Shawbrook's profits up but says too soon to judge Brexit effect
Chief executive Steve Pateman said yesterday he was “delighted” at the interim numbers, which saw profits come in at £38 million compared with £33.2m in the first six months of 2015.
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Hide AdLast month Shawbrook revealed it was having to take an additional financial hit of about £9m related to “irregularities” in its asset finance business.
The bank, 75 per cent of whose business is lending to small and medium-sized businesses and which floated on the stock market in 2015, has said the extra impairment charge is linked to some loans being underwritten that did not meet its lending criteria.
Pateman said yesterday that without this charge underlying profits in the first six months of 2016 would have been 41 per cent higher.
“This performance was driven by continued growth in the book to £3.8bn as we progressively increased originations 22 per cent to £993m, with strong growth across all three divisions,” Pateman said.
However, he warned: “It is clear from the rapidly evolving and ever changing view of the future for the UK economy post the decision to leave the EU, that the situation will remain fluid for some time.
“We have already seen economic forecasts move from a near certain recession on 24 June [the day after the Brexit vote] to lower but still respectable growth rates for 2017 in the latest IMF forecasts.
“Much remains to be resolved and this will undoubtedly influence consumer and business confidence as the future of our relationship with the EU becomes clearer – at present we are not seeing any material change in activity; indeed some markets that slowed in the run up to the referendum have picked up.”
Shawbrook’s shares recovered 5 per cent to 184.5p yesterday, compared with a 290p flotation price.
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Hide AdWealth manager St James’s Place interim operating profits have risen to £284m from £265.3m in the first six months of last year, while funds under management have lifted to £5.3 billion from £4.4bn “despite continued volatility in world stock markets and political uncertainty across Europe”.
St James’s Place saw net inflow of funds under management of £3.1bn, up from £2.7bn. The interim divi rises to 12.33p from 10.72p.