Specialist lender OneSavings Bank (OSB) rockets 14.6% higher to 291.4p as it posts envious figures for 2015.

While the UK’s larger lenders’ performance was disappointing in 2015, £708 million cap OneSavings reports higher returns, margins and capital buffers as well as lower costs.

Incoming higher stamp duty charges on buy-to-let properties may have hit confidence, but OneSavings’ reports its 'strong ever pipeline' of demand for funding from professional landlords.

This helps to reverse the decline in the Chatham-based bank’s share price since November. It had almost halved its value.

More than half of OneSavings’ loan book is in the professional buy-to-let market where landlords own several properties.

OneSavings' pre-tax profits increased 65% to £105 million in 2015 thanks to lending rising by almost a third (31%) to £5.1 billion.

This generated a slight return on equity gain to 32%, while costs falling to 26% of earnings from 28% 12 months earlier pushes lending margins to almost 3.1% from 2.9%.

Capital reserves reached 11.6% of risk-weighted assets from 11.4%, which should offer more protection against a potential spike in defaults linked to economic turbulence.

Web - OneSavings - 17 March 2016

Investec analyst Ian Gordon is unsurprised by the figures. ‘We see OneSavings as a reassuringly predictable story which delivers extraordinary returns on a consistent basis.

‘As such, it is something of a mystery to us as to why analysts/investors have been so fickle; the stock fell c.40% in four months ahead of today’s numbers.’


Issue Date: 17 Mar 2016