Aldermore: We have outgrown challenger label

Tim Wallace
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ALDERMORE’S chief executive yesterday claimed the lender has outgrown the challenger bank label and is a now a well-established player in the market.

The bank reported profits of £22.4m in 2013 yesterday, smashing its previous earnings of £1.5m in 2012.

Its lending volumes soared by 64 per cent in the year to £3.4bn, which is now evenly split between mortgages and small businesses.

Mortgages grew particularly rapidly, with lending to homeowners up 76 per cent on the year. Part of that rise came from the bank’s participation in the Help to Buy Scheme.

Deposits increased by 64 per cent to £3.4bn, and the bank is in the process of pricing a securitisation, tapping up wholesale funds.

As a result, chief executive Philip Monks argues the bank has moved into a new phase of development.

“We are often called a challenger bank, but I think we have moved beyond that,” he told City A.M.

“We have a very reliable dynamic and a straightforward model, and we have grown organically with very strong risk controls.”

However, Monks still expects several more years of high double-digit per cent growth.

“We are not mature to the extent that we have nowhere else to go – these are very significant markets and even at these levels of growth we have only a tiny market share,” Monks said.

He plans to spend more on marketing the bank, as it gained approval last year to sell mortgages directly to consumers, rather than solely through intermediaries.

The bank is also starting to consider entering the business current account market in the coming years.

Aldermore’s cost to income ratio fell from 89 per cent to 67 per cent in 2013.

Its return on equity jumped from 0.9 per cent in 2012 to 10.9 per cent last year.

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