Aldermore’s profits more than double

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BRITISH bank Aldermore said its pre-tax profit more than doubled in 2014 and its profit margin improved as it increased lending to small firms and homeowners.

Aldermore, founded in 2009 by former Barclays executive Phillip Monks with backing from private equity firm AnaCap, has established itself among the newcomers trying to challenge Britain’s established banks.

The bank said its underling pre-tax profit grew to £56m in 2014, while its net interest margin, or the difference between the rate at which a bank lends and what it pays to savers, expanded by 40 basis points to 3.4 per cent.

Aldermore, which does not have branches, focuses on lending to small businesses, as well as on savings products and home loans, has picked up customers from larger banks which are downsizing and building capital to meet tougher regulations.

Aldermore said its return on equity, a key measure of profitability, increased to 15 per cent from 12 per cent the year before.

Net lending to customers grew 42 per cent to £4.8bn and the bank said it expected its net lending to grow in line with the current rate in 2015. It also expects its cost to income ratio, a measure of how efficient the business is, to be less than 40 per cent by the end of 2017, against 60 per cent last year.