Any defaulted loans in your portfolio at the time of the sale were acquired in the purchase. When a loan defaults, the value of that loan drops to £0, which is why you didn’t receive a payment for these loans.

However, through our regular debt sales, a lot of the defaulted loans in the P2P portfolio had already been sold off. We concluded our last debt sale in September 2021. It’s important to be aware that many of the defaulted loans that were left in investors’ portfolios were likely already in default before the September sale but were ineligible for purchase. A loan may be ineligible for a debt sale for a few reasons, such as if it’s held by a vulnerable customer or someone in a bankruptcy agreement. In these instances, the chance of making recoveries is significantly reduced.

As we paid face value on loans that were already in arrears, this should more than make up for any money that may have come through in recoveries from loans that had already defaulted.