All RateSettter peer-to-peer investors are to have their money repaid after the platform announced that Metro Bank is purchasing its remaining loan portfolio.
The bank has been funding all new consumer lending on the platform following its acquisition of RateSetter in September 2020, with the remaining P2P investor loan portfolio left to run-off.
But RateSetter said in a note to investors this morning (2 February) that Metro Bank has freed up capital to purchase the remaining consumer loans.
The value of the portfolio is currently £384m but Metro Bank said it was likely to be lower once the transaction completes.
The purchase will clear the backlog of withdrawal requests and all investors will be repaid.
P2P accounts will be closed from 2 April and all invested money will be returned to investor holding accounts.
Money left in the provision fund will be included in the P2P consumer loan portfolio sale.
The platform has already sold its remaining property loan portfolio to Shawbrook Bank.
Innovative Finance ISA investors can still use the RateSetter tax wrapper this year but any money added after 2 April won’t earn interest
Investors will be unable to open a new IFISA from the 2021/2022 tax year onwards.
“We are proud to have delivered an average annual return of 4.4 per cent, while our credit management and pioneering provision fund ensured no investor ever lost a penny of capital – a unique track record that has been maintained throughout the current time of economic uncertainty,” RateSetter said.
“Going forward, RateSetter will focus on being a market-leading consumer lender consistent with Metro Bank’s strategy to grow in consumer finance.”
Read more: Why is Metro Bank eyeing RateSetter?
Daniel Frumkin, chief executive of Metro Bank, described the purchase as a “further step towards growing our presence in the unsecured lending market.”
“It builds on our acquisition of the RateSetter platform – a well-established business with a strong technology platform that is enabling us to rapidly expand our unsecured lending offering,” he said.
“We continue to deliver against Metro Bank’s strategic priority of optimising our balance sheet and asset mix, whilst positioning ourselves to better serve customer needs as the UK’s best community bank.”