World Business Quick Take – Taipei Times
Unemployment rate drops to 4%
The unemployment rate fell more than expected in the second quarter as the economic recovery boosted hiring and began to fuel wage inflation. The unemployment rate fell to 4 percent from a revised first quarter rate of 4.6 percent, Statistics New Zealand reported yesterday. Employment increased 1% from the previous three months. In the private sector, ordinary time wages have increased the most in 13 years. The labor market report is the latest sign that the economy is growing faster than its capacity, and that the Reserve Bank may start raising the official cash rate to contain price pressures. Annual inflation jumped to 3.3% in the second quarter, exceeding the central bank’s 1-3% target range.
Commerzbank posts loss
Germany’s second-largest lender, Commerzbank AG, yesterday posted a huge loss for the second quarter as it covered the costs of laying off employees and closing branches. The bank’s loss reached 527 million euros ($ 625 million), as it recorded € 511 million in restructuring costs in its attempt to digitize its operations and return to profitability. Revenue for the quarter was down 18% from the previous year to 1.86 billion euros. Several one-off items also had a negative impact. The German government still has a stake of around 15 percent in the bank it bailed out during the 2008-2009 financial crisis.
Lyft posts first-ever profit
Lyft Inc made its first-ever adjusted profit in the second quarter, a milestone for a company that has racked up losses since inception. The company previously said it would not realize profit before taxes, depreciation and other expenses until the third quarter. Lyft’s adjusted profit was US $ 23.8 million, helped by growing demand for its ridesharing services and the sharp cost reduction the company achieved last year. Adjusted earnings exceeded analysts’ estimates that the company would lose $ 40.2 million in the second quarter.
OCBC, UOB up payments
Two of Singapore’s largest lenders will increase their dividend payments after second-quarter profit exceeded expectations for lower bad debt provisions. Oversea-Chinese Banking Corp (OCBC, 華僑 銀行), the city-state’s second-largest bank, plans to pay an interim dividend of S $ 0.25 per share after reporting a 59% increase in net income at S $ 1.16 billion (US $ 860 million). United Overseas Bank Ltd (UOB, 大 華 銀行) expects a payment of S $ 0.60 per share following a 43% increase in profits to S $ 1 billion. Profits for both banks were helped by improving credit prospects, with OCBC reporting a 69% drop in allowances for potential loan losses and UOB reporting a 54% drop.
Softbank bets on Roche
Softbank Group Corp quietly built up a $ 5 billion stake in Roche Holding AG, placing a bet on the drug company’s strategy of using the data to develop drugs, people familiar with the matter said. The Japanese conglomerate is now one of Roche’s biggest investors, according to data compiled by Bloomberg. The drugmaker has a dual class share structure with separate voting and non-voting shares. The founding families hold 50.1 percent of the electoral class, while rival Novartis AG holds a third. It was not clear what type of shares Softbank owns.
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