Allica Bank raises £100m in Series C funding round led by TCV
Allica Bank has announced a £100m Series C funding round led by global growth technology investor, TCV, with participation from existing investors Warwick Capital Partners and Atalaya Capital Management. Chief executive Richard Davies said the firm is now looking to grow its market share. “From the moment we sat down with TCV it was clear we shared the same vision to transform SME banking in the UK, by taking on the mainstream ‘high street’ banking market", he said. “It’s a massive vote of confidence in the team we’ve built at Allica to attract backing from such a world-class technology investor under the toughest of market conditions, and this £100m funding round will enable us to support far more of Britain’s established and growth companies, who have been underserved for too long". The cash backing from TCV follows a swing into the black for Allica in June, placing it among a host of fintechs to double down on a shift to profitability amid a slide in economic conditions this year.
Zopa bucks layoff trend with new hiring and pay hike
Zopa is increasing minimum salaries and continues to hire new people as its steady growth trajectory remains on course. The British fintech has grown its headcount 27% to over 600 employees in the past year while other tech firms slash numbers. Zopa CEO Jaidev Janardana said: “For the majority of fintechs, the philosophy was raising a lot of capital and using that to grow in the hope of being profitable some day in the future. In a world where there was an abundance of capital and interest rates were low that seemed like a good approach…[but] for us the profitability horizon was never too far away -- we have taken a prudent approach to growth and haven’t overhired in the way others have done.”
Financial services rule changes imminent
The Treasury is set to reveal changes to the financial services rulebook on Friday, sources told Bloomberg, with hopes that cabinet sign off will lead to an announcement next week. Previous statements from the Government suggest the Solvency II directive on insurance firms could be scrapped along with ring-fencing rules requiring banks to keep their investment banking and consumer banking activities separate.
New average mortgage rates fall below 6%
New average two and five-year fixed-rate mortgages now have an interest rate of less than 6% for the first time for two months, according to Moneyfacts. The typical two-year deal on the market now had a rate of 5.99%, and was likely to fall further, said Rachel Springall, from Moneyfacts.
Energy sector will power IPO recovery
A survey of top bankers suggests the second half of next year will see a pick-up in flotations as funds flow back into UK equities. The energy sector is expected to lead the recovery, followed by business services, tech, healthcare and financial services
Debt-laden PE funds risk market instability
The Bank for International Settlements (BIS) has warned that efforts to tackle inflation could be set back if central banks are forced to intervene to shore up highly leveraged financial institutions. "Long periods of low interest rates have incentivised a reach for yield and leverage build-up by financial institutions across the spectrum, including more innovative forms of securitisation, such as those of private equity funds," it said. "With rapid increases in rates and receding liquidity in core markets, simultaneous deleveraging can generate liquidity demand pressure, which could lead to market dysfunction."
Credit Suisse shares jump on rumours of Saudi Crown Prince investment
Credit Suisse shares rose on Monday following reports that Saudi Crown Prince Mohammed Bin Salman is poised to snap up a stake worth as much as $500m of its spun out investment banking division. Credit Suisse is set to resurrect its CS First Boston brand by spinning out the unit as part of emergency restructuring plans, after a string of scandals and heavy losses this year. The former chief of Barclays Bob Diamond is also reportedly eyeing a stake in the firm via his investment vehicle Atlas Merchant Capital. Shares in the firm jumped beyond 4% in early trading before settling to trade up around 3.66% as of 13:55.
Toyota to launch six electric models in Europe by 2026
Toyota will launch six electric models in Europe by 2026 and start UK trials converting pick-up trucks to run on hydrogen, as the Japanese carmaker lays out plans to meet tougher emissions rules later this decade.
UK finalises plans for regulation of ‘wild west’ crypto sector
New powers being proposed by UK ministers will grant the Financial Conduct Authority greater oversight of the crypto industry, including restrictions on selling into the UK market from overseas. Separately, the stablecoin group Circle has scrapped plans to go public though Concord Acquisition, the US-listed special purpose acquisition vehicle chaired by former Barclays CEO Bob Diamond.
Sky moves into home insurance market
Sky is making a move into Britain’s £7bn home insurance market following a similar move by BT’s mobile network EE earlier this year. The media giant will launch Sky Protect products this week, which will be underwritten by Zurich UK.
Nexo to quit United States
The UK-based crypto lender Nexo is to withdraw from the US after talks with regulators over its interest-earning accounts came to a dead end.
LEISURE & HOSPITALITY
RMT strikes could cost hospitality £1.5bn
Christmas strikes by the RMT will cost pubs, restaurants and hotels £1.5bn in sales, hospitality leaders have warned. The union has rejected a pay offer citing conditional reforms which it says will jeopardise job security. But Sacha Lord, chairman of the Night Time Industries Association, said the strikes could prove fatal to already struggling businesses. Kate Nicholls, chief executive of UKHospitality, added: “The sheer number of strike days that have affected Britain’s hospitality sector this year has been unprecedented and the strikes in December will no doubt be the toughest yet.”
MEDIA & ENTERTAINMENT
Vodafone chief Nick Read to step down following turbulent year
Vodafone chief executive Nick Read will step down at the end of this month following a turbulent year in which the company’s share price has fallen sharply and management has faced criticism from investors. Chief financial officer Margherita Della Valle will lead the company on an interim basis while it seeks a permanent successor for Mr Read. The 58-year-old leaves amid talks to push through a deal to combine Vodafone UK with its rival Three UK to create Britain’s biggest mobile operator and compete more effectively with BT and Virgin Media O2. Following the announcement, one of the largest investors in the telecoms group, Xavier Niel, the French telecoms billionaire and owner of Iliad, called for the new CEO to offload infrastructure assets and cut the group’s debt.
Home REIT accused of inflating portfolio value
The Boatman Capital, an activist investor, has accused the social housing investor Home REIT of inflating its property portfolio by as much as 50% and called for its board to be sacked over the valuations and a raft of accounting issues. The claims come after a series of accusations from short-seller Viceroy which questioned the quality of tenants in Home REIT’s property portfolio, causing a slump in its share price.
November sales boost Britain’s retailers
New figures from the British Retail Consortium (BRC) show sales growth picked up in November compared with the previous month. However, inflation masked a large drop in volumes. Helen Dickinson, the chief executive of the BRC, said: “Sales picked up as Black Friday discounting marked the beginning of the festive shopping season. However, sales growth remained far below current inflation, suggesting volumes continued to be down on last year.”
Services sector contracts again
The latest survey of the services sector by S&P Global and the Chartered Institute of Procurement and Supply reveals sales were down for the third consecutive month as ongoing price rises dampen demand. The UK services PMI stood at 48.8, which is below the 50 mark that separates growth from contraction, but is unchanged from October and in line with economists’ expectations. Chris Williamson, chief business economist at S&P Global market intelligence, said: “A further contraction signalled by the PMI surveys hints at a growing recession risk for the UK. Inflows of new work fell at an increased rate, indicating slumping demand for goods and services, forcing companies to pare back their hiring, resulting in only very modest employment growth.”
Shrinking workforce poses threat to economy
Analysis by Goldman Sachs indicates that an aging population combined with weaker migration since Brexit and an increase in ill-health is having a detrimental impact on the UK economy. “The share of the UK population aged 50 and above has increased meaningfully over the past decade from 42% in 2010 to 47% in 2020 and is projected to grow further going forward,” Goldman said in a note. A jump in long term illness along with a fall in workers migrating to the UK means Britain’s workforce is still 2.7% smaller compared to pre-pandemic levels. A smaller workforce poses serious long-term problems for the UK economy, the bank’s economists warned.