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Metamorphosis
01 October 2001
ABB has restructured to meet changing customer needs.
But with rapid growth in financial services ? is this a generator getting into banking? By Michael Marray
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The Swiss-Swedish ABB Group has been releasing additional financial
information over the course of the year as part of an effort to
make its accounts more transparent. The biggest surprise for
analysts has been the size of the contribution to overall profits
from the ABB Financial Services division.
For the twelve months ended 31 December 2000 Financial Services
contributed earnings before interest and taxes (EBIT) of $349
million, or 25 % of total ABB Group earnings. And this percentage
is expected to be even higher for the 2001 financial year.
Growing profitability has come as Financial Services has evolved
from its traditional role as a captive financing arm, used to help
ABB win contracts for products such as electrical transmission
systems, oil & gas equipment, and automation systems for
process industries. Nowadays Financial Services is primarily
engaged in non-captive business, and is providing third parties
with financial advisory and structuring services, arranging and
syndicating loans, and initiating...
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