OSB Group H1 net interest margin declines on retail funding costs
OSB Group H1 net interest margin declines on retail funding costs
Overview
UK specialist lender's H1 net loan book grew 1.3%, net interest income up 1% yr/yr
Profit before tax for H1 fell 3% yr/yr due to higher impairments and admin expenses
Basic EPS for H1 rose 3% yr/yr, mainly due to fewer shares outstanding
Outlook
OSB Group expects 2026 NIM of 215bps to 220bps, down from prior guidance of 225bps
Company maintains 2026 administrative expenses guidance at c.£280m, excluding incoming CEO costs
OSB Group expects 2026 RoTE of c.12.5%, assuming elevated funding costs continue
Result Drivers
BUY-TO-LET ORIGINATIONS - Co said Buy-to-Let and higher-yielding sub-segments originations grew 10% yr/yr despite macro uncertainty and elevated mortgage rates
RETAIL FUNDING COSTS - Net interest margin declined due to more costly spreads from new retail funding and strong competition in the retail savings market
TRANSFORMATION PROGRAMME INVESTMENT - Administrative expenses increased due to further investment in transformation programme, though core admin expenses fell slightly
Company press release: ID:nGNE4yDjRn
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 CET1 Capital Ratio |
| 15.20% |
|
H1 Pretax Profit |
| GBP 187.20 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 10 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the banks peer group is "buy"
Wall Street's median 12-month price target for OSB Group PLC is GBp690.00, about 21.3% above its August 5 closing price of GBp569.00
The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 6 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)