Sancus Lending to review Channel Islands business amid £3.4m H1 loss
Sancus Lending Group is expected to report an operating loss before tax of £3.4bn for the first half of the year, citing the geopolitical and macroeconomic environment.
This would be a deepening of its loss of £900,000 in the first half of last year.
Although the group said its business had been impacted, it reported progress in its core markets.
This included an increase in assets under management, which stood at £339m, up from £307m in December, and £258.8m during the same period last year.
Further, Sancus Lending saw its revenue grow 36% year-on-year to £13.1m.
It said its revenue growth was supported by the origination of new loans, which fell from £84.4m to £81.2m year-on-year, and a 20.6% increase in new facilities across the UK and Ireland, which rose from £59.7m to £72.1m.
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A review of Channel Islands activity
However, Sancus Lending reported that new facilities in the Channel Islands joint venture fell from £24.6m in 2025 to £9.1m this year due to “challenging” market conditions.
Sancus Lending said it would concentrate its resources on higher-growth business in the UK and Ireland and was now undergoing a “formal review of strategic options” regarding the Channel Islands.
This includes its joint venture with Hawk Lending, which was established in December 2023, and Sancus Lending Jersey, which closed to new business at the same time and remains in run-off.
As of 30 June this year, the group’s share in the Hawk joint venture held a value of £14.7m. Sancus Lending said it was prepared to recognise a non-cash accounting charge to lower the value of its investment by around £14m.
Costs and charges also dent profitability
A rise in Sancus Lending’s operating expenses, impairment charge and loan financing costs also negatively impacted its performance in H1.
The group’s planned investments in growing its human capital and higher management costs in the Channel Islands resulted in its operating expenses rising from £3m to £3.8m.
Further, it had an impairment charge of £700,000, compared to a writeback of £200,000 last year. The charge related to legacy loans, but the group assured that the underlying credit quality of its portfolio remained stable.
It also reported a temporary £800,000 rise in loan financing costs, which it said would “substantially reverse over time”.
On 28 August, Sancus Lending entered into a liquidity facility with Somerston Fintech, which it said would provide it with additional capital that could be used for general corporate purposes.
This year, Andrew Charnley replaced Rory Mepham as CEO of Sancus Lending. Mepham is currently director of Somerston Capital, a subsidiary of Somerston Group, the majority shareholder of Sancus Lending.
