OneSavings Bank confident of net loan growth by end of 2016

OneSavings Bank said it was performing in line with expectations as it remains confident of achieving net loan growth by the end of the year.

In a third quarter update, the FTSE 250 'challenger' bank reported that the underlying loan book grew by 13% for the nine months to September, this excluded the impact of selling Rochester Financing which disposed of about £220m worth of mortgages.

The loan book was swelled by £466m to £5.6bn, closing in rapidly on its full year target of £5.9bn.

There was £510m of organic origination in the third quarter, which was also in line with expectations versus £301m in the second quarter, while on 31 October, the bank completed the purchase of a small £60m residential mortgage portfolio.

From its Funding for Lending Scheme the bank has drawn £626m to date and said it intends to begin drawing from the new Term Funding Scheme during the fourth quarter which goes with the long-term retail savings franchise.

Chief executive Andy Golding said: "Application levels for the second half to date are significantly in excess of the first half and our pipeline of new business is at a record level. This means we remain confident of achieving our net loan book growth target for this year and double-digit growth into 2017."

On Tuesday the bank said its chairman Mike Fairey is to step down from his role at the shareholder meeting in May, after three years, which included the bank’s floating in 2014.

Shares in OneSavings Bank were down 2.23% to 285.20p at 0801 GMT.