The Finance Class

Business and stocks, explained in simple words.

Tag: Banks

  • Canada’s Fairfax Wants to Buy India’s IDBI Bank, but Workers Say No

    Canada’s Fairfax Wants to Buy India’s IDBI Bank, but Workers Say No

    Introduction
    A Canadian firm wants to buy a big bank in India. The firm is Fairfax Financial Holdings. The bank is IDBI Bank. The deal is worth about $5.5 billion. But many bank workers say no. Some politicians in India say no too.

    What Happened
    Fairfax wants to buy more than 60% of IDBI Bank. That would give Fairfax control of the bank. Control means the power to make the big choices. The Indian government said on October 14 that this sale would be the biggest foreign investment yet in India’s bank sector. Foreign investment means money from another country put into a business here. Fairfax offered 81 rupees for each IDBI share. Experts had set a fair value of 75.99 rupees per share. Fair value means what experts think a share is truly worth. On Monday, IDBI shares opened at about 79 rupees. On Sunday, a workers’ group called for a two-day strike across India. The group is the United Forum of IDBI Officers and Employees. A strike means workers stop work to show they disagree. The group wants the government to cancel the sale. It also wants the government to protect public money and staff jobs.

    Key figures

    • Deal value: about $5.5 billion
    • Stake Fairfax wants: more than 60% of IDBI Bank
    • Fairfax offer per share: 81 rupees
    • Fair value set by experts per share: 75.99 rupees
    • IDBI share price at Monday’s open: about 79 rupees
    • Strike called by workers: two days, across India

    Why It Happened
    IDBI Bank is a state-owned bank. State-owned means the government owns a big part of it. India has tried to sell its stake for a long time. The sale is now in its final steps. But workers worry about their jobs. They also worry the sale price is too low. They want clear facts on how the price was set. One news report said officials hid the true value to make the offer look good. That claim is not proven. It is a report, not a confirmed fact. Rahul Gandhi is India’s opposition leader. He backed the workers on Thursday. He said public banks are tools to build the nation, not goods to sell. India’s finance minister is Nirmala Sitharaman. She answered that the bank was in poor shape when the government took it. She said the bank was fixed with care and with more than 250 billion rupees of new money. 250 billion rupees is about $2.6 billion.

    Why It Matters
    This deal matters in two countries. In India, it is about who owns a public bank. Many people see public banks as a public good. In Canada, it is about a Canadian firm growing abroad. Fairfax already owns about 40% of a smaller Indian bank, CSB Bank. Indian rules say one firm cannot own and run two banks. Earlier reports said Fairfax may get up to two years to fix this. It could sell its CSB stake, or join CSB with IDBI. That part is not yet final. The deal also needs more approvals before it can close.

    What Happens Next
    Watch the strike first. Will workers stop work for two days? Watch the government next. Will it change the sale, or push on? Watch regulators too. They must check the deal follows bank rules. The sale is not done yet. It can still change, or even fail.

    Final Thoughts
    A $5.5 billion deal sounds done. This one is not done. Workers, politicians, and regulators still have a say. That is why this bank sale is now a big public fight.

    Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.
    Sources: CNBC, https://www.cnbc.com/2026/11/02/canada-india-5point5-billion-bank-takeover-attracts-opposition-from-workers-politicians.html ; Reuters background on the IDBI sale, https://www.newspointapp.com/english/trending/india-to-give-canadas-fairfax-two-years-to-consolidate-holdings-for-idbi-bank-deal-sources-et/articleshow/145048204a43d9e1c3eb71be44f7c5a5a44f49ce

  • Companies Are Finally Putting a Number on AI Gains — Santander Says €194 Million

    Companies Are Finally Putting a Number on AI Gains — Santander Says €194 Million

    Introduction

    For two years, companies have promised that artificial intelligence will make them more efficient and more profitable. Investors kept asking the same question: show me the money.

    In this earnings season, some companies are finally starting to answer — with numbers, even if those numbers are still rough.

    What Happened

    Spanish bank Santander said its AI initiatives generated €194 million (about $216 million) in business value in the first nine months of 2026. The bank reported the figure alongside record underlying profit of €11.18 billion for the same period, up 16% from a year earlier.

    Other companies pointed in the same direction without giving an AI-specific total. Drug maker Novartis reported third-quarter core operating income of $6.04 billion, up 10% at constant currencies, and said AI had begun to improve its bottom line. Standard Chartered reported third-quarter operating income growth of 14% at constant currency, excluding notable items, and said AI tools were helping it scale more efficiently.

    Key figures

    • Santander AI business value, first nine months of 2026: €194 million (about $216 million)
    • Santander underlying profit, same period: €11.18 billion, up 16%
    • Novartis Q3 core operating income: $6.04 billion, up 10% at constant currencies
    • Standard Chartered Q3 operating income growth: 14% at constant currency, excluding notable items
    • Global corporate AI investment in 2025: $581.7 billion, up 130% from the prior year (Stanford HAI 2026 AI Index)

    Why It Happened

    Santander’s chief financial officer, José García Cantera, said AI is helping the bank cut low-value tasks so employees can focus on higher-value work. That affects both revenue and costs, he said — the first quarter, in his words, where the bank could directly link a positive contribution to AI.

    But there is an important warning attached to the number. Santander’s €194 million is a company-defined measure, not a standard accounting figure. It combines extra revenue, cost savings and lower loan-loss provisions from its data and AI programmes, and it was not audited as a separate measure. In other words, it is the bank’s own best estimate, not a figure every company calculates the same way.

    That is why comparisons are tricky. Meta linked AI to stronger advertising growth but gave no AI-only revenue figure. Alphabet’s Google Cloud revenue jumped 103% to $30.71 billion, helped by AI demand, but that is a whole business line, not an AI profit number. And not every company is seeing gains yet: brewer Carlsberg said this week it is not seeing AI benefits at scale, even though the technology has affected costs, pricing and marketing.

    Why It Matters

    The €194 million matters less as a precise profit count and more as a sign of a shift. Companies are moving from talking about AI pilots to trying to measure AI in their accounts. Investors have been worried that AI spending — $581.7 billion globally in 2025 alone — is growing faster than AI returns. Even small, honest numbers help answer that worry.

    At the same time, the different yardsticks are a reason to stay careful. When every company measures AI differently, a big number from one firm cannot be directly compared with a vague claim from another.

    What Happens Next

    Expect more companies to publish AI numbers in the next few earnings seasons, and expect analysts to push them on how those numbers are calculated. The useful question is not just ‘how much did AI add?’ but ‘how did you count it, and would another company count it the same way?’

    Santander itself has set a bigger target: its chair has said AI should help grow annual revenue by about €300 million and cut costs by about €700 million by 2028. That gives investors something concrete to check against in future reports.

    Final Thoughts

    AI is starting to show up in earnings, not just in presentations. Santander’s €194 million is a first step, not a final proof. The companies that win trust will be the ones that explain their numbers clearly — and keep reporting them, good quarter or bad.

    Related: Anthropic IPO, Nasdaq and AI spending worries

    Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice.

    Sources: CNBC, https://www.cnbc.com/2026/11/01/ai-investments-company-earnings.html; Santander results as reported by Kalkine, https://kalkine.com/news/announcements/santander-posts-112bn-underlying-profit-for-first-nine-months-of-2026; AI gains summary as reported by Political.org, https://political.org/2026/10/31/santander-novartis-cite-first-measurable-ai-gains-in-third-quarter-earnings-as-investors-demand-returns/

Is this your new site? Log in to activate admin features and dismiss this message
Log In