Interim profits soar at OneSavings Bank

26th Aug 2015 07:18

(ShareCast News) - Profitability soared at OneSavings Bank in the first half of the current year as the lender managed to improve several of its key performance metrics.The volume of loans and advances jumped 17% to reach £4.6bn driving the cost-income ratio to 26%, down from the 29% seen in the comparable period of 2014.The net interest margin at the specialist lending and retail savings group improved to 305 basis points versus the 282 seen in 2014.As a result of the above, the group´s underlying profit before taxes soared 60% to £47.6m.Andy Golding waxed optimistic on the future, saying: "Despite recent political and regulatory announcements, and some increasing competition in certain lending niches, the market remains supportive of our core businesses and we continue to see strengthening levels of new business applications and good opportunities for growth at attractive returns."One Savings Bank´s capital cushion or the so-called fully-loaded Common equity tier 1 capital ratio stood at 11.0% at period end, unchanged from a year ago.An interim dividend of 2p per share was declared."OSB does not look expensive being valued at 10.4 times´ earnings but we believe current operating conditions are exceptionally positive and that eventually margins will fall and impairments will increase," broker Numis told clients following the release of the bank´s latest interims."We observe that businesses such as Virgin Money and others are increasingly focusing on the core OSB market segment. Until Lloyds, RBS etc. start to turn the taps on, we believe atractive volumes and margins will remain freely available to the specialist providers like OSB."