Hertfordshire-based digital business bank Redwood has announced its first profit, recording a pre-tax operating profit of £2.2m in the year to 31 December 2021, compared to a loss of £1.7m the year prior.
Founded in 2017, Redwood Bank is a neobank designed for SMEs. It offers business savings accounts and mortgage decisions for both commercial and residential property investors.
While digital banks have become a popular choice in the consumer market, Redwood serves a customer base that remains largely dominated by traditional high street banks.
Redwood, which self-describes as being “born on the cloud”, said the gap in the market for neobanks for business has allowed for quick profitability.
“Redwood Bank plugs a gap in the market where mainstream banks prefer not to lend,” said Redwood Bank co-founder and CEO Gary Wilkinson.
“As we truly understand the challenges of British businesses, responding to their concerns and supporting their need for flexibility and resilience in the face of a crisis.”
Redwood secured a lot of its business during the Covid-19 pandemic, as it continued offering its business loans during the lockdowns.
“We reached this milestone because we continued to offer vital lending support to British businesses during the various Covid-19 lockdowns when many other mainstream lenders retrenched,” Wilkinson said.
“We are proud to have played our part in bolstering the resilience of British business.”
The news of Redwood’s profit comes shortly after challenger bank Starling announced its first full-year profit, making £32.1m.
Challenger banks have still not become an industry with consistently reliable profits. However, several new editions to the in-profit club may be a sign of that the industry is maturing.
The first challenger bank to report a full-year profit was OakNorth, which was in profit in 2018, three years after first launching.
The post Hertfordshire SME digital bank Redwood reports first profit appeared first on UKTN | UK Tech News.