28th Jun 2016 07:04
LONDON (Alliance News) - Lender Shawbrook Group PLC on Tuesday said trading has been in line with its expectations in 2016 so far, but it will book an impairment charge due to irregularities uncovered in its Asset Finance unit.
The FTSE 250 bank said loan originations in the second quarter of 2016 were flat against the first quarter and were up 35% year-on-year, in line with its guidance.
But it will book a GBP9.0 million impairment charge in the second quarter on the Asset Finance unit of its Business Finance arm, due to irregularities found in one office. These irregularities have been rectified and were a result of a number of loans being underwritten in the asset finance unit which did not meet its lending criteria, Shawbrook said.
The control breach, Shawbrook said, was identified by the company's upgraded risk management system and it is confident the new system will prevent any further issues like this occurring.
"While this is extremely disappointing, the irregularities were identified by the upgraded risk management systems and controls we implemented earlier this year. They have been investigated thoroughly and appropriate action has been taken," said Shawbrook Chief Executive Steve Pateman.
"Whilst the additional impairment charge arising from these irregularities will impact pretax profit for the year, performance is otherwise in line with our expectations," he added.
Shawbrook also said it had accepted the resignation of Tom Wood as its chief financial officer. Dylan Minto, currently director of strategy, will step in as interim CFO.
By Sam Unsted; [email protected]; @SamUAtAlliance
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