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Lease Team

Aldermore brings more competition to UK banking



Following its acquisition by the FirstRand Group earlier this year, Aldermore has announced its results for the 18-month period to 30 June 2018, a period which reflects a change in Aldermore’s financial year end from 31 December to 30 June to align with the FirstRand Group.

 The acquisition by the FirstRand Group, completed in March 2018, will enable Aldermore to “broaden its propositions and bring more competition to UK banking,” according to the company. It promises “strong cultural alignment driving significant progress of integration into FirstRand and planning for MotoNovo, one of the UK’s leading independent motor finance companies, to become part of the Aldermore Group.”

The company reports high levels of customer satisfaction with its Net Promoter Score (“NPS”), improved 1 point to +44. Pat Butler joined as Chairman in March 2018 and Aldermore has welcomed to the Board, the FirstRand representative Directors, Alan Pullinger, Chief Executive Officer, and Harry Kellan, Chief Financial Officer. Harry Kellan joins the Board subject to regulatory approval. 

Aldermore reports 18 months of underlying profit before tax of £232 million (2017: £160 million and 2016: £133 million), as well as a strong underlying return on equity of 17.2pct (2017: 18.5pct and 2016: 18.0pct). It also claims statutory profit before tax and return on equity of £195 million and 13.9pct respectively. Aldermore’s net lending to customers now totals £9.0 billion (2017: £8.6 billion and 2016: £7.5 billion).

The company reports originations for the 18 months of £4.7 billion (both 2017 and 2016: £3.2 billion) within existing risk appetite, while net interest margin has been maintained at 3.5pct as guided (both 2017 and 2016: 3.5pct). It boasts continued secure and well controlled credit performance with cost of risk of 16bps (2017: 15bps and 2016: 23bps). Customer deposits grew to £7.8billion (2017: £7.1 billion and 2016: £6.7 billion) to support lending growth across an enlarged portfolio. Aldermore claims an underlying cost/income ratio of 46pct (both 2017 and 2016: 45pct), reflecting continued investment.

 Phillip Monks OBE, Chief Executive Officer, commented, “Our results demonstrate continued financial delivery, strengthening our balance sheet with a CET1 ratio in excess of 12pct and, in an increasingly competitive market, maintaining our asset quality, net interest margin, and our profitability.

“We have been providing customers with “banking as it should be” for almost a decade, through our award-winning products and services. As we enter this new stage in our journey, we see real potential to further increase the breadth and depth of what we offer customers as part of the FirstRand Group by exploring opportunities for product diversification. The process of integration with MotoNovo is underway and we are excited about the possibilities to strengthen our competitive position in our core markets.”

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