Saudi-backed SoftBank fund pumps $390m into banking startup

British banking start-up OakNorth is targeting international expansion after closing a $440 million fundraising round led by Japan’s SoftBank Group Corp. (File/Reuters)
Updated 08 February 2019
0

Saudi-backed SoftBank fund pumps $390m into banking startup

  • The specialist business and property lender will use the cash injection to launch in the United States before considering further overseas opportunities
  • The fundraising also represented a vote of confidence in British lending, despite mounting concerns over the potential impact of Brexit on the country’s economy

LONDON: British banking start-up OakNorth is targeting international expansion after closing a $440 million fundraising round led by Japan’s SoftBank Group Corp.
The specialist business and property lender will use the cash injection to launch in the United States before considering further overseas opportunities, Rishi Khosla, the firm’s co-founder and chief executive, told Reuters on Friday.
The fundraising also represented a vote of confidence in British lending, despite mounting concerns over the potential impact of Brexit on the country’s economy, Khosla said.
“Small businesses are the key growth driver in most economies and that’s true in the UK,” he said.
“The fundamentals are absolutely good over a period of time. If you tar a whole segment with the same brush I think that’s incredibly unfair. You’ll always have good businesses and bad businesses.”
SoftBank’s Vision Fund led the round with a $390 million investment, with Clermont Group providing the rest of the cash.
OakNorth, which also provides personal and business savings, has raised more than $1 billion since launching in September 2015 as investors show an appetite for financial technology firms to shake up the banking industry.
The latest investment values the company at around $2.8 billion.
SoftBank’s technology-focused Vision Fund has multi-billion-dollar investments in US companies, including WeWork and Uber.
“SoftBank always has a very large vision for businesses they get involved in and for us we have a relentless focus on small businesses,” Khosla said.
“For us to fulfil that on a global basis having an investor who shares that vision is really important.”
Khosla added that while the firm was now well-funded, there was a possibility it could float within five years.
British media had reported late last year that OakNorth had held talks with SoftBank about a potential investment.
In September, OakNorth had closed a $100 million funding round, which valued it at $2.3 billion at the time.


Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

Updated 25 April 2019
0

Head of Saudi Arabia’s SRC: ‘Ask banks for a mortgage, and we will refinance it’

  • SRC CEO Fabrice Susini: One of our key objectives is to ensure that the banks are extending loans to more and more people
  • Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production

RIYADH: The head of the state-owned Saudi Real Estate Refinance Company (SRC) has made an unprecedented offer to the Kingdom’s home-seekers to underwrite future mortgages.
Speaking at the Financial Sector Conference in Riyadh, Fabrice Susini, SRC CEO, told the audience: “Ask them (the banks) for a mortgage, and we will refinance it.”
Although Susini later clarified his remarks to show that he still expected normal standards of mortgage applications to be met, the on-stage show of bravado illustrates SRC’s commitment to facilitate home-ownership in the Kingdom.
“Obviously if you have no revenue, no income, poor credit history, that will not apply. Now if you have a job, it is different. We have people in senior positions at big foreign banks that could not get a mortgage,” he explained.
He said that Saudi banks have traditionally assessed mortgages on the basis of “flow stability” of earnings. Government employees, or those of big corporations like Saudi Aramco and SABIC, found it easy to get mortgages “because you were there for life.”
“One of our key objectives is to ensure that the banks are extending loans to more and more people. The government is pushing for entrepreneurship, private development, private jobs. If you work in the private sector and cannot get a mortgage the next thing you will do is go to the government for a job,” Susini said.
Extending home-ownership is one of the cornerstones of the Vision 2030 strategy to diversify the economy away from oil production. Saudi Arabia has one of the lowest rates of mortgage penetration of any G20 country — in single digit percentages, compared with others at up to 50 percent.