Intel Report Digital Banking - Flipbook - Page 18
OakNorth Bank
Another digital-only bank that is profitable is London-based OakNorth Bank.
The U.K. bank has no branches, had its first full year of profitability within two
years of its launch in 2015, and caters to what it calls the “missing middle,” growth
businesses in the small-to-medium sized range that often struggle to get financing
Ben Barbanel,
head of
debt finance,
OakNorth Bank
from banks.
The fact that OakNorth is efficient is an understatement. It had a 29% efficiency
ratio, known as a cost-to-income ratio in the United Kingdom, in the fourth quarter
of 2020, according to its 2020 annual report. Big banks in the U.K. typically have
cost-to-income ratios in the 60% range, says Ben Barbanel, head of debt finance for
OakNorth Bank.
He attributes that to a relentless focus on cost control. The focus dates back
to OakNorth’s earliest days. Barbanel remembers getting a call from his boss,
OakNorth co-founder Joel Perlman, in 2015. Perlman asked Barbanel to meet at
one of London’s swankiest hotels, Claridge’s. When Barbanel got to the hotel, he
asked the doorman for help, but the doorman had no idea who Perlman was, nor did
Source: OakNorth Bank
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