26th Aug 2015 06:44
LONDON (Alliance News) - OneSavings Bank PLC on Wednesday reported an 88% surge in profit in the first half, driven up by higher-margin new lending and lower costs of funding.
The specialist lender, which offers residential, buy-to-let and commercial mortgages, secured loans and development finance, said pretax profit increased to GBP46.6 million in the six months ended June 30, compared with GBP24.8 million in the corresponding half the prior year.
OneSavings, which listed on the London Stock Exchange in June 2014, said it will pay a 2.0 pence per share interim dividend.
Net interest income increased 43% to GBP79.5 million from GBP55.7 million, as net interest margin improved to 305 basis points from 282bp, driven by high-margin loan origination and portfolio purchases that diluted lower yielding assets, the roll-off of its higher yielding personal loan portfolio, and a continued reduction in the cost of funding.
Impairment loss increased to GBP4.9 million from GBP4.7 million.
Regulatory provisions, which are primarily made for the UK Financial Services Compensation Scheme, rose to GBP3.4 million from GBP2.7 million, largely due to growth in the bank's share of protected deposits in the UK.
"We enjoyed strong growth in our core markets in the first half, ending the period with a record pipeline. On-going application volumes have continued to grow in the third quarter to date and we expect loan book growth for the full year marginally ahead of the 29% growth experienced in 2014," Chief Executive Andy Golding said in a statement.
Golding said that demand for the bank's main products has enabled it to maintain or increase pricing where necessary to help manage volumes. While some pricing pressure is expected as a result of competition, the bank said it hasn't experienced any in its core markets.
"Having made a portfolio purchase in the first half of the year, we continue to focus on organic origination as our core growth strategy. However, we will continue to actively consider inorganic opportunities as they arise where they meet our strict financial and strategic objectives," Golding said.
By Samuel Agini; [email protected]; @samuelagini
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