Shawbrook loan book grows nearly a quarter YOY to £13.3bn

According to Shawbrook’s latest financial report, within its enterprise franchise, around £2.7bn of its loan book came from SMEs, with real estate coming to £6.1m.

In its consumer franchise, consumer lending had a £600m loan book, and £13.6bn of deposits were reported in its savings division. The latter is up from £10.9bn in 2022 and shows a strengthening of its funding base.

Shawbrook said that its retail mortgage brands, which include The Mortgage Lender (TML) and Bluestone Mortgages, had a combined loan book of £3.8bn.

The report said: “Looking ahead, the overall mortgage market is expected to contract in 2024. However, strong demand is expected to remain in the specialist residential mortgage market, driven by an increasing number of people being excluded from high-street lending due to their complex income profiles, such as the self-employed or those with multiple income streams.

“To cater for these shifting dynamics while upholding the quality of our loan book, we will continue to leverage and invest in our data capabilities to gain valuable insights into our portfolio while improving the customer experience and speed of offers.

“We also see significant opportunity to extend our proposition into adjacent markets to support the underserved segments, while strengthening our existing relationships using our digital product transfer capabilities.”

Shawbrook delivered an underlying profit before tax of £302m, which is up from £238m from 2022.

Its net interest margin (NIM) stands at 4.9%, which is down from 5.1% last year.

The number of employees stands at 1,435, a rise from 1,198 in 2022.

Shawbrook delivers ‘strong set of results’

Marcelino Castrillo, Shawbrook’s CEO, said that its approach had delivered a “strong set of results”, pointing to its underlying profit before tax and underlying return on tangible equity of 20.2%.

“From growth businesses to professional property investors, consumers and homeowners, more customers than ever are choosing Shawbrook to meet their specific and often event-driven funding needs, driving loan book growth of 24% in 2023.

“By delivering a premium experience, choice and consistently great value to c.350,000 savers, we also grew our savings franchise to £13.6bn,” he said.

Castrillo continued: “The business model we have created is unique and difficult to replicate, centred around our ‘best of both’ approach that combines deep human expertise with advanced digital, technology and data capabilities. This enables us to serve customers at scale, while maintaining operational efficiency with our underlying cost to income ratio reducing further to 38.2%.”

He said that the group was embracing technology, like AI and machine learning (ML), to “transform our customer and colleague experience”.

“This has so far included the implementation of new cloud contact centre technology, driving enhanced customer experience with in-depth sentiment analysis helping us to identify customers that may require additional support. We have also embedded generative AI into our software development workflow to support agility and drive productivity gains for our engineers,” Castrillo explained.

He said: “While the macroeconomic landscape continues to evolve, we are encouraged by both the resilient performance we have delivered to date, and the improving sentiment seen across our markets.

“The attractive returns we generate year-on-year give us the confidence to continue to pursue our ambition – to deliver for more customers in more markets by combining the innovative mindset and agility of a start-up with the scale and financial strength of a large business.

“The embedded optionality of the platform we have created at Shawbrook enables us to both react quickly to attractive inorganic opportunities as they arise, whilst continuing to pursue the significant organic growth we see in our existing markets.”