23 Nov Citigroup Bets Millions on U.K. Mortgage Lender
Brexit may be roiling Westminster and inflating prices on supermarket shelves, but don’t tell that to financial institutions eyeing the U.K.’s burgeoning online-lending industry.
In the latest sign of confidence in the sector, Citigroup Inc. has agreed to provide a fintech firm called LendInvest Ltd. with funding for mortgages, the startup said in a statement Wednesday.
Four-year-old LendInvest, which already manages 500 million pounds ($663 million) in lending capital for institutional investors, plans to eventually securitize and sell the loans funded by Citigroup. While the firms didn’t disclose the terms, deals involving securitizations and big bank funding are rarely executed for less than 200 million pounds.
Unlike peer-to-peer lenders, which match investors and borrowers on their websites, LendInvest taps bank funding lines and its own equity capital to finance its loans. The London-based firm utilizes proprietary software to originate and manage mortgages entirely online, which reduces overhead expenses and makes it easier to manage complex portfolios. To back up its risk-scoring approach, LendInvest will put its own equity capital into every loan that Citigroup funds.