Challenger bank Aldermore prepares for London flotation

UK challenger bank Aldermore, which provides financial services to small and medium sized-businesses, has confirmed its intentions to launch an initial public offering (IPO) on the London Stock Exchange in October.

The specialist bank, which also serves homeowners, has announced plans to raise £75 million in new shares to support its medium-term growth.

In its half-yearly results, also published on Monday, the bank revealed that its pre-tax profits for the six months up to the end of June reached £18.6 million. This represents an increase of almost 250% from the same period a year ago.

As of June 30, the bank held £4.8 billon in assets and had net loans of £4 billion. Based on its impressive growth, analysts say the float could raise about £800 million.

“This has been an excellent six months for Aldermore,” said CEO Phillip Monks.

“Our first half results again demonstrate our ability to deliver growth and profitability and we announced today our intention to list on the London Stock Exchange. This is an important step in the bank’s development which will enable us to lend more to British SMEs and homeowners.”

Credit Suisse and Deutsche Bank have been named joint global co-ordinators of the float, while Nomura and Numis will be co-lead managers and Lazard will serve as financial adviser. 

Aldermore, at only five-years-old, was one of many challenger banks launched to provide alternatives to traditional high street banks during the recession. 

A survey published earlier this month revealed that some 90% of small and medium sized enterprises prefer dealing with challenger banks to their high street competitors.

In March, it was also revealed that up to ten new retail banks could launch initial public offerings by 2016. Alongside Aldermore were Metro Bank, Shawbrook and OneSavings.

Virgin’s banking arm, estimated to be worth £2 billion by city insiders, is expected to be floated on the financial markets later this year. 

Further reading:

Challenger bank Aldermore prepares for IPO

Challenger banks considering stock market listings to boost high street alternatives

Ethical sector could see boost as FCA reveals talks with 21 new banks

90% of small businesses prefer challenger banks

New SME lending rules to ‘open the flood gates’ for alternative finance