Finance

British neobank Monzo told CNBC it raised another $190 million from investors including Hedosophia and CapitalG, Alphabet’s independent growth fund.
The latest funding boost Monzo’s total funding this year to $610 million and values the business at $5.2 billion post-money.
TS Anil, CEO of Monzo, told CNBC his firm plans to use the cash to build new products and accelerate its international expansion plans.

Monzo CEO TS Anil.

British neobank Monzo said Wednesday that it’s raised another $190 million, lifting the total it’s raised so far this year to $610 million.
The company told CNBC it raised the cash from new investors including Hedosophia, a backer of top European fintechs including N26 and Qonto. CapitalG, Alphabet’s independent growth fund, also participated in the round.

Singaporean sovereign wealth fund GIC also participated in Monzo’s latest fundraise, a source familiar with the matter told CNBC. The source spoke on the condition of anonymity as details of GIC’s involvement aren’t yet public.
GIC declined to comment.
The latest funding values Monzo at roughly $5.2 billion, an increase on the $5 billion valuation it attained in March when it raised $430 million. The total $610 million round marks the single-biggest funding round for a European fintech in the past year, according to Dealroom data.
TS Anil, CEO of Monzo, told CNBC his firm plans to use the cash to build new products and accelerate its international expansion plans.
“At the heart of it we are a mission-oriented company that’s looking to build the single place where people can meet all of their financial needs,” Anil told CNBC in an exclusive interview.

“What’s exciting to me is that, as we pursue that mission of changing people’s relationship with money, we’ve built a business model that is congruent with that as well, with this model that is built entirely around the customer.”

Monzo entered the black for the first time last year, hitting profitability following the end of its 2023 fiscal year. Anil said Monzo’s looking to ramp up profits with diversification into other income generators, like lending and savings.
Notably, Anil said that Monzo’s planning to launch its first pensions product in the next six to nine months.
That would put it in competition with traditional lenders including Barclays and NatWest. Last year, NatWest acquired 85% of U.K. workplace pension services provider Cushon for £144 million ($180 million).

Global expansion plans

Monzo’s funding expansion caps off a busy year for the nine-year-old firm, which now counts more than 9 million retail customers in the U.K. — 2 million of whom joined Monzo last year alone — and over 400,000 business customers.
Last year saw Monzo make its first foray into investments with a feature allowing customers to invest in funds managed by BlackRock.
Anil said Monzo identified that about a third of people using the service had never invested previously — and, more notably, 45% of the women investing via the Monzo app are first-time investors.
Another big priority for Monzo in the coming months is international expansion.

The company recently restarted its U.S. expansion efforts, hiring a long-time executive from Block’s Cash App as its new U.S. CEO after earlier abandoning a bid to acquire a banking license from U.S. regulators.
For now, Anil says, Monzo’s team in the U.S. is primarily focusing on product to ensure that the service it has there is of high enough quality that it can compete with major incumbents like JPMorgan and Citibank.
The U.S. has proven notoriously difficult for European neobanks to crack.
Berlin-based digital bank N26 notably withdrew from the U.S. in 2021.
Revolut, meanwhile, has failed to formally file an application for a U.S. bank charter yet despite having earlier said it intends to file a draft application for a U.S. bank license.
“What I like about how we’re approaching this is, at the heart of it, it’s not just words,” Anil told CNBC in an exclusive interview Tuesday.
“The necessary conditions for the U.S. for us is getting the product right. That’s what we’re spending our time and effort on there.”
European expansion is also on the cards, Anil said, although he didn’t commit to a date for when this will happen.

Mortgages are coming

Longer term, Monzo is also planning to launch a mortgages product, which would see it compete much more aggressively with U.K. retail banks in the world of lending.

Monzo currently offers monthly installment plans and consumer loans via its app.
It also has a “Mortgage Tracker” feature which lets users track how much they’ve paid toward their mortgage and how much equity they’ve built.
But it’s yet to officially roll out a service that would let people apply for mortgages directly within its app.
Anil said Monzo is in the early stages of exploring partnerships with lenders to offer this.
He declined to name any prospective partners.
One thing Monzo hasn’t got any immediate plans for is an initial public offering.
Although he thinks Monzo will make a “great public company one day,” Anil said it’s still too early to talk of an IPO. He says he’s focused on growing Monzo at scale before reaching that milestone. More

HD Hyundai Marine Solution’s IPO is South Korea’s largest since January 2022, when LG Energy Solution went public.
The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering.
The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.

Employees of HD Hyundai Marine Solution Co., during the company’s listing ceremony at the Korea Exchange in Seoul, South Korea, on Wednesday, May 8, 2024. HD Hyundai Marine, a ship repair company, jumped as much as 45% in its South Korea trading debut after a 742.3 billion won ($547 million) initial public offering that was priced at the top of a range and met strong demand.
Bloomberg | Bloomberg | Getty Images

Shares of maintenance and repair firm HD Hyundai Marine Solution nearly doubled in their trading debut Wednesday, marking a strong start to South Korea’s largest IPO since January 2022.
Shares traded as high as 166,100 South Korean won ($121.59) apiece, representing a 99.1% surge from the IPO price of 83,400 won. The stock closed at 163,900 won, representing a gain of 96.52%.

The ship-repair unit of South Korea’s largest shipping conglomerate HD Hyundai Group sold 8.9 million shares in the initial public offering. The IPO totaled 742.26 billion won, valuing the newly public unit around 3.71 trillion won at the offering price.
Half — or 4.45 million—of the IPO shares are newly issued.
The company’s IPO showed strong investor interest, with both the institutional and retail offering oversubscribed by over 200 times combined.
The Wall Street Journal, citing HD Hyundai officials, reported that the parent conglomerate, which held a 62% stake in its unit ahead of the IPO, will continue to be in control.
Meanwhile, KKR, the second-largest shareholder since 2021, plans to gradually reduce its stake, which currently stands at 38%. More

Since Russia began its invasion in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have escaped the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. “If you can drive a tractor, you can drive a tank,” notes Mr Kachka. Farmers therefore not only have new opportunities to evade taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More

Since Russia invaded in 2022, Ukraine’s economy has shrunk by a quarter. But the ravages of war are not the only reason for the government’s reduced tax take. Businesses are also making use of the chaos to dodge paying their fair share. This is particularly true in agriculture, which before the war was responsible for 40% or so of Ukraine’s exports by income. The sector has been transformed by a scramble to find export routes safe from Russian attack. As Taras Kachka, Ukraine’s deputy minister for agriculture, notes, this disturbance has provided plenty of opportunity for farmers to “optimise taxes”.Around 6.5m Ukrainians—or 15% of the country’s pre-war population—have left the country, shrinking the domestic food market. At the same time, Russia is targeting transport infrastructure, grain silos and other agricultural equipment, which has driven up costs. Many workers have been recruited by the armed forces, and are at the front. Farmers therefore not only have new opportunities to dodge taxes, they are also increasingly desperate. The result is that two of every five tonnes of grain harvests now avoid contributing to state coffers, according to Mr Kachka’s estimates. More

Billionaire investor Stanley Druckenmiller revealed Tuesday that he has slashed his big bet in chipmaker Nvidia earlier this year, saying the swift artificial intelligence boom could be overdone in the short run.
“We did cut that and a lot of other positions in late March. I just need a break. We’ve had a hell of a run. A lot of what we recognized has become recognized by the marketplace now.” Druckenmiller said on CNBC’s “Squawk Box.”

Druckenmiller said he reduced the bet after “the stock went from $150 to $900.” “I’m not Warren Buffett; I don’t own things for 10 or 20 years. I wish I was Warren Buffett,” he added.
Nvidia has been the primary beneficiary of the recent technology industry obsession with large artificial intelligence models, which are developed on the company’s pricey graphics processors for servers. The stock was one of the best performers last year, rallying a whopping 238%. Shares are up another 66% in 2024.

Arrows pointing outwards

The notable investor, who now runs Duquesne Family Office, said he was introduced to Nvidia by his young partner in the fall of 2022, who believed that the excitement about blockchain was going to be far outweighed by AI.
“I didn’t even know how to spell it,” Druckenmiller said. “I bought it. Then a month later ChatGPT happened. Even an old guy like me could figure out okay, what that meant, so I increased the position substantially.”
While Druckenmiller has cut his Nvidia position this year, he said he remains bullish in the long term on the power of AI.

“So AI might be a little overhyped now, but underhyped long term,” he said. “AI could rhyme with the Internet. As we go through all this capital spending we need to do the payoff while it’s incrementally coming in by the day. The big payoff might be four to five years from now.”
The widely followed investor also owned Microsoft and Alphabet as AI plays over the past year.
Druckenmiller once managed George Soros’ Quantum Fund and shot to fame after helping make a $10 billion bet against the British pound in 1992. He later oversaw $12 billion as president of Duquesne Capital Management before closing his firm in 2010.  More

Citigroup CEO Jane Fraser said Monday that consumer behavior has diverged as inflation for goods and services makes life harder for many Americans.
Fraser, who leads one of the largest U.S. credit card issuers, said she is seeing a “K-shaped consumer.”
That means the affluent continue to spend, while lower-income Americans have become more cautious with their consumption.

Citigroup CEO Jane Fraser said Monday that consumer behavior has diverged as inflation for goods and services makes life harder for many Americans.
Fraser, who leads one of the largest U.S. credit card issuers, said she is seeing a “K-shaped consumer.” That means the affluent continue to spend, while lower-income Americans have become more cautious with their consumption.

“A lot of the growth in spending has been in the last few quarters with the affluent customer,” Fraser told CNBC’s Sara Eisen in an interview.
“We’re seeing a much more cautious low-income consumer,” Fraser said. “They’re feeling more of the pressure of the cost of living, which has been high and increased for them. So while there is employment for them, debt servicing levels are higher than they were before.”
The stock market has hinged on a single question this year: When will the Federal Reserve begin to ease interest rates after a run of 11 hikes? Strong employment figures and persistent inflation in some categories have complicated the picture, pushing back expectations for when easing will begin. That means Americans must live with higher rates for credit card debt, auto loans and mortgages for longer.
“I think, like everyone here, we’re hoping to see the economic conditions that will allow rates to come down sooner rather than later,” Fraser said.
“It’s hard to get a soft landing,” the CEO added, using a term for when higher rates reduce inflation without triggering an economic recession. “We’re hopeful, but it is always hard to get one.”

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Berkshire Hathaway shares rose Monday after Warren Buffett’s conglomerate reported a surge in operating earnings as well as a record cash hoard. Berkshire’s Class A shares were higher by 0.3%, while Class B shares gained about 0.4%.
The company’s stock has already outperformed this year, with each share class having advanced more than 10%. The S&P 500 is up by over 7% this year.

Warren Buffett poses with Martin, the Geico gecko, ahead of the Berkshire Hathaway Annual Shareholder’s Meeting in Omaha, Nebraska on May 3rd, 2024.
David A. Grogan | CNBC

Berkshire Hathaway shares rose Monday after Warren Buffett’s conglomerate reported a surge in operating earnings as well as a record cash hoard.
The company’s Class A shares were higher by 0.3% in morning trading. Meanwhile, Class B shares last gained about 0.4%.

Those moves come after Berkshire posted first-quarter operating profit of $11.22 billion, up 39% from the year-ago period, mainly driven by an increase in insurance underwriting earnings. Operating profit measures earnings encompassing all of Berkshire’s businesses.

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Berkshire Hathaway Class B

The strength in the insurance businesses, particularly its crown jewel Geico, comes as the sector as a whole benefits from stronger demand and increased pricing power. Insurance underwriting earnings rose to $2.598 billion, a 185% increase from $911 million in the year-earlier quarter. Geico earnings swelled 174% to $1.928 billion from $703 million a year prior.
Berkshire’s cash hoard swelled to a record, partly due to the holding company’s inability in recent years to find a suitable acquisition target. Cash soared to a record $188.99 billion in the first quarter, up from $167.6 billion in the fourth quarter.
“We had much-improved earnings in insurance underwriting. And then our investment income was almost certain to increase,” Buffett said Saturday at the conglomerate’s annual shareholder meeting in Omaha, Nebraska. “And I said that in the annual report because yields are so much higher than they were last year. And we have a lot of fixed, short-term investments that are very responsive to the changes in interest rates.”
Berkshire Hathaway shares have already outperformed this year, with each share class having advanced more than 10%. The S&P 500 is up by more than 7% this year.

Class A shares marked an all-time closing high this year, reaching $634,440 in March; they closed at $603,000 on Friday. Class B shares were recently priced Monday at about $402.60 a share, or about 4% below their record close of $420.52, also set in March.
But Wall Street analysts continue to be positive on the company’s outlook. UBS analyst Brian Meredith has a buy rating on Berkshire, citing the earnings beat and noting that Geico is on pace to catch up to competitors Progressive and others on data analytics by 2025. His $734,820 price target, raised from $722,234, is nearly 22% above where the shares closed Friday.
Elsewhere, Edward Jones’ analyst James Shanahan has a hold rating on Berkshire, saying the current stock price is already fairly priced. However, he said he continues to “expect solid earnings from BRK’s diverse group of operating companies.”
Correction: UBS analyst Brian Meredith’s price target is nearly 22% above where the shares closed Friday. An earlier version misstated the percentage.

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OMAHA, Neb. — Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.”

Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings.
The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. Since then the media company has had a tough ride, experiencing a dividend cut, earnings miss and a CEO exit. The stock declined 44% in 2022 and another 12% in 2023.

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Just this week, Sony Pictures and private equity firm Apollo Global Management sent a letter to the Paramount board expressing interest in acquiring the company for about $26 billion. The firm has also been having takeover talks with David Ellison’s Skydance Media.
Paramount has struggled in recent years, suffering from declining revenue as more consumers abandon traditional pay-TV, and as its streaming services continue to lose money. The stock is in the red again this year, down nearly 13%.
Buffett said the unfruitful Paramount bet made him think more deeply about what people prioritize in their leisure time. He previously said the streaming industry has too many players seeking viewer dollars, causing a stiff price war. More