Metro Bank plans to offer RateSetter products in its branches after lockdown restrictions have been eased.
The challenger bank released its full-year financial results on Wednesday, which revealed that its unsecured personal loan book ended last year with a value of £121m, following the acquisition of RateSetter in September.
The bank said that its consumer lending business represented just two per cent of its loanbook last year, but this will increase as it scales up lending volumes over the course of 2021.
During a media call on the day of the bank’s full-year financial results, Metro Bank – which will complete the purchase of RateSetter’s legacy loanbook on 2 April – said that the platform’s backbook was at £384m as of 29 January 2021.
The bank said it already offers RateSetter lending through its website and app and will launch it in stores when lockdown restrictions ease.
Daniel Frumkin, chief executive at Metro Bank, told Peer2Peer Finance News that the bank will use the RateSetter brand in its aggregator channels and will price it differently to the core Metro Bank in store proposition.
“The purchase of the RateSetter platform, specifically its backbook, allowed us to enter the unsecured lending market and provide significant technological capability,” said Frumkin.
“We’re really pleased with the RateSetter acquisition and have made really good progress integrating it. The team there are really capable and we’re really happy with the talent they bring.
“We have RateSetter launched on our digital channels and it will be launched in store shortly after the pandemic. Once the lockdown begins to ease, we will launch RateSetter lending through our stores. There’s no plans at the moment to offer any incentives to store colleagues or anybody else.
“If a customer needs a loan, we’ll now be in a position to service their needs better. It’s all about meeting customer needs and providing unbelievable customer service.
“We’re not the only ones running multiple brands and pricing accordingly, so I think that’s just us growing up and becoming more mature as an organisation.”
Frumkin said that if his team spots another appropriate acquisition opportunity they will consider it.
“In terms of acquisitions we will do what’s right for our shareholders and if there’s opportunities that present themselves like RateSetter that we think would add value to our shareholder base like RateSetter was and is, we would consider acquisitions at that point but it’s completely driven by the maths,” he said.
“If we can find something that makes sense and we can buy it for the right price and think it would be a credit to the shareholders then we would absolutely consider it.”
Metro Bank’s results showed its underlying loss after tax widened from £11.7m in 2019 to £271.8m in 2020 with an estimated £124m impact from Covid-19.