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Sancus Lending Reviews Channel Islands Amid £3.4m H1 Loss

Sancus Lending Group is set to report an operating loss before tax of £3.4m for the first half of 2026, citing the geopolitical and macroeconomic environment. The group has announced a formal review of its Channel Islands business following a significant drop in new facilities in the region.

Sancus Lending’s loss deepened from £900,000 in the first half of the previous year. Despite this, the group reported progress in its core markets, with assets under management rising to £339m, up from £307m in December and £258.8m during the same period last year. Revenue also grew 36% year-on-year to £13.1m, supported by the origination of new loans and a 20.6% increase in new facilities across the UK and Ireland, which rose from £59.7m to £72.1m.

However, new facilities in the Channel Islands joint venture fell from £24.6m in 2025 to £9.1m this year, which Sancus Lending attributed to “challenging” market conditions. The company stated it would focus resources on higher-growth business in the UK and Ireland and is now conducting a “formal review of strategic options” for its Channel Islands operations. This review includes its joint venture with Hawk Lending, 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 2026, the group’s share in the Hawk joint venture was valued at £14.7m, but Sancus Lending indicated it may recognise a non-cash accounting charge to reduce the value of its investment by around £14m.

The group’s performance was also affected by increased operating expenses, an impairment charge, and higher loan financing costs. Operating expenses rose from £3m to £3.8m, partly due to investments in human capital and higher management costs in the Channel Islands. An impairment charge of £700,000 was recorded, compared to a writeback of £200,000 last year, relating to legacy loans. Sancus Lending reported that the underlying credit quality of its portfolio remained stable. Loan financing costs temporarily increased by £800,000, which the group expects to “substantially reverse over time.”

On 28 August, Sancus Lending entered into a liquidity facility with Somerston Fintech to provide additional capital for general corporate purposes. This year, Andrew Charnley replaced Rory Mepham as CEO of Sancus Lending. Mepham is now director of Somerston Capital, a subsidiary of Somerston Group, the majority shareholder of Sancus Lending.