OneSavings mulls more deals after ‘stunning’ results

OneSavings Bank joined the London market in 2014. Picture: Sang Tan/AP
OneSavings Bank joined the London market in 2014. Picture: Sang Tan/AP
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Specialist lending and retail savings group OneSavings Bank (OSB) has reported what one analyst described as a “stunning” performance in the first half, with pre-tax profits more than doubling from the year-ago period amid growth in its loan book.

The firm, which says its balance sheet exceeds £3 billion, said pre-tax profit jumped 115 per cent year on year to reach £100 million as gross new organic lending jumped to £973m from £778m.

Underlying pre-tax profit grew by 36 per cent to £64.6m, ahead the consensus expectation of £60.3m

Group chief executive Andy Golding described the figures overall as “another strong set of results” and added that the business has achieved all its financial objectives since its IPO. The firm was admitted to the main market of the London Stock Exchange in June 2014.

READ MORE: OneSavings Bank float values lender at £413m

It also achieved growth of 5 per cent in net loans and advances to £5.4bn, and Golding said: “We have continued to grow the loan book through our specialist lending brands, with 25 per cent growth in organic origination in the first half, supported by accretive portfolio acquisitions.”

In terms of deals, OSB in February and March announced separate acquisitions of UK mortgage portfolios.

Golding said the lender is “taking a more cautious approach when assessing portfolio purchases”.

He continued: “However, we do see potential upside opportunities, supported by our strong capital position, for further accretive loan pool acquisitions, driven by reduced competition in this area, subject to us establishing the correct risk versus reward pricing for any such purchase.”

Looking at Brexit, he said it is too early to forecast its medium- to long-term effect on the UK economy, “but we will continue to concentrate on what we have proven we do best; using our broker relationships, manual underwriting expertise and secured lending strategy to lend responsibly to customers in underserved markets.”

In terms of overall outlook, he added that “the strength of our balance sheet, together with the high quality of our secured asset portfolio, positions us well in the current uncertain economic climate”.

Analysts praised the interim figures, with Ian Gordon at Investec highlighting what his team saw as a “stunning performance” and summing up the figures as “supercalifragilisticexpialidocious”. He said: “Moreover, we think that OSB’s outlook remains much more robust than the market expects.”

OSB closed the session’s trading up 16.9 per cent at 277.3p.

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