FinTech Futures: Top five stories of the week – 1 December 2023
Here’s our pick of five of the top news stories from the world of finance and tech this week.
Barclays could reportedly cut around 2,000 jobs in push to reduce costs by £1bn
British bank Barclays could reportedly axe up to 2,000 jobs as part of a £1 billion ($1.25 billion) cost-cutting plan, according to Reuters.
The move is expected to affect the back office departments within Barclays Execution Services (BX), a group-wide service company which provides technology, operations and functional services to its business units.
BX currently employs more than a quarter of Barclays’ total staff, or around 22,300 people as per 2022 figures.
Following the bank’s Q3 results last month, in which it reported a 16% drop in Q3 profits to £1.3bn, CS Venkatakrishnan, group chief executive of Barclays, said the bank would be looking for “efficiencies” in a push to bring down “structural costs”.
India’s PhonePe reportedly planning to launch consumer lending in January 2024
Reports this week suggest that the Walmart-backed fintech giant PhonePe is aiming to become a distributor for personal loans in January 2024.
Sources tell The Economic Times that the firm could launch multiple consumer credit products over the next six to seven months, with the potential to introduce a credit line sometime next year.
The move should not come as a surprise, with PhonePe having launched its merchant lending platform in June this year with a view to leverage its network of more than 35 million businesses.
Earlier this year, the company also promoted its vice president of financial services, Hemant Gala, to CEO of its credit business.
Shareholders approve Metro Bank refinancing deal
Shareholders of Metro Bank have given the go-ahead to a funding deal that will help shore up the finances of the UK high-street bank.
The £925 million refinancing plan, compiled by Morgan Stanley and Moelis, comprises a £325 million equity capital raise and £600 million in debt financing.
It also raises the stake of the bank’s largest shareholder, Colombian billionaire Jaime Gilinski Bacal’s Spaldy Investments, from 9% to 52.88% in exchange for its leading $126 million investment.
Metro Bank says the arrangement was “duly passed with very strong support with over 90% of shareholders voting in support of all resolutions”.
Meanwhile, the bank has also announced it’s looking to cut costs elsewhere, revealing this week that it plans to cut its staff headcount by 20% as part of a cost reduction plan that could save £50 million a year.
HSBC appoints CEO and COO for joint venture with Tradeshift
HSBC has appointed Vinay Mendonca as the CEO designate of its new embedded finance joint venture with US fintech Tradeshift.
In addition, Barry O’Byrne, CEO of global commercial banking at HSBC, has been named as board chair for the new venture, while the bank’s head of digital solutions for GTRF, Shehan Silva, has also been appointed as chief operations officer (COO).
Set to launch in the first half of 2024 and backed by a $35 million investment, the new venture will aim to develop embedded finance solutions and financial services apps.
HSBC will own 75% of the business, with Tradeshift owning the remaining 25%.
Apple’s partnership with Goldman Sachs is reportedly nearing its end
Apple has reportedly proposed ending its credit card and savings account partnership with Goldman Sachs within the next 12 to 15 months, according to sources this week at the Wall Street Journal and CNBC.
Speculation around the future of the partnership, which started in 2018, has grown as a result of Goldman Sachs’ decision to migrate away from the retail banking market and shift its focus back to its core propositions.
If actioned, the move would bring to an end one of the most prominent arrangements between a bank and a technology provider to date.
It’s not yet been fully determined how or when Apple will seek a new financial partner, or how its plans around its credit, savings and BNPL products may be affected by a potential split.