UK's ‘green' digital bank makes first profit as challengers boom

Independent

23-04-2025

A green-focused digital bank has said a wave of consumers buying heat pumps and solar panels and switching to electric cars has helped it make its first yearly profit.
Tandem Bank, which launched in 2014, is among the UK challenger banks to see earnings rocket over the past year.
The Blackpool-based group said it wants to make it easier for people to live a 'greener lifestyle' at a time when costs are rising and environmental rules are becoming more complex.
It reported an annual pre-tax profit of £4.4 million in 2024, having previously been operating at a loss.
On an underlying basis, which strips out what it views as one-off costs, profits surged 40% to £24.1 million compared with the previous year.
'Green' lending rose 9% year-on-year to total £572 million, representing more than a third of its total loans, Tandem revealed.
This incorporates all the bank's lending products targeted at borrowers who are transitioning to a lower-carbon lifestyle, such as installing heat pumps, solar panels and energy-efficient windows or boilers in their homes.
It also offers a mortgage with an interest rate discount to people whose homes are more energy efficient.
New motor finance lending hit £160 million, with 80% of cars financed meeting emission standards for cities across the UK, Tandem said.
Alex Mollart, Tandem's chief executive, said the bank's 'mission is to make it easier for people to choose a greener lifestyle', particularly as 'products and services get more expensive, environmental rules and regulations get more complex, and banks offer increasingly limited services on old tech'.
The latest results from Tandem reflect a wave of growing challenger banks that have muscled into the market with new products, technology and customer service that appeals to digitally savvy consumers and businesses.
Zopa Bank, in newly released annual accounts, reported its second full year of profitability.
The digital bank, which was founded in 2020, revealed its pre-tax profit doubled to £34.2 million in 2024, from £16.8 million the previous year.
It now has about 1.4 million customers and saw savings and lending grow during the year, with the group offering products including loans, credit cards and car finance.
Zopa last year partnered with John Lewis to offer loans of up to £35,000 for spending like home upgrades, a new car, holidays, or big events such as a wedding.
Meanwhile, Allica Bank, which has been dubbed one of Britain's fastest-growing fintechs, revealed earlier this month that it had almost doubled its yearly profit.
The bank, which focuses on lending to established small and medium businesses, reported a pre-tax profit of about £30 million for 2024.
Allica's chief executive Richard Davies said the pace of growth was 'testament to the frustration that our customers feel with the status quo'.