The specialist lending and retail savings group OneSavings Bank plc (OSB) has released its interim results for the six months up until 30th June 2014, revealing a major increase to its underlying
The specialist lending and retail savings group OneSavings Bank plc (OSB) has released its interim results for the six months up until 30th June 2014, revealing a major increase to its underlying profit…
OSB revealed that its underlying profit before taxation has increased fourfold up to a staggering £29.7 million, up from £7.3 million in 2013.
It was also revealed that loans and advances grew by 13 per cent in the first half of 2014 to £3.4 billion, from £3.04 billion in 2013.
The report showed that total assets also grew by 12 per cent, in line with the increase in loans and advances, to £4.2 billion from £3.8 billion in 2013.
Results stated that arrears on new lending since the creation of the Bank on the 1st February 2011 remain at negligible levels, due to the strength of its bespoke underwriting and lending criteria. It also reported that its newest business, Heritable Development Finance, is performing in line with expectations, where it is growing with high quality residential development lending.
During the first half of 2014, the Group increased its volume of organically-originated residential lending by 26 per cent to £130 million, from the first half of 2013 where new lending hit £103 million. This included growth in first charge residential lending in the UK, particularly distributed in London and the South East, through the Kent Reliance brand for first charge, and through the Prestige brand for second charge lending.
Other business highlights included:
- Strong income growth and continued focus on reduction in cost, where the income ratio is now down to 29 per cent, from 47 per cent in 2013.
- Net Promoter Score remains high at 33.5 per cent
- Continued strong loan to deposit ratio of 94 per cent, up 1 per cent from last year, with growth in loans and advances funded by retail deposits
- Strong growth in total new lending up 78 per cent to £649 million
- Successfully completed IPO at 170 pence per share in June 2014, resulting in the raising of £41.5 million of gross primary proceeds, generating £35.8 million of new CT1 capital to support growth in the business
Commenting on the results, Mike Fairey, Chairman of OneSavings Bank, said: “OneSavings Bank has made a strong start in its life as a listed company. The successful completion of the IPO in June this year is a great tribute to the hard work of the executive management team and staff across the business over the last three and a half years in creating a unique retail funded specialist lending business.
“I am delighted to have joined as Chairman to support OneSavings Bank’s future development and growth as a publicly listed company.”
Andy Golding, CEO of OneSavings Bank, added: “These results show the strength and opportunity in the business we have created. Our return on equity of 30 per cent is a number of which we are particularly proud and this has been delivered at a time when we have also delivered a significant growth in lending.
“Underpinned by our strong retail funding base, the profitable lending growth, significantly improved efficiency and continued low level of impairments have all combined to drive a significant uplift in our earnings and returns. We have demonstrated our ability to deliver on the commitments we have made to our new shareholders and thank our staff for all their support during what has been a very busy period.”
The report stated: “The Bank has not made any portfolio purchases so far in 2014. The Bank remains focused on organic origination as its core growth strategy; however, it will continue to actively consider inorganic opportunities as they arise.”
It was revealed that the second half of 2014 will see the Bank investing in the on-going development of the Group, which includes expansion of staff and further investment on infrastructure to support the Bank’s growth plans.
Keywords: One Savings Bank, OSB, profits, review, interim, results, underlying profit, MMR, arrears, Heritable Development Finance, underwiting, lending