Alt Lending week ended 26th November 2021

Eurozone housing sector entering bubble territory ECB.

So it’s not just the UK that is seeing property prices rise? Apparently the ECB is concerned that the property market in Europe is sensitive to a rise in interest rates. Well where isn’t it? The problem is our old friend inflation which rose to an un eurolike 4.1% in October. Apparently the ECB thinks that Inflation will peak in November and gradually tail off in the following year. We shall see. This is yet another example of how Central Bankers show that they do not have a clue as to how to get themselves out of the mess that they have created by money printing. It is not just the eurozone that is suffering the UK is not different but at least out interest rates are in positive territory. BofE governor Andrew Bailey was roundly criticized last week for not sanctioning a miniscule rise and his reputation is taking a real hammering as a result. Madame Lagarde has opined that an interest rate rise is very unlikely next year despite inflation. However there are other factors at play. The current situation is seemingly driving European punters to buy assets such as crypto currencies which only exist on myriad hard drives. And on top of all that there is growing civil unrest in many European capitals over the authoritarian measures to contain COVID with a dive in economic activity likely to do more harm than good. We all need to get back to some kind of normality.

Strange tale of bank reporting itself to Watchdog over analyst recommendation?

Boutique investment bank Numis has reported itself to the Financial Conduct authority for issuing a memo concerning THG (The Hut Group). Apparently the offending wording concerns an allegation of “accounting irregularities”. In any case it seems to have spooked Numis’s executive management and would seem to suggest something more fundamental. THG are not without their detractors and from reading a number of reports one of the major problems seems to be confusion over what they actually do? Surely this is what investment analysts are suppose to flush out and clarify? The offending memo also suggested that the shares were overvalued hardly a controversial statement under the circumstances amid what appears to be an institutional lack of clarity. Very strange.

Carlyle withdraws from Metro Bank takeover talks.

The coverage from this story, that was reported in practically every single UK newspaper, seemed to conclude that this was final proof that physical banking assets were now an anachronism and there was no future for bricks  and mortar or glass and neon in Metro Banks case. I am not sure about this and the argument is far from clear cut. Traditional banks are closing bank branches at an ever increasing pace and many people particularly the elderly and non technically savvy audience are becoming increasingly isolated and ignored. Those in rural communities and without driving licenses are also on the receiving end of this. In addition the challenger banks have shown themselves to be pretty good at maintaining deposits but not quite so good at deploying those deposits productively. It is hard, however, to see Metro Bank as having a strategic vision that would work  in today’s world without some major changes in approach but I am sure there is a role for a traditional bank if it pursued seriously enough.

Howard Tolman is a well-known banker, technologist and entrepreneur in London,We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.For context on Alt Lending please read the Interview with Howard Tolman about the future of Alt Lending and read articles tagged Alt Lending in our archives.

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