Allica Bank has swung to a profit before tax of £16.09m in 2023 from a loss of £1.58m in 2022, marking its first full-year profit since it began lending in 2020.
The UK-based digital bank, which specialises in serving small and medium-sized enterprises (SMEs), saw a 140.7% surge in gross revenue, reaching £190.99m from £79.33m in 2022.
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Allica Bank’s loans and advances to SME customers increased to £1.97bn, a surge of 47% compared with £1.34bn a year ago.
This growth was largely attributed to new lending activities, with a total of £861.3m in new loans completed within the year.
Organic lending through direct distribution and broker partners contributed £729.1m to this figure.
However, the bank also recognised an increased provision for expected credit losses, which went up to £22m from £9m.
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By GlobalDataAllica Bank’s asset finance business surpassed £200m in annual lending for the first time since the product’s introduction in 2021.
Furthermore, customer deposits saw a 75% increase, climbing from £1.5bn to £2.63bn.
The bank offers a variety of savings accounts, including term, notice, and instant access deposits, catering to the diverse needs of its customers.
During the 12 months, interest income was up by 146% to £177.8m.
This is primarily due to a 91% increase in interest income on loans and advances to customers, which amounted to £124.9m, and a 717% increase in interest income on loans and advances to banks, which totalled £35.6m.
Operational expenses rose by 36%, from £41.4m to £56.4m, with staff costs contributing an additional £9.2m as Allica Bank continues to invest in its workforce, which grew to 496 colleagues by the end of 2023, up from 324 in 2022.
Looking ahead, Allica Bank aims to significantly scale its operations, targeting over 10% market penetration in the forthcoming years.
Allica Bank CEO Richard Davies said: “The last year has been incredibly successful at Allica. We have seen significant growth in revenue, lending and deposits, showing that our proposition for SMEs is starting to really cut through.
“Recording our first full-year profit just three years after opening our doors for lending on the eve of the covid lockdown was a true milestone in challenging market conditions, and one we’re very proud to have achieved.
“Allica remains the UK’s only full-service digital bank dedicated to serving established SMEs, and we are laser-focused on transforming banking for this critical segment of our economy.”
