Interim Management Statement

06 November 2017

Aldermore Group PLC

Q3 2017 Interim Management Statement

The Board recommends offer from FirstRand

· Aldermore received a 313p per share offer for the entire business, which has been recommended bythe Board to the Group's shareholders

Strong customer driven growth, with £2.4bn of new lending within a consistent risk appetite

· Net loans up 12% to £8.4bn (FY 2016: £7.5bn), driven by £2.4bn of new lending (9M 2016: £2.3bn)

· Customer deposits up 8% to £7.2bn (FY 2016: £6.7bn), TFS utilisation now at £1.4bn

· Net interest margin remains stable at 3.5%

Continued strong capital generation with CET1 ratio now above 12%

· CET1 capital ratio(1) at 12.1%, up 30bps in the quarter and 60bps YTD (FY 2016: 11.5%)

· Tangible book value increased by 15% to £607.1m or 176.0p on a per share(2)  basis (FY 2016: £525.9m, 152.5p)

Further progress in our stated strategic priorities

· Completed our investment in AFS, a leading asset and commercial finance introducer

· Awarded "Business Finance Champion" and "SME Champion" at the LeasingWorld Awards

· Continuing traction in our Mortgages retention strategy across both Residential and Buy-to-Let

· Securely managed, with robust credit performance and cost of risk remaining below our medium-termexpectations of 25 - 35bps

Phillip Monks, CEO, commented:

"Aldermore remains focused on delivering against our stated priorities, with more new lending to customers, greater leverage of our efficient operating model and a robust credit performance. Together, these contribute towards continued strong capital generation, with our CET1 ratio now above 12%.

"Total new lending of over £2.4bn has been delivered within our consistent risk appetite and has driven loan bookgrowth of £0.9bn to £8.4bn, remaining on track to reach our guided range of 10% - 15%.

"We have increased our support for SMEs, providing the vital financing they need to succeed, and have continued to see strong levels of growth in our Buy-to-Let portfolio as we capitalise on the trends of increasing professionalisation in the market. We continue to remain vigilant to changes in our operating environment with a key focus on driving a robust credit performance. As a result we continue to anticipate our cost of risk in 2017 remaining below our medium term guidance of 25 - 35bps.

"Ongoing delivery against our strategic and financial targets extends our track record of performance and provides us with continued confidence in our future prospects. Both of these factors have been reflected in the offer received from FirstRand, which the Board is recommending to Shareholders. With the backing of their considerable resources and wider capabilities, we will be able to accelerate the delivery of our strategy and further expand the products and services we offer our customers."

(1) Fully loaded CRDIV CET1 as at 30 September 2017 includes Q3 2017 profits

(2) Outstanding number of shares: 344.9m (FY 2016: 344.7m)

Enquiries 

Important disclaimer

This document contains certain forward-looking statements with respect to the business, strategy and plans of Aldermore Group PLC ("Aldermore") and its current goals and expectations relating to its future financial condition and performance. Such forward-looking statements include, without limitation, those preceded by, followed by or that include the words "targets", "believes", "estimates", "expects", "aims", "intends", "will", "may", "anticipates", "projects", "plans", "forecasts", "would", "could", "should" or similar expressions or negatives thereof. Statements that are not historical facts, including statements about Aldermore's, its directors' and/or management's beliefs and expectations, are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that will or may occur in the future. Factors that could cause actual business, strategy, plans and/or results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by Aldermore or on its behalf include, but are not limited to: general economic and business conditions in the UK and internationally; market related trends and developments; fluctuations in exchange rates, stock markets, inflation, deflation, interest rates and currencies; policies of the Bank of England, the European Central Bank and other G8 central banks; the ability to access sufficient sources of capital, liquidity and funding when required; changes to Aldermore's credit ratings; the ability to derive cost savings; changing demographic developments, and changing customer behaviour, including consumer spending, saving and borrowing habits; changes in customer preferences; changes to borrower or counterparty credit quality; instability in the global financial markets, including Eurozone instability, the potential for countries to exit the European Union (the "EU") or the Eurozone, and the impact of any sovereign credit rating downgrade or other sovereign financial issues; technological changes and risks to cyber security; natural and other disasters, adverse weather and similar contingencies outside Aldermore's control; inadequate or failed internal or external processes, people and systems; terrorist acts and other acts of war or hostility and responses to those acts; geopolitical, pandemic or other such events; changes in laws, regulations, taxation, accounting standards or practices, including as a result of an exit by the UK from the EU; regulatory capital or liquidity requirements and similar contingencies outside Aldermore's control; the policies and actions of governmental or regulatory authorities in the UK, the EU or elsewhere including the implementation and interpretation of key legislation and regulation; the ability to attract and retain senior management and other employees; the extent of any future impairment charges or write-downs caused by, but not limited to, depressed asset valuations, market disruptions and illiquid markets; market relating trends and developments; exposure to regulatory scrutiny, legal proceedings, regulatory investigations or complaints; changes in competition and pricing environments; the inability to hedge certain risks economically; the adequacy of loss reserves; the actions of competitors, including non-bank financial services and lending companies; and the success of Aldermore in managing the risks of the foregoing.

Any forward-looking statements made in this document speak only as of the date they are made and it should not be assumed that they have been revised or updated in the light of new information of future events. Except as required by the Prudential Regulation Authority, the Financial Conduct Authority, the London Stock Exchange PLC or applicable law, Aldermore expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in Aldermore's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. The information, statements and opinions contained in this document and subsequent discussion do not constitute a public offer under any applicable law or an offer to sell any securities or financial instruments or any advice or recommendation with respect to such securities or financial instruments.

Aldermore

Aldermore Group PLC is a specialist bank offering straightforward products to Small and Medium-sized Enterprises (SMEs), homeowners, landlords and individuals.

Aldermore has no branch network but serves customers and intermediary partners online, by phone and face to face through its network of regional offices located around the UK. Building on its core values of being reliable, expert, dynamic and straightforward, Aldermore aims to deliver banking as it should be.

Established in 2009, Aldermore has grown significantly. At the end of September 2017, lending to customers stood at £8.4 billion.

For more information, please visit www.aldermore.co.uk.  

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Aldermore Bank PLC is an operating entity of Aldermore Group PLC. Aldermore Group PLC's shares (ALD.L) are listed on the Main Market of the London Stock Exchange. Aldermore Bank PLC is authorised by the Prudential Regulation Authority, regulated by the Financial Conduct Authority and the Prudential Regulatory Authority and is registered under the Financial Services Compensation Scheme.