Aldermore posts £193.5m profit despite motor finance provision impact

Aldermore Group has reported a statutory profit before tax of £193.5 million for the financial year ended 30 June 2025 (FY2024: £253.1m), reflecting a robust trading performance driven by solid growth in lending and deposits, despite a significant provision linked to the FCA’s review into historical motor finance commissions.

Total customer lending increased 8% year-on-year to £16.6 billion (FY2024: £15.3bn), supported by growth across all divisions and led by the continued strength of Aldermore’s specialist Buy to Let portfolio within its Property division. Customer deposits also grew 5% to £17.0 billion (FY2024: £16.3bn), boosted by strong inflows into both the Personal Savings and Corporate Deposits franchises.

Despite this operational growth, profits were impacted by a £60.6m charge related to potential remediation costs arising from the FCA’s investigation into historical motor finance commission arrangements, compared with an £18.1m charge in FY2024. The absence of last year’s £39.5m impairment provision release connected to Consumer Credit Act remediation also contributed to the year-on-year decline.

Reflecting its continued profitability and balance sheet strength, Aldermore has declared a dividend of £125m, its first shareholder distribution since joining the FirstRand Group in 2018.

Steven Cooper, CEO of Aldermore Group, said: “Aldermore has had a robust year, delivering resilient profitability and lending balance growth across all of our core lending divisions, as well as significant net inflows into our savings products.

“We have also maintained a strong capital and liquidity position, which demonstrates the underlying strength of the business.

“We welcomed the clarity brought by the decision of the Supreme Court relating to the payment of historical motor finance commissions, and we expect trading to remain healthy as the economic backdrop improves.

“Our performance was bolstered by strong cost management as inflationary pressures persisted, despite continued investment in our proposition and technology. We will remain focused on disciplined cost and capital allocation to ensure Aldermore’s long-term resilience and growth.”

Key capital and liquidity metrics remained healthy. The CET1 ratio stood at 14.9% post-dividend (FY2024: 15.9%), while the liquidity coverage ratio remained strong at 195% despite the repayment of £600m of TFSME funding during the year.

The Group also made progress on strategic initiatives, launching technology investments and strengthening its propositions across lending and savings. However, the evolving regulatory landscape surrounding motor finance continues to pose challenges. Aldermore has increased its total provision for potential redress and related costs to £73.1m (FY2024: £15m) and remains in active discussions with the FCA ahead of a proposed redress scheme expected to be finalised in early 2026.

While net interest income dipped slightly to £597.9m (FY2024: £604.3m) due to a tightening net interest margin of 3.78% (FY2024: 4.00%), the bank benefited from a stronger contribution from other operating income, which rose to £2.5m from an £18.5m loss last year, aided by fair value adjustments in a stabilising interest rate environment.