23rd Aug 2018 08:03
LONDON (Alliance News) - OneSavings Bank PLC boosted its interim dividend by 23% on Thursday as it reported a strong increase in interim profit.
Shares in the company opened 2.3% lower at 432.89 pence each.
OneSavings' pretax profit for the six months to June-end was GBP91.8 million, 17% higher year-on-year, and it is now to pay a 4.3 pence per share interim dividend from the 3.5p it paid for the same period a year earlier.
The lender's net loan book has grown 11% to GBP8.1 billion, fuelled by 17% growth in gross organic origination to GBP1.44 billion.
OneSavings' net interest margin is 301 basis points, from 324 basis points a year prior, while its loan to deposit ratio is now 90% from 93%.
The company's common equity tier 1 ration is "strong", at 13.3%, compared to 13.7% a year ago, while its return on equity is 26% from 28%.
OneSavings said it was "delighted" with the "excellent" progress it has made in the first six months of 2018, with its core buy-to-let & small to medium enterprise segment doing well.
Looking forward, OneSavings said it continues to see growth opportunities in its core markets despite higher levels of competition, and it now expects net loan book growth in the "high-teens" for 2018, driven by organic lending and strong retention of existing customers.
The company did warn, however, on the uncertainty around Brexit, but it believes its specialist underwriting means it can weather such risks.
Chief Executive Andy Golding said: "I am delighted OneSavings Bank has continued to deliver excellent shareholder returns in the first half of 2018."
"Volumes grew strongly with 17% growth in organic originations, driven by high demand for our professional Buy-to-Let and our commercial and semi-commercial products. This supported 17% growth in profit before tax to GBP91.8 million and a strong return on equity of 26%."
Golding added: "Our continued focus on cost efficiency, whilst investing in the future, is reflected in our market-leading cost to income ratio for the first half of 27%. There will be further planned expenditure in the second half, as we invest in technology infrastructure and enhancements to our online savings and mortgage origination platforms.
"We continue to expect our cost to income ratio will be approximately 30% for the full year, as previously guided, with all other guidance for the full year also unchanged."
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