Shawbrook reports further loan book, deposit growth

(Sharecast News) - Shawbrook reported further loan book and deposit growth in the first quarter on Thursday, as the specialist lender set guidance for 2026 and said it expected to pay its maiden ordinary dividend in 2027.

The FTSE 250 group said its loan book, including originate-to-distribute balances, rose 2.6% to £19.7bn in the three months ended 31 March, from £19.2bn at the end of December.

Customer deposits increased 1.8% to £18.7bn from £18.4bn, while the stock cost of deposits reduced to 3.71% from 3.88% for the 2025 financial year.

Shawbrook said asset quality remained robust, with loans more than three months in arrears rising slightly to 1.7% from 1.6%, in line with management expectations.

The common equity tier 1 ratio strengthened to 12.6% from 12.4%, while the total capital ratio rose to 14.9% from 14.8%.

In April, the group completed the issue of £250m of additional tier 1 securities alongside a tender offer for its existing £124m of AT1 securities, which it said would have increased the total capital ratio to 16.0% had the transaction taken place at the end of March.

Shawbrook said it expected its loan book, including originate-to-distribute balances, to reach around £21bn in 2026, with a cost-to-income ratio below 38%, a CET1 ratio above 13.2% before Basel 3.1, and an underlying return on tangible equity of around 17%.

The group also reiterated its medium-term guidance, including low double-digit compound annual loan book growth from 2024, a mid-30s cost-to-income ratio, mid-to-high-teens underlying profit before tax growth, a high-teens underlying return on tangible equity and a CET1 ratio of 12% to 13%.

Shawbrook said it continued to execute its originate-to-distribute strategy, with OTD balances rising to £1.8bn at the end of March.

During the quarter, it disposed of its residual interest in the £510m Lanebrook Mortgage Transaction 2024-1.

Following its acquisition of ThinCats in the fourth quarter of 2025, the group also completed the purchase of a roughly £160m loan portfolio originated and serviced by ThinCats, further building scale in its targeted SME segment.

Chief executive Marcelino Castrillo said the first quarter had delivered "tangible progress" against the group's strategic priorities.

"Financial performance was strong in the first quarter, driven by continued growth and cost discipline," he said.

"We see attractive opportunities for growth within the specialist markets we serve, underpinned by a TAM of c.£300bn.

"Our proven specialist model and disciplined underwriting allow us to capture those opportunities, while remaining alert to the macroeconomic backdrop.

"Our confidence underpins the FY26 guidance we are setting out today, as well as reiterating our medium-term guidance."

At 1018 BST, shares in Shawbrook Group were up 0.16% at 309.5p.

Reporting by Josh White for Sharecast.com.

See latest RNS on Investegate