Metro Bank looks to acquire peer-to-peer lender RateSetter amid coronavirus crisis

By Aisling Finn on Monday 15 June 2020

Alternative Lending

Reports from people close to the talks say a deal could be struck as early as next month.

Metro Bank looks to acquire peer-to-peer lender RateSetter amid coronavirus crisis
Image source: RateSetter CEO Rhydian Lewis

Metro Bank is in talks to acquire RateSetter, one of the largest peer-to-peer lenders in the UK RateSetter.

In an RNS announcement put out by the high street bank this morning, Metro Bank confirmed it “has entered into a period of exclusivity with RateSetter, but discussions regarding the potential acquisition are at an early stage.”

No price has been set yet for the acquisition which was first reported by Sky News, although Sky reported that someone close to the talks had said the peer-to-peer lender will be entering talks at a “knockdown valuation.”

Back in April, RateSetter revealed that as a business, its “options are under review” as it was reported the lender was on the lookout for a potential merger or sale, although it’s unclear whether or not Metro Bank was a consideration at that time.

Following the news that the two firms were in talks, Metro Bank’s share price surged by several percentage points this morning in an otherwise struggling market. 

The announcement also revealed that the acquisition of RateSetter would be to help “accelerate [Metro Bank’s] stated strategy to grow its unsecured consumer lending book.”

Metro Bank is currently one of the only fintech lenders to be accredited under both the CBILS and Bounce Back Loan government-backed schemes.

Metro Bank had a rocky 2019, the high street bank was ejected from the FTSE 250 following a massive £900m accounting error and is still under investigation by both the FCA and the Prudential Regulation Authority.

Despite the ongoing market turmoil, RateSetter claims that its loans were some of its most stable assets in the first quarter of 2020, outperforming some of the most popular assets including the FTSE 100.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.