It’s easy to forget now how close the UK banking system came to collapse during the early stages of the financial crisis, but it’s not only survival they have to worry about now, it’s the new kids on the block.
People are now being encouraged to shop for financial products like they would their groceries, which means that more players are entering the market and threatening the dominance of the ‘legacy’ banks.
For decades the big UK banks have carved up the market between them, paying lip service to their customers’ needs and becoming involved in scandal after scandal. Now they are facing competition like never before in a new age of financial services.
One of these incomers, the Shawbrook Bank, announced its results yesterday and even though it’s a sector minnow, there were some very decent figures on show.
For the year ending December, 2013, the bank recorded a pre-tax profit of £16.8 million which compares to an accounting loss of £7.1 million the year before.
Shawbrook calls itself a specialist bank and it lends to businesses (mostly SMEs), and individuals.
It also announced yesterday the acquisition of Centric Commercial Finance, which provides lending services to the SME marketplace, from Cabot Square Capital LLP. This boosts its representation in the SME market, where thirst for expansion money during this period of recovery is the greatest.
Other highlights from the announcement include a total lending figure (at December, 2013) of £1.4 billion. This included new lending of over £700 million to SMEs in that period.
Perhaps most importantly, in the period under review the Bank took on board 44,000 new customers.
CEO Richard Pyman said: “2013 was a pivotal year for Shawbrook. Our specialist lending teams have focused on delivering a quality service with an unwavering emphasis on human underwriting and simple, straightforward processes. The result is outstanding organic growth across the business in 2013, and a significant rise in SME lending. We are in excellent shape for future growth in 2014 and beyond.”
“The acquisition of Centric Commercial Finance is an exciting strategic move for Shawbrook. We can now offer SMEs a broader range of funding services to support their growth aspirations, and the move will enable Shawbrook to become an even more prominent business lending bank. Centric’s dedication to traditional customer service and tailored lending solutions fits very nicely with our own, and we have ambitious plans to grow the business under Shawbrook this year.”
It may be a small start, but you can see why the big banks need to be aware of what’s coming up behind them.