OneSavings Bank posts loan book growth, ups forecast

OneSavings Bank reported 17% growth in its loan book for the first nine months of the year, driven primarily by its buy-to-let activities, as it bumped up its loan book growth forecast.

For the first nine months to the end of September, net loans and advances grew by £997m to £6.9bn.

Meanwhile, in the three months to the end of September, organic originations rose to a record £677m from £510m in the same period a year ago. To date, the group said it has drawn a total of £1bn under the Term Funding Scheme and drawings under the Funding for Lending Scheme have been reduced to £92m.

The challenger bank said on Wednesday that it expects net loan book growth of around 20% for the full year - up from previous guidance of high teens - while keeping the net interest margin for the full year broadly flat to 2016 and the cost to income ratio broadly flat to the first half.

Chief executive officer Andy Golding said: "OSB has yet again delivered exceptional performance in the third quarter of 2017 with strong loan book growth and record levels of organic originations at attractive margins.

“We have reinforced our position as a leading specialist lender in our target markets and I am pleased to report that following the new PRA underwriting rules that came into effect on 1 October 2017, application levels remain strong.

"I am delighted with OSB's performance as we continue to focus on professional landlords and increase our market share.”

Canaccord Genuity said: "We anticipate consensus earnings per share for the current year to move up around 1% on the back of this statement to where we are at 48p. Not a material move but earnings expectations continue to move in the right direction in contrast to the stock's de-rating over the past six months. We expect momentum into the final quarter to accelerate with a strong regulatory tailwind for lending volumes which could see further near-term upgrades to consensus."

At 0810 GMT, the shares were up 4.9% to 417p.