OneSavings Bank share price falls despite revealing double-digit loan book growth

Oliver Gill
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OneSavings is a popular lender to professional buy-to-let landlords (Source: Getty)

Shares in OneSavings Bank fell over 1.5 per cent today despite beating expectations and posting strong growth in its annual figures.

The figures

Underlying profit before tax rose by 29 per cent to £137m with the number of loans issued swelling by 16 per cent to £5.9bn.

Net interest margin increased to 3.14 per cent from 3.09 per cent.

Read more: Two digits of growth for OneSavings

Basic earnings per share were 41.7p, up from 34.8p in 2015. The lender's final dividend totalled 7.6p meaning investors received a full year return of 10.5p per share.

Why it's interesting

Speaking to City A.M. this morning, OneSaving's chief exec Andy Golding said it was a case of steady-as-she-goes, in terms of growth.

Read more: OneSavings' boss reveals how he will manage Brexit

The results beat the expectations of analysts at Peel Hunt by around five per cent and achieved "best in class" returns for shareholders.

It was the net interest margin uplift that particularly benefitted OneSavings. Peel Hunt had expected it to fall to 3.05 per cent and was further surprised that the lender's loss ratio had fallen to 0.16 per cent compared with 0.23 per cent in 2015 and its estimates of 0.21 per cent.

What the company said

Chief executive Golding added: "We have once again met or exceeded all of the financial objectives we set at IPO despite a number of regulatory and tax changes. This was another period of strong loan book growth through our specialist lending brands, demonstrating the strength of our organic lending franchise.

"Following this strong performance in 2016, we entered 2017 with a strong pipeline of new business and are seeing very strong application levels in our core businesses. We expect to deliver net loan book growth in the mid-teens in 2017, whilst keeping bet interest margin and cost to income ratio broadly flat."

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