Credit Suisse plans to reduce its workforce by 6,500 jobs; the Zurich-based lender has reported significant losses primarily the result of a $2 billion provision for a settlement with the US Department of Justice over mortgage portfolios; the firm has already cut 7,250 jobs in 2016 and is focused on a new strategy under CEO Tidjane Thiam who was appointed in 2015. Source
News Roundup
This page contains an archive of the Global Newsletter summaries and the weekly fintech news roundups.
Every day the Fintech Nexus news team scours the globe for the most important stories of the day to include in our daily newsletter.
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Jefferies has renewed their loan purchase agreement with small business lender Bond Street; deal expands loan purchases to as much as $300 million building on a $100 million commitment from mid-2015; Bond Street has also expanded their term product and now will make loans from $10,000 to $1 million; previous loans were between $50,000 to $500,000; investors in the company include Spark Capital, Homebrew as well as the co-founder of Airbnb and David Chang, chef and owner of momofoku. Source
Lending Club released its fourth quarter and full year earnings results on Tuesday, February 14; Lend Academy provides details of the earnings release in their article; the lender originated $8.6 billion in loans for 2016; net operating revenue for the year was $495.5 million, up from $426.7 million in 2015; net income fell to -$146 million from -$5 million in 2015; banks increasingly returned to the platform in the fourth quarter of 2016 funding 31% of loans, an increase from 18% in the third quarter. Source
China has developed a new Chinese village called Yuhuang Shannan which it has designed for the hedge fund community; a quiet village an hour from Shanghai offers a newly designed community tailored to the hedge fund industry with local office space, an elementary and an after work club for financiers; the number of hedge funds has been increasing in China and 1,000 hedge funds and private equity funds are registered in the village with assets under management of approximately 580 billion yuan ($84 billion); it's likely that hedge funds could become more prevalent in China and the village is receiving ongoing support from the government which currently includes a 30% tax bill subsidy. Source
In an article from American Banker, the pros and cons of AI-based credit scores are outlined; pros include more precise scores through more nuanced evaluations of data and the ability to consider consumers that linear models would reject; the cons are the risk that regulators will consider an AI-based score a "black box" and being able to provide one clear reason for credit denial; perspectives from Elevate, ID Analytics, Experian and FICO on AI credit scoring are presented in the article. Source
Zest Finance has developed a new credit scoring platform called ZAML that provides a technology solution for alternative credit underwriting; similar to other emerging alternative credit models, the technology uses machine learning software to analyze alternative credit reporting information and arrive at a lending decision; the firm has worked with Baidu to test its credit underwriting, which helped the firm approve 150% more borrowers with no increased losses. Source
Mosaic has announced the closing of its Mosaic Solar Loans 2017-1 securitization portfolio which resulted in proceeds of $138.95 million; Guggenheim Securities and BNP Paribas were the lead arrangers on the deal; Mosaic specializes in solar loans with over $1 billion originated on the platform since its launch. Source
SoftBank is a telecommunications and internet focused business with its headquarters in Japan; the firm has announced it will be acquiring asset manager Fortress Investment Group for $3.3 billion; SoftBank owns and invests in a range of internet and digital businesses; the acquisition follows a previous collaboration between SoftBank and Fortress on a new $100 billion Vision Fund; Fortress will be run independently from SoftBank after the acquisition and will be led by existing Fortress principals Pete Briger, Wes Edens and Randy Nardone with close collaboration on the Vision Fund. Source
Former Merrill Lynch advisor Carlos Garcia is leading the launch of a new robo advisor, Finhabits, targeting Latin Americans; the platform offers investing and advice through investment accounts and Roth IRAs with low minimums of only $5; targeting the Latin American community the service will be available in both English and Spanish; fees are slightly higher due to the customized target demographic with a $1 per month fee for accounts under $2,500 and a 50 basis point annual fee for accounts over $2,500. Source
Neo Capital provides details on their business services in their featured blog posts; the firm provides a range of services for wealth management, inclusive finance, consumer finance and investment management with a specific focus on data management and anti-fraud solutions for financial inclusion initiatives; their white paper, "How Big Data Risk Management Helps to Build the Value of Inclusive Finance Rapidly" offers insight on financial inclusion solutions and fintech for financial enterprises. Sponsored Blog Post