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OakNorth becomes first challenger bank to turn a profit

Digital-only lender OakNorth has announced it has made a profit after just one year in business.

The bank, one of the new generation of challenger banks, began operating last September and since then has doubled its loan book to over £200m with its SME focused lending.

While the exact financials have not been divulged, the bank, which bills itself as ‘the bank for entrepreneurs, by entrepreneurs’, said that it made a pretax profit in its first 12 months making it the first new bank to do so.

Seemingly unaffected by Brexit uncertainty, London and Manchester-based OakNorth also said that it had closed £100m in debt finance deals after the EU referendum, including a £19m debt deal with fast food chain LEON, and that it has plans to launch additional retail products imminently.

Rishi Khosla, Chief Executive Officer and co-founder, said that the figures are a ‘huge milestone’ for the fledgling bank.

He commented: “Achieving profitability is something that some of our larger competitors – both those that are completely new like us, and those that have been borne out of existing businesses – have yet to achieve.

“It is testament to our lending and deposit-taking capabilities, as well as the fantastic work that has been carried out by our team.”

Grappling with the likes of Aldermore, Atom Bank and Starling, OakNorth’s rapid ascent to profitability is a first for the increasingly crowded challenger bank market, with most shouldering losses as they look to cement their place in the lending market.

Reaffirming the bank’s commitment to the UK’s small businesses and entrepreneurs, Khosla added: “With or without Brexit, we are strong believers in the UK entrepreneur. We have a unique opportunity to prove our commitment to our country’s entrepreneurs and growth businesses at a time when many other banks are retrenching.”