Wellesley puts P2P product on “pause” and boosts transparency
WELLESLEY & Co is putting its peer-to-peer lending activities on “pause” and has published details of its loan book for the first time, as it works towards gaining full authorisation from the Financial Conduct Authority (FCA).
From 31 May, the lender will not be accepting any new money into its existing P2P product, ahead of a new offering set to be launched in the third quarter. This does not affect existing investments that are yet to mature, the company said.
“Wellesley is currently working towards full authorisation by the FCA,” it said on Friday. “Presently we have sufficient lender funds available which allows us to pause the existing P2P product whilst we will be make a few changes to our product range over the coming months.”
Like many platforms, Wellesley is still on interim permission from the City watchdog. The regulatory process has been long and arduous, with ‘big three’ lenders Zopa and Funding Circle finally getting the green light in May, around 18 months after applying.
Read more: FCA approval is no longer a three-horse race
The peer-to-peer lender, which hit the headlines in January amid reports that it was struggling to stay afloat, also unveiled highlights from its full-year results ahead of their release next week. The firm’s losses narrowed to £210,288 in 2016, an improvement from a £2.2m loss in 2015.
Read more: Wellesley & Co narrowly avoids being struck off
It announced that its loan book has grown by 10 per cent to £163.6m, it raised more than £100m of new P2P and bond investment and acquired 2,000 new customers last year. 16 per cent of its 125 loans originated since the start of 2015 are now beyond their original term, but this is in line with expectations and is common for development finance, the company said.
Wellesley left the Peer-to-Peer Finance Association in 2014, meaning it now longer had to comply with the association’s standards of loan book disclosure. However, Peer2Peer Finance News understands that transparency is a key prerequisite to FCA authorisation.
Read more: Wellesley stops offering longer-term P2P loans to investors
“I am pleased to see the progress which the management team has made in the past year in an industry which is in a period of transition,” said chairman David Godfrey.
“We returned to profit in the second-half of the year, a trend we expect to continue through the first half of 2017, and management is developing a strong platform on which to build Wellesley’s future growth and long-term success.
“Wellesley’s business model proved attractive to investors and enabled us to lend more than £100m to developers, supporting the creation of 822 mid-priced homes across the country, taking the total since the firm’s inception above 2,000.”
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