UK lender OakNorth faces up to its first downturn

Rishi Khosla, co-founder and chief executive of OakNorth, is clearly someone who fights hard to get things the way he wants them. If he is interrupted mid-flow, he will politely but firmly insist to Euromoney on finishing precisely what he wants to say.

He enjoys an energetic lifestyle: weekend days at his rural bolthole apparently begin at the crack of dawn, with him leading his family on a jog across the countryside.

For staff at OakNorth, too, this is no time to rest. Up to now, the bank has outshone the other UK neobanks that were founded in the mid 2010s.

It is the only one known for building up the asset side of the business – in its case, offering loans to small and medium-sized enterprises of between about a £1 million and £40 million. This was a more obvious strategy when rates were low but now, with higher rates, gathering low-cost retail deposits is much more profitable than it was before, while borrowers’ repayment capacity in areas such as unsecured consumer credit and SMEs is weakening.

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