- Today’s main news: China Rapid Finance issues regulatory report, board change. H&M invests in Klarna. Tencent drops $180M into Nubank. KKR, Tencent lead $175M investment into Voyager.
- Today’s main analysis: Gen Z is more optimistic than millennials about home ownership.
- Today’s thought-provoking articles: The cities in America with the biggest houses. Inside Ameritrade’s integration with WeChat. Unemployment rate at 48-year low.
- Unemployment at 48-year low. A PeerIQ analysis that includes growth of POS lending and the performance of LendingClub’s 36-month loans. A great read.
- LendingTree reports on biggest, smallest houses in America. Three of the top five markets are in Texas. The midwest dominates the smallest houses list. This isn’t too surprising when you consider that older cities also have older houses, which tend to be smaller in size while the south, which is largely spread out–especially Texas–has room for larger houses. But how can online lenders use this information?
- Generation Z is more optimistic than millennials about home ownership. Is this optimism based on the current state of the economy or is there another reason they feel this way. Either way, this information should be valuable to real estate lenders and alternative lenders alike. A must-read.
- B+E to sell TD Bank property.
- Landis raises $2 million.
- Curve to raise $50 million to become the Amazon of banking.
- Smartphone brand can reflect creditworthiness.
- The Federal Reserve studies rural bank branch closings.
- AFR promotes Brandao to president, Packer to COO.
- Are there too many property investment platforms?
- Meet Stephen Moss, founder of Sourced.
- Multiply wants to put a financial adviser in your pocket.
- Manchester residents and P2P lending.
- China Rapid Finance announces regulatory report, board change.
- China looks to foreign investors, pensioners as distressed-debt saviors.
- Inclusion must not create exclusion.
- H&M buys $20 million stake in Klarna.
- Mintos partners with Trustly.
- Money laundering, backlogs dent ING’s image.
- Anaxago launches asset management firm.
- Tencent invests $180 million in Nubank.
- TD Ameritrade’s integration with WeChat.
- Celsius pays interest to crypto depositors.
- United States
- Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA
- LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA
- More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA
- B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A
- Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A
- Fintech firm Curve looking to raise $ 50 million to become the ‘Amazon of banking’ (CNBC), Rated: A
- Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A
- Fed studies rural branch closings (American Banker), Rated: A
- AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B
- United Kingdom
- Are there too many property investment platforms? (Development Finance Today), Rated: A
- I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A
- Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B
- How Manchester entrepreneurs should begin investing (About Manchester), Rated: B
- China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA
- China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A
- The digital divide: inclusion must not create exclusion (The Finanser), Rated: A
- European Union
- H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA
- Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A
- Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A
- Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B
- China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA
- Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA
- Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A
- KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA
- UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA
Startup Credit Kit; 48-year Low Unemployment Rate (PeerIQ), Rated: AAA
The US economy added 134k jobs in September and the unemployment rate dropped to a low of 3.7% – a level not seeing since the Beatles broke up in 1970. Wage growth came in strong at 2.8%, and raises the specter of inflation down the road.
Point-of-Sale lending continues to grow, with Square now providing instalment loans of up to $10,000 to shoppers who purchase big-ticket items from Square’s merchants. Borrowers can repay in fixed monthly payments over a period of 3, 6, and 12 months with interest rates ranging from0% to 24%. The move puts Square in direct competition with other POS lending services – Affirm, Klarna, Greensky and more.
In regulatory news, the FDIC has received 21 banking applications this year, over twice the number for last year. The FDIC however has approved only 4 of these applications to date.
PeerIQ’s Learning of the Week
This week we look at the performance of LendingClub’s 36-month loans. Over the life of the loans, borrowers with verified income have 140 bps higher losses. This is due to a “selection effect” – namely, LendingClub applies an extra layer of income verification high credit risk borrowers.
LendingTree Reveals the Cities with the Biggest Houses in America (LendingTree), Rated: AAA
LendingTree compared home sizes across the country, but first, let’s look at some national data. The Census Bureau reports that the median size of new homes completed in the second quarter was 2,412 square feet. Home sizes have leveled off the past few years from a peak of 2,488 square feet in the third quarter of 2015, though homes sizes are generally larger today than they were for previous generations. Because only a small proportion of the housing stock is new each year, the median size of all homes is lower given a median house age of 37 years.
- Everything is bigger in Texas. Whoever coined this phrase must have been thinking about real estate. Houston leads the list, with Austin and Dallas also in the top five. Besides having a lot of space, Texas has been adding new residents at a steady pace, with the nation’s largest annual population growth between 2010 and 2016. More new homes means larger homes.
- South equals size. Other Southern cities dominate the top 10, with Atlanta, known for its sprawl, at No. 2.
- Money talks. The Washington, D.C., area, whose suburbs includes the three wealthiest counties in the country, comes in third. Boston, another wealthy city, shows up at ninth.
- Show me? The Midwest lives up to its unpretentious reputation by having the most cities with the smallest houses. Missouri’s Show Me State nickname clearly does not refer to houses, with its two largest cities both in the bottom 10.
- Older is smaller. Cities with older housing stock have smaller houses, including Detroit at No. 45 on our list.
More Optimistic Than Millennials, Gen Z Is Here to Revolutionize the Housing Market (Property Shark), Rated: AAA
- Gen Z has its eye on homeownership, with 83% planning on buying a home within the next 5 years
- College debt is the #1 obstacle towards homeownership for Millennials and Gen Z
- Gen X chooses intergenerational living to care for relatives more often than any other generation
- Gen Z is willing to compromise on almost anything to keep costs down – but dreams of lots of space and amenities
- Gen Z to pose serious competition to Millennials on the real estate market
- Millennials are more realistic about their means, and the most pessimistic about the prospect of homeownership
Whatever they may see as the most significant hurdle towards homeownership, more than 80% of respondents from all three generations expect to buy a home in the next 5 years. Part of more established family units and with stabilized careers, Gen Xers are the least likely to buy homes in the near future, while Millennials are the most likely – 87% of Millennial respondents expect to enter homeownership within 5 years.
Considering that the oldest of Gen Z are barely 23, it is noteworthy that a whopping 83% see themselves entering the real estate market within 5 years.
B+E announces sale of Darien TD Bank property for $ 6.9 million (Patch), Rated: A
B+E (Brokers+Engineers), the first brokerage firm and trading platform for net lease (NNN) real estate, today announced the sale of property that is leased long-term to TD Bank in Darien, Connecticut.
Located at 55 Boston Post Road, the +/- 4,380SF location was sold for $6,900,000 at a 5.1% cap rate. The property has +/- 7 years remaining on the lease and was sold to a 1031 exchanger. B+E represented the seller, Chimblo Family Real Estate, LLC.
Real Estate Startup Landis Raises $ 2M in Funding (Finsmes), Rated: A
Landis, a NYC-based marketplace for institutional real estate investing, raised $2M in funding.
The round was led by Signia Venture Partners with participation from Red Swan Ventures, Graph Ventures, and Kima Ventures, as well as the founders of RealtyShares (Nav Athwal), Compass, Floored, Tango, Rypple, and Stanford professor and JetBlue Chairman Joel Peterson.
Fintech firm Curve is aiming to raise $50 million in funding, its CEO told CNBC in an exclusive interview, as it looks to get some cash to boost its aim to become the “Amazon of banking.”
Smartphone brand can reflect creditworthiness: FDIC study (American Banker), Rated: A
A new study released Thursday bolsters the case for lenders to use borrowers’ digital footprints in assessing their creditworthiness.
The paper, released by the Federal Deposit Insurance Corp.’s Center for Financial Research, said the data trails people leave online — even down to what brand of smartphone they use — are useful at predicting default rates.
Fed studies rural branch closings (American Banker), Rated: A
For a regulator grappling with what is the right balance in big-bank supervision, the Federal Reserve is also trying to drill down on industry trends at the most micro levels.
The Fed’s top regulatory official, Vice Chairman of Supervision Randal Quarles, gave wide-ranging remarks Thursday on the central bank’s efforts to gather and understand data about the community banking sector.
AFR Promotes Brandao to President and Packer to COO (Business Insider), Rated: B
American Financial Resources, Inc. (AFR) is pleased to announce two key executive promotions. Laura Brandao has been promoted to President and Bill Packer is now Chief Operating Officer of the NJ-based leading niche lender.
Are there too many property investment platforms? (Development Finance Today), Rated: A
I’m Stephen Moss, the founder and managing director of Sourced (Property Investor Today), Rated: A
Established to match UK and overseas investors with hand-selected investment opportunities, we offer UK-wide investment advice and property sourcing through our 34-strong network of franchises. This guarantees the same level of local knowledge and off-market opportunities, anywhere in the country.
Since we started in October 2017 our network has grown from one to 34 offices, we have launched a new peer-to-peer (P2P) lending platform and we’re building on our current position as the country’s largest property investment platform and network of property sourcers. We’re also the first company to provide a free online training platform that gives investors of all levels of experience, the skills, knowledge and support they need to grow their portfolios.
Multiply: the new app that wants to put a financial adviser in everyone’s pocket (Evening Standard), Rated: B
How Manchester entrepreneurs should begin investing (About Manchester), Rated: B
- Peer to peer lending – you may have heard of popular companies in this investment sector such as Funding Circle. With peer to peer lending, you lend money to business start-ups to help them become established. When they are profitable you get your money back with any agreed interest.
China Rapid Finance Announces Regulatory Report & Board Change (Crowdfund Insider), Rated: AAA
China Rapid Finance Limited (NYSE: XRF) announced last week that it submitted its P2P Compliance Self-Inspection Report to its local P2P regulatory office. According to the online lender, this new report is considered the first of three steps mandated in the inspection process, a key element in demonstrating compliance with industry reforms being promulgated by the National P2P Rectification Office.
China Rapid Finance then explained it is focused on the next two process steps:
- A self-disciplinary inspection conducted by NIFA and regional regulatory authorities
- verification of inspection results by the regional P2P Rectification Office to conduct on field inspections
China Looks to Foreign Investors and Pensioners as Distressed-Debt Saviors (The Epoch Times), Rated: A
According to data from Bloomberg, China’s total balance of non-performing loans (NPLs) reached 1.96 trillion yuan ($285 billion) at the end of June 2018. To help lower this figure, China has been pawning off toxic loans onto foreign investors and unsuspecting pensioners.
Oaktree Capital Management in September acquired 115 NPLs for 2.4 billion yuan ($350 million) from one of China’s “bad banks” China Huarong Asset Management Co., according to Bloomberg.
The digital divide: inclusion must not create exclusion (The Finanser), Rated: A
There’s a legitimate concern that the change that’s happened in Chinese society since 2014 with regard to rapid conversion from cash and cards to mobile payments has been too fast for some. What happens to those left behind in the digital economy？
H&M buys $ 20 million stake in Swedish fintech firm Klarna (Reuters), Rated: AAA
Fashion chain H&M (HMb.ST) is acquiring a small stake in Klarna in what will be the Swedish online payments services firm’s largest partnership so far.
H&M is paying around $20 million for a stake of less than 1 percent, a Klarna spokeswoman said, confirming a Financial Times report on Monday.
Mintos partners with Trustly to offer real-time transfers (P2P Finance News), Rated: A
MINTOS, Europe’s largest peer-to-peer marketplace, has partnered with payments company Trustly to offer its customers the option to transfer funds in real-time from bank accounts across Europe.
Mintos said the collaboration with Swedish e-payments company Trustly will allow investors using its platform to transfer money in real-time from bank accounts across 29 European countries. This strips out the usual waiting time that is associated with conventional clearing systems.
Money laundering and backlogs dent ING’s image as tech leader (American Banker), Rated: A
Since taking charge of ING Group in 2013, Chief Executive Officer Ralph Hamers has labored to make it the most digitally advanced lender in Europe. His motto: disrupt yourself before a competitor does it first.
It’s safe to say the tumult at ING during the last few weeks isn’t what Hamers had in mind.
Equity Crowdfunding Platform Anaxago Launches Asset Management Firm Anaxago Capital (Crowdfund Insider), Rated: B
Anaxago is launching an asset management firm, Anaxago Capital, to attract more institutional investors and ready itself to fund larger projects. With this, Anaxago expects to double its outstanding investments by 2020.
China’s Tencent invests $ 180 million in Brazil fintech Nubank (Reuters), Rated: AAA
Chinese gaming and social media firm Tencent Holdings Ltd (0700.HK) paid $180 million for an undisclosed minority stake in Brazilian financial technology company Nu Pagamentos SA, both companies said on Monday.
Inside TD Ameritrade’s integration with WeChat (Tearsheet), Rated: AAA
TD Ameritrade continues to explore how to connect with its clients over different platforms.
The company, which has already launched experiences on Messenger, Twitter DM, Amazon Alexa devices and Apple Business Chat, has launched a chatbot for WeChat.
TD Ameritrade’s chatbot allows retail investors in Hong Kong to do their research, access market information, and get support through one of the most popular social and messaging platforms in Asia.
Celsius, Pays Interest To Crypto Depositors (CoinTrust), Rated: A
Celsius, a recently established cryptocurrency lending firm, has announced that it offers interest to thousands of users who deposit Bitcoin and Ether with its wallet application. Celsius claims to have won over 10,000 users since its mobile app was launched on June 29, with an average deposit of 0.5 BTC or 5.50 Ether earning as much as 6.7% per annum. Celsius generates the interest income by lending the crypto to hedge funds which open short position in the crypto market.
KKR and Tencent lead $ 175m investment in Philippines’ Voyager Innovations (Banking Tech), Rated: AAA
UAE-based startup Smart Crowd just got funded by Shorooq Investments (Startup MGZN), Rated: AAA
Smart Crowd, a new real estate crowd investing platform is just closed a Seed Funding round with $600,000 from Shorooq Investments, followed by Abaxx Technologies, 500 Startups, and other high-level strategic individual investors.