Allica Bank Accelerates AI Integration as Profits and Lending Volumes Soar
Small business lending specialist Allica Bank has unveiled a substantial increase in its financial performance, with pre-tax profits climbing significantly over the past year. The neobank, which achieved unicorn status earlier this year, posted a pre-tax profit of £36.9 million, marking a robust 23 per cent rise from the £29.9 million recorded in 2024.
Loan Book Expansion and Lending Dominance
This profit surge coincided with a vigorous period of new lending activity, where Allica originated approximately £1.3 billion in fresh loans. This influx propelled the bank's total loan book to experience an uplift of over 23 per cent, growing from just above £3 billion in 2024. Within this portfolio, commercial mortgages constituted the majority, accounting for £2.4 billion and representing nearly two-thirds of the total book. Asset finance, on the other hand, made up around 13.6 per cent, equivalent to £507 million.
Strategic AI Adoption and Market Share Goals
Chief Executive Richard Davies expressed confidence in Allica's trajectory, stating the bank is "well on track" to capturing a 10 per cent market share by 2028. Currently, Allica serves more than 30,000 established small and medium-sized enterprises across the UK, which approximates to nearly five per cent of its overall target market. Davies emphasized that the bank's aggressive adoption of artificial intelligence is set to "turbo charge" its mission to expand market share.
The integration of AI tools among Allica's engineering team has seen a dramatic escalation, escalating from "limited usage" at the beginning of 2025 to an impressive 79 per cent daily usage by January 2026. Davies remarked, "We already see like really strong evidence this is going to be the most transformative technology since the internet for banking."
European Expansion Plans and Regulatory Insights
Looking beyond the UK, Allica is actively targeting expansion and investment into European markets, with plans to introduce its small business lending offerings to the region. Davies noted, "We're definitely deep into sort of how we will execute that, but sort of not quite in a place to yet publicly talk about that." He also highlighted the distinct regulatory landscapes between the UK and Europe, describing the differences as "very interesting" and noting variations in how regulators operate.
Advocacy for Fintech Sector Support
In the UK context, Davies, who previously held the role of group chief operating officer at Revolut, argued that more support is necessary to strengthen the fintech sector. He pointed to the Growth Guarantee Scheme (GGS), a government-backed initiative launched on 1 July 2024 designed to enhance finance access for smaller UK businesses. Allica has been actively lobbying for the expansion of this scheme.
Last year, the bank identified a substantial £65 billion gap in productive credit for UK small businesses and advocated for doubling the GGS, which currently provides 70 per cent guarantees to lenders on facilities up to £2 million. Davies characterized this potential expansion as a "no brainer lever" to pull, underscoring its importance for the sector's growth and stability.
