New banks

UK challenger bank OakNorth posts profit growth of 95 percent, but growth slows significantly

  • The challenger bank is likely the only profitable one of its peers.
  • But growth is slowing down amid uncertainty.
close

Email a Friend

UK challenger bank OakNorth posts profit growth of 95 percent, but growth slows significantly

OakNorth Bank posted financial results yesterday that revealed pre-tax profits grew 95 percent in 2019 to £65.9 million.

By the numbers: In four years since launching, OakNorth Bank has become the fastest growing company in Europe, according to the Financial Times.

  • OakNorth reported total revenues of £104 million for 2019, up 74 percent year on year
  • The bank has lent over £4 billion to British businesses since its launch in September 2015.
  • Loans and advances to customers grew 58 percent to £2 billion, compared with a more than 100 percent increase in 2018
  • It has attracted deposits from 144,000 savers, up from 28,000 in 2018
  • Over 102,000 of those new savers came via partnerships with other leading fintechs, in addition to 42,000 which came to OakNorth directly.
  • The bank had £2 billion worth of deposits at the end of 2019, up 68 percent year over year
  • The company’s claims a Net Promoter Score of 80.5 with its borrowers

“In four years, we have been able to leverage OakNorth’s Platform to build one of the most successful new banks globally, and in doing so, help hundreds of UK businesses who have in turn created thousands of new homes and jobs,” said Rishi Khosla, CEO and co-founder of OakNorth.

Carbon footprint: OakNorth has become one of the first banks globally to achieve net carbon zero by offsetting its estimated direct emissions and electricity-generated indirect emissions from its IT infrastructure suppliers.

Context: OakNorth is likely the only major challenger bank to post profits, as financial performance has remained a secondary goal to growth for many competitors.

  • OakNorth’s technology platform is a key part of its international growth plan. Unlike other challengers, like Revolut, that acquire local banking licenses as part of their expansion strategy, OakNorth uses its platform to partner with balance sheet lenders internationally.
  • The challenger bank was valued at $2.8 billion in a deal backed by Softbank’s Vision Fund last year. OakNorth raised $390m from Softbank’s fund, with the remaining capital coming from Clermont.

0 comments on “UK challenger bank OakNorth posts profit growth of 95 percent, but growth slows significantly”

New banks

On Deposit Solutions’ launch in the U.S. with CEO Philipp von Girsewald

  • Deposit Solutions has found success in Europe helping banks bring in new deposits.
  • Now launching in the U.S., the firm is using its launch blueprint to enter a new market.
Michael Deleon | June 23, 2020
New banks, Podcasts

Current’s Stuart Sopp on building a bank with customers’ best interests in mind

  • As a trader, Stuart Sopp thought he could do more to help the people not being served by the banking system.
  • His challenger bank Current targets people living paycheck to paycheck and teens.
Zachary Miller | June 22, 2020
New banks

Stash reveals its growth metrics during the pandemic

  • As the pandemic shut down bank branches, consumers turned to digital options.
  • Challenger bank Stash is experiencing strong growth in its banking and investing offerings.
Zoe Murphy | June 17, 2020
New banks

As Sesame Cash adds thousands of new users per day, Credit Sesame acquires Canadian challenger bank Stack

  • Credit Sesame collaborated with Canada's Stack to develop Sesame Cash, its banking product.
  • After the merger, Credit Sesame plans an international expansion.
Zachary Miller | June 16, 2020
New banks

How Stash harnesses financial data to develop products designed for everyone

  • Stash's chief product officer doesn't hail from the financial services industry.
  • Sudev Balakrishnan credits his background in consumer with the success the challenger bank has in attracting new customers.
Zoe Murphy | June 15, 2020
More Articles