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Shawbrook’s profit increases 25%

Shawbrook Bank’s pre-tax profit increased more than 25 percent for the full year of 2016, according to a recent results statement.

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The bank, founded in 2011, grew its pre-tax profit to £88.2m in 2016 from £70.1m the previous year.

 

Shawbrook’s impairment charges for 2016 hit £24.3m, nearly half (£11.2m) of which related to a controls breach in the business finance division. This breach was identified in the first half of 2016 following an investment in the bank’s risk management framework.

 

The upgraded framework detected a breach in the underwriting process of a number of loans, originating between 2012 and 2015, that did not meet the bank’s lending criteria. The breach resulted in an impairment charge of £11.2m and associated administrative expenses of £800,000.

 

The results statement also recorded the bank’s non-performing loan ratio, which as at December 31 2016 was 0.99 percent, reflecting what the lender described as a benign economic environment.

 

Hugh Fitzpatrick, chief risk officer of Shawbrook, described how the bank’s risk committee works during an exclusive interview with Credit Strategy.

 

Across the full year of 2016, Shawbrook grew its customer loan book by 22 percent to £4.1bn, from £3.4bn in 2015. At the end of December 2016 there were a total of 273 consumer loans in forbearance arrangements with a face value of £1.8m.

 

Steve Pateman, chief executive of the bank, said consumer lending had a “buoyant” year in 2016 and there has been significant growth in the retail finance and personal loans sub-divisions.

 

The figure of impairment losses on financial assets more than tripled in 2016, from £6.5m in 2015 to £24.3m in 2016. Impairment losses on consumer loans also increased in 2016, by more than 300 percent to £7.7m, compared to £1.8m the year before.

 

Over the last 12 months, Shawbrook has recruited several new members to its team.

 

Dylan Minto was appointed chief financial officer and executive director of the bank in February 2017, following his successful stint as interim chief financial officer after the departure of Tom Wood in 2016.

 

Also in 2017, Andrew Didham was appointed as an independent non-executive director of the bank following the appointment of Angela Wakelin as chief operating officer in November 2016.

 

Prior to Wakelin’s appointment, Shawbrook made an internal promotion to appoint a new collections director in October 2016.

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