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RBS reports an annual profit for the first time in a decade

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Royal Bank of Scotland (RBS) posted its first annual profit in a decade Friday, continuing its recovery following the financial crash of 2008.

The bank recorded a net profit of £752 million ($1.05 billion) for 2017, surpassing analyst forecasts for a figure of £592 million. Just a year earlier, the bank had suffered an annual loss of £6.95 billion.

Operating profit came in at £2.239 billion, a notable increase of £6.321 billion compared to 2016. Fourth-quarter operating losses before tax were £583 million, with a net loss of £579 million.

“Our financial strength is much clearer,” RBS CEO Ross McEwan said in a press release Friday, adding that “we still have more to do in cost reduction, however this reflects progress we have made in making the bank more efficient.”

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Property group Alliance Global aims to become more sustainable

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A combination of a delicate natural environment and increasing poverty is encouraging the son of a billionaire business founder to improve their company’s sustainable and social efforts.

Property group Alliance Global is based in the Philippines, which — being an archipelago of more than 7,000 islands — is particularly susceptible to the effects of climate change, as CEO Kevin Tan described.

“We’re located in a very unique and rather precarious geographic location,” Tan said. “Every year, we experience several calamities, ranging from simple tropical depressions to typhoons to even prolonged droughts and dry spells … In recent years, we have actually seen these occurrences happen more frequently, and with a much higher ferocity,” he added.

Founded by Tan’s father Andrew Tan in 1993, Alliance Global operates in real estate, hospitality and food, with assets including casino and hotel complex Resorts World Manila, and the world’s largest brandy distiller, Emperador. It is also the main McDonald’s franchise holder in the Philippines, via its Golden Arches Development Corporation.

Alongside this, the country has a poverty problem: The World Bank estimates that there will have been 2 million more poor Filipinos in 2020 than there were in 2018 due to the coronavirus pandemic, per a June report — the country has a total population of 108 million.

And according to Tan, a shifting population is also putting pressure on resources. “(There is an) uneven sort of distribution of population growth towards the urban centers versus the rural centers of our country. And … it poses several challenges — among them is really this unequal distribution of economic opportunities,” he said.

The Philippines’ environmental and economic issues spurred Alliance Global to identify two goals: becoming carbon neutral by 2035 and creating 5 million jobs, either directly or indirectly, by the same date. “We decided we wanted to be … better corporate citizens,” Tan said. However, the pandemic meant that the firm extended its deadline for both from 2030. “Nothing could have prepared us for this. I have to admit, yes, of course we had to step back a bit, because we were on survivor mode for the most part of last year and even until today, we’ve had to recalibrate our entire business model. We’ve had to … reduce our costs,” Tan explained.

Alliance Global’s Emperador is the world’s largest brandy distiller.

Jay Directo | AFP | Getty Images

The firm’s net income reduced by 62% year-over-year to 10.3 billion pesos ($216 million) in 2020, although several of its businesses recovered during the fourth quarter. McDonald’s revenue went up 36% compared with the previous quarter, while liquor sales at Emperador rose 42% over the same period.

Making its alcohol operations more environmentally-friendly has been a focus for Alliance Global: At Emperador the firm uses biogas created from the distilling process to fuel its boilers. In turn, the boilers produce steam, which powers turbines and creates electricity. Around 30% of the company’s distillery operations are powered this way, while vineyards producing grapes for its Fundador brandy in Spain use a process called deficit irrigation, where only the areas that need water are given it.

When it comes to economic development, Tan said the company’s Megaworld “township” residential and office complexes are creating jobs. He singled out Iloilo, a development on the Philippines’ Panay Island, where there is a focus on business process outsourcing (BPO), a practice where firms contract some of their operations to external suppliers. Such BPO companies are growing — and they need office space, Tan said. “Traditionally, the BPO sector was dominated by health care, travel, and financial services. Because of the pandemic, new industries have been introduced to outsourcing, for example logistics, technology, and e-commerce,” he explained.

Alliance Global is also looking to reduce waste in its developments. “We collect all the plastics from all of our developments, from all of our communities, we put them together and … cement factories, they take this plastic and use it as fuel,” Tan said.

Tan claimed the firm now looks at a “triple” bottom line. “Profitability is obviously still very important … But when we look at things now, we look at … not just having a singular bottom line, but having a triple bottom line, and that now includes, of course, environmental sustainability, as well as our social impact.”

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Tesla will accept bitcoin when miners use clean energy

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Elon Musk, the CEO of Tesla.

Christophe Gateau/picture alliance via Getty Images

Tesla CEO Elon Musk on Sunday said the company will resume bitcoin transactions once it confirms there is reasonable clean energy usage by miners.

“When there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions.”

Musk was reacting to comments from Magda Wierzycka, CEO of South African asset manager Sygnia, who said that Musk’s tweets on bitcoin prices were “market manipulation” and should have triggered an investigation by the U.S. Securities and Exchange Commission.

Tesla revealed in an SEC filing in February that it purchased $1.5 billion worth of bitcoin and said it would begin accepting bitcoin as a payment method for its products.

However, the electric-car maker halted car purchases with bitcoin in mid-May due to concerns over how cryptocurrency mining, which requires banks of powerful computers, contributes to climate change.

Read more about cryptocurrencies from CNBC Pro

“We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in May.

On Sunday, Musk disputed Wierzycka’s allegations of market manipulation, explaining, “Tesla sold roughly 10% of its bitcoin holdings “to confirm BTC could be liquidated easily without moving market,” he said. During the first quarter, Tesla sold $272 million worth of “digital assets,” which helped it reduce operating losses by $101 million, the company revealed in its earnings statement.

Musk’s comments on social media about cryptocurrency often send prices soaring or plummeting, but appeared to have little immediate effect Sunday. Overall, bitcoin prices rose about 8% during the day.



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Markets in Australia, mainland China and Hong Kong closed

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SINGAPORE — Shares in Asia-Pacific were mixed in Monday morning trade, with multiple major markets in the region closed for holidays.

In Japan, Nikkei 225 rose 0.45% in early trade while the Topix index gained 0.25%. South Korea’s Kospi dipped fractionally.

MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.13% lower.

Looking ahead, Japan’s industrial production data for April is expected at 12:30 p.m. HK/SIN on Monday.

Markets in Australia, mainland China and Hong Kong are closed on Monday for holidays.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 90.504 following a recent climb past the 90.3 level.

The Japanese yen traded at 109.73 per dollar, weaker than levels below 109.5 seen against the greenback last week. The Australian dollar changed hands at $0.7703 after falling from above $0.774 late last week.

Oil prices were little changed in the morning of Asia trading hours, with international benchmark Brent crude futures up fractionally at $72.73 per barrel. U.S. crude futures hovered above the flatline, trading at $70.92 per barrel.

Here’s a look at what’s on tap:

  • Japan: Industrial production data for April at 12:30 p.m. HK/SIN

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