Finance

Buying art can be a nerve-racking experience. But investors have long been able to console themselves with the thought that, if their purchase plummets in value, they will at least have something nice on their wall. Now they can also console themselves that they will have something to borrow against.That is because there has been a boom in “art-secured lending”. Until recently this was only available to the wealthiest clients of private banks. In the past five years, though, auction houses and boutique lenders have become more involved. Deloitte, a consultancy, reckons that such outfits increased their lending by 119% over the period, compared with a 31% rise at banks. Last year non-banks doled out as much as $8bn against art and collectibles, or 23% of all such loans, up from 15% in 2019. More

Zhou Qiren is an unusual economist. A professor at Peking University, he spent ten years toiling in the countryside during China’s cultural revolution. “The same farmer”, he observed, “worked like two totally different persons on his private plots versus on collective land.” Unlike most economists, Mr Zhou still studies incentives and constraints from the ground up, starting not with abstract principles, but with concrete cases, often drawn from his travels around China and beyond.After a visit to a rice-noodle bar in Qinzhen, he wondered why it offered one-week courses showing others how to replicate its prized dish. On trips to China’s sprawling new city districts, he notes that it takes 70 steps to cross the road compared with 15 or so for many streets in Manhattan. He is sceptical of state-owned enterprises, which he once compared to public passages crowded with private “sundries”. He also has doubts about the feasibility of national self-reliance. Prosperity, he has pointed out, is built on “coming and going” across borders. More

How to explain the disparity? India’s economy is growing astonishingly fast, Bangalore and Mumbai have become destinations for bosses of global financial firms and Narendra Modi trumpets the country’s appeal in his electoral campaign. Given the enthusiasm, surely foreign money is flooding into the country.Not quite. In April foreign investors dumped $1bn-worth of Indian shares. In May they dumped another $4.2bn. This is a sliver of the roughly $900bn of Indian shares in foreign hands, but it is a striking move given the mood music—and one that has pushed the share of the Indian stockmarket held by foreigners to just 18%, its lowest in a dozen years. More

When William Nordhaus, who would later win a Nobel prize in economics, modelled the interaction between the economy and the atmosphere he represented the “damage function”—an estimate of harm done by an extra unit of warming—as a wiggly line. So little was known about the costs of climate change that he called it “terra incognita”, unknown land, compared with the “terra infirma”, shaky ground, of the costs of preventing it. Eventually, a rough calculation gave him an estimate that 1-2% of global GDP would be lost from a 3°C rise in temperature. This was no more than an “informed hunch”, he wrote in 1991.A new working paper puts the damage far higher. Diego Känzig of Northwestern University and Adrien Bilal of Harvard University use past changes in temperatures caused by volcanic eruptions, as well as El Niño, a years-long increase in heat released by the Pacific Ocean, to model the impact of a warmer planet. Employing long-term data on global economic growth and average annual temperature, they find that an additional 1°C of warming will lead to a 12% fall in GDP. A climate-change scenario with more than 3°C of warming would be, according to their estimates, an equivalent blow to fighting a permanent war. More

In an exclusive interview with CNBC, Johan Tjarnberg, CEO of Trustly, said that his firm still needs time to prove the value of its open banking technology to investors before going public.
Trustly is holding out on an IPO even after reporting a strong set of financials, with results shared exclusively with CNBC showing the firm reported revenues of $265 million in 2023.
Trustly increased operating profit by 51% in full-year 2023, with adjusted EBITDA climbing to $51 million from $33 million in 2022.

Trustly CEO Johan Tjarnberg.

The boss of Swedish financial technology startup Trustly says an initial public offering for the company is still a year or two away from happening, even after a 51% jump in operating profit.
In an exclusive interview with CNBC, Johan Tjarnberg, CEO of Trustly, said that his firm still needs time to prove the value of its open banking technology to investors before going public.

“We need another year or two to really demonstrate to the market that open banking is happening happening, it’s here,” Tjarnberg told CNBC.
“For me, there is so much we want to demonstrate to the market in terms of user adoption, merchant adoption. We still need some time to execute on our existing playbook.”
Trustly is holding out on an IPO even after reporting a strong set of financials. Results shared exclusively with CNBC show the firm reported revenues of $265 million in its 2023 full year.
Growth accelerated significantly in the second half of the year, Trustly said, climbing 27% compared with the same period in 2022. That was as transaction volumes spiked 48% over the same period.
Tjarnberg told CNBC that the company’s performance in 2023 was heavily driven by the growth at its U.S. business. Trustly merged with American rival PayWithMyBank in 2020.

“We invested a lot into the U.S. market,” Tjarnberg said. “We were roughly 20 people there four years ago; we now have 500 supporting the U.S. market.”
Tjarnberg said that, in the first quarter of this year, Trustly saw heightened growth in areas like utilities, retail, and travel, with 22% of volumes coming from those core verticals, up 44% over 12 months.

Chipping away at Visa, Mastercard?

Trustly increased operating profit by 51% in full-year 2023, with adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) climbing to $51 million from $33 million in 2022.
That was as overall transaction value processed during 2023 climbed by 79%, to $58 billion.
Trustly helps companies integrate the ability to accept payments via open banking technology.
This tech lets consumers make payments directly to a merchant’s bank account without the need for an intermediary such as a card issuer.
It provides an alternative to incumbent credit card programs such as Mastercard and Visa, which charge merchants high fees for transactions.

In the U.S., Tjarnberg said, Trustly is seeing heightened demand from merchants “trying to take down costs,” as high card processing fees have made them more price-conscious.
“There is no secret that our objectives and ambition is to bring a good alternative to other payment methods, including cards,” he told CNBC.
Open banking is a trend which has gained significant momentum, particularly across Europe.
That’s thanks to the introduction of regulations which require banks to open their clients’ account data and payment functionalities to third-party firms.
It has paved the way for new entrants into finance including fintechs, startups and tech companies. Founded in 2008, Sweden’s Trustly competes with the likes of GoCardless, TrueLayer, Volt, Bud, and Yapily.

Future product plans

Trustly expects to launch a feature that allows its merchants to set up recurring payments for customers. That will be targeted at things like telecom packages and subscription-based music streaming services.
Tjarnberg said Trustly is “bullish” on the mobile space, particularly in the U.S. after having seen early success in mobile billing partnerships with the likes of AT&T and T-Mobile.
Trustly is used by more than 9,000 merchants worldwide including Facebook, Alibaba, PayPal, eBay, AT&T, Unicef, Dell, Lyft, DraftKings, Wise, and eToro.
Trustly is majority-owned by venture capital firm Nordic Capital, which owns a 51.1% stake in the business. Alfven & Didrikson is its second-biggest backer, with a 11.1% stake, while BlackRock holds an 8.9% stake.
Aberdeen Standard Investments and Neuberger Berman own 0.7% and 0.9% stakes in Trustly, respectively, while others including the Trustly management and employees own 27.4%. More

UBS on Thursday announced a shake-up of its executive board in the latest phase of a radical overhaul of the Swiss banking giant, following its takeover of fallen rival Credit Suisse.
A newly split global wealth management division sees the bank double down across the two geographies as part of its “sustainable, strategic growth” strategy.
The new appointments provide an important signal on the future direction of the bank as it tees up a replacement for outgoing CEO Sergio Ermotti, who is expected to step down by early 2027.

The three keys USB logo is seen outside the London office of Swiss bank UBS in central London, on March 20, 2023.
Daniel Leal | AFP | Getty Images

LONDON — UBS on Thursday announced a shake-up of its executive board in the latest phase of a radical overhaul of the Swiss banking giant, following its takeover of fallen rival Credit Suisse.
A newly split global wealth management division, led by co-presidents Iqbal Khan in Asia-Pacific and Rob Karofsky in the U.S., sees the bank double down across the two geographies as part of what it has dubbed its “sustainable, strategic growth” strategy.

It marks the first time a divisional UBS president has been based in Asia-Pacific, the bank said.
The new appointments provide an important signal on the future direction of the bank, as it tees up a replacement for outgoing CEO Sergio Ermotti, who is expected to step down by early 2027.
“The appointments to the Group Executive Board we are announcing today will allow us to continue to progress on our integration journey and realize the expected synergies and efficiencies, while putting even more emphasis on our long-term priorities and growth prospects, particularly in the Americas and Asia-Pacific,” Ermotti said in a statement.
George Athanasopoulos and Marco Valla also join the executive board as co-presidents of the investment bank, alongside Damian Vogel, incoming global chief risk officer.
The trio replace outgoing board members Credit Suisse CEO Ulrich Korner, UBS Asia-Pacific President Edmund Koh, and UBS Americas Regional President Naureen Hassan.

The reshuffle comes as part of a wider overhaul of the bank, following its emergency rescue last year of Credit Suisse — a shotgun marriage brokered by Swiss authorities to prevent the then 167-year-old institution’s collapse and protect the Swiss economy.
The FT reported Monday that UBS had ruled out an outsider as successor to Ermotti, who returned last year to steer the bank through its mammoth takeover.
The bank is said to be choosing from a shortlist of three internal candidates to assume the CEO role when Ermotti steps down in around three years’ time. A name could be announced as early as next year, sources told the FT.
UBS did not immediately respond to CNBC’s request for comment on the reports. More

The logo for Salesforce is displayed on the Salesforce Tower in New York City on March 7, 2019.
Brendan Mcdermid | Reuters

Check out the companies making headlines in extended trading:
Salesforce — Shares plunged more than 14% after first-quarter revenue of $9.13 billion missed consensus estimates of $9.17 billion, according to LSEG. Adjusted earnings of $2.44 per share beat a consensus estimate of $2.38, but current-quarter guidance fell below estimates on both top and bottom lines. 

UiPath — The software company tanked 30% after saying its CEO Rob Enslin will resign, effective June 1. He will also be stepping down from the board of directors. Daniel Dines, former CEO of UiPath and current chief innovation officer, will return to the helm.
HP Inc. — The manufacturer of personal computers rose 3%. HP posted adjusted earnings of 82 cents per share on revenue of $12.8 billion in its fiscal second quarter, above analysts’ estimates of 81 cents a share and revenue of $12.6 billion, according to LSEG.
Pure Storage — The software company rose 1% on better-than-expected fiscal first-quarter earnings. Pure Storage posted 32 cents a share in adjusted earnings on $693.5 million in revenue. Analysts surveyed by LSEG had forecast 21 cents a share on revenue of $681 million. 
Okta — The digital identity verification company added nearly 2% after top- and bottom-line numbers topped analysts’ estimates in the first quarter. Okta’s second-quarter revenue guidance range of $631 million to $633 million also beat the consensus estimate for $616 million, according to LSEG data. 
Capri — The Versace and Jimmy Choo fashion group shed 3% after fiscal fourth-quarter results missed analysts’ estimates. Capri reported adjusted earnings of 42 cents a share, while analysts had estimated 65 cents, according to LSEG. Revenue of $1.22 billion also missed forecasts of $1.30 billion. Management cited softening demand for luxury goods and a slowdown in Asia. 

C3.ai — Shares of the artificial intelligence software company climbed more than 8% after reporting quarterly results above estimates. C3.ai lost an adjusted 11 cents per share on $86.6 million in revenue. Consensus estimates had called for a loss of 30 cents on revenue of $84.4 million, according to LSEG. Full-year revenue forecasts also beat estimates. 
American Eagle Outfitters — Shares pulled back nearly 6% after the clothing retailer’s first-quarter revenue missed estimates and it issued weak forward guidance. American Eagle Outfitters reported $1.14 billion in revenue, lower than the average analyst estimate of $1.15 billion, according to LSEG data. Earnings beat estimates, but full-year revenue guidance was in a range of 2% to 4%, compared to forecasts for 3.4%. 
Agilent Technologies — The life sciences company tumbled 14% after lowering full-year earnings and revenue guidance. Agilent guided for earnings per share between $5.15 and $5.25 versus previous guidance of $5.44 to $5.55, according to FactSet. Revenue guidance was also pulled back to between $6.42 billion and $6.50 billion, compared to prior guidance in a range of $6.71 billion to $6.81 billion. Meanwhile, fiscal second-quarter earnings topped estimates, while revenue narrowly fell below the consensus estimate.
Nutanix — The cloud computing company tumbled 14% after issuing its fiscal fourth-quarter revenue forecast of $530 million to $540 million that missed analysts’ estimates of $546 million. Full-year revenue guidance of $2.13 billion to $2.14 billion compared to prior forecasts of $2.12 billion to $2.15 billion, and consensus estimates of $2.14 billion, per FactSet.
— CNBC’s Darla Mercado contributed reporting. More

Nissan warned owners of nearly 84,000 older vehicles to stop driving them, according to the National Highway Traffic Safety Administration.
The warning covers certain 2002-2006 Nissan Sentra, 2002-2004 Nissan Pathfinder and 2002-2003 Infiniti QX4 vehicles that may have Takata airbags that were recalled in 2020.
The NHTSA said the agency has confirmed that a defective Takada airbag that exploded killed 27 people and allegedly injured at least 400 others in the U.S.

A Nissan Sentra sits on the lot of a dealership in Evanston, Illinois, on Nov. 12, 2010.
Scott Olson | Getty Images

Nissan has warned owners of older vehicles to drop driving cars equipped with recalled, unrepaired Takata airbags the National Highway Traffic Safety Administration announced Wednesday.
The NHTSA said the Japanese carmaker’s “Do Not Drive” alert applies to 83,920 cars. The affected cars include 2002-2006 Nissan Sentra, 2002-2004 Nissan Pathfinder and 2002-2003 Infiniti QX4 vehicles that may have Takata airbags that were recalled in 2020.

Nissan’s stock closed Wednesday’s session down around 3% following the warning.
“NHTSA is urging all vehicle owners to immediately check to see if their vehicle has an open Takata airbag recall,” the NHTSA said in a statement. “If you have one of these vehicles, do not drive it until the repair is completed and the defective airbag is replaced.”

Read more CNBC auto news

Nissan and Infiniti will offer affected owners free towing and mobile repair, as well as loaner cars in select locations. Infiniti is a division of Nissan.
“Due to the age of the vehicles equipped with defective Takata airbag inflators, there is an increased risk the inflator could explode during an airbag deployment, propelling sharp metal fragments which can cause serious injury or death,” a Nissan spokesperson told CNBC in a statement.
According to the NHTSA, 27 people in the United States were confirmed to have been killed by a defective Takata airbag that exploded. At least 400 others have allegedly sustained injuries, according to the NHTSA.

At least 67 million Takata airbag inflators have been recalled in the country, and more than 100 million have been recalled worldwide, making it one of the largest auto safety callbacks in history.
In 2017, Takata filed for bankruptcy protection in Japan and the U.S. after agreeing to pay $1 billion in criminal penalties tied to its allegedly fraudulent conduct in the sales of its defective airbag inflators.

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