Shawbrook Bank’s loan and deposit book boosted by retail demand
Shawbrook Bank received a boost to its loan book in the first-quarter driven by strong demand in commercial and retail markets.
Lending increased to £15.8bn, from £15.2bn at the end of 2024. This marked a 15 per cent annual jump.
The growth came as the group’s structured lending pipeline reached a new high, as it targeted small- and medium-sized enterprises (SMEs) with “strategic investments”.
The firm also completed its integration of TML and BML into a single retail mortgage business, which it said created a “scalable, unified platform”.
Meanwhile, deposits jumped to £16.6bn from £15.8bn. The lender said this was supported by “seasonal demand” enabling its deposit franchise to “provide a solid foundation for our funding strategy”.
Shawbrook shrinks cost of risk
Shawbrook’s cost of risk – which measures the effort a bank makes to protect itself against potential losses in its portfolio – reduced to 34 basis points from 47 points the end of 2024.
Marcelino Castrillo, the bank’s chief executive, said the lender’s “diversified and proactive approach to credit management” had enabled it to “optimise growth and risk-adjusted returns”.
Shawbrook was reported to be weighing up a £5bn merger with fintech giant Starling last month, in a move that would be a major blow to outlooks on stock market lisitngs.
The mid-cap lender had reached out to Starling in the last two months to initiate talks on a potential deal, according to Sky News.
No active discussions were reported between the firms, but Shawbrook had left opportunities for Starling to return with a formal offer, reports said.
In the trading update, Castrillo said: “Our specialist proposition and the scalable technology platform we have engineered are delivering strong profitability, despite the pressure from the interest rate environment and competition for both assets and liabilities on margins across the UK banking sector.
“Notwithstanding our continued growth and investment in digital, we remain lean with our running costs broadly flat quarter on quarter.”