Social lender Charity Bank doubled the value of loan applications and almost tripled its commitments to lend in 2014, but it filed an operating loss of over £1m, according to annual results announced today.
The annual results for the year to December 2014 also showed that the bank's loan book remained static at around £55m. This figure has since increased to £61m at the end of April. The bank said it is still on target to increase its loan book to £250m by the end of 2018.
Charity Bank generated 155 loan applications worth £70m in 2014, compared to £32m in 2013, and made commitments to lend worth £33m, compared to £12m the previous year.
But it made an operating loss of £1.07m, compared to a loss in 2013 of £804,000. The bank hopes to break even in 2017.
The bank is targeting a period of rapid growth and is planning to start making larger loans, following an investment of £4.5m last year from social investment wholesaler Big Society Capital (BSC).
Since then it has attracted another £1m from the Mercers’ Charitable Foundation and expects to receive another £10m of investment from BSC by the end of 2016.
It has moved to larger offices and is growing staff numbers, its chief executive Patrick Crawford (pictured) has said. Staff numbers increased by five last year to 53 people, but Crawford said more people are still being recruited.
The bank had previously gone through a period of stagnation in 2012 and 2013 while it attempted to change its legal status from being a registered charity, after finding that charity law was incompatible with stricter banking rules laid down by the Financial Conduct Authority following the credit crunch.
Crawford said growing the bank’s loan book was likely to be a “long, drawn-out activity”, and was taking longer than expected as the bank offered larger loans.
“It’s taken longer than anticipated but we’re still more or less on target,” he said. “The momentum is beginning to grow, and our pipeline is beginning to produce results.”
He said he was not concerned by several years of operating losses.
“All businesses which invest to grow incur costs before the income begins to flow,” he said. “We’ve increased staff numbers in anticipation of growth. We expect the results to come.”
