The digital bank benefited from higher interest rates over the past year, which increased the cost of borrowing from lenders
Tandem Bank has reported a surge in earnings, attributing the growth to customers switching to the eco-conscious digital bank in pursuit of greener lifestyles.
The bank, which was established ten years ago and offers savings and loan products, saw an increase in its customer base and savings balances last year. It also managed to reduce its annual losses to £7.7million, down from a pre-tax loss of £12.4million the previous year.
However, on an underlying basis, it recorded an operating profit of £17.2million in the most recent year, a significant increase from £3.6million the year before. Companies often favour underlying profits as a measure because they exclude the impact of one-off costs, such as technology or upgrades following a company acquisition.
Like other high street and digital banks, Tandem benefited from higher interest rates over the past year, which increased the cost of borrowing from lenders. Its net interest income the difference between the interest it earns from loans and pays out to savers soared by more than a quarter compared to 2022, reaching £87.8million.
The value of savings deposited with the bank also more than doubled year on year to £3.6billion, with the number of customers exceeding 300,000. Tandem attributed part of this growth to its ambition to become “the UK’s greener, digital bank”, which it said was “attracting more green-savvy consumers to the bank”.
Alex Mollart, the chief executive of Tandem, expressed enthusiasm about customer engagement, saying: “It’s great to see so many customers buying into our mission to help the transition to a lower carbon lifestyle and save money along the way. We’ve seen big increases in customers trusting their hard-earned savings with Tandem, while helping to fund the green lending we offer to customers looking to switch to a greener lifestyle.”
Tandem has positioned itself as an eco-conscious choice for consumers, promoting its loan products as tools for reducing one’s carbon footprint. The bank offers incentives such as a mortgage with a lower interest rate for homeowners with more energy-efficient properties and loans tailored for greener home improvements.
Additionally, Tandem is catering to the eco-friendly car market by providing finance options for lower-emission vehicles. The bank proudly announced that its total lending balance surged by 14% to £1.37 billion, with environmentally-focused lending accounting for £523million of this figure.
