UK-based high street lender Metro Bank is in talks to buy Ratesetter, a peer-to-peer (P2P) lender in Britain, Sky News has reported citing people familiar with the matter.
The consideration Metro Bank is willing to provide for the P2P firm is uncertain.
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However, Metro Bank said it will buy Ratesetter at “a knockdown valuation”.
A deal could happen next month, however, there is no guarantee the deal may come to fruition, the report added.
Launched in 2010, Ratesetter has been seeking a sale or merger amid a funding squeeze caused by the Covid-19 pandemic.
The P2P lender has over 700,000 people investing or borrowing from its platform in the UK.
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By GlobalDataAt its peak, Ratesetter had about £1bn of lending on its balance sheet.
The merger talks between Metro Bank and Ratesetter will surprise city analysts and shareholders, as they were expecting the former to focus on implementing its core strategy, Sky News said.
A deal is expected to empower Metro Bank with a new lending platform and distribution capabilities.
Metro Bank was hit by an accounting scandal last year which is said to have swept 90% of its market value in one year.
Since its shareholding plunged, the bank has a market capitalisation of just £180m.
Last year, Metro Bank sold a portfolio of mortgages for about £520m.
