Aldermore saw residential mortgage origination down by 14 per cent to £240m during the first half, from £280m during the same period last year.
The bank’s results statement described this performance as “robust” and revealed wider loan origination up 26 per cent to £1.5bn during the period, compared to £1.2bn in the first half of 2015.
“In addition to leveraging our strong relationships with our broker partners, where origination grew by 21 per cent compared with H1 2015, we were pleased with the 51 per cent increase in direct driven by strong growth in wholesale deals in asset finance and our direct team in buy-to-let,” read the update, adding as a result, direct accounted for 21 per cent of origination, compared to 17 per cent last year.
Buy-to-let growth during the period was up 12 per cent to £2.7bn - from £2.4bn at 31 December - while residential mortgages were up by 9 per cent to £1.5bn - from £1.4bn at the end of the year.
“We demonstrated our ability to be nimble and take advantage of the market opportunity in the first quarter as we focused on driving buy-to-let, increasing our market share to 2.3 per cent with origination up by 74 per cent to £520m - from £300m during the first half last year.
Underlying profits before tax were up by 45 per cent to £63m, from £44m during the first six months of 2015.
Excluding goodwill impairment of £4.1m (pre-tax and post-tax) in the first half, and IPO related costs of £4.1m pre-tax and £3.2m post-tax in the first half of 2015, the bank delivered a 47 per cent increase in operating profit before impairment losses to £65.5m - up from £44.7m last year.
Sufficient capital was raised in March 2015 to support growth plans and act as a bridge to the point at which Aldermore starts to generate surplus capital.
Chief executive Phillip Monks stated new lending increased by more than a quarter compared with the first half of last year as the customer base expanded.
“I’m very pleased with the strong and balanced growth we have achieved across our diversified portfolio whilst maintaining our prudent underwriting approach,” he commented.
He explained there is an ongoing investment programme to ensure the sustainability of the business and, in the first half of 2016, the mortgages and asset finance platforms were upgraded.
In terms of outlook following the Brexit vote, said as a UK-focused business there has been no direct impact either on the lending, deposit or credit aspects.
“However, we have proactively added a further element of caution into our collective provision charge by extending the mortgages emergence period assumptions by three months to reflect increased economic uncertainty,” noted Mr Monks.
Peter Lenardos, an analyst at RBC Capital Markets said the results were in line with expectations.
“There is nothing wrong with Aldermore,” he stated, adding it is growing and impairments are well-contained.
“We continue to believe that management is capable and prudently managing the business. However, we no longer believe – given the economic risks – that the upside is material enough to warrant an outperform rating.”
peter.walker@ft.com
