August 10, 2017 / 6:43 AM / a year ago

UPDATE 1-British bank Aldermore's first-half profit jumps 32 pct

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Aug 10 (Reuters) - British bank Aldermore Group Plc reported a 32 percent rise in profit for the first half of the year, helped by strong demand from small- and medium-sized businesses, homeowners and landlords.

Aldermore, founded in 2009 by a former Barclays executive with backing from private-equity firm AnaCap, said net loans to customers rose 8.4 percent to 8.11 billion pounds in the period.

Loan originations — the process by which a borrower applies for a new loan — grew about 10 percent in the first half to 1.6 billion pounds.

Aldermore, one of the banks aiming to challenge Britain’s “Big 5” lenders, said total customer deposits also grew more than 10 percent to 7.3 billion pounds in the period.

The challenger bank maintained its full-year loan growth expectation of 10-15 percent, but said it expects 2017 cost of risk to be below its medium term range of 25-35 basis points.

Aldermore, which lends to small and medium-sized businesses (SMEs), homeowners and landlords, said first-half net interest margin was 3.5 percent, lower than the 3.6 percent it recorded a year earlier.

The bank said its underlying cost-to-income ratio declined by 1.4 percentage points to 44.1 percent.

Aldermore’s profit before tax rose to 78 million pounds in the six months ended June 30, from 59 million pounds a year earlier.

Larger rival Virgin Money last month reported a 26 percent rise in first-half profit on growth in its core mortgages, savings and credit card businesses, but warned of a weaker housing market and pressure on margins. (Reporting by Arathy S Nair in Bengaluru; Editing by Sunil Nair)

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