Access Accounts Run Off - by the (rough) numbers (AC)

Hats off (including flying pigs) and a deep bow for your 10,000th post. There was a very high chance that it would be both interesting and informative and it hasn't disappointed. You are without doubt The most knowledgeable poster on all things P2P on the forum. Your posts rebuffing irate investor's misunderstandings have been exceptional. 

Thank you. 

Rough numbers, due to a certain level of estimating AA holdings, and no guarantee I havent made errors

As of April 30

Capital outstanding £120m
Free Cash £12.3m
Outstanding funding commitments £7.6m

Loans 271
Default 37 (NB includes 6 where holding is nominal) £9.7m
Arrears 17 (includes 3 where arrears are nominal which is just annoying)
Late 1 (less than 7 days)
Repaid 6


Capital repaid £2.7m v scheduled £4.8m
Drawdowns £860k v scheduled £1.9m
Cash flow +£1.9m v £5.9m

Interest received c430k representing approx 98% of sum needed to pay 4% before the lender fee
(NB due to the month end falling on a weekend/BH there are a considerable number of April payments that will fall into May - this will likely distort the interest payment calcs)

May

Scheduled repayments £11.5m (but includes 3 big loans that are not likely to repay)
Scheduled drawdowns £2.1m (includes outstanding drawdowns from previous months NB AC ledgers are inconsistent so likely an overestimate)

Top 5 AA loans by holding

1226 -£3.9m - deja vu event imminent of Lendy investors
1521 -£2.4m
1551 -£2.4m
1532 -£2.2m
1604 -£2.2m

Doing some rough maths, working back from numbers elsewhere.
Interest received by AA c£430k
Interest paid @2.4% £264k
Difference representing fee £166k
£166k @2.9% means about £80m loan book paying fees.
However, a lot of loans had April payments falling into May due to BH so likely a distorted month.
Might be able to get more accurate estimate later when not on phone. Very hard to be precise because loans in arrears then catching up will distort numbers.

We are pleased to confirm that, ahead of schedule, we are starting to return Access Accounts cash to investors from the week commencing 1st May 2023.



Lenders will be aware that Access Account withdrawals were not possible for a period since the 15th of December 2022 in order to ensure that sufficient funds are maintained to meet the funding requirement of development loans held by lenders in the Access Accounts. We had previously estimated that it would take until around June 2023 to reach the point where we were able to allow capital repayments to be distributed to Access Account investors as they occurred. Following lots of activity, we have now completed on a considerable number of loan redemptions and have now fully covered all future loan funding requirements. We now have a surplus to distribute, with further monthly payments now expected each month alongside interest payments.



Access Account capital distributions will be made pro-rata across all Access Account investors, with funds going back to investors’ Cash Accounts.



As no new loan investments are coming to the platform, we would ask that all lenders take steps to withdraw all funds held in their Cash Accounts in a timely manner to maximise investment returns elsewhere. We cannot make any payments automatically so please request the withdrawal on your investment dashboard as usual.



For Standard Accounts this involves making a withdrawal request to your verified bank account in the normal way. For IFISA accounts this will involve creating an ISA Transfer Out request, via your chosen new ISA Manager, so that you can move funds to another IFISA provider and keep funds within the IFISA wrapper – please see the IFISA FAQ Section on the investor platform for further information. If you do not wish to keep funds in the ISA wrapper, then you are free to withdraw them to your verified bank account but please consider whether that would result in the loss of tax-free status. Please note that Assetz Capital cannot provide any form of tax advice so if you are uncertain of the tax treatment of your IFISA you should seek advice from a qualified professional.



As previously indicated, we are looking to introduce the following changes to the existing withdrawals process:



A de Minimis level of an amount of £5 for any withdrawal, with the exception to this rule being if it is the withdrawal of the final remaining balance on a lender’s account. This is for cost saving purposes that will help minimise the Lender Fee;

Withdrawals will be processed less frequently moving to weekly in the first instance.



We are actively looking to define a process which allows Assetz Capital to distribute cash balances on lenders’ accounts to their verified bank accounts regularly, so a lender does not need to log on to make a withdrawal. We will aim to provide further details in or before the next lender update.

Lender Fees

The ceasing of new retail lending meant a significant drop in our income for the retail part of the business. Since we closed the platform to new investment on the 15th of December 2022 we have achieved a reduction in the costs associated with that part of our business in order to keep the lender fee to the lowest possible level and that work continues.

Unfortunately, the cost reductions have taken longer to implement than wished for and these extended higher costs mean that the Lender Fee plan needs to also be adapted to ensure we can cover the costs of the retail business reduction and facilitate a smooth run-off process over the coming years. We are fully committed to keeping the lender fee as low as possible, but this does mean the average fee over 5 years goes from 1.15% pa to 1.3% pa. We will continue to press down on costs as much as possible to help keep the lender fee as low as possible too.

The following Lender Fees were estimated to be applied to cover the anticipated costs of adjusting the business to a run-off footing, then managing the loan book through run off and returning capital to investors.

Through to the end of June 2023 - 2.9% pa of performing loans
July to December 2023 - 1.4% pa of performing loans
January 2024 onward - 0.9% pa of performing loans

(This equates to an average fee level of 2.15% for the first 12 months and a 5 year effective fee of 1.15% pa)

This is now estimated to be as follows :

Through to the end of December 2023 - 2.9% pa of performing loans
January 2024 onward - 0.9% pa of performing loans

(This equates to an average fee level of 2.90% for the first 12 months and a 5-year effective fee of 1.3% pa)

These are estimated fees and are subject to review over time.

Please note, however, that due to timing discrepancies from some borrowers on their precise repayment dates, there has been a lower effective fee actually collected to date. The fee actually paid in the last two months has been around 2.4%, not the 2.9% theoretical fee. The Access Accounts have also paid just below target rates at around 3.9%.

"Through to the end of December 2023 - 2.9% pa of performing loans"

Extending this very high 2.9% pa additional fee from June to December 2023 will be a massive hit to lenders.

It's preposterous, as AC are making significant amounts of money from all manner of other fees.

However, we mustn't forget that Stuart Law needs to pocket as much money as possible from you for his Jaguar etc. Petrol prices are not low these days.

He doesn't care the slightest for AC's retail lenders like us. Therefore, he will undoubtedly once again extend the extra 2.9% fees, from December 2023 into 2024 as well.

Stuart Law has been conditioned by his parents, since the day he was born, that, by virtue of his surname, whatever he says will be The Law. Nobody has the right to question Him.

Therefore, the only way to hold Mr Law and his merry band of accomplices to account is to report Assetz Capital to the Financial Ombudsman Service and to other bodies, and to let people know how Assetz Capital treats folks wherever they are named online.

Doing nothing just encourages the continuation of this pilfering.

Do you want a laugh?

"As previously indicated, we are looking to introduce the following changes to the existing withdrawals process:

A de Minimis level of an amount of £5 for any withdrawal, with the exception to this rule being if it is the withdrawal of the final remaining balance on a lender’s account. This is for cost saving purposes that will help minimise the Lender Fee;" 


I read that as CHARGES and that they were going to start charging £5 for each withdrawal!  Composed an indignant email and have only just realised my mistake.

I'm really happy to be wrong about this but with AC's track record, I think it's easy to understand why I jumped to that conclusion!