iRobot
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Post by iRobot on Aug 5, 2020 9:10:05 GMT
The only reason Metro exists is the government. It was handed slugs of public money in an effort to introduce more competition into UK banking. NOw it is using government money to buy RS. So we have been baled out by the government. It is getting harder to find any economic activity these days that does not have the government behind it. Conceptually, I don't disagree with you. However, it doesn't sit well with me that 'government money' - and, by extension, taxpayers' money - is being used (however indirectly) to bail out speculative investment instruments. Anyone thinking that gov't / taxpayer (or even FSCS) funds might be available to bail-out P2P investments at any point should be promptly disabused of that notion, IMO.
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Post by shanghaiscouse on Aug 5, 2020 9:18:29 GMT
Fair point. We aren't being baled out in the sense that any losses are being compensated, only in the sense that our wind-down can be more orderly thanks to Metro using government money to buy RS and keep its operations afloat.
Nice of the shareholders to do a bit of asset stripping on the way out though and hang on to the Australia investment.
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iRobot
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Post by iRobot on Aug 5, 2020 10:48:08 GMT
Nice of the shareholders to do a bit of asset stripping on the way out though and hang on to the Australia investment. Yeah, although it's only a ~15% holding, so doubt it would change the world. (And 15% of what? What sort of shape is RS Aus in?)
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iRobot
Member of DD Central
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Post by iRobot on Aug 5, 2020 10:51:05 GMT
The Metro Bank results are out this morning. The RS acquisition does get its' own slide in the presentation. (See, it was all the lenders' fault - they were too expensive and there weren't enough of them...  ) 
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Post by Deleted on Aug 5, 2020 11:23:06 GMT
So after Completion Date for the deal, there will be no new loans for RS investors to invest in? No wonder RS isn't open to new investors.
And doesn't that change RS's figures for future contributions to the PF because there will be no new business?
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macq
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Post by macq on Aug 5, 2020 11:27:04 GMT
In the combined goal for the future box it mentions "sticky deposit funding" -But has it not hit the fan already?
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Post by shanghaiscouse on Aug 5, 2020 11:38:37 GMT
Nice of the shareholders to do a bit of asset stripping on the way out though and hang on to the Australia investment. Yeah, although it's only a ~15% holding, so doubt it would change the world. (And 15% of what? What sort of shape is RS Aus in?) they had it on the balance sheet valued at £13m......they were hoping to IPO it soon but covid put paid to that. It kept their P&L afloat for the last two years as they originally had it at almost zero but revalued it to £13m over 2 years.
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Post by diversifier on Aug 5, 2020 13:45:35 GMT
So after Completion Date for the deal, there will be no new loans for RS investors to invest in? No wonder RS isn't open to new investors. And doesn't that change RS's figures for future contributions to the PF because there will be no new business? It doesn’t change that (at least) because “future contributions” is a % of the incoming repayments of the current loans. The PF only insures current loans.
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Post by diversifier on Aug 5, 2020 14:05:56 GMT
The Metro Bank results are out this morning. The RS acquisition does get its' own slide in the presentation. (See, it was all the lenders' fault - they were too expensive and there weren't enough of them... ) Wow. Just Wow. Metro are stating RS investors are currently getting just 1.5% interest, with still significant downside risk remaining on that. They state explicitly that the risk-adjusted interest rate is not sufficient to attract capital in the free market (“seeking lending volumes unconstrained by investor inflows”). Their own depositor base is going to lend them money at 0.5% (“lower cost of funds”), despite the fact that defaults will cause their return to be Extremely Negative. When the losses come to bite, Metro depositors are Insured for those losses by the FSCS. This presentation is as clear a statement as I have ever seen that the entire banking sector is just rent-seeking on the taxpayer now. It explains on a single slide, why the P2P sector is entirely unable to compete with free money any more.
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aju
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Post by aju on Aug 5, 2020 14:13:59 GMT
The only reason Metro exists is the government. It was handed slugs of public money in an effort to introduce more competition into UK banking. NOw it is using government money to buy RS. So we have been baled out by the government. It is getting harder to find any economic activity these days that does not have the government behind it. Not an economic activity as such but Virgin Atlantic look like they'll be mothballing for a while rather than the government chipping in. Unless they cave of course...
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on Aug 5, 2020 15:18:07 GMT
The RS acquisition does get its' own slide in the presentation. (See, it was all the lenders' fault - they were too expensive and there weren't enough of them... ) Wow. Just Wow. Metro are stating RS investors are currently getting just 1.5% interest, with still significant downside risk remaining on that. They state explicitly that the risk-adjusted interest rate is not sufficient to attract capital in the free market (“seeking lending volumes unconstrained by investor inflows”). Their own depositor base is going to lend them money at 0.5% (“lower cost of funds”), despite the fact that defaults will cause their return to be Extremely Negative. When the losses come to bite, Metro depositors are Insured for those losses by the FSCS. This presentation is as clear a statement as I have ever seen that the entire banking sector is just rent-seeking on the taxpayer now. It explains on a single slide, why the P2P sector is entirely unable to compete with free money any more. well lets be honest, we all ask for 5,6, 7 % + as the risk is high but also expect a provision fund to grow and credit worthy borrowers to be in the mix. if you want credit worthy you need to offer better rates and so offer lower rates to investors or accept a loss. if they lend at 8% they need to lend to a less worthy borrower or greater risk... so yes, their management and our unreal expectations is the crux of it.
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Aug 5, 2020 17:28:07 GMT
Are you sticking to your prediction of a "loss of 15-25% of total portfolio" for me? well, after HSBC wrote off £10billion of covid losses yesterday, I can't see RS being immune, so yes I would stick to that prediction It's never really a good idea to base predictions on personal experiences elsewhere
I'll keep you posted. One third of my original investment (approx. one quarter of my total portfolio) back so far, through 'natural wastage'.
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Post by RateSetter on Sept 14, 2020 17:36:50 GMT
Good evening. We are pleased to confirm that the acquisition has completed. We have published a blog and a RateSetter Notice, copied below for reference: |
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beagle
Investor in ratesetter, funding circle, lendy (lesson learnt) and AC
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Post by beagle on Sept 14, 2020 17:49:04 GMT
Good evening. We are pleased to confirm that the acquisition has completed. We have published a blog and a RateSetter Notice, copied below for reference: in short good luck when the provision fund runs out (no future funds).
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adrian77
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Post by adrian77 on Sept 14, 2020 18:01:04 GMT
or to put another way (as in non-spin gonads) with no support from Metro Bank If I were a betting man I would put money
on the APM interest being reduced in Jan 2021 - as I see it is 50-50 that we get 100% of our monay back before the provisional fund runs out...
Happy to be proven wrong!
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