Unicorn digital bank Oaknorth to award first dividend after bumper profit
Digital challenger bank Oaknorth has agreed to award its maiden dividend to shareholders after the fintech unicorn enjoyed a jump in profit last year.
The business-focused lender, which launched in 2015, told investors last week that its board had resolved to declare a special dividend.
Sky News reported that the payout would distribute around $40m (£31.3m). Oaknorth declined to comment on the figure when approached by City PM
Oaknorth told investors that the ability to unlock its first capital return was “a testament to the strength of the business and its underlying profitability”.
The London-based bank reported a 23 per cent increase in pretax profit to £187.3m in 2023, from £152.3m in 2022. It was boosted by its total loan book growing 22 per cent to £3.8bn.
“In the future, we may from time-to-time consider further capital returns including, but not limited to, dividends,” Oaknorth told investors.
“Any future assessment around returning capital would consider inter alia prevailing economic conditions, business performance, and growth opportunities (both organic and inorganic) at that point in time.”
The bank specialises in lending to businesses with revenues of between £1m and £100m. It was valued at $2.8bn in a 2019 funding round led by SoftBank’s Vision Fund and appointed former City watchdog boss Lord Adair Turner as its chair in January.
News of Oaknorth’s inaugural dividend comes as the bank, one of a crop of fintech “unicorns” to emerge in the 2010s, weighs up entering the public markets.
Co-founder and chief executive Rishi Khosla told City PM in May that no decision had been taken on when and where to IPO and said the public markets were “not attractive right now”. However, he added that the UK was “less attractive on a relative basis” than other markets.
The bank is looking to open a representative office in the US and is exploring M&A opportunities within the banking and fintech sectors there as part of its expansion plans.