Aldermore set to float with value of £900m

The bank, which focuses on lending to small and medium-sized businesses and homeowners, is part of a wave of challenger banks to opt for a listing after OneSavings and TSB floated earlier this year.

These newer banks are hoping to seize market share from traditional high-street lenders such as Lloyds, Royal Bank of Scotland and Barclays, which became mired in the financial crisis and the subsequent banking scandals.

Analysts said Aldermore’s float will test investor appetite for new lenders aiming to take on the established big banks.

Aldermore, which is partly owned by private equity fund AnaCap Financial Partners, was set up in 2009.

The bank said that its “no gimmicks” approach has proved popular in Yorkshire, where it has over 8,000 customers.

Around 50 staff are employed at Aldermore’s invoice finance division which is based in Cleckheaton, West Yorkshire.

Aldermore Invoice Finance was formerly owned by Batley-based Cattles and known as Cattles Invoice Finance.

It was bought by financial services private equity house AnaCap in September 2009 and relaunched as Absolute Invoice Finance.

In 2009, the business was acquired by Aldermore Bank, a move that increased the size of its funding pool.

The bank decided to postpone its float until after the Scottish referendum.

Aldermore’s chief executive Phillip Monks said: “Aldermore is a modern, legacy-free bank that challenges the established view on what banking should be.

“We deliver straightforward products and sector expertise to customers in underserved market segments that offer attractive risk-adjusted returns.”

He added that the bank benefits from modern digital infrastructure and proven distribution channels and is underpinned by a diversified funding base and robust capital position.

“Now in our sixth year of growth, becoming a public company is the natural next step in Aldermore’s evolution and positions us for the next stage of our development through greater access to the capital markets and enhanced profile for our brand,” said Mr Monks

The offer will consist of £75m of new shares, plus an undetermined amount of existing shares.

Aldermore said first-half profit leapt 249 per cent to £18.6m, while lending to businesses and homeowners hit the £4bn mark.

“We’re raising more capital to put more fuel in the tank,” said Mr Monks.

The company does not intend to pay a dividend in the near term, but said it will consider doing so from 2017 depending on growth opportunities.

“This has been an excellent six months for Aldermore as we continue to focus on providing attractive lending and savings products to UK SME and retail customers,” said Mr Monks.

“We’ve again grown organically with our loan book up by 19 per cent since the end of 2013 and loans to customers passing the £4bn mark. Our deposit business continues to attract customers and I’m particularly pleased by the 51 per cent growth in our SME deposits which demonstrates our ability to deliver products which meet the needs of this underserved customer base.”

Credit Suisse and Deutsche Bank are leading the listing, while Nomura and Numis are co-lead managers. Lazard is advising.

Virgin Money is also expected to float this year.