NatWest Funded Collapsed UK Consumer Lender Amplifi With Up To £250 Million
NatWest's Involvement and the Collapse of Amplifi
By Naomi Rovnick and Lawrence White
LONDON, July 24 (Reuters) - Britain's NatWest helped fund London-based consumer credit firm Amplifi Capital with up to £250 million ($333 million) in the years before it collapsed last month, company filings show, as regulators caution banks over such lending.
Amplifi, which had £119 million in total assets according to its last-filed accounts for the year ended March 2024, specialised in unsecured personal loans. It entered insolvency in June after struggling to adapt to new consumer credit rules.
NatWest lent to a business that financed Amplifi called Castor Financing from 2023 to 2025, a Reuters review of filings shows. Britain's biggest business lender's links to Amplifi, which have not been previously reported, highlight how banks have lent large sums to non-bank financial institutions (NBFI).
The Bank of England is among global regulators examining whether NBFI defaults pose risks to the wider financial system.
Earlier this year, UK mortgage originator Market Financial Solutions also collapsed, owing £1.8 billion and leaving banks such as Barclays and HSBC facing losses.
Regulatory Concerns and Market Impact
"We have started to see how the banks are involved in NBFIs that have collapsed but we could never have known it the day before, so it is scary," said Jackie Ineke, chief investment officer at Swiss fund Spring Investments.
Reuters was not able to establish if NatWest, whose business loan book totals £160 billion, is owed money by Amplifi or related businesses. Its funding of Castor represents the biggest source of finance for Amplifi that Reuters could identify.
NatWest and Interpath, Amplifi's administrators, both declined to comment. Amplifi's former CEO and chair did not respond to messages sent via social media.
The Bank of England declined to comment, citing its policy not to comment on individual firms, as did Britain's Financial Conduct Authority, which oversees NBFIs.
'Securitisation Warehouse' and Funding Structure
Amplifi, which began in 2013 as a small lender to credit unions, expanded to consumer lending in 2022 through the launch of its Reevo brand, which offered unsecured personal loans with interest rates of between 23% and 50%.
As it sought to fund its growth, Amplifi in 2023 sold some of its loans to Castor, which in turn sold loan notes to NatWest, Companies House filings show.
Castor describes itself as a "special purpose vehicle for the purpose of purchasing a portfolio of loans". Those loans, it said in filings, were originated and serviced by Amplifi.
In September 2023, Amplifi said it had secured a £100 million "securitisation warehouse" with NatWest to expand its lending, a report on an archived version of its website shows.
This gave NatWest, which was partially owned by the British taxpayer until May 2025, exposure to higher-risk consumer lending, which regulations encourage banks to avoid directly.
Castor raised its debt facilities in March 2025, company filings naming NatWest as the holder of "Class A2" loan notes show. As is common with this type of debt, the notes were listed on an exchange. Vienna Stock Exchange filings from March 2025 show the Class A facility was increased to £250 million.
British asset manager M&G was also named as the holder of up to £56 million worth of Castor's "Class B" notes in March 2025.
"Funds managed by M&G first provided financing to Amplifi in 2023 and subsequently supported the business through its financial difficulties," an M&G spokesperson said, adding it deferred interest payments as Amplifi sought ways to remain viable.
Popularity of Securitisation with Banks
The type of financing used by Amplifi has become more popular with banks because they need to set aside less capital against potential losses than for regular loans.
Banks face a 20% capital requirement, compared to 100% if they lend directly, Michael Roberts, CEO of corporate and institutional banking at HSBC, told British lawmakers in November.
Banks can triple their return on equity by funding NBFIs via securitisation instead of directly offering loans to the non-banks' own customers, Barclays analysis found.
Such borrowers make up a small share of broader bank balance sheets and the European Central Bank said in May the bloc was not facing systemic risk from private credit turbulence, although pockets of financial markets were exposed.
Nevertheless, European banks' exposure to non-bank financing firms has grown, rising to 11% of their total assets by end-2025 from around 6% a decade ago, ECB analysis showed.
"It leads to fears of what's the next one, will there be a bigger one, how will we know?" said Ineke at Spring Investments, speaking generally about NBFI defaults so far.
Difficult Time for Amplifi
The additional NatWest and M&G funding for Castor came at a difficult time for Amplifi, which swung to a £100,000 financial loss in the year ended March 2024 from a £5.5 million profit the year before, its latest filed accounts show.
New UK regulations in July 2023 forced Amplifi to review its practices, according to the 2024 accounts, and it had become over-reliant on its credit union business where performance had soured, the auditors' opinion in the company statements said.
A Reuters review of its accounts filed between 2015 and 2025 shows Amplifi had several sources of funding, including a £50 million loan facility in 2024 with an unnamed lender.
($1 = 0.7506 pounds)
(Reporting by Naomi Rovnick and Lawrence White in London; Editing by Tommy Reggiori Wilkes and Alexander Smith)
