OSB Group PLC on Thursday reported strong profit growth in the first half as the bank benefited from a rising loan book and increasing interest margins.
Shares in the FTSE 250-listed bank were 3.4% higher in London on Thursday morning at 566.00 pence each.
In the first six months of 2022, pretax profit rose to £268.1 million from £221.9 million. Keeping a lid on profit growth, OSB booked a £1.6 million impairment on financial assets, reversing a £14.6 million gain in the year before.
The bank put its profit increase down to a rise in its loan book and a higher net interest margin.
‘I am delighted with the strong financial and operational performance of the group in the first half of 2022. We delivered a record underlying profit with consistent and class-leading returns for our shareholders,’ Chief Executive Andy Golding said.
‘Demand in our core lending segments remains robust and we have a record pipeline of applications. We have entered the final quarter of our three year integration programme having successfully delivered our pledged savings at lower cost than originally expected.’
Net interest income rose to £343.4 million from £265.3 million the year before. Its net interest margin improved to 2.80% from 2.36%.
OSB’s cost-to-income ratio was 25% in the first half, bettered from 28% the year before.
It declared an interim dividend of 8.7 pence, rising from 4.9p the year before.
Its loan book ended the half at £21.76 billion, rising from £21.08 billion at the same point a year prior. Its buy-to-let loan book rose to £9.10 billion from £8.87 billion, while its Residential book increased to £2.16 billion from £2.11 billion.
Retail deposits were up to £17.94 billion from £17.53 billion.
Its CET1 ratio slipped to 18.9% from 19.6%.
Golding added: ‘The group recognises the somewhat uncertain outlook for the UK economy and the impact of inflation and increasing cost of living on us all. We continue to monitor our lending book closely for any early signs of stress, however the credit performance of our portfolio to date remains strong.’
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