Challenger bank OakNorth grows profits as lending book increases
Challenger bank OakNorth made pre-tax profits of £214.8m in 2024 and lent £2.1bn and is looking to bolster its teams in Manchester, Leeds and Birmingham.
To date, OakNorth’s total cumulative credit facilities have grown to £12.5bn – up from £10.2bn at the end of 2023, with a return on equity of 22%.
OakNorth targets what it describes as the “missing middle” of lower mid-market customers, and claims its loans have directly supported the creation of over 56,000 jobs and over 34,000 new homes.
OakNorth also began operating in the US in mid-2023 and by the end of 2024, had lent $685m to fast-growing, entrepreneurial businesses there.
Regional UK businesses it has backed include Total Fitness, Hurstwood, Ultimate Performance and agreement on a bespoke facility to Huddersfield headquartered premium nursery brand, Mamas & Papas, to support future growth, and a £15m loan to Palatine private equity-backed, creative cocktail bar and restaurant group, The Alchemist, to open 10 new sites over the next three years.
In an exclusive interview with the Rainmakers service from TheBusinessDesk.com this week, Stewart Haworth, director of debt finance, said the bank needs to expand the teams to do deals: “We’ve got three or four adverts out for people across the north at the minute – they’ll be right in the thick of it, because they’ll be on the tools. And we’ll see 10 times the volume, and we’ll probably transact four times the volume that anyone else will do.”
Rishi Khosla
Speaking to the progress made over the last year, founder Rishi Khosla, CEO of OakNorth, said: “Over the last year, we have continued to invest in and develop our offering for our customers, expanding both our product suite and our geographic footprint.
“The compounding power of consistent double-digit growth across our net income and return on equity is profound, and is driven by our strong customer satisfaction, proprietary tech, data, efficient operations, and disciplined credit approach. Despite ongoing macro-economic challenges, we are bullish for 2025, and excited about helping even more exceptional businesses and entrepreneurs on their scaling journeys.”
