OakNorth boosts profits by 70 per cent after lending surge
Digital lender OakNorth boosted its profits by more than 70 per cent last year as an economic rebound from the pandemic led to a surge in business lending.
The property-focused bank saw revenues surge 26 per cent year on year to £176m in 2021, while pre-tax profit increased 73 per cent to £134.5mn.
Lending at the firm topped £1.8bn with total facilities growing by 20 per cent to £4.2bn, up from £3.5bn in 2020.
Boss Rishi Khosla said the year marked a period of significant growth for the firm as ot passed the £100m milestone in net income
“We look forward to continuing to build on this momentum and supporting the change-makers, productivity-drivers, job-creators, and innovators who are helping fuel the economic recovery, even as uncertainty lingers,” he said.
“We have come an incredibly long way in a short amount of time, and are really excited about what the future holds for our customers as we continue on our mission to empower the Missing Middle.”
Performance was boosted by a net release of £3.7m it had written off to protect against bad loans, compared with a charge of £21.6m in 2020 when businesses felt the strain of the pandemic and loan defaults were more common.
Since its launch in 2015 by chief executive Khosla and co-founder Joel Perlman, OakNorth has lent over £7bn to primarily businesses and property developers.
OakNorth’s most recent 2019 $440m funding round, led by Softbank’s Vision II fund, valued the firm at $2.8bn, but bosses said that strong profitability meant the firm had no further plans for funding.
“We’ve built a well-balanced model, offering value for customers while retaining capital so we don’t have to go to the market,” Khosla said.