Finance Breaking news Metro Bank acquires P2P lender RateSetter last financial news
Breaking-Finance.Com - Metro Bank is to buy distressed P2P lender RateSetter for a bargain basement price of £2.5 million.
Breaking-Finance.Com - Metro Bank is to buy distressed P2P lender RateSetter for a bargain basement price of £2.5 million. The buy out comes comes just weeks after the UK's largest P2P lender slashed the interest rate paid to investors by 50% in anticipation of a wave of defaults under Covid-19.RateSetter says six percent of borrowers have requested a payment freeze and, as a result, it has increased its projected loan losses from £27.5m to £39.2m.Metro Bank is buying the firm for an initial consideration of £2.5 million, with a further £0.
. Under the deal, Metro Bank will assume no credit risk for existing loans at risk of default.The acquisition does not include RateSetter's holding in RateSetter Australia which is being retained by RateSetter shareholders.In its financial year ending 31 March 2019, RateSetter reported revenue of £33 million, a pre-tax loss of £8 million and gross assets of £42 million. Since inception, the business has originated £4 billion of lending, primarily offering unsecured personal loans, auto dealer financing and property financing. Metro Bank says the acquisition will further its ambition to scale up its consumer lending operations, running RateSetter as an independent platform and originating loans under both brands. Daniel Frumkin, chief executive officer at Metro Bank says: "The ability to enhance our offer of unsecured lending to our customers is an important strategic ambition as we continue to evolve the Bank and increase our returns. RateSetter is an established business with a strong technology platform and a talented team who have deep experience in the consumer unsecured lending market. This acquisition therefore accelerates our plans, helps us to better meet the needs of our customers and further strengthens our position as the UK's best community bank."
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