FirstRand Bank Aldermore

Challenger bank Aldermore will use the “firepower” gained from its £1.1bn takeover by South African giant FirstRand to push into UK business banking.

Phillip Monks, chief executive at Aldermore, told The Telegraph the lender had launched a strategic review of how the company could “leverage” investment from its new parent, likely to complete by the end of this year.

However Mr Monks said the lender had already identified lending to small and medium sized enterprises (SMEs) as an early priority.

Aldermore joins a rush of challenger banks, including Virgin Money and TSB, gearing up to bid for an £833m pot of funding earmarked to boost competition in SME banking. The cash is being stumped up by RBS as the price of keeping its business banking subsidiary Williams & Glyn to allay regulators’ competition concerns.

In its last set of full-year results as an independent bank, covering the 2017 calendar year, Aldermore posted a 10pc jump in pre-tax profits to £141m.

Underlying pre-tax profits, stripping out the costs of the FirstRand takeover and one-off hits, were up 20pc to £160m.

A slowdown in buy-to-let mortgage lending led to slower expansion of Aldermore’s loan book, up 15pc to £8.6bn. It had grown 22pc the previous year.

Mr Monks said he did not anticipate FirstRand intervening too heavily in the running of Aldermore. “I don’t expect it to be heavy touch, quite the opposite,” he said. Mr Monks said he thought the results reflected “very strong performance” and the bank did not have a “myopic focus on growth”.

FirstRand, South Africa’s largest bank by market capitalisation, agreed its takeover of Aldermore in November and completed it last week. Aldermore delisted after two years on the London Stock Exchange.

Mr Monks, a former Barclays banker, set up Aldermore in 2009 as an alternative to the traditional banks.