pip
Posts: 542
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Post by pip on Apr 1, 2020 11:50:21 GMT
Good evening everyone. We have published a response to the Sky News article on our blog here, which is copied in full below for reference. 'Has' being the operative word. Millions of businesses now with zero revenue and millions of workers soon to be laid off I suspect this won't last long. I actually like what LendingCrowd have done, just offer lenders a 3 month period of no payments. To suggest anything other than the current situation is likely to severely impact borrowers ability to service their loans, for at least the short term, is a head in the sand mentality. I got out of Ratesetter's rolling market a few months ago due to the ridiculous way they forced investors to declare themselves as sophisticated. At that point I knew this is not a company I wanted to be dealing with. Glad I did get out. Investors in rolling market will find out soon enough that they were offered low returns for taking on long term risks as once liquidity dries up you are in the same boat as any other investor. Would have been much better to release a statement that actually addresses investors concerns. After the shambles with FS I have absolutely zero confidence in the safety of any platform or how my money would be protected if warm words of comfort fall flat.
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coogaruk
Hello everyone! Anyone remember me?
Posts: 703
Likes: 463
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Post by coogaruk on Apr 1, 2020 12:12:49 GMT
BofE has asked all big banks to cancel payment of already-announced dividends so that they can survive? Not so they can survive but to retain the cash and divert it if necessary to those said (wrongly in my view) to be in greater need, like businesses with cash-flow problems! What about shareholders with cash-flow problems?
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pip
Posts: 542
Likes: 725
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Post by pip on Apr 1, 2020 12:30:26 GMT
BofE has asked all big banks to cancel payment of already-announced dividends so that they can survive? Not so they can survive but to retain the cash and divert it if necessary to those said (wrongly in my view) to be in greater need, like businesses with cash-flow problems! What about shareholders with cash-flow problems? I personally think that it is prudent for most businesses, including banks to not pay dividends until they have completed an assessment of the likely impact of COVID-19 on their business. For most businesses they are probably in either the 'this is going to be awful' or 'too early to say' camps. Banks probably very much the latter as there is always a delay between a credit event occurring and the banks recognising this. For what it's worth I suspect that the impact, at least short term, on many borrowers ability or willingness to service their debt will be worse than many are predicting but it is really too early to quantify the impact. In terms of dividends, yes even investors with well diversified portfolios are likely to see large reductions in dividends, which may be short or long term. Unfortunately company dividends should be treated like bonuses, you can hope and even expect to receive them, but you should make sure you can still pay the bills if they don't materialise.
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Post by blueboy on Apr 1, 2020 12:38:52 GMT
Good evening everyone. We have published a response to the Sky News article on our blog here, which is copied in full below for reference. “I actually like what LendingCrowd have done, just offer lenders a 3 month period of no payments. To suggest anything other than the current situation is likely to severely impact borrowers ability to service their loans, for at least the short term, is a head in the sand mentality.” Starting to think that this is the only way out of this mess.
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jane
Posts: 145
Likes: 214
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Post by jane on Apr 1, 2020 14:44:28 GMT
Dear Ratesetter Rep,
You continually post that 'the vast majority of investors continue to invest'. Could you provide some clarification what this actually means. Do you include the backlog of RYI customers in this figure? Without these would it still be the vast majority? Bearing in mind that silence can speak louder than words, maybe you could provide three figures to us: - Amount invested in Ratesetter at 1 March 2020.
- Amount invested in Ratesetter at 31 March 2020.
- Amount currently in the RYI backlog.
This would allow us to subjectively evaluate whether what you are saying is just carefully crafted corporate semantics or not.
Thankyou
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coogaruk
Hello everyone! Anyone remember me?
Posts: 703
Likes: 463
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Post by coogaruk on Apr 1, 2020 16:53:07 GMT
Not so they can survive but to retain the cash and divert it if necessary to those said (wrongly in my view) to be in greater need, like businesses with cash-flow problems! What about shareholders with cash-flow problems? In terms of dividends, yes even investors with well diversified portfolios are likely to see large reductions in dividends, which may be short or long term. Unfortunately company dividends should be treated like bonuses, you can hope and even expect to receive them, but you should make sure you can still pay the bills if they don't materialise. A bit like wages then, especially for those on zero hours contracts.
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Post by shanghaiscouse on Apr 2, 2020 18:26:26 GMT
Obviously there will be consolidation in P2P, as apart from FC, who managed to get their IPO away and poison the well for everyone else in the process, nobody has the cash to get them through this storm. They were all cashflow negative in any case, relying on annual capital injections from investors hoping for an IPO, but the FC debacle had already severely limited the flow of new capital. So the question now is how it will consolidate. Due to the structure of Ratesetter, it would be quite easy for another platform to take on their loans by just letting them go to the wall, wait for the regulator to step in, then pick the loans up for free and add a new income stream. Personally I think this is the way it will go, because there is no value in the existing businesses whatsoever. There is no-one in this industry strong enough and cash rich enough, and secure enough of their own future, to be able to act as a consolidator. But if FC can pick up a book of loans without paying any premium then this could offset the shrinkage in its own loan book and allow it to maintain its staff and cost structure. SO it depends on how quickly the regulator can step in, they can either let this happen in a disorderly fashion, which would be disastrous for the holders of the loans (us) as bad debts would go through the roof, or they can step in whilst the borrowers still feel obligated to pay the loans and force through some mergers in the industry. I hope for the latter.
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Post by cinereus on Apr 2, 2020 21:29:13 GMT
With the spreads they charge, how on earth are players like Z still massively in the red?
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Post by p2plender on Apr 4, 2020 12:54:31 GMT
I thought I'd read RS may well be an acquirer?
One or two listed US p2p cos may well be interestd in getting a foot in UK door btw I'd have thought.
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Post by marcusponds on Apr 6, 2020 10:53:54 GMT
I find the response mendacious. How can they say their loan book quality not deteriorated on the same day that the BofE has asked all big banks to cancel payment of already-announced dividends so that they can survive? And you think the borrowers who took personal loans from ratesetter are somehow immune to this crisis? Its a ridiculous position to take. I believe the cancellation of dividends was to encourage the banks to lend more, not to ensure their own survival.
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Post by shanghaiscouse on Apr 6, 2020 13:31:50 GMT
With the spreads they charge, how on earth are players like Z still massively in the red? Does Z use spreads? Most don't, they just charge a fixed % of loans under management.
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Post by shanghaiscouse on Apr 6, 2020 13:33:41 GMT
I find the response mendacious. How can they say their loan book quality not deteriorated on the same day that the BofE has asked all big banks to cancel payment of already-announced dividends so that they can survive? And you think the borrowers who took personal loans from ratesetter are somehow immune to this crisis? Its a ridiculous position to take. I believe the cancellation of dividends was to encourage the banks to lend more, not to ensure their own survival. Its all connected, they want banks to hang onto cash so that when they are hit with the wave of bad debts they still have funds to survive and lend, although at a reduced level.
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