Allica Bank acquires £0.6b SME lending portfolio from AIB Group Plc

By Joy Dumasia

Allica Bank, the FinTech challenger bank, makes its first significant acquisition with an agreement to acquire c.2,000 SME customers and c.£0.6 billion of associated lending from AIB Group (UK) Plc following AIB’s exit from the SME market in Great Britain. The transaction will build on Allica Bank’s positive momentum since launching in March 2020 and accelerate the bank’s ambition to become the leading SME challenger bank for the decade ahead.

Since first opening its doors to SME lending in March 2020, Allica Bank has launched a new network of local SME relationship managers offering tailored SME lending expertise to fully support AIB’s SME customers. 2,000 SME borrowers will transfer to Allica Bank and benefit from the bank’s distinctive customer-focused proposition, built around tailored lending expertise supported by modern proprietary technology and genuine local relationship banking. 85% of Allica Bank’s existing lending is to businesses outside London.

The acquisition of AIB’s SME lending book in Great Britain will:

• Fuel the development and expansion of Allica Bank’s existing award-winning service and proposition, including more comprehensive lending products, with Allica Bank also poised to launch its innovative Business Rewards Account early next year.
• Bring forward Allica Bank’s target date for reaching profitability to the middle of 2022 upon full completion of the transaction, given Allica Bank’s continued organic growth combined with the quality of the AIB SME lending portfolio.
• After completing the transaction, Allica Bank is expected to have a combined total lending book of more than £1 billion.

Richard Davies, Allica Bank CEO, said: “We are thrilled to be welcoming AIB’s SME lending customers to Allica Bank, following AIB’s decision to withdraw from the GB SME lending market. We’re working closely with AIB to ensure a smooth and seamless transition for AIB customers, who we look forward to providing with a secure and sustainable home. We’re proud of the strong technology and tailored personal service we’re able to offer Allica Bank customers and are delighted to be able to extend this service to AIB’s customers. Allica Bank is fast becoming the SME lender of choice, not least due to the investment we continue to make in developing both our direct relationship with SMEs and via our broker channel. This acquisition enables us to support and scale even more of Britain’s established SMEs and growth companies at a time when SMEs are looking for more tailored support from their bank. As we said at our recent trading update, we’re laser-focused on growing our lending to multiple billions over the coming years as we seek to support the underserved and overlooked SMEs across the UK.”