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Aldermore Group PLC - Interim Management Statement Q3 2016

POSTED: 10th November 2016
IN: Newsroom
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(9 months from 1 January 2016 to 30 September 2016)

Continuing growth in lending and capital generation                                                     

Profitable growth with £2.3bn in originations for 9M 2016

  • Strong organic growth continues, with net loans up 15% to £7.1bn (end 2015: £6.1bn)
  • Growth driven through greater levels of new lending, up 20% to £2.3bn YTD (9M 2015: £1.9bn) as more British SMEs, homeowners and landlords choose Aldermore to serve their needs:
    • New lending to Business Finance customers up 13% to £0.8bn YTD (9M 2015: £0.7bn)
    • New lending to Mortgage customers up 24% to £1.5bn YTD (9M 2015: £1.2bn)
  • Net interest margin stable in the quarter and in-line with management expectations

Significant capital growth in the third quarter

  • CET1 capital ratio(1) grew by c40bps to 11.5% in Q3, driven by c30bps of organic capital generation and an increase in the value of assets held for liquidity purposes
  • Pro-forma total capital ratio(2) rose to 15.7% (end Q2: 14.0%)
  • Tangible book value per share(3) increased by 6% to 146.0p (end Q2: 137.1p)

Further strategic and financial progress

  • The first bank to utilise the Term Funding Scheme (TFS) in Q3
  • Successfully issued £60m of Tier 2 notes in October at a coupon of 8.5%; significantly below the cost of our existing Tier 2 issuance(4)
  • Voted Leasing & Asset Finance Provider, Most Supportive Lender, and Development Funder of the Year in the NACFB awards.

Phillip Monks, CEO, commented:

“I am delighted that Aldermore continues to deliver on our strategy with another strong quarter. 

“While the economic and regulatory environment continues to evolve, we have seen no changes in customer demand, our pipeline remains strong and our credit performance robust.  As a result, in the first nine months of 2016 we have grown the loan book by over £900m balanced across SME and mortgage customers, whilst maintaining our strict controls on underwriting standards.

“New lending has been funded through the growth of our deposit franchises as well as the use of Government funding schemes, including the Bank of England’s newly launched TFS which we began to utilise in September.

“I am also pleased to report that strong organic profit generation has driven our CET1 capital ratio to 11.5% in the quarter, delivering on our IPO commitment of capital self-sufficiency by the end of 2016.

“We look forward to updating you on our progress and outlook at our 2016 full year results in March 2017.”

  • Fully loaded CRDIV CET1 as at 30 September 2016 includes Q3 2016 profits. c.30bps of capital generation represents retained profit in excess of RWA growth.
  • Pro-forma total capital ratio includes £60m of Tier 2 issued in October and Q3 2016 profits. Excluding the £60m Tier 2, the total capital ratio was 14.3%
  • Outstanding number of shares: 344.7m (Q2: 344.7m)
  • Previous Tier 2 issuance of £40m with a Coupon of 12.875% issued at a discount with effective interest cost through the P&L at 18.597%

Enquiries:

Analysts

Media

Martin Adams

Holly Marshall

Tel: +44 (0) 20 8185 3108

Tel: +44 (0) 20 3553 4828

 

 

Ryan Jones

Andy Homer

Tel: +44 (0) 20 8185 3146

Tel: +44 (0) 20 3553 4244

 

 

 

FTI Consulting

 

Neil Doyle

 

Mobile: +44 (0) 7771 978 220

 

 

 

Important disclaimer

This document contains certain forward-looking statements with respect to the business, strategy and plans of Aldermore Group PLC (“Aldermore”) and its current goals and expectations relating to its future financial condition and performance. Such forward-looking statements include, without limitation, those preceded by, followed by or that include the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "may", "anticipates", "projects", "plans", "forecasts", "would", "could", "should" or similar expressions or negatives thereof. Statements that are not historical facts, including statements about Aldermore’s, its directors’ and/or management’s beliefs and expectations, are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, plans and/or results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by Aldermore or on its behalf include, but are not limited to: general economic and business conditions in the UK and internationally; market related trends and developments; fluctuations in exchange rates, stock markets, inflation, deflation, interest rates and currencies; policies of the Bank of England, the European Central Bank and other G8 central banks; the ability to access sufficient sources of capital, liquidity and funding when required; changes to Aldermore’s credit ratings; the ability to derive cost savings; changing demographic developments, and changing customer behaviour, including consumer spending, saving and borrowing habits; changes in customer preferences; changes to borrower or counterparty credit quality; instability in the global financial markets, including Eurozone instability, the potential for countries to exit the European Union (the “EU”) or the Eurozone, and the impact of any sovereign credit rating downgrade or other sovereign financial issues; technological changes and risks to cyber security; natural and other disasters, adverse weather and similar contingencies outside Aldermore’s control; inadequate or failed internal or external processes, people and systems; terrorist acts and other acts of war or hostility and responses to those acts; geopolitical, pandemic or other such events; changes in laws, regulations, taxation, accounting standards or practices, including as a result of an exit by the UK from the EU; regulatory capital or liquidity requirements and similar contingencies outside Aldermore’s control; the policies and actions of governmental or regulatory authorities in the UK, the EU or elsewhere including the implementation and interpretation of key legislation and regulation; the ability to attract and retain senior management and other employees; the extent of any future impairment charges or write-downs caused by, but not limited to, depressed asset valuations, market disruptions and illiquid markets; market relating trends and developments; exposure to regulatory scrutiny, legal proceedings, regulatory investigations or complaints; changes in competition and pricing environments; the inability to hedge certain risks economically; the adequacy of loss reserves; the actions of competitors, including non-bank financial services and lending companies; and the success of Aldermore in managing the risks of the foregoing.

Any forward-looking statements made in this document speak only as of the date they are made and it should not be assumed that they have been revised or updated in the light of new information of future events. Except as required by the Prudential Regulation Authority, the Financial Conduct Authority, the London Stock Exchange PLC or applicable law, Aldermore expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in Aldermore’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The information, statements and opinions contained in this document and subsequent discussion do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

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 September 2016, lending to customers stood at £7.1 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.

 

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