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Funding Circle retreats from Europe; lays off 125 staff

Funding Circle retreats from Europe; lays off 125 staff

P2P lender Funding Circle is to lay off 125 staff as it scales back its European operations after booking a £34.3m writedown related to its Dutch and German divisions.

The job cuts will affect staff in Berlin and Amsterdam as the firm puts together a team of 25 employees to run its European operations from its London base.

The retreat from Europe comes as Funding Circle posts an £84 million loss for 2019 amid a tightening of lending criteria against higher risk loans. The London business reported an operating profit of £3 million in the second half of 2019, compared to a loss of £5.4 million for the half the year before.

The company is currently piloting an instant decision lending platform, including historical data on approximately one million loan applications from the last ten years, which it expects to roll out to approximately 50% of businesses by the end of 2020.

In a statement, the firm says: "In times of uncertainty, it’s important we are prepared to do the right thing for the long term future of the business—and the investors who lend through our platform—even if it means slowing growth or affecting our profitability in the short term.

"We will continue to take this approach in the future. While it’s too early to predict any impact of the ongoing development of the coronavirus, we are continuing to monitor the situation very closely and are prepared to make prudent and timely adjustments where necessary."

Shares in the lender, which have crashed as much as 87% since its stock market debut in 2018, dipped by a further 5.62% on the update.

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