Tandem Bank grows savings as ‘green-savvy’ consumers switch to bank

Tandem Bank has reported stronger earnings as it said customers were switching to the green-focused digital bank as they strive for a more eco-friendly lifestyle.

Tandem, which launched a decade ago and offers savings and loan products, grew its customers and savings balances last year.

It also narrowed its annual losses to £7.7 million, from a pre-tax loss of £12.4 million the prior year.

But on an underlying basis, it achieved an operating profit of £17.2 million in the latest year, up from £3.6 million a year earlier.

Underlying profits are a measure that companies often prefer because they strip out the impact of one-off costs, such as for technology or upgrades after buying another firm.

Tandem, like other high street and digital banks, benefited from higher interest rates over the latest year which pushed up the cost of borrowing from lenders.

Its net interest income – meaning the difference between the interest it generates from loans and pays out to savers – surged by more than a quarter versus 2022 to £87.8 million.

It also saw the value of savings deposited with the bank more than double year on year to £3.6 billion, with the number of customers surpassing 300,000.

Tandem said this growth had partly come from its plan to become “the UK’s greener, digital bank”, which it said was “attracting more green-savvy consumers to the bank”.

Alex Mollart, Tandem’s chief executive, said: “It’s great to see so many customers buying into our mission to help the transition to a lower carbon lifestyle – and save money along the way.

“We’ve seen big increases in customers trusting their hard-earned savings with Tandem, while helping to fund the green lending we offer to customers looking to switch to a greener lifestyle.”

Tandem says its loan products can help people reduce their carbon footprint.

It offers a mortgage with a lower interest rate for customers who’s homes are more energy efficient, as well as loans for greener home improvements.

It also targets car finance to people buying lower-emission vehicles.

The bank said its total lending balance grew by 14% to £1.37 billion.

Lending focused on more environmentally-friendly projects made up £523 million of the total amount.