10th year sees lending to customers exceed £10bn

05-Sep-2019

Aldermore is pleased to announce results for the financial year to 30 June 2019, its 10th year of operation and first full financial year as part of the FirstRand Group, the largest financial services group in Africa by market capitalisation. These show strong profits across a diversified and growing portfolio of loans, supported by continued healthy growth in customer deposits.

Financial Delivery:

Net lending to customers now totals £10.6bn (2018: £9.0bn) as Aldermore continues to strengthen its support to SMEs, homeowners, landlords and vehicle owners

Diversified portfolio with Business Finance lending up 12% to £3.4bn, Retail Finance lending up 15% to £6.8bn, and motor finance via MotoNovo Finance at £0.4bn, driven by originations since May 2019
Originations of £3.9bn up 30% (2018: £3.0bn1)

Deposits grew by 15% to £9.0bn (2018: £7.8bn) to support lending growth

Net interest margin (NIM) at 3.3% (2018: 3.4%1)

Cost of Risk increased to 24bps (2018: 16bps1) mainly reflecting adoption of IFRS9 and inclusion of MotoNovo Finance

Full year July 2018-June 2019 profit before tax of £129.6m (2018: £117.1m1)

Aldermore Bank’s ROE was maintained at 12.9%; Aldermore Group’s ROE is lower due to the £209 million of new equity capital to support the growth of MotoNovo Finance

CET1 ratio has strengthened to 14.9% (2018: 12.3%) due primarily to additional capital to pre-fund future MotoNovo Finance originations

Strategic Progress:

Commitment to delivering superior service and products sees consistently high levels of customer satisfaction:

Aldermore’s average product rating from customers is 4.5 out of 5, as displayed on our website

90% of reviewers rated Aldermore at 4 or more

94% (up 1%) of reviewers would recommend Aldermore

MotoNovo has a strong Net Promoter Score (NPS) of +72

Aldermore Group now has a combined total of nearly 2,000 employees

Mark Standish, CEO of MotoNovo, has joined the Aldermore Group leadership team

The MotoNovo business adds a new engine of growth to the Aldermore portfolio and in the medium term is expected to make a significant contribution to profits

Our strategic review of the enlarged Group’s capabilities and market propositions continues as we plan future investment in technology and products

Phillip Monks, CEO of Aldermore Group, commented:

“I am pleased that the last year, the first under our parent company FirstRand, has been a successful one for Aldermore. Our performance in the lending and savings markets has been strong against a backdrop of intense competition and economic and political uncertainty. Our capital position has further strengthened and we have welcomed colleagues from MotoNovo into the Aldermore Group.

“I am excited about the potential which we can unleash by combining forces with MotoNovo. This is a new source of growth for us and we believe the opportunities created will bring great benefits to customers, with an even more competitive offering available, as well as being a significant contributor to profits going forward.

“Aldermore was established during the financial crisis to help SMEs who were unable to borrow from traditional banks. With Brexit on the horizon there is of course uncertainty in the air, with downward pressure on net interest margins and worsening credit performance likely to remain a feature of the market.

“As we look forward, our diversified lending book together with our strong savings base continues to position us well. We are excited about the potential opportunities our enlarged Group can bring to benefit customers. Our business model, risk management processes and preparations for Brexit eventualities mean we are well placed to navigate through the political and market uncertainties of the next few months and years. We have a resilient and robust model which will enable us to continue to support the needs of our customers through the cycle.”