27th Aug 2020 10:25
(Alliance News) - OneSavings Bank PLC on Thursday reported loan book growth in its first-half, with lender also posting a near double-digit profit climb despite chunky impairment costs.
OneSavings was the best mid-cap performer in London on Thursday morning. Its shares were 16% higher at 303.30 pence each.
Net loans at June 30 stood at GBP18.8 billion, a 2% rise from GBP18.4 billion at the end of 2019.
"I am extremely proud of the way that OSB has performed during the Covid-19 pandemic. Our business model and systems have proved to be very resilient and our colleagues have all demonstrated dedication and flexibility, as they worked hard responding to the needs of our savers and borrowers," Chief Executive Officer Andy Golding said.
Gross new organic lending surged 29% annually to GBP2.1 billion from GBP1.6 billion. The buy-to-let loan book climbed 5% to GBP4.98 billion. This was despite "reduced activity" in the UK mortgage sector due to the Covid-19 lockdown for most of the second quarter.
Net interest income during the half climbed 55% year-on-year to GBP233.8 million from GBP150.5 million, helping push pretax profit up 9.7% to GBP99.3 million from GBP90.5 million.
Profit growth came despite impairments of financial assets climbing almost tenfold to GBP54.2 million from GBP5.9 million. Exceptional costs were reduced to GBP1.7 million, however, from GBP5.9 million a year earlier, when OneSavings booked a charge related to its merger with Charter Court.
"I am very pleased with our ability to generate profit despite taking significant impairment charges," Golding added.
The lender's Common equity tier 1 ratio climbed to 17.4% from 16.0% at the end of 2019.
Earnings were higher, but OneSavings still decided against an interim payout, following its decision to cancel its final 2019 payout due to Covid-19. It paid a first-half dividend of 4.3p a year ago.
"The board is not proposing to pay an interim dividend and will consider dividend payments at the year-end, taking into account the performance of the group and the macroeconomic conditions at that time," OneSavings said.
By Eric Cunha; [email protected]
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