Aldermore Share Discussion Threads

[steptoes yard] 17/11/2016 14:12

Markets climb the wall of worry you are referring to CC. I think this rests on whether this can attract a multiple of 12x rather than 9x earnings over the next year. This is possible as ALDs capital base improves, the negative headwinds are always there. I still like these.

[cc2014] 17/11/2016 12:37

I think the next 18 months should be plain sailing and the challenger banks are going to continue to grow at a pace that will see the share price back nearer 300.

I can see anything that's holding this back except for the continued scaremongering that's bound to continue

[mazarin] 14/11/2016 16:00

I see today the share price has just about clawed back and is nearing its 'open market' admission of price of £2.08 set on 10/03/15. What a journey, I wonder what will the next 18 months bring?

[steptoes yard] 10/11/2016 09:34

Good points...which suggests a trend. I cannot see a trend that's my problem

[future financier] 10/11/2016 09:25

Steptoe - Because the loan book is still growing at an annual rate of 20% and they are maintaining their Net Interest Margin. Just that they appear to have a high "churn" rate in their book of business - and that is rarely healthy. Now - it may be down to the mix of business being written - but that level of detail is only included in annual results.

[steptoes yard] 10/11/2016 09:08

FF,
If they are losing loans at a rate of 30% how have you determined that there is growth that will translate into profits and dividends please?

[future financier] 10/11/2016 09:01

Agree superficially nice update - but ALD seem to be losing loans rather quickly - net new lending in period of £2.3Bn - but net loans up by just £1Bn. So £1.3Bn of redemptions in 9 months on a book of £6Bn implies they are losing loans at an annualised rate of 30%. They are going to have to keep running very hard to stand still.

That said there is no denying the growth and I look forward to that being translated into profits. And Dividends!

[hutch_pod] 10/11/2016 08:54

FF, ahh sorry i see what you are saying, as deposits don't count as part of their Tier 1 or Tier 2 capital base, but the notes do (as Tier 2).

[steptoes yard] 10/11/2016 08:54

Tremendous update given what has been banded about by many since summer 2015. Still a good spec at less than 9 years earnings

[che7win] 10/11/2016 08:29

Good update

[future financier] 10/11/2016 08:18

No it is for the reasons set out in my post 1056 - they have to reinforce their regulatory capital base in order to be ALLOWED to lend more (so that depositors funds are not put at risk in the event of borrower default). They still have to attract the deposits from punters with dosh in order to have the money to lend out. No smoke and mirrors, no magic - just very simple common sense!

[hutch_pod] 09/11/2016 22:41

Presumably because they can't just borrow more - customers have to deposit it. Although you might think they could lift the rate a little bit to attract more..

[isaready] 26/10/2016 20:57

They simply type some numbers in a spreadsheet and enter 60million, then the next cell, they type 600 million and that's it. its as simple as that, they create money out of thin air. Can I?

[che7win] 26/10/2016 16:26

Thanks Future Financier, Now I understand!

[future financier] 26/10/2016 14:26

che7win - the short answer is that they need this money to reinforce their capital base in order for them to be able to continue growing without running too close to (regulatory) capital margins. This new (Tier 2) capital will enable ALD to expand its balance sheet by c. £600m.
So ALD can lend to its borrower customers £600m @ say average 4% (annual interest cost £24 million), and this would be funded by £540 million of customer deposits @ 1% cost (£5.4 million) and £60m new notes at 8.5% (£5.1 million) to leave a profit (before admin etc.) of £13.5 million.

[che7win] 26/10/2016 12:33

Can someone more knowledgable than me explain why ALD is raising £60m at 8.5% interest and how they can make a profit out of that?Thanks in anticipation.

[netflix2015] 18/10/2016 12:16

You're the plank for taking me seriously! I knew some of you were out there! I'm long from £1.19 and going nowhere until £2+!!

[igoe104] 18/10/2016 11:19

Another plank, to add to my filter list.

[netflix2015] 17/10/2016 14:37

Uptrend BROKEN, £1 coming!

[tini5] 14/10/2016 12:03

Originally bought 3405 @ 149
Sold 1405 @ 131 (panicked)
Sold 2000 @ 173

Makes my average sell at 155 I think.

So, made about £200 which isn't a huge amount granted but a profit's a profit. If I'd held my ground though and not sold that first tranche I'd cleared around £800. Hindsight is marvelous...

Have no spare cash at the moment and now sat on the sideline wringing my hands together and shuffling my feet lol. Everything else is sat on a paper loss but too good a prospect to take the hit (aren't they always?) and move back into ALD.

Seriously considering £5/10k on the credit card over 30 days and then 0% fee/transfer balance to a new credit card to get myself back in.

[netflix2015] 14/10/2016 11:26

Where did you sell out? I thought you sold out at around £1.70?

tini5
14 Oct '16 - 10:55 - 1048 of 1048
At this rate I'll be able to buy back in where I stepped out...

[tini5] 14/10/2016 10:55

At this rate I'll be able to buy back in where I stepped out...

[netflix2015] 14/10/2016 10:47

It should be, maybe a little more of a fall, but then we should be on our way to £2+ this time around, but the markets maybe a factor, even though they were not on the way down!