The lender is due to announce 2018 profits upwards of £21m next month, while the licensing of its core technology continues to grow.
In a rare turn for the fintech industry, lender OakNorth will report a doubling of its already impressive profits, possibly to £21.2m, when its annual results are published next month.
OakNorth first turned a profit in 2017, its second year of operation, of £10.6m, an achievement for a sector largely dominated by loss making companies.
CEO and co-founder Rishi Khosla revealed the lender’s incredible progress, along with confirming that OakNorth has yet to have a single loan default on its books over the last 12 months, in an interview with The Sunday Times.
“It is very rare that there are new financial paradigms invented,” the 43-year-old entrepreneur said.
Other figures he revealed included OakNorth grew its loan book by 160% in 2018, which would place its total loan book for the start of 2019 at £1.92bn.
OakNorth hit the headlines earlier this month reaching a $2.8bn valuation after Japanese telecoms giant SoftBank led a $440m investment round in the lender via its Vision Fund.
At its core, OakNorth is a savings and loan bank, but it also makes money by selling its lending technology (called OakNorth Analytical Intelligence) to overseas banks. It offers savings accounts to consumers while lending to businesses, with much of its loan book secured against property.
Despite the now vast size of its loan book OakNorth has yet to report a single default, by using its own proprietary algorithm to assess applicants in only a matter of weeks.
Last year Cristina Alba Ochoa, OakNorth’s chief financial officer, told AltFi “On the Bank side here in the UK, the reason we grew so fast is because we were solving a problem,” adding that medium-sized business borrowers were underserved by rivals like Funding Circle which target smaller borrowers.
OakNorth’s lending ranges from £500,000 to over £40m.
Part of SoftBank’s investment has been lined up for international expansion, with Khosla aiming to expand the licensing of OakNorth’s algorithm to help banks and lenders the US, Asia and Europe offer a similar service.