Jonathan Thompson, founder and chief executive of Bank North told the media, “This is a landmark for the team at Bank North who have been working tirelessly to build the most customer-focused bank possible. Our model is groundbreaking, and there has never been a more compelling backdrop to launch a new regional bank for the UK, as the country looks to build back better and recover from the ravages of the Covid-19 pandemic.

“SMEs will be the lifeblood of economic recovery. We owe it to the UK’s innovators and entrepreneurs to help them access the funding that will enable them to grow and create opportunity across the country. We’re here to help these businesses thrive.”

Earlier this month, UK-based neobank Kroo announced that it has received a restricted banking licence from the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

The bank has been given this opportunity to test out its systems and its infrastructure and make sure that it will be able to handle bigger deposits, more features, and a high number of consumers when it switches to the final banking license. It’s expected that sometime next year, the testing phase will be complete.

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The bank has been given this opportunity to test out its systems and its infrastructure and make sure that it will be able to handle bigger deposits, more features, and a high number of consumers when it switches to the final banking license. It’s expected that sometime next year, the testing phase will be complete.

As a part of its product expansion, Kroo has also raised a total of £30 million in venture capital funding since launch. The bank will offer loans later in 2022 and grow its workforce across technology, marketing, risk, compliance and customer support.

Andrea De Gottardo, CEO of Kroo told the media, “It is incredibly exciting to finally be a bank that is authorised with restrictions. Very few firms in the UK get to this point and this represents a huge milestone for the entire team.”

Kroo started off its services as a simple prepaid card and an app that lets its users make payments, add friends, track spending, etc. All these services proved to be very useful and popular among its users, which is a major reason behind the neobank’s growth over the last couple of years. The bank also seeks to slowly wind down its prepaid cards once it receives its full banking license as it will be able to offer savings and current accounts and other financial services that any bank would be able to offer.

In the future, neobanks are expected to slowly and steadily replace the traditional banks and the legacy systems in the coming years as our world becomes more digitised and financial services start getting delivered through mobile apps and the internet.

Credits- Kroo

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It is reported that these banks did not make a good impression on campaigners. They had in fact pledged to reduce carbon emissions in 2020, along with other commitments in the coming years. 

Last year, NatWest launched the UK’s first green mortgage which will incentivise customers, thereby encouraging them to purchase energy-efficient homes. This is carried out by reducing interest rates for them. The bank also seeks to fund green home improvements for its existing customers at cheaper rates, media reports said. 

It is reported that the UK is preparing to host the UN COP26 climate summit in Glasgow at the end of this year. With that, British banks will come into further scrutiny by activists and campaigners. 

Now Lloyds and Natwest have both promised to reduce their carbon emissions which are linked to their loans. The reduction will be made by half on the net emissions figure. That said, Lloyds is planning to expand its lending facilities to electric vehicles as part of its efforts to promote sustainable living. 

Even smaller firms are joining the wagon. Oxbury Bank is creating products such as a ‘carbon offset savings account’ for savers. The bank plans to use the interest generated as interest from the savings to fund tree-planting projects.

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Ziglu said that it has been licensed as an Electronic Money Institution (EMI) by the UK’s Financial Conduct Authority.

The Ziglu app now supports the British pound and four other crypto assets – bitcoin (BTC), bitcoin cash (BCH), ethereum (ETH) and litecoin ( LTC).

The London-headquartered company received the licence of September 1 this year. Reportedly, it applied for the same more than a year back.

Ziglu founder and chief executive officer Mark Hipperson said in an emailed statement to news.Bitcoin.com that “Paying people should be instant, free, and easy regardless of their location or the currency, whether that is splitting the cost of your Airbnb or sending a bitcoin birthday present.”

Mark is also a co-founder and former CTO of British neobank Starling Bank.

According to reports, Ziglu wants to reach 100 million customers in the next 7 years.

Since its inception, the challenger bank has raised £5.25 million in seed funding. According to the company, its total digital assets are insured against cyber attacks, up to the value of £50,000, with commission fees of 1.25 percent on all trading activities.

With regard to the seed funding, Mark Hipperson earlier told the media, “As we gear up for our next stage of development, we are delighted to have oversold our seed funding and welcome our new investors. This significant cash injection allows us to deliver an exciting product with an innovation cycle, fast and responsive to customer needs.”

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The funding includes £12 million in equity and £30 million in debt lines.

Selina Finance provides loans to small and medium businesses in the form of flexible credit facilities. SMEs in the UK can borrow up to £1 million with an interest rate starting at 4.95 percent APR.

The company says it plans to raise significantly more debt in the coming months as its business expands.

Investors that participated in the funding round for Selina Finance include Picus Capital, Global Founders Capital, and others.

According to the startup, the funding will help to grow its business in the UK and also start the process of launching in other European markets.

Co-founders Leonard Benning told the media, “We’re bringing a completely new product to the lending market which, unlike a conventional loan, offers customers real flexibility. Our customers can save time and money by only drawing down and repaying when they need to without the need to re-apply, plus the product is feeless and transparent which is what customers have come to expect in the 21st century.”

Founded in 2019 by Andrea Olivari, Hubert Fenwick and Leonard Benning, Selina Finance works with more than 200 commercial finance and mortgage distribution partners across the UK and is planning to offer its product to UK consumers later in 2020.

Co-founder Andrea Olivari added: “This Series A funding is a significant milestone in Selina Finance’s mission to offer homeowners flexible and affordable credit. Despite the uncertainty and disruption caused by COVID-19, our investors have demonstrated their belief in our unique proposition and the team we have built to bring our vision to the UK market.”

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Through the platform, clients will be able to open a FundsNetwork Pension account. For clients, the bank will provide SIPPs in addition to retirement advice on an existing product as well as a new one: HSBC Flexible Retirement Account and FundsNetwork Pension, media reports said.

HSBC UK Head of  Wealth Management James Hewitson told the media, “We know our customers are looking for greater flexibility with their retirement planning. They want to receive their retirement income and be able to pass on their wealth to future generations in the most tax-efficient way. Fidelity has a strong reputation within the retirement space and the FundsNetwork Pension adds flexibility, quality and convenience for our customers and advisers alike. Coupled with investing in the technology our advisers use, we are helping customers to plan their retirement income more effectively.”

According to the bank, it has approximately 1.22 million clients who could quality for SIPP and make the most out of its benefits. The bank will provide free advice to high net worth clients on the Fidelity product. SIPP will be available to all clients regardless of their investment amount, media reports said.

Jackie Boylan, head of Fidelity FundsNetwork, told the media, “ The introduction of pension freedoms five years ago marked a significant opportunity to change the way in which people prepare for retirement, and our pension has been designed to offer value and choice to support them with their financial goals.” 

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According to a study by market research firm Propeller Insights nearly three-quarter of UK consumers engage in online banking, 77 percent of them are considering switching over to a neobank and only 21 percent of them might continue to visit a bank branch.
“In the UK especially, where the financial services market is quite developed, consumers are more willing to at least test banking alternatives. The culture of the UK consumer is vital to the success of new digital banks, says Koen Vanpraet, who is the CEO of PXP Financial, a complete end-to-end payments provider. To second Vanpraet’s view, Propeller Insights’ statistics showed that 65 percent of the country’s younger demographic between 18 years and 34 years use neobanks as alternate banking avenues.

As it appears, neobanks have changed the era where retail consumers traditionally preferred to visit bank branches for paperwork. “Over the past two years, we’ve seen an influx of consumers choosing neobanks or challenger banks as an alternative to traditional banks that we are all so familiar with,” Ian Wright CEO of SmallBusinessPrices.co.uk tells in a statement given to International Finance.

Perhaps the growing popularity of neobanks suggest that they are filling the digital expectations gap in the country. “They are helped by the fact that many of their consumers fall under the bracket of ‘digital natives’ — those who have grown up using technology. And their digital services go a step beyond what many of the traditional banks are offering,” says Ian Bradbury, CTO for Financial Services, Fujitsu UK, in an email interview with International Finance.

A study conducted by Finder on digital banking in the UK on how people might perceive banking in the future, found over one in 10 Brits have fully switched over to a neobank and 47 percent of them keep less than £1,000 in a neobank. Also, two-thirds of consumers have expressed interest to fully adopt neo banking services in the future. Certainly, the numbers highlight that neobanks are doing things differently. “They have agile ways of working, relatively cheap, stable to run and equipped with the latest technology,” Bradbury says.

Digital innovation: The hallmark of digital banks in the UK

Last year The Forrester Banking Wave: UK Mobile Apps, Q3 2019 report reviewed four traditional banks and three neobanks, which attest to Bradbury’s view. The report found that neobanks are competing with traditional banks on the back of intuitive services and retail consumers are experiencing a paradigm shift in the country’s financial landscape.

The first approach that neobanks have taken is to determine what financial tools and services consumers actually need, and then to find more meaningful ways to deliver on the potential. For example, Monzo, Revolut and Starling are making an impact on older consumers and those left vulnerable by bank branches closing down in the country. Starling and Monzo have partnered with the Post Office and PayPoint respectively to allow consumers to deposit cash in person. Here the idea is to equally serve those who find it cumbersome to use digital technology. Revolut has launched a Plain English customer contract to ease the signing up process.

For businesses, Amaiz is targeting sole traders and small business owners underserved by the banking industry. “Our research shows that this group has particular needs and we want to focus on that,” Steve Taklalsingh, managing director of Amaiz tells International Finance.
While traditional banks are busy carrying big trading assets on their books, neobanks have become more consumer-centric across demographics and are fixated on technology innovation. “Ultimately, digital innovation will be crucial in an increasingly competitive market and neobanks will have to stay ahead of their rivals on this front,” Bradbury says. “So their overall success lies on how well they can innovate — and those who attract the most consumers are those who can differentiate their products in the most creative ways.”

Simplicity and transparency is what these neobanks have been tapping into in the last two years. Amaiz has developed a mobile banking app that provides a 24/7 phone service — a unique selling point in the market today. The app uses smart analytics to manage and track all payments. “We do that because our customers are not typically people who sit in front of a computer all day. They are serving their customers — and therefore, are more likely to want to talk to someone,” Taklalsingh says. “We’ve integrated voice recognition software for top level security and to give our customers the best experience.” Neobanks integrating human touch into their sophisticated digital services have an important stronghold that is missing from much of the traditional banks’ offerings.

Gen Z wants speed and convenience

But what might seem like a quick win for startups is often a lot more to do with hype than substance, Vanpraet explains. The continuous and often advanced neo banking services are changing the traditional understanding of retail banking, but they have a long way to go. “This comes down to the majority of customers who are still sticking with traditional banks. When a new digital bank is introduced, those interested in the industry may look at what they offer and switch services if they think it is beneficial, but the vast majority of ‘casuals’ will stick with what they know.”

PXP Financial carried out a research on Gen Z payment habits in the high street and their top requirement was convenience. Today, customer experience necessitates transaction methods that are the most convenient and fastest. The research highlights that personal data security is of utmost importance for UK consumers. “Despite challengers providing a speedy and slick user experience through digital apps, many consumers still do not feel they are secure,” Bradbury says. This observation is compatible with statistics showing that 40 percent of UK consumers don’t trust neobanks to keep their data safe, and a further 49 percent plan to bank only with a traditional bank unless neobanks can demonstrate they have the right technology to protect them.

This point is debatable. Globalwebindex’s survey last year found that neobanks are more likely to be used by the country’s top income groups. The UK consumers who have used at least one service of Monzo, Starling, Revolut or Atom increased by 83 percent — an impressive growth rate since the third quarter of 2018.

Together, the neobanks in the country are expected to triple customer count to 35 million over the next 12 months, compared to 12 million users last September, according to an Accenture report. In the first half of 2019, five million consumers opened an account with them — resulting in percentage gains in primary account holders. The average account balances increased five-fold to $422 in the first half, from $84, the report noted.

Arguably, this trend could work against traditional banks if they are too slow in rendering advanced digital services. In fact, Vanpraet points out that “change can be slower for traditional banks.” The past two years have seen neobanks demonstrate robust financial performance broadening the competitive playing field of banking in the UK.
Neobanks create significant cost advantage with the average operating cost per customer ranging between £20 and £50, compared to over £170 with a traditional bank.

Performance analysis of top neobanks in the UK

Last year Monzo surpassed 2 million total users — and is expected to add 200,000 new accounts every month, compared to 60,000 a month in the previous year. Monzo crossed £40 million of annual run-rate revenue last May.

Another top neobank Starling aims to break-even by 2020 — targeting 6.7 percent share of the UK SME banking market in the next five years. Since November 2018, it has seen a rise of 110 percent in customer numbers and 200 percent in deposit base.

Revolut, one of the world’s biggest fintech unicorns, was valued at £1.3 billion last year. In 2018, it recorded £58.2 million revenue and cost of sales grew at 247 percent, improving the gross profit margin. Recently, it raised $500 million in a series D funding with a $5.5 billion valuation — and has set an ambitious goal to onboard 100 million customers in the next five years.
Revolut’s global expansion testifies the success of neobanks business model designed to take on big players in the industry, Bradbury says. “But they have a challenging future ahead of them — and it’s certainly an interesting space to watch.”

Neobanks are fighting layers of complexities

Despite the numbers, their market share is low as they are relatively new. Consumers still require their banks to have a physical presence. In fact, 56 percent of consumers show concerns over bank branches closing down in the next five years, says Bradbury, reinstating that neobanks are under strain to build trust and value.

The challenges for neobanks are not subtle. Many of them struggle to churn revenue from existing customers who are used to free services. Following that is their greatest test to prove to investors their ability to make profits — or they might not reach the level of funding received by traditional banks, Bradbury says.

Traditional banks versus neobanks: Threat or hype?

The creation of neobanks has the potential to challenge traditional banks, but for now, “they are still being seen as an add-on service, rather than a primary service,” Vanpraet says. It is impossible to turn a blind eye to the credibility and trust that traditional banks have established over the years. This should be worrying for neobanks, says Vanpraet, pointing to the fact that they are often used for smaller, less important payments. However, “neobanks proving themselves over a sustained period of time will lead to consumer trust on par with traditional banks,” Bradbury says.

The allure of going digital has increased among UK traditional banks. “As neobanks become more popular, traditional banks will hit back,” Bradbury explains. And the big news is “traditional banks already see neobanks as competitors, and this competition will only grow as more UK consumers start to use them as their main current accounts,” he adds.

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The Access Bank UK leverages specialist skills in trade finance and is in a strong position to support companies all over the world in their trade financing activities into Sub-Saharan Africa. The bank’s team of experienced trade experts work closely with corporate customers to understand their trade flows in order to propose solutions appropriate to the target country, leveraging on the bank’s extensive network of banking relationships on the African continent. 

The bank also offers correspondent banking services to a number of financial institutions across Sub-Saharan Africa supporting their international trade flows.  An important factor is that the bank regularly leads and partners with peers in the area of risk participation as a way to maximise its trade capacity. In addition, The Access Bank UK also collaborates with development financial institutions on a regular basis to support appropriate medium to long term projects on the continent.

DIFC branch the geographical hub between the East and the West

The bank’s regulated branch in Dubai International Financial Centre is ideally positioned as the geographical hub between the East and the West and Africa, to harness the growing appetite among the established economies of China, India, and Singapore for developing stronger trade links in the MENA region and Sub-Saharan Africa.

The Dubai team at the DIFC branch offer bespoke services tailored to meet customer business requirements. The strong links that the DIFC branch has with the UK and Sub-Saharan Africa ensure that it has an in-depth knowledge of the marketplace and is able to assist customers with their transactions and investments. 

The Access Bank UK Dubai branch offers a broad range of products and services to assist customers with trade and investment needs in Nigeria and Sub-Saharan Africa. The DIFC Branch is committed to building a long-lasting relationship in the region in line with the approach that has proven so effective for The Access Bank UK. The combination of the Dubai office together with our presence in the UK and Nigeria delivers a wealth of expertise that significantly benefits our customers. 

Access Private Bank offers in-house approach

Many high net worth customers who utilise The Access Bank UK for trade finance and commercial banking services also use its asset management and private banking services for their personal financial interests in the UK. 

Access Private Bank offers in-house investment approach and a commitment to understanding customers and their needs to offer tailor-made investment solutions. Its dedicated and experienced private bankers use a range of investment products including both discretionary and execution only portfolios. Access Private Bank provides updates on portfolio developments on a regular basis. Customers have instant access to their discretionary investment portfolios through the bank’s online valuation facility.  Access Private Bank also supports UK Investor Visa applications by working closely with the UK Investor Visa specialist to provide facilities or to create a bespoke discretionary managed investment portfolio. In addition, the bank offers loans secured on UK properties or the value of investments that can be used to secure a loan. 

The Access Bank UK records strong results

The Access Bank UK has recorded yet another year of significant all-round growth in 2018, achieving and exceeding its targets for all the main growth strategies. Operating income was up 47 percent year-on-year to £53 million, with all four strategic business units performing well. Pre-tax profits overall grew significantly by 50 percent to £33 million and the pre-tax return on equity rose to 18.3 percent, up from 16.6 percent in 2017. 

The bank’s trade finance operation continues to be its largest strategic business unit. Income at the unit grew by 20 percent year-on-year to £23.7 million, of which £9.3 million was accounted for by correspondent banking, representing annual growth of 45 percent. 

Commercial banking had another strong year, with income growing by 90 percent to £21.9 million while asset management income rose by 13 percent to £1.7 million. 

The bank achieved the return of the initial investment to establish the operation in Dubai a year earlier than anticipated. The income of £2.1 million represents year-on-year growth of 213 percent in what was only its second full year of operation, and reinforcing the fact that the Dubai market offers considerable potential.

Measured expansion into Sub Saharan Africa

The bank recorded across-the-board growth during 2018, a year which was also notable for its measured expansion in Sub-Saharan Africa and for recouping the investment in its key Dubai operation in only its second full year of operation. 

The provision of trade finance solutions continues to be the bank’s largest business activity. In addition to its role as confirming bank for Access Bank Plc, one of the year’s highlights was the continued development of correspondent banking activities more broadly within Sub-Saharan Africa. This included expanding the bank’s reach to a number of other African countries, in particular in Ghana, Kenya and Tanzania, with its proven correspondent banking offer.

The successful introduction of a number of innovative products, tailored specifically for corporate customers, and organic growth among its existing customer base, contributed to the growth of the bank’s trade finance offering.

Jamie Simmonds, chief executive officer and managing director of The Access Bank UK commented on the results: “The bank’s growth has flowed naturally from the strength of dynamic customer relationships and the trust that comes from the continuity of delivery by the same team.”

International Finance Corporation awards The Access Bank UK confirming bank status

The Access Bank UK provides a number of services to support business activities in Sub-Saharan Africa and across the world. The bank was awarded confirming bank status by the International Finance Corporation (IFC) as part of their Global Trade Finance Programme, thereby strengthening its trade finance capabilities further. The bank was also the first Nigerian Bank in the UK to be appointed as correspondent bank to the Central Bank of Nigeria to undertake infrastructure work on behalf of the Nigerian government. It also issues letters of credit on behalf of the Nigerian government and the Nigerian National Petroleum Corporation (NNPC).

The Access Bank UK was the first UK based Nigerian bank to become an IFC confirming bank.  This partnership enables the Bank to develop low-risk solutions for a range of its customers. 

The Access Bank UK works closely with the Central Bank of Nigeria (CBN), the MDAs (ministries, departments, and agencies), the World Bank and other funding banks, and the government contractors to support medium to long terms infrastructure projects with the objective to develop infrastructure in Africa. Projects supported by The Access Bank UK in the last decade include but are not limited to: the Niger Delta Power Holding  (NDPHC), National Integrated Power Project (NIPP), Nigeria Electricity and Gas Improvement Project, PHCN PMU (funded by the World Bank), electrification projects under the Rural Energy Agency (REA) Tanzania (funded by Rural Energy Fund (REF)), engineering, procurement and construction (EPC) contracts under Electricity Company of Ghana, and the power generation project under the Liberia Electricity Corporation (LEC), among many others. 

The Access Bank UK is a wholly-owned subsidiary of The Access Bank, a Nigerian Stock Exchange listed company. In addition to providing trade finance, commercial banking, private banking and asset management products and services for customers in their dealings with Organisation for Economic Co-operation and Development (OECD) markets, the bank also supports companies that seek to invest in and trade in Sub-Saharan Africa, MENA and Asian markets. 

The bank is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and the PRA. The Access Bank UK Limited – Dubai Branch, situated in the iconic Gate Building of Dubai International Financial Centre (DIFC), is regulated by the Dubai Financial Services Authority (DFSA). 

Committed to developing a sustainable business model 

Like Access Bank Plc, The Access Bank UK is committed to developing a sustainable business model for the environment in which it operates. This is reflected in the bank’s moderate appetite for risk, its dedication to customer service, as well as commitment to build long-term relationships by working in partnership with its customers. 

The Access Bank UK drives the development and growth of The Access Bank Group’s international business interests, through four strategic business units supported by its treasury team. Each of the units are charged with increasing its international reach, using a combination of outstanding service and innovative products, to leverage already strong customer relationships while maintaining the bank’s moderate risk appetite. 

The Access Bank UK’s relationship-based philosophy continues to drive the growth being delivered as part of the bank’s third five-year plan. The bank is confident that this strong focus on relationships will enable the bank to build on the achievements delivered to date, despite the current challenges resulting from the headwinds in some global markets.

Herbert Wigwe, chairman and non-executive director said, “The Access Bank UK was founded to establish a credible, sustainable OECD hub for The Access Bank Group. This was achieved with commendable efficiency while also becoming a successful and profitable business on its own right.” 

In 2018 the bank became a direct member of the three key UK payment clearing systems: Bacs (Bankers’ Automated Clearing Services), C&CCC (Cheque and Credit Clearing Company’s Image Clearing System) and Faster Payments. In this regard, The Access Bank UK’s Managing Director and Chief Executive Officer, Jamie Simmonds said: “This is a great landmark for us, enabling us to build a sustainable platform with direct entry into the UK payment clearing system. This will enable us to enhance the level of service our customers receive. We have a clear commitment to strong customer service and we anticipate and respond quickly to market needs with the right technology, products, and services. Joining the UK payment clearing system is a clear example of meeting the needs of our customers.”

The Access Bank UK’s commercial banking team offers relationship-based services for corporate and individual customers. It offers a wide range of products and services with a choice of competitive rates, market leading systems, and top-quality service. 

The Access Bank UK takes time to build long-term relationships and works closely with its customers to understand their goals in order to create a strategy designed to meet their needs. The bank provides constant support and development opportunities for its employees, that reflects in their dedication and professionalism. The bank is led by a team of accomplished individuals determined to deliver superior financial solutions for business and individuals. The Access Bank UK staff are highly experienced and many have spent time working in the Sub-Saharan, West African, and international marketplaces. 

Jamie Simmonds added: “Our people are fundamental to our bank’s continued development. They provide the skills that deliver our focus on service and customer relations. Reflecting this, during the year, we selectively recruited additional members to the team and also invested more in professional development. We were the first Nigerian bank to achieve Investors in People accreditation. We have now advanced our status to Gold. We believe that our consistently low staff turnover rate reflects in part the advances that we have made in training and development. The bank is currently working in partnership with BPP professional apprenticeships and the Chartered Institute of Personnel & Development (CIPD) programmes”. 

 “The completion of The Access Bank UK’s first decade of trading was one of the year’s major milestones. It has been a period during which the bank earned a reputation for innovation and flexibility, outperformed its own targets and, thanks to the enduring strength of its customer relationships, has built the foundations for its continued progression,” Herbert Wigwe added.

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Founder Tom Blomfield told the media that he expects the workforce to go up from 1,500 to 2,000 employees this year as part of its growth strategy. Its employees are currently based in London, Cardiff and Las Vegas.

Monzo loans £120 million on deposits of around £2 billion. According to Blomfield, Monzo had plans to float within three or four years, however. It incurred a loss of £47.2 million in 2018, encouraging the bank to hold talks with investors about the next best move. 

Now Monzo is valued at around £2 billion. The digital bank was launched in 2015. Since then, the bank has attracted 3.8 million customers in the UK with its offerings Coral Card and track-spending data, media reports said. 

Monzo received a banking licence in 2017. Last year, the digital bank’s attempt to trademark its signature bright coral colour card was rejected. The move was to secure Monzo’s brand identity against companies using a similar colour tone in their products, media reports said. 

Also, Blomfield said that Monzo is largely focused on monetisation. It plans to drive revenue using methods that are practical and transparent. Monzo now accounts for more than half of the digital challenger bank market on the basis of new data, media reports said. 

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Des Crowley, Bank of Ireland UK Chief Executive Officer, said:  “In 2017 we have continued to invest in new customer propositions and extend our distribution reach, with the priority of putting our customers, colleagues, communities and our partners, at the centre of everything we do.”

The Bank’s Annual Report findings for the end of 2017 underpins factors that shaped its financial and business forefront. The profit before taxation of £151mn has reflected an increase in business investments, changes to product portfolios and ongoing competition in the UK consumer lending market.

Financial Highlights

• Over £4.5bn in new customer lending: a 12% increase on 2016
• Impairment charges: £26mn (2016: £23mn)
• Strong net interest margin 2.02% (2016: 2.07%)
• £160mn dividend paid to Parent
• Strong organic generation of capital: CET 1 ratio 14.7%. with a total capital ratio 20.5%

Business highlights

•  £3.2 billion of new mortgage origination in the year across all channels: c.15% increase on 2016
• Successful longstanding partnership with the Post Office, serving 2.4mn customers, and savings balances of c.£13.9bn
• Second year of partnership with the AA, with over 150,000 new customer relationships and lending book of c.£350mn
• Excellent year for Northridge Finance with 7 percent growth in total business lending, and acquisition of Marshall Leasing Limited, a complementary car and commercial vehicle leasing and fleet management company
• Northern Ireland business sustains profitability, reflecting strong margin performance, strict cost control and ongoing management of impairment charges on commercial loan portfolio

“Our financial performance reflects the increased investment we have made in our business, as we have continued to transform the customer experience through technical innovation, digitisation and product development.  We have grown our personal loan and new mortgage business, significantly reduced our funding costs, acquired a strategically important and complementary car leasing and fleet management business, Marshall Leasing Limited, and continued to win many industry awards.

Looking ahead, our strategic priorities are focused on transforming our business, serving our customers brilliantly and growing sustainable profits.  I am confident that given the momentum in the business, combined with a strong risk and cost culture and our clear focus on value-add customer and partner offerings, that we will build on our trading performance and deliver sustainable returns for all our stakeholders,” Crowley added.

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