Challenger bank Aldermore expected to show it can outpace the big players this Thursday

Hayley Kirton
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Challenger banks did not fare well post-Brexit vote but this one could be about to show all is still well (Source: Getty)

Aldermore is expected to report a large leap in pre-tax profits when it reveals its half-year results on Thursday.

Results released by banking's big players over the last fortnight have been rather gloomy, with HSBC and Barclays both reporting substantial slips in their profits and RBS revealing a £2bn loss.

Meanwhile, even though Lloyds Banking Group more than doubled its statutory profits, it still managed to send shockwaves through the sector with an additional 3,000 job cuts, blaming low interest woes and lack of footfall at branches.

However, Aldermore, which has made its mark in the buy-to-let market, is expected to reveal a different fate, with the Sunday Times reporting the increase in its pre-tax for the first half of the year could be as big as 50 per cent.

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Many of the worries which have plagued the big banks are likely to have also caused problems for the challengers. Many lenders were already struggling with the lower for longer interest environment, and last Thursday's rate cut probably raises further questions as to how they will cope.

Meanwhile, June's Brexit vote caused bank share prices to crumble across the globe, with challengers particularly badly hit.

The subsector was dealt another blow when a Bank of England report stated challengers were less well shielded from downturns in the commercial property sector than the bigger banks, right after a number of property funds had shut their gates.

Aldermore's own share price closed at 139.3p on Friday, down 32 per cent on the 205.7p it closed at on 23 June.

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