16/05/2025

BIZ & FINANCE FRIDAY | MAY 16, 2025

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Hang Seng Bank restructures business, cuts 1% of ‘core staff’ HONG KONG: Hong Kong-based lender Hang Seng Bank said yesterday that it was restructuring its business and streamlining duplicate roles in a move that would lead to job losses for about 1% of its “core staff”. Hang Seng Bank, which is 63%-owned by global banking group HSBC, “reviews and restructures its business from time to time” in response to“the ever-changing market condition and diversified client needs”, it said in a statement. The lender will use technology to improve operational efficiency and service quality, it added. Hang Seng Bank did not respond immediately to a request for comment on how many of its employees were considered “core staff”. It employed around 8,300 people, mainly in Hong Kong and mainland China, as of the end of 2024. The statement from Hang Seng Bank came a day after Hong Kong’s Sing Tao Daily reported the lender, which has rarely made large-scale layoffs, was cutting 10% to 50% of staff in some teams. The bank is opening up new roles, for which impacted staff can apply as part of the restructure, it said in the statement, without providing further details. The Hong Kong and China-focused lender has reported rising bad loans over the last few years due to its relatively high exposure to the property sector in those key markets. The impaired loans reached 6.1% of its gross loans as of end-2024, up sharply from 2.8% at the end of 2023. Reuters last year reported that due to worries about a potential rise in bad loans amid growing economic headwinds and the property sector crisis in China, HSBC in early 2024 started planning to tighten risk management at Hang Seng Bank. Parent HSBC last year launched a global overhaul and began trimming its workforce to remove duplicated roles to bring down costs. HSBC said on Wednesday it plans to cut 348 jobs in France through a voluntary redundancy scheme, amounting to about 10% of its workforce in the country. The job losses are part of a cost-cutting drive led by CEO Georges Elhedery, who aims to reduce expenses by US$1.8 billion (RM7.7 billion) by the end of 2026. – Reuters Mizuho hits record annual profit despite 18% slump in Q4 TOKYO: Japan’s third-largest lender Mizuho Financial Group posted a record annual profit of ¥885 billion (RM26 billion) as the end of deflation proved a boon for Japan’s largest banks, although its fourth-quarter net profit fell 18%. Mizuho booked a net profit of ¥30.1 billion in the January-March quarter compared to ¥36.6 billion in the same period a year earlier. The results follow those of Sumitomo Mitsui Financial Group, which announced a record ¥1.18 trillion annual net profit on Wednesday. Demand for commercial loans has swelled as Japan’s economy emerges from decades of deflation, spurring mergers and acquisitions, growth investments overseas and capital expenditure. Mizuho forecast annual net profit for the year to end-March 2026 at ¥940 billion yen – which would be another record – even though the economic outlook has been muddied by US President Donald Trump’s sweeping global tariffs. Mizuho estimated a ¥110 billion yen hit to its bottom line in the current financial year as a result of the uncertainty in the external business environment. – Reuters

People walking past the Tencent headquarters in the southern China city of Shenzhen. – AFPPIC

Tencent says resilient to chip curbs after revenue rises o New games lead growth

year-on-year to 17.7 billion yuan, driven by AI-powered advertising. The company’s FinTech and Business Services segment, which includes consumer loans, wealth management and cloud services, posted revenue of 27.6 billion yuan, a 16% increase. Net profit for the quarter was 47.8 billion yuan, compared with analyst expectations of 52.2 billion yuan, LSEG data showed. Tencent has developed its own proprietary large language model Hunyuan, and in March made public a version called T1. Of its peers, it has been the most open to adopting third-party technology. It became the first major Chinese tech company to integrate technology from DeepSeek, which gained prominence this year with its release of AI models that rival Western counterparts at lower development costs. – Reuters “China’s consumer confidence has shown greenshoots in 2025, with healthy retail growth the last few months and strong travel numbers on May Day and the Qingming Festival,” he said. On Tuesday, the State Administration for Market Regulation, China’s top market regulator, said it has summoned e-commerce platforms such as JD.com, Meituan, and Alibaba’s Ele.me and requested they abide by laws and regulations and compete fairly and in an orderly manner. Food delivery in China is dominated by Meituan and Ele.me, but JD.com’s high-profile entry into the field in February has intensified the competition. – Reuters

“The good thing is that we have a strong stockpile of chips that we acquired previously and that would be very useful for executing our AI strategy,” Tencent president Martin Lau said in a post-earnings call. He did not directly address the impact on Tencent’s spending plans of US rules that have banned sales of Nvidia’s advanced H20 chip to Chinese companies. However, the company noted alternative chips are available in China and that its software innovations should optimise chip efficiency. Tencent in March said it would allocate a low double-digit percentage of 2025 revenue to capital expenditure, primarily for AI development. For the quarter, domestic gaming revenue rose 24% to 42.9 billion yuan, it said on Wednesday, while international gaming revenue climbed 23% to 16.6 billion yuan. Marketing services revenue increased 22% JD.com reported total revenue of 301.08 billion yuan (RM179 billion) for the quarter ended March 31, up 15.8% from a year earlier. Analysts’ estimate was 289.22 billion yuan, according to data compiled by LSEG. The upcoming shopping festival, dubbed as 618 as it falls on June 18, will be a barometer to gauge to what extent consumer demand in the country has recovered. The online shopping event, initiated by JD.com, is becoming longer and longer. This year, Taobao already started the 618 pre-sale on Tuesday, while JD.com, whose official start date of 618 is May 31, announced an event called the “Heartbeat Shopping Festival” which began on Tuesday. Jacob Cooke, CEO of e-commerce

while AI allows more targeted advertising

BEIJING: Tencent Holdings’ stockpiles of AI chips should protect it from US restrictions, its president said on Wednesday, after it reported first-quarter results that beat expectations. Tencent, the world’s largest video game company and WeChat operator, reported revenue of 180 billion yuan (RM106 billion) for the quarter ended March, up 13% and beating LSEG analysts’ estimates of 174.6 billion yuan. The growth was driven by strong performance in gaming and advertising, with both segments benefiting from AI enhancements.

JD.com posts strong results on steady consumer demand BEIJING: Chinese e-commerce retailer JD.com topped market estimates for quarterly revenue, in a sign of steady demand even as US tariffs and prolonged economic weakness weighed on consumer sentiment. China’s retail sales growth also quickened in January and February. consultancy WPIC Marketing + Technologies, said he expects sales growth during this year’s 618.

Consumer demand in China has faced a series of hurdles in recent years, with a prolonged property sector crisis and high unemployment rates never allowing for a full recovery from the impact of the Covid-19 pandemic. But e-commerce players such as JD.com and Alibaba have resorted to slapping heavy discounts and cutting product prices to lure shoppers, while also leaning on government subsidies to drive consumption. That has helped JD.com, a major retailer of home appliances in China, even as consumer sentiment took a hit from US-China trade tensions.