NatWest's £250 Million Funding of Amplifi Capital Raises Concerns

Islamabad, Pakistan Jul 25, 2026 ALN: 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. The collapse of Amplifi is significant, not only for the stakeholders directly involved but also for the broader financial ecosystem in the UK and the regulatory landscape governing non-bank financial institutions (NBFIs).

NatWest lent to a business that financed Amplifi called Castor Financing from 2023 to 2025, a Reuters review of filings shows. The connections between NatWest and Amplifi, which have not been previously reported, highlight how banks have lent large sums to NBFIs, a practice that has come under scrutiny. NBFIs, which operate outside traditional banking regulations, have been increasingly relied upon for consumer credit, raising concerns about their stability and the potential risks they pose to the financial system.

The Bank of England is among global regulators examining whether NBFI defaults pose risks to the wider financial system. This scrutiny is particularly timely given the growing number of collapses among NBFIs in recent years. Earlier this year, UK mortgage originator Market Financial Solutions also collapsed, owing £1.8 billion and leaving banks such as Barclays and HSBC facing substantial losses. The increasing prevalence of such failures has led to calls for stricter regulations and oversight of NBFIs, which have traditionally operated with less regulatory oversight than their banking counterparts.

“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. The implications of these collapses extend beyond immediate financial losses; they raise fundamental questions about the resilience of the financial system and the adequacy of current regulatory frameworks. Investors and analysts are increasingly concerned about the lack of transparency surrounding NBFI operations and the potential for systemic risks to emerge.

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. This lack of clarity regarding financial obligations adds another layer of complexity to the situation, as stakeholders attempt to piece together the financial ramifications of Amplifi's insolvency.

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 silence from key figures in the company raises further questions about the decision-making processes that led to Amplifi's rapid decline.

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. This lack of public commentary from regulatory bodies underscores the challenges in addressing the growing concerns surrounding NBFIs and their interactions with traditional banks.

‘SECURITISATION WAREHOUSE’

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%. This rapid expansion into unsecured lending was indicative of a broader trend in the market, where demand for consumer credit has surged, particularly in the wake of economic uncertainty and rising living costs.

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. This securitisation process allowed Amplifi to access much-needed capital while transferring some of the risk associated with its loan portfolio to investors. 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 arrangement 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. The securitisation warehouse model has gained traction among banks as a means to engage in higher-risk lending without the associated capital requirements of direct loans.

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. This significant increase in debt facilities reflects the aggressive growth strategy employed by Amplifi, but it also raises questions about the sustainability of such a model in an increasingly regulated environment.

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. This willingness to provide additional support indicates a recognition of the potential value of Amplifi's loan portfolio, but it also illustrates the precarious nature of its financial situation.

POPULAR 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. This trend has significant implications for the risk profile of banks and the overall stability of the financial system. 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. This regulatory framework creates a strong incentive for banks to engage with NBFIs, even as the risks associated with such lending become more pronounced.

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. This financial engineering is appealing to banks seeking to enhance their profitability, but it can lead to a misalignment of incentives, where banks prioritize short-term returns over long-term stability. 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. The increasing reliance on NBFIs could pose challenges for regulators as they work to ensure financial stability in the face of evolving market dynamics.

“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. The uncertainty surrounding the future of NBFIs and their interconnectedness with traditional banks raises important questions about the adequacy of existing regulatory frameworks and the need for a more proactive approach to risk management.

DIFFICULT TIME

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. This sharp decline in profitability underscores the challenges faced by Amplifi as it navigated a rapidly changing regulatory environment and increasing competition in the consumer lending space.

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. This over-reliance on a specific segment of its business model highlights the vulnerabilities inherent in Amplifi's strategy and the need for diversification in revenue sources.

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. The diversity of funding sources may have provided some cushion against the financial pressures faced by Amplifi, but ultimately, it was not sufficient to prevent its collapse. The situation serves as a cautionary tale for other NBFIs and banks engaged in similar lending practices, emphasizing the importance of prudent risk management and regulatory compliance in an increasingly complex financial landscape.