LONDON (UK) – British challenger bank Metro revealed on Monday it is in exclusive early stage talks to buy peer-to-peer lender RateSetter.
Metro Bank, one of the banks set up after the global financial crisis to challenge established players such as Barclays and RBS, was hit last year by an accounting scandal that cost it its chairman and CEO and reduced its market value by 90%.
The bank this year said it was cutting back growth plans after plunging into the red.
According to analysts, the deal would offer Metro a strong revenue source in its push into unsecured consumer lending, on the basis of the spread between RateSetter’s charges to borrowers and the amount it pays to lenders.
RateSetter will benefit from a capital injection as it grapples with a surge in customers withdrawing funds.
RateSetter, launched in 2010, has grown to be one of Britain’s leading peer-to-peer platforms, although, like others, it has struggled in recent months to honour promptly a high volume of customers’ withdrawal requests.
Some customers have waited up to three months rather than the usual wait of a day or so.
RateSetter said it has delivered £55 million in release requests since the start of the novel coronavirus outbreak and was processing withdrawal requests in chronological order.
Sky News reported the merger talks late on Sunday.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field