Aldermore Group Plc, one of the U.K’s smaller challenger banks, said that their rate of loans has increased which has spiked their end of year profits for 2015 by 75 per cent. The share price of the bank has risen.
On Thursday it was said by Reading, a U.K based bank, that Aldermore’s profit before tax, excluding costs which are connected to company’s primary public offering, has increased to 98.8 million pounds from the figure of 56.3 million pounds from the earlier year. Also Net loans rose by 28 percent to 6.1 billion pounds due to the improving development in residential and commercial mortgages.
Chief Executive Officer, Phillip Monks said in a telephone interview:
“We saw growth in almost all of our segments, which shows the diversification we have in our lending book, we don’t need acquisitions to sustain our growth; it’s been 100 percent organic so far and we are very confident we can continue to drive the momentum we’ve seen at the same risk-adjusted returns.”
Aldermore launched its IPO last year in March and subsequently merged onto the U.K ’s FTSE 250 stock index. The bank is a very active challenger bank along with a number of others who are on a mission to take back customers from the four major lenders who currently hold 80 per cent stake in the market. The lender is aiming to achieve this by offering speedy lending processes and an attractive customer service package.
Aldermore saw a growth of 6.3 per cent in their stock value trading at 1.1 per cent more at 218.2 pence in early trading. Thereby the market value of the company totaled around 753 million pounds.
Monks stated that the possible acquisition of the Royal Bank of Scotland’s Williams & Flynn unit “is not on our radar”.
In accordance with an E.U order RBS needs to sell the retail unit by 2017. In this context Monk talked about whether Aldermore is a target and stated: “Whether someone else thinks we are an attractive bank for a takeover is up to them.”
While small company commercial mortgages saw a growth of 50 per cent to 829 million pounds, residential mortgages had grown by 42 per cent to 1.4 billion pounds. However, the bank’s smaller business, invoice financing saw a decline by 11 per cent.
Ian Gordon, an analyst at Investec Plc who current placing a “buy” rating on the bank said: “These are excellent results… Net loan growth is accelerating strongly. We continue to expect Aldermore to deliver material out-performance against every other U.K. bank in our coverage.”
Chief Financial Officer James Mack said Aldermore was badly hit by an 8 per cent corporate tax on earnings which was implemented last year by the Chancellor, George Osborne and this has impacted the outlook for profit growth.