Assetz Capital made a profit of £2.6m in its latest full-year results – its largest annual profit to date – during a “challenging” year.
The peer-to-peer lending platform swung into the black in the 12 months to 31 March 2021 from a loss of £508,390 the previous year.
Assetz chief executive Stuart Law attributed the return to profit to “a combination of institutional lending, some temporary lender fees and conservative cost management”.
“As with much of the economy it was a challenging year but we were fortunate to be able to execute several mitigating strategies for the benefit of all stakeholders,” Law said.
“We ensured that every penny requested to be withdrawn from the platform, at a time when people might have needed the money to be repaid earlier than planned, was indeed sent to our lenders over a period of time.
“This was substantially slower than the usual withdrawal speed, both previously and again now, but far faster than waiting for loans to end their term and repay. We delivered well over £100m of cash withdrawals in the end in that exceptional year.
“We also fully funded all our borrowers that had finalised loan facilities that had started to draw down without a single one of those loan drawdowns missed and amounting again to a figure approaching £100m. At the same time we paused new retail lending commitments in order to focus fully on those other two requirements until they were fully completed.”
The platform instead focused on its participation in the coronavirus business interruption loan scheme (CBILS). The government-backed loans can only be funded by institutional investors.
“Our profit for the year, our largest one to date but not the first, was in part used for our ‘skin in the game’ contribution to loan funding that was a necessary component of CBILS lending,” said Law.
The overall value of Assetz’ loanbook fell to £321m in the year to 31 March 2021, from £392m the previous year, while loan originations dropped to £160m from £261m, according to documents filed with Companies House.
“The pandemic impacted loan origination across the length of the reporting period…but with over £200m of further Covid lending intended to be carried out from that pipeline, post year-end, by the summer of 2021,” the company said in its annual accounts. “This is expected to result in a lending run-rate that was above all previous years.”
Assetz Capital lent a total of £370m through CBILS before the scheme ended on 31 March 2021. The platform was recently approved to join the Recovery Loan Scheme, the successor to CBILS.
The platform has now fully restarted retail lending and Law said that the pipeline is “becoming sizeable again”.
“We look forward to further progress in coming years and seeing both institutional and retail lending moving ahead to ever and ever larger levels in our mission to deliver fairer and stable income returns to investors whilst addressing much needed funding of businesses and housebuilders,” said Law.