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
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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.


US penalizes Chinese firm

Updated 46 sec ago
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US penalizes Chinese firm

  • Sanctions are part of Trump’s effort to increase pressure on Tehran

WASHINGTON: The Trump administration is penalizing a Chinese company and its top executive for violating US restrictions on dealing with Iran.

US Secretary of State Mike Pompeo said on Monday the US is imposing sanctions on Zhuhai Zhenrong Limited and its CEO for violating restrictions on Iran’s oil industry.
Pompeo announced the measures in a speech in Orlando to the VFW.
The US sanctions are part of the Trump administration’s effort to increase pressure on Iran by starving its economy.
Oil exports are Iran’s largest source of foreign income and the US campaign has raised tensions between the two countries.
China has continued to import Iranian oil as other countries have stopped out of fear of US penalties.
Meanwhile, oil prices rose on Monday on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf.  Brent crude futures climbed 79 cents, or 1.26 percent, to $63.26 a barrel.
West Texas Intermediate (WTI) crude futures were up 74 cents, or 1.33 percent, at $56.37 a barrel.
Last week, WTI fell over 7 percent and Brent lost more than 6 percent.
“The events in the Gulf have definitely taken the market into more bullish territory in today’s trading,” said Erik Norland, senior economist at CME Group.
“But that doesn’t mean markets will continue to go higher, and previous incidents in the Gulf haven’t driven up prices much — suggesting that investors’ calculus, rightly or wrongly, is that a war is not very likely.”

HIGHLIGHTS

• China has continued to import Iranian oil as other countries have stopped out of fear of US penalties.

• Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 bpd.

• Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd.

Iran’s Revolutionary Guards said on Friday they had captured a British-flagged oil tanker in the Gulf in response to Britain’s seizure of an Iranian tanker earlier this month.
The move has increased the fear of potential supply disruptions in the Strait of Hormuz at the mouth of the Gulf, through which flows about one-fifth of the world’s oil supplies, but no major escalation with Britain or the US appears imminent.
“In the cat and mouse game that Iran is playing with the US, it is taking calculated risks,” Harry Tchilinguirian, global oil strategist at BNP Paribas in London, told the Reuters Global Oil Forum.

“So far the US is not taking the bait.”
Capping gains, force majeure was lifted on loadings of crude on Monday at Libya’s Sharara oilfield, the country’s largest, whose closure since Friday had caused an output loss of about 290,000 barrels per day (bpd).
Hedge funds and other money managers raised their combined futures and options positions on US crude for a second week and increased their positions in Brent crude as well, according to data from the US Commodity Futures Trading Commission and the Intercontinental Exchange.
Goldman Sachs on Sunday lowered its forecast of growth in oil demand for 2019 to 1.275 million bpd, citing disappointing global economic activity.