OneSavings Bank adds £460m to loan book in Q1

Challenger lender and retail savings group OneSavings Bank describes its financial and operational performance in the year to date as “strong” on Wednesday, with new loans and advances growing £460m in the first quarter.

The FTSE 250 firm said this was driven by further strong organic origination, and accelerated by acquisitions of first and second charge residential mortgage portfolio totalling £131m.

It said margins on £627m of organic origination in the quarter remained strong, with its net interest margin in line with expectations and confidence remaining in its guidance of around 300 bps for the year.

OneSavings Bank’s cost to income ratio was on track to be in line with or slightly higher than the 26% achieved in 2015, as previously indicated.

And, despite the introduction of the bank tax surcharge, return on equity was described as “strong” in the first quarter, with the company on track to deliver a return comfortably ahead of its financial target.

The group has drawn £576m under the Funding for Lending Scheme to date, and was targeting a minimum drawdown of £700m in 2016.

"I am extremely pleased with the performance of the business so far this year,” said OneSavings Bank CEO Andy Golding.

“We achieved strong levels of new business in the first quarter with £627m of organic origination at attractive margins, supported by acquisitions of £131m.”

Golding said March was a record month, as expected, with the bank fulfilling heightened demand to accelerate mortgage completions ahead of stamp duty changes.

“Intermediary focus has now returned to new applications and we are confident in achieving our full year growth targets.

“We remain confident in the outlook for 2016,” Golding confirmed.