Aldermore report record profitability and continued strong lending growth
Underlying profit before tax(1) up by 75% to £99m
– Reported profit before tax up by 88% to £95m (2014: £50m)
– Net interest margin increased to 3.6%; in line with management expectations (2014: 3.4%)
– Underlying cost/income ratio(1) improved by 9pts to 51% (2014: 60%)
– Strong credit performance; cost of risk improved by 4bps to 19bps (2014: 23bps) Delivering strong, sustainable returns
– Earnings per share grew by 75% to 22.7p (2014: 13.0p)
– Return on equityincreased to 19.7% (2014: 13.5%)
Net loans up by 28% to £6.1bn; c71,000 customers, up by 27%
– Asset Finance +29%; SME Commercial Mortgages +50%; Buy-to-Let +18%; Residential Mortgages +42%
– Third largest net lender to UK SMEs under Funding for Lending Scheme in 2015
– Record origination of £2.6bn; up by 10% on prior year (2014: £2.4bn) Innovative online deposit franchise funds lending growth; c124,000 customers, up by 18%
– Total deposits up by 29% to £5.7bn (31 December 2014: £4.5bn)
– SME deposits within this, up by 37% to £1.4bn (31 December 2014: £1.0bn) Strong capital position maintained
– Total capital ratio of 15.1% (31 December 2014: 14.8%)
– CET1 capital ratio of 11.8% (31 December 2014: 10.4%)
– Leverage ratio of 7.3% (31 December 2014: 6.3%) Confident of continued strong delivery
– Nominal net loan growth expected to continue to be in line with recent run rates
– Return on equity percentage expected to be in the high-teens following introduction of UK bank tax surcharge
– Fully loaded CRD IV CET1 capital ratio to remain around 11% Phillip Monks, CEO, commented:
“It has been an excellent year, both operationally and financially, for the Group. We have delivered record levels of profitability with our profit before tax up by 88%. Today’s results clearly demonstrate our continued focus on delivery across a range of key metrics, with our net interest margin exactly as expected, continued improvement in our cost/income ratio and another strong credit performance.
“We are serving more customers than ever. Net lending is up to £6.1bn driven by strong double digit growth in Asset Finance and all our Mortgage portfolios. We continue to support UK businesses and were pleased to be the third largest net lender to SMEs under the Bank of England’s Funding for Lending Scheme in 2015. Our online deposit business grew in line with our lending and continued to enhance our reputation for innovation with the launch of our SME Rate Checker. We aim to deliver exceptional service every time and I’m pleased with our Net Promoter Score of 22, which is well above the UK banking average of 2, and that 97% of customers posting feedback on our website would recommend us to a friend or family member.
“We are committed to supporting the UK’s SMEs, homeowners, landlords and savers who are often under- or poorly served by the wider market. We have a clear and differentiated growth strategy and remain both excited about the opportunity in our chosen markets and confident of our ability to deliver continued strong profitable growth and attractive, sustainable returns for shareholders.”
(1) Excluding IPO related costs of £4.1m pre-tax and £3.4m post-tax in 2015 (2014: £6.0m and £4.6m).