OakNorth, a UK-based challenger bank, has reported a 15% rise in pre-tax profits, reaching £215 million in 2024. The increase is attributed to its expansion in the UK and its recent entry into the US market. Since its establishment in 2015, the bank has focused on lending to mid-sized businesses, providing financial products such as savings accounts and business cards. OakNorth’s growth strategy continues to focus on increasing its loan book and expanding internationally.
When OakNorth secured a $2.9 billion valuation in 2019, its primary focus was the UK market. The bank has since extended its reach, officially launching in the US in 2023. The latest annual report highlights that OakNorth provided £2.1 billion in new loans in 2024, surpassing earlier lending volumes. In the US, where lending activities started in mid-2023, the bank has already issued $685 million in loans, demonstrating its growing presence outside the UK.
What led to OakNorth’s profit growth?
The bank’s increased profitability is mainly due to a rise in net interest income, which represents the difference between earnings from loans and interest paid on deposits. The expansion of its loan book has contributed to this growth, reflecting a strong demand for its lending services. Additionally, the bank’s decision to maintain a diverse lending portfolio has helped drive financial stability despite wider economic uncertainties.
How has OakNorth expanded its operations?
OakNorth has not only increased lending but has also expanded its workforce. According to its latest report, the number of employees grew from 228 to 278 last year. This expansion supports the bank’s operational growth and its ability to serve a larger customer base. The bank continues to invest in its products and services, aiming to strengthen its market position in both the UK and US.
There is speculation that OakNorth is considering a stock market listing. Although no official announcement has been made, such a move could provide additional capital to support further expansion. Rishi Khosla, CEO and co-founder of OakNorth, previously commented on the potential benefits of public listings for financial institutions, stating:
“It would be super if more of these businesses were to go public and perform well.”
Despite economic challenges, OakNorth remains optimistic about the future. Khosla emphasized the bank’s commitment to growth, stating:
“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.”
OakNorth’s expansion in the US marks an important step in its strategy to grow beyond its home market. The bank’s ability to generate continued profit growth despite economic pressures highlights its resilience. As it looks for new opportunities, its lending model will remain a key factor in determining its long-term performance. If the bank decides to proceed with a stock market float, it could further solidify its position in the financial sector.
