rtmark
LearnBonds.com

OakNorth suffers first defaults, ends start-up’s four-year 100 per cent loan record

OakNorth has suffered its first two defaults, ending a remarkable four-year run in which the digital business bank saw no loans go bad.

The start-up admitted that two property loans have fallen into default, but added that the event has not yet led to credit losses.

The bank, said the loans represent less that one per cent of the £4bn it has lent to small businesses since it was founded in September 2015 by Rishi Khosla (pictured).

The loss is notable, because OakNorth is one of the few fintechs to make a profit, despite the billions investors have pour into these firms, betting they will disrupt long-established banking and financial leaders.

 

Underwriting standards

The London-based digital bank has boasted that its tight underwriting standards and credit monitoring technology, helped it post a pre-tax profit of £33.9m in 2018, up from £10.6m the previous 12 year.

A spokeswoman for the bank said “the fact that we’ve only had two defaults and no losses, is pretty phenomenal”.

OakNorth said it was also seeking large lenders to help manage larger loans of around £60m as its business grows. It currently works with property investor Cogress, splitting the risk on larger loans.

The digital bank said it is currently looking for partners on “five to six loans where we have large exposure”.

 

Reducing exposure

However, the spokeswoman for the digital bank added “there is no connection between the two defaults and us wanting to partner with institutions to reduce exposure”.

In February, OakNorth landed a $440m of investment led by WeWork investor SoftBank, as the start-up prepares to drive into the US market. Other OakNorth backers of the business include UK investment firm Toscafund and Singapore’s sovereign wealth fund GIC.

That investment valued the digital bank at around $2.8bn, making it almost a triple ‘unicorn’ business, which refers to any privately-held firm valued at over $1bn.

Trusted & Regulated Stock & CFD Brokers

Rating

What we like

  • 0% Fees on Stocks
  • 5000+ Stocks, ETFs and other Markets
  • Accepts Paypal Deposits

Min Deposit

$200

Charge per Trade

Zero Commission

Rating

64 traders signed up today

Visit Now

75% of investors lose money when trading CFDs.

Available Assets

  • Total Number of Stocks & Shares5000+
  • US Stocks
  • German Stocks
  • UK Stocks
  • European
  • ETF Stocks
  • IPO
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 Zero Commission
  • NASDAQ Zero Commission
  • DAX Zero Commission
  • Facebook Zero Commission
  • Alphabet Zero Commission
  • Tesla Zero Commission
  • Apple Zero Commission
  • Microsoft Zero Commission

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
  • Paypall
  • Skrill
  • Neteller

Rating

What we like

  • Sign up today and get $5 free
  • Fractals Available
  • Paypal Available

Min Deposit

$0

Charge per Trade

$1 to $9 PCM

Rating

Visit Now

Investing in financial markets carries risk, you have the potential to lose your total investment.

Available Assets

  • Total Number of Shares999
  • US Stocks
  • German Stocks
  • UK Stocks
  • European Stocks
  • EFTs
  • IPOs
  • Funds
  • Bonds
  • Options
  • Futures
  • CFDs
  • Crypto

Charge per Trade

  • FTSE 100 $1 - $9 per month
  • NASDAQ $1 - $9 per month
  • DAX $1 - $9 per month
  • Facebook $1 - $9 per month
  • Alphabet $1 - $9 per month
  • Telsa $1 - $9 per month
  • Apple $1 - $9 per month
  • Microsoft $1 - $9 per month

Deposit Method

  • Wire Transfer
  • Credit Cards
  • Bank Account
Users should remember that all trading carries risks and users should only invest in regulated firms. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Roger Baird

Roger Baird is News Editor at Finixio. He has worked as a financial journalist for 20 years reporting on companies, capital markets and the UK economy.