Shawbrook posts solid quarter with 'minimal' impact from Brexit

The FTSE 250 company said it saw continued operational leverage as the group grew, with underwriting remaining robust and disciplined.

Its third quarter year-to-date cost of risk, excluding the controls breach announced on 28 June, remained “significantly lower” than anticipated through cycle loss rates supported by continued strengthening of controls and risk frameworks.

Organic originations were up 23% in the third quarter year-to-date to £1.5bn, with net loans and advances to customers increasing 19%, exceeding £4.0bn at 30 September from £3.4bn at 31 December 2015.

“The momentum of the first half of 2016 continued into the third quarter with the group exceeding £4.0bn of customer loans and achieving sustained growth at strong and disciplined risk adjusted margins, maintaining stability in NIM and achieving a cost of risk and cost to income in line with management's expectations,” said CEO Steve Pateman.

“Gross originations for the nine months to 30 September 2016 were £1.5bn, an increase of 23% compared with the same period in 2015, with Brexit-related uncertainties in the economy having a minimal impact on our business to date.”

Pateman said the company continued to make good progress in each of its divisions, with the Property Finance division achieving record levels of originations in the third quarter despite the usual slowdown in the property market during August.

The company was also continuing to invest in the roll out of our Regional Business Centres in the Business Finance division, and expected a number of its centres to be operational by the end of 2016, while its Consumer division continued to widen its distribution channel with the announcement of a new partnership with Saga.

“Overall, the group continues to deliver sustained growth within its disciplined credit quality and returns metrics.

“Whilst we remain cognisant of the uncertainty which lies ahead as the UK begins the process of leaving the EU, we remain confident that we will continue to deliver on our strategic goals.”

Pateman added that one of Shawbrook's strengths is its diversity across many specialist segments.

“There is considerable potential to grow in our core markets with new products which allow us to meet the needs of businesses and individuals which are becoming less well served by the mainstream banks.”