28th Jul 2015 07:50
LONDON (Alliance News) - Shawbrook Group PLC Tuesday said it would benefit from rising interest rates, after years of historically low rates designed to help the economy recover following the financial crisis.
"The group's balance sheet is positively positioned to benefit from rising interest rates, however given the unclear economic outlook, the timing of any anticipated benefit is uncertain," the FTSE 250 lender said in a statement.
Shawbrook's comments come as both US Federal Reserve Chair Janet Yellen, Janet Yellen, and her counterpart at the Bank of England, Mark Carney, prepare to raise interest rates from their current historic lows. The central banks have been making it increasingly clear that an increase in interest rates is drawing closer.
The FTSE 250-listed lender said it's on track to increase gross originations to more than GBP2 billion per year by 2017, maintain net interest margin at about 6% in the medium term, further cut the ratio of its costs to income to about 40% in the medium term and improve from that point, and to pay a "modest" maiden dividend for 2016.
Shawbrook said it made a GBP24.7 million pretax profit in the six months ended June 30, compared with GBP13.4 million in the corresponding period the year prior, driven by higher net interest income. Underlying pretax profit increased to GBP34.8 million from GBP17.9 million year-on-year. Higher profitability was driven by a 17% increase in Shawbrook's loan book, the company said.
The lender joined the London Stock Exchange in April 2015, when it raised GBP90 million.
Shawbrook shares were down 1.2% at 332.80 pence on Tuesday morning in London.
By Samuel Agini; [email protected]; @samuelagini
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