Shawbrook Group plc delivered a solid start to 2026, reporting loan book growth of 2.6% to £19.7 billion in the three months ended 31 March, up from £19.2 billion at the end of December 2025, as the Essex-based specialist digital bank maintained its growth trajectory heading into the year’s heavier lending months.
Customer deposits grew 1.8% over the same period to £18.7 billion from £18.4 billion, with the cost of deposits falling to 3.71% from 3.88% for the full 2025 financial year, reflecting the benefit of a more favourable interest rate environment and disciplined funding management.
Asset quality remained robust despite a slight uptick in late-stage arrears, with loans more than three months past due at 1.7% versus 1.6% at the end of 2025, a move management described as within expectations and consistent with seasonal patterns in specialist mortgage and SME lending.
Capital strength improved during the quarter, with the common equity tier 1 ratio rising to 12.6% from 12.4% and the total capital ratio ticking up to 14.9% from 14.8%, providing a comfortable buffer above regulatory minimums ahead of the Basel 3.1 implementation timeline.
In April, Shawbrook completed the issuance of £250 million of additional tier 1 securities alongside a tender offer for its existing £124 million of AT1 paper, a transaction that management said would increase the pro-forma CET1 ratio to 13.3%, placing it ahead of the full-year guidance range already and reinforcing the bank’s access to wholesale capital markets.
Chief Executive Marcelino Castrillo described the quarter as delivering “tangible progress” against the strategic priorities outlined at the 2025 full-year results, noting that growth was driven by continued selective originations across specialist segments and the ongoing execution of the group’s originate-to-distribute strategy, with OTD balances rising to £1.8 billion at the end of March.
For the full year 2026, Shawbrook guided to a loan book of approximately £21 billion including OTD balances, a cost-to-income ratio below 38%, a CET1 ratio above 13.2% pre-Basel 3.1, and an underlying return on tangible equity of approximately 17%, all of which represent meaningful step-ups from the prior year and reflect the board’s confidence in the group’s specialist market positioning.
Medium-term targets were reiterated without change, including low double-digit compound annual loan book growth from the 2024 base, a mid-30s cost-to-income ratio, mid-to-high-teens underlying pretax profit growth, a high-teens underlying return on tangible equity, and a CET1 ratio of 12% to 13%.
A maiden ordinary dividend in respect of FY26 results was also reiterated as part of the medium-term capital return framework, giving income investors a concrete milestone to monitor as the bank continues to scale.
Castrillo highlighted the group’s total addressable market of approximately £300 billion as underpinning the confidence behind those targets, arguing that Shawbrook’s specialist underwriting model and disciplined credit culture are well positioned to capture a growing share of that opportunity while remaining alert to macroeconomic headwinds.
