Funding Circle listed on the London stock exchange in October at 440p, with today’s current dive this brings the fall in the firm’s share price since IPO to approximately 40 per cent.
Shares in the UK’s largest P2P lending platform Funding Circle have fallen more than 25 per cent in morning trading, following a downgrade from analysts at Citi.
In a note to investors today Citi said there was evidence of credit deterioration in the firm's loans, Bloomberg reports, following on from a separate half yearly report from the Funding Circle SME Income fund, a separate listed investment trust that invests exclusively in loans originated by Funding Circle, two days ago.
The fund said in the half-yearly report that it was expecting lower returns from loans within two annual cohorts - 2016 and 2017 - but this seems to have been interpreted by Citi’s analysts as part of a wider issue.
Funding Circle listed on the London stock exchange in October at 440p, valuing the company at £1.5bn, with today’s current dive this brings the fall in the firm’s share price since IPO to approximately 40 per cent.
The stock is currently trading around 257p but has hit 240p this morning.
Samir Desai, CEO and co-founder of Funding Circle said a statement to AltFi: "Loans taken out across the UK and US since 2016 and 2017 are projected to deliver returns of between 4 and 7 percent per year, as previously indicated. We recently announced two £/$1bn lending transactions in the UK and the US respectively, which is a vote of confidence in the quality and risk-adjusted returns of loans on the Funding Circle platform. We are projecting loans taken out today to deliver returns of between 5 - 8% globally. Our guidance for full year and medium term set out at the IPO remains unchanged.”
More details to follow.