These are testing times for some of Britain’s challenger banks. The Brexit vote, plunging gilt yields and the slowing housing market have all taken their toll. The big unanswered question is how they are likely to fare in a downturn. For the most part, they are recession virgins.
The reception yesterday to Aldermore Group’s perfectly respectable figures illustrated how nervous investors are. First-half profits soared by 45 per cent to £63 million and there was virtually no evidence of any deterioration in loan quality, but still the doubters doubted.
The shares ended the day down 8 per cent at 141½p. That compares with a float price 17 months ago of 192p and a peak price last summer north of 300p.
Banks are complicated geared