Funding Circle Holdings PLC on Thursday reported an annual loss as operating income fell and loans under management declined.
Shares in Funding Circle closed 6.2% lower to 56.30 pence in London on Thursday.
The commercial lender said operating income in 2022 amounted to £131.4 million, down 21% from £165.5 million a year ago, as it was hit by a decline in transaction fees to £77.5 million, down from £115.0 million.
The decline meant Funding Circle swung to a pretax loss of £12.9 million from a profit of £64.1 million a year before.
Loans under management declined to £3.73 billion, down 16% from £4.46 billion, following anticipated early repayments of Coronavirus Business Interruption Loan Scheme loans in the UK and Paycheck Protection Programme loan forgiveness in the US.
For 2023, the company guided for total income including its new credit offering FlexiPay of £160 million to £170 million. Adjusted earnings before interest, tax, depreciation and amortisation are expected between £0 million to £10 million in its UK and US loans business, while a £10 million to £20 million loss is predicted at FlexiPay.
By 2025 Funding Circle expects total income of at least £295 million, margins of 25% to 30% and to be adjusted earnings before interest, tax, depreciation and amortization positive.
Funding Circle said general credit quality has weakened in the UK and with the increasing economic uncertainty in the UK, it has tightened its credit criteria and introduced interest rate increases on loans in line with rises in the base rate.
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