Funding Circle is set to cut 125 staff as it scales back its European operations.

The UK peer-to-peer (P2P) lender reported a £34.3 million writedown related to its Dutch and German divisions, with the subsequent lay-offs affecting its Berlin and Amsterdam offices. Instead, the firm will assemble a team of 25 employees to run its European operations from its London headquarters.

Funding Circle posted an £84 million loss for 2019 - amid a tightening of lending criteria against higher risk loans - although operating profit was £3 million in the second half of 2019, compared to a loss of £5.4 million during the same period the year before.

A statement explained: "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.

"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."

The company is piloting an instant decision lending platform, including historical data on around one million loan applications from the last 10 years, which it expects to roll out to half of its clients by the end of 2020.

At the end of September 2018, Funding Circle made its stock market debut, valued at £1.5 billion and raising £440 million pounds. Launched in 2010, the FinTech connects small businesses looking for finance directly with investors seeking returns.

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