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Funding Circle operating losses rise but sees long-term lending opportunity

Funding Circle reported a first half operating loss of 113.5 million pounds ($144.18 million) on Thursday, more than three times the 31.3 million pounds loss posted a year ago as the pandemic hurt momentum in its peer-to-peer lending business.

LONDON, Sept 24 (Reuters) - Funding Circle FCH.L reported a first half operating loss of 113.5 million pounds ($144.18 million) on Thursday, more than three times the 31.3 million pounds loss posted a year ago as the pandemic hurt momentum in its peer-to-peer lending business.

This equated to a 33 pence loss per share in the six months to end-June, compared with 8.9 pence in the first half of 2019.

The British-based company, which matches borrowers with retail and institutional investors, said it would however reinstate previous adjusted EBITDA guidance of close to break-even in the second half of 2020.

"Early COVID-19 trends suggest a permanent change in the SME borrowing market that we believe will benefit Funding Circle in the medium to long term," the lender said.

Funding Circle's 1.1 billion pounds of loan origination in the first half of 2020 was down 7% year-on-year as a result of lower levels of activity in March and April as it waited for accreditation to take part in government guarantee programmes in Britain and the United States.

Since being accredited, the lender has become the fifth largest Coronavirus Business Interruption Loan lender in Britain, with a market share of around 20% of loans approved. It has approved around $1 billion of Paycheck Protection Program loans in the United States.

($1 = 0.7872 pounds)

(Reporting By Sinead Cruise; editing by Carolyn Cohn)

((sinead.cruise@thomsonreuters.com; 020 7513 5026; Reuters Messaging: sinead.cruise.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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