RateSetter and Metro Bank: acquisition completes
On 3 August we announced that Metro Bank and RateSetter had agreed for Metro Bank to acquire RateSetter, with the acquisition being subject to regulatory approval. Today we are pleased to confirm that the transaction has completed.
There are no changes to your existing investment as a result of Metro Bank acquiring RateSetter. RateSetter continues to manage the loan portfolio and the Provision Fund as before, and the Provision Fund continues to apply to your investment with no liability for Metro Bank. Access to your online RateSetter account and monthly statements continues in the normal way and our Investor Services team remains available to help with any questions you may have.
Going forward, all new unsecured personal loans originated by RateSetter will be funded by Metro Bank, in line with Metro Bank’s stated strategy to grow in this area. RateSetter investors will continue to fund the ongoing essential secured residential property development, dealer finance, family finance and giffgaff lending. Apart from the remaining essential lending, the investor portfolio will go into run-off. This means the investor loan portfolio will decrease in size over time but our focus on investment performance will remain throughout.
We are also announcing today the closure in 30 days’ time of the 5 Year market, including the investment release request functionality in the 5 Year market. All investors with investments in the 5 Year market will receive an email today explaining this and how they can continue to invest in the other markets.
We will continue to deliver investment release requests as the supply of funds and essential lending allows (aside from the 5 Year market from 14 October). We expect the speed of processing investment releases will improve as the essential lending is delivered and we continue to explore potential ways to further speed up the releases, but we ask anyone making new investments to only do so if they do not need early access to their funds for the time being.
Metro Bank’s stated objective is to be the UK’s best community bank and under its ownership, RateSetter will continue to be at the forefront of delivery for customers. The focus of RateSetter will change but we remain committed to serving every one of our existing customers, both investors and borrowers.
Does the acquisition change my existing investment?
No. RateSetter is an investment and, in common with all investments, capital is at risk. The Provision Fund continues to apply to all investments and will be managed by RateSetter as before. The Provision Fund does not provide a guarantee. We will continue to report on the performance of the portfolio each month and the Provision Fund, including the temporary interest reduction. Our focus on investment performance will remain.
Does the acquisition change processing investment release requests?
No. We will continue to deliver investment release requests as the supply of funds allows, as we have been doing since March. Please note that investors in the 5 Year market will not be able to make a new investment release request after 14 October and we are writing to all 5 Year market investors with further details.
Does the acquisition change my ability to keep investing?
No. Existing investors can continue to reinvest and make new investments. Please note that with all new unsecured personal lending being funded by Metro Bank, the weighting of the investor loan portfolio towards secured lending will increase. Investment releases are expected to remain constrained for a period and we ask anyone choosing to continue to invest or reinvest to only do so if they do not need early access to their funds for the time being.