Shawbrook Bank delivers steady lending growth as specialist focus pays off

Specialist lender Shawbrook reported an increase in loans and deposits at the start of this year as it stepped up its challenge to the big banks.

The privately-held bank said in a trading update on Wednesday that its loan book swelled by roughly £500m to £13.8bn during the first three months of 2024, up 15 per cent on an annualised basis.

It said the increase was driven by “strong net lending volumes” across its specialist real estate and small and medium-sized business markets.

Shawbrook added that its deposits grew by some £1.2bn during the quarter to £14.8bn, driven by seasonal ISA demand.

The bank said its arrears ratio rose 20 basis points to 2.5 per cent during the three months but that its credit risk metrics remained “within risk appetite”.

“We have started the year positively, with customers continuing to value the premium experience, flexibility and certainty Shawbrook delivers across our diverse markets,” chief executive Marcelino Castrillo said on Wednesday.

“The macroeconomic landscape continues to evolve and we remain encouraged by the versatility of our ‘best of both’ model and the resilient performance we have delivered to date.”

He added: “The breadth of our specialist offering and the flexibility of our platform will allow us to deliver for more customers in our chosen markets by combining the innovative mindset and agility of a start-up with the scale and financial strength of a large business.”

The news comes after reports earlier this year that private equity firms BC Partners and Pollen Street Capital, which took Shawbrook private for £868m in 2017, were in talks with City investors about another public listing for the lender.

Pollen Street previously floated Shawbrook in London at a valuation of £725m in 2015. Both the bank and its owners declined to comment on the listing plans.

Shawbrook has enjoyed bumper profits in recent years on the back of a surge in lending and interest rate hikes from the Bank of England. Its underlying pretax profit ballooned 27 per cent to £302m last year.