ZOPA is reported to be close to securing the £130m capital injection needed to launch its long-awaited bank.
The peer-to-peer lender was granted a banking licence with restrictions on 4 December 2018, which technically gave it 12 months to meet the capital requirements necessary to gain full permissions.
Jaidev Janardana (pictured), chief executive of Zopa, said at the time that the licence was “the starting point to become a major force in retail banking.”
It had been rumoured to be struggling to raise the necessary funds but Sky News reported on the weekend that it is close to secured a £130m capital injection from IAG Capital.
The delay had caused one of its backers, Augmentum Capital, to delay publication of its interim results as it awaits a valuation of the company.
Andrew Holgate, chief executive of fintech consultancy Equitivo, said it would be embarrassing if Zopa failed to launch its bank.
“Zopa was given permission under the mobilisation regime because it didn’t quite meet the required standards, and it needed to prove to the Financial Conduct Authority (FCA) that it could raise the capital needed to become a bank,” Holgate said.
“This wasn’t cheap, and it was estimated that Zopa required £150m to do this. The Bank of England says that banks operating under mobilisation should take no longer than 12 months to meet the grade expected by the FCA.”
Read more: Zopa plans bank launch
He suggested the FCA could agree an extension if the platform was struggling.
“It would be the decision of the FCA to agree an extension or revoke it, which is within their remit to do so,” Holgate added.
“Both parties seem to be in a difficult position; it is highly embarrassing for Zopa given all the importance they have placed on becoming a bank, and given recent events in the P2P sector the FCA need to be seen to be a firm guiding hand.”
Zopa declined to comment.