RateSetter announces that Metro Bank is purchasing the loan portfolio

Today we are announcing that Metro Bank is purchasing the RateSetter loan portfolio in line with Metro Bank’s strategic objective to grow in consumer loans. 

Metro Bank has been funding all new consumer lending following its acquisition of RateSetter in September 2020, since when the investor loan portfolio has been in run off. Today’s announcement follows the subsequent sale of RateSetter’s residential property development portfolio, a line of lending which is not an area of focus for Metro Bank, and was made possible by Metro Bank’s recent sale of a £3bn residential mortgage portfolio, which freed up capital for the purchase. The performance of the consumer loan portfolio has allowed the purchase to be at full value, despite the ongoing economic uncertainty.

The portfolio purchase means that all RateSetter investors will receive their money back in full and the investing side of RateSetter will close.  In line with our Investor Terms we are providing two months’ notice of account closure and so this will happen on 2 April 2021.

What happens now?

All invested money will return to investors’ Holding accounts from 2 April 2021, as will money on market. This process is expected to take five days.  Naturally, no investment release fee will apply to money returned to investor’s Holding accounts from the purchase. Invested money will continue to earn interest until then and repayments will continue to be treated in line with investors’ account settings until then too. 

Thank you for being a RateSetter investor  

We launched over ten years ago and grew to be the UK’s most popular P2P platform, attracting over three quarters of a million investors and borrowers.  We are proud to have delivered an average annual return of 4.4%, while our credit management and pioneering Provision Fund ensured no investor ever lost a penny of capital – a unique track record that has been maintained throughout the current time of economic uncertainty and through to the purchase we are announcing today. 

Going forward, RateSetter will focus on being a market-leading consumer lender consistent with Metro Bank’s strategy to grow in consumer finance.

We are committed to continuing our customer service.  If you have any questions or require any further assistance, please contact our Investor Services team at [email protected].

 

FAQs

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Is Metro Bank purchasing the entire P2P loan portfolio?

Yes, Metro Bank is purchasing all the loans in the portfolio. This will happen from 2 April 2021. The process is expected to take five days.  

Why is the purchase happening now rather than when Metro Bank acquired RateSetter?

 When Metro Bank acquired RateSetter in September 2020 the portfolio contained residential property development loans, a line of lending which is not an area of strategic focus for Metro Bank and which was sold in December 2020 to Shawbrook.  Also, since the acquisition last September, Metro Bank has sold a £3bn residential mortgage portfolio to NatWest (announced in December 2020) which freed up capital for Metro Bank to make this purchase of the RateSetter loan portfolio in line with its strategic objective to grow in consumer loans. The performance of the consumer loan portfolio has allowed the purchase to be at full value, despite the ongoing economic uncertainty.

Do I need to log in to withdraw my money to my bank account?

Yes. You can do this as soon as money comes into your Holding account. We will contact you again when the processing has been completed and all your money has been returned to your Holding account. As now, money in your Holding account does not earn interest.

How long does it take for money I withdraw to reach my bank account?

Money sent from your RateSetter Holding account to your bank account should be in your bank account by 6pm the following working day.

When do I need to submit my Transfer Out request?

You can submit your request to Transfer Out your ISA now or after the 2nd April 2021.

If you submit your request now and you do not want the transfer to proceed until after the 2nd April 2021, please ensure that this is clearly stated on the request. As the ability to release investments in still active, if the Transfer Out request either states to Transfer Out immediately or does not have any instruction to keep on hold, we will process the request immediately and release investments accordingly.

The fee to release investments in Access is set to zero.  The fee in Plus is 30 days of interest charged at the Going Rate; and in Max it’s 90 days of interest charged at the Going Rate. These fees will be charged until the 26th March 2021. Thereafter, you will not be able to create new investment release requests. No fees will apply from the 2nd April 2021 under the portfolio purchase.  

I am a RateSetter ISA investor, how do I keep my money within the tax-free ISA wrapper?

You can withdraw money from your ISA Holding account to your bank account, however, it may not stay in its tax-free ISA wrapper. By transferring from your ISA Holding account to a new ISA provider you can keep your money in the tax-free ISA wrapper. To transfer your ISA please contact your new ISA provider.  Your new ISA provider will ask you to complete a Transfer-In form and they will submit this to RateSetter on your behalf.  For more information please see the ISA FAQs section of our website here.

I have a RateSetter ISA and haven’t used my full ISA allowance for this tax year. Can I still add money to my ISA?
Yes, investors in this position may add money up to their annual ISA allowance until 5 April 2021. Invested money will return to your ISA Holding account from 2 April, as will money on market. Any money added on or after 2 April will count towards your annual ISA allowance for the 2020/21 tax year, but will remain in your ISA Holding account and will not earn interest.

I withdrew money from my RateSetter ISA earlier in this tax year, can I still add that money back in?

The RateSetter ISA is a flexible ISA and this means that if you have withdrawn money, you can put it back in the same tax year without affecting your ISA allowance. Investors in this position may add money to replace withdrawals from their RateSetter ISA until 5 April 2021.

Will I be able to open a RateSetter ISA in the 2021/22 tax year?

No, you will not be able to open a new RateSetter ISA in the 2021/22 tax year.

Can I still release an investment before 2 April 2021?

Yes. As always, the speed of delivering release requests depends on the availability of funds in the RateSetter market.

Will I be charged any early release fees?

Naturally, no early release fee will apply to money returned to your Holding account from the purchase. If you choose to release your investment in advance of this, the usual early release fee will apply.

Note: If you choose to remove funds from your RateSetter ISA, you will lose the ISA tax-free wrapper around these funds.  The RateSetter ISA is a flexible ISA and this means that if you have withdrawn money, you can put it back in the same tax year without affecting your ISA allowance. Investors in this position may add money to replace withdrawals from their RateSetter ISA until 5 April 2021.

From the 26th March 2021 you can access the money at any time by using the Withdraw function in your ISA account to release your investment.  You can then move the cash from your ISA holding account to your bank account.

From the 6th April 2021 you can access the money at any time by using the Withdraw function in your ISA account to release your investment.  You can then move the cash from your ISA holding account to your bank account.

If you choose to remove funds from your RateSetter ISA, you will lose the ISA tax-free wrapper around these funds.  To ensure your funds stay within the tax-free wrapper, please Transfer Out your ISA to a new ISA manager. From the 6th April 2021, the flexibility feature of the RateSetter ISA will not be available. Therefore, if you withdraw funds to your bank account from the 6th April 2021, you will not be able to deposit this back to the RateSetter ISA. 

Will I still be able to access my investment account tax statements in future?

Your tax statement details will continue to be available. We would encourage you to download your existing tax statements.

What happens to the money in the Provision Fund?

The Provision Fund was set up to protect RateSetter investors from credit losses in the portfolio. It has done its job and RateSetter investors will receive their money back in full. Following the purchase, the Provision Fund will remain attached to the loan portfolio. 

Will the Provision Fund return any money to me from the interest reduction?

No, money does not return from an interest reduction. The money from the interest reduction went into the Provision Fund to protect investors against expected future credit losses.

When will my RateSetter account close?

In line with our Investor Terms we are providing two months’ notice of account closure and so this will happen on 2 April 2021.

Is there any change for RateSetter borrowers?

No, nothing is changing for borrowers.