Zopa is considering the direction of its peer-to-peer lending operations.
The world’s oldest P2P lender revealed in its 2020 annual accounts that the board was considering the “strategic direction” of the platform as it said future growth will be driven by balance sheet lending.
It comes after Zopa gained a full licence for its bank launch last year.
The accounts, representing the 12 months to 31 December 2020, showed that £633m of new lending was made through the P2P platform last year, of which Zopa Bank funded £456m.
The level of originations on the Zopa P2P lending platform fell from £1.1bn in 2019, which Zopa said reflected the tightening of its credit policy and underwriting criteria, according to documents filed with Companies House.
The P2P lending platform has continued issuing loans but was closed to new investors earlier this year so it could focus on existing users funding new finance.
There is currently a waiting list to join.
Zopa said it still maintained its P2P lending track record in 2020, with average returns at four per cent in its Core product and 5.1 per cent for Zopa Plus, according to documents filed at Companies House.
Revenues for Zopa Group – encompassing both the P2P platform and the digital bank – fell from £47m in 2019 to £29.8m.
This was blamed on the pandemic and also the removal of upfront loan fees, which reduced fee and commission income from £46m to £23m.
The group reported a loss for the year of £41.7m – deeper than the £15.3m loss in 2019 – attributed to the costs of building its bank brand and the impact of IFRS9 accounting standards that take account of estimated losses on loans.
Zopa said it regularly reviews the position of all areas of its business.
“The past two years presented several challenges for the P2P sector,” Zopa said in an emailed statement to Peer2Peer Finance News.
“Despite the headwinds of the Covid pandemic, Zopa continued to serve its retail investors, including offering its secondary market sale options throughout the crisis.
“A leader in its space with over 16 years of strong lending returns, Zopa continues to consistently deliver positive returns to its customers.
“As with all areas of our business we make sure to monitor the wider ecosystem on a regular basis in order to refine our future strategy.”
Its customers also reported issues with accessing their accounts and making payments following a website update last week.
The platform has said most services should now be accessible and any charges applied as a result of the outage will be refunded.