Shares in challenger bank Aldermore surge on London debut

By Matt Scuffham and Freya Berry

LONDON (Reuters) - British banking newcomer Aldermore (ALD.L) made a rousing stock market debut on Tuesday, rising by 12 percent following a sale that netted 150 million pounds for its private equity backers AnaCap.

Aldermore, founded by former Barclays executive Phillip Monks in 2009 with backing from AnaCap, raised 75 million pounds from the sale of new shares. It said it would use the proceeds to fund growth.

Shares in the company had risen to 215.25 pence by 8.51 a.m., from the initial public offering (IPO) price of 192 pence.

The bank has established itself as one of the more credible challengers to Britain's "Big Five" - Lloyds (LLOY.L), HSBC (HSBA.L), Royal Bank of Scotland (RBS.L), Barclays (BARC.L) and Santander UK (SAN.MC) - to emerge since the financial crisis.

It has been looking to take customers from established rivals which are slimming down.

The sale of shares offered investors exposure to Britain's economic recovery through a bank untainted by the investigations into past misconduct that have hampered some of its larger rivals. About 35 percent of the company was sold in the IPO.

"The success of our IPO is testament to the strength of our story as a legacy-free bank focused on providing banking services to SMEs (small-and-medium-sized enterprises) and homeowners," said Aldermore Chief Executive Philip Monks.

"It's a natural next stepping stone for us to go to markets which have deeper and broader pools of capital. The company will after a while outgrow private equity and we were getting towards that stage," he told Reuters.

Aldermore's net lending grew by 42 percent to 4.8 billion pounds last year and the bank said it expected it a similar rate of growth in 2015.

Sources said the IPO had attracted a mixture of "blue-chip" long-term investors from Britain and the United States, as well as hedge funds, and demand for the shares outstripped the amount for sale by five times.

The sale was priced towards the top of an initial price range which had been set between 175 pence and 195 pence per shares. It valued the business at 1.5 times the value of its assets, far ahead of the industry average of 0.87 times.

Credit Suisse (CSGN.VX) and Deutsche Bank (DBKGn.DE) led the listing, while RBC Capital Markets was joint bookrunner. Lazard was also an adviser.

(Editing by Pravin Char)