Strong capitalisation provides the foundation for solid growth in 2015 (Unaudited full year 2015 results)

08 November 2016

Charter Court Financial Services (“Charter Court”), the specialist challenger bank and owner of Precise Mortgages and Charter Savings Bank, recorded a strong financial and operational performance in 2015.


  • Mortgage balance sheet up 126% to £1.95 billion
  • New mortgage originations up 120% to £1.61 billion
  • Net interest income up 190% to £45 million at Net Interest Margin of 2.53%
  • Profit before tax of £27 million (2014: £1 million loss)
  • Profit after tax of £21 million (2014: £2 million)
  • Cost income ratio halved to 55% (2014: 107%) driven by lending growth and increasing operating leverage
  • Exceptional asset quality with a three months-plus arrears rate of just 0.05% and low cost of risk at 2.7bps
  • Customer deposits of £1.56 billion with more than 36,000 savings accounts opened from March 2015 to December 2015
  • Common Equity Tier 1 Ratio of 21%

arrears rate based on mortgages as at month end December 2015.
CML mortgages >3 months in arrears at end of Q2 2015.

Ian Lonergan, CEO of Charter Court, said:

“Charter Court performed strongly in 2015. Our focus on capital strength and liquidity provided the foundation for our solid growth and enabled us to continue to build a strong presence and reputation in our chosen property lending markets. We are strongly capitalised and continue to generate capital organically. We delivered solid lending growth during the year, increased profitability and exceptional operational efficiency. New mortgage originations increased to £1.61 billion in 2015, a level similar to those of our listed specialist challenger bank peers. This top line growth translated into significantly increased profits, reflecting the downward trajectory of our cost income ratio as the benefits from the inherent efficiency and scalability of our highly efficient, purpose-built operating platform started to flow through.

“Our sophisticated risk management systems embedded across all aspects of our business continued to underpin the exceptional quality of our assets. This resulted in a Cost of Risk of just 2.7 bps and just six mortgage loans standing three or more monthly payments in arrears at year end, equating to an arrears rate of just 0.05% compared to the CML mortgage industry average arrears rate of 1.19% . Buy-to-let (BTL) lending represented the largest asset class, accounting for approximately 62% of our total long term lending in 2015, with the remaining 38% comprising residential home owners.

“The successful launch of Charter Savings Bank in March 2015 following the award of our banking license in January 2015 exceeded our expectations, attracting £1.56 billion in deposits in its first nine months of operation to year end. Our success was driven by offering straightforward, transparent savings products at great rates which have consistently featured in the consumer best buy tables. The growth and scale of our deposit base has provided significant flexibility, funding the majority of our mortgage book at year end.

“Looking ahead, the business is off to a strong start in 2016 on both the deposit taking and lending side and I am confident we will continue to deliver strong asset growth and drive accelerating profitability while continuing to maintain robust capital ratios”

Key financial results, ratios and metrics

Key balance sheet data (£m) 2015 2014
Mortgage balance sheet 1,945 859
Mortgage originations 1,610 731
Retail deposits 1,562 n/a
Total assets 2,605 908
CET1 capital 141 n/a
Key income statement data (£m) 2015 2014
Net interest income 44.9 15.5
Total income 60.5 18.8
Profit / Loss before tax 27.2 -1.4
Profit / Loss after tax 21.4 2.0

About Charter Court Financial Services Limited (Charter Court)

Charter Court is one of the UK’s leading specialist challenger banks, founded in 2008 by its senior management team and purpose built to focus on specialist BTL, residential, bridging and second mortgage lending. We operate through our three highly rated brands – Precise Mortgages, Exact Mortgage Experts and Charter Savings Bank – providing buy-to-let and specialist residential mortgages; mortgage servicing, administration and credit consultancy; and retail savings products. Our focus on strong capitalisation and access to liquidity provides the foundation for our growth strategy. At 31 December 2015 our total mortgage balance sheet stood at £1.95 billion generated through our relationships with more than 16,000 intermediaries nationwide, while Charter Savings Bank had attracted £1.56 billion in retail deposits from its launch in March 2015 to 31 December 2015. Underpinning our success, our risk management expertise and best-of-breed automated technology and systems ensure efficient processing, strong credit and collateral risk control and speed of product development and innovation. These factors have enabled our strong balance sheet growth and the exceptional credit quality of our mortgage assets. Charter Court is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.