WASHINGTON: A US bank regulator has fined Citibank $70 million for failing to address shortcomings in its anti-money laundering policies.
The Office of the Comptroller of the Currency fined the bank in late December and announced it on Thursday. The regulator assessed the civil penalty because the bank had failed to address concerns it had first flagged in 2012.
A spokesman for the bank, a unit of Citigroup Inc, said it aimed to satisfy all federal rules that target money laundering.
“Citi is committed to taking all necessary and appropriate steps to remedy the concerns identified by the OCC,” said spokesman Mark Costiglio.
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Citibank fined $70m over anti-money laundering policies
Citibank fined $70m over anti-money laundering policies
Oil Updates – prices slip on weaker US consumer demand, rise in China output
NEW DELHI: Oil prices slipped in Asian trading on Monday after a survey on Friday showed weaker US consumer demand and as May crude production rose in China, the world’s biggest crude importer, according to Reuters.
Global benchmark Brent crude futures for August delivery were down 40 cents, or 0.5 percent, at $82.22 per barrel at 9:31 a.m. Saudi time. US West Texas Intermediate crude futures for July delivery fell 36 cents to $78.09 a barrel.
The more-active August delivery WTI contract slipped 0.5 percent to $77.7 per barrel.
That followed prices slipping on Friday after a survey showed US consumer sentiment fell to a seven-month low in June, with households worried about their personal finances and inflation.
However, both benchmark contracts still gained nearly 4 percent last week, the highest weekly rise in percentage terms since April, on signs of stronger fuel demand.
“Last week’s robust rally was fueled by forecasts of strong 2024 demand from OPEC+ and the IEA. However, given OPEC’s vested interest in crude oil, there is some skepticism around OPEC’s forecasts,” said Tony Sycamore, a market analyst at IG in Singapore.
“Friday’s soft US consumer confidence numbers suggest that the resilience of the American consumer and the US economy will be tested as households run down their savings to combat higher interest rates and cost-of-living pressures,” he added.
Meanwhile, China’s May domestic crude oil production rose 0.6 percent on year to 18.15 million tonnes, according to data released by the National Bureau of Statistics on Monday.
Year-to-date output was 89.1 million tonnes, up 1.8 percent from a year earlier. National crude oil throughput fell 1.8 percent in May over the same year-ago level to 60.52 million tonnes, with year-to-date totalling 301.77 million tonnes, up 0.3 percent from a year ago.
The country’s May industrial output lagged expectations and a slowdown in the property sector showed no signs of easing, adding pressure on Beijing to shore up growth.
The flurry of data on Monday was largely downbeat, underscoring a bumpy recovery for the world’s second-largest economy.
On the geopolitical front, concerns of a wider Middle East war lingered after the Israeli military said on Sunday that intensified cross-border fire from Lebanon’s Hezbollah movement into Israel could trigger serious escalation.
After the relatively heavy exchanges over the past week, Sunday saw a marked drop in Hezbollah fire, while the Israeli military said that it had carried out several airstrikes against the group in southern Lebanon.
Markets in key oil trading hub Singapore and other countries in the region were closed for a public holiday on Monday.
Air transport industry improves baggage handling despite rising passenger numbers: SITA report
RIYADH: Baggage mishandling in the air transport industry has decreased to 6.9 bags per 1,000 passengers in 2023 from 7.6, despite increased passenger traffic, according to a new report.
According to the latest report from multinational information technology company SITA, this decrease marks a positive trend even as global passenger numbers exceeded pre-pandemic levels for the first time since 2019, reaching 5.2 billion.
This improvement underscores the industry’s strong adoption of technology, especially in automated baggage handling driven by artificial intelligence and computer vision technologies.
David Lavorel, CEO of SITA, noted that technology-driven solutions will play a pivotal role in managing the projected doubling of global passenger traffic by 2040.
He said: “Technologies like these are essential because they help us gather, integrate, and share data effectively. This means we can uncover important insights that make decision-making easier and more automated.”
Over the years, there has been a 63 percent decrease in mishandling rates from 2007 to 2023, despite a simultaneous 111 percent increase in passenger traffic. However, challenges remain, particularly in managing escalating baggage volumes, SITA said.
It highlighted that the industry’s focus on digitalization is crucial, with emphasis placed on enhancing data analysis capabilities and implementing automated systems for baggage handling.
SITA’s research highlighted growing passenger expectations for seamless travel experiences, including self-service options like unassisted bag drops and mobile-enabled journey tracking.
“Today, 32 percent of passengers rely on bag collection information sent straight to their mobile. Better communication and visibility for passengers will encourage more use of digital self-service and give passengers control over their journey,” SITA said.
Collaboration between airlines and airports is identified as key to further enhancing baggage handling efficiencies. While data sharing has improved, there is room for enhancement, especially in providing comprehensive, real-time baggage tracking throughout the journey.
Initiatives like the International Air Transport Association’s Resolution 753 and advocacy from Airports Council International underscore the industry’s commitment to achieving greater transparency and reducing passenger anxiety associated with baggage handling.
The report highlighted varying trends in baggage mishandling rates regionally, with North America and Europe showing notable declines over the years, attributable to increased investments in infrastructure and technology.
In contrast, Asia Pacific maintained the lowest mishandling rates globally, reflecting successful digitization efforts despite ongoing recovery challenges.
In conclusion, SITA’s findings highlight the air transport industry’s resilience and adaptability amid growing passenger demands.
By continuing to innovate and collaborate, stakeholders can build on these achievements to ensure smoother, more reliable travel experiences for passengers worldwide.
Technology shapes future of hospitality with enhanced guest experiences
RIYADH: The global hospitality industry is increasingly investing in technology to improve the guest experience, with artificial intelligence playing a key role in automating tasks like booking, check-ins, and housekeeping management.
In a recent report, The Bench, a publication by the Future Hospitality Summit, noted that implementing advanced technologies also enables 24/7 traveler support through AI chatbots and virtual assistants.
“The hospitality industry has continually been reputed to adapt slowly to technological advancements. Hospitality asset owners and investors are keen on ramping up technology investment,” said the report.
Citing a 2023 PwC analysis, the report noted that over 70 percent of hotel executives are prioritizing investments in technologies that streamline operations and elevate customer experiences.
“This growing focus is evident in the adoption of Customer Relationship Management systems and data-driven marketing strategies aimed at customer retention,” added The Bench.
According to the report, CRM systems are becoming a cornerstone in hotel operations, helping hoteliers manage and analyze guest interactions and data throughout the customer lifecycle.
FHS added that leveraging CRM systems could also help hotels improve customer service relationships, assist in guest retention, and drive sales growth.
It cited a Salesforce study, noting that CRM technology could increase sales by up to 29 percent and improve forecast accuracy by 32 percent.
“Data-driven market strategies supported by robust CRM systems enable hotels to tailor their marketing efforts to individual guest preferences, thereby increasing the likelihood of repeat business,” said the report.
Property Management Systems
According to the analysis, Property Management Systems like innRoad, Oracle, and Hotelogix are essential for maximizing revenues, increasing efficiencies, and enhancing guest understanding.
“These systems serve as the backbone of hotel operations, offering comprehensive functionalities that streamline various processes. From managing reservations and check-ins to overseeing housekeeping and billing, PMS solutions integrate all these functions into a single cohesive platform, making operations smoother and more efficient,” the report added.
The FHS publication also noted that technologies like TakeUp.ai leverage AI to analyze past guest behavior and competitors’ pricing, thereby optimizing revenues without reliance on guesswork.
“This approach provides hoteliers with a strategic advantage in a competitive market. AI-driven revenue management systems can predict demand with higher accuracy, allowing hotels to adjust prices dynamically and maximize revenues,” said the report.
It added: “These systems also help in identifying and capitalizing on market trends, ensuring that hotels remain competitive.”
The release highlighted that the hospitality industry is witnessing a shift in guests’ behavior, as most travelers expect a seamless, modern experience blended with technology.
“Guests now expect digital control over room environments, such as lighting, shades, and temperature, even in mid-range hotels. Additional basic additions like bedside USB-C ports, mobile key entry, and digital check-in contribute to a seamless and modern guest experience,” added the analysis.
Moreover, mobile key entry will reduce the need for physical keys and front desk check-ins, thereby streamlining the arrival process.
Post-pandemic market dynamics
According to the report, rising wages and worker shortages have accelerated the move toward automation and technology utilization in the hospitality sector.
“Automated check-ins, robotic room service, and AI-powered concierge services are just a few examples of how technology can mitigate labor shortages. These innovations allow hotels to maintain high service levels, even with reduced staff, ensuring guest satisfaction,” said the FHS publication.
With travel restrictions easing post-pandemic, the report highlighted that hotels are prioritizing technology to enhance operational efficiency and attract guests.
“This focus is vital in a landscape marked by intense competition. Technologies that enhance cleanliness and safety, such as contactless check-in and check-out and mobile room keys, have become particularly important. Hotels are also investing in digital marketing strategies to reach potential guests who are eager to travel again but are cautious about safety,” said the analysis.
Moreover, the hospitality tech sector is experiencing a surge in acquisitions as companies aim to consolidate and offer more comprehensive solutions to meet the diverse needs of hotels.
“This consolidation trend is driven by the need to provide integrated solutions that address multiple aspects of hotel operations. By acquiring or merging with other tech companies, firms can offer a broad range of services, from property management and guest services to marketing and revenue management,” added the report.
Discussing the challenges faced by the sector in implementing technology, the study highlighted that several hotels face the problem of outdated and siloed systems that hinder their efficient operations.
“The solution lies in adopting open API-based (Application Programming Interface) systems that facilitate the integration of various functionalities, thereby overcoming the limitations of legacy systems,” said the analysis.
The report also highlighted that using open API-based systems will enable seamless communication between different software applications, allowing hotels to integrate new technologies without overhauling their entire IT infrastructure.
Areas of untapped potential
The analysis highlighted that some untapped areas in the hospitality industry can be strengthened further using technology.
It added that many processes in the sector are still handled manually and should be automated using advanced technologies.
“For example, night audits, which involve substantial administrative work, can be automated to improve efficiency and reduce labor costs,” added the document.
Moreover, integrating a proper payment technology setup can enable hotels to offer more personalized and flexible experiences without relying on manual administrative tasks.
Saudi Arabia leads Middle Eastern banking growth amid favorable conditions: Fitch
RIYADH: High oil prices and interest rates are creating favorable operating conditions for banks across the Middle East, despite regional tensions, according to Fitch Ratings.
During a recent webinar on the region’s banking sector, Fitch Ratings highlighted that in Saudi Arabia, lending growth is expected to be around double the regional average of 5-6 percent for the fiscal year 2024, driven by significant non-oil gross domestic product growth.
This expansion presents new business opportunities for the Kingdom’s financial institutions and heightens competition for liquidity.
The agency noted the Gulf Cooperation Council as a standout in the global banking landscape, adding that the region is benefiting from robust oil prices, elevated interest rates, substantial government expenditure, strong non-oil sector growth, and high investor and consumer confidence.
These factors contribute to solid business conditions and healthy financial metrics for banks in most markets.
Fitch Ratings highlighted that GCC financial institutions experienced record US dollar issuance in the first quarter of 2024, fueled by favorable pricing conditions, lending increases, refinancing needs, and strong investor demand.
However, the credit rating agency noted that regional banks are currently at the peak of their cycle. Lower hydrocarbon prices pose a risk to financial operating environments across the Middle East, and each country faces unique challenges.
In contrast to Saudi Arabia, the UAE has enjoyed stronger liquidity conditions, enhancing banks’ profitability metrics in 2023 and the first quarter of 2024, with the sector’s average net interest margin improving by 100 basis points over 2022–2023.
Qatar’s banking sector notably relies on non-domestic funding, which constituted 42 percent of total holdings at the end of the first quarter of 2024. This dependence makes Qatari banks vulnerable to external political and economic shocks, as well as shifts in investor sentiment.
In October last year, Fitch Ratings affirmed that banks in the GCC are thriving due to high oil prices, contained inflation, and rising interest rates.
It also highlighted that financial institutions in the UAE are improving, and banks in Saudi Arabia, Qatar, and the UAE are well-positioned to benefit from rising interest rates due to quick loan book repricing and substantial low-cost funding.
Saudi Arabia’s inflation holds steady at 1.6% in May: GASTAT
RIYADH: Saudi Arabia’s annual inflation rate held steady at 1.6 percent for the third consecutive month in May, driven by rising housing rents, according to official data.
The General Authority for Statistics report stated that the Consumer Price Index increased due to a 10.5 percent rise in actual housing rents, which included a 14.3 percent surge in apartment rents.
“This increase had a significant impact on maintaining the annual inflation rate for May 2024, due to the substantial weight of this category at 21 percent,” said the authority in the report.
Similarly, costs of food and beverages increased by 1.4 percent, driven by a 6.9 percent rise in vegetable prices.
On the other hand, prices of furnishing and home equipment decreased by 3.8 percent.
Similarly, expenses for clothing and footwear decreased by 4 percent year-on-year in May, while transport costs also decreased by 2.4 percent during the same period.
Monthly inflation
Meanwhile, the monthly inflation rate rose marginally by 0.2 percent in May compared to the previous month, driven by changes in housing prices.
The expenses for housing, water, electricity, gas, and other fuels increased by 0.4 percent month-on-month in May.
The monthly inflation index was also impacted by expenses for food and beverages, which went up by 0.7 percent in May compared to April.
Additionally, expenses for restaurants and hotels edged up by 0.2 percent, while costs for personal goods and services increased by 0.1 percent month-on-month in May.
On the other hand, prices for clothing and footwear dipped by 0.6 percent in May compared to the previous month, while costs for transportation edged down by 0.4 percent.
The report further pointed out that prices of education, furnishing and home equipment, and tobacco products did not show any significant change in May compared to April.
In May, a report released by Riyad Capital revealed that Saudi Arabia’s inflation rate is expected to average around 2 percent in 2024, with a moderate acceleration to 2.4 percent in 2025.
The Riyad Capital analysis also added that the Kingdom’s non-oil sector is projected to grow at a rate of 4.8 percent in 2024, driven by growth-oriented fiscal policy.
The report further noted that non-oil activities in Saudi Arabia will accelerate further in 2025, with a projected expansion rate of 5.2 percent.
Last year, the International Monetary Fund noted that the likelihood of a rise in headline and core inflation in oil-exporting countries like Saudi Arabia is low.
“Headline and core inflation in many oil-exporting countries like Bahrain, Iraq, Kuwait, Oman, Qatar, and Saudi Arabia remain relatively lower than elsewhere,” said the IMF.
Wholesale price index increases
In another report, GASTAT revealed that Saudi Arabia’s Wholesale Price Index increased by 3.2 percent in May compared to the same month of the previous year.
This increase is mainly driven by a 14.5 percent rise in prices of basic chemicals and a 12 percent increase in the costs of refined petroleum products, the authority added.
Similarly, prices of food products, beverages, tobacco, and textiles rose by 1.8 percent year-on-year in May, due to a 7.4 percent increase in the prices of leather, leather products, and footwear.
On the other hand, the costs of ores and minerals decreased by 2.8 percent, mainly due to a 2.8 percent decrease in stone and sand prices.
Additionally, agricultural and fishery product expenses experienced a 1.3 percent year-on-year decrease in May, driven by a 2.8 percent decrease in fish and other fishing product prices and a 2.7 percent decline in live animals and animal product prices.
Furthermore, the prices of metal products, machinery, and equipment decreased by 0.4 percent in May compared to the same month of the previous year, attributed to a 6.6 percent decline in the prices of radio, television, and communication equipment and apparatus.
Compared to April, the Kingdom’s WPI decreased by 0.1 percent in May, driven by a 0.3 percent drop in the prices of food products, beverages, tobacco, and textiles.
This decline resulted from a 1.7 percent decrease in the prices of meat, fish, fruit, vegetables, oils, and fats, and a 0.4 percent decline in the prices of leather, leather products, and footwear.
Similarly, the costs of agriculture and fishery products also decreased by 0.2 percent month-on-month, driven by a 1.6 percent fall in the prices of live animals and animal products.
Compared to April, the prices of other transportable goods declined by 0.1 percent in May, driven by a 0.7 percent decrease in the costs of basic chemicals.
In contrast, the costs of metal products, machinery, and equipment rose by 0.1 percent, as a result of a 1.1 percent increase in the prices of electrical machinery and apparatus.
Average prices rising
Meanwhile, in another report, GASTAT revealed that the prices of Abu Sorra Egyptian oranges increased by 22.70 percent in May compared to the previous month.
Similarly, the prices of local tomatoes and Turkish plums rose by 12.80 percent and 10.33 percent, respectively, in May from April.
Additionally, Indian pomegranates and Pakistani mandarins also experienced notable increases, rising by 10.15 percent and 9.71 percent, respectively.
On the other hand, hotel accommodation prices in Saudi Arabia witnessed a 13.94 percent month-on-month decline.
Similarly, the costs of local melons, Lebanese peaches, and imported onions dipped by 13.30 percent, 11.37 percent, and 9.34 percent, respectively.
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