Aldermore Group PLC reported a 74% drop in statutory profit before tax for the year ended June 30, 2026, as a large charge relating to the Financial Conduct Authority’s motor finance redress scheme weighed on results.
Statutory profit before tax fell to £51.2 million from £193.5 million a year earlier. Underlying profit before tax, excluding specific charges, declined 6% to £238.9 million from £254.1 million.
The largest driver of the statutory decline was a £164.8 million charge tied to the FCA’s proposed redress scheme for historic motor finance commissions. That provision rose sharply to £231.8 million from £73.1 million at June 2025, reflecting an updated assessment of the regulator’s plans. The figure differed from a preliminary estimate of £280 million published on April 7, 2026.
Additional costs included £18.1 million in restructuring charges and £4.8 million in transaction-related expenses connected to parent company FirstRand’s process to explore a potential sale of the business.
Net interest income rose 1% to £604.1 million, but net interest margin compressed to 3.46% from 3.78%. Customer lending balances grew 13% to £18.8 billion, while customer deposits increased 12% to £19.1 billion.
In March 2026, Aldermore acquired Octane’s lending business assets, adding £500 million in specialist property finance loans to its portfolio.
The cost of risk rose to 26 basis points from 10 basis points, a move the group said reflected updated forward-looking macroeconomic assumptions and kept the metric at the lower end of its through-the-cycle range.
The CET1 ratio fell to 13.6% from 14.9%, impacted by the motor finance charge and the Octane acquisition. Aldermore updated its CET1 target range to 12.0%–13.0% from the previous band, citing revised capital requirements linked to Basel 3.1 implementation effective January 1, 2027.
