Funding Circle ups forecasts after strong growth in Britain

By Simon Jessop

LONDON (Reuters) - British loans platform Funding Circle said on Tuesday total income rose 38% on the year in the four months to end-October and it expected second-half earnings to be materially ahead of forecasts.

The company, which matches borrowers with retail and institutional investors, said the strong performance had been driven by demand in Britain, where total income rose 67%.

Loan repayments by consumers had also not been materially impacted by a second national COVID-19 lockdown, it said, although it continued to expect "a period of significant stress going forward".

In total, it said it had approved around 1.85 billion pounds ($2.47 billion) and originated around 1.35 billion pounds of loans linked to a UK government support scheme at Nov. 15, around 24% of the number of loans approved since it began taking part.

In the United States, total income was up 10% year on year in the four months to Oct. 30, driven by investment income, it said.

As a result of the strong performance, Funding Circle said it expected second-half total income to be ahead of the same period a year earlier and around 20% higher by year-end.

Cost reductions flagged at the half year stage would likely be less than the 15% expected, but it now expected adjusted earnings to be profitable in the second half, "materially ahead" of interim guidance of close to breakeven.

(Reporting by Simon Jessop, editing by Louise Heavens)