LENDY has reshuffled its senior leadership team, as it moves to reassure investors about its progress in recovering bad debts.
The peer-to-peer property lending platform confirmed in an investor update that three members of a board established to focus on recoveries have now departed – chief financial officer Paul Thompson, chief operating officer David Gammon and general counsel Gary Anderson.
The board had been established in December 2018 to “deliver the recovery programme” amid investor concerns about the level of arrears and defaults on the platform.
They were due to be based in a new office in Manchester, but Liam Brooke, chief executive of Lendy, said this was no longer required due to the platform making progress on recoveries and no longer planning to move to the north west.
“We announced some changes to the board in December and since then, there have been further changes to senior personnel within Lendy,” Brooke said.
“As a large proportion of Lendy’s loanbook is in the North of England, we had been looking to set up an office in the Manchester area to oversee and manage the recoveries process.
“As the recoveries moved forward, this move has become less of a priority and we felt that expenditure on an additional office was not justified.
“Most of that team was based in the North West and the logistics of travel were increasingly time consuming. Gary, David and Paul each made valuable contributions to the business during a period of transition and have left on good terms.”
Brooke said a new executive leadership team has been appointed with “specialist industry expertise,” although he did not name the individuals in an update to investors.
Lendy is still yet to respond to Peer2Peer Finance News’ repeated requests for comment about the departure of former chief operating officer Robert Kelly and other staff members.
Brooke said recoveries should be significant during the next three to four months.
“Some of these will include interest as well as capital, while others will be interim repayments as we seek to recover further monies through legal claims,” he said.
“Lendy, like much of the P2P sector, has experienced a significant rise in borrower defaults as challenging market conditions continue to affect us all.
“The next quarter will not be without these issues, but I want to assure you that the business is in a more robust position than it has been, and we continue to focus on achieving recoveries on your outstanding loans.
“It has been well documented that the P2P sector, particularly in the UK, has seen a rise in loan defaults. Lendy is not alone in facing a challenging period of recoveries as borrowers find themselves under increasing pressure which has led to their failure to repay on time and in full.”
He added that Lendy had a provision fund that would only pay out in “exceptional circumstances.”
The update revealed that Lendy had raised finance to improve its working capital and to fund ongoing recoveries towards the end of last year, which also meant taking a £1m charge over its provision fund.
It said this will be removed over the next four to eight weeks and the fund will be further ringfenced going forward.
Brooke also said the platform has developed an investor portal for specific loans, to provide its customers with further information on loans they are involved in.
“This will enable us to share with you a greater level of transparency on these loans, without waiving legal privilege and each lender will have password protected access,” he said.