Aldermore profit up 34% as mortgage lending grows

Challenger bank Aldermore reported a 34% jump in full-year pre-tax profit as mortgage lending grew.

For the year to the end of December, underlying pre-tax profit rose to £133m from £99m, as mortgage lending increased 24% to £5.7bn. Consensus expectations had been for profit of £129m.

Operating income was up 19% to £267.5m and basic earnings per share came in at 25.2p from 22.7p the year before.

Chief executive Phillip Monks said: “It is with great pride that we are reporting another record year for Aldermore, demonstrating continued progress on the journey we described at IPO. I am particularly pleased that we were able to deliver such a strong performance despite the uncertainty presented by the UK's referendum on EU membership. While the full political and economic implications of this decision are as yet unknown, the UK economy has remained resilient to date, and we continue to closely monitor our operating environment for any change.

“Throughout the year, the group has performed well and customer confidence remained high. We ended the year with strong growth, a robust credit performance and a healthy pipeline, giving us confidence that we are well positioned for further success.”

Aldermore said the process of Britain's exit from the EU may result in economic conditions deviating from current forecasts but for 2017, there is unlikely to be any material impact. The bank expects to continue delivering a return on equity in the high teens over the medium term, through a combination of focused loan growth, margin management and the control of operational expenses and risk.

It expects to grow its loan book by between 10% and 15% in 2017, with further growth thereafter and the portfolio mix remaining broadly stable.

At 0905 GMT, the shares were up 3.3% to 244.70p.