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StanChart Q3 profit doubles as bad loans shrink, trade finance booms

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November 2, 2021

By Anshuman Daga and Lawrence White

SINGAPORE/LONDON (Reuters) -Standard Chartered rode a recovery in pandemic-hit markets to post a stronger-than-expected pre-tax profit for the third quarter on Tuesday, aided by lower credit charges and growth in trade finance.

Statutory pretax profit for the bank, which earns most of its revenue in Asia, jumped to $996 million in July-September, from $435 million a year earlier and better than the $942 million average estimate of 16 analysts as compiled by the bank.

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The beat comes amid a push by CEO Bill Winters, who took charge in 2015, to restore growth while creating a portfolio of digital assets in the last few years, after repairing the bank’s balance sheet and slashing thousands of jobs in his early years.

Still, StanChart’s London-listed shares have underperformed rivals since then, and are up 8% this year versus a 18% rise for HSBC and 37% surge for Barclays.

Its shares in Hong Kong edged up 0.2%.

The London-headquartered bank’s overall quarterly income rose 7% to $3.8 billion from a year earlier.

StanChart, which bases its business on capturing trade flows between its key markets of Asia, Africa and the Middle East, said trade income rose 13% to the highest since early 2018.

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The bank has suffered more than most rivals in recent years from rising geopolitical tensions, including between the United States and China, which have subdued global trade flows.

StanChart reported credit impairment charges of $107 million in the third quarter versus $353 million a year earlier and said it expects these to remain at low levels in the fourth quarter.

The bank said it had $4.2 billion in exposure to China’s real estate sector, where China Evergrande Group is grappling with a $300 billion debt pile and stoking worries of further defaults and contagion risks.

“We continue to monitor the potential second order impacts of recent developments,” StanChart said, stating an overall exposure of $18.5 billion to commercial real estate, a fraction of its total group customers loans and advances of $302 billion.

Like larger rival HSBC, StanChart has been betting on the world’s second-largest economy to help drive its growth amid sluggish prospects in western markets.

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Last month, HSBC beat quarterly estimates and announced a $2 billion share buyback.

Winters faces a challenge to convince investors of StanChart’s prospects as, according to Refinitiv data, the bank trades at 0.44 times book value for 2022 versus 0.62 times for HSBC and 0.55 for Barclays.

He is by far the longest-serving CEO at a major British-based bank. The shock departure of Barclays CEO https://www.reuters.com/business/barclays-ceo-staley-stand-down-following-epstein-investigation-2021-11-01 Jes Staley on Monday means it along with HSBC, Lloyds and NatWest have all seen change at the top in the last two years.

(Reporting by Anshuman Daga in Singapore and Lawrence White in London; Editing by Himani Sarkar)

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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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