Oaknorth Bank doubles profits but reports a slowdown in growth
Oaknorth Bank nearly doubled its profits last year, but reported a slowdown in growth.
The five-year-old challenger bank reported a 95 per cent jump in pre tax profit to £65.9m, up from £33.9m in 2018.
Oaknorth said it had kickstarted efforts to broaden its customer base outside of its core market of London and the south-east but growth slowed. Loans and advances to customers grew 58 per cent to £2bn, compared with a more than 100 per cent increase in 2018.
Chief executive and co-founder Rishi Khosla said: “We built Oaknorth to provide a better borrowing experience – borrowing the way it should be. In four years, we have been able to leverage Oaknorth’s platform to build one of the most successful new banks globally, and in doing so, help hundreds of UK businesses who have in turn created thousands of new homes and jobs.”
He said the company had taken a “measured” approach to expansion and pointed to uncertainty last year.
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The bank said that it would be monitoring the outbreak of coronavirus closely. Oaknorth said: “We are mindful of this risk on our new loans and are incorporating this in the stress testing scenarios on the existing loan book.”
“I am excited to demonstrate the power of our platform and continue to work with our partner banks around the world to enable businesses and economies to thrive,” Khosla said.
Oaknorth provides loans of between £500k and £25m to the so-called “Missing Middle” – growth businesses which have been in banking’s blind spot.
The challenger bank was valued at $2.8bn deal in a deal backed by Softbank’s Vision Fund last year. Oaknorth raised $390m from Softbank’s fund, with the remaining capital coming from Clermont.