved it by starting [to build] a lot of factories overseas... They build overseas four times more than what they export," he said in October. 

RIYADH — Saudi Arabia has ordered energy giant Aramco to maintain its oil production capacity at 12 million barrels per day, abandoning a planned increase, the firm said on Tuesday. 

"Aramco announces that it has received a directive from the ministry of energy to maintain its maximum sustainable capacity [MSC] at 12 million barrels per day" instead of ramping it up to 13 million bpd, the firm said in a statement. 

"The company will update its capital spending guidance when its full-year 2023 results are announced in March." 

Saudi Arabia is the world's largest crude exporter and Aramco is the jewel of the Gulf kingdom's economy. 

Aramco's profits are expected to finance Crown Prince Mohammed Bin Salman's sweeping economic and social reform programme known as Vision 2030, which aims to lay the groundwork for an eventual post-oil future. 

Riyadh announced the planned production capacity increase in October 2021, the same month it pledged to achieve net zero carbon emissions by 2060 — drawing intense scepticism from environmental activists. 

Aramco said it planned to achieve production capacity of 13 million bpd by 2027. 

Aramco has pledged to achieve "operational net-zero" carbon emissions by 2050. 

That applies to emissions that are produced directly by Aramco's industrial sites, but not the CO2 produced when clients burn Saudi oil in their cars, power plants and furnaces. 

In the lead-up to the COP28 climate change talks in Dubai last year, Saudi Arabia was among the loudest voices calling for more investment in fossil fuel production, saying it was necessary to fight energy poverty in regions such as Africa. 

Fluctuating profits 

Tuesday's announcement was not expected to have an immediate effect on production or exports. 

After a series of oil supply cuts dating back to October 2022, Saudi Arabia's daily production stands at approximately nine million bpd, far below its capacity of 12 million bpd. 

Aramco reported record profits in 2022 after Russia's invasion of Ukraine sent oil prices soaring, allowing Saudi Arabia to record its first budget surplus in nearly a decade. 

Lower prices resulted in year-on-year profit drops of 23 per cent in the third quarter, 38 per cent in the second quarter and 19.25 per cent in the first quarter of last year, with fourth quarter earnings yet to be announced. 

LONDON — Irish no-frills airline Ryanair on Monday said net profit dived 93 per cent in its third quarter as higher fuel costs offset rising revenues, resulting in a lower full-year earnings forecast.

The carrier, which flies mostly throughout Europe, said net profit slumped to 14.8 million euros ($16 million) in the final three months of 2023 compared with one year earlier.

Chief Executive Michael O'Leary said Ryanair was narrowing its forecast for annual net profit to a range of 1.85 billion and 1.95 billion euros.

It previously estimated between 1.85 billion and 2.05 billion euros. 

"This guidance and the full year result remains heavily dependent upon avoiding unforeseen adverse events" in the group's current fourth quarter, O'Leary added in the earnings statement. 

He identified risks as being "the Ukraine war, the Israel-Hamas conflict and further Boeing delivery delays".

In the third quarter, Ryanair's fuel costs surged 35 per cent, while revenue jumped 17 per cent.

Passenger traffic grew 7 per cent to 41.4 million, despite higher average fares which helped to offset other rising costs such as higher salaries.

Its fourth quarter, or January-March period, is traditionally the airline's weakest. 

O'Leary used the earnings release to repeat his complaint that US plane manufacturer "Boeing have more work to do to improve quality, (and) reduce delivery delays".

A top Boeing executive on Friday apologised for the problems highlighted by the mid-flight blowout of a door plug on an Alaska Airlines flight, as two airlines began returning the troubled 737 MAX 9 planes to service.

The comments from Stan Deal, CEO of Boeing's commercial plane unit, came three weeks after the major incident which has focused intense scrutiny on Boeing and grounded its planes for safety checks.

BEIJING — The first Boeing 737 MAX delivered to China since 2019 landed recently at Guangzhou's Baiyun International Airport, according to tracking website Flightradar24. 

The aircraft, a 737 MAX 8 belonging to China Southern Airlines, landed at 10:23am local time (0223 GMT), according to the website. 

Boeing has rated China a crucial growth market, but deliveries ceased throughout the lengthy grounding of the 737 MAX following two deadly crashes in 2018 and 2019.

The delivery of the plane to China is a rare bright spot for the American company, which is facing intensifying scrutiny over its quality control practices in the aftermath of a near-catastrophic Alaska Airlines flight three weeks ago.

A panel blew off one of the carrier's Boeing 737 MAX 9s mid-flight, leaving a hole in the fuselage and forcing an emergency landing.

Alaska Airlines resumed flights with its 737 MAX 9 fleet on Friday, after sweeping inspections. 

The January 5 incident followed months of earlier, smaller problems with the same aircraft. 

The Alaska Airlines episode represents the most serious operational problem for Boeing since the crashes in 2018 and 2019, which resulted in 346 casualties. 

China was among the first countries to ground the plane after the two fatal accidents involving its flight control software and was the last major Boeing market to rescind the ban.

Boeing executives have at times suggested that diplomatic tensions between Beijing and Washington played a role in the pause on deliveries of new jets even after Chinese officials moved to allow MAX planes already in China to resume service.

In addition, China's zero-tolerance COVID-19 policies in the first three years of the pandemic had "reduced demand for airplanes in general", Boeing Chief Executive Dave Calhoun said in 2022. 

But in December, China's Juneyao Airlines took delivery of a 787 Dreamliner, the first Boeing craft to be delivered since 2019. 

The new 737 MAX 8, meanwhile, left Seattle this week and made stopovers on the islands of Hawaii and Saipan en route to China, according to flightradar24. 

Boeing last September forecast that China will need 8,560 new commercial planes through 2042, accounting for 20 per cent of the world's airplane demand.

The company said last year it had more than 80 737 MAX jets already built, but not delivered, to designated Chinese carriers.

Beijing hopes it’s new domestically produced passenger jet, the C919, will challenge foreign models like the Boeing 737 MAX and Airbus A320, though many of its parts are sourced from abroad.

The C919 made its debut outside mainland China in December when it was put on display at Hong Kong International Airport.

AMMAN — Arab Bank Group achieved solid results for the year ending December 31, 2023, reporting a growth of 52 per cent in net income after tax of $829.6 million compared with $544.3 million in 2022.

The Group’s performance was driven by sustainable growth in the underlying business across different markets, as net profit before provisions and tax improved by 34 per cent to reach $1.81 billion. Total Assets grew by 6% to reach $68.3 billion, loans grew by 5 per cent to reach $37.1 billion, and deposits grew by 6 per cent to reach $50.6 billion. While total Group equity stood at $11.4 billion.

In view of the solid results, the Board of Directors has recommended to the shareholders the distribution of 30 per cent cash dividends for the financial year 2023.

Sabih Masri, chairman of the Board of Directors, commented that the bank's strong underlying performance reflects the successful execution of its strategy which focuses on delivering sustainable growth and building a resilient business model capable of generating positive results, while dealing with the regional and international challenges. He also noted that the bank’s record net operating profit is a clear testament to its strong growth momentum across several markets, especially in the GCC region and international markets.

Randa Sadik, chief executive officer, stated that Arab Bank delivered robust results during 2023, where the Bank’s net operating profit grew by 34 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. This was achieved while the Bank continued to invest in transformation and maintaining a resilient balance sheet, which will position us for further growth in the future. 

Sadik added that the Group’s liquidity and asset quality remain solid where loan-to-deposit ratio stood at 73.2 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 17.5 per cent.

Sadik also highlighted that as part of Arab Bank’s commitment towards Sustainability and its Environmental, Social and Governance (“ESG”) priorities, the bank successfully issued $250 million in sustainable Additional Tier 1 (AT1) Capital Securities. The issuance marks the first and largest sustainable perpetual AT1 issue in Jordan and was listed on the International Securities Market (ISM) and the Sustainable Bond Market of the London Stock Exchange.

With regard to the bank's ongoing commitment towards digital transformation and providing value for its customers, Sadik noted the establishment of "Acabes International Pvt Ltd", Arab Bank’s technology arm, as a global capability centre, supporting the bank’s businesses worldwide. Arab Bank, in collaboration with "Acabes", has recently launched an updated version of “Reflect” offering more features and services to its users.

This is in addition to launching "Arabi Shopix", a first of its kind service in the Kingdome which offers Arab Bank customers, including merchants, the ability to build and design an e-commerce website as part of the host of integrated digital banking solutions designed to meet the needs of SMEs through the “Arabi SMEs” programme.

As part of the bank's expansion strategy, and in line with the bank's continuous efforts to expand its footprint in promising markets, Masri commented that the Bank is in the process of starting its operations in the Iraqi market during the year 2024, providing comprehensive banking solutions and services to its current and future customers. In line with the group’s focus on expanding its wealth management and private banking business, Masri noted that during 2023, Arab Bank Switzerland acquired the majority stake in the family holding company which owns a deep-rooted Swiss bank "Gonet & Cie SA". The new banking group will be a major actor in the Swiss wealth management industry, with assets under management in excess of CHF 10 billion.

Arab Bank was named “Bank of The Year 2023 in the Middle East” by the London-based “The Banker” Magazine, owned by the Financial Times. The bank was also named “Best Bank in the Middle East 2023” for The eighth consecutive year by New York-based international publication “Global Finance”. Additionally, the bank received 18 awards in recognition of its corporate and consumer digital banking services in Jordan and the MENA region.

The bank’s 2023 financial statements are subject to the approval of the Central Bank of Jordan.