OakNorth Bank sees profits hike 73% in 2021

UK-based neobank, OakNorth, has revealed a 73 per cent increase in pre-tax profits in its 2021 Annual Report, published this week, bringing numbers up to £134.5m.

OakNorth says its new lending increased by 60 per cent on the prior year, with total facilities growing by 20 per cent to £4.2bn in 2021.

“2021 marked a significant period of growth for our business, during which we surpassed the £100 million milestone in net income after just six years of operation,” said Rishi Khosla, CEO and co-founder of OakNorth Bank. “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.”

OakNorth claims its business is powered by its data-driven approach, with the ON Credit Intelligence Suite providing the Bank with a “data-rich” understanding of each business that it lends to, with a focus on future performance forecasting. The Bank attributes its low credit default track record to this approach.    

Since its launch in 2015, OakNorth Bank has lent over £7bn to UK businesses. It now receives around 80 per cent of its new customers via referrals and has a rate of 40 per cent repeat borrowers, according to the Bank. Offering loans ranging from £250k, up to tens of millions, OakNorth claims its performance metrics now place it among the top 1 per cent of commercial banks globally.

In addition to its bumper profit figures, the Bank has also further improved its cost to income ratio over the past year and increased its return on required equity by over 50 per cent, from 19.3 per cent in 2020, to 30.1 per cent in 2021.

“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,” added Khosla.