FinTech Futures: Top five news stories of the week – 8 March 2024
Here’s our pick of five of the top news stories from the world of finance and tech this week, featuring Monzo, NYCB, Virgin Money, Shift4 Payments and more.
Monzo’s valuation tops $5bn with $430m Alphabet-led funding round
Monzo raises $430m in fresh funding
Monzo has raised $430 million in a fresh funding round that also saw its valuation exceed the $5 billion mark for the first time.
Alphabet, better recognised as the parent company of Google, leveraged its independent growth fund, CapitalG, to lead the challenger’s latest funding round, which received additional support from Google Ventures (GV), HongShan Capital, and existing backers Passion Capital and Tencent.
Monzo says it will apply the new capital to “accelerate” its expansion plans and “further fuel a rich product roadmap”, building on what it claims was “a year of record growth”.
Recent figures support this statement, showing that it accumulated 2 million new customers throughout 2023, alongside 400,000 business customers.
Nationwide Building Society set for £2.9bn takeover of Virgin Money
Nationwide, the UK’s largest building society, has agreed terms with retail bank Virgin Money over a potential £2.9 billion acquisition deal.
If the potential acquisition goes ahead, it would create a combined group with £366.3 billion in total assets and £283.5 billion in advances, ultimately positioning the building society as the second largest provider of savings and mortgages in the country.
Nationwide says it expects to integrate Virgin Money “gradually over multiple years”, and plans to operate the retail bank as a separate business with a separate banking licence and board “in the medium term”, but ultimately intends to phase out the bank’s brand image over a six-year period of the deal being completed.
The potential deal has yet to be finalised and Nationwide has until 4 April to put a final offer forward. Should the deal land, Virgin Money’s shareholders, who will need to approve the deal, would receive a total of 220p for each share they currently hold, marking a 38% premium on Virgin Money’s share price as of Wednesday.
Fiserv reportedly in the running to acquire Shift4 Payments
Shift4 Payments reportedly exploring sale
US fintech Fiserv is reportedly in the running to acquire Shift4 Payments, a Pennsylvania-based payment processing firm sporting a market value of around $7 billion.
According to a recent Reuters report, sources claim final bids for a potential takeover are due to arrive in the coming weeks, but add that a deal still might not materialise.
Founded in 1999 as United Bank Card, Shift4 provides payment processing services and POS software and hardware to over 200,000 merchants across North America, Europe and Japan, with an annual processing rate of over $200 billion across 3.5 billion transactions.
A shareholder letter for the end of Q3 2023 by CEO Jared Isaacman stoked the possibility of a sale by adding that Shift4 is “actively exploring strategic opportunities and alternatives that will reduce distractions and serve our company, employees and shareholders best”.
New York Community Bancorp secures $1bn equity boost following Q4 2023 losses
New York Community Bancorp (NYCB), the parent company of Flagstar Bank, is set to secure $1.05 billion in equity capital from a group of investors and has made several high-profile appointments to its board of directors.
The main investors involved in the deal are Liberty Strategic Capital, which will invest $450 million; Hudson Bay Capital, which will put forward $250 million; and Reverence Capital Partners, whose investment will total $200 million.
The significant investment comes after NYCB posted a loss of $2.7 billion over Q4 2023, which it attributes largely to a $2.4 billion goodwill impairment charge tied to certain legacy transactions, alongside “material weaknesses” in its loan review processes.
Additionally, NYCB will reduce its board to nine members, consisting of four new directors including Steven Mnuchin, Allen Puwalski, Milton Berlinski and Joseph Otting, who is set to now serve as CEO of NYCB.
Banking veteran Marc Page hired by Metro Bank as CFO
Metro Bank hires new CFO
Metro Bank has hired Barclays exec Marc Page as its new chief financial officer (CFO), effective 2 September.
Page, who will take the reins from interim CFO Cristina Alba Ochoa, most recently served as CFO of non-bank lender Kensington Mortgages, which was acquired by Barclays in 2023, as well as non-executive director of Clydesdale Financial Services, a unit also owned by the bank.
Prior to joining Barclays, Page worked as finance director for Lloyds Banking Group and held various senior positions at HBOS.
The announcement of Page’s appointment comes just months after Metro Bank’s shareholders gave the green light to a £925 million refinancing plan provided by Morgan Stanley and Moelis to help shore up its finances.
