There was some compensation for banks like Aldermore (ALD) when the Bank of England cut interest rates last year. The challenger bank drew almost £400m from the term funding scheme, which allows banks to lend close to base rate. This helped bring down the cost of funding, but was not quite enough to prevent a slight reduction in the net interest margin to 3.51 per cent.
Encouragingly, new loans were up almost a quarter at £3.2bn. As a result of a surge in applications during the first quarter - prior to the introduction of stamp duty increases - buy-to-let lending was the biggest contributor to growth. However, chief financial officer James Mack says the year also ended with a high level of buy-to-let mortgage applications. Concentration on buy-to-let came at the expense of new residential mortgages, which were down a fifth.
Asset finance continued its strong run by lending £1.6bn to businesses, an increase on last year's £1.3bn. There were also signs of improvement for invoice finance, which, despite suffering a decline in income, managed to grow its profits more than half to £7m. The business focused on larger discounting facilities to small businesses.
Analysts at Shore Capital expect adjusted net tangible assets of 180p at the end of December 2017, up from 153p the previous year.
ALDERMORE (ALD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 242.7p | MARKET VALUE: | £837m | |
| TOUCH: | 242.8-243.3p | 12-MONTH HIGH: | 256p | LOW: 102p |
| DIVIDEND YIELD: | nil | PE RATIO: | 10 | |
| NET ASSET VALUE: | 182p | LEVERAGE: | 13.9 | |
| Year to 31 Dec | Total operating income (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 57.9 | 0.27 | 0.6 | nil |
| 2013* | 108 | 25.7 | 2.7 | nil |
| 2014* | 165 | 50.3 | 13.0 | nil |
| 2015 | 225 | 94.7 | 22.7 | nil |
| 2016 | 268 | 129 | 25.2 | nil |
| % change | +19 | +36 | +11 | - |
Ex-div: na Payment: na *Pre-IPO figures | ||||
