Connect with us

Banking

LAUNCH OF BANK REFERRAL SCHEME NEEDS TO BE THE CATALYST TO FURTHER CHANGE FOR SMES

Published

on

LAUNCH OF BANK REFERRAL SCHEME NEEDS TO BE THE CATALYST TO FURTHER CHANGE FOR SMES

Andrew Whelan, Chief Executive Officer at GLI Finance

The bank referral scheme has the potential to be a game changer for the alternative finance sector. Launched earlier this month, it is now compulsory for the UK’s top banks to refer SMEs whose funding applications they reject to alternative providers in the sector.

Developed in response to businesses not getting the financial support they need to grow, its introduction represents a significant step forward for SMEs and marks the culmination of hard work across industry, regulators and government. I am also personally delighted that Funding Options, one of GLI’s prioritised platforms (held within its newly created investment vehicle FinTech Ventures Limited), is one the Government’s designated finance platforms for the scheme.

Research published by the Department for Business, Innovation and Skills (BIS) back in 2013 found that half of first time borrower SMEs were rejected for finance, and of these, 37% did not attempt to seek out alternative options but cancelled their spending plans altogether. Their reluctance to seek out non-traditional bank finance was fuelled by a lack of awareness of alternative providers with less than a third of those surveyed aware of business angels, export/import finance or peer-to-peer lending, and less than 12% aware of crowd sourcing or mezzanine finance. It is hoped that the new scheme can go some way in tackling this issue.

However, despite the progress it symbolises, it is important that the introduction of the scheme acts as a stepping stone to further change for SMEs, rather than being an end in itself.

Work published earlier this month by the Business, Energy and Industrial Strategy (BEIS) Select Committee highlighted the challenge that still lies ahead.The ‘Access to Finance’report revealed that a lack of awareness of alternative options amongst SMEs was their main barrier to growth and outlined that more must be done in order to counter this.

Amongst its recommendations the report requested the British Business Bank to conduct a review of the knowledge of the range of alternative finance providers on the market and the products available to SMEs in order to gain a better understanding of the current levels of awareness. It also tasked the organisation with setting out a strategy detailing exactly how the sector can be promoted to those involved in giving face-to-face advice to SMEs such as the accountancy, legal and banking sectors.

Such measures would help pinpoint exactly where greater awareness needs to be promoted and identify the best means of doing so. In this way, both the government and alternative finance sector will be able to set out the next steps they must take to ensure SMEs are able to secure the funding they need.

Importantly, the Committee also asked the Government and British Business Bank to focus on support for the ‘scale-up’ and growth stages of SMEs and recommended they work with investors to target this demand. Ensuring such businesses receive appropriate funding is crucial not only to the businesses, but to the economy as a whole.

The referral scheme is an excellent proof point in the development of the sector over the last few years. To be actively promoted and positioned as a credible source of finance to SMEs by the Government is testament to the importance of the alternative services we provide. That said, it is key that further action is taken in order to continue this momentum and ensure SMEs are aware of all of the options available to help them succeed going forwards.

Driving further awareness will prove crucial in enabling the alternative finance sector to continue on its current growth trajectory.The launch of the scheme is only the beginning.

Banking

Commerzbank to lose 1.7 million clients by 2024 – Welt am Sonntag

Published

on

Commerzbank to lose 1.7 million clients by 2024 - Welt am Sonntag 1

FRANKFURT (Reuters) – Commerzbank expects to lose 1.7 million customers by 2024 as part of its current restructuring, resulting in a 300 million euro ($364 million) hit to revenue, weekly Welt am Sonntag reported, citing sources close to the bank.

The lender hopes to offset the drop by growing its loan business as well as by expanding its business with corporate and very wealthy clients, the report said, without giving any further detail of why customer numbers were expected to decline.

It also didn’t say if any specific category of client was most likely to be lost.

Commerzbank declined to comment.

According to the bank’s website it serves around 11.6 million private and small-business customers in Germany and more than 70,000 corporate and other institutional clients worldwide, so the reported loss of customers would suggest a drop of around 15%.

The bank earlier this month reported a $3.3 billion fourth-quarter loss, sinking further into the red as it continued a major restructuring and dealt with the fallout of the COVID-19 pandemic.

The bank’s restructuring plan involves cutting 10,000 jobs and closing hundreds of branches in the hope it can remain independent.

($1 = 0.8253 euros)

(Reporting by Christoph Steitz and Tom Sims; Editing by David Holmes)

Continue Reading

Banking

Citigroup considering divestiture of some foreign consumer units – Bloomberg Law

Published

on

Citigroup considering divestiture of some foreign consumer units - Bloomberg Law 2

(Reuters) – Citigroup Inc is considering divesting some international consumer units, Bloomberg Law reported on Friday, citing people familiar with the matter.

The discussions are around divesting units across retail banking in the Asia-Pacific region, the report https://bit.ly/3pD57WP said.

“As our incoming CEO Jane Fraser said in January, we are undertaking a dispassionate and thorough review of our strategy,” a Citigroup spokesperson told Reuters.

“Many different options are being considered and we will take the right amount of time before making any decisions.”

The move, part of Fraser’s attempt to simplify the bank, can see units in South Korea, Thailand, the Philippines and Australia being divested, the Bloomberg report said.

However, no decision has been made, according to the report.

Revenue from Citi’s consumer banking business in Asia declined 15% to $1.55 billion in the fourth quarter of 2020.

The divestitures could be spaced out over time or the bank could end up keeping all of its existing units, the Bloomberg report said.

The firm is also reviewing consumer operations in Mexico, though a sale there is less likely, the report said, citing one of the people.

Last month, New York-based Citigroup beat profit estimates but issued a gloomy forecast for expenses. Finance head Mark Mason said the lender’s expenses could rise in 2021 in the range of 2% to 3%, weighing on its operating margins. (https://reut.rs/2ZwXRB1)

(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)

Continue Reading

Banking

European shares end higher on strong earnings, positive data

Published

on

European shares end higher on strong earnings, positive data 3

By Sagarika Jaisinghani and Ambar Warrick

(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.

The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.

The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.

Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.

Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.

But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.

“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.

“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”

Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.

The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.

The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.

London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]

French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.

(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)

Continue Reading
Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.

Call For Entries

Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Latest Articles

Former Bank of England Governor Carney joins board of digital payments company Stripe 4 Former Bank of England Governor Carney joins board of digital payments company Stripe 5
Finance5 hours ago

Former Bank of England Governor Carney joins board of digital payments company Stripe

By Kanishka Singh (Reuters) – Mark Carney, former head of the UK and Canadian central banks, has joined the board...

Airbus CEO urges trade war ceasefire, easing of COVID travel bans 6 Airbus CEO urges trade war ceasefire, easing of COVID travel bans 7
Top Stories5 hours ago

Airbus CEO urges trade war ceasefire, easing of COVID travel bans

By Tim Hepher PARIS (Reuters) – The head of European planemaker Airbus called on Saturday for a “ceasefire” in a...

Why a predictable cold snap crippled the Texas power grid 8 Why a predictable cold snap crippled the Texas power grid 9
Top Stories5 hours ago

Why a predictable cold snap crippled the Texas power grid

By Tim McLaughlin and Stephanie Kelly (Reuters) – As Texans cranked up their heaters early Monday to combat plunging temperatures,...

UK could declare Brexit 'water wars' - The Telegraph 10 UK could declare Brexit 'water wars' - The Telegraph 11
Top Stories5 hours ago

UK could declare Brexit ‘water wars’ – The Telegraph

(Reuters) – Britain could restrict imports of European mineral water and several food products under retaliatory measures being considered by...

Commerzbank to lose 1.7 million clients by 2024 - Welt am Sonntag 12 Commerzbank to lose 1.7 million clients by 2024 - Welt am Sonntag 13
Banking5 hours ago

Commerzbank to lose 1.7 million clients by 2024 – Welt am Sonntag

FRANKFURT (Reuters) – Commerzbank expects to lose 1.7 million customers by 2024 as part of its current restructuring, resulting in...

Bitcoin and ethereum prices 'seem high,' says Musk 14 Bitcoin and ethereum prices 'seem high,' says Musk 15
Top Stories5 hours ago

Bitcoin and ethereum prices ‘seem high,’ says Musk

(Reuters) – Billionaire CEO Elon Musk said on Saturday the price of bitcoin and ethereum seemed high, at a time...

Sunak to raise business tax to pay for COVID-19 support - The Sunday Times 16 Sunak to raise business tax to pay for COVID-19 support - The Sunday Times 17
Business5 hours ago

Sunak to raise business tax to pay for COVID-19 support – The Sunday Times

(Reuters) – British finance minister Rishi Sunak is set to increase a tax on business to pay for an extension...

FTSE Russell to include 11 stocks from China's STAR Market in global benchmarks 18 FTSE Russell to include 11 stocks from China's STAR Market in global benchmarks 19
Trading1 day ago

FTSE Russell to include 11 stocks from China’s STAR Market in global benchmarks

SHANGHAI (Reuters) – Index provider FTSE Russell will add 11 stocks from China’s STAR Market to its global benchmarks, according...

Foxconn chairman says expects "limited impact" from chip shortage on clients 20 Foxconn chairman says expects "limited impact" from chip shortage on clients 21
Business1 day ago

Foxconn chairman says expects “limited impact” from chip shortage on clients

TAIPEI (Reuters) – The chairman of Apple Inc supplier Foxconn said on Saturday he expects his company and its clients...

Bitcoin, ether hit fresh highs 22 Bitcoin, ether hit fresh highs 23
Top Stories1 day ago

Bitcoin, ether hit fresh highs

SINGAPORE (Reuters) – Bitcoin hit a fresh high in Asian trading on Saturday, extending a two-month rally that saw its...

Newsletters with Secrets & Analysis. Subscribe Now