Business
Acquisition of RateSetter
Acquisition of RateSetter.
About this update from Metro Bank Holdings Plc
[{"type":"text","content":"\n \n \n RNS Number : 9011U\n Metro Bank PLC\n 03 August 2020\n \n \n \n 3 August 2020\n \n \n Legal Entity Identifier: 213800X5WU57YL9GPK89 \n \n \n \n \n METRO BANK PLC \n \n Acquisition\n of RateSetter\n \n \n Delivers strategic ambition to enhance unsecured lending capability\n \n Metro Bank PLC (\"Metro Bank\" or \"the Company\") today announces that it has agreed to acquire Retail Money Market LTD (\"RateSetter\") for initial consideration of £2.5 million, with additional consideration of up to £0.5 million payable 12 months after completion subject to the satisfaction of certain criteria and further consideration of up to £9 million payable on the third anniversary of the completion of the transaction, subject to the satisfaction of certain key performance criteria. The acquisition does not include RateSetter's holding in RateSetter Australia which is being retained by RateSetter shareholders.\n \n RateSetter was founded in 2010 and is the UK's most popular peer-to-peer lender with over 750,000 people having invested or borrowed through the platform. In its financial year ending 31 March 2019, the company reported revenue of £33 million, a pre-tax loss of £8 million and gross assets of £42 million. Since inception, the business has originated £4 billion of lending. The business primarily originates unsecured personal loans, and also arranges secured auto dealer financing and property financing. As a peer-to-peer platform, RateSetter connects investors and borrowers and therefore does not hold deposits or loans on its balance sheet. \n \n As part of its strategy to enhance returns, Metro Bank has previously signalled its ambition to grow unsecured lending. RateSetter's originating and underwriting capability will enable the bank to rapidly accelerate this ambition via an existing, scalable platform. The acquisition presents an attractive opportunity for Metro Bank to improve its lending yield, with RateSetter having achieved an average total gross yield of 8 percent for the financial year ending 31 March 2020, and is expected to be net interest margin enhancing in the first full financial year of ownership.\n \n Metro Bank will operate RateSetter as an independent platform and originate loans under both the RateSetter and Metro Bank brands. The acquisitio...