SoftBank-backed OakNorth sees new lending drive up profits

OakNorth, the UK challenger business bank, has reported a 15 per cent increase in pre-tax profits to £215m in 2024, driven by new lending in the UK and the US where it has recently launched.

OakNorth, which is backed by SoftBank, the Japanese investment group, lends to UK businesses with between £1m and £100m in revenue and offers business banking through savings accounts and cards.

The London-headquartered online lender has lent more than £12.5bn to customers since its 2015 launch.

Valued at $2.9bn in a 2019 funding round, OakNorth launched in the US in 2023, with the same lending offering as in the UK.

Figures published in its Annual Report show OakNorth provided over £2.1bn in new lending last year.

It said profits were up because of an uplift in net interest income, the difference between the interest earned from lending and interest paid out in deposits, driven by an increase in its loan book.

In the US, since it began leading in mid-2023, it said it had lent $685m.

Headcount was up from 228 to 278 in the year, the report shows.

OakNorth is said to be weighing up a stock market float.

Rishi Khosla, CEO and co-founder of OakNorth, last year told CityAM: “It would be super if more of these businesses were to go public and perform well."

Khosla said:

“Over the last year, we have continued to invest in and develop our offering for our customers, expanding both our product suite and our geographic footprint.

“Despite ongoing macro-economic challenges, we are bullish for 2025, and excited about helping even more exceptional businesses and entrepreneurs on their scaling journeys.”