gg
Posts: 83
Likes: 61
|
Post by gg on Jun 16, 2020 18:37:57 GMT
ZOPA started in 2005. Some time before the world financial crisis of 2008.
P2P was considered by many as a way to put two fingers up to the banks. Banks had had it too easy for too long.
ZOPA was fun - especially for a spreadsheet geek like me. Borrowers could get rates that were comparable to those offered by the banks while lenders could earn 1% to 20% lending in the same loan. Listings were really fun. Some lenders played at Dragon’s Den before risking a tenner (a bit embarrassing IMHO). I had £50 lent out at 15.5% (and he repaid on time).
Then ZOPA changed and I switched to RS and Fundings Circle. I never liked FC and bailed out rather quickly - with a small loss. RS has been the star of the show for me despite being less interesting than ZOPA. The provision fund made RS more like a savings account - but without the FSCS protection. Unless P2P can gain FSCS protection I fear all P2P will be closed this year. Or very soon thereafter.
Its not the concept that is wrong. Interest rates are ridiculously low and are not likely to rise any time soon. My bank offers me a loan far more cheaply than P2P loan providers. Why would anybody with an excellent credit rating take a loan at 7%+ from ZOPA or RS when banks offer at less than 3%?
I don’t see Metro Bank as buying RS out. I see it as a bank rescuing RS before it collapses. The party really is over. And it’s sad.
gg
My sign off on ZOPA when it had a forum was... Need alone? You’re not a loan.
|
|
|
Post by oppsididitagain on Jun 16, 2020 19:05:57 GMT
ZOPA started in 2005. Some time before the world financial crisis of 2008. P2P was considered by many as a way to put two fingers up to the banks. Banks had had it too easy for too long. ZOPA was fun - especially for a spreadsheet geek like me. Borrowers could get rates that were comparable to those offered by the banks while lenders could earn 1% to 20% lending in the same loan. Listings were really fun. Some lenders played at Dragon’s Den before risking a tenner (a bit embarrassing IMHO). I had £50 lent out at 15.5% (and he repaid on time). Then ZOPA changed and I switched to RS and Fundings Circle. I never liked FC and bailed out rather quickly - with a small loss. RS has been the star of the show for me despite being less interesting than ZOPA. The provision fund made RS more like a savings account - but without the FSCS protection. Unless P2P can gain FSCS protection I fear all P2P will be closed this year. Or very soon thereafter. Its not the concept that is wrong. Interest rates are ridiculously low and are not likely to rise any time soon. My bank offers me a loan far more cheaply than P2P loan providers. Why would anybody with an excellent credit rating take a loan at 7%+ from ZOPA or RS when banks offer at less than 3%?
I don’t see Metro Bank as buying RS out. I see it as a bank rescuing RS before it collapses. The party really is over. And it’s sad. gg My sign off on ZOPA when it had a forum was... Need alone? You’re not a loan. I Agree Zopa was fun in the beginning - very similar to FC. Some of RS lending is to people who buy a phone from Giff Gaff (maybe others as well) - So the financing is all rolled into the monthly contract. I'm sure other things like furniture, kitchens maybe even Cars etc that all offer 'in house' financing finds its way to P2P somehow. Just like the App's that automatically sweep your bank accounts to a saving account. I.E. Plum . (All that money finds its way to RS, this is probably what is funding most of the RYI's at the moment. ) Metro bank could have access to this type of funding and then up sell, CC, Loans, Mortgages etc
|
|
cwah
Member of DD Central
Posts: 949
Likes: 468
|
Post by cwah on Jun 16, 2020 19:24:47 GMT
The highly regarded Lex column of the Financial Times ran a commentary today on this potential takeover. It is behind a paywall but I have quoted below the salient part; "Metro Bank could provide the liquidity needed to support the peer-to-peer book, some £800m in loans. For its part Metro would get a new brand and technology platform. Metro Bank could then use its cheap deposits to fund new unsecured loans from its own balance sheet."
The tone of the column was very positive on the benefits to Metro of a tie up if the price is right..they assume £62m. Time to buy metrobank? I got some I bought at 630 after the dip. Then it kept dipping so I doubled down at 500 when Vermon Hill plowed $500M of his own cash in. I think it lost 90% of its value since then. I was surprised how little was left out of low 5 figures investment I only ended up with 3 figures... But maybe now its the time for the reborn!! I added some and may double down once more
|
|
|
Post by Deleted on Jun 16, 2020 21:13:47 GMT
The highly regarded Lex column of the Financial Times ran a commentary today on this potential takeover. It is behind a paywall but I have quoted below the salient part; "Metro Bank could provide the liquidity needed to support the peer-to-peer book, some £800m in loans. For its part Metro would get a new brand and technology platform. Metro Bank could then use its cheap deposits to fund new unsecured loans from its own balance sheet."
The tone of the column was very positive on the benefits to Metro of a tie up if the price is right..they assume £62m. Time to buy metrobank? I got some I bought at 630 after the dip. Then it kept dipping so I doubled down at 500 when Vermon Hill plowed $500M of his own cash in. I think it lost 90% of its value since then. I was surprised how little was left out of low 5 figures investment I only ended up with 3 figures... But maybe now its the time for the reborn!! I added some and may double down once more My advice would be to only invest money you can afford to lose.
|
|
copacetic
Member of DD Central
Posts: 305
Likes: 666
|
Post by copacetic on Jun 16, 2020 21:28:52 GMT
Or alternatively invest in a long term low cost world index fund, drip fed in to balance dips and peaks, if like me you don't think you're better at analysing market information than Goldman Sachs and the rest.
|
|
cwah
Member of DD Central
Posts: 949
Likes: 468
|
Post by cwah on Jun 16, 2020 21:33:37 GMT
Or alternatively invest in a long term low cost world index fund, drip fed in to balance dips and peaks, if like me you don't think you're better at analysing market information than Goldman Sachs and the rest. I do that as well. But I still like buying stock. This one is a good punt
|
|
mrk
Posts: 807
Likes: 753
|
Post by mrk on Jun 16, 2020 21:53:20 GMT
The highly regarded Lex column of the Financial Times ran a commentary today on this potential takeover. It is behind a paywall but I have quoted below the salient part; "Metro Bank could provide the liquidity needed to support the peer-to-peer book, some £800m in loans. For its part Metro would get a new brand and technology platform. Metro Bank could then use its cheap deposits to fund new unsecured loans from its own balance sheet."
The tone of the column was very positive on the benefits to Metro of a tie up if the price is right..they assume £62m. Time to buy metrobank? The FT article is positive on the prospect of the deal going through perhaps, but not really on Metro Bank (or P2P). It closes with "One of the many problems faced by challenger banks is that they have to carry a lot more capital than high-street lenders. They are left fighting with one hand tied behind their backs. The peer-to-peer business has flopped in the UK, as Lex gloomily expected. Unfortunately, challenger banks are faring little better."
|
|
|
Post by shanghaiscouse on Jun 16, 2020 21:56:42 GMT
Well, it won't be paying any dividends - ever- after that loss last year, so hope you get some capital appreciation. But falling from 4,000 to 100 suggests to me there is a deep problem that is only heading one way, although you can ride some volatility in the meantime. It will certainly be volatile.
|
|
|
Post by peertopier on Jun 16, 2020 22:26:35 GMT
Metro Bank are odd. They opened a lot of high street branches with all of this "we're really different from all the other banks" marketing which I'm pretty sure all the other banks have tried at some stage. This gave them lots of operating costs which the other banks had been trying to get rid of by closing branches and going online.
My personal dealings with them convinced me to give them a wide berth. I applied for an account where they lost all of the information but couldn't bring themselves to admit that to me. Our discussions got more bizarre and I decided they were just plain useless.
I think for most people it's just a matter of extracting the majority of our money from Rate Setter before we have to find out what's going to happen. I regard the Metro Bank purchase as a positive for now, it would hopefully extend the time period for an orderly wind down.
|
|
|
Post by diversifier on Jun 16, 2020 22:50:22 GMT
Or alternatively invest in a long term low cost world index fund, drip fed in to balance dips and peaks, if like me you don't think you're better at analysing market information than Goldman Sachs and the rest. Agreed on the general principle. But the gotcha in practice, is that “world index funds” are so much less diversified in detail than one expects naively (apologies if I’m being professor of the bleedin’ obvious here). 1) It’s hugely overweight in ultra-large caps - particularly a problem as Fama French tells us that large size consistently underperforms. 2) The USA is so heavily financialised, that its stock market is 50% of world total equity. US stock performance dominates “world index” results, out of all proportion to its contribution to world GDP and GDP growth. 3) US stock market is dominated by FAANG tech stocks. Worth having, but do you really want a quarter of your entire wealth concentrated in five rather bubbly companies......and the rest of world mega-stocks are dominated by global mega banks. Ditto, ditto. One might be very disappointed to discover that a fund of Global Top 100, has more weight in US tech stocks alone, than combined global utilities, raw materials, oil&gas, industrials, telecom, consumer goods. Instead, one needs to pick a wide spread of geographic, sector and theme funds; plus some (short duration) bond funds, plus currency hedges - otherwise all your geographic equity indexing actually becomes just a currency basket bet. And of course drip-feed & re-balance. Anyway, that’s my take on life.
|
|
ashtondav
Member of DD Central
Posts: 1,805
Likes: 1,087
|
Post by ashtondav on Jun 17, 2020 8:07:32 GMT
P2p will survive but only the top 4. Not the 50 other also rans.
|
|
|
Post by gricehead on Jun 17, 2020 8:22:05 GMT
ZOPA started in 2005. Some time before the world financial crisis of 2008. P2P was considered by many as a way to put two fingers up to the banks. Banks had had it too easy for too long. ZOPA was fun - especially for a spreadsheet geek like me. Borrowers could get rates that were comparable to those offered by the banks while lenders could earn 1% to 20% lending in the same loan. Listings were really fun. Some lenders played at Dragon’s Den before risking a tenner (a bit embarrassing IMHO). I had £50 lent out at 15.5% (and he repaid on time). Then ZOPA changed and I switched to RS and Fundings Circle. I never liked FC and bailed out rather quickly - with a small loss. RS has been the star of the show for me despite being less interesting than ZOPA. The provision fund made RS more like a savings account - but without the FSCS protection. Unless P2P can gain FSCS protection I fear all P2P will be closed this year. Or very soon thereafter. Its not the concept that is wrong. Interest rates are ridiculously low and are not likely to rise any time soon. My bank offers me a loan far more cheaply than P2P loan providers. Why would anybody with an excellent credit rating take a loan at 7%+ from ZOPA or RS when banks offer at less than 3%? I don’t see Metro Bank as buying RS out. I see it as a bank rescuing RS before it collapses. The party really is over. And it’s sad. gg My sign off on ZOPA when it had a forum was... Need alone? You’re not a loan. I could have written the first four paragraphs - word for word - myself. I think I only ever put £100 in FC, and lost probably a third of that.
|
|
|
Post by davee39 on Jun 17, 2020 8:46:38 GMT
P2p will survive but only the top 4. Not the 50 other also rans. I'm afraid my rose tinted glasses are in quarantine. FC - finished for 'ordinary' lenders. The founders have stashed their cash while investors lost theirs. Likely to continue as a commercially funded small business lender after probable takeover. Zopa - cannot make a profit. Banks can get their cash free from Government schemes or my offering 0.001% to savers. The P2P will be wound down, Zopa may survive as a bank. RS - In fire sale mode before the PF runs out. Desperately needs capital. Metro may only be interested in the loan book. If takeover goes ahead P2P will wind down. Assetz - Better placed than the above three. Quality and experienced management team, but some glaring mistakes and in need of more investment, Likely to become platform for institutional money and High net worth investors. My best guess would be that they could repackage the Access product into fixed term income paying bonds. P2P worked when interest rates were high, it cannot work in a low interest rate environment. It has also been tarnished by bandwaggon jumping platforms which have fooled investors into thinking property is 'safe'.
|
|
macq
Member of DD Central
Posts: 1,924
Likes: 1,191
|
Post by macq on Jun 17, 2020 9:01:28 GMT
Or alternatively invest in a long term low cost world index fund, drip fed in to balance dips and peaks, if like me you don't think you're better at analysing market information than Goldman Sachs and the rest. Agreed on the general principle. But the gotcha in practice, is that “world index funds” are so much less diversified in detail than one expects naively (apologies if I’m being professor of the bleedin’ obvious here). 1) It’s hugely overweight in ultra-large caps - particularly a problem as Fama French tells us that large size consistently underperforms. 2) The USA is so heavily financialised, that its stock market is 50% of world total equity. US stock performance dominates “world index” results, out of all proportion to its contribution to world GDP and GDP growth. 3) US stock market is dominated by FAANG tech stocks. Worth having, but do you really want a quarter of your entire wealth concentrated in five rather bubbly companies......and the rest of world mega-stocks are dominated by global mega banks. Ditto, ditto. One might be very disappointed to discover that a fund of Global Top 100, has more weight in US tech stocks alone, than combined global utilities, raw materials, oil&gas, industrials, telecom, consumer goods. Instead, one needs to pick a wide spread of geographic, sector and theme funds; plus some (short duration) bond funds, plus currency hedges - otherwise all your geographic equity indexing actually becomes just a currency basket bet. And of course drip-feed & re-balance. Anyway, that’s my take on life. Had never seen the Fama French (point 1) about under performance before and take your point about the top 100 making up the vast percentage of a 3000+ all world index fund when the top 100 probably move the other 2900 most of the time.But would counter Fama French point of "consistently under performs" with something like the L&G global 100 index fund which seems to have preformed better then most over 10 years by using VWRL for a comparison passive (rather then say Fundsmith but which it still comes close to at times) Not to say that it will continue but its not a short period of time for them to use the word consistently but will have a read later
|
|
|
Post by shanghaiscouse on Jun 17, 2020 9:30:51 GMT
Generally agree with Davee39 post above, there are not going to be any P2P left as none of them made any money! And now with their regulatory disadvantage stripped bare, its even more obvious that they are uncompetitive. Its a shame that in financial services not having government backing means you are disadvantaged, but there it is. I pulled out all my funds from RS and FC and put them into national savings which is 100% secure, no 85k limit. Who wouldn't? P2P worked when people were trying to maximise yield, but failed when it came to protecting against capital losses. The ultimate irony in Metro Bank, of course, is that they themselves depend on state aid (could be why their losses are so disastrous), as a 'challenger bank' they got £120m, and so the financing for any RS acquisition could becoming from.... the bank of you and me! Isn't it great how it works.
|
|