Crypto bank Silvergate to shut down after FTX turmoil; UK house prices ‘on downward trajectory’ – business live

Key events

GB News losses rise to over £30m

Photograph: GB News/PA

GB News saw losses balloon to more than £30m last year, as staff costs surged as it signed new talent and advertisers remained wary of the right-leaning news operation, our media correspondent Mark Sweney reports.

The controversy-prone channel, which last week regulator Ofcom ruled broke impartiality for misleading viewers about Covid-19 boosters, racked up a pre-tax loss of £30.68m in the year to the end of May 2022.

The TV channel, and a more recent launch as a digital radio station, is aiming to provide a viable news alternative to established players such as Sky and the BBC.

However, the fledgling operation has spent a turbulent first almost two years weathering on and off-air turmoil and trying to shake a reputation as the “British Fox News”, and has found it difficult to win over advertisers wary of associating with its at times controversial output.

GB News made just £3.6m in turnover over the year - with the two biggest streams being £3m from advertising revenue and just over £550,000 in digital revenue.

The company reported a bill of £12.75m for its 175 staff at the end of May last year, up from 16 staff and less than £1m a year earlier when it was in start up mode.

Despite the ballooning losses, up from £3m when GB News filed its first public financial report for 2021, the company said that it continues to have the support of its backers for the foreseeable future.

“The company’s aim is to champion robust, balanced debate and to provide a range of perspectives on the issues that affect everyone in the UK,” it said in financial filings published on Thursday, adding:

“The Directors are confident about the future outlook for the company.”

Last August there was a shakeup among its backers, with the founding investor Discovery selling up, and the existing shareholders Sir Paul Marshall, the Brexiter hedge fund tycoon, and Legatum, the Dubai-based investment company founded by the New Zealand billionaire Christopher Chandler, taking control.

Financial accounts for Discovery’s UK business subsequently revealed that it sold its 25% stake for £8m, a 60% drop on the original £20m it paid, which would suggest the value of GB News has fallen from £80m at launch to £32m. The latest £60m funding round, in which the co-founders Andrew Cole and Mark Schneider resigned as directors and sold their stakes, could sustain GB News for a number of years if it chose to cut costs dramatically.

“This renewed investment in the company gives GB News the financial capability to build for the long term in what is a hugely competitive market,” said GB News.

UK house prices on downward trajectory, surveyors warn

UK house prices “remain on a downward trajectory”, according to a new poll of property surveyors released this morning.

The Royal Institution of Chartered Surveyors (RICS) has reported that house prices continued to slip across the country last month.

The RICS house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in house prices, has dropped to -48 in February from -46 the previous month, which is the lowest reading since April 2009.

However, there are also signs that the market is stabilising, as it recovers from the surge in mortgage rates after the calamatous mini-budget last September.

RICS found that property surveyors are less gloomy about the prospects for the housing market, as a slump in new buyer enquiries eased.

Tarrant Parsons, senior economist at RICS, says the increase in borrowing costs continues to dampen the market.

“The housing market continues to adjust to the tighter lending climate, with stretched mortgage affordability still weighing heavily on activity.

“Given the ongoing weakness in demand, house prices remain on a downward trajectory, and are expected to see further falls through the first half of the year at least.

“Going forward, near-term expectations suggest market activity will remain generally subdued over the coming months, although the latest survey feedback shows tentative signs that the ongoing decline in buyer enquiries is now moderating”.

Lender Nationwide reported that house prices fell at the fastest annual rate since 2012 last month, but Halifax found that they rose by 1.1%.

Introduction: Crypto bank Silvergate to shut down in face of market turmoil

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The turmoil in the crypto sector following the collapse of crypto exchange FTX has claimed crypto-focused bank Silvergate.

Silvergate Capital Corp announced last night that it plans to wind down Silvergate Bank‘s operations and voluntarily liquidate it in an orderly fashion, after incurring losses following the dramatic collapse of FTX in November.

Silvergate is one of the few mainstream financial organisations to have focused on providing services to the cryptocurrency sector. That helped it grow rapidly until the ‘crypto winter’ began last year, when prices of crypto assets tumbled.

Silvergate announced that:

In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward.

The Bank’s wind down and liquidation plan includes full repayment of all deposits. The Company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.

The news sent Silvergate’s share price slumping in after hours trading, down 43% to $2.76. They’re down over 96% over the last 12 months.

Once a small community bank, Silvergate reinvented itself during the crypto boom to provide services to companies that struggled to work with conventional financial providers.

The collapse of Sam Bankman-Fried’s crypto exchange FTX in November created a crisis of confidence in the sector, and drove investors to pull money from Silvergate.

At the start of January, Silvergate reported that customers had pulled more than $8bn (£6.7bn) of their crypto-related deposits in the final quarter of last year, forcing it to sell billions of dollars of assets to protect its balance sheet.

Silvergate’s future has been in doubt since it delayed the publication of its annual report last week, and announced a fresh sale of assets to repay debts.

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