17th Mar 2016 07:46
LONDON (Alliance News) - Lender OneSavings Bank PLC on Thursday said pretax profit shot higher in 2015 as lending grew and its cost-income ratio improved further.
The FTSE 250-listed company, one of the slew of so-called 'challenger banks' seeking to carve out a space in the UK banking sector, said pretax profit for the year to the end of December grew to GBP105.3 million from GBP63.7 million a year earlier. This was helped by costs associated with its listing in London in June 2014 not repeating.
Loans and advances for the group grew 31% in the year to GBP5.1 billion from GBP3.9 billion in 2014, driven by robust organic loan origination activity and the acquisition of a second-charge mortgage portfolio.
The cost-to-income ratio also improved, down to 26% from 28% thanks to strong income growth and a focus on cost controls in the business.
OneSavings said it will pay a final dividend of 6.7 pence per share, taking its total payout for the year to 8.7p, in line with its target dividend policy.
"I am delighted to report another year of very strong performance in 2015, delivering on all our financial objectives. We have continued to grow the loan book through our specialist lending brands and improved both our net interest margin and cost to income ratio," said Chief Executive Andy Golding.
Golding said OneSavings will remain "cognisant" of the political and regulatory challenges facing the buy-to-let sector, which has been hit by extra stamp duty charges. For 2016, Golding said the bank has amended its lending criteria to sharpen its focus on professional landlords which the bank believes will continue to develop their buy-to-let portfolio in spite of the challenges.
"This is in line with our expectation that the private rented sector will continue to be a vital component of the UK housing market. We have entered 2016 with our strongest ever pipeline, and application and completion volumes are showing sustained growth. We look forward with confidence," Golding added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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