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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.
Then every Saturday we bring you our weekly news roundup of the top 10 fintech stories of the week with commentary from Peter Renton.
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The British High Court ruled on Thursday that Parliament must give its approval for Brexit, creating uncertainty on whether or not the UK will leave the European Union; plans for exiting the EU were to begin in March; the government now has appealed the High Court's decision to the Supreme Court which will consider the appeal in December; if the ruling is upheld speculators believe Parliament would continue with the same sentiment that its voters reported in June. Source
On November 3rd, On Deck Capital, the largest online small business lender in the US, reported its third quarter earnings; Lend Academy provides details of the earnings report in their article; company reported a loss of $16.6 million; it had reported a profit for the same period in 2015; the adjusted loss came to -$0.18 per share, versus Wall Street expectations of -$0.15 per share; originations increased from $590 million in the second quarter to $613 million for the third quarter; company expects full-year revenue of $280 million to $290 million; shares closed at $4.52, down from $9.46 a year ago; last week, it was publicized that Zhengyuan Lu, an executive for investor loan sales, is leaving the firm to join Victory Park Capital. Source
Marketplace lender, Spotcap, is headquartered in Germany and first launched in Spain; it now has opened an office in London and has begun serving the UK lending market; uncertainties with Brexit crossed executives' minds but didn't deter the launch; UK Managing Director, Niels Turfboer, said, "a lot needs to happen in the world [for London] to lose its position, which is basically number one in the world after Silicon Valley [for fintech]"; in fact, he adds, "Historically a period of uncertainty will lead to more restricted activity from the more traditional finance companies like the High Street banks. That has its effect mostly on the SMEs as they're considered to be more risky. I definitely think it's going to be a turbulent and challenging time but alternative finance will have more influence in the coming years, in my opinion."; the company focuses on offering working capital lines of credit for small businesses. Source
RateSetter's Provision Fund is a capital reserve that helps ensure investors get paid principal and interest even if loans default; currently the fund is valued at £22 million; with the company projecting future losses via default of £18 million, the "Provision Fund coverage" ratio is roughly 120%; now, the firm has begun publishing a "capital coverage ratio" that combines the reserve funds with the expected interest payments on the loans, then divides by expected losses; with £30 million in interest payments expected, added to the £22 million reserves, the capital coverage ratio is nearly 3x; RateSetter said the newly published ratio is more fair when comparing RateSetter's assurances against other online lenders that don't hold a reserve fund but that still calculate coverage of potential losses. Source
The Financial Conduct Authority (FCA) has approved LendingCrowd for full FCA authorization which allows the company to offer investments through IFISAs; the approval follows a £2.75 million Scottish Enterprise investment in the platform's small business loans last week; the FCA's last approval was in October for P2PFA member firm, Lending Works. Source
Crowdfunding platform, Abundance, has launched the UK's first innovative finance individual savings accounts (IFISAs) for investors in crowd bonds; the investment offering follows an announcement from the UK Treasury that it will extend qualified investments in UK IFISAs to crowd bonds; platform offers bond investments from renewable energy companies; the company is able to offer the IFISAs because of its status as an investment-based crowdfunding platform. Source
Faircent has released a market report on P2P lending in India; report says Faircent, India's largest P2P lender, had funding of over Rs 1 crore ($150,000) in August 2016 and has been growing originations at a 15% to 20% monthly rate; report also provides insight on the platform's borrowers; in India, P2P platforms continue to await guidelines from the government which are expected to help improve business efficiency. Source
FT Alphaville provides interesting insight on a recently released report from Altus Consulting; cites "meteoric rate of expansion" of P2P with annual originations growing 70% per year; while the report gives the impression that P2P growth may be short lived, further details reveal how the expansion of interest is likely to create more institutional and retail products for investment; also notes innovation in fintech investing platforms which will help to increase interest in P2P investments. Source
The Bureau of Labor Statistics released its October jobs report; data showed an increase of 161,000 jobs in October with the unemployment rate decreasing to 4.9%; continues positive momentum in the labor market after an increase of 191,000 jobs in September. Source