(Alliance News) - Metro Bank PLC on Tuesday said it has acquired at par value a portfolio of peer-to-peer loans invested through the RateSetter platform.
Metro Bank acquired RateSetter for up to GBP12.0 million in cash back in August.
The loan book, the lender explained on Tuesday, was acquired from peer-to-peer investors who have invested through the RateSetter platform. Metro Bank will fork out up to GBP384 million for the portfolio of unsecured consumer loans.
"The exact amount is expected to be less as the portfolio will continue to amortise between announcement and expected completion in April 2021, following a two-month notice period for retail investors," Metro Bank said.
The portfolio has a total book value of GBP384 million with an average total gross yield of around 8%.
Metro Bank added: "The portfolio consists primarily of unsecured consumer loans and is amortising rapidly, with an average weighted loan term of two years remaining. It is a well-seasoned portfolio delivering a consistent credit performance."
The move boosts Metro Bank's presence in the unsecured lending market, Chief Executive Officer Daniel Frumkin noted.
The acquisition is forecast to reduce the lender's September 30 pro-forma CET1 ratio by around 0.6% and its MREL ratio by about 0.9%.
Back in December, Metro Bank said its CET1 ratio was around 16.3% and its MREL ratio around 24.2%.
Metro Bank shares were 4.0% higher at 122.43 pence each in London on Tuesday morning.
By Eric Cunha; ericcunha@alliancenews.com
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Metro Bank (MTRO)