Aldermore Group PLC – Q3 strong growth & rapidly accelerating profitability
Further strong organic growth in lending
– Organic loan origination at record levels of £1.7bn up by 63% on the first half (H1 2014: £1.0bn)
– Total lending to customers up by 10% in Q3 to £4.4bn (30 June 2014: £4.0bn) and by 30% YTD
– Resulting in net new lending on balance sheet of £1.0bn year to date, an increase of £0.4bn in Q3 and in line with management expectations
Record lending performance matched by dynamic online deposit franchise
– Customer deposits up by 8% in the quarter to £4.2bn (30 June 2014: £3.9bn) and by 20% YTD
– Deposits from SMEs continued to increase strongly and were up by 15% in Q3 to £0.9bn (30 June 2014: £0.8bn) and by 74% year to date
Driving rapidly accelerating profitability
– Profit before tax for nine months increased strongly to almost double that delivered in the first six months of the year
– Return on equity for the third quarter in isolation approaching 20% (H1 2014: 11.7%) demonstrating a strong trajectory towards the medium term objective of c20% by the end of 2017
– Cost to income ratio for year to date of around 60% (H1 2014: 64%) and on track to achieve the objective of c40% by the end of 2017
– Improved cost of risk reflects robust and consistent credit performance in line with expectations
Phillip Monks, CEO at Aldermore said: “This is an excellent set of results which demonstrate the continued success of the group. I’m proud to say that Aldermore has now lent around £4.4bn to Britain’s SMEs and homeowners, an increase of 30% since the start of the year.
“As expected, with this strong growth we are driving rapidly accelerating profitability. Looking at the third quarter in isolation, profits generated were close to those for the first two quarters of the year combined and the return on equity was approaching 20%.
“In addition to strong growth in interest income, we continue to see the benefits of our ongoing activity to diversify our funding base in an increased net interest margin and our ability to leverage our digital operating model in a reduced cost to income ratio. I’m also pleased with the robust credit performance of the portfolio reflected in the improved cost of risk.
“We look forward to the rest of the year and beyond with confidence. I’d like to thank our customers for their support and our employees for their hard work which has been so vital to our success.”
30 September 30 June 31 December Movement v Movement v
2014 £m 2014 £m 2013 £m June 14 % Dec 13 %
Loans to SMEs 2,105 1,970 1,694 7% 24%
Loans to
homeowners 2,294 2,039 1,680 12% 37%
Total 4,399 4,009 3,374 10% 30%
Customer
deposits 4,161 3,859 3,464 8% 20%