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Aldermore Group PLC 2015: Record profitability and continued strong lending growth

POSTED: 9th September 2016
IN: Newsroom
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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).

Enquiries:

Analysts

Media

Claire Cordell

Holly Marshall

Tel: +44 (0) 20 3553 4274

Tel: +44 (0) 20 3553 4828

 

 

Amit Deshpande

Andy Homer

Tel: +44 (0) 20 3553 4251

Tel: +44 (0) 7931 492 722

 

 

 

FTI Consulting

 

Neil Doyle/ Paul Marriott

 

Mobile: +44 (0) 7771 978 220 /+44 (0) 7703 330 390

 

 

 

A live webcast of the analyst presentation, including the question and answer session, will be broadcast on our IR website www.investors.aldermore.co.uk at 9:30am today and is available via a listen only conference call by dialling + 44 (0) 203059 8125. An indexed version of the webcast will be available on the website by the end of the day and copies of the slides to be presented at the analyst meeting will be available on the website from 9.00am today.

Note on rounding and % movements

In preparing the 2015 financial statements, the 2014 comparative numbers were restated from the original £ thousands to £ millions to one decimal place. As a result of rounding issues arising from this change, the presentation of some of the comparative numbers may differ slightly to the 2014 financial statements. All percentage movements shown are calculated using the financial data in £ millions to one decimal place as shown in the consolidated financial statements. We have adopted the convention of favourable movements being shown as a positive, e.g. a reduced expense is shown as a positive variance.

 Important disclaimer

Visit www.aldermore.co.uk for more information. This press release may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial condition, performance, results, strategic initiatives and objectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. By their nature, all forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK economic business conditions, market-related risks such as fluctuations in interest rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group operates. As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward-looking statements. Forward-looking statements in this press release are current only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or regulation. Nothing in this press release shall be construed as a profit forecast.

 Aldermore

Aldermore Group PLC is a specialist lender and savings bank offering straightforward products to Small and Medium-sized Enterprises (SMEs), homebuyers and individuals, who we believe are often under- or  poorly served by the wider market. Aldermore has no branch network but serves customers and intermediary partners online, by phone and face to face through its network of regional offices located around the UK. Building on its core values of being reliable, expert, dynamic and straightforward, Aldermore aims to deliver banking as it should be. Established in 2009, Aldermore has grown significantly. At the end of December 2015, lending to customers stood at £6.1 billion and customer deposits totalled £5.7 billion. For more information, please visit www.aldermore.co.uk.

Aldermore Bank PLC is an operating entity of Aldermore Group PLC. In March 2015, Aldermore Group PLC’s shares (ALD.L) listed on the Main Market of the London Stock Exchange. Aldermore Bank PLC is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is registered under the Financial Services Compensation Scheme

Please see our 2015 infographic

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