Shawbrook (SHAW) has rejected a revised takeover bid worth 330p a share from a consortium that includes its largest shareholder, Pollen Street Capital. That drama rather overshadowed what was a solid set of 2016 trading figures. The challenger bank grew its loan book by more than a fifth to £4.1bn. Increasing income also helped bring down the cost-to-income ratio to 45.1 per cent (from 48.3 per cent in 2015).
Property finance continued to drive growth, with £1bn in new loans written. Unsurprisingly, buy-to-let applications during the first quarter surged ahead of the stamp duty changes. Anticipating a softer market in future, management diversified its client base by launching development finance products aimed at smaller housebuilders.
The business finance division had a more troubled year. Discovering some asset finance loans had been written outside of the bank's lending criteria forced it to take a £11.2m impairment charge. Business clients also deferred investments, meaning new asset finance loans were down more than a quarter.
However, working capital loans were much stronger, with balances growing 38 per cent to £253m. The consumer finance division agreed distribution deals with RAC and Saga (SAGA), which should help build on the £500m in year-end balances.
Analysts at Numis expect net tangible assets of 165.3p a share at December 2017.
SHAWBROOK (SHAW) | ||||
|---|---|---|---|---|
| ORD PRICE: | 318.2p | MARKET VALUE: | £797m | |
| TOUCH: | 318.2-318.9p | 12-MONTH HIGH: | 323p | LOW: 117p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 175p | LEVERAGE: | 12.2 | |
| Year to 31 Dec | Total operating income (m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 24.7 | -7.1 | -7.0 | nil |
| 2013* | 60.1 | 16.1 | 10.0 | nil |
| 2014* | 112 | 45.3 | 21.0 | nil |
| 2015 | 167 | 70.1 | 24.1 | nil |
| 2016 | 210 | 88.2 | 25.9 | 2.7 |
| % change | +26 | +26 | +7 | - |
Ex-div: 1 Jun Payment: 30 Jun *Pre-IPO figures | ||||
