Member Info for Jinny122

Ratesetter was always a bad idea at the worst possible time.

Metro should be celebrating their heavily asset backed loan book, rather than chasing yield by jumping into unsecured lending at the onset of the worst recession in several hundred years.

Maybe shareholders rebelled behind the scenes, who knows.

Not sure how its possible to strip out the RS platform only and dump the investors. Also wouldnt yield much value for RS owners.

If this Ratesetter deal doesnt go ahead, management would have shown their empty hands for lack of any credible route to profitability.

Hard to justify plodding on and just eroding shareholder capital with huge bad debts and operating losses for next 4 to 5 years.

Article reads like PR for a managed retreat. A pet hamster could have reeled out those excuses about risky unsecured personal loans etc etc, so definitely not buying that aa the real reason for the about turn.

https://www.standard.co.uk/business/ratesetter-metro-bank-p2p-default-loans-frumkin-a4476546.html

Sounds like Metro's BOD are getting cold feet on Ratesetter. About time too

If you were Metro CEO, newly appointed and belueving in your strategy, will you vote to lose your job with minimal upside?? Dont know many who would.

It has to be a full offer from GS/JPM to over-ride any argument from Metro, they then have to sell.

They bought stakes here to gain speedy access to Metro management as major shareholdersto discuss a potential transaction.

Then they were immediately rebuffed by Metro and they sold down rapidly in visible protest.

Think about it, how else can GS and JPM guarantee speedy access to management's time

Jimdson.

Imo if not for the shorters, there would have been a huge cash call by now.

If this was sat at £8/share, there would have been a raise, little doubt about that. Would have raised equity last year even for MREL funding, if not for shorters.

Maybe shorters are working to avoid dilution for the day 1 investors??? Thats a thought.

Zccax7.

Metro was deliberately reducing its loan book and expected to reduce further through rest of 2020.

It's deposit growth must have ground to a halt or possibly gone negative by now, with GS Marcus having so spectacularly cleaned up.

Then their MREL buffer was wafer thin at Q1, and thats before the expected bad debt hit at next results.

Then they have to pay out to acquire Ratesetter, possibly £100m (was previously valued at £350m).

Then they have to find new capital buffers to support the Ratesetter loan assets, which are riskier and hence more capital consuming.

It doesnt square at all, unless it is a prelude to an equity raise

Zccax7.

Scale up to what exactly though?? Lenders are quietly withdrawing from unsecured lending while Metro is charging in.

If a P2P specialists ( Ratesetter, Funding Circle etc) couldnt make it work, the betting is not looking good for this time around either.

Looks like out of ideas and in desperate need to something, just anything, to present at the next results to keep show on the road Imo.

Could be a backdoor route to an equity raise. It'll explain the increasing shorts.

Just doesnt make any sense whatsoever.

To warn of rising losses at AGM and then follow up a few weeks later by jumping head first into unsecured debt of the riskiest variety in a deep recession??? Surely there's something else at play.

Does anyone get the feeling the Ratesetter move is a sign of serious desperation?

Pushong into something so risky as unsecured peer-to-peer lending at the onset of the deepest recession in modern history just doesnt add up. Funding Circle looks badly distressed, why does Metro want to jump in???

The shorts know something here for sure..

Theosus.

Just imagine the damage GS/ JPM can do to UK retail incumbents if they move into current accounts, credit cards, mortgages etc... it will be savage.. GS's brand alone will be enough for it to clean up on current accounts (which come with hefty additional deposits earning 0% interest)

Will be bricking themselves possibly more than shorts.

Their worst nightmare in JPM moving into UK retail and leapfrogging them day 1 with Metro t/o. Especially after temporarily shutting Marcus to new deposits.

Metro has been busy, getting exciting again.

This stock is absolutely wrecked! Zero market confidence. Needs to be de-listed / taken private and start again. It wont recover on the market.

Was looking at buying some but giving it a pass.

Good luck to holders, but Im off.

Zccax7.

Ratesetter had arpund £800m to £1bn assets / loan book. You're suggesting they'll sell that for £30m??

By the same measure, Metro could be acquired for pennies

Cyberdog.

Were they 'talking it down' or signalling to potential acquirers that they were willing to negotiate at a discount to net asset value???

Interesting one to ponder

Knowbodyyouknow.

"We're off" means its doing its own thing which may not fit with an acquirer's desired strategy.

Ratesetter t/o (valued at around £300m not long ago) may likely be larger than Metro's market cap and Metro will get much more expensive for any acquirer

Hmmm..

RNS reads like a 'come and get us by July or we're off' type of statement.

Expect any interested acquirers to emerge from woodwork by July IMO.

Just saw this.

Definitely GAME ON for holders here. This should also flush out potential acquirers out of the woodwork. Its simple, take Metro out before they make a strategic decision you may not like.

Suspect they may finance Ratesetter acquisition through targetted asset disposal from mortgage loan book.

Tomc1

Take a look at the trading performance trend and debt level, and that was pre covid. Then re-assess and it'll make sense.