According to its annual results, the firm said that owner-occupied net lending fell modestly year-on-year, adding that strong end of term retention was offset by the impact of a “muted purchase market”.
The firm’s property finance division’s impairment charge came to £29.5m, up from £13.3m in 2022 which it said was due to a “more challenging economic outlook and the implication of higher interest rates”.
It added that around 2.9 per cent of its portfolio was more than 85 per cent loan to value (LTV), so it was “well collateralized” and its arrears had only increased “marginally”.
The report said that the strategy in its property finance division was to be “profitably growing in existing market segments and new sub-segments where we can back more people, including expansion into sustainable property financing”.
The lender’s profit before tax has grown by nine per cent year-on-year to £222.5m
Aldermore noted that its strategic technology investment increased from £0.7m in 2022 to £34.6m in 2023.
The firm said that the investment is “part of a de-risking and modernisation programme” which would support the group’s “long-term growth ambitions”. It noted that the bulk of the spending related to Aldermore Bank.
Aldermore: ‘UK facing considerable economic uncertainty’
Steven Cooper, CEO of Aldermore Group, said: “We’re proud of what Aldermore has achieved in the last year, delivering a strong increase in profits against a backdrop of challenging economic conditions. Lending and customer deposits have both grown steadily and we’re pleased to be supporting more people than ever with over 825,000 customers.
“We are mindful that many are still struggling with the increased cost of living and so we are continuing to provide extra support to customers, while proactively contacting the most vulnerable to offer our help.”
He added: “Looking to the future, the UK is facing considerable economic uncertainty, with much tighter financial conditions. Over the last year we’ve significantly modernised Aldermore so that we can deliver new products and services at pace and quickly take advantage of changes in a market that is more unpredictable than ever.
“When we combine this greater flexibility in our business, with a strong, stable capital and liquidity position we’re confident that we’re well placed to weather these challenging economic conditions. By helping customers through these difficult times while investing in our own people and capabilities, we believe the business will continue to deliver steady growth.”
