28/04/2025

BIZ & FINANCE MONDAY | APR 28, 2025

17 Scrap ring-fencing, UK banks urge govt

LONDON: Bank ring-fencing should be scrapped to support the UK economy, bank bosses from HSBC, Lloyds, NatWest and Santander UK said in a letter to the Finance Ministry, which said it would work with them to boost growth. In a letter sent to British Finance o Lenders say rules are too onerous and hamper competitiveness

regime is, we believe, among the most significant steps the government could take to ensure the prudential framework maximises the banking sector’s ability to support UK businesses and promote economic growth,” the letter said. But Bank of England governor Andrew Bailey in February warned that the costs of that global financial crisis should not be forgotten in the backlash against the burden of financial regulation, saying there is no trade-off between economic growth and financial stability. The Bank of England declined to comment on the letter on Saturday. – Reuters

“That’s why the Chancellor (Reeves) has set out a new approach to regulation that supports growth, instead of excessively focusing on risk, and why we are co-designing the first-ever Financial Services Growth and Competitiveness Strategy with industry,” the spokesperson said. In their letter, the bank chiefs said that given global economic challenges, it was crucial that the government removed “unnecessary constraints on the ability of UK banks to support businesses across the economy and sends the clearest possible signal to investors in the UK of your commitment to reform”. “Removing the ring-fencing

introduced after British taxpayers had to bail out several failing lenders during the 2008 financial crisis. Banks have long argued that the rules are too onerous and hamper Britain’s competitiveness versus other global financial centres. Reeves has stepped up pressure on regulators and other public bodies to remove barriers that might be hindering growth. A Treasury spokesperson said the banking sector was “critical to delivering our number one priority of economic growth” and indicated the government was open to allowing more risk-taking in support of that goal.

Minister Rachel Reeves last week, first reported by Sky News on Saturday, the chief executives said bank ring-fencing – which separates consumer lending operations from more volatile investment banking – “is not only a drag on banks’ ability to support business and the economy, but is now redundant”. A spokesman for HSBC confirmed the letter existed as reported and that the bank was a signatory. NatWest and Santander UK declined further comment on the letter and Lloyds did not immediately respond to a request for comment outside of regular business hours. The ring-fencing rules were

China’s Q1 industrial profits return to growth BEIJING: China’s industrial profits returned to growth in the first quarter, official data showed yesterday, but are likely to come under further pressure amid a trade war with the United States. With Washington’s aggressive tariffs threatening to hit China’s crucial export engine hit and no time frame yet for any bilateral trade talks, economists and investors are waiting for the Chinese government to roll out more support measures to cushion the blow to the world’s second-largest economy. Cumulative profits of China’s industrial firms rose 0.8% to 1.5 trillion yuan (RM900 billion) in the first quarter from a year earlier, the National Bureau of Statistics (NBS) data showed, reversing a 0.3% decline in the first two months. In March alone, profits rose 2.6% on-year. The profit gain in the first quarter followed a 3.3% fall in 2024, reversing the trend of continuous declines in cumulative profits of enterprises since the third quarter of last year, Yu Weining, an NBS statistician, said in a separate statement along with the data release. Thanks to a consumer goods trade-in campaign, profits in the wearable smart device manufacturing sector soared by 78.8% while those for household kitchen appliance makers rose 21.7%, said the statement. China reported stronger-than-expected economic growth in the first quarter as government stimulus boosted consumption and supported investment, but deflationary pressures persisted, ripping into corporate profits and workers’ incomes as firms tried to navigate rising trade disruptions. “At the current stage, the external environment is becoming more complex and severe, and unstable and uncertain factors are increasing,” said Yu, adding the government will further strengthen policy implementation and promote the continuous improvement of corporate profitability. Beijing has made increasingly louder calls on exporters to find local buyers as an alternative to the US market, now effectively frozen after Washington hiked tariffs on Chinese goods by 145%, but many export-reliant factories have decried weak domestic demand, price wars, low profits and payment delays in the Chinese market. The ruling Communist Party’s Politburo on Friday pledged to support firms and workers most affected by the impact of US tariffs, also saying new monetary tools and policy financing instruments will be set up to boost innovation, consumption and foreign trade. Profits at state-owned firms dipped 1.4% in the first quarter. Private-sector companies saw a 0.3% fall, but foreign firms recorded a 2.8% gain, according to a breakdown of the NBS data. Industrial profit numbers cover firms with annual revenue of at least 20 million yuan from their main operations. – Reuters

India asks firms to acquire overseas iron ore, coking coal assets MUMBAI: India is encouraging companies to acquire iron ore, coking coal, and other key raw material assets overseas, Steel Secretary Sandeep Poundrik said on Saturday, as the country ramps up its steelmaking capacity to meet rising demand. India, the world’s second-largest producer of crude steel, aims to boost its overall steelmaking capacity to 300 million tons by 2030, up from about 200 million tons currently. To support this expansion, coking coal imports are projected to rise to 160 million tons by 2030 from around 58 million tons now, Poundrik had projected on Friday. India relies on imports to meet 85% of its coking coal needs, with Australia supplying more than half of those shipments. In a bid to diversify supply, India has also been exploring partnerships with Mongolia. However, logistical challenges remain in sourcing material from the landlocked country, Poundrik noted.

“We are encouraging our companies to acquire assets abroad, right from iron ore to coking coal to even limestone and dolomite,” Poundrik said at an industry event in Mumbai. “Raw material securitisation is the most important aspect of steelmaking.”

India’s state-run miner NMDC is exploring coking coal assets, in Indonesia and Australia, chairman Amitava Mukherjee said last Thursday. – Reuters

Despite an uptick in steel output, India’s coking coal imports dipped 0.7% in the fiscal year ended in March due to lower shipments from Australia and US, said commodities consultancy BigMint.

Riyadh Metro trains travel along their tracks in the middle of a road in Riyadh. – AFPPIC

Saudi Arabia reports record non-oil exports of 515 billion riyals RIYADH: Saudi Arabia’s non-oil exports reached an all-time high of 515 billion riyals (RM600 billion) in 2024, the state news agency said on Saturday, as the kingdom continues its push to diversify its economy away from oil dependence. boost industries like tourism, sports and manufacturing. Saudi Arabia is also working to attract more outside investment to ensure its ambitious plans stay on track. SPA attributing the jump in non-oil exports to the “kingdom’s sustained efforts in economic diversification”. On Friday, Saudi Arabia announced its 2024 annual report for the kingdom’s 2030 Vision plan, which saw the kingdom attract foreign direct investment worth 77.6 billion riyals.

Non-oil exports rose 13% year-on-year, and over 113% since the launch of Saudi vision 2030, state news agency SPA added. Abdulrahman Althukair, CEO of the Saudi Export Development Authority, was quoted by

The world’s leading oil exporter is investing billions of dollars to achieve its Vision 2030 plan, which focuses on reducing its reliance on oil and spending more on infrastructure to

It has set itself a target to attract US$100 billion in annual foreign direct investment by the turn of the decade. – Reuters