Aldermore (ALD) could soon add another string to its bow. The challenger bank increased its common equity tier one ratio – of such capital as a proportion of risk-weighted assets – from 11.5 per cent at the end of December to 11.8 per cent at the end of June. This should top 12 per cent by the end of 2017, which means management can consider commencing dividend payments.
Buy-to-let lending once again led the way in loan book growth, up 15 per cent to £3.8bn. However, growth in commercial mortgages for small-and medium-sized businesses (SMEs) was much lower at 1 per cent, as management took a more cautious approach to "development-based lending" following last year’s referendum. Residential mortgage lending declined 1 per cent to £1.5bn, as customers switched out of fixed-rate mortgages written two years ago.
Aldermore acquired a minority stake in asset finance intermediary AFS, with which it already had a distribution partnership. Asset finance loans were up 8 per cent to £1.7bn, which together with an uplift in invoice financing meant business loans grew to £1.9bn overall. However, increased competition in the asset finance market meant the challenger bank’s gross interest yield – that's annualised interest as a proportion of loans – reduced to 4.93 per cent, from 5.43 per cent the previous year.
Analysts at Investec expect adjusted net tangible assets of 184p at the end of December 2017, up from 152.5p a year earlier.
| ALDERMORE (ALD) | ||||
| ORD PRICE: | 228.3p | MARKET VALUE: | £787m | |
| TOUCH: | 227.9-228.3p | 12-MONTH HIGH: | 260p | LOW: 130p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 8 | |
| NET ASSET VALUE: | 197p | LEVERAGE: | 14.3 | |
| Half-year to 30 Jun | Total operating income (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 128 | 59.1 | 10.3 | nil |
| 2017 | 150 | 78.1 | 14.9 | nil |
| % change | +17 | +32 | +45 | - |
| Ex-div: | na | |||
| Payment: | na |
