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

Navigating a changing business model: How banks can compete with fintechs

  • Fintech players are challenging the vertical business model by segmenting the value chain and coupling their own products with others’.
  • Banks can remain competitive by embracing this trend and rebundle their products to unlock new growth opportunities.
Iulia Ciutina | November 30, 2021
New banks

‘We were laughed out of a lot of rooms’: How Daylight and First Boulevard offer personalized banking experiences for underserved communities

  • A number of challenger banks have recently emerged to serve the needs of historically marginalized groups.
  • Daylight provides individualized banking services to the LGBTQ+ community, while First Boulevard caters to the financial needs of African Americans.
Ismail Umar | November 22, 2021
New banks

GoHenry zeroes in on finding the fun in finance

  • GoHenry is a banking app for kids that focuses on financial literacy.
  • With cash less of a staple payment form, GoHenry could be a solution to parents who want to track their kids’ allowances.
Rivka Abramson | November 16, 2021
New banks

‘Like navigating a dark forest with a dying mini-flashlight’: How Lance uses automation to simplify money management for freelancers

  • Lance provides automated banking solutions for freelancers.
  • The challenger bank recently launched a new feature that allows freelancers to receive direct credit card payments from their clients.
Ismail Umar | November 09, 2021
New banks

Radhika Duggal, CMO of community and business development at Chase, talks financial literacy for families

  • Financial literacy is becoming a crucial checkbox to mark for all players in the financial ecosystem.
  • Chase’s CMO of community and business development, Radhika Duggal, recently sat down with Tearsheet to give her thoughts on the topic.
Rivka Abramson | October 22, 2021
More Articles