New bloodletting hits Spanish banking sector

New bloodletting hits Spanish banking sector
As a wave of consolidation took hold, Spain’s huge network of smaller local banks were absorbed by bigger rivals who began slashing staff. (AFP)
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Updated 26 April 2021

New bloodletting hits Spanish banking sector

New bloodletting hits Spanish banking sector
  • Online transactions at BBVA have grown by 87 percent over the past two years

MADRID: In Spain where bank tellers were once legion, the sector is again reeling from thousands more job cuts as a 10-year trend gathers pace due to the ongoing pandemic.

Two more big banks announced thousands of layoffs last week with 8,300 jobs to be axed at CaixaBank, or one in five of its staff, and 3,800 at its smaller rival BBVA, accounting for 16 percent of the workforce.

The announcements drew an angry response from Spain’s big unions, the UGT and the Workers’ Union (CCOO), who denounced the cuts as “brutal” and “scandalous.”

Late last year, Banco Santander, Spain’s largest bank, said it would cut 3,500 jobs while Banco Sabadell moved to lay off 1,800 staff.

All of them have made the same argument: That in a context of low interest rates which is expected to continue, they have to cut costs by reducing the number of branches rendered unnecessary by the growth of online banking.

Online transactions at BBVA have grown by 87 percent over the past two years, while branch-based operations have fallen by 48 percent, the bank said on Thursday.

This bloodletting is not new in Spain: Between 2008 and 2019, the sector shed around 100,000 staff — or nearly 40 percent of its employees — after narrowly escaping collapse during a financial crisis when banks only survived thanks to a massive public bailout.

As a wave of consolidation took hold, Spain’s huge network of smaller local banks, which fueled a property bubble two decades ago by lending willy-nilly, were absorbed by bigger rivals who began slashing staff.

In the past decade, the number of bank branches was cut in half, a report by the Moody’s ratings agency found.

“Over the past decade, the Spanish banking system has undergone one of the most profound consolidation processes in Europe,” it said.

Between 2008 and 2019, Spain had the highest number of branch closures and job cuts in Europe, with 48 percent of its branches shuttered compared with a bloc-wide average of 31 percent, and 37 percent of its staff laid off compared with 19 percent in Europe.

According to World Bank figures cited in the report, Spain had 105 bank branches per 100,000 residents in 2008, three times the European average.

By 2019, that figure had dropped to 46, still double the European average.

“The employment restructuring process is not yet over,” nor is the consolidation, predicted Robert Tornabell, a banking specialist at the Esade business school.

To remain profitable, “banks must get bigger ... and close branches that need a lot of staff but don’t justify the cost,” particularly in rural areas, he said.


Royal Caribbean cancels new cruise line from Israel over unrest

Royal Caribbean cancels new cruise line from Israel over unrest
Updated 16 May 2021

Royal Caribbean cancels new cruise line from Israel over unrest

Royal Caribbean cancels new cruise line from Israel over unrest
  • The ship will spend its inaugural season in Florida

JERUSALEM: Cruise operator Royal Caribbean is canceling a new line that had been scheduled to run from Israel to Greece and Cyprus from next month, citing regional security concerns.
The sailings out of Haifa port would have been the first for Royal Caribbean’s new ship “Odyssey of the Seas” and were intended to exploit a travel corridor being set up among the three countries for travelers vaccinated against COVID-19.
“Due to the unrest in Israel and region, Odyssey has not been able to complete the preparations required,” the company said late on Saturday in what appeared to be a reference to fighting over Gaza and tensions on Israel’s border with Lebanon.
The ship will spend its inaugural season in Florida, the statement said, adding that it “remains hopeful to return to this popular destination (Israel) with its ships in the future.”


Dubai’s Union Properties swings to profit

Dubai’s Union Properties swings to profit
Updated 16 May 2021

Dubai’s Union Properties swings to profit

Dubai’s Union Properties swings to profit
  • Dubai-listed Union Properties focused on improving key operational activities across the group

DUBAI: The developer of Motor City in Dubai has reported a 5.6 million dirhams ($1.5 million) net profit in the first quarter of 2021 – recovering from a net loss of 121.9 million dirhams in the same period last year.
Dubai-listed Union Properties focused on improving key operational activities across the group, including a significant reduction in direct and administrative costs of 6.4 percent and 14.2 percent respectively.
The group also settled a large portion of its debt, reducing finance costs by 42.1 percent year-on-year, it said in a stock exchange filing.
“We have sought out to optimize our cash flows by adopting a flexible policy to adapt to the economic changes,” board chairman Khalifa Hassan Al-Hammadi said.
He noted the UAE government’s effective management of the COVID-19 pandemic, which helped the real estate sector gradually recover from its impact.
Other UAE developers have also been seeing positive indicators during the first three months of the year, as buyers regain confidence in the country’s post-pandemic real estate market. However a glut of new homes remains to be absorbed after years of rampant construction.


Flared natural gas powers Bitcoin mining

Flared natural gas powers Bitcoin mining
Updated 16 May 2021

Flared natural gas powers Bitcoin mining

Flared natural gas powers Bitcoin mining
  • Backlash has formed against the digital assets’ energy usage
  • Ethereum and dogecoin see meteoric price spikes since pandemic

WASHINGTON: As the value of bitcoin soars and concerns rise about the energy-intensive process needed to obtain it, cryptocurrency entrepreneurs in the United States believe they have found a solution in flared natural gas.
Profitably creating, or mining, bitcoin and other cryptocurrencies requires masses of computers dedicated to solving deliberately complicated equations — an endeavor that globally consumes more electricity than entire nations, but for which these start-ups say the jets of flaming gas placed next to oil wells are perfect power sources.
“I think the market is enormous,” said Sergii Gerasymovych, CEO of EZ Blockchain, which has six different data centers powered off natural gas in the US states of Utah and New Mexico, as well as in Canada.
Across the country, companies like EZ Blockchain are setting up shipping containers where racks containing hundreds of computers mine cryptocurrency, fueled by natural gas from oil wells that otherwise would be burned in the open.
Interest in their work has grown over the past year. Bitcoin and other cryptocurrencies like ethereum and dogecoin have seen meteoric price spikes since the Covid-19 pandemic turned the global economy on its head and mainstream companies began to embrace the technology.
But a backlash has formed against the digital assets’ energy usage, fueled by concerns it relies on carbon-emitting power sources that contribute to climate change.
This week, Tesla boss Elon Musk criticized bitcoin’s power consumption, particularly of energy produced from coal, and said he would no longer accept the cryptocurrency as payment for his electric cars.
While entrepreneurs in the fledgling industry say using natural gas that is otherwise wasted represents a solution to these concerns, its ability to actually cut emissions remains to be seen, said Tony Scott, managing director of analysis at oil and gas research firm BTU Analytics.
“In the grand scheme of things and relative to other load, yes, it’s small,” Scott said. “They are creating economic value (but) they’re not necessarily significantly changing the emissions profiles.”
Huge numbers of processors worldwide are dedicated to the task of mining bitcoin. The activity uses 149.6 terawatt-hours per year, according to the Cambridge Bitcoin Energy Consumption Index (CBECI). That is slightly less than all the electricity consumed by Egypt.
As the most popular cryptocurrency, bitcoin is undoubtedly valuable, trading at around $50,000 in mid-May from less than $10,000 a year ago, giving miners incentive to find the cheapest source of power to increase their margins.
Enter flared natural gas.
Oil producers flare natural gas if they can’t find a way to process it, which, with prices low and pipelines complicated to build, can be the case worldwide.
“Miners tend to be based around areas where there tends to be surplus power. What is new... is this whole concept of taking gas flaring,” said Jason Deane, bitcoin analyst at Quantum Economics.
Flaring combusts many of the greenhouse gases in natural gas, but the International Energy Agency said the approximately 150 billion cubic meters of natural gas flared worldwide in 2019 put out about the same amount of carbon dioxide as Italy.
Using flared gas to power the application-specific integrated circuits that mine bitcoin does not end emissions entirely, but is more efficient than flaring it and puts energy that is otherwise wasted to use.
“We come in, they’re making zero for their gas, we say, hey, we’ll come in (and) take the gas off your hands, give you a little something,” said Matt Lohstroh, co-founder of Giga Energy Solutions.
“We’ll be able to reduce your emissions you’re putting out, combust it, create economic value on our end.
Natural gas’s edge is in the cost of power. CBECI estimates the average global power cost for bitcoin mining is about $0.05 per kilowatt hour. Lohstroh said natural gas power can bring the kilowatt hour cost to below $0.018.
Interest has grown in diverting flared gas to cryptocurrency mining, and not just because the digital assets are growing in value.
“There’s more scrutiny on issuing new flare permits and I think these producers are realizing that,” said Britt Swann, who is leading holding company Ecoark’s expansion into cryptocurrency mining.
“They are willing to play ball and figure out a way to use that gas without necessarily wanting any value for it.”
Where companies differ is over what to do with bitcoin and other digital assets once they get it.
Ecoark intends to convert it into dollars, but Lohstroh plans to hold the bitcoin he mines, which he believes will one day underpin a new global financial system.
“No need to sell the most valuable asset in the world that’s underpriced,” he said.


UAE’s FDI inflows jump 44% in 2020

UAE’s FDI inflows jump 44% in 2020
Updated 16 May 2021

UAE’s FDI inflows jump 44% in 2020

UAE’s FDI inflows jump 44% in 2020
  • The oil and gas sector stood out as a number of deals were struck with foreign partners
  • The cumulative value of FDI reached $174 billion

DUBAI: Foreign direct investment (FDI) inflows to the UAE grew 44.2 percent in 2020 to reach $19.9 billion despite the pandemic.
The oil and gas sector stood out as a number of deals were struck with foreign partners, the Ministry of Economy revealed.
The cumulative value of FDI reached $174 billion, representing a growth of 12.9 percent in the same period.
Outflows amounted to $9.2 billion, the ministry said, covering various economic sectors such as aviation, transportation, renewable energy, and agriculture.
“The investment landscape of the UAE has been steadily developing over the past years with the rapid introduction of progressive measures that have earned the nation a coveted position internationally,” Abdullah bin Touq Al-Marri, the country’s economic minister, said.
He said the UAE is eyeing more measures to improve its investment landscape, particularly in priority sectors.


Massive Saudi presence at ATM travel show in Dubai

Massive Saudi presence at ATM travel show in Dubai
Updated 16 May 2021

Massive Saudi presence at ATM travel show in Dubai

Massive Saudi presence at ATM travel show in Dubai
  • 81 Saudi exhibitors at this year's travel meet
  • Kingdom prepares to resume international flights

DUBAI: The Saudi travel industry will have top billing in Dubai this week as the Kingdom showcases its biggest tourism attractions.
With 81 Saudi exhibitors the Arabian Travel Market, the Kingdom has the biggest regional presence at this year's event outside of the UAE itself.
It is the first major in-person international travel event since outbreak of pandemic with 62 countries represented on the exhibition floor. It comes as the regional travel sector slowly emerges from a year of crippling restrictions with international flights also set to resume in Saudi Arabia from May 17.
“This year more than any other, we, along with our partners and sponsors, have worked together closely, to enable an inspirational in-person event, that will set the tone for the Middle East travel and tourism industry for the rest of this year,” said Exhibition Director Danielle Curtis.
Under the theme of ‘A new dawn for travel & tourism’, the 28th edition of the four-day show will include a dedicated buyer forum for Saudi Arabia.
Several leading figures from the Saudi tourism sector are due to speak at the show tomorrow, including Fahd Hamidaddin, the CEO of the Saudi Tourism Authority and Ibrahim Koshy, the CEO of national carrier Saudia.
This year’s event coincides with the reopening of regional tourism after a year of devastating setbacks for the sector as hotels were forced to shut and airlines grounded their fleets.
The resurgence of the pandemic in India remains a major concern for the Dubai tourism sector because the country is the biggest source market for tourism in the emirate — accounting for almost 2 million visits in 2019, according to official data. Saudi Arabia was the second-largest source market with more than 1.5 million visits.


“If you look at the MENA region you still have a large number of cases,” Aathira Prasad, a director at Nasser Saidi & Associates told Bloomberg TV on Sunday.
“It is no longer sufficient for the pandemic to be brought under control in certain places because the case surge can happen anywhere and this is likely to persist until this is controlled globally.”
Beyond the region, more tourism markets are also gradually recovering with both Greece and Portugal opening to most European tourists this week.