04/11/2025

BIZ & FINANCE TUESDAY | NOV 4, 2025

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Westpac faces fierce competition in home lending SYDNEY: Australia’s Westpac Banking Corp reported a slight fall in annual profit yesterday but beat analyst forecasts, sending its shares up nearly 3%, as the bank works to boost its market share in the intensely competitive home loan market. The country’s third-largest lender by market capitalisation said it expected credit growth to moderate through 2025 before stabilising in 2026 as higher interest rates and slowing consumption cool the economy and housing demand. It added that strong employment and accumulated savings were helping to limit arrears and defaults. Australian banks have scaled back non-core operations in recent years to sharpen their focus on home lending, increasing their dependence on the sector to drive income and profit, while intensifying competition in the mortgage sector. Westpac’s home-loan growth rate in the past six months has trailed its main rivals, but chief executive Anthony Miller said he was satisfied with the division’s performance as it moves to hire more bankers and streamline its loan approval process. The bank is aiming to reduce its dependence on mortgage brokers to lift margins on new home loans. “We want to be very thoughtful about where we grow and how we grow, so the fact that I’m not quite at system in terms of growth is deliberate. “What we’re really working on is how we get our service proposition so it’s absolutely best in market,” he told Reuters in a phone interview. Westpac posted a net profit after tax of A$6.99 billion (RM19 billion) for the year ended Sept 30, down from A$7.11 billion a year earlier but ahead of Visible Alpha’s A$6.83 billion consensus estimate. Westpac’s net interest margin, the spread between interest earned from loans and paid to depositors, declined 1 basis point to 1.94% amid persistent competition in lending and deposits. The bank’s home lending book now stands at A$497 billion, up 5% from last year, but regulatory data published on Friday showed mortgage lending at Commonwealth Bank, National Australia Bank and ANZ Group is growing at a faster pace than Westpac. Westpac’s consumer division, which includes its mortgage operations, accounted for roughly 33% of the bank’s net profit in the full year. – Reuters US could hike duties if China backtracks on rare earths: Bessent NEW YORK: US President Donald Trump’s administration is prepared to raise tariffs on China if Beijing continues blocking rare earth exports, Treasury Secretary Scott Bessent warned on Sunday. China announced Thursday it would suspend for one year the restrictions it imposed in October on rare earth materials and technologies, but Bessent voiced concern that Beijing had not always followed through on its commitments. “The Chinese have cornered the market (on rare earths), and unfortunately at times they proved to be unreliable partners,”Bessent told Fox News. Such metals are mined in several countries including the US, but China has a virtual monopoly on processing these metals for industry usability. The suspension was announced following recent talks between Trump and his Chinese counterpart Xi Jinping in South Korea. Some of the export restrictions previously decided by Beijing remain in place. Following the agreement and the “goodwill” between the leaders of the world’s two largest economies, Bessent said he hoped “we can depend on them to be more reliable partners”. If not, “we could threaten the tariffs again,“ Bessent warned, stressing Washington has been prepared to use “maximum leverage.” “We don’t want to decouple with China, but we’re going to have to de-risk,” he said. – AFP

Turkiye inflation eases to lowest level since 2021

ISTANBUL: Turkish inflation eased slightly in October, reaching 32.87% – its lowest figure in nearly four years, official data showed yesterday after rising for the first time in more than a year. The annual figure had experienced a slight rebound in September to 33.29% after 15 months of decline, with the increase mainly affecting food and housing prices.

On a monthly basis, consumer prices rose by 2.55%, with the highest increases affecting food, which rose 8.4%, housing, up 7.8% and transport, which rose 4.3%. Turkiye has experienced double-digit inflation since 2019, making life increasingly more expensive for millions of people, after President Recep Tayyip Erdogan ordered interest rate cuts in a bid to spur growth.

Turkiye’s which exceeded 75% in May 2024 before starting to fall, is now at its lowest level since November 2021. The official figures are disputed by independent economists from the Inflation Research Group ENAG, who estimate that consumer prices rose by 60% year-on-year in October. – AFP inflation figure,

A view of Istanbul’s business and financial districts, which comprise leading banks’ and companies’ headquarters, from the July 15 Martyrs’ Bridge, also known as the Bosphorus Bridge, which links the Turkish city’s Asian and European sides. – REUTERSPIC

Industrial giants regain footing as turmoil recedes o Companies offset US tariffs with cost-cutting and price hikes

reporting their best year-over-year revenue growth since the first quarter of 2023 at 6.3%, according to data compiled by LSEG. Over the summer, equipment maker Caterpillar estimated tariffs would cost the firm between US$1.5 billion and US$1.8 billion in 2025. In results released on Oct 29, it narrowed that range to US$1.6 billion to US$1.75 billion after reporting a strong quarter, and its shares rose 12%. “Generally speaking, industrial companies are doing a pretty good job managing through the uncertainty and the changes in the tariff landscape,” said Joshua Schachter, chief investment officer at Easterly Asset Management. Logistics giants UPS and FedEx cut costs to offset the scrapping of duty-free status for low-value e-commerce shipments. However, UPS has also sharply cut its payrolls, jettisoning 48,000 jobs in the face of continued pressure on its business this year. Analysts fear the bleak outlook among lower- and middle-income earners that has hit consumer companies like Newell will reach other parts of the economy. In addition, the Trump administration reached agreements with numerous nations that set levies on foreign imports for many between 15% and 20% – after a previous pause left them at 10%. That effect has not yet been fully felt. “This is the real beginning of when the effects of tariffs would have hit,” said Angela Santos, partner and customs practice group leader at ArentFox Schiff. “We’re only in October and the increases for reciprocal tariffs started in August, so it hasn’t been that long.” Some European companies that rely on US sales have had it worse, as US importers are less

likely to buy their products due to the high levies. SKF, a Swedish bearings maker considered a global manufacturing barometer, expects weak short-term demand as customers remain hesitant due to tariffs and uncertainty. “If we can get a bit more calm and stability, then I think we will see demand return,” SKF CEO Rickard Gustafson told Reuters. Swedish construction equipment maker HIAB told Reuters that orders have been slowing since mid-February due to trade tensions. The German Engineering Federation VDMA, which represents 3,600 machinery and plant engineering companies, has warned that more than half of German and European machinery exports could be hit with new tariffs if Washington includes more products on its list of aluminum and steel levies. European car makers like Volkswagen have been hit particularly hard, with the latter flagging a US$5.8 billion tariff hit in its most recent results. Yale’s Budget Lab, which has been tracking trade policies, says the effective US tariff rate stood at 18% as of mid-October, highest in more than 90 years. The Trump Administration’s new 25% tariffs on imported medium- and heavy-duty trucks and parts are scheduled to start on Nov 1, including dump trucks and tractors for 18-wheelers, alongside a 10% tariff on imported buses. The full effects are still to be felt as industrial companies are going through inventory that hasn’t been hit with tariffs yet, said Don Marleau, managing director for metals and capital goods at S&P Global. “In a lot of cases, we don’t have higher tariff costs yet. We have higher estimates for tariff costs.” – Reuters

NEW YORK: Industrial companies have been on a roller-coaster this year as they tried to adjust to the shifting trade policies of US President Donald Trump, but this quarter, executives suggested the confusion may be receding as corporations have had time to adjust to higher levies on US imports of foreign goods. Unlike in the first half of the year, some of the US bellwethers that reflect the “real economy” - heavy machinery, engine makers and construction firms – have navigated the environment with strong demand, cost-cutting and price increases to offset the Trump administration’s tariffs. While there are still plenty of concerns about coming quarters, the unpredictability factor has faded, executives say. “Certainly, from a cost standpoint and maybe from a demand standpoint ... tariffs are no longer the kind of the main event here,” Michael Larsen, chief financial officer at Illinois Tool Works, said on an analyst call last week. Companies that have reported results between Oct 16 and Oct 31 put the total estimated hit to global companies’ bottom lines at about US$7 billion, according to a Reuters analysis, though the markets are still only about midway through the earnings season globally. In the second quarter, that figure was estimated at a range of US$16.2 billion to US$17.9 billion. US industrial companies at present are