UK’s Digital Bank Tandem Reports Second Year of Profitability

Tandem Bank reveals that it has delivered a second year of profitability as increasing numbers of mainstream consumers choose the Bank to help reduce their carbon footprint while saving money.

Tandem’s savings products are described as “a smart and secure home for savers’ money.”

They claim to offer green-savvy consumers competitive rates “on their savings, which in turn power the bank’s expanding green lending offer, designed to help homeowners and car buyers transition to a greener lower carbon lifestyle.”

The bank’s 2023 annual results show Tandem’s strategy “to be the UK’s greener digital bank is on course, following the transformational acquisition of leading consumer lender Oplo and the bank’s first full year of profitability in 2022.”

The bank says that it has reported a year of measured growth “despite challenging economic headwinds and the tightening of its credit risk appetite, managing lending carefully to ensure consumers’ interests remained paramount.”

‍In 2023 the bank accelerated its efforts “to help more mainstream consumers transition” to a greener lifestyle:

  • Savings more than doubled for second year, reaching over £3.6 billion, helping fuel Tandem’s green lending proposition – winning Best App-Based Savings Provider at the annual Savings Champion Awards
  • Green and ‘pathway to green’ lending stood at £523 million
  • Total lending balances increased to £1.37 billion – an increase of £170 million
  • Total customer increased to over 300,000 for the first time since Tandem’s launch, driving 120,000 Tandem Bank app downloads
  • Beta launch of Tandem’s Green hub, with over 200,000 visits since launch and over 1,700 personalised Green Home Plan journeys fully completed
  • Launched Tandem’s ‘Green Gap’ research tracking the pace at which consumers are moving towards a new greener lifestyle and showing how the market for smart green finance continues to grow
  • Delivered a community charity program, launching a new One Million Minutes commitment for volunteering, continuing Tandem’s financial education programme, as well as saving 74,000 tonnes of Co2 in 2023

‍Tandem’s strategy to be the UK’s greener digital bank has resulted in another year of strong financial metrics:

  • 28.2% growth in net interest income (NII) to £87.8 million, (FY22: £68.5 million) demonstrates a strong and profitable balance sheet
  • Lending balances increased to £1.37 billion – an increase of £170 million, up 14.2% (FY22: £1.2 billion)
  • £168 million of Home Improvement lending originated, taking the book to £342 million
  • £293 million of Second Charge mortgages originated, increasing total to £682 million
  • £114 million of Motor Finance originations, after 2022’s successful launch – total motor finance lending now stands at £116 million

Deposits increased to over £3.6 billion – “more than doubling the book for a second consecutive year (FY22: £1.75 billion) and helping to grow the bank’s total customer numbers to over 300,000 for the first time.”

Full Year underlying profit of £17.2 million – “representing a second year of profitability, a near five-fold increase on 2022 (FY22: £3.6 million).”

Alex Mollart, Tandem Chief Executive, said:

“Tandem’s strategy of becoming the UK’s greener, digital bank is working. We’re profitable for a second year running and delivering growth across deposits, lending and revenue – attracting more green-savvy consumers to the bank. It’s great to see so many customers buying into our mission to help the transition to a lower carbon lifestyle – and save money along the way. We’ve seen big increases in customers trusting their hard-earned savings with Tandem, while helping to fund the green lending we offer to customers looking to switch to a greener lifestyle.”

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