RateSetter is confident of expanding Metro Bank’s unsecured lending

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RateSetter is confident that Metro Bank unsecured lending can expand in 2020 despite the widening of losses.

According to RateSetter’s financial results for the year ended March 31, 2020, the platform was – that was Acquired by Metro Bank in September – Pre-tax losses increased from £ 8.3m in 2019 to £ 8.6m in 2020. This was due to an increase in overhead expenses which was partially offset by an improvement in gross profit.

RateSetter had core income of £ 29.3m in 2020, down from £ 29.7m in 2019, while gross profit increased from £ 18.9m in 2019 to £ 19.5m in 2020, attributable to improved credit management margins after launching new investor products and lower launch commissions.

RateSetter said the platform will generate future revenue through a commission agreement with Metro Bank for the issuance, underwriting and servicing of unsecured loans.

The platform that will stop investment withdrawals from March 26thadded that Metro Bank plans to provide further financial assistance if its future loans and commissions are insufficient to cover its costs.

However, RateSetter said there is no unconditional guarantee of financial support from the bank and therefore relies on it to continue to follow its proposals if necessary.

Continue reading: What does the latest deal with Metro Bank mean for RateSetter investors?

“Given these factors, and taking into account the risks and uncertainties to which the Group’s business model is exposed, the Directors expect that the Group will have sufficient financial resources to meet its obligations (including regulatory capital requirements) for the foreseeable future (within a period of time). to comply with at least 12 months from the date of this report), ”said Rhydian Lewis (pictured), RateSetter General Manager.

RateSetter origins totaled £ 734 million as of March 31, 2020, a slight decrease from £ 771 million in the same period last year.

The platform’s managed loans declined from £ 855m in 2019 to £ 831m in 2020, with the average value of loans under management being higher than the previous year.

Meanwhile, Metro Bank financial results today showed that the bank has issued more than £ 120 million in unsecured consumer loans and plans to expand this further by planning to offer RateSetter’s products in its branches.

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