The past six months have been far from plain sailing for challenger bank Shawbrook (SHAW). Irregularities in the writing of some asset finance loans, as well as concerns over a slowdown in lending following the stamp duty hike and the EU referendum, sent the shares south. While the consequences of the Brexit vote are uncertain, the property finance business is still going strong. Loans and advances to customers grew 44 per cent year on year to £2.3bn during the reported period.
However, as lower-yielding new lending continued to replace a higher-yielding legacy book, the gross asset yield from property finance fell by 4 basis points to 6.7 per cent. New loans written in business finance, including asset finance, were up 19 per cent to £363m, with the loan book increasing by a quarter to £1.1bn.
Management intends to launch a direct-to-consumer lending product during the second half of the year. Chief executive Steve Patemen says the business has identified a gap in the market to undercut rates being offered by some lenders to consumers with annual percentage rates of 20-30 per cent.
Analysts at Numis expect net tangible assets of 147p at the end of December, from 125p a year earlier.
SHAWBROOK (SHAW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 184.5p | MARKET VALUE: | £462m | |
| TOUCH: | 184.5-185p | 12-MONTH HIGH: | 370p | LOW: 117p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 7 | |
| NET ASSET VALUE: | 158p | LEVERAGE: | 12.5 | |
| Half-year to 30 June | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 77.1 | 24.7 | 8.0 | nil |
| 2016 | 99.3 | 35.2 | 10.2 | nil |
| % change | +29 | +43 | +28 | - |
Ex-div: na Payment: na | ||||
