Aldermore Group reports 74% drop in statutory profit
Aldermore Group PLC, operating through Aldermore Bank PLC and MotoNovo Finance Limited, experienced a substantial 74% reduction in statutory profit before tax for the fiscal year ending June 30, 2026, according to a press release issued on the same day. The decrease in profit, standing at £51.2 million before tax, marked a stark contrast to the £193.5 million recorded in the preceding year.
The primary cause of this decline was a £164.8 million charge associated with the Financial Conduct Authority's motor finance redress scheme, along with £18.1 million in restructuring charges and £4.8 million in transaction-related costs linked to FirstRand Group's exploration of a potential sale of Aldermore Group. Despite these adverse factors, the company's net interest income saw a modest 1% increase to £604.1 million, while the net interest margin slightly contracted from 3.78% to 3.46% due to reduced asset yields and deposit pricing pressures.
Customer lending balances climbed by 13% year-on-year to £18.8 billion, and customer deposits rose by 12% to £19.1 billion. The growth in lending was partly attributed to the acquisition of Octane's lending business assets in March 2026, injecting £500 million in specialized property finance loans. However, the provision for historical motor finance commissions surged to £231.8 million from £73.1 million in June 2025, reflecting Aldermore Group's forecast of the FCA's proposed redress scheme, although this differed from an initial estimate of £280 million published on April 7, 2026.
The Group's cost of risk rose to 26 basis points from 10 basis points, staying within the lower range of its through-the-cycle capital requirements. The reduction in the CET1 ratio to 13.6% from 14.9% was primarily due to the motor finance charge and the Octane acquisition, while the Group adjusted its CET1 target range to 12.0%-13.0% in anticipation of Basel 3.1 implementation effective January 1, 2027.
Aldermore Group, encompassing Aldermore Bank PLC and MotoNovo Finance Limited, operates under the umbrella of FirstRand Group.
Written by urgent.news from Investing.com's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
