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Peer2Peer Finance News | August 18, 2019

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GLI Finance falls into the red as it takes £20m hit on Fintech Ventures arm

GLI Finance falls into the red as it takes £20m hit on Fintech Ventures arm
Hannah Smith

GLI FINANCE fell into the red last year, dragged down by a “disappointing” further writedown on its Fintech Ventures portfolio of almost £20m.

The Aim-listed alternative finance group on Monday reported operating losses of £2.3m for the year ended 31 December 2018, compared to a £101,000 profit the previous year.

The continued disparity in performance between the two arms of the business – Fintech Ventures and Sancus BMS – was laid bare in the group’s full-year results.

Read more: GLI Finance hopes fundraisings will reverse slow growth of fintech portfolio

GLI’s Fintech Ventures arm – which invests in fintech lending platforms – wrote off £19.6m across eight platforms in 2018, which was attributed to challenges in securing additional growth capital.

“It is clearly disappointing to take a further large writedown and we continue to review our options to achieve the greatest potential return from the portfolio,” GLI Finance said.

“Whilst we have made improvements on the cost side, we recognise that more needs to be done to improve profitability.”

One of Fintech Ventures’ investments is UK Bond Network, which shut down its P2P bonds platform last month due to a change of focus after acquiring another company.

Meanwhile, GLI’s lending division Sancus BMS reported revenue growth of 28 per cent to £13.3m, and operating profit before credit losses of £2.8m, up 82 per cent from 2017.

Total cumulative loans advanced across Sancus BMS rose to £1bn, from £797m in 2017, with an actual loss rate of under one per cent reflecting strong underwriting controls, the firm said.

“Sancus BMS continues to deliver strong growth and we are confident this growth will continue, as we increase our market share and launch into new markets such as Ireland,” said chief executive Andy Whelan.

“The launch of a special purpose lending vehicle with a £50m lending capacity, backed by a £45m facility with Honeycomb Investment Trust in January of 2018 was an important step in the expansion plans for Sancus BMS.

“The implementation of the line is an endorsement of the thorough credit processes used within Sancus BMS and, as evidenced by the revenue growth seen during the year, this is proving a success.”

Group revenue rose by 14 per cent year-on-year to £13.2m.

The group continues to focus on simplifying its business following the closure of its loss-making peer-to-peer supply chain finance platform, which it blamed on worsening market conditions and a £1.1m hit from an insolvent borrower. It has said it plans to focus more on asset-backed lending.