FUNDING Circle shares were up more than 12 per cent by late morning trading, after an upbeat third-quarter update that revealed a 31 per cent year-on-year increase in loans under management.
The peer-to-peer business lender reported that loans under management had hit £3.7bn as of the end of September.
Projected annualised returns for 2019 continue to show an improvement compared to recent years, Funding Circle said.
However, loan originations dipped slightly to £561m from £565m in the third quarter of 2018.
“While the slowdown in originations growth was expected given the revision to guidance on 2 July, it is encouraging to note the improvement in asset quality, with projected annualised returns for 2019 continuing to show an improvement over recent years, a reflection of the tightening of underwriting standards to higher risk band businesses,” said analysts at brokerage Goodbody, noting that “the market clearly feels reassured” by the update.
Funding Circle halved its revenue growth forecasts for 2019 in July, blaming economic uncertainty and lower demand for its business loans.
In Monday’s update, founder and chief executive Samir Desai noted the increased loans under management and higher projected returns, adding: “In what remains an uncertain economic environment we continue to manage the business prudently, which we are confident is the right course of action for the long-term growth and development of our business.”
Funding Circle shares were trading 12.43 per cent higher at 115.80p as of 11.05am GMT.
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