According to its latest results for 2022, Shawbrook Bank said its underlying profit before tax in 2021 was £197.2m.

The lender explained that its loan book growth was driven by its “diverse offering and further expansion across our markets” while its enhanced profitability was driven by net interest margin improvement and cost management.

The bank’s overall arrears rate was 1.9 per cent, which compares to 1.7 per cent in 2021.

The firm said there was a net £47.7m impairment loss, which is when the value of a company assets decreases, on financial assets was recognised for the year, which is up from £31.4m in 2021.

The company said the increase was due to underlying growth of its loan book, updates to the economic outlook and addition of a “prudent new cost of living post-model adjustment” brought in in the second half of the year.

Sponsored

How to get your first-time buyer clients mortgage ready

Sponsored by Halifax Intermediaries

The bank said it had served around 425,000 customers, a growth on 350,000 customers in 2021.

 

SME and real estate divisions both report strong growth

The firm said it had strong originations, especially in its SME and real estate markets. Its real estate loan book was pegged at £5.9bn, up 9.3 per cent and accounted for around 56 per cent of the group’s total loan book.

The real estate loan book includes buy-to-let, bridging, commercial investment, owner-occupied mortgage and second charges.

The firm said within its real estate division it would “continue to improve the customer and broker experience”, which included the delivery of a digital bridging journey and advancement of its “next generation underwriting project” to improve the customer journey.

“We will also explore additional opportunities to serve the complex needs of our customers and respond to the wider macroeconomic trends, including the near prime market and the evolution of our sustainable lending offering to support our customers in their climate-related transitions,” it added.

The company’s SME loan book grow by nearly 17 per cent to £2.6bn and accounted for around quarter of the group’s loan book.

The SME book covers digital SME lending, corporate lending, structured lending and development finance.

Shawbrook said while “economic headwinds are expected to further hamper confidence across our SME markets” it was going into this year with a “robust loan book and business pipeline”.

“We take confidence that the technology and data investments made to bolster our customer propositions and enhance our risk environment will help to protect and retain existing customers, while attracting new business,” it added.

The lender said it would continue to deploy digital capabilities and human expertise across its markets to “serve the complex needs of SMEs through the uncertainty”.

“Shaping our proposition to meet the evolving needs of our customers, we will continue to capitalise on attractive opportunities presented by megatrends, including the provision of funding to support SMEs in their transition to a more sustainable future,” it added.

 

The Mortgage Lender loan book grows to £1.5bn

The Mortgage Lender (TML), which was bought by Shawbrook in 2021, loan book is currently around the £1.5bn mark. This is an increase of 184 per cent compared to the previous year.

The firm added that TML had exceeded its £1bn in new lending milestone this year and made up 14.3 per cent of the group’s loan book.

“Despite the uncertainty felt across the UK mortgage market, with the increased cost of living and interest rate rises placing increased pressure on home buyers’ affordability, TML continues to identify significant opportunities to provide real-life lending solutions to those with complex needs requiring a purchase or a refinance,” Shawbrook said.

The firm said “excellent progress” had been made on its “digitalisation journey”, which had “bolstered its competitive advantage”.

It added that TML had a “strong pipeline, solid reputation and enhanced digital capabilities”.

“Looking ahead, TML will continue to utilise access to enriched data sources to reduce processing requirements and enhance the TML experience for intermediaries and customers,” it added.

Regarding its recent acquisition of Bluestone Mortgages, the firm said it had established a platform lending funding arrangement in 2017 and maintained a “successful relationship” since then.

It continued that it was “delighted to have strengthened our long-standing partnership through this acquisition”.

It said by adding Bluestone to the group it could “use our combined capabilities and scale to offer an even stronger proposition to UK homeowners”.

 

2022 ‘exceptionally good year’ for Shawbrook

Marcellino Castrillo, Shawbrook’s chief executive, said 2022 was an “exceptionally good year” for the group pointing to its profit, return on tangle equity and number of customers served.

“Customers across all of our markets have a pressing funding need, often complex or time-sensitive and frequently both. They choose Shawbrook for our ability to understand their individual requirements and to deliver the right finance solution quickly and seamlessly. To do this consistently and at scale requires the combination of great technology and human ingenuity – the ‘best of both’,” he added.

Castrillo said that it had developed its digital portfolio monitoring tool, broadened its MyShawbrook portal and its partner ecosystem, but also focused on “attraction and retention of exceptional talent”.

“While the external landscape changed significantly over the course of 2022, the flexibility of our model continued to play to our advantage. We are well positioned for further sustainable growth across our diverse markets and remain alert to further inorganic opportunities.

“I am reassured by the financial strength of our platform and the resilience of our model given the likelihood of continued market volatility. The success of 2022 allows us to look ahead with confidence in our ability to respond to the immediate needs of the customers we serve today and to commit to prudent investment in the long-term sustainable growth of Shawbrook,” Castrillo added.