Shawbrook shares dive after profit jump on bullish AI plans
Shawbrook Bank reported a jump in profit for the last year in its first set of first set of financial results since its landmark IPO in October.
The London-listed bank reported a pre-tax profit of £340.5m, up from £293.8m the year prior as costs tumbled and the group’s loan book swelled.
Still, the firm’s shares dived as much as six per cent open to 386.50, erasing the majority of gains it had made since its October listing.
The bank snapped up alternative finance provider Thincats in an £180m deal last year, a move that helped the group’s total loan book grow 20 per cent to just south of £20bn. Customer deposits also notched up 16 per cent to reach £18.4bn
AI also became a defining part of Shawbrook’s cost-cutting endeavours, with the integration of new tech helping improve the bank’s cost-to-income ratio – a key metric of a bank’s profitability – to 39 per cent, from 40.8 per cent the year prior.
Shawbrook said it had deployed AI tools to automate and enhance high-volume tasks including valuation handling, broker engagement and customer support.
“The knowledge and expertise of our people remain central to our decision-making, but now data and AI can sharpen, accelerate and make those decisions more consistent at scale,” Marcelino Castrillo, chief executive, said.
The group said it is now targeting a ‘mid-30s’ cost-to-income ratio target.
Shawbrook’s rocky road after listing
Shawbrook launched its IPO last year, with a valuation just shy of £2bn and a listing price of 370p.
The lender had been eyeing raising over £50m from the listing, alongside a sale of £348m of existing shares by Marlin Bidco Ltd – a company jointly owned by Shawbrook’s private equity overheads Pollen Street Capital and BC Partners LLP. Marlin acquired Shawbrook for £825m in 2017.
The listing was offered to qualified institutional buyers internationally and to retail investors resident in the United Kingdom through a partner network with Retailbook.
The firm’s stock has had a rocky road since its debut, falling 16 per cent since the beginning of the year, but remains around five per cent in the green since its float.
The bank recorded an earnings per share of 47 per cent, an increase of 16 per cent.
The group plans to pay its maiden dividend in 2027 following its financial results for the 2026 period.