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Peer2Peer Finance News | July 24, 2019

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Funding Circle’s UK loanbook hits £4bn

Funding Circle’s UK loanbook hits £4bn
Marc Shoffman

FUNDING Circle’s UK loanbook has passed the £4bn mark after a bumper fourth quarter.

A fourth-quarter update from the FTSE 250-listed peer-to-peer business lending platform showed that UK investors have now funded £4.6bn of loans between 2012 and 2018.

It comes as Funding Circle reported a record quarter of £684m of originations across all its global businesses in the final months of 2018.

The lender – which raised £300m in an initial public offering (IPO) last year – said its originations across the group were up 31 per cent annually at the end of the fourth quarter of 2018.

It made £2.3bn of loans across its platforms in the UK, US, Germany and The Netherlands during the last year.

Of this, £1.5bn came from the UK business, $792m (£615m) was in the US, €105m (£93m) was in Germany and €81m in The Netherlands.

Its book of active loans amounted to £3.1bn at the end of the year, £2.2bn of which came from the UK.

Read more: Funding Circle remains fastest growing P2P firm

Loans originated in the second half of 2018 for the UK are expected to return 5.5-6.5 per cent, the update said, adding that it still expected lower performance from its 2016/2017 originations due to a weaker consumer credit environment.

The platform also reported revenue was up by around 55 per cent over 2018, above the 50 per cent guidance it included in its IPO document.

Revenue growth is expected to be at around 40 per cent in the medium term, the update said.

“Funding Circle delivered a strong end to 2018 which resulted in exceeding our revenue and loans under management guidance for the year,” Samir Desai (pictured), chief executive of Funding Circle, said.

“We were pleased to announce a number of new institutional investor transactions in the fourth quarter, which is further validation of the attractive risk-adjusted returns generated on the Funding Circle platform.

“We enter 2019 with continuing confidence and remain focused on delivering our growth strategy set out at IPO.”

Its shares were at 335p this morning, still below its float price of 440p.

Analysts at Goodbody backed the strong growth figures, but said it would be good to see more evidence of profitability, which could be a “positive catalyst for the stock.”

Read more: Funding Circle originations hit record high