OSB notes 14% rise in statutory profit before tax

Jake Carter

March 19, 2020

uk finance

OneSavings Bank has recorded a 14% rise in statutory profit before tax to £182.8m annually.

Pro forma underlying profit before tax also increased, rising by 9% to £381.1m between 2018 and 2019.

Furthermore, the bank’s net loan book grew by 105% to £18.4bn in 2019 on a statutory basis, and increased 16% to £18.2bn on a pro forma underlying basis.

Data collected by the lender shows that statutory gross originations grew by 36% to £4.1bn and increased by 10% on a pro forma underlying basis to £6.5bn year-on-year.

Looking at the cost to income ratio on a statutory basis, this figure rose to 32%.

On a pro forma underlying basis, the cost to income ratio remained at 29%.

Net interest margin was 2.43% on a statutory basis, and 2.66% on a pro forma underlying basis in 2019, according to the bank.

The lender outlined that impairments remain low with a loan loss ratio of 13bps on a statutory basis and 10bps on a pro forma underlying basis.

Statutory return on equity fell to 18% however, on a pro forma underlying basis, RoE remained strong at 25%.

In addition, statutory basic earnings per share fell by 5% to 52.6 pence, however, pro forma underlying basic EPS increased by 9% to 64.9 pence.

The bank highlighted the recommended final dividend of 11.2 pence per share, which gives a full year dividend of 16.1 pence per share.

It added that together with the pre-combination CCFS interim dividend of 4.3 pence per share, this is in line with its target dividend payout ratio

Andy Golding, chief executive of OneSavings Bank, said: “I am delighted with OneSavings Bank’s achievements in 2019.

“I am particularly pleased that we successfully completed our combination with Charter Court, and that both businesses maintained momentum and delivered strong results whilst the transaction progressed.

“The rationale behind the combination remains compelling and I am pleased with progress to date on integration.

“The combined group delivered excellent shareholder returns in 2019. Both buy-to-let and residential segments continued to grow, with strong demand from professional landlords and owner-occupiers.

“The Group’s organic originations grew by 36% to £4.1bn, including three months of Charter Court’s business, supporting 14% growth in statutory profit before tax to £209m.

“Our funding model has been enhanced through the combination.

“Securitisations since 2013 across the combined Group now total £5.7bn and during 2019 CCFS generated a gain on sale of £59m on three structured asset sales and OSB completed an inaugural securitisation of £500m of organically originated mortgages.

“We continued to take advantage of high demand and attractive market pricing with additional deals completed early this year.

“Both banks achieved exceptional customer net promoter scores which we are very proud of.

“The UK and global economies are currently experiencing unprecedented uncertainty stemming from COVID-19.

“Whilst we entered the year with a robust pipeline, strong application levels in our core businesses and stable margins, it is too soon to say what the impact will be and we therefore consider it imprudent to provide forward guidance for 2020.

“We enter this period of uncertainty as an enlarged business with the strength of our combined lending and funding franchises, robust capital position, secured loan book and strong risk management capabilities.”

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