Fledgling bank posts maiden profit

Fledgling bank Aldermore unveiled its first annual profit as its drive to challenge the big high street players gathers pace.

The Peterborough-headquartered group, which has lent £1 billion to small businesses and the same amount to homeowners since its launch in 2009, edged into the black with profits of £759,000 in 2012, against losses of £899,000 the year before.

Aldermore now has more than 80,000 accounts for retail and business savers and saw deposit balances leap 59% to £2.1 billion at the end of the year.

The group's net lending rose 77% to £899 million as it also tapped into the Funding for Lending scheme (FLS) launched last summer by the Treasury and the Bank of England.

Aldermore is one of 13 lenders to draw down from the FLS and has accessed £205 million in cheap finance under the scheme as at the end of 2012.

Chief executive Phillip Monks said the group had established itself as a challenger bank for a market that was "hungry for change".

He added: "We are supporting UK businesses and homeowners by expanding our lending at a time when a number of the UK's largest banks are reducing their overall lending."

The bank does not have branches, instead allowing customers to bank online and by phone, and said it was benefiting from not having the legacy system issues hitting many of its larger rivals.

Aldermore, which has more than 500 staff, offers lending to small businesses through commercial mortgages, invoice financing and asset finance, which provides cash secured against assets such as equipment. It now has more than 1,600 commercial mortgage borrowers, over 1,000 customers in the invoice finance business and lends asset finance to some 5,500 small businesses.

The group also launched residential mortgages in 2010 and now lends to more than 7,000 homeowners and buy to let borrowers. But its growth saw the bank put aside more to cover bad debts, up from £1 million in 2011 to £4.6 million last year.

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