Funding Circle Q3 2019 Update

21 October 2019

 

Funding Circle Holdings plc

Q3 2019 Update

Full-year guidance unchanged

 

Funding Circle Holdings plc ("Funding Circle"), the leading small and medium enterprise ("SME") loans platform in the UK, US, Germany and the Netherlands, today announces updates to its statistics pages for the three months ending 30 September 2019 (the "Quarter").

The data by country included in this announcement is also available on the Company's website at corporate.fundingcircle.com/investors/loan-performance-statistics.

 

Operational overview

·      Loans under management ~£3.7 billion, up 31% compared to Q3 2018. Year to date total originations of ~£1.8 billion vs ~£1.6 billion compared to the same period last year, up 9%.

·      Projected annualised returns for 2019 continue to show an improvement over recent years.

·      In July in the UK, Funding Circle completed a £232 million asset-backed securitisation transaction adding 9 new institutional investors onto the platform in the UK.

·      In August in the US, Funding Circle closed a $198 million securitisation, its first asset-backed securitisation of US small business loans, adding 18 new institutional investors onto the platform in the US.

 

FY 2019 Outlook

·      Guidance for 2019 is unchanged; performance on track to meet market expectations.

 

Samir Desai CBE, CEO and co-founder, said:

"In the third quarter, loans under management reached £3.7 billion and projected returns for 2019 continued to show an improvement over recent years. In what remains an uncertain economic environment we continue to manage the business prudently, which we are confident is the right course of action for the long-term growth and development of our business."

 

Group performance

		2019 YTD	2018 YTD	%	Q3 2019	Q3 2018	%
Loans under management	£m	3,675	2,809	31%	N/A	N/A	N/A
Originations	£m	1,753	1,608	9%	561	565	(0.5%)

 

Reporting timetable

·      The next reporting date for loan performance statistics (gross yield, projected annualised return and projected bad debt) will be January 2020.

·      Full Year results will be released in March 2020.

 

Our statistics

 

Loans under management (million)                            

	2012	2013	2014	2015	2016	2017	2018	2019 YTD
Group (£)	52	145	366	860	1,362	2,107	3,148	3,675
UK (£)	52	144	332	653	1,027	1,584	2,208	2,513
US ($)	N/A		54	261	354	577	939	1,110
DE (€)	N/A			27	30	65	131	170
NL (€)	N/A				16	40	95	124

 

Originations (million)

	2012	2013	2014	2015	2016	2017	2018	2019 YTD
Group (£)	49	130	311	721	1,065	1,738	2,292	1,753
UK (£)	49	129	279	531	823	1,264	1,531	1,172
US ($)	N/A		334		281	514	792	575
DE (€)	N/A		33		19	55	105	84
NL (€)	N/A			21		34	81	64

 

Gross Yield

	2012	2013	2014	2015	2016	2017	2018	2019 YTD
UK	9.2%	8.4%	9.9%	9.5%	9.5%	9.5%	9.7%	9.9%
US	N/A		14.5%		13.2%	12.3%	12.8%	12.9%
DE	N/A		6.7%		9.5%	9.5%	10.2%	10.6%
NL	N/A			8.6%		10.7%	11.6%	11.0%

 

Projected annualised return range (after fees and bad debt)¹

	2012	2013	2014	2015	2016	2017	2018	2019 YTD
UK	7.1-7.2%	6.0-6.2%	7.2-7.4%	6.5-6.8%	5.0-5.5%	4.0-4.6%	4.2-5.2%	5.0-7.0%
US	N/A		2.6-2.8%		4.1-4.9%	5.3-6.2%	5.0-6.3%	5.7-7.8%
DE	N/A		0.1-1.0%		2.3-4.1%	5.0-6.9%	5.0-7.0%	5.0-7.0%
NL	N/A			3.7-4.5%		5.6-7.6%	6.0-8.0%	6.0-8.0%

 

Projected bad debt rate range²

	2012	2013	2014	2015	2016	2017	2018	2019 YTD
UK	1.3-1.3%	1.5-1.6%	1.7-1.9%	2.0-2.2%	3.1-3.6%	4.0-4.6%	3.6-4.6%	2.1-4.0%
US	N/A		10.7-10.9%		7.5-8.3%	5.5-6.4%	6.1-7.3%	4.8-6.8%
DE	N/A		4.7-5.6%		4.5-6.2%	1.8-3.6%	2.4-4.3%	2.8-4.7%
NL	N/A			3.2-4.0%		2.4-4.3%	2.9-4.8%	2.3-4.2%

 

ENDS

 

Media Enquiries:

Funding Circle

David de Koning - Director of Investor Relations and Communications (0203 927 3893)

Headland Consultancy

Mike Smith / Stephen Malthouse (020 3805 4822)

About Funding Circle:

Funding Circle (LSE: FCH) is a global SME loans platform, connecting SMEs who want to borrow with investors who want to lend in the UK, US, Germany and the Netherlands. Since launching in 2010, investors across Funding Circle's geographies - including retail investors, banks, asset management companies, insurance companies, government-backed entities and funds - have lent more than £8 billion to 77,000 businesses globally.

Forward looking statements and other important information

This document contains forward looking statements, which are statements that are not historical facts and that reflect Funding Circle's beliefs and expectations with respect to future events and financial and operational performance. These forward looking statements involve known and unknown risks, uncertainties, assumptions, estimates and other factors, which may be beyond the control of Funding Circle and which may cause actual results or performance to differ materially from those expressed or implied from such forward-looking statements.  Nothing contained within this document is or should be relied upon as a warranty, promise or representation, express or implied, as to the future performance of Funding Circle or its business. Any historical information contained in this statistical information is not indicative of future performance.

The information contained in this document is provided as of the dates shown.  Nothing in this document should be construed as legal, tax, investment, financial, or accounting advice, or solicitation for or an offer to invest in Funding Circle.

 Definitions and notes to the editor:

1. The projected annual return shows how loans are estimated to perform. Loans are shown by the year they were taken out, and are after fees and bad debt. Returns equal gross yield minus net losses minus servicing fee and is estimated, using an internally managed model, by cohort of origination incorporating actual returns received for each cohort and adding future expected returns which are determined using the same aforementioned model. Net yield is compounded to recognise re-investment. These expectations may be revised, for example if macroeconomic conditions change, and the projected return, projected gross yield and the projected bad debt rate may be adjusted to reflect this.

2. The projected bad debt rate shows the projected annualised percentage of loans, by loan amount, that will not be repaid. Loans are shown by the year they were taken out and include recoveries. It can take up to five years for loans to be fully repaid, so the projected return, projected gross yield and projected bad debt rate take into account how each year of loans are performing and how Funding Circle expects them to perform in future. These expectations may be revised, for example if macroeconomic conditions change, and the projected return, projected gross yield and the projected bad debt rate may be adjusted to reflect this.