Aldermore is consulting on plans to significantly scale back its invoice finance division, putting an unspecified number of jobs at risk in the process.
The Reading-headquartered lender is looking to slash the number of customers it serves in the invoice finance market, according to sources familiar with the matter.
The firm is considering axing clients below a minimum £1m financing line, a move that would cut its customer base from roughly 500 to around 100.
A source said the bank was also not planning to renew its remaining client base, effectively engineering a “slow market exit” from the sector.
Businesses use invoice financing as a means to borrow money using unpaid customer invoices as collateral, making it a vital tool for many smaller firms managing cash flow.
An offshoring campaign is also being considered within the division as the bank looks to maximise revenue during the wind-down period.
A source close to the firm confirmed that some roles within the invoice finance business line may be at risk of redundancy as part of the consultation, though the exact number of affected positions remains unknown.
Invoice finance fees generated £3.2m in Aldermore’s last financial year, broadly flat compared with £3.3m the year prior, suggesting the division has offered limited growth.
Aldermore booked a £51.2m profit for the year ending June 2026, down 74 per cent from the previous period, after setting aside £187.7m for a potential motor finance redress scheme.
The City regulator indicated it would force firms to pay compensation over the use of so-called secret commission deals struck between car brokers and lenders without customers’ knowledge.
Those controversies surrounding the car mis-selling saga prompted Aldermore’s parent company, South African lender Firstrand, to put the firm up for sale earlier this year.
Firstrand described the City watchdog’s car finance redress scheme, which could cost the industry just over £9bn, as “disproportionate and unfair” as it laid out its plans to exit the UK market.
The sale has attracted significant interest from major financial institutions, with Nationwide and Investec both weighing bids alongside Lloyds and private equity firm Warburg Pincus.
A source close to the firm insisted the invoice finance consultation was part of a standard model review and did not relate to any potential sale of the business.
A spokesperson for Aldermore said: “We’re carrying out a strategic review to ensure our products continue to meet our customers’ needs and align with our long-term strategic priorities.”
The spokesperson added: “The review is in progress and will be completed imminently. We’ll work closely with impacted colleagues, customers, and intermediaries to guide them through this process.”