Metro Bank has today (June 15) confirmed it is in talks to acquire RateSetter, saying the peer-to-peer lender could accelerate growth across its unsecured consumer lending.
After press speculation yesterday, the lender confirmed it’s in talks to acquire Retail Money Market and its subsidiaries including RateSetter, having entered a period of exclusivity with the peer-to-peer lender, but Metro emphasised that discussions are at “an early stage.”
Metro Bank’s statement said: “RateSetter is a UK focused peer-to-peer lender whose distribution platform could accelerate the company’s stated strategy to grow its unsecured consumer lending book.”
The lender said there can be no certainty at this stage that a formal agreement will be reached, nor as to the term of any agreement.
Following media speculation in March this year, about RateSetter being the subject of a potential sale, the peer-to-peer lender came out with a statement at that time, saying it expected "consolidation in our sector", with RateSetter "potentially being a consolidator rather than potentially being acquired."
The March statement also emphasised that it remained RateSetter’s "long-term objective" to become a public business, allowing people to invest in the company as well as its products.
For Metro, the speculation follows a period in which it has had some success with savings products.
The bank’s Q1 results from last month showed deposits had increased £77m compared to the previous quarter, reaching £14.5bn, and reflecting growth in retail savings accounts.
At the time the results were published, Metro chief executive Daniel Frumkin said that despite the unfolding situation with the pandemic, the board were pleased that “deposits continued to grow in the first quarter, adding: “Our ambition to become the UK’s best community bank has never been more important.”
The bank said it had also put in place new processes for more vulnerable customers to access cash and dedicated times to call, during the first three months of 2020.
In another statement at the end of last month, Metro Bank’s chairman Sir Michael Snyder said the lender has benefited from “relatively low exposure to unsecured lending and a conservative debt to value profile”.
Nonetheless, he added, the bank is seeing short term economic disruption “which will naturally result in significantly higher credit risk impairments than in recent years.”