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Peer2Peer Finance News | November 18, 2017

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Zopa’s revenues rocket thanks to rise in loan origination

Zopa’s revenues rocket thanks to rise in loan origination
Suzie Neuwirth

ZOPA saw its revenues soar by 61 per cent last year, after loan origination increased by almost a third.

The world’s oldest peer-to-peer lender, which specialises in consumer finance, posted revenues of £33.2m, up from £20.6m the previous year.

The growth in revenue reflects an increase in loan origination of 30 per cent to £689m, the firm said in accounts filed with Companies House, published on Monday.

Zopa reported a profitable fourth quarter, causing its full-year operating losses to narrow to £5.9m from £8.9m in 2015.

This is the first time that Zopa has made a profit since 2012.

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“The results reflect continued and significant investment in the company, in particular in technology and operational systems, and in governance infrastructure through strengthening risk, legal and compliance functions,” said the firm.

“Investment in these areas will ensure the company is both viable and sustainable as it moves towards its next stage of growth.”

Zopa’s highest-paid director received £1.13m last year, up from £622,168 the year before.

Looking ahead, Zopa said the directors anticipate the P2P lending sector to continue to expand along with more general expansion of the personal loans market.

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However, it warned that there are concerns surrounding the continued growth of consumer unsecured debt, amid rising inflation.

“The company continues to monitor credit performance and indebtedness trends closely and will act consistently with its prudent approach to credit risk management and responsible lending,” it said.

Zopa also warned that it expects greater competition from both new entrants and traditional financial service providers.

The platform, which was the UK’s largest P2P lender until Funding Circle surpassed it in terms of cumulative lending earlier this year, has had a busy few months. It received full Financial Conduct Authority authorisation in May and launched its Innovative Finance ISA in June.

It also completed a £32m equity fundraising in June and announced plans to launch a tech hub in Barcelona, to help develop its infrastructure for its new digital bank.

Look out for the full interview with Zopa’s co-founder and chairman Giles Andrews in the upcoming print edition of Peer2Peer Finance News.