Wall Street Journal
Betting on Better
SoftBank Group is investing $500 million in Better, a seven-year-old mortgage lender that “provides home loans through its website and banks with which it partners, such as Ally Financial.” The company originated $25 billion in loans last year and has already done $14 billion in so far this year. “Better generated over $800 million in revenue in 2020 and generated profits, according to people familiar with the company’s metrics.”
“The investment values parent Better Holdco Inc. at about $6 billion. SoftBank is buying shares from the company’s existing investors at a sharp jump from the $4 billion at which it raised money in November. Better is expected to go public later this year. In a sign of its eagerness to put money into Better, SoftBank agreed to give all of its voting rights to the company’s CEO and co-founder, Vishal Garg. Mr. Garg is not selling any of his shares in the offering — and the company won’t derive any proceeds either.”
Financial Times
We want answers
Senate Banking Committee Chairman Sherrod Brown has written to Credit Suisse, Nomura, Goldman Sachs and Morgan Stanley “seeking answers about the implosion of Archegos Capital, in a sign that lawmakers in Washington are ramping up scrutiny of family offices and their lenders.” He gave the banks two weeks to respond.
“Brown is the latest senior official seeking answers about the breakdown of Archegos. Regulators, including the SEC and the U.K.’s Financial Conduct Authority have requested information from the banks involved. Finra, Wall Street’s self-regulatory body, has also contacted the lenders.”
New York Times
Now that’s flexible
London-based banking startup Revolut “said Thursday that it would allow its more than 2,000 employees to work abroad for up to two months a year in response to requests to visit overseas family for longer periods. Revolut has been valued at $5.5 billion, making it one of Europe’s most valuable financial technology firms. It joins a number of companies that will allow more flexible working arrangements to continue after the pandemic ends.”
“Our employees asked for flexibility, and that’s what we’re giving them as part of our ongoing focus on employee experience and choice,” said Jim MacDougall, Revolut’s vice president of human resources.
Elsewhere
Greener finance
Bank of America said Thursday “it will deploy $1 trillion for its environmental business initiative to push for green finance by 2030, expanding on the $300 billion it had announced for the same project in 2019,” Reuters reported. “The latest announcement puts its total commitment to sustainable finance by 2030 at $1.5 trillion.”
“The initiative will help the bank’s push for a greener economy through lending, capital raising, advisory and investment services to help low-carbon and other sustainable businesses, Bank of America said.”
HSBC is joining with the Asian Development Bank to “provide a combined $300 million in financing to help Asia’s supply chains boost manufacturing capacity for COVID-19 vaccines,” Reuters said. “The initiative builds on a risk-sharing scheme the banks launched in July to help to fund suppliers of personal protective equipment (PPE) as they and vaccine makers race to meet global demand that outstrips supply.”
“By leaning on the ADB’s sovereign-level credit rating, private sector lenders such as HSBC can lend more easily to companies in the complex chain of vaccine supply production, HSBC said. The lenders will offer funds through trade loans and invoice financing among other tools.”
Quotable
“I am troubled, but not surprised, by the news reports that Archegos entered into risky derivatives transactions facilitated by major investment banks, resulting in panicked selling of stocks worth tens of billions of dollars and those banks collectively losing nearly $10 billion.” — Senate Banking Committee Chairman Sherrod Brown in a letter to four banks seeking answers about their involvement with the failed investment firm.
