6th May 2015 07:51
LONDON (Alliance News) - OneSavings Bank PLC Wednesday said its forecasts for net interest margin are now higher, while its cost-to-income ratio is also expected to improve.
Net loans and advanced grew by GBP455 million during the three months ended March 31, helped by the acquisition of a GBP251 million portfolio of UK-based second charge mortgages, meaning the lender expects loan growth for 2015 as a whole to be in line with that reported in the prior year.
It said its current net interest margin, a key driver of profit, has improved due to an "absence of competitive price pressure year-to-date" in its main markets and the benefit of the acquisition of the GBP251 million mortgage portfolio. Those factors have improved current and forecast net interest margin "marginally ahead of expectations and prior year".
OneSavings Bank expects its cost to income ratio to be "slightly improved" in 2015 against the prior year, as planned infrastructure investment in the second half will be more than offset by the acquisition of the mortgage portfolio and stable asset yields in the year to date.
Chief Executive Andy Golding said the bank has seen an "encouraging" increase in new business opportunities at "attractive" margins.
"Whilst we have seen increased competition in certain niche areas, the housing market remains supportive of buy-to-let mortgages. Despite the uncertain political backdrop, we continue to see strengthening levels of new business enquiries in our main markets and are not currently experiencing pressure on margins," Golding said in a statement.
"We continue to see attractive opportunities for organic growth and will balance opportunities to maximise risk adjusted shareholder returns," Golding added.
OneSavings Bank shares were up 4.3% at 303.38 pence on Wednesday morning.
By Samuel Agini; [email protected]; @samuelagini
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