REG-Interim results for six months ended 30 June 2025
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OSB GROUP PLC
Interim report
for the six months ended 30 June 2025
LEI: 213800ZBKL9BHSL2K459
20 August 2025
OSB GROUP PLC (OSBG or the Group), the specialist lending and retail savings
group, announces today its results for the six months ended 30 June 2025.
Andy Golding, Group CEO, said:
“The Group’s results for the first half of 2025 demonstrate resilient
financial performance in line with management expectations in addition to
strategic progress as we work our way through the two-year transition period.
We continued to exercise cost and lending discipline and our focus on returns
was reflected in a 13.7% return on tangible equity. Our transformation
programme is on track and I am pleased with the favourable feedback received
following the soft launch of our new lending platform and Rely brand for
Buy-to-Let investors, both key steps in our strategic plan.
We delivered 1.2% net loan book growth in the first half as we focused on loan
book diversification. In line with the targeted expansion into higher yielding
sub-segments where we have existing expertise, we saw strong growth in
originations across Commercial, Asset finance, Residential development and
Bridging.
Given the performance in the first half of the year, today we reiterate our
2025 guidance of low single digit net loan book growth, NIM of c.225bps,
c.£270m of administrative expenses and a low teens RoTE.
The Group is well-capitalised, with strong liquidity and a high-quality
secured loan book. We are focused on making progress through the transition
period to deliver on our medium-term aspirations, prioritising positive
outcomes for our stakeholders and strong returns for our shareholders.”
Financial and operational highlights
* Net loan book grew by 1.2% to £25.4bn (31 December 2024: £25.1bn)
supported by a 10% growth in originations to £2.1bn (H1 2024: £1.9bn) with
continued focus on returns and diversification into higher yielding
sub-segments
* Net interest income and net interest margin (NIM)(1 )were £337.0m and
230bps (H1 2024: £353.5m and 237bps, respectively). The reduction primarily
reflected more costly spreads to SONIA as the savings book continued to
recycle, partially offset by more resilient back book performance and an
emerging benefit from higher yielding sub-segments. The Group completed a
£1.25bn securitisation and deconsolidation of Precise Buy-to-Let loans in
December 2024 which further affected net interest income
* Administrative expenses and cost to income ratio increased to £131.4m and
40.3% (H1 2024: £126.2m and 34.8%, respectively) reflecting planned
investment in the Group’s transformation programme and lower total income.
Core administrative expenses increased by 0.4% from the prior period
* Loan loss ratio(2) was 2bps (H1 2024: (4)bps) and arrears balances of three
months or more increased slightly to 1.8% (31 December 2024: 1.7%)
* Profit before tax was £192.3m (H1 2024: £241.3m). The reduction was
primarily due to lower net interest income and a fair value loss on financial
instruments compared to a fair value gain in the prior period
* Retail deposits increased by 3% to £24.6bn (31 December 2024: £23.8bn)
offsetting £730m of TFSME repayment in the period. The outstanding balance of
TFSME drawings was £348m as at 18 August 2025
* Return on tangible equity(3) was 13.7% (H1 2024: 17.4%, H2 2024: 12.5%)
largely due to lower profit after tax for the period and TNAV per share(4) was
540 pence as at 30 June 2025 (31 December 2024: 544 pence)
* Basic earnings per share(5) (EPS) was 37.3 pence (H1 2024: 44.4 pence)
* The Common Equity Tier 1 capital ratio, which included the full impact of
the £100m share repurchase programme announced in March, remained strong at
15.7% (31 December 2024: 16.3%). As at 18 August, the Group had repurchased
£38m worth of shares under the programme
* Interim dividend(6) of 11.2 pence per share (H1 2024: 10.7 pence) up 5%, as
guided, representing one-third of the full year 2024 ordinary dividend, in
line with the Group’s stated dividend policy
Summary financials
H1 2025 H1 2024 change vs H1 2024 H2 2024 change vs H2 2024
Net interest income, £m 337.0 353.5 (5)% 312.9 8%
Net FV (loss)/gain on financial instruments (14.3) 5.9 n/m (7.4) 93%
Total income, £m 325.8 362.6 (10)% 304.6 7%
Administrative expenses, £m (131.4) (126.2) 4% (131.9) n/m
Impairment of financial assets, £m (2.0) 4.7 n/m 7.0 n/m
Profit before tax, £m 192.3 241.3 (20)% 176.8 9%
EPS, pence (6) 37.3 44.4 (16)% 33.0 13%
Dividend per share, pence (7) 11.2 10.7 5%
Net interest margin, bps 230 237 (7) 206 24
Cost to income ratio, % 40.3 34.8 (5.5)pps 43.3 3.0pps
Loan loss ratio, bps 2 (4) 6 (5) 7
Return on tangible equity (4), % 13.7 17.4 (3.7)pps 12.5 1.2pps
TNAV/share, pence 540 517 4% 544 (1)%
30-Jun-2025 31-Dec-2024
Net loans and advances, £m 25,429.6 25,126.3 1.2%
Total assets, £m 30,287.5 30,243.6 n/a
Retail deposits, £m 24,590.1 23,820.3 3%
Enquiries:
OSB GROUP PLC Brunswick
Group
Alexander Holcroft, Investor Relations Robin Wrench/Simone Selzer
t: 01634 838 973 t:
020 7404 5959
Results presentation
A webcast presentation for analysts will be held at 9:30am on Wednesday 20
August. The presentation will be webcast or call only and will be available on
the OSB Group website at
www.osb.co.uk/investors/results-reports-presentations.
The UK dial in number is 020 3936 2999 and the password is 974743.
Registration is open immediately.
Notes
1. Net interest income as a percentage of a 7 point average of interest
earning assets, annualised on an actual days basis
2. Impairment losses as a percentage of a 7 point average of gross loans and
advances, annualised
3. Profit attributable to ordinary shareholders, which is profit after tax,
and after deducting coupons on AT1 securities, gross of tax, as a percentage
of a 7 point average of shareholders’ equity excluding average intangible
assets and £150m of AT1 securities, annualised
4. Tangible net asset value per share is shareholders’ equity excluding
intangible assets and £150m of AT1 securities as at the end of the period
divided by the number of shares outstanding at the end of the period
5. Profit attributable to ordinary shareholders, which is profit after tax,
and after deducting coupons on AT1 securities, gross of tax, divided by the
weighted average number of ordinary shares in issue
6. The declared interim dividend of 11.2 pence per share is based on one-third
of the total 2024 dividend of 33.6 pence per share (H1 2024: 10.7 pence per
share)
Chief Executive’s Statement
The Group’s financial results for the first half of 2025 reflected resilient
delivery and progress against the full year guidance. They also demonstrate
our day-to-day discipline and focus as we work our way through the two-year
transition period to achieve the Group’s medium-term aspirations. We made
operational and strategic progress in the period with further milestones
completed in the transformation programme.
Resilient financial performance and strategic progress on track to meet 2025
guidance
The Group’s net loan book increased by 1.2% to £25.4bn (31 December 2024:
£25.1bn), supported by originations of £2.1bn in the period (H1 2024:
£1.9bn).
The Group delivered pre-tax profit of £192.3m in the first half of 2025 (H1
2024: £241.3m, H2 2024: £176.8m). The reduction was largely due to lower net
interest income and a net fair value loss on financial instruments compared to
a gain in the prior period. It was further impacted by an impairment charge
compared to an impairment credit in the prior period and higher administrative
expenses. Basic earnings per share was 37.3 pence (H1 2024: 44.4 pence).
Net interest margin reduced to 230bps from 237bps in the prior period (H2
2024: 206bps), primarily reflecting more costly spreads to SONIA as the
savings book continued to recycle, partially offset by more resilient back
book performance and an emerging benefit from higher yielding sub-segments.
Net interest income also reflected a smaller average net loan book in the
first half of 2025 compared to 30 June 2024 due to the £1.25bn securitisation
and deconsolidation of Precise Buy-to-Let loans completed in December 2024.
We again demonstrated our strong cost discipline and efficiency with core
administrative expenses across the UK and India increasing by just 0.4% from
the prior period. Including investment in the Group’s transformation
programme, administrative expenses increased by 4% to £131.4m, from £126.2m
in the first half of 2024 (H2 2024: £131.9m). In the first six months of the
year, including amortisation, we expensed a total of £10.1m for the
transformation programme.
The cost to income ratio increased to 40.3% from 34.8% in the prior period (H2
2024: 43.3%) primarily due to a reduction in total income as the Group
recognised lower net interest income and a fair value loss on financial
instruments of £14.3m compared with a gain of £5.9m in the prior period.
Cost to income and management expense ratios were further impacted by an
increase in administrative expenses as the Group continued its investment in
the transformation programme. Management expense ratio was 88bps at the end of
June 2025 (H1 2024: 83bps, H2 2024: 86bps).
The Group delivered return on tangible equity of 13.7% for the first half, a
decrease from 17.4% in the prior period, largely as a result of lower profit
after tax (H2 2024: 12.5%).
Headroom to grow – Loan mix shift momentum is building
The Buy-to-Let market saw an improvement in activity in the first half of the
year as buyers sought to complete their transactions before the increase in
Stamp Duty Land Tax thresholds came into effect on 1 April. In addition, lower
mortgage pricing provided a much needed stimulus. For 2024, we were ranked the
largest independent Buy-to-Let lender in the UK in terms of gross new lending
with a market share of 5.3%.(1)
In line with the strategy we set out earlier this year, the diversification of
the loan book into higher yielding sub-segments continued in the first half;
originations in our Commercial sub-segment more than doubled to £310.9m,
Asset Finance and Bridging saw an increase in originations of 59% and 73%
compared to the first six months of 2024. We also continued to exercise
lending discipline, deploying our expertise across all of our lending segments
and balancing returns and opportunity to optimise the composition of the loan
book.
In March, we set out our new lending strategy. Since then, we have soft
launched our new lending platform to selected brokers as well as a new lending
brand dedicated to Buy-to-Let investors, Rely, which combines and enriches our
existing Buy-to-Let propositions. The new brand is also a key step in our
medium-term strategy to consolidate our Buy-to-Let expertise under Rely and
move our specialist Residential lending to Precise.
While the diversification of our loan book continued, Buy-to-Let remained the
largest part of our portfolio, with combined gross loans across Kent Reliance
and Precise of £17,627.2m at the end of June, broadly flat compared to
£17,568.5m as at 31 December 2024. However, as a proportion of the Group’s
total gross loan book, Buy-to-Let reduced to 69% from 70% at the end of 2024,
in line with our diversification strategy to reduce Buy-to-Let lending to
equal to or less than 60% of the loan book in the next four years.
Credit and risk management
The Group has a high-quality secured loan book; balances over three months in
arrears increased slightly to 1.8% of the loan book at 30 June 2025 (31
December 2024: 1.7%) largely due to the impact of borrowers with maturing
fixed rate mortgages facing significantly higher prevailing rates.
The Group recorded an impairment charge of £2.0m representing a loan loss
ratio of 2bps for the period (H1 2024: £4.7m credit and (4)bps favourable,
respectively) with low actual write-offs compared to £125.1m of total
expected credit loss provisions held (H2 2024: £7.0m credit and (5)bps
favourable).
Multi-channel funding model
Retail deposits remained the primary source of funding for the Group, growing
by 3% to £24.6bn at the end of June (31 December 2024: £23.8bn). The growth
was due to the competitively priced savings products and contributed to
further repayment of the TFSME drawings in the period.
I am pleased that new Kent Reliance savers can now open easy access accounts
on the new savings platform, in addition to fixed rate bonds and joint
accounts released earlier in the year.
In the first half of 2025, the Group opened over 158k new savings accounts (H1
2024: nearly 133k) with retention rates consistently high for existing
customers: 92% for savers with maturing fixed rate bonds and ISAs at Kent
Reliance and 83% for Charter Savings Bank (H1 2024: 90% and 86%,
respectively). As a result of this very strong demand and rapidly changing
rate environment, the service response times were temporarily impacted leading
to lower, but still strong, Net Promoter Scores for the period of +67 for Kent
Reliance and +51 for Charter Savings Bank (H1 2024: +73 and +66,
respectively).
As at 30 June 2025, the Group had £655.5m of TFSME balance outstanding for
repayment before October 2025 (31 December 2024: £1,394.9m). The Group also
utilised the Bank of England’s Indexed Long Term Repo programme with a
balance of £176.9m as at the end of June 2025 (31 December 2024: £380.3m).
The Group will continue to opportunistically access the wholesale markets to
benefit from diversification of funding and to support a smooth funding
transition as the final TFSME drawings are repaid.
Solid capital generation and attractive shareholder returns
The Group’s capital position, which reflected the £100m of share repurchase
programme announced in March, remained strong with a CET1 ratio of 15.7% as at
30 June 2025 (31 December 2024: 16.3%).
The implementation of Basel 3.1 rules is expected to reduce the CET1 ratio as
at 30 June 2025 by 1.3%, if the rules were implemented as written, compared to
just over 1% as at 31 December 2024. The increase in impact on the CET1 ratio
is largely due to the growth and change in the mix of the Group’s loan book.
The Group is seeking clarification from the Bank of England in respect of the
recently announced changes to the MREL regime and its implications for the
Group’s requirements. In the meantime, the Group will continue with its
current capital and funding plans which are reflected in the Group’s
financial targets and guidance announced in March 2025. The Group is also
liaising with the PRA on the next steps for its IRB application.
In July, we received a Domestic Liquidity Subgroup (DoLSub) Permission which
allows full fungibility of liquidity and funding across the Group’s two
banking entities. As we will now measure liquidity at the Group level, we will
be able to leverage our savings brands more efficiently to support the funding
requirements of the Group.
In line with our stated dividend policy, the Board has today declared an
interim dividend of 11.2 pence for the first half of 2025, up 5% on prior
period as guided. The Board is confident that the Group’s strategy and
proven capital generation capability can support both net loan book growth and
further capital returns to shareholders.
Confidence in our short-term guidance and medium-term aspirations
The Group’s performance in the first six months of 2025 was in line with
expectations and we are on track to meet our full year guidance. Even though
we have seen some pressure from cost of funds, we are also seeing better than
expected lending spreads.
Our guidance for 2025 remains unchanged and we continue to expect low single
digit net loan book growth, NIM of circa 225bps and circa £270m of
administrative expenses. We also anticipate a low teens RoTE.
We also reiterate our medium-term aspirations as follows:
2026 Direction 2027 – 2029 Aspirations
Loan book growth Modestly higher than 2025 Mid single digit if returns meet our requirements
NIM Similar levels to 2025
Loan book diversification Buy-to-Let to comprise ≤ 60% of the net loan book
Administrative expenses Modestly higher than 2025 Gradual improvement to low 30s% cost to income ratio and positive jaws
RoTE Low teens Mid teens
Distributions 5% dividend per share growth and commitment to return excess capital Progressive dividend per share and commitment to return excess capital
The Group is well-capitalised, with strong liquidity and a high-quality
secured loan book. We are focused on making progress through the two-year
transition period to deliver on our medium-term aspirations, prioritising good
outcomes for our stakeholders and strong returns for our shareholders.
Andy Golding
Chief Executive Officer
19 August 2025
1. UK Finance, Value of BTL gross lending, July 2025
Financial review
Review of the Group’s performance for the six months to 30 June 2025.
H1 2025 H1 2024
Summary Profit or Loss £m £m change
Net interest income 337.0 353.5 (5)%
Net fair value (loss)/gain on financial instruments (14.3) 5.9 n/m
Other operating income 3.1 3.2 (3)%
Total income 325.8 362.6 (10)%
Administrative expenses (131.4) (126.2) 4%
Profit before provisions and impairment of financial assets 194.4 236.4 (18)%
Provisions (0.1) 0.2 n/m
Impairment of financial assets (2.0) 4.7 n/m
Profit before tax 192.3 241.3 (20)%
Profit after tax 142.1 178.3 (20)%
Key ratios (1) H1 2025 H1 2024 change
Net interest margin, bps 230 237 (7)
Cost to income ratio, % 40.3 34.8 5.5pps
Management expense ratio, bps 88 83 5
Loan loss ratio, bps 2 (4) 6
Return on tangible equity, % 13.7 17.4 (3.7)pps
Basic earnings per share, pence 37.3 44.4 (16)%
Ordinary dividend per share, pence 11.2 10.7 5%
Tangible net assets value per share, pence 540 517 4%
30-Jun-25 31-Dec-24
£m £m change
Extracts from the Statement of Financial Position
Loans and advances to customers 25,429.6 25,126.3 1.2%
Total assets 30,287.5 30,243.6 -
Retail deposits 24,590.1 23,820.3 3%
Risk weighted assets 12,205.0 11,915.7 2%
Key ratios
Common equity tier 1 ratio 15.7% 16.3% (60)bps
Total capital ratio 19.0% 19.7% (70)bps
Leverage ratio 7.5% 7.7% (20)bps
1. For more detail on the calculation of key ratios, see the Appendix.
Profit before tax
H1 2025 H1 2024 Change
Profit before tax £192.3m £241.3m (20)%
Basic earnings per share 37.3p 44.4p (16)%
Return on tangible equity 13.7% 17.4% (3.7)pps
Profit before tax decreased largely due to lower net interest income and a net
fair value loss on financial instruments compared to a gain in the prior
period. It was further impacted by an impairment charge compared to an
impairment credit in the prior period and higher administrative expenses.
The Group’s effective tax rate remained broadly flat for the first half of
2025 at 26.1% (H1 2024: 26.2%), see note 7 to the Consolidated Financial
Statements.
Return on tangible equity and basic earnings per share decreased in the period
predominantly due to a reduction in profit after tax compared to the prior
period.
Net interest income and net interest margin
H1 2025 H1 2024 Change
Net interest income £337.0m £353.5m (5)%
Net interest margin 230bps 237bps (7)bps
Other operating income £3.1m £3.2m (3)%
Net interest income and net interest margin reduced compared to the prior
period primarily reflecting more costly spreads to SONIA as the savings book
continued to recycle, partially offset by more resilient back book performance
and an emerging benefit from higher yielding sub-segments. Net interest income
was further impacted by smaller average net loan book in the first half of
2025 compared to the prior period due to the £1.25bn securitisation and
deconsolidation of Precise Buy-to-Let loans completed in December 2024.
Other operating income mainly comprised CCFS’ commissions and servicing
fees, including those relating to securitised loans, which have been
derecognised from the Group’s balance sheet.
Net fair value loss on financial instruments
H1 2025 H1 2024 Change
Net fair value (loss)/gain on financial instruments £(14.3)m £5.9m n/m
Net fair value loss on financial instruments included a gain of £0.5m (H1
2024: £15.7m loss) from hedge ineffectiveness and a net loss on unmatched
swaps of £14.7m (H1 2024: £23.3m gain). The Group also recorded a £3.6m
loss from the amortisation of hedge accounting inception adjustments (H1 2024:
£1.8m loss), a £nil from the amortisation of acquisition-related inception
adjustments (H1 2024: £2.0m gain), and a gain of £3.5m from other items (H1
2024: £1.9m loss); see note 5 to the Consolidated Financial Statements.
The gain in respect of the ineffective portion of hedges arose from recent
swap volatility and will unwind over the remaining life of the hedged fixed
term mortgages and retail savings bonds.
The net loss on unmatched swaps related primarily to fair value movements on
mortgage pipeline swaps, prior to them being matched against completed
mortgages, and was caused by a decrease in interest rate outlook on the SONIA
yield curve. The Group economically hedges its committed pipeline of mortgages
and this unrealised loss will unwind over the life of the swaps through hedge
accounting inception adjustments.
Administrative expenses
H1 2025 H1 2024 Change
Administrative expenses £131.4m £126.2m 4%
Cost to income ratio 40.3% 34.8% 5.5pps
Management expense ratio 88bps 83bps 5bps
Administrative expenses increased due to further investment in the Group’s
transformation programme. Core administrative expenses increased by 0.4%
compared to the prior period.
The Group’s cost to income and management expense ratios increased primarily
as a result of lower total income compared to the prior period.
Impairment of financial assets
H1 2025 H1 2024 Change
Impairment charge/(credit) £2.0m £(4.7)m n/m
Loan loss ratio 2bps (4)bps 6bps
The Group recorded an impairment charge and an adverse loan loss ratio for the
first half of 2025 compared to an impairment credit and a favourable loan loss
ratio in the prior period.
The impairment charge was primarily due to a £4.7m charge relating to an
increase in provision for accounts with arrears of three months or more, a
£1.2m increase in Stage 1 provisions in respect of loan book growth and a
£2.4m charge for individually assessed provisions. Write-offs and other
adjustments amounted to a charge of £3.8m in the period.
These were partially offset by updated macroeconomic scenarios and the
valuation methodology alignment resulting in a release of £5.4m, a £3.9m
release due to a reduction in post-model adjustments and a £0.8m release from
IFRS 9 stage migration.
In the first half of 2024, the impairment credit was largely due to more
favourable macroeconomic scenarios, partially offset by increase in provisions
for accounts in arrears, changes in the credit profile of borrowers as they
transitioned through modelled IFRS 9 impairment stages and higher individually
assessed provisions and write-offs.
Dividend
The Group’s dividend policy is to declare interim dividends equal to
one-third of the prior year’s total dividend. The Board has therefore
declared an interim dividend of 11.2 pence per share for the first half of
2025, based on the full year 2024 dividend of 33.6 pence per share.
The declared dividend will be paid on 19 September 2025, with an ex-dividend
date of 28 August 2025 and a record date of 29 August 2025.
Balance sheet growth
30-Jun-2025 31-Dec-2024 Change
Net loans and advances to customers £25,429.6m £25,126.3m 1.2%
Total assets £30,287.5m £30,243.6m -
Retail deposits £24,590.1m £23,820.3m 3%
Net loans and advances to customers increased in the first six months of the
year supported by a 10% growth in mortgage originations to £2.1bn from
£1.9bn in the first half of 2024.
Total assets remained broadly flat in the period, as lower liquid assets were
offset by an increase in loans and advances to customers and balances related
to mortgage hedging.
Retail deposits increased as the Group continued to repay its drawings under
the TFSME scheme and replace them with retail deposits. In the first half of
2025, the Group repaid £730m of TFSME funding and had a £655.5m balance
outstanding as at 30 June 2025 (31 December 2024: £1,394.9m). The Group also
utilised the Bank of England’s Indexed Long-Term Repo with drawings of
£176.9m as at the end of June 2025 (31 December 2024: £380.3m).
Liquidity
H1 2025 H1 2024 Change
High-quality liquid assets – Group £3,394.1m £3,625.5m (6)%
High-quality liquid assets – OSB £1,701.1m £1,586.3m 7%
High-quality liquid assets – CCFS £1,694.5m £2,043.1m (17)%
Liquidity coverage ratio – Group 167% 177% (10)pps
Liquidity coverage ratio – OSB 184% 231% (47)pps
Liquidity coverage ratio – CCFS 149% 142% 7pps
OSB and CCFS operate under the Prudential Regulation Authority’s liquidity
regime and are managed separately for liquidity risk. Each Bank holds its own
significant liquidity buffer of liquidity coverage ratio (LCR) eligible
high-quality liquid assets (HQLA).
Each Bank operates within a target liquidity runway in excess of the minimum
LCR regulatory requirement. Each Bank has a range of contingent liquidity and
funding options available for possible stress periods.
The Group also held portfolios of unencumbered pre-positioned Bank of England
level B and C eligible collateral in the Bank of England Single Collateral
Pool.
As at 30 June 2025, liquidity coverage ratios were all significantly in excess
of the regulatory minimum of 100% plus Individual Liquidity Guidance.
In July, the Group received a Domestic Liquidity Subgroup (DoLSub) Permission
which allows full fungibility of liquidity and funding across the Group’s
two banking entities. As liquidity will now be measured at the Group level,
the Group will be able to leverage its savings brands more efficiently to
support its funding requirements.
Going forward, the Group will report the liquidity coverage ratio on a DoLSub
basis instead of individual banking entities basis. On a DoLSub basis, the
high-quality liquid assets were £3,395.6m and the liquidity coverage ratio
was 165% as at 30 June 2025.
Capital
30-Jun-2025 31-Dec-2024 Change
CET1 ratio 15.7% 16.3% (60)bps
Total capital ratio 19.0% 19.7% (70)bps
Risk-weighted assets £12,205.0m £11,915.7m 2%
Leverage ratio 7.5% 7.7% (20)bps
The Group’s capital position remained strong in the first six months of
2025. Profit generated in the period increased the CET1 ratio by 1.2%, which
was more than offset by 0.5% reduction for the interim dividend, 0.8%
reduction for the £100m share repurchase programme announced in March 2025
and 0.4% for the loan book growth. Other movements in the CET1 reduced the
ratio by a further 0.1%.
The combined Group had a Pillar 2a requirement of 1.35% of risk-weighted
assets (excluding a static add-on of £17.4m for transformation risk) as at 30
June 2025, unchanged from the requirement as at 31 December 2024.
Mortgage market review
The housing and mortgage market activity in the first half of the year can be
separated into two distinct periods. It was buoyant in the first three months
of the year largely as a result of a temporary reduction to the Stamp Duty
Land Tax (SDLT) that ended on 1 April. This stimulated a high level of
purchase activity as buyers sought to complete before the higher rates came
into effect, with monthly gross completions hitting a 46-month high of £34bn
in March, before falling to a 24-month low of £15bn in April.(1)
According to a provisional estimate by HMRC, property transactions reached
476,500 in the first five months of the year (2024: 398,000), representing a
year-on-year increase of 20%.(2) Bank of England data showed that mortgage
approvals grew by 12% to £118bn (2024: £106bn)(3) and total UK gross
mortgage lending increased by 22% to £111bn over the same period (2024:
£91bn).(1) Purchase transactions were the main driver of this increase, with
gross mortgage lending for new purchases growing by 40%.(1)
As the inflation rate fell significantly over the last 24 months, the Bank of
England gradually reduced the Bank Rate from 5.25% to 4.00% with five cuts
implemented over a 13-month period from July 2024 to August 2025(4) which led
to a reduction in borrowing costs and mortgage pricing. According to the Bank
of England, the average quoted interest rate on a two-year fixed rate
residential mortgage at 75% loan to value fell by 84bps to 4.32% in June 2025
compared to the same month a year ago(5), further supporting mortgage demand
in the first six months of 2025.
UK annual house price growth climbed to a 28-month high of +7.0% in March 2025
before falling to +3.9% in May as measured by the UK House Price Index.(6)
Based on the provisional estimate by ONS, the average UK house price reached
an all-time high of £273,000 in March before falling back to £269,000 in May
reflecting a decline in buyer demand following the SDLT change.(6)
Buy-to-Let and the Private Rented Sector
Activity in the Buy-to-Let sector remained subdued relative to historical
standards as landlords navigated a changing tax landscape with an increase to
SDLT for additional properties implemented in November 2024. Compounded with
rising costs of managing a property and higher mortgage interest rates, this
led to some landlords exiting the Private Rented Sector (PRS), with evidence
suggesting that this was concentrated amongst amateur landlords with smaller
property portfolios.
However, the demand for housing remained robust and the PRS comprised 4.7m
households in 2023-24 according to the UK Government’s English Housing
Survey. It was the second largest type of tenure in England having grown by
52% since 2008-09 and represented 19% of all households.(7)
Respondents to the RICS Residential Market Survey in June 2025 noted a
slightly softer trend in tenant demand through the early months of the year,
increasing between March and May before stabilising in June.(8) Research
conducted by Pegasus Insight also noted a slight easing of demand in the first
six months of 2025, with 71% of landlords reporting strong demand in the
second quarter of 2025, down from 82% in the same period last year.(9)
The RICS market survey suggested that new landlord rental instructions
continued to decline as denoted by a net balance of -21% of respondents, a
persistent trend in this measure over several years, with the last positive
reading occurring in March 2022.(8) Just 8% of landlords surveyed by Pegasus
Insight reported purchasing a new property in the last 12 months, up slightly
from an all-time low for this measure reported in the first quarter, however
this increased to 16% for landlords with four or more mortgaged Buy-to-Let
properties(9) suggesting that professional, multi-property landlords were
taking a more active role in managing their portfolios.
This imbalance between rental demand and supply continued to exert upward
pressure on rents, with private rental prices in the UK rising by 6.7% in the
12 months to June 2025 according to the ONS(6) while the Landlord Trends study
reported that 69% of landlords increased rents in the last 12 months and 61%
plan to do so in the next 12 months, suggesting that rental growth will
continue to support strong rental yields, which tracked above 6% on average
for six successive quarters.(9)
Buy-to-Let mortgage gross advances reached £16.2bn in the five months to May
2025, an increase of 23% compared with the same period in 2024. Purchases
increased by 33% to £4.7bn boosted by the effect of the SDLT change in April,
while remortgage completions increased by 20% to £11.0bn (2024: £9.2bn).(10)
1. Bank of England, UK Gross Mortgage Lending
2. HMRC, Monthly Property Transactions
3. Bank of England, Mortgage Approvals
4. Interest rates and Bank Rate | Bank of England
5. Quoted household interest rates - a visual summary of our data | Bank of
England
6. ONS, Private rent and house price index, July 2025
7. GOV UK, English Housing Survey 2023-24, Chapter 1: Profile of households
and dwellings
8. RICS, Residential Market Survey, June 2025
9. Pegasus Insight, Landlord Trends Q2 2025
10. UK Finance, BTL mortgages outstanding and gross lending, July 2025
Segment review
The Group reports its lending business under two segments: OneSavings Bank and
Charter Court Financial Services.
The tables below present the Group’s originations and loans and advances to
customers by product type and by segment.
Originations
H1 2025 H1 2024 Change
£m £m %
OSB Buy-to-Let 819.7 685.3 20
CCFS Buy-to-Let 115.7 339.3 (66)
Total Buy-to-Let 935.4 1,024.6 (9)
OSB Residential 76.0 133.7 (43)
CCFS Residential 212.7 251.5 (15)
Total Residential 288.7 385.2 (25)
Commercial 310.9 137.0 127
Asset finance 123.3 77.6 59
Residential development 113.1 88.4 28
Bridging 331.2 191.9 73
Funding lines 5.1 8.5 (40)
Total originations 2,107.7 1,913.2 10
Originations by segment
H1 2025 £m H1 2024 £m Change %
OSB segment 1,448.1 1,130.5 28
CCFS segment 659.6 782.7 (16)
Total originations 2,107.7 1,913.2 10
Gross loans
30 June 2025 31 December 2024 Change
£m £m %
OSB Buy-to-Let 11,613.9 11,201.2 4
CCFS Buy-to-Let 6,013.3 6,367.3 (6)
Total Buy-to-Let 17,627.2 17,568.5 -
OSB Residential 2,089.4 2,181.2 (4)
CCFS Residential 2,959.9 3,005.7 (2)
Total Residential 5,049.3 5,186.9 (3)
Commercial 1,546.0 1,356.0 14
Asset finance 381.9 316.9 21
Residential development 302.7 262.0 16
Bridging 480.3 364.5 32
Other (1) 167.3 198.4 (16)
Total gross loans 25,554.7 25,253.2 1
Gross loans by segment
As at 30 June 2025 £m As at 31 December 2024 £m Change %
OSB segment 16,036.0 15,439.0 4
CCFS segment 9,518.7 9,814.2 (3)
Total gross loans 25,554.7 25,253.2 1
Gross loans as a percentage of total gross book
30 June 2025 £m % of total 31 December 2024 £m % of total
Buy-to-Let 17,627.2 69 17,568.5 70
Residential 5,049.3 20 5,186.9 21
Commercial 1,546.0 6 1,356.0 5
Asset finance 381.9 1 316.9 1
Residential development 302.7 1 262.0 1
Bridging 480.3 2 364.5 1
Other (1) 167.3 1 198.4 1
Total gross loans 25,554.7 25,253.2
1. Other includes funding lines, second charge books in run off and a
portfolio of residential mortgages recognised at fair value through profit and
loss (FVTPL).
OneSavings Bank (OSB) segment
The following tables present OSB’s contribution to profit and loans and
advances to customers:
Contribution to profit for the period
BTL/SME Residential Total
For the six months ended 30 June 2025 £m £m £m
Net interest income 168.9 35.0 203.9
Other expense (12.7) (0.5) (13.2)
Total income 156.2 34.5 190.7
Impairment of financial assets (5.9) (0.2) (6.1)
Contribution to profit 150.3 34.3 184.6
For the six months ended 30 June 2024
Net interest income (restated) (1) 154.2 40.4 194.6
Other income 2.7 0.5 3.2
Total income (restated) (1) 156.9 40.9 197.8
Impairment of financial assets (2.4) (1.4) (3.8)
Contribution to profit (restated) (1) 154.5 39.5 194.0
Loans and advances to customers
BTL/SME Residential Total
As at 30 June 2025 £m £m £m
Gross loans and advances to customers 13,858.3 2,177.7 16,036.0
Expected credit losses (92.5) (10.5) (103.0)
Net loans and advances to customers 13,765.8 2,167.2 15,933.0
Risk-weighted assets 7,003.5 973.6 7,977.1
As at 31 December 2024
Gross loans and advances to customers 13,155.8 2,283.2 15,439.0
Expected credit losses (90.5) (10.6) (101.1)
Net loans and advances to customers 13,065.3 2,272.6 15,337.9
Risk-weighted assets 6,592.6 1,040.3 7,632.9
1. Prior period interest income, total income and contribution to profit were
restated due to a change in swap cost allocation methodology.
OSB Buy-to-Let/SME sub-segment
Loans and advances to customers 30-Jun-2025 £m 31-Dec-2024 £m Change %
Buy-to-Let 11,613.9 11,201.2 4
Commercial 1,546.0 1,356.0 14
Asset finance 381.9 316.9 21
Residential development 302.7 262.0 16
Funding lines 13.8 19.7 (30)
Gross loans and advances to customers 13,858.3 13,155.8 5
Expected credit losses (92.5) (90.5) 2
Net loans and advances to customers 13,765.8 13,065.3 5
This sub-segment comprises Buy-to-Let mortgages secured on residential
property held for investment purposes by experienced and professional
landlords, commercial mortgages secured on commercial and semi-commercial
properties held for investment purposes or for owner occupation, asset finance
and residential development finance to small and medium-sized developers.
The Buy-to-Let/SME net loan book increased by 5% to £13,765.8m (31 December
2024: £13,065.3m). It was supported by originations across all sub-segments
of £1,372.1m, which increased by 38% from £996.8m in the prior period, in
line with the Group’s diversification strategy.
Net interest income in this sub-segment increased by 10% to £168.9m (H1 2024
restated(1): £154.2m) due to a number of factors including, growth in the net
loan book, more resilient back book performance and an emerging benefit from
higher yielding sub-segments, partially offset by more costly funding spreads
to SONIA as the deposit book continued to recycle.
Other expenses were £12.7m and related primarily to losses from the Group’s
hedging activities (H1 2024: £2.7m income). The impairment charge of £5.9m
(H1 2024: £2.4m) was driven by modelled IFRS 9 stage migration, an increase
in accounts with arrears and write-offs. Overall, the Buy-to-Let/SME
sub-segment made a contribution to profit of £150.3m, a decrease of 3% from
the prior period (H1 2024 restated(1): £154.5m.
The Group remained highly focused on the risk assessment of new lending, as
demonstrated by the average loan to value (LTV) for Buy-to-Let/SME
originations(2) of 71% (H1 2024: 70%). The average book LTV in this
sub-segment(2) increased marginally to 69%, with 5.1% of loans exceeding 90%
LTV (31 December 2024: 68% and 4.5%, respectively).
Buy-to-Let
The Buy-to-Let gross loan book increased by 4% to £11,613.9m at the end of
June from £11,201.2m as at 31 December 2024. Originations increased by 20% to
£819.7m in the period (H1 2024: restated £685.3m(3)) as buyers sought to
complete before higher rates of Stamp Duty Land Tax came into effect on 1
April.
The proportion of Kent Reliance Buy-to-Let completions represented by
refinance remained unchanged from the prior period at 63%. Product transfers
reduced to 69% of existing borrowers choosing a new product within three
months of their initial rate mortgage coming to an end (H1 2024: 74%).
OSB Buy-to-Let/SME sub-segment
New borrowers continued to favour five-year fixed rate mortgages, which
represented 66% of Kent Reliance Buy-to-Let completions in the first half of
2025 (H1 2024: 71%), while the majority of Kent Reliance existing customers
transferring to a new product at maturity preferred the flexibility of
shorter-term mortgages.
Landlords continued to optimise their businesses from a tax perspective, with
92% of Kent Reliance mortgage purchase applications coming from landlords
borrowing through a limited company (H1 2024: 91%). Proportion of
professional, multi-property landlords remained unchanged from the prior
period at 92% of completions by value for the Kent Reliance brand in the first
half of 2025.
Research conducted by Pegasus Insight in the second quarter of 2025, found
that 71% of landlords reported strong rental demand from prospective tenants
in the regions where they currently let property and that rental yields
exceeded 6% in the first quarter of 2025, the highest level recorded in ten
years.
The weighted average LTV of the Buy-to-Let book as at 30 June 2025 was 69%
with an average loan size of £265k (31 December 2024: 67% and £260k). The
weighted average interest coverage ratio for Buy-to-Let originations remained
high during the first half of 2025 at 195% (H1 2024: 185%) supported by
reducing mortgage interest rates and opportunities to increase rents.
Commercial
Through its InterBay brand, the Group lends to borrowers investing in
commercial and semi-commercial property, reported in the Commercial total, and
more complex Buy-to-Let properties and portfolios, reported in the Buy-to-Let
total.
The gross loan book grew by 14% to £1,546.0m in the first six months of 2025
(31 December 2024: £1,356.0m) supported by originations of £310.9m which
more than doubled from £137.0m in the prior period. The Group continued to
focus on high-quality commercial and semi-commercial business in the period,
launching a new range of products in February with reduced rates and product
fees.
The weighted average LTV of the commercial book was stable at 73% and the
average loan size increased to £455k in the first half of 2025 (31 December
2024: 73% and £440k).
InterBay Asset Finance, which predominantly targets UK SMEs and small
corporates, financing business- critical assets, continued to grow in the
first half of 2025, adding to its high-quality portfolio. The gross carrying
amount under finance leases increased by 21% to £381.9m as at 30 June 2025
(31 December 2024: £316.9m) and originations grew by 59% to £123.3m from
£77.6m in the prior period.
Residential development
Our Heritable residential development business provides development finance to
small and medium-sized residential property developers. The preference is to
fund house builders which operate outside central London and provide
relatively affordable family housing, as opposed to complex city centre
schemes where affordability and control of construction costs can be more
challenging. New applications predominantly represent repeat business from the
team’s extensive existing relationships. Heritable continue to take a
careful approach to approving funding for new customers.
OSB Buy-to-Let/SME sub-segment
The residential development finance gross loan book increased by 16% at the
end of June 2025 to £302.7m, with a further £209.3m committed (31 December
2024: £262.0m and £168.2m, respectively). Total approved limits were
£770.6m, exceeding drawn and committed funds due to the revolving nature of
the facilities, where construction is phased and loans are redrawn as sales on
the initially developed properties occur (31 December 2024: £623.3m).
At the end of June 2025, Heritable had commitments to finance the development
of 2,626 residential units, the majority of which are houses located outside
central London and other major cities in England.
Funding lines
During the period, the Group maintained a cautious risk approach focusing on
servicing existing customers. Total credit approved limits as at the end of
June 2025 were £38.8m with total gross loans outstanding of £13.8m (31
December 2024: £44.4m and £19.7m, respectively).
1. Prior period interest income, total income and contribution to profit were
restated due to a change in swap cost allocation methodology.
2. Buy-to-Let/SME sub-segment average weighted LTVs include Kent Reliance and
InterBay Buy-to-Let, semi-commercial and commercial lending.
3. Restated to exclude asset finance originations.
OSB Residential sub-segment
30-Jun-2025 £m 31-Dec-2024 £m Change %
First charge 2,089.4 2,181.2 (4)
Second charge (1) 88.3 102.0 (13)
Gross loans and advances to customers 2,177.7 2,283.2 (5)
Expected credit losses (10.5) (10.6) -
Net loans and advances to customers 2,167.2 2,272.6 (5)
1. Second charge mortgage book is in run-off.
This sub-segment comprises first charge mortgages to owner-occupiers, secured
against a residential home and under shared ownership schemes.
First charge
First charge originations under the Kent Reliance brand reduced to £76.0m in
the first six months of 2025 (H1 2024: £133.7m) in line with the Group’s
strategic move to offer specialist Residential mortgages under the Precise
brand. The gross loan book was £2,089.4m as at 30 June 2025, a decrease of 4%
compared with £2,181.2m as at 31 December 2024.
Net interest income in the Residential sub-segment decreased by 13% to £35.0m
(H1 2024 restated(1): £40.4m) due to a decline in the net loan book, the roll
off of higher margin mortgages and more costly funding spreads to SONIA as the
deposit book continued to recycle. Other expenses of £0.5m (H1 2024: £0.5m
income) related to losses from the Group’s hedging activities and the
impairment charge of £0.2m (H1 2024: £1.4m charge) was due to individual
provisions against a small number of counterparties and write-offs. Overall,
contribution to profit from this sub-segment decreased by 13% to £34.3m (H1
2024 restated(1): £39.5m).
The average book LTV increased marginally from prior year to 49%(2), with only
1.7% of loans with LTVs exceeding 90% (31 December 2024: 48% and 1.5%,
respectively). The average LTV of new residential originations increased to
71%(2) (H1 2024: 64%) as a result of more mortgages completing at LTVs of 80%
and above in the period.
1. Prior period interest income, total income and contribution to profit were
restated due to a change in swap cost allocation methodology.
2. Residential sub-segment average weighted LTVs include first and second
charge lending.
Charter Court Financial Services (CCFS) segment
The following tables present CCFS’s contribution to profit and loans and
advances to customers:
Contribution to profit for the period
For the six months to 30 June 2025 Buy-to-Let £m Residential £m Bridging £m Second charge £m Other (1) £m Total £m
Net interest income 82.4 38.7 9.6 1.1 1.3 133.1
Other income - - - - 2.0 2.0
Total income 82.4 38.7 9.6 1.1 3.3 135.1
Impairment of financial assets 2.8 1.4 (0.2) 0.1 - 4.1
Contribution to profit 85.2 40.1 9.4 1.2 3.3 139.2
For the six months to 30 June 2024 Buy-to-Let £m Residential £m Bridging £m Second charge £m Other (1) £m Total £m
Net interest income 92.7 51.8 5.9 1.5 7.0 158.9
Other income - - - - 5.9 5.9
Total income 92.7 51.8 5.9 1.5 12.9 164.8
Impairment of financial assets 7.2 1.1 0.2 0.1 (0.1) 8.5
Contribution to profit 99.9 52.9 6.1 1.6 12.8 173.3
1. Other relates to net interest income from acquired loan portfolios, fee
income from third party mortgage servicing and gains or losses on the
Group’s hedging activities.
Charter Court Financial Services (CCFS) segment
Loans and advances to customers
As at 30 June 2025 Buy-to-Let £m Residential £m Bridging £m Second charge £m Other (1) £m Total £m
Gross loans and advances to customers 6,013.3 2,959.9 480.3 53.3 11.9 9,518.7
Expected credit losses (18.1) (3.2) (0.6) (0.2) - (22.1)
Net loans and advances to customers 5,995.2 2,956.7 479.7 53.1 11.9 9,496.6
Risk-weighted assets 2,561.1 1,348.5 289.4 24.6 4.3 4,227.9
As at 31 December 2024 Buy-to-Let £m Residential £m Bridging £m Second charge £m Other (1) £m Total £m
Gross loans and advances to customers 6,367.3 3,005.7 364.5 63.8 12.9 9,814.2
Expected credit losses (20.5) (4.6) (0.4) (0.3) - (25.8)
Net loans and advances to customers 6,346.8 3,001.1 364.1 63.5 12.9 9,788.4
Risk-weighted assets 2,687.8 1,355.8 205.7 28.7 4.8 4,282.8
1. Other relates to acquired loan portfolios.
Charter Court Financial Services (CCFS) segment
30-Jun-2025 £m 31-Dec-2024 £m Change %
Buy-to-Let 6,013.3 6,367.3 (6)
Residential 2,959.9 3,005.7 (2)
Bridging 480.3 364.5 32
Second charge (1) 53.3 63.8 (16)
Other (2) 11.9 12.9 (8)
Gross loans and advances to customers 9,518.7 9,814.2 (3)
Expected credit losses (22.1) (25.8) 14
Net loans and advances to customers 9,496.6 9,788.4 (3)
1. Second charge mortgage book is in run-off.
2. Other relates to acquired loan portfolios.
The CCFS segment comprises Buy-to-Let mortgages secured on residential
property held for investment purposes by both non-professional and
professional landlords, residential mortgages to owner-occupiers secured
against residential properties including those unsupported by the high street
banks and short-term bridging secured against residential property in both the
regulated and unregulated sectors.
CCFS’ net loan book reduced by 3% to £9,496.6m at the end of June (31
December 2024: £9,788.4m). Originations decreased in Buy-to-Let and
Residential sub-segments, with a 16% reduction in total CCFS segment
originations to £659.6m from £782.7m in the prior period.
CCFS Buy-to-Let sub-segment
Originations in the Buy-to-Let sub-segment through the Precise brand decreased
in the first half of 2025 to £115.7m (H1 2024: £339.3m) as the Group focused
on returns in more specialist and professional landlord market serviced by
Kent Reliance. The gross Buy-to-Let loan book decreased by 6% in the period to
£6,013.3m from £6,367.3m at the end of 2024.
The proportion of remortgages remained at 48% of completions under the Precise
brand in the first half of 2025 and 49% of existing borrowers chose to switch
to a new product within three months of their initial rate mortgage coming to
an end.
Five-year fixed rate products accounted for 46% of Precise completions, down
from 60% in the first half of 2024, as an increasing proportion of borrowers
elected to take shorter-term mortgages in anticipation of falling interest
rates. Borrowing through a limited company made up 71% of Buy-to-Let
completions in the first half (H1 2024: 68%). The proportion of loans for
specialist property types, including houses of multiple occupation and
multi-unit properties represented 14% of completions in this sub-segment (H1
2024: 27%).
The weighted average LTV of the loan book in this segment increased marginally
to 68% (31 December 2024: 67%). The new lending average LTV was 74% with an
average loan size of £188k (H1 2024: 72% and £190k, respectively). The
weighted average interest coverage ratio for Buy-to-Let originations decreased
to 159% in the first half (H1 2024: 161%).
Net interest income in this sub-segment decreased to £82.4m compared with
£92.7m in the prior period, primarily as a result of a decline in the net
loan book in the first half of 2025 compared to 30 June 2024 as the Group
completed the £1.25bn securitisation and deconsolidation of Precise
Buy-to-Let loans in December 2024. It was further impacted by more costly
funding spreads to SONIA as the deposit book continued to recycle. The
impairment credit of £2.8m (H1 2024: £7.2m credit) reflected improved house
price valuations and a release of post-model adjustments. Buy-to-Let
sub-segment made a contribution to profit of £85.2m, compared with £99.9m in
the prior period primarily due to the decline in net interest income.
Charter Court Financial Services (CCFS) segment
CCFS Residential sub-segment
The gross loan book in the CCFS’ Residential sub-segment reduced by 2% to
£2,959.9m as at 30 June 2025 (31 December 2024: £3,005.7m) reflecting
primarily a 15% reduction in originations in the period to £212.7m (H1 2024:
£251.5m). The Group introduced new and improved products in the second
quarter, building a strong pipeline for the reminder of the year.
Focus on borrowers underserved by the high street was demonstrated in the
broadened offering launched in the second quarter of the year, including a new
three-year fixed rate product, expanding the maximum LTV to 95% as well as
introducing zero fee mortgages.
The weighted average LTV for the Residential book was 60% and the average loan
size £167k (31 December 2024: 59% and £160k, respectively). The average LTV
of new lending remained 62%, unchanged from the prior period.
Net interest income decreased to £38.7m compared with £51.8m in the prior
period, reflecting more costly funding spreads to SONIA as the deposit book
continued to recycle, reduction in the net loan book and the roll off of
higher margin mortgages. The Residential sub-segment recorded an impairment
credit of £1.4m (H1 2024: £1.1m credit) due to improved house price
valuations and IFRS 9 stage migrations. The Residential sub-segment
contribution to profit reduced to £40.1m (H1 2024: £52.9m) primarily due to
the decline in net interest income.
CCFS Bridging sub-segment
Short-term bridging originations grew by 73% to £331.2m (H1 2024: £191.9m)
as the Group focused on building a pipeline of high-quality, high-return
business. The gross loan book in this sub-segment grew by 32% to £480.3m at
the end of June (31 December 2024: £364.5m).
In the first six months of the year, the Group improved its bridging
proposition by expanding the availability of automated valuations up to 75%
LTV and allowing them to be used for light refurbishment. It also launched a
new product which allows customers to borrow based on the future market value
of a refurbished property.
Net interest income was £9.6m compared with £5.9m in the prior period due to
strong originations. Impairment charge of £0.2m was recognised for the period
(H1 2024: £0.2m credit) and bridging sub-segment made a contribution to
profit of £9.4m in the first six months of 2025 (H1 2024: £6.1m).
Risk review
Key areas of focus during the six months to 30 June 2025
The Group continued to leverage its Enterprise Risk Management Framework and
supporting capabilities to effectively manage the risk profile across existing
and emerging risks, whilst delivering against planned strategic and financial
objectives. Progress continued to be made across all risk objectives set out
in the 2024 Annual Report and Accounts.
The macroeconomic outlook for the United Kingdom remained uncertain with the
impact of US trade tariffs, wider geo-political instability and the go forward
impact of government policy still to be fully observed, with these factors
reflected in the economic scenarios used for financial forecasting and credit
risk provisioning. Base case economic forecasts assumed a gradual reduction in
bank base rate levels throughout 2025 which are expected to ease affordability
pressures and normalise market dynamics. Unemployment levels are forecast to
rise throughout 2025 and peak in 2026, moderating in the following years,
coupled with muted house price inflation during 2025-2026.
Ongoing affordability challenges continued to result in elevated levels of
arrears within the Residential and Buy-to-Let sub-segments of the loan book,
whilst the actual level of observed write-off balances remained relatively low
given the inherent resilience of the fully secured loan book. Originations
across the Group’s core Buy-to-Let and Residential mortgage portfolios have
been subject to adherence to the Group’s prudent underwriting disciplines
with continued focus on customer and affordability risk assessments,
risk-based pricing and security coverage. The Group maintained its focus on
originations across the Group’s higher-yielding sub-segments in line with
its strategy, where the book exhibits strong income and credit performance.
The Group has leveraged its risk-based analytical capabilities including
credit risk models, stress testing and scenario analysis to assess areas of
potential future vulnerability to inform the setting of risk appetite,
assessment of contingent financial resources and monitoring performance.
In line with the Group’s modelled forecast, arrears levels marginally
increased during the six months to 30 June 2025, as customer affordability
challenges persisted. It is important to note that arrears metrics include a
small number of run-off legacy acquired first and second charge mortgage
portfolios, which disproportionately contributed to the arrears profile. Low
levels of arrears continued to be observed across the Group’s Commercial
sub-segment. The Group continued to support customers in arrears by deploying
a full tool kit of forbearance and vulnerability management protocols to
ensure compliance with its customer centric values and good customer outcome
objectives.
Liquidity coverage ratios remained strong across the Group, with funding
predominantly provided by retail deposits, supplemented with wholesale
funding, with the Group remaining on track to repay Term Funding Scheme for
SME (TFSME) balances in line with its funding plan. Indexed Long-Term Repo
(ILTR) borrowing was also utilised. In July, the Group received a Domestic
Liquidity Subgroup (DoLSub) permission which allows full fungibility of
liquidity and funding across the Group.
The Group’s capital position remained strong with a CET1 ratio of 15.7% (31
December 2024: 16.3%), which reflecting the £100m share repurchase programme
announced in March 2025, ongoing profitability and balance sheet size and mix.
During the period, the Group re-assessed the impact of planned balance sheet
forecasts from the perspective of current and go to Basel 3.1 standardised
requirements and demonstrated its ability to meet both its internal and
regulatory requirements under both approaches.
The Group’s transformation programme continued to be delivered in a robust
and controlled manner, whilst the Group’s operational risk profile remained
stable and operating within appetite. Progress was also made in simplifying
the Group’s Information Technology estate, whilst further enhancing cyber
risk management capabilities which is a key area of ongoing focus for the
Board.
During the period, the Group further strengthened its financial and
operational resilience, recovery and resolvability capabilities in accordance
with its underlying risk management objectives and regulatory expectations.
The Group is seeking clarification from the Bank of England in respect of the
recently announced changes to the MREL regime and its implications for the
Group’s requirements.
The Group continued to leverage its Internal Ratings Based (IRB) models to
actively monitor and manage its risk profile, whilst capabilities continued to
be further integrated into the Group’s risk and capital management
disciplines. The Group notes the recent PRA announcement (DP1/25) which
details a range of possible policy changes to the treatment of residential
mortgage exposures under the IRB approach, with the aim of removing barriers
for aspirant firms to gain accreditation, which in turn should improve the
level of market competition and the ability for firms to scale and grow. The
Group looks forward to engaging with the PRA on its own IRB application in the
second half of 2025.
Principal risks and uncertainties
The Board is responsible for determining the nature and extent of the
principal risks it is willing to take in order to achieve its strategic
objectives.
During the six months to 30 June 2025, the Board saw no significant change in
the principal risks and uncertainties as disclosed on pages 54 to 63 of the
2024 Annual Report and Accounts.
The table below provides a high-level overview of the principal risks which
the Board believes are the most material with respect to potential adverse
impact on the business model, future financial performance, solvency and
liquidity.
Principal risks Key mitigating actions
Strategic and business risk * Regular monitoring by the Board and the Group Executive Committee of business and financial performance against the Group’s strategic agenda and risk appetite.
* The financial plan is subject to regular reforecasts.
* Use of stress testing to flex core business planning assumptions to assess potential performance under stressed operating conditions.
* The Balanced Business Scorecard is the primary mechanism to support how the Board assesses management performance against key targets.
Reputational risk * The Group has a culture and commitment to being open and transparent in communication with all key stakeholders and has established processes to proactively identify and manage potential sources of reputational risk, for instance: * The Group actively monitors customer and broker feedback (through social media, Trustpilot channels, NPS and CSAT surveys) to assess the ongoing performance of service levels.
* Established processes are in place to review, assess and remediate complaints in a timely manner.
* The Group also actively monitors external press reports, social media, sentiment of banking industry analysts, its investors, performance of key third party suppliers and interactions with regulators.
Credit risk Individual borrower defaults: * Across both OSB and CCFS a robust underwriting assessment is undertaken to ensure a customer has the ability and propensity to repay, and sufficient security is available to support the new loan requested.
* Where problems are observed in maintaining loan repayments, the Financial Support function works with the customer to reach a satisfactory conclusion.
Macroeconomic downturn * The Group works within portfolio limits on LTV, affordability, individual and loan type exposure, sector and geographic concentrations that are approved by the Group Risk Committee and the Board. These are reviewed at least on an annual basis.
* Stress testing is performed to ensure that the Group maintains sufficient capital to absorb losses in an economic downturn and continues to meet its regulatory requirements.
Wholesale credit risk * The Group transacts only with high quality wholesale counterparties.
* Derivative exposures include collateral agreements to mitigate credit exposures.
Market risk * The Group’s Treasury function actively hedges to match the timing of cash flows from assets and liabilities.
* Interest rate risk in the banking book (IRRBB) is monitored via a comprehensive range of techniques and scenarios including both economic value and earnings measures at both the Interest Rate Forum and the Group Assets and Liabilities Committee.
Liquidity and funding risk * The Group’s funding strategy is focused on a highly stable retail deposit franchise.
* The Group has made significant progress towards paying back all TFSME borrowing across both banking entities and has plans to refinance the remaining funding ahead of its maturity in October 2025.
* The Group is actively using BoE’s Indexed Long-Term Index Repo (ILTR) to support the business-as-usual liquidity requirements. Use of ILTR is subject to appropriate risk management disciplines in relation timing and cost of roll-over. This fully aligns to the BoE guidance and expectations.
* The Group’s large number of depositors provide diversification, with a high proportion of balances covered by the Financial Services Compensation Scheme (FSCS), mitigating the risk of a retail run.
* The Group performs in-depth liquidity stress testing and holds prudential liquidity buffers to manage funding requirements under normal and stressed conditions.
* The Group proactively manages its savings proposition through the Savings Pricing Group, Liquidity Forum and the Group Assets and Liabilities Committee.
* The Group has positioned mortgage collateral and securitised notes with the Bank of England, which allows it to consider alternative funding sources to ensure that it is not solely reliant on retail savings and maintain appropriate levels of contingent funding.
* The Group continuously monitors wholesale funding markets and is experienced in taking proactive management actions where required.
Solvency risk * The Group operates from a strong capital position and has a record of delivering strong profitability.
* The Group actively monitors its capital requirements and resources against financial forecasts, including MREL requirements and undertakes stress testing analysis to subject its solvency ratios to extreme but plausible scenarios.
* The Group also holds prudent levels of capital buffers based on CRD IV requirements and expected balance sheet growth.
* The Group engages actively with regulators, industry bodies and advisers to keep abreast of potential changes and provides feedback in consultation processes.
Operational risk IT security (including cyber risk) * The Group operates with a suite of detective controls to ensure services between the business and its customers operate securely with potential threats identified and mitigated as part of its IT risk and control assessment. This is further supported by documented and tested procedures intended to ensure the effective response to a security breach.
* The Group’s programme of IT and cyber improvements continued with the aim of enhancing its protection against IT security threats, deploying a series of tools designed to identify and prevent network/system intrusions.
IT failure * The Group continues to invest in improving the resilience of its core infrastructure. It has identified its prioritised business services and the infrastructure that is required to support them. Tests are performed regularly to validate the Group’s ability to recover from an incident.
* The Group has established a site in Hyderabad to ensure that, in the event of an operational incident in Bangalore, services can be maintained.
Data quality * The Group has a suite of data governance policies and procedures along with dedicated resources to ensure the quality of data is maintained at an appropriate standard.
Change management * The Group recognises that implementing change introduces significant operational risk and has therefore implemented a series of control gateways designed to ensure that each stage of the change management process has the necessary level of oversight.
Conduct risk * The Group’s culture is clearly defined and monitored via its Purpose, Vision and Value driven behaviours.
* The Group has a strategic commitment to provide simple, customer-centric products which deliver good customer outcomes across the product lifecycle.
* The Group has an embedded Conduct Risk Management Framework which clearly defines roles and responsibilities with respect to the management of conduct risk and oversight across the Group’s three lines of defence.
* The Group has incorporated Consumer Duty regulations in line with its commitment to deliver good customer outcomes, which continue to be enhanced over time.
Compliance and regulatory risk Prudential regulatory changes * The Group has an effective horizon scanning process to identify regulatory change.
* All significant regulatory initiatives are managed by structured programmes overseen by the Project Management team and sponsored at Executive level, with oversight also provided by the Board.
* The Group utilises external expert opinion to support interpretation of requirements and validation of its response, where required.
Conduct regulation * The Group has a programme of regulatory horizon scanning linking into a formal regulatory change management programme.
* All Group entities utilise underwriting, arrears and forbearance and vulnerable customer policies which are designed to comply with regulatory principles, rules and expectations. These policies articulate the Group’s commitment to ensuring that all customers, especially those who are vulnerable or experiencing financial hardship, receive good outcomes in a way that considers their individual needs and circumstances.
Financial crime risk * The Group has an established screening programme that is deployed at the point of origination and on a regular basis throughout the customer lifecycle. Where applicable, enhanced due diligence is applied to ensure that any increase in risk is appropriately managed and any activity remains within risk appetite.
* The Group has a horizon scanning programme that identifies changes to money laundering regulations and any other financial crime related legislation to ensure that it complies with all regulatory obligations.
* The Group screens its customers on a regular basis against sanctions listings acting swiftly to react to any updates released in relation to the financial sanctions regime. Given the Group’s customer target market, it has negligible exposure to any of the affected jurisdictions and no exposure to any specific individual or entity contained within revised sanctions listings.
* All new business applications are subject to a range of controls to identify and mitigate fraud. Customer activity is monitored in order to detect suspicious activity or behaviour that may be indicative of fraud.
* All controls are supported by documented fraud related policies and procedures that are managed by experienced employees in a dedicated Financial Crime function.
Emerging risks
The Group proactively scans for emerging risks which may have an impact on its
operations and strategy. The Group considers its top emerging risks to be:
Emerging risks Key mitigating actions
Political and macroeconomic uncertainty * The Group’s lending activity is focused in the United Kingdom (with a legacy book of mortgages in the Channel Islands) and, as such, will be impacted by any risks emerging from changes in the macroeconomic * The Group has mature and robust monitoring processes and via various stress testing activities (i.e. ad hoc, risk appetite and Internal Capital Adequacy Assessment Process (ICAAP)) understands how the Group performs over a variety of macroeconomic stress scenarios and has developed a suite of early warning indicators, which are closely monitored to identify changes in the economic environment.
environment which itself is influenced by geopolitical movements. Changes in inflation and interest rates pose risks to loan portfolio performance. * The Board and management review detailed portfolio reports to identify any changes in the Group’s risk profile.
Climate change Regulatory expectations and industry best practice continue to evolve. The Group is exposed to the following climate change risks: * Physical risks which relate to specific weather events, such as storms and flooding, or to longer-term * During the reporting period the Group continued to closely monitor its climate risk profile versus risk appetite.
shifts in the climate, such as rising sea levels. These risks could include adverse movements in the value of certain properties that are in coastal and low-lying areas or located in areas prone to increased subsidence and heave.
* Transitional risks may arise from the adjustment towards a low-carbon economy, such as tightening energy efficiency standards for domestic and commercial buildings. These risks could include a potential adverse movement in the value of properties
requiring substantial updates to meet future energy performance requirements.
* Reputational risk arising from a failure to meet changing societal, investor or regulatory demands.
Regulatory change The Group remains subject to a high-level of regulatory oversight and an extensive and broad ranging regulatory change agenda, including meeting the requirements of Basel 3.1 regulation. The Group is therefore required to respond to * The Group has established horizon scanning capabilities, together with dedicated prudential and conduct regulatory experts in place to ensure the Group manages future regulatory changes effectively.
prudential and conduct-related regulatory changes, fulfilling information requests and taking part in thematic reviews as required. * The Group also has strong relationships with regulatory bodies, and via membership of UK Finance contributes to responses to regulatory consultations.
Artificial Intelligence Artificial Intelligence (AI), including generative AI is rapidly advancing and since its creation is being utilised more widely across the financial services industry. OSB Group is in the early stages of its journey in adopting the * OSB Group has established a responsible AI policy, which controls the use and deployment of AI technology across the Group. Internal subject matter experts are in place and the Group will liaise with external third-party advisers as required. Close monitoring of developments in AI technology is undertaken by the Group’s IT function, where a suite of planned initiatives are underway to enable the Group to benefit (where appropriate) from the use of AI technology, whilst mitigating future risks which may occur.
use of AI across the organisation. The Group will continue to embrace this new technology, but in a controlled manner applying robust risk management arrangements to ensure risks continue to be identified, monitored and mitigated. Potential future risks
including (i) external threats including cyber criminals use of AI technology, market competition dynamics changing based on the varying levels of success firms have in leveraging this technology to drive enhancements in business performance. Potential use
of AI by external fraudsters (ii) internal risks relating to uncontrolled or inappropriate use of AI capabilities across the Group.
Risk Profile Performance Overview
Credit risk
The Group’s credit profile remained resilient during the six months to 30
June 2025.
The Group’s net loans and advances increased to £25.4bn as at 30 June 2025
from £25.1bn at the end of 2024, with further loan book diversification
observed resulting from strong origination performance across Commercial,
Asset finance, Residential development and Bridging lending.
Buy-to-Let sub-segment remained the Group’s largest portfolio. Average
weighted interest coverage ratios across originations improved to 195% for OSB
and remained strong at 159% for CCFS (H1 2024: 185% and 161%, respectively).
The improvement in interest coverage ratios reflected the steady reduction in
interest rates observed since July 2024 and continued robust application of
lending policy.
The Group’s risk appetite and well-established underwriting processes
supported new mortgage lending at prudent average weighted LTVs of 71% for OSB
and 64% for CCFS (H1 2024: 69% and 67%, respectively).
As at 30 June 2025, the average weighted LTV of the Group’s loan book was
65% (31 December 2024: 64%). The Group’s ability to absorb any future
economic shocks remained robust. The total average book LTV remained resilient
at 66% for OSB and 65% for CCFS (31 December 2024: 64% for both OSB and CCFS),
reflecting the impact of new lending LTV levels and changes in collateral
values.
Forward-looking internal and external credit scoring metrics remained strong,
considering internal performance and customers’ wider credit obligation
performance.
Group balances with greater than three months arrears increased marginally to
1.8% (31 December 2024: 1.7%), predominantly driven by ongoing affordability
issues resulting from Buy-to-Let and Residential borrowers with maturing fixed
rate mortgages facing higher prevailing rates at the point of reversion. The
Group continued to deploy its full forbearance and wider collections toolkits
to help borrowers in financial difficulties, whilst several targeted
initiatives have been under way to manage arrears performance to ensure it
continues to operate within modelled estimates. OSB’s greater than three
months in arrears levels increased to 2.0% (31 December 2024: 1.8%), whilst
CCFS’s remained stable at 1.5% (31 December 2024: 1.5%). Arrears levels
across the OSB bank entity continue to be impacted by the performance of
acquired portfolios which are in run off, whilst low levels of arrears
continue to be observed across the Commercial sub-segment.
Write-offs remained low at £6.5m during the six months to 30 June 2025 (H1
2024: £4.8m), indicating the resilience of the Group’s fully secured loan
book, compared with total provision held of £125.1m.
Expected credit losses
The Group recorded an impairment charge of £2.0m for the six months to 30
June 2025 (H1 2024: £4.7m credit) which represented a loan loss ratio of 2bps
compared to (4)bps in the first half of 2024.
The primary drivers of the impairment charge in the period were as follows:
a. Valuation methodology alignment and macroeconomic scenarios
In the first half of 2025, the Group enhanced its property valuation
methodology by incorporating the same third-party data for OSB segment,
aligning the valuation approach across the Group.
The Group continued to receive regular macroeconomic scenario updates from its
advisers, which were reviewed and discussed by management and the Board, along
with the probability weightings applied to each scenario.
The macroeconomic scenarios utilised within the IFRS 9 provisioning process as
at 30 June 2025 forecast a downgrade within its Gross Domestic Product outlook
as the United Kingdom economy slowed driven in part by geopolitical
uncertainty and global trade pressures. The revised macroeconomic scenarios
are more conservative on unemployment rates whilst house price performance
remains on a protracted recovery. The probability weighting assigned to each
scenario remained unchanged from 31 December 2024.
Macroeconomic scenarios utilised within IFRS 9 impairment calculations as at
30 June 2025:
Scenario (%) (1)
Scenario Probability weighting (%) Economic measure Year end 2025 Year end 2026 Year end 2027 Year end 2028 Year end 2029
Base case 40 GDP 1.1 0.9 1.3 1.8 1.7
Unemployment 4.8 4.9 4.7 4.3 4.1
House price growth 1.0 1.7 2.8 5.1 6.4
CPI 3.2 2.5 2.2 2.1 2.1
Bank Base Rate 3.8 3.5 3.5 3.5 3.5
Upside 30 GDP 2.0 3.3 2.2 2.3 1.6
Unemployment 4.4 4.0 3.7 3.6 3.6
House price growth 2.1 3.9 5.6 6.7 6.7
CPI 3.9 3.5 2.7 2.2 2.1
Bank Base Rate 5.0 4.6 3.6 3.5 3.5
Downside 20 GDP -0.4 -2.2 0.7 1.4 1.8
Unemployment 5.5 6.4 6.9 6.7 6.4
House price growth -3.7 -4.9 -2.0 2.7 7.4
CPI 2.2 1.3 1.7 1.9 1.9
Bank Base Rate 3.5 2.1 1.8 1.8 1.8
Severe Downside 10 GDP -1.2 -3.9 0.2 1.1 1.8
Unemployment 5.6 6.9 7.4 7.3 6.9
House price growth -5.8 -8.3 -5.1 0.9 7.7
CPI 1.6 0.8 1.3 1.8 1.9
Bank Base Rate 3.3 1.4 1.0 1.0 1.0
1. Scenarios show annual movement for GDP, house price growth and CPI and year
end positions for unemployment and bank base rate. Commercial and residential
properties follow the same HPI forecast
The aggregated impact of the valuation methodology alignment and updated
forward-looking macroeconomic scenarios accounted for a £5.4m impairment
release in the period.
b. Model enhancements and post model adjustments
Calibrations to the IFRS 9 models to ensure forecasted estimates continued to
align to recently observed performance and PMAs to account for risks not fully
captured within the framework resulted in an impairment release of £3.9m.
c. Arrears flow
With the increase in the Group’s arrears (or other default triggers) largely
due to the impact of borrowers with maturing fixed rate mortgages facing
significantly higher prevailing rates, there was an additional impairment
charge of £4.7m (31 December 2024: £10.8m).
d. Stage migration
An impairment release of £0.8m related to changes in the credit profile of
borrowers as they transitioned through modelled IFRS 9 impairment stages.
e. New lending
The Group’s Stage 1 impairment balance increased by £1.2m as a result of
new lending in the period.
f. Individually assessed provisions and other
The Group’s specialist Real Estate Management and Financial Support teams
maintained watchlists of loans where objective evidence of impairment existed
over a given exposure. For these specific loans, a detailed assessment of the
collateral and circumstances of the arrears was completed and, where required,
an individual impairment provision was raised based on this updated
information which replaced any modelled provisions held.
During the six months to 30 June 2025, the Group raised a number of additional
individual provisions against a small number of counterparties, which net of
other items accounted for a further charge of £2.4m. Included in this were
cross contingency defaults where a borrower had multiple facilities, all
facilities are considered in default when a minimum threshold of the
borrower’s exposure was classified as defaulted, noting the majority of
cross contingency defaults were up to date.
In addition to the above, the income statement included a charge of £3.8m
related to write-offs and other adjustments.
The table below indicates the provision coverage as at 30 June 2025:
As at 30 June 2025 Gross carrying amount £m Expected credit loss £m Coverage ratio % (1)
Stage 1 19,896.0 14.0 0.07%
Stage 2 4,579.2 34.9 0.76%
Stage 3 + POCI (2) 1,067.6 76.2 7.14%
Total 25,542.8 125.1 0.49%
As at 31 December 2024 Gross carrying amount £m Expected credit loss £m Coverage ratio % (1)
Stage 1 19,877.1 13.7 0.07%
Stage 2 4,352.9 39.3 0.90%
Stage 3 + POCI (2) 1,010.3 73.9 7.31%
Total 25,240.3 126.9 0.50%
1. Coverage ratios is calculated as total IFRS 9 expected credit loss as a
percentage of gross loans and advances.
2. POCI assets are purchased or originated credit impaired loans. These are
acquired loans that meet the Group’s definition of default (90 days past due
or an unlikely to pay) at acquisition.
Provision levels remained broadly stable with a coverage ratio of 0.49% as at
30 June 2025 (31 December 2024: 0.50%). The observed movements in house price
valuations and model updates, including post model adjustment, provided some
release within the impairment calculation, which offset individually assessed
provisions raised against a small number of loans and general changes to the
underlying risk of the portfolio, using both external and internal variables
to assess risk.
Liquidity and funding risk
The Group’s Liquidity Forum continued to monitor daily liquidity reporting
and forecasting to ensure liquidity levels remained at target levels.
The Group continued to be predominantly funded by retail savings, with a high
proportion of balances covered by the Financial Services Compensation Scheme
(FSCS). For reporting and stress testing purposes all deposits received via
deposit aggregators were assumed not to be protected by FSCS, as the Group was
not regularly provided with the individual customer data for these deposits.
Diversification of funding was provided by borrowing from the Bank of England
under its funding and repo schemes. As at 30 June 2025, the Group’s balance
under the Term Funding Scheme for SMEs was £655.5m, with £730m repaid in the
first six months of the year. Indexed Long-Term Repo (ILTR) balance was
£176.9m as at 30 June 2025.
Securitisation remained central to the Group’s liability management
strategy, as well as being a key funding source, although there were no new
transactions in the first half of 2025.
Liquidity coverage ratios remained strong at 184% for OSB and 149% for CCFS
(31 December 2024: OSB 183% and CCFS 231%) versus the regulatory minimum of
100% plus Individual Liquidity Guidance. On a DoLSub basis, the high-quality
liquid assets were £3,395.6m and the liquidity coverage ratio was 165% as at
30 June 2025.
Market risk
Interest rate risk is the key market risk the Group is exposed to. Gap and
basis risk are managed within defined risk appetite limits for each bank. The
Group’s Treasury function actively hedges risk to match the timing of cash
flows from assets and liabilities for each bank.
The Group has a small amount of foreign exchange exposure, due to the rupee
denominated running costs of the OSB India operation. Rupee denominated
running costs during the period to 30 June 2025 totalled £9.9m (30 June 2024:
£8.3m).
The Group maintained the equity structural hedge in the first half of 2025 in
order to reduce earnings volatility due to interest rate changes arising from
the portion of the balance sheet funded by equity. The equity structural hedge
comprises of a series of receive fixed rate swaps with a weighted average life
of 2.5 years and a notional amount of £1,409.7m as at 30 June 2025.
Solvency risk
Solvency risk is a function of balance sheet growth, profitability, access to
capital markets and regulatory changes. The Group actively monitors all key
drivers of solvency risk and takes prompt action to maintain its solvency
ratios at acceptable levels.
The Group remained profitable within the period and the Group’s capital
resources remained strong with the CET1 ratio at 15.7% (31 December 2024:
16.3%). The Group’s total capital ratio was 19.0% (31 December 2024: 19.7%)
whilst the leverage ratio at 30 June 2025 was 7.5% (31 December 2024: 7.7%).
Conduct risk
The Group considers its culture and behaviour in ensuring the delivery of good
customer outcomes and in maintaining the integrity of the market sub-segments
in which it operates to be a fundamental part of its strategy and a key driver
to sustainable profitability and growth.
The Group does not tolerate any systemic failure to deliver good customer
outcomes. On an isolated basis, incidents can result in detriment owing to
human and/or operational failures. Where such incidents occur, they are
thoroughly investigated, and the appropriate remedial actions are taken to
address any customer detriment and to prevent recurrence.
The Group considers effective conduct risk management to be a product of the
positive behaviour of all employees, influenced by the customer-centric
culture throughout the organisation and therefore continues to promote a
strong sense of awareness and accountability.
Statement of Directors’ Responsibilities
We, the Directors listed below, confirm that to the best of our knowledge:
• the interim condensed financial statements have been prepared in
accordance with International Accounting Standard 34, Interim Financial
Reporting, as adopted by the United Kingdom (UK);
• the interim management report includes a fair review of the information
required by:
(a) DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an
indication of important events that have occurred during the first six months
of the financial year and their impact on the interim condensed financial
statements; and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
(b) DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being
related party transactions that have taken place in the first six months of
the financial year and that have materially affected the financial position or
performance of the Group during that period; and any changes in the related
party transactions described in the last Annual Report and Accounts that could
do so.
Kal Atwal
Henry Daubeney
Andy Golding
Noël Harwerth
Sarah Hedger (Resigned on 8 May 2025)
Gareth Hoskin (Appointed on 1 April 2025)
Sally Jones-Evans (Appointed on 1 April 2025)
Victoria Hyde
Rajan Kapoor (Resigned on 8 May 2025)
Simon Walker
David Weymouth
By order of the Board
Date: 19 August 2025
Conclusion
We have been engaged by OSB GROUP PLC and its subsidiaries (the “Group”)
to review the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 which comprises the
Condensed Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Statement of Financial Position, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated Statement of Cash
Flows and related notes 1 to 35.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2025 is not prepared, in all
material respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of
the United Kingdom’s Financial Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 “Review of Interim Financial Information Performed by
the Independent Auditor of the Entity” issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, “Interim Financial
Reporting”.
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom’s Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the Group’s ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the Company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our conclusion, including our
Conclusion Relating to Going Concern, is based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the Company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the Company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Group, for our review work, for
this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
19 August 2025
Condensed Consolidated Statement of Comprehensive Income
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
Note £m £m
Interest receivable and similar income 3 964.6 1,073.7
Interest payable and similar charges 4 (627.6) (720.2)
Net interest income 337.0 353.5
Fair value (losses)/gains on financial instruments 5 (14.3) 5.9
Other operating income 3.1 3.2
Total income 325.8 362.6
Administrative expenses 6 (131.4) (126.2)
Provisions 24 (0.1) 0.2
Impairment of financial assets 17 (2.0) 4.7
Profit before taxation 192.3 241.3
Taxation 7 (50.2) (63.0)
Profit for the period 142.1 178.3
Other comprehensive expense
Items which may be reclassified to profit or loss:
Fair value changes on financial instruments measured at fair value through other comprehensive income (FVOCI):
Arising in the period - (0.2)
Revaluation of foreign operations (1.7) 0.2
Other comprehensive expense (1.7) -
Total comprehensive income for the period 140.4 178.3
Dividend declared for the period, pence per share 9 11.2 10.7
Earnings per share (EPS), pence per share
Basic 8 37.3 44.4
Diluted 8 36.5 43.4
The above results are derived wholly from continuing operations.
Notes 1 to 34 form part of these condensed consolidated financial statements.
Condensed Consolidated Statement of Financial Position
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
Note £m £m
Assets
Cash in hand 0.3 0.3
Loans and advances to credit institutions 11 3,014.0 3,405.9
Investment securities 12 1,491.3 1,434.4
Loans and advances to customers 13 25,429.6 25,126.3
Fair value adjustments on hedged assets 18 34.6 (179.3)
Derivative assets 164.6 313.8
Other assets 22.8 17.8
Current taxation asset 10.5 14.8
Deferred taxation asset 7.3 6.2
Non-current assets held for sale 0.6 -
Property, plant and equipment 53.6 54.6
Intangible assets 58.3 48.8
Total assets 30,287.5 30,243.6
Liabilities
Amounts owed to credit institutions 19 862.6 1,935.2
Amounts owed to retail depositors 20 24,590.1 23,820.3
Fair value adjustments on hedged liabilities 18 13.7 (6.1)
Amounts owed to other customers 441.2 104.9
Debt securities in issue 21 909.6 1,018.3
Derivative liabilities 150.1 81.9
Lease liabilities 22 8.2 9.1
Other liabilities 23 129.8 56.4
Provisions 24 4.2 4.6
Deferred taxation liability 15.8 13.1
Senior notes 25 723.0 722.7
Subordinated liabilities 26 259.9 259.8
28,108.2 28,020.2
Equity
Share capital 27 3.6 3.7
Share premium 27 4.9 4.5
Other equity instruments 150.0 150.0
Retained earnings 3,363.1 3,406.4
Other reserves (1,342.3) (1,341.2)
Shareholders’ funds 2,179.3 2,223.4
Total equity and liabilities 30,287.5 30,243.6
Notes 1 to 34 form part of these condensed consolidated financial statements.
The condensed consolidated financial statements on pages 40 to 43 were
approved by the Board of Directors on 19 August 2025 and signed on its behalf
by:
Andy Golding
Victoria
Hyde
Chief Executive Officer
Chief Financial Officer
Company number: 11976839
Condensed Consolidated Statement of Changes in Equity
Share capital Share premium Capital redemption and Transfer reserve (1) Own shares (2) Foreign exchange reserve FVOCI reserve Share-based payment reserve Retained earnings Other equity instruments Total
£m £m £m £m £m £m £m £m £m £m
As at 1 January 2025 3.7 4.5 (1,354.5) (0.9) (2.1) 0.1 16.2 3,406.4 150.0 2,223.4
Profit for the period - - - - - - - 142.1 - 142.1
Other comprehensive expense - - - - (1.7) - - - - (1.7)
Total comprehensive (expense)/income - - - - (1.7) - - 142.1 - 140.4
Coupon paid on Additional Tier 1 (AT1) securities - - - - - - - (4.5) - (4.5)
Dividends paid - - - - - - - (84.8) - (84.8)
Share-based payments - 0.4 - - - - (1.1) 4.0 - 3.3
Tax recognised in equity - - - - - - 1.6 - - 1.6
Share repurchase (3) (0.1) - 0.1 - - - - (100.1) - (100.1)
As at 30 June 2025 (Unaudited) 3.6 4.9 (1,354.4) (0.9) (3.8) 0.1 16.7 3,363.1 150.0 2,179.3
As at 1 January 2024 3.9 3.8 (1,354.7) (1.0) (2.1) 0.2 14.2 3,330.2 150.0 2,144.5
Profit for the period - - - - - - - 178.3 - 178.3
Other comprehensive income/(expense) - - - - 0.2 (0.2) - - - -
Total comprehensive income/(expense) - - - - 0.2 (0.2) - 178.3 - 178.3
Coupon paid on AT1 securities - - - - - - - (4.5) - (4.5)
Dividends paid - - - - - - - (85.6) - (85.6)
Share-based payments - 0.4 - - - - (0.7) 4.6 - 4.3
Tax recognised in equity - - - - - - 0.3 - - 0.3
Own shares (2) - - - 0.1 - - - (0.1) - -
Share repurchase (3) - - 0.1 - - - - (50.5) - (50.4)
As at 30 June 2024 (Unaudited) 3.9 4.2 (1,354.6) (0.9) (1.9) - 13.8 3,372.4 150.0 2,186.9
1. Comprises Capital redemption reserve of £0.9m (30 June 2024: £0.7m) and
Transfer reserve of £(1,355.3)m (30 June 2024: £(1,355.3)m).
2. The Group has adopted look-through accounting (see note 1 c) of the 2024
Annual Report and Accounts) and recognised the Employee Benefit Trusts (EBT)
within OSB GROUP PLC (OSBG).
3. Includes £99.3m (30 June 2024: £50.0m) for shares repurchased and £0.8m
(30 June 2024: £0.5m) for transaction costs and fees.
Condensed Consolidated Statement of Cash Flows
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
Note £m £m
Cash flows from operating activities
Profit before taxation 192.3 241.3
Adjustments for non-cash and other items 32 96.0 124.0
Changes in operating assets and liabilities 32 637.3 1,957.5
Cash generated from operating activities 925.6 2,322.8
Provisions paid 24 (0.4) -
Net tax paid (42.1) (63.2)
Net cash generated from operating activities 883.1 2,259.6
Cash flows from investing activities
Maturity and sales of investment securities 307.7 326.6
Purchases of investment securities (363.6) (307.2)
Interest received on investment securities 29.5 15.8
Purchases of property, plant and equipment and intangible assets (16.0) (22.8)
Net cash from investing activities (42.4) 12.4
Cash flows from financing activities
Financing received 28 288.7 1,251.3
Financing repaid 28 (1,304.4) (2,239.5)
Interest paid on financing 28 (108.4) (145.5)
Dividends paid 9 (84.8) (85.6)
Share repurchase (1) (37.8) (32.1)
Other financing activities 28 (10.2) (5.0)
Net cash from financing activities (1,256.9) (1,256.4)
Net (decrease)/increase in cash and cash equivalents (416.2) 1,015.6
Cash and cash equivalents at the beginning of the period 10 3,231.4 2,514.0
Cash and cash equivalents at the end of the period 10 2,815.2 3,529.6
Movement in cash and cash equivalents (416.2) 1,015.6
1. Includes £37.5m (30 June 2024: £32.0m) for shares repurchased and £0.3m
(30 June 2024: £0.1m) for transaction costs and fees.
Notes to the Condensed Consolidated Financial Statements
1. Accounting policies
a) Basis of preparation
These interim condensed consolidated financial statements have been prepared
in accordance with the Disclosure Guidance and Transparency Rules (DTR) of the
Financial Conduct Authority (FCA) and in accordance with International
Accounting Standard 34 Interim Financial Reporting as adopted by the United
Kingdom (UK).
The accounting policies, presentation and methods of computation are
consistent with those applied by the Group in its latest audited financial
statements, which were prepared in accordance with International Financial
Reporting Standards (IFRS) as adopted by the United Kingdom Endorsement Board
and interpretations issued by the IFRS Interpretations Committee (IFRS IC) and
in conformity with the requirements of the Companies Act 2006. They do not
include all the information required for a complete set of IFRS financial
statements. However, selected explanatory notes are included to explain events
and transactions that are significant to an understanding of the changes in
the Group’s financial position and performance since the last Annual Report
and Accounts for the year ended 31 December 2024.
The comparative figures for the year ended 31 December 2024 are not the
Group’s statutory accounts for that financial year. The statutory accounts
for the year ended 31 December 2024 have been delivered to the Registrar of
Companies in England and Wales in accordance with section 447 of the Companies
Act 2006. The auditor has reported on those accounts. Their report was
unqualified; did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report, and did not
contain a statement under section 498(2) or (3) of the Companies Act 2006.
These interim condensed consolidated financial statements were authorised for
issue by the Company’s Board of Directors on 19 August 2025.
b) Accounting standards
Standards and amendments effective in 2025
‘Lack of Exchangeability – Amendments to International Accounting Standard
21’ is effective from 1 January 2025. The adoption of this amendment has not
had a material impact on the Group.
Standards not yet effective
No new or revised reporting standards significantly affecting the Group’s
accounting have been issued since the approval of the 2024 Annual Report and
Accounts.
All other accounting policies applied are consistent with those set out on
pages 201 to 209 of the 2024 Annual Report and Accounts.
c) Going concern
The Board undertakes regular rigorous assessments of whether the Group is a
going concern in light of current and potential future economic conditions and
all available information about future risks and uncertainties.
In assessing whether the going concern basis is appropriate, projections for
the Group have been prepared, covering its future performance, capital and
liquidity for a period in excess of 12 months from the date of approval of
these interim condensed consolidated financial statements. These forecasts
have been subject to sensitivity tests utilising a range of stress scenarios,
which have been compared to the latest economic scenarios provided by the
Group’s external economic advisors, as well as reverse stress tests.
The assessments included the following:
* Financial and capital forecasts were prepared utilising the latest economic
forecasts provided by the Group’s external economic advisors. Reverse stress
tests were run to identify combinations of adverse movements in house prices
and unemployment levels which would result in the Group breaching its minimum
regulatory and total loss absorbing capital requirements. The reverse stress
testing also considered what macroeconomic scenarios would be required for the
Group to breach its interim 18% Minimum Requirement for own funds and Eligible
Liabilities (MREL) requirement as of these dates. The Directors assessed the
likelihood of those reverse stress scenarios occurring within the next 12
months and concluded that the likelihood is remote.
* The latest liquidity and contingent liquidity positions and forecasts were
assessed against internal combined stress scenarios with the Group maintaining
sufficient liquidity throughout the going concern assessment period.
* The Group continues to assess the resilience of its business operating model
and supporting infrastructure in the context of the emerging economic,
business and regulatory environment. The Group’s Operational Resilience
Self-Assessment Report for 2024/2025 was reviewed and endorsed by the Group
Risk Committee, and approved by the Board in June 2025. Key areas of focus
include the provision of the Group’s Important Business Services (IBSs) to
minimise the impact of any service disruptions on the firm’s customers or
the wider financial services industry, and validating the levels of resilience
of the third parties that the Group depends upon for delivery of its IBSs.
There were no items identified that could threaten the Group’s viability
over the going concern assessment time horizon.
The Group’s financial projections demonstrate that the Group has sufficient
capital and liquidity to continue to meet its regulatory capital requirements
as set out by the Prudential Regulation Authority (PRA).
The Board has therefore concluded that the Group has sufficient resources to
continue in operational existence for a period in excess of 12 months from the
date of approval of these interim financial statements and, as a result, it is
appropriate to prepare these interim condensed consolidated financial
statements on a going concern basis.
d) Segmental reporting
IFRS 8 requires operating segments to be identified on the basis of internal
reports and components of the Group which are regularly reviewed by the chief
operating decision maker to allocate resources to segments and to assess their
performance. For this purpose, the chief operating decision maker of the Group
is the Board of Directors.
The Group provides loans, asset finance and retail deposits within the UK. The
Group segments its lending business and operates under two segments:
* OneSavings Bank (OSB)
* Charter Court Financial Services (CCFS)
The Group has disclosed relevant risk management tables in note 29 at a
sub-segment level to provide detailed analysis of the Group’s core lending
business.
2. Judgements in applying accounting policies and critical accounting
estimates
The preparation of the interim condensed consolidated financial statements
requires management to make judgements, estimates and assumptions that affect
the reported income and expense, assets and liabilities and disclosure of
contingencies at the date of the interim condensed consolidated financial
statements. Although these estimates and assumptions are based on
management’s best judgement at that date, actual results may differ from
these estimates. Estimates and assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised in the period in which the estimate is
revised and in any future periods affected.
As set out in the Risk review on page 100 of the 2024 Annual Report and
Accounts, climate change is a global challenge and an emerging risk to
businesses, people and the environment. Therefore, in preparing the financial
statements, the Group has considered the impact of climate-related risks on
its financial position and performance, including the impact on expected
credit losses (ECL) and redemption profiles included in effective interest
rate (EIR). While the effects of climate change represent a source of
uncertainty, the Group does not consider there to be a material impact on its
judgements and estimates from the physical or transition risks in the short
term. As part of the Group’s recognition of climate risk and overall
Environmental, Social and Governance (ESG) agenda, the Group considers the
physical risks of climate change and has retained a post-model adjustment
(PMA) of £0.2m (31 December 2024: £0.3m).
Estimates and judgements are regularly reviewed based on past experience,
expectations of future events and other factors.
The judgements made by the Group in the application of its accounting policies
are consistent with those set out on pages 209 to 212 of the 2024 Annual
Report and Accounts.
The following estimates may have a significant risk of material adjustment to
the carrying amount of assets within the next financial period.
(i) Loan book impairments
Set out below are details of the critical accounting estimates which underpin
loan impairment calculations. Less significant estimates are not discussed as
they do not have a material effect. The Group has recognised total impairments
of £125.1m (31 December 2024: £126.9m) at the reporting date as disclosed in
note 13.
Modelled impairment
Modelled provision assessments are subject to estimation uncertainty,
underpinned by a number of estimates being made by management which are
utilised within impairment calculations. Key areas of estimation within
modelled provisioning calculations include those regarding the loss given
default (LGD) model and forward-looking macroeconomic scenarios.
Loss given default model
The Group has a number of LGD models, which include estimates regarding
propensity to go to possession given default (PPD), forced sale discount, time
to sale and sale costs. The LGD is sensitive to the application of the House
Price Index (HPI), with an 8% haircut considered to be a reasonable percentage
change when reviewing historical and expected 12-month outcomes. The table
below shows the resulting incremental provision required in an 8% house price
haircut being directly applied to all exposures which not only adjust the sale
discount but the propensity to go to possession:
As at 30-Jun-25 As at 31-Dec-24
£m £m
OSB 23.1 22.3
CCFS 7.9 9.1
Group 31.0 31.4
Forward-looking macroeconomic scenarios
The Group’s macroeconomic scenarios can be found in the Risk review section
on page 33. The following tables detail the ECL scenario sensitivity analysis
with each scenario weighted at 100% probability. The purpose of using multiple
economic scenarios is to model the non-linear impact of assumptions
surrounding macroeconomic factors and ECL calculated:
As at 30 June 2025 (Unaudited) Weighted (ECL: note 16) 100% Base case scenario 100% Upside scenario 100% Downside scenario 100% Severe downside scenario
Total loans before provisions, £m 25,542.8 25,542.8 25,542.8 25,542.8 25,542.8
Modelled ECL, £m 77.3 61.3 50.9 112.2 151.4
Individually assessed provisions ECL, £m 40.6 40.6 40.6 40.6 40.6
Post Model Adjustments ECL, £m 7.2 5.6 3.7 11.3 16.0
Total ECL, £m 125.1 107.5 95.2 164.1 208.0
ECL coverage, % 0.49 0.42 0.37 0.64 0.81
As at 31 December 2024 (Audited) Weighted (ECL: note 16) 100% Base case scenario 100% Upside scenario 100% Downside scenario 100% Severe downside scenario
Total loans before provisions, £m 25,240.3 25,240.3 25,240.3 25,240.3 25,240.3
Modelled ECL, £m 79.6 63.6 53.2 114.5 153.0
Individually assessed provisions ECL, £m 37.6 37.6 37.6 37.6 37.6
Post Model Adjustments ECL, £m 9.7 7.2 4.3 15.9 23.5
Total ECL, £m 126.9 108.4 95.1 168.0 214.1
ECL coverage, % 0.50 0.43 0.38 0.67 0.85
(ii) Effective interest rate on lending
Estimates are made when calculating the EIR for loan assets. These include the
likely customer redemption profiles. Mortgage products offered by the Group
include directly attributable net fee income and a period on reversion rates
after the fixed/ discount period.
Products revert to the standard variable rate (SVR) or base rate plus a margin
for the Kent Reliance (OSB) brand, a SONIA/Base rate plus a margin for the
Precise (CCFS) brand and a LIBOR replacement rate/base rate for the InterBay
brand. Subsequent to origination, changes in actual and expected customer
prepayment rates are reflected as increases or decreases in the carrying value
of loan assets with a corresponding increase or decrease in interest income.
The Group uses historical customer behaviours, expected take-up rate of
retention products and macroeconomic forecasts in its assessment of expected
prepayment rates. Customer prepayments in a fixed rate or incentive period can
give rise to Early Repayment Charge (ERC) income.
Judgement is used in estimating the expected average life of a mortgage, to
determine the quantum and timing of redemptions that incur ERCs, the period
over which net fee income is recognised and the length of time customers spend
on reversion after the fixed/discounted period. Estimates are reviewed
regularly and during the first half of 2025, the Group made small adjustments
to remove 0.4 months from the average time on reversion rate for the Precise 5
year BTL portfolio (now 3.6 months) and adjusted the level of prepayments in
the fixed period on the Precise 5 year residential portfolio. Borrowers’
behaviour can be variable as base rate and market dynamics change, and we will
continue to monitor their behaviour for any potential impact on the
measurement of EIR. The adverse EIR adjustment was £7.4m (30 June 2024:
adverse EIR adjustment of £0.8m) during the first half of 2025 which reduced
net interest income and loans and advances to customers.
The impact of a -/+ two months movement in time spent on reversion by Precise
customers is -/+ £22.2m. £17.2m of this total sensitivity relates to the
£3bn of loans with product terms issued up to the end of 2022. These loans
are from the annual cohorts identified as having been written in a low-rate
environment. The remaining £5.0m sensitivity relates to the £6.5bn in loans
with product terms issued from 2023 onwards, written in a higher-rate
environment, where the step-up in reversion is smaller.
As the base rate increased throughout 2022 and 2023, using the EIR approach
resulted in additional monthly net interest income as the benefit of time
spent on a reversion rate became greater. Forward rates are used in the EIR
calculation and a decrease greater than the current expected forward rate
curve leads to a decrease in monthly net interest income. Based on the loans
and advances to customers balance as at 30 June 2025, if there was a 50bps
parallel shift downwards in the forward curve, it is estimated that this would
decrease monthly interest income by £1.4m across all mortgages.
3. Interest receivable and similar income
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
At amortised cost:
On OSB mortgages (1) 459.6 419.2
On CCFS mortgages (2) 287.5 323.2
On finance leases 12.0 4.4
On investment securities 22.2 12.2
On other liquid assets 60.7 91.2
Amortisation of fair value adjustments on CCFS loan book at Combination - (8.7)
Amortisation of fair value adjustments on hedged assets (3) 11.9 8.8
853.9 850.3
At fair value through profit or loss (FVTPL):
Net income on derivative financial instruments - lending activities 92.9 218.1
On investment securities 10.6 -
103.5 218.1
At FVOCI:
On investment securities 7.2 5.3
964.6 1,073.7
1. Includes adverse EIR behavioural adjustment of £1.0m (30 June 2024: £2.1m
adverse).
2. Includes adverse EIR behavioural adjustment of £6.4m (30 June 2024: £1.3m
adverse).
3. The amortisation relates to hedged assets where the hedges were terminated
before maturity and were effective at the point of termination.
4. Interest payable and similar charges
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
At amortised cost:
On retail deposits 517.1 550.7
On Bank of England (BoE) borrowings 25.2 68.0
On senior notes 32.3 31.1
On debt securities in issue 25.9 30.4
On subordinated liabilities 12.6 12.6
On wholesale borrowings 7.1 10.5
On Perpetual Subordinated Bonds (PSBs) - 0.3
On lease liabilities 0.1 0.2
620.3 703.8
At FVTPL:
Net expense on derivative financial instruments - savings activities 3.5 12.4
Net expense on derivative financial instruments - subordinated liabilities and senior notes 1.4 4.0
Net expense on derivative financial instruments - structural hedge 2.4 -
627.6 720.2
5. Fair value (losses)/gains on financial instruments
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Fair value changes in hedged assets 204.2 (72.4)
Hedging of assets (203.5) 51.2
Fair value changes in hedged liabilities (14.0) 31.9
Hedging of liabilities 13.8 (26.4)
Ineffective portion of hedges 0.5 (15.7)
Net (losses)/gains on unmatched swaps (14.7) 23.3
Amortisation of inception adjustments (3.6) (1.8)
Amortisation of acquisition-related inception adjustments - 2.0
Amortisation of de-designated hedge relationships 2.3 (2.8)
Fair value movements on mortgages at FVTPL 0.1 0.6
Fair value movements on loans and advances to credit institutions at FVTPL - 0.3
Fair value movements on investment securities at FVTPL 1.1 -
(14.3) 5.9
6. Administrative expenses
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Staff costs 71.8 69.6
Support costs 25.6 23.5
Professional fees 11.3 12.2
Facilities costs 3.6 4.0
Marketing costs 2.3 2.2
Depreciation 3.3 3.2
Amortisation 3.6 2.4
Other costs 9.9 9.1
131.4 126.2
The average number of people employed by the Group (including Executive
Directors) during the period is analysed below:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
UK 1,470 1,567
India 990 991
2,460 2,558
7. Taxation
The Group publishes its tax strategy on its corporate website. The table below
shows the components of the Group’s tax charge for the period:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Current tax
Corporation tax 47.4 65.5
Total current tax charge 47.4 65.5
Deferred tax
Deferred tax 2.8 -
Deferred tax - prior year adjustments - (0.1)
Release of deferred tax on CCFS Combination - (2.4)
Total deferred tax charge/(credit) 2.8 (2.5)
Total tax charge 50.2 63.0
The charge for taxation on the Group’s profit before taxation differs from
the charge based on the standard rate of UK Corporation Tax of 25% (2024: 25%)
as follows:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Profit before tax 192.3 241.3
Profit multiplied by the standard rate of UK Corporation Tax 25% (2024: 25%) 48.1 60.3
Bank surcharge (1) 2.9 4.7
Tax effects of:
Timing differences (2.8) (0.4)
Fair value adjustments on acquisition - 2.4
Tax on coupon paid on AT1 securities (2) (1.3) (1.3)
Expenses not deductible for tax purposes 0.5 (0.2)
Total current tax charge 47.4 65.5
Movement in deferred taxes 2.8 -
Release of deferred taxation on CCFS Combination - (2.4)
Deferred taxation - prior year adjustments - (0.1)
Total deferred tax charge/(credit) 2.8 (2.5)
Total tax charge 50.2 63.0
1. In 2024 tax charge for the two banking entities of £5.0m offset by
unwinding of CCFS acquisition adjustments of £0.3m.
2. The Group has issued AT1 capital instruments that are classified as Hybrid
Capital Instruments (HCI) for tax purposes. The coupons paid under HCI are
deductible under UK tax legislation despite being charged to equity.
Factors affecting tax charge for the period
The standard rate of UK corporation tax applicable in the period was 25%
(2024: 25%). The Group’s banking entities also pay the bank surcharge at
3.0% (2024: 3.0%) on combined profits for the full year above £100.0m (2024:
£100.0m).
The effective tax rate for the period ended 30 June 2025, excluding the impact
of adjustments in respect of earlier years, was 26.1% (2024: 26.2%). This is
higher than the standard rate of UK corporation tax, principally due to the
impact of the bank surcharge payable by the two banking entities offset by
deductions available for the coupon paid on AT1 instruments that are charged
to equity.
8. Earnings per share
EPS is based on the profit for the period and the weighted average number of
ordinary shares in issue. Basic EPS is calculated by dividing profit
attributable to ordinary shareholders by the weighted average number of
ordinary shares in issue during the period. Diluted EPS takes into account
share options and awards which can be converted to ordinary shares.
For the purpose of calculating EPS, profit attributable to ordinary
shareholders is arrived at by adjusting profit for the year for the coupon on
securities classified as equity:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Profit after tax 142.1 178.3
Less: coupon paid on AT1 securities classified as equity (4.5) (4.5)
Profit attributable to ordinary shareholders 137.6 173.8
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
Weighted average number of shares in issue, millions
Basic 368.7 391.4
Dilutive impact of share-based payment schemes 8.6 8.8
Diluted 377.3 400.2
Earnings per share, pence per share
Basic 37.3 44.4
Diluted 36.5 43.4
9. Dividends
Dividends paid during the period are detailed below:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m Pence per share £m Pence per share
Final dividend for the prior year 84.8 22.9 85.6 21.8
The Group’s dividend policy is to declare interim dividends equal to
one-third of the prior year’s total dividend. The Board has therefore
declared an interim dividend for 2025 of £40.9m, 11.2 pence per share (30
June 2024: £41.4m, 10.7 pence per share), based on the 2024 total dividend.
The interim dividend is payable on 19 September 2025 with an ex-dividend date
of 28 August 2025 and a record date of 29 August 2025. This dividend is not
reflected in these financial statements as it was not declared at the
reporting date.
A summary of the Company’s distributable reserves is shown below:
Distributable reserves
£m
As at 31-Dec-24 (Audited)
Retained earnings 1,354.2
Own shares (1) (0.9)
1,353.3
Movement:
Dividend distributions (84.8)
Coupon paid on AT1 securities (4.5)
Share repurchase (100.1)
As at 30-Jun-25 (Unaudited) 1,163.9
1. Represents own shares held in the Group’s EBT which are recognised within
OSBG under look-through accounting.
Further additional distributable reserves are expected to be realised over
time from distribution receipts from profits generated from the subsidiaries
including two regulated banks within the Group.
10. Cash and cash equivalents
The following table analyses the cash and cash equivalents disclosed in the
Condensed Consolidated Statement of Cash Flows:
As at 30-Jun-25 As at 31-Dec-24 As at 30-Jun-24 As at 31-Dec-23
(Unaudited) (Audited) (Unaudited) (Audited)
£m £m £m £m
Cash in hand 0.3 0.3 0.3 0.4
Unencumbered loans and advances to credit institutions 2,814.9 3,231.1 3,529.3 2,513.6
2,815.2 3,231.4 3,529.6 2,514.0
11. Loans and advances to credit institutions
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Unencumbered:
BoE call account 2,756.3 3,053.9
Call accounts 2.3 58.5
Cash held in special purpose vehicles (SPVs) (1) 31.5 99.5
Term deposits 24.8 19.2
2,814.9 3,231.1
Encumbered:
Cash held in SPVs (1) 34.3 40.6
Cash margin given 164.8 134.2
199.1 174.8
3,014.0 3,405.9
1. Cash held in SPVs is ring-fenced for use in managing the Group’s
securitised debt facilities under the terms of securitisation agreements. Cash
held in internal SPVs is treated as unencumbered in proportion to the retained
interest in the SPVs based on the nominal value of the bonds held in the Group
to total bonds in the securitisation, and included in cash and cash
equivalents. Cash retained in SPVs designated as cash reserve credit
enhancement is treated as encumbered in proportion to the external holdings in
the SPVs and excluded from cash and cash equivalents.
12. Investment securities
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Held at amortised cost:
Residential Mortgage-Backed Securities (RMBS) loan notes 724.1 742.1
Covered bond 220.5 56.2
944.6 798.3
Held at FVOCI:
UK Sovereign debt 129.5 226.0
Covered bond 11.0 -
140.5 226.0
Held at FVTPL:
RMBS loan notes 406.2 410.1
1,491.3 1,434.4
The credit risk on investment securities held at amortised cost has not
significantly increased since initial recognition and they are categorised as
stage 1. As at 30 June 2025, there were no ECLs on investment securities (31
December 2024: nil).
Movements during the period in investment securities held by the Group are
analysed below:
Six months ended 30-Jun-25 Year ended 31-Dec-24
(Unaudited) (Audited)
£m £m
As at 1 January 1,434.4 621.7
Additions (1) 363.6 1,597.3
Disposals and maturities (307.7) (789.1)
Movement in accrued interest (0.1) 4.6
Changes in fair value 1.1 (0.1)
1,491.3 1,434.4
1. In 2024 additions included £786.1m of notes received as part of PMF 2024-2
securitisation.
13. Loans and advances to customers
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Held at amortised cost:
Loans and advances (see note 14) 25,160.9 24,923.4
Finance leases (see note 15) 381.9 316.9
25,542.8 25,240.3
Less: Expected credit losses (see note 16) (125.1) (126.9)
25,417.7 25,113.4
Held at FVTPL:
Residential mortgages 11.9 12.9
25,429.6 25,126.3
14. Loans and advances
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
Held at amortised cost OSB CCFS Total OSB CCFS Total
£m £m £m £m £m £m
Gross carrying amount
Stage 1 12,380.2 7,142.3 19,522.5 12,029.3 7,539.0 19,568.3
Stage 2 2,535.0 2,038.6 4,573.6 2,411.8 1,935.5 4,347.3
Stage 3 714.4 296.2 1,010.6 653.2 294.1 947.3
Stage 3 (POCI) (1) 24.5 29.7 54.2 27.8 32.7 60.5
15,654.1 9,506.8 25,160.9 15,122.1 9,801.3 24,923.4
1. Purchased or originated credit impaired
The table below shows the movement in loans and advances to customers by IFRS
9 stage during the period:
Stage 1 Stage 2 Stage 3 Stage 3 (POCI) Total
£m £m £m £m £m
As at 1 January 2024 20,362.5 4,531.9 709.1 70.9 25,674.4
Originations (1) 3,771.6 - - - 3,771.6
Acquisitions (2) 5.9 - - - 5.9
Disposals (3) (1,126.1) (124.5) (0.2) - (1,250.8)
Repayments and write-offs (4) (2,669.7) (469.2) (128.4) (10.4) (3,277.7)
Transfers:
- To Stage 1 1,244.4 (1,210.5) (33.9) - -
- To Stage 2 (1,874.4) 1,933.5 (59.1) - -
- To Stage 3 (145.9) (313.9) 459.8 - -
As at 31 December 2024 (Audited) 19,568.3 4,347.3 947.3 60.5 24,923.4
Originations (1) 1,984.4 - - - 1,984.4
Acquisitions (2) 1.0 - - - 1.0
Repayments and write-offs (4) (1,316.1) (330.5) (95.0) (6.3) (1,747.9)
Transfers:
- To Stage 1 597.7 (578.3) (19.4) - -
- To Stage 2 (1,257.3) 1,318.1 (60.8) - -
- To Stage 3 (55.5) (183.0) 238.5 - -
As at 30 June 2025 (Unaudited) 19,522.5 4,573.6 1,010.6 54.2 25,160.9
1. Originations include further advances and drawdowns on existing
commitments.
2. The Group repurchased £1.0m (31 December 2024: £5.9m) of own originated
UK residential and buy to let mortgages from deconsolidated SPVs at par.
3. Disposals include loans and advances to customers derecognised as part of
the PMF 2024-2 securitisation.
4. Repayments and write-offs include customer redemptions and write-offs which
are immaterial.
The contractual amount outstanding of loans and advances that were written off
during the reporting period and that were still subject to collections and
recovery activity was £4.3m at 30 June 2025 (31 December 2024: £1.9m).
As at 30 June 2025, loans and advances of £319.5m (31 December 2024:
£280.8m) were in a probationary period before they could move out of Stage 3.
Where a borrower has multiple facilities, all facilities are considered in
default when a minimum threshold of the borrower’s exposure has been
classified as defaulted. As at 30 June 2025, loans and advances of £83.5m
(31 December 2024: £72.0m) were in this category of default.
15. Finance leases
The Group provides asset finance lending through InterBay Asset Finance
Limited.
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Gross investment in finance leases, receivable
Less than one year 144.0 120.3
Between one and two years 117.0 97.7
Between two and three years 86.6 74.0
Between three and four years 52.7 42.2
Between four and five years 24.0 18.9
More than five years 7.1 4.8
431.4 357.9
Unearned finance income (49.5) (41.0)
Net investment in finance leases 381.9 316.9
Net investment in finance leases, receivable
Less than one year 121.7 102.0
Between one and two years 102.6 85.6
Between two and three years 78.6 67.4
Between three and four years 49.2 39.3
Between four and five years 23.0 18.0
More than five years 6.8 4.6
381.9 316.9
The Group recognised £4.4m (31 December 2024: £4.1m) of ECLs on finance
leases as at 30 June 2025.
16. Expected credit losses
The ECL has been calculated based on various scenarios as set out below:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
ECL provision Weighting Weighted ECL provision ECL provision Weighting Weighted ECL provision
£m % £m £m % £m
Scenarios
Upside 50.9 30 15.3 53.2 30 16.0
Base case 61.3 40 24.5 63.6 40 25.4
Downside scenario 112.2 20 22.4 114.5 20 22.9
Severe downside scenario 151.4 10 15.1 153.0 10 15.3
Total weighted provisions 77.3 79.6
Other Provisions:
Individually assessed provisions 40.6 37.6
Post model adjustments 7.2 9.7
Total provision 125.1 126.9
The Group held £7.2m (31 December 2024: £9.7m) of ECL due to post model
adjustments for risks not sufficiently accounted for in the IFRS 9 framework.
The Group continued to recognise the risk due to the cost of borrowing as
interest rates have remained elevated and are expected to remain higher for
longer. This resulted in a PMA £0.5m of provision held (31 December 2024:
£2.1m) noting the risk associated with exposures at the point of reversion
continued to decrease. The Group continued to observe an elongated time to
sale. Whilst there has been improvement, the time to sale remains in excess of
modelled expectations and observations prior to the pandemic, which accounted
for £4.5m (31 December 2024: £6.3m) as a PMA. Additional PMAs recognised
through the framework that are less material include Physical risk relating to
climate change, concerns around cladding, and Development Finance loans with a
combine PMA of £2.1m.
The Group’s ECL by segment and IFRS 9 stage is shown below:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
OSB CCFS Total OSB CCFS Total
£m £m £m £m £m £m
Stage 1 12.4 1.6 14.0 11.8 1.9 13.7
Stage 2 27.0 7.9 34.9 29.6 9.7 39.3
Stage 3 62.7 11.8 74.5 58.6 13.1 71.7
Stage 3 (POCI) 0.9 0.8 1.7 1.1 1.1 2.2
103.0 22.1 125.1 101.1 25.8 126.9
The table below shows the movement in the ECL by IFRS 9 stage during the
period. ECLs on originations and acquisitions reflect the IFRS 9 stage of
loans originated or acquired during the period as at 30 June 2025 and not the
date of origination. Re-measurement of loss allowance relates to existing
loans which did not redeem during the period and includes the impact of loans
moving between IFRS 9 stages.
Stage 1 Stage 2 Stage 3 Stage 3 (POCI) Total
£m £m £m £m £m
As at 1 January 2024 22.4 54.3 66.7 2.4 145.8
Originations 6.1 - - - 6.1
Acquisitions 0.1 - - - 0.1
Disposals (1) (0.6) (0.3) - - (0.9)
Repayments and write-offs (2.4) (5.0) (15.4) (0.3) (23.1)
Re-measurement of loss allowance (24.3) 13.0 18.5 (0.3) 6.9
Transfers:
- To Stage 1 15.3 (13.4) (1.9) - -
- To Stage 2 (2.3) 3.9 (1.6) - -
- To Stage 3 (0.2) (9.0) 9.2 - -
Changes in assumptions and model parameters (0.4) (4.2) (3.8) 0.4 (8.0)
As at 31 December 2024 (Audited) 13.7 39.3 71.7 2.2 126.9
Originations 3.0 - - - 3.0
Repayments and write-offs (0.5) (2.6) (10.8) (0.4) (14.3)
Re-measurement of loss allowance (7.3) 8.3 12.4 - 13.4
Transfers:
- To Stage 1 6.5 (5.5) (1.0) - -
- To Stage 2 (1.2) 2.4 (1.2) - -
- To Stage 3 (0.2) (5.2) 5.4 - -
Changes in assumptions and model parameters - (1.8) (2.0) (0.1) (3.9)
As at 30 June 2025 (Unaudited) 14.0 34.9 74.5 1.7 125.1
1. Disposals include ECL on the loans and advances to customers derecognised
as part of the PMF 2024-2 securitisation.
The table below shows the stage 2 ECL balances by transfer criteria:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
Carrying value ECL Coverage Carrying value ECL Coverage
£m £m % £m £m %
Criteria:
Relative/absolute Probability of Default (PD) movement 4,245.0 32.3 0.76 3,998.9 35.7 0.89
Qualitative measures 268.1 2.3 0.86 283.6 3.3 1.16
30 days past due backstop 66.1 0.3 0.45 70.4 0.3 0.43
Total 4,579.2 34.9 0.76 4,352.9 39.3 0.90
The Group has a number of qualitative measures to determine whether a
significant increase in credit risk (SICR) has taken place. These triggers
utilise both internal performance information, to analyse whether an account
is in distress but not yet in arrears, and external credit bureau information,
to determine whether the customer is experiencing financial difficulty with an
external credit obligation.
17. Impairment of financial assets
The charge/(credit) for impairment of financial assets in the Condensed
Consolidated Statement of Comprehensive Income comprises:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Write-offs in period 6.5 4.8
Decrease in ECL provision (4.5) (9.5)
2.0 (4.7)
18. Hedge accounting
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Hedged assets
Current hedge relationships 44.9 (165.3)
Swap inception adjustment 14.7 23.5
Cancelled hedge relationships (23.0) (33.2)
De-designated hedge relationships (2.0) (4.3)
Fair value adjustments on hedged assets 34.6 (179.3)
Hedged liabilities
Current hedge relationships 13.6 (9.0)
Swap inception adjustment 0.1 2.9
Fair value adjustments on hedged liabilities 13.7 (6.1)
The swap inception adjustment relates to hedge accounting adjustments arising
when hedge accounting commences, reflecting the change in fair value on the
hedged item due to the hedged risk that occurred prior to being designated in
a hedge accounting relationship. The Group uses the associated swap value as a
proxy for this initial value, based on derivative instruments previously taken
out on the mortgage pipeline or new retail deposits.
Cancelled hedge relationships predominantly represent the unamortised fair
value adjustment for interest rate risk hedges that have been cancelled and
replaced due to IBOR transition.
De-designated hedge relationships relate to hedge accounting adjustments on
failed hedge relationships which are amortised over the remaining lives of the
original hedged items and also include the Group’s equity structural hedge.
19. Amounts owed to credit institutions
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
BoE Term Funding Scheme for SMEs (TFSME) 655.5 1,394.9
BoE Indexed Long-Term Repo (ILTR) 176.9 380.3
Commercial repo 23.1 -
855.5 1,775.2
Cash collateral and margin received 7.1 160.0
862.6 1,935.2
20. Amounts owed to retail depositors
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
OSB CCFS Total OSB CCFS Total
£m £m £m £m £m £m
Fixed rate deposits 9,002.6 5,640.6 14,643.2 9,016.1 6,340.2 15,356.3
Variable rate deposits 5,225.4 4,721.5 9,946.9 4,509.3 3,954.7 8,464.0
14,228.0 10,362.1 24,590.1 13,525.4 10,294.9 23,820.3
21. Debt securities in issue
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Asset backed loan notes at amortised cost 909.6 1,018.3
Amount due for settlement within 12 months 84.9 2.3
Amount due for settlement after 12 months 824.7 1,016.0
909.6 1,018.3
The asset-backed loan notes are secured on fixed and variable rate mortgages
and are redeemable in part from time to time, but such redemptions are limited
to the net principal received from borrowers in respect of underlying mortgage
assets. The maturity date of the funds matches the contractual maturity date
of the underlying mortgage assets. The Group expects that a large proportion
of the underlying mortgage assets, and therefore these notes, will be repaid
within five years.
Where the Group owns the call rights for a transaction, it may repurchase the
asset-backed loan notes on any interest payment date on or after the call
dates, or on any interest payment date when the current balance of the
mortgages outstanding is less than or equal to 10% of the principal amount
outstanding on the loan notes on the date they were issued.
Interest is payable at fixed margins above SONIA.
The asset-backed loan notes were issued through the following funding
vehicles:
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
PMF 2024-1 plc 436.2 441.2
CMF 2024-1 plc 242.4 283.1
CMF 2023-1 plc 147.8 193.5
Canterbury Finance No.4 plc 83.2 100.5
909.6 1,018.3
22. Lease liabilities
Six months ended 30-Jun-25 Year ended 31-Dec-24
(Unaudited) (Audited)
£m £m
As at 1 January 9.1 11.2
New leases - 0.6
Lease modification - (0.8)
Lease repayments (1.0) (2.2)
Interest accruals 0.1 0.3
8.2 9.1
23. Other liabilities
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
£m £m
Falling due within one year:
Share repurchase liability 72.6 10.0
Accruals 40.8 33.8
Other creditors 16.2 12.4
Deferred income 0.2 0.2
129.8 56.4
On 14 March 2025, the Group commenced a share repurchase programme of up to
£100.0m, recognising a £100.7m (including incentive fees of £0.7m)
reduction in retained earnings and a share repurchase liability. As at 30 June
2025, 6,268,354 shares had been purchased by the Group’s agent under the
programme at a total cost of £28.1m, reducing the share repurchase liability
to £72.6m. Other creditors included less than £0.1m for 2,119 shares
purchased by the agent prior to 30 June 2025 for which the Group has completed
payment in July 2025. Any share repurchases made under this programme were
announced to the market each day in line with regulatory requirements, see
note 27 for further details.
24. Provisions and contingent liabilities
Following the Group’s review of its collection processes and how mortgage
customers in arrears are managed, a retrospective review of the Group’s
application of forbearance measures and associated outcomes for certain
cohorts of customers (Prestige second charge) has been completed. This review
has led the Group continuing to recognise a provision of £2.6m as of 30 June
2025 based on its estimated costs to redress the accounts in scope and the
costs to operationalise the activity, with redress expected to be applied in
the second half of 2025.
The Group recognised a provision of £1.0m (31 December 2024: £1.1m) relating
to dismantling costs. This was capitalised to the cost of the associated
right-of-use asset.
The Group operates in a highly regulated environment and in the normal course
of business, may from time to time receive complaints and claims or be
involved in legal proceedings that could lead to a provision or contingent
liability. This environment continues to evolve through legislation,
regulatory guidance and court rulings and the Group actively monitors these
developments. At the reporting date the Group considered that it had no
material provisions or contingent liabilities save as here.
An analysis of the Group’s provisions is presented below:
Other regulatory provisions ECL on undrawn loan facilities Dismantling cost Total
£m £m £m £m
As at 1 January 2024 - 0.8 - 0.8
Profit or loss charge/(credit) 3.0 (0.3) - 2.7
Additions - - 1.1 1.1
As at 31 December 2024 (Audited) 3.0 0.5 1.1 4.6
Paid during the period (0.4) - - (0.4)
Profit or loss charge - 0.1 - 0.1
Reversal - - (0.1) (0.1)
As at 30 June 2025 (Unaudited) 2.6 0.6 1.0 4.2
25. Senior notes
The Group’s outstanding senior notes are as follows:
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
Reset date Spread £m £m
Fixed rate:
Senior notes 2028 (9.5%) 7 September 2027 4.985% 307.9 307.7
Senior notes 2030 (8.875%) 16 January 2029 5.252% 415.1 415.0
723.0 722.7
The senior notes comprise fixed rate notes denominated in pounds sterling and
are listed on the official list of the FCA, and admitted to trading on the
main market of the London Stock Exchange plc.
The principal terms of the senior notes are as follows:
* Interest: Interest on the senior notes is fixed at an initial rate until the
reset date. If the senior notes are not redeemed prior to the reset date, the
interest rate will be reset and fixed based on a benchmark gilt rate plus the
specified spread.
* Redemption: The Issuer may redeem the senior notes in whole (but not in
part) in its sole discretion on the reset date. Optional redemption may also
take place for certain regulatory or tax reasons. Any optional redemption
requires the prior consent of the PRA.
* Ranking: The senior notes constitute direct, unsubordinated and unsecured
obligations of OSBG and rank at least pari passu, without any preference,
among themselves as senior notes. The notes rank behind the claims of
depositors, but in priority to holders of Tier 1 and Tier 2 capital as well as
equity holders of OSBG.
Movements during the period in senior notes are analysed below:
Six months ended 30-Jun-25 Year ended 31-Dec-24
(Unaudited) (Audited)
£m £m
As at 1 January 722.7 307.5
Addition - 398.0
Movement in accrued interest 0.3 17.2
723.0 722.7
26. Subordinated liabilities
The Group’s outstanding subordinated debt liabilities are summarised below:
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Audited)
Reset date Spread £m £m
Fixed rate:
Subordinated debt liabilities 2033 (9.993%) 27 July 2028 6.296% 259.9 259.8
All subordinated liabilities are denominated in pounds sterling and are listed
on the official list of the FCA, and admitted to trading on the main market of
the London Stock Exchange plc.
The principal terms of the subordinated debt liabilities are as follows:
* Interest: Interest on the subordinated debt liabilities is fixed at an
initial rate until the reset date. If the subordinated debt liabilities are
not redeemed prior to the reset date, the interest rate will be reset and
fixed based on a new floating benchmark gilt rate plus the specified spread.
* Redemption: The Issuer may redeem the subordinated debt liabilities in whole
(but not in part) in its sole discretion on any day from (and including) 27
April 2028 to (and including) 27 July 2028 (the reset date) as specified in
the terms of the agreement. Optional redemption may also take place for
certain regulatory or tax reasons. Any optional redemption requires the prior
consent of the PRA.
* Ranking: The subordinated debt liabilities constitute direct, unsecured and
subordinated obligations of OSBG and rank at least pari passu, without any
preference, among themselves as Tier 2 capital. The subordinated debt
liabilities rank behind the claims of depositors and other unsecured and
unsubordinated creditors, but rank in priority to holders of Tier 1 capital
and of equity of OSBG.
Movements during the period of the subordinated debt liabilities are analysed
below:
Six months ended 30-Jun-25 Year ended 31-Dec-24
(Unaudited) (Audited)
£m £m
As at 1 January 259.8 259.5
Movement in accrued interest 0.1 0.3
259.9 259.8
27. Share capital
Ordinary shares Number of shares issued and fully paid Nominal value £m Premium £m
As at 1 January 2024 393,187,681 3.9 3.8
Shares cancelled under repurchase programme (22,595,996) (0.2) -
Shares issued under OSBG employee share plans 1,554,107 - 0.7
As at 31 December 2024 (Audited) 372,145,792 3.7 4.5
Shares cancelled under repurchase programme (8,604,568) (0.1) -
Shares issued under OSBG employee share plans 1,561,371 - 0.4
As at 30 June 2025 (Unaudited) 365,102,595 3.6 4.9
The Group commenced a share repurchase programme on 6 September 2024 which
allowed the Group to repurchase a maximum of 39,358,310 shares, restricted by
a total cost of £50.0m. Since 1 January 2025, 2,365,661 shares were
repurchased under the programme and 2,479,759 shares were cancelled. On
completion,13,087,132 shares, representing 3.52% of the issued share capital,
were repurchased and cancelled at an average price of £3.77 per share and a
total cost of £49.3m excluding transaction costs.
Since the inception of a new share repurchase programme on 14 March 2025,
6,270,473 shares were repurchased as at 30 June 2025 at an average price of
£4.48 per share and a total cost of £28.1m, of which 6,124,809 shares have
been cancelled representing 1.65% of the issued share capital. The programme
allows the Group to repurchase a maximum of 26,271,178 shares, restricted by a
total cost of £100.0m excluding transaction costs.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time, and are entitled to one vote per share at meetings of the
Company. All ordinary shares rank equally with regard to the Company’s
residual assets.
All ordinary shares issued in the current period and prior year were fully
paid.
28. Cash flows from financing activities
The tables below show a reconciliation of the Group’s liabilities classified
as financing activities within the Condensed Consolidated Statement of Cash
Flows:
Amounts owed to credit institutions (see note 19) Debt securities in issue (see note 21) Senior notes (see note 25) Subordinated liabilities (see note 26) PSBs Total
£m £m £m £m £m £m
As at 1 January 2025 1,775.2 1,018.3 722.7 259.8 - 3,776.0
Cash movements:
Principal drawdowns 288.7 - - - - 288.7
Principal repayments (1,195.7) (108.7) - - - (1,304.4)
Interest paid (38.0) (25.9) (32.0) (12.5) - (108.4)
Non-cash movements:
Interest charged 25.3 25.9 32.3 12.6 - 96.1
As at 30 June 2025 (Unaudited) 855.5 909.6 723.0 259.9 - 2,748.0
Amounts owed to credit institutions Debt securities in issue Senior notes Subordinated liabilities PSBs Total
£m £m £m £m £m £m
As at 1 January 2024 3,362.2 818.5 307.5 259.5 15.2 4,762.9
Cash movements:
Principal drawdowns 109.2 744.1 398.0 - - 1,251.3
Principal repayments (1,787.1) (452.4) - - - (2,239.5)
Interest paid (90.6) (27.8) (14.3) (12.5) (0.3) (145.5)
Non-cash movements:
Interest charged 68.4 30.4 31.1 12.6 0.3 142.8
As at 30 June 2024 (Unaudited) 1,662.1 1,112.8 722.3 259.6 15.2 3,772.0
The table below show other financing activities:
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
Note £m £m
Coupon paid on AT1 securities (4.5) (4.5)
Net swap interest paid on subordinated liabilities and senior notes (2.8) -
Net swap interest paid on structural hedge (2.4) -
Repayments of principal portion of lease liabilities 22 (0.9) (0.9)
Proceeds from issuance of shares under employee Save As You Earn (SAYE) schemes 0.4 0.4
Net cash from financing activities (10.2) (5.0)
29. Risk management
The tables below are a summary of the Group’s risk management and financial
instruments disclosures, of which a complete disclosure for the year ended 31
December 2024 is included in the 2024 Annual Report and Accounts. The tables
do not represent all risks the Group is exposed to and should be read in
conjunction with Principal risks and uncertainties in the Risk review.
Credit risk
The following tables show the Group’s maximum exposure to credit risk and
the impact of collateral held as security, capped at the gross exposure
amount, by impairment stage. Capped collateral excludes the impact of forced
sale discounts and costs to sell.
As at 30-Jun-25 (Unaudited)
OSB CCFS Total
Gross carrying amount Capped collateral held Gross carrying amount Capped collateral held Gross carrying amount Capped collateral held
£m £m £m £m £m £m
Stage 1 12,753.7 12,696.3 7,142.3 7,142.1 19,896.0 19,838.4
Stage 2 2,540.6 2,539.2 2,038.6 2,038.4 4,579.2 4,577.6
Stage 3 717.2 709.8 296.2 294.4 1,013.4 1,004.2
Stage 3 (POCI) 24.5 24.2 29.7 29.6 54.2 53.8
16,036.0 15,969.5 9,506.8 9,504.5 25,542.8 25,474.0
As at 31-Dec-24 (Audited)
OSB CCFS Total
Gross carrying amount Capped collateral held Gross carrying amount Capped collateral held Gross carrying amount Capped collateral held
£m £m £m £m £m £m
Stage 1 12,338.1 12,290.5 7,539.0 7,538.4 19,877.1 19,828.9
Stage 2 2,417.4 2,416.0 1,935.5 1,935.0 4,352.9 4,351.0
Stage 3 655.7 649.6 294.1 294.1 949.8 943.7
Stage 3 (POCI) 27.8 27.4 32.7 32.6 60.5 60.0
15,439.0 15,383.5 9,801.3 9,800.1 25,240.3 25,183.6
The Group’s main form of collateral held is property, based in the UK and
the Channel Islands.
The Group uses indexed loan to value (LTV) ratios to assess the quality of the
uncapped collateral held. Property values are updated to reflect changes in
the HPI. A breakdown of loans and advances to customers by indexed LTV is as
follows:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
OSB CCFS Total OSB CCFS Total
£m £m £m % £m £m £m %
Band
0% - 50% 2,202.4 1,085.8 3,288.2 13 2,375.0 1,091.3 3,466.3 14
50% - 60% 2,086.3 1,231.4 3,317.7 13 2,291.2 1,312.7 3,603.9 14
60% - 70% 4,181.8 2,662.3 6,844.1 27 4,548.2 3,035.8 7,584.0 30
70% - 80% 5,722.2 3,944.3 9,666.5 37 4,624.2 3,881.3 8,505.5 34
80% - 90% 1,185.4 553.4 1,738.8 7 1,043.7 461.5 1,505.2 6
90% - 100% 269.8 13.4 283.2 1 221.0 14.8 235.8 1
>100% 388.1 16.2 404.3 2 335.7 3.9 339.6 1
Total loans before provisions 16,036.0 9,506.8 25,542.8 100 15,439.0 9,801.3 25,240.3 100
The table below shows the LTV banding for the OSB segments’ two major
lending streams:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
BTL/SME Residential Total BTL/SME Residential Total
OSB £m £m £m % £m £m £m %
Band
0% - 50% 959.0 1,243.4 2,202.4 14 1,037.4 1,337.6 2,375.0 15
50% - 60% 1,823.2 263.1 2,086.3 13 2,021.2 270.0 2,291.2 15
60% - 70% 3,979.7 202.1 4,181.8 26 4,345.0 203.2 4,548.2 29
70% - 80% 5,532.7 189.5 5,722.2 36 4,430.7 193.5 4,624.2 30
80% - 90% 942.2 243.2 1,185.4 7 799.1 244.6 1,043.7 8
90% - 100% 240.3 29.5 269.8 2 190.8 30.2 221.0 1
>100% 381.2 6.9 388.1 2 331.6 4.1 335.7 2
Total loans before provisions 13,858.3 2,177.7 16,036.0 100 13,155.8 2,283.2 15,439.0 100
The tables below show the LTV analysis of the OSB BTL/SME sub-segment:
As at 30-Jun-25 (Unaudited)
Buy-to-Let Commercial Residential development Funding lines Total
OSB £m £m £m £m £m
Band
0% - 50% 834.4 111.5 12.7 0.4 959.0
50% - 60% 1,592.5 136.8 87.5 6.4 1,823.2
60% - 70% 3,484.8 301.7 186.4 6.8 3,979.7
70% - 80% 4,892.9 624.7 15.1 - 5,532.7
80% - 90% 744.8 197.4 - - 942.2
90% - 100% 132.3 108.0 - - 240.3
>100% 314.1 65.9 1.0 0.2 381.2
Total loans before provisions 11,995.8 1,546.0 302.7 13.8 13,858.3
As at 31-Dec-24 (Audited)
Buy-to-Let Commercial Residential development Funding lines Total
OSB £m £m £m £m £m
Band
0% - 50% 925.7 107.0 3.9 0.8 1,037.4
50% - 60% 1,819.0 128.7 66.1 7.4 2,021.2
60% - 70% 3,951.9 207.2 184.0 1.9 4,345.0
70% - 80% 3,918.8 495.5 7.0 9.4 4,430.7
80% - 90% 562.0 237.1 - - 799.1
90% - 100% 100.8 90.0 - - 190.8
>100% 239.9 90.5 1.0 0.2 331.6
Total loans before provisions 11,518.1 1,356.0 262.0 19.7 13,155.8
The tables below show the LTV analysis of the OSB Residential sub-segment:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
First charge Second charge Total First charge Second charge Total
OSB £m £m £m £m £m £m
Band
0% - 50% 1,186.3 57.1 1,243.4 1,272.8 64.8 1,337.6
50% - 60% 244.9 18.2 263.1 248.6 21.4 270.0
60% - 70% 193.8 8.3 202.1 192.9 10.3 203.2
70% - 80% 185.9 3.6 189.5 189.5 4.0 193.5
80% - 90% 242.5 0.7 243.2 244.0 0.6 244.6
90% - 100% 29.1 0.4 29.5 29.8 0.4 30.2
>100% 6.9 - 6.9 3.6 0.5 4.1
Total loans before provisions 2,089.4 88.3 2,177.7 2,181.2 102.0 2,283.2
The table below shows the LTV analysis of the four CCFS sub-segments:
As at 30-Jun-25 (Unaudited)
Buy-to-Let Residential Bridging Second charge lending Total
CCFS £m £m £m £m £m %
Band
0% - 50% 313.4 606.5 146.0 19.9 1,085.8 11
50% - 60% 625.9 483.3 108.0 14.2 1,231.4 13
60% - 70% 1,721.4 800.0 129.8 11.1 2,662.3 28
70% - 80% 3,144.3 703.9 89.4 6.7 3,944.3 42
80% - 90% 190.4 358.3 3.3 1.4 553.4 6
90% - 100% 6.6 6.3 0.5 - 13.4 -
>100% 11.3 1.6 3.3 - 16.2 -
Total loans before provisions 6,013.3 2,959.9 480.3 53.3 9,506.8 100
As at 31-Dec-24 (Audited)
Buy-to-Let Residential Bridging Second charge lending Total
CCFS £m £m £m £m £m %
Band
0% - 50% 335.2 607.7 123.8 24.6 1,091.3 11
50% - 60% 714.9 508.1 73.1 16.6 1,312.7 13
60% - 70% 2,024.9 896.5 101.4 13.0 3,035.8 31
70% - 80% 3,099.8 713.3 60.3 7.9 3,881.3 40
80% - 90% 183.0 275.7 1.2 1.6 461.5 5
90% - 100% 7.4 3.6 3.7 0.1 14.8 -
>100% 2.1 0.8 1.0 - 3.9 -
Total loans before provisions 6,367.3 3,005.7 364.5 63.8 9,801.3 100
Forbearance measures undertaken
The Group has a range of options available where borrowers experience
financial difficulties that impact their ability to service their financial
commitments under the loan agreement. These options are explained on pages 46
to 69 of the 2024 Annual Report and Accounts.
A summary of the forbearance measures undertaken during the period is shown
below. The balances disclosed reflect the period end balance of the accounts
where a forbearance measure was undertaken during the period.
Restated (1)
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
Forbearance type Number of accounts £m Number of accounts £m
Interest-only switch 391 52.3 619 85.8
Interest rate reduction 430 47.5 552 48.2
Payment deferral 387 65.6 418 66.1
Others 92 9.7 54 18.6
Total 1,300 175.1 1,643 218.7
Loan type
First charge owner-occupier 972 108.8 1,251 147.9
Second charge owner-occupier 50 1.7 105 3.1
Buy-to-Let 256 61.4 251 59.2
Commercial 22 3.2 36 8.5
Total 1,300 175.1 1,643 218.7
1. In second half of 2024 the Group updated its forbearance reporting to
standardise the approach used across its entities. To aid comparability, the
2024 figures have been restated to reflect this change. This has the effect of
increasing the number of accounts by 542 to 1,643 and the balances by £37.7m
to £218.7m for the six months ended 30 June 2024.
Geographical analysis by region
An analysis of loans, excluding asset finance leases, by region is provided
below:
As at 30-Jun-25 (Unaudited) As at 31-Dec-24 (Audited)
OSB CCFS Total OSB CCFS Total
Region £m £m £m % £m £m £m %
East Anglia 442.6 1,048.1 1,490.7 6 447.4 1,084.7 1,532.1 6
East Midlands 803.6 663.7 1,467.3 6 756.7 674.3 1,431.0 6
Greater London 6,617.5 2,628.6 9,246.1 37 6,329.8 2,769.6 9,099.4 36
Guernsey 15.7 - 15.7 - 17.0 - 17.0 -
Jersey 58.9 - 58.9 - 63.2 - 63.2 -
North East 236.9 282.2 519.1 2 224.4 282.4 506.8 2
North West 1,059.1 869.0 1,928.1 8 1,017.1 890.1 1,907.2 8
Northern Ireland 7.3 - 7.3 - 7.9 - 7.9 -
Scotland 20.7 276.1 296.8 1 23.5 282.1 305.6 1
South East 3,507.5 1,529.9 5,037.4 19 3,419.1 1,577.6 4,996.7 20
South West 1,062.4 684.7 1,747.1 7 1,047.7 680.1 1,727.8 7
Wales 357.7 275.7 633.4 3 345.1 289.4 634.5 3
West Midlands 934.6 734.9 1,669.5 7 907.4 755.9 1,663.3 7
Yorks and Humberside 529.6 513.9 1,043.5 4 515.8 515.1 1,030.9 4
Total loans before provisions 15,654.1 9,506.8 25,160.9 100 15,122.1 9,801.3 24,923.4 100
Approach to measurement of credit quality
The Group categorises the credit quality of loans and advances to customers
into internal risk grades based on the 12-month PD calculated at the reporting
date. The PDs include a combination of internal behavioural and credit bureau
characteristics and are aligned with capital models to generate the risk
grades which are then further grouped into the following credit quality
segments:
* Excellent quality – where there is a very high likelihood the asset will
be recovered in full with a negligible or very low risk of default.
* Good quality – where there is a high likelihood the asset will be
recovered in full with a low risk of default.
* Satisfactory quality – where the assets demonstrate a moderate default
risk.
* Lower quality – where the assets require closer monitoring and the risk of
default is of greater concern.
The following tables disclose the credit risk quality ratings of loans and
advances to customers by IFRS 9 stage. The assessment of whether credit risk
has increased significantly since initial recognition is performed for each
reporting period for the life of the loan. Loans and advances to customers
initially booked on very low PDs and graded as excellent quality loans can
experience SICR and therefore be moved to Stage 2. Similarly, loans and
advances to customers initially booked on high PDs having lower credit quality
can remain in stage 1 if subsequently SICR is not experienced or triggered.
Such loans may still be graded as excellent quality, if they meet the overall
criteria.
As at 30-Jun-25 (Unaudited)
Stage 1 Stage 2 Stage 3 Stage 3 (POCI) Total PD lower range PD upper range
£m £m £m £m £m % %
OSB
Excellent 5,623.3 232.4 - - 5,855.7 - 0.3
Good 6,436.3 1,182.4 - - 7,618.7 0.3 2.0
Satisfactory 612.8 511.6 - - 1,124.4 2.0 7.4
Lower 81.3 614.2 - - 695.5 7.4 100.0
Impaired - - 717.2 - 717.2 100.0 100.0
POCI - - - 24.5 24.5 100.0 100.0
CCFS
Excellent 4,299.7 648.8 - - 4,948.5 - 0.3
Good 2,624.1 798.6 - - 3,422.7 0.3 2.0
Satisfactory 206.4 246.5 - - 452.9 2.0 7.4
Lower 12.1 344.7 - - 356.8 7.4 100.0
Impaired - - 296.2 - 296.2 100.0 100.0
POCI - - - 29.7 29.7 100.0 100.0
19,896.0 4,579.2 1,013.4 54.2 25,542.8
As at 31-Dec-24 (Audited)
Stage 1 Stage 2 Stage 3 Stage 3 (POCI) Total PD lower range PD upper range
£m £m £m £m £m % %
OSB
Excellent 5,426.9 212.9 - - 5,639.8 - 0.3
Good 6,199.2 1,135.3 - - 7,334.5 0.3 2.0
Satisfactory 633.0 503.1 - - 1,136.1 2.0 7.4
Lower 79.0 566.1 - - 645.1 7.4 100.0
Impaired - - 655.7 - 655.7 100.0 100.0
POCI - - - 27.8 27.8 100.0 100.0
CCFS
Excellent 4,623.4 622.3 - - 5,245.7 - 0.3
Good 2,682.2 740.7 - - 3,422.9 0.3 2.0
Satisfactory 220.1 242.5 - - 462.6 2.0 7.4
Lower 13.3 330.0 - - 343.3 7.4 100.0
Impaired - - 294.1 - 294.1 100.0 100.0
POCI - - - 32.7 32.7 100.0 100.0
19,877.1 4,352.9 949.8 60.5 25,240.3
The tables below show the Group’s other financial assets and derivatives by
credit risk rating grade. The credit grade is based on the external credit
rating of the counterparty; AAA to AA- are rated Excellent; A+ to A- are rated
Good; and BBB+ to BBB- are rated Satisfactory.
As at 30-Jun-25 (Unaudited)
Excellent Good Satisfactory Total
£m £m £m £m
Investment securities 1,487.2 1.9 2.2 1,491.3
Loans and advances to credit institutions 2,875.4 115.0 23.6 3,014.0
Derivative assets 85.5 79.1 - 164.6
4,448.1 196.0 25.8 4,669.9
As at 31-Dec-24 (Audited)
Excellent Good Satisfactory Total
£m £m £m £m
Investment securities 1,434.4 - - 1,434.4
Loans and advances to credit institutions 3,127.2 264.4 14.3 3,405.9
Derivative assets 174.7 139.1 - 313.8
4,736.3 403.5 14.3 5,154.1
30. Financial instruments and fair values
The following tables provide an analysis of financial assets and financial
liabilities measured at fair value in the Condensed Consolidated Statement of
Financial Position grouped into Levels 1 to 3 based on the degree to which the
fair value is observable:
Carrying amount Principal amount Level 1 Level 2 Level 3 Total
As at 30-Jun-25 (Unaudited) £m £m £m £m £m £m
Financial assets
Investment securities 546.7 545.2 129.5 417.0 0.2 546.7
Loans and advances to customers 11.9 13.8 - - 11.9 11.9
Derivative assets 164.6 17,087.8 - 164.6 - 164.6
723.2 17,646.8 129.5 581.6 12.1 723.2
Financial liabilities
Derivative liabilities 150.1 13,057.7 - 150.1 - 150.1
As at 31-Dec-24 (Audited)
Financial assets
Investment securities 636.1 638.3 226.0 409.8 0.3 636.1
Loans and advances to customers 12.9 14.9 - - 12.9 12.9
Derivative assets 313.8 16,474.8 - 313.8 - 313.8
962.8 17,128.0 226.0 723.6 13.2 962.8
Financial liabilities
Derivative liabilities 81.9 11,291.4 - 81.9 - 81.9
Level 1: Fair values that are based entirely on quoted market prices
(unadjusted) in an actively traded market for identical assets and liabilities
that the Group has the ability to access. Valuation adjustments and block
discounts are not applied to Level 1 instruments. Since valuations are based
on readily available observable market prices, this makes them most reliable,
reduces the need for management judgement and estimation and also reduces the
uncertainty associated with determining fair values.
Level 2: Fair values that are based on one or more quoted prices in markets
that are not active or for which all significant inputs are taken from
directly or indirectly observable market data. These include valuation models
used to calculate the present value of expected future cash flows and may be
employed either when no active market exists or when there are no quoted
prices available for similar instruments in active markets.
Level 3: Fair values for which any one or more significant input is not based
on observable market data and the unobservable inputs have a significant
effect on the instrument’s fair value. Valuation models that employ
significant unobservable inputs require a higher degree of management
judgement and estimation in determining the fair value. Management judgement
and estimation are usually required for the selection of the appropriate
valuation model to be used, determination of expected future cash flows on the
financial instruments being valued, determination of the probability of
counterparty default and prepayments, determination of expected volatilities
and correlations and the selection of appropriate discount rates.
The following tables provide an analysis of financial assets and financial
liabilities not measured at fair value in the Condensed Consolidated Statement
of Financial Position grouped into Levels 1 to 3 based on the degree to which
the fair value is observable:
Estimated fair value
As at 30-Jun-25 (Unaudited) Carrying amount Principal amount Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m
Financial assets
Cash in hand 0.3 0.3 - 0.3 - 0.3
Loans and advances to credit institutions 3,014.0 3,009.4 - 3,014.0 - 3,014.0
Investment securities 944.6 939.0 - 942.8 - 942.8
Loans and advances to customers 25,417.7 25,641.1 - 2,237.4 23,254.1 25,491.5
Other assets (1) 3.5 3.5 - 3.5 - 3.5
29,380.1 29,593.3 - 6,198.0 23,254.1 29,452.1
Financial liabilities
Amounts owed to retail depositors 24,590.1 24,270.5 - 9,947.0 14,639.7 24,586.7
Amounts owed to credit institutions 862.6 853.1 - 862.6 - 862.6
Amounts owed to other customers 441.2 436.0 - - 441.2 441.2
Debt securities in issue 909.6 907.9 - 909.6 - 909.6
Other liabilities (2) 129.6 129.6 - 129.6 - 129.6
Senior notes 723.0 700.0 - 767.4 - 767.4
Subordinated liabilities 259.9 250.0 - 274.9 - 274.9
27,916.0 27,547.1 - 12,891.1 15,080.9 27,972.0
1. Balance excludes prepayments.
2. Balance excludes deferred income.
Estimated fair value
As at 31-Dec-24 (Audited) Carrying amount Principal amount Level 1 Level 2 Level 3 Total
£m £m £m £m £m £m
Financial assets
Cash in hand 0.3 0.3 - 0.3 - 0.3
Loans and advances to credit institutions 3,405.9 3,400.1 - 3,405.9 - 3,405.9
Investment securities 798.3 793.2 - 796.0 - 796.0
Loans and advances to customers 25,113.4 25,313.6 - 2,183.0 22,660.5 24,843.5
Other assets (1) 1.7 1.7 - 1.7 - 1.7
29,319.6 29,508.9 - 6,386.9 22,660.5 29,047.4
Financial liabilities
Amounts owed to retail depositors 23,820.3 23,412.5 - 8,464.0 15,342.8 23,806.8
Amounts owed to credit institutions 1,935.2 1,913.0 - 1,935.2 - 1,935.2
Amounts owed to other customers 104.9 103.1 - - 104.9 104.9
Debt securities in issue 1,018.3 1,016.2 - 1,018.3 - 1,018.3
Other liabilities (2) 56.2 56.2 - 56.2 - 56.2
Senior notes 722.7 700.0 - 763.0 - 763.0
Subordinated liabilities 259.8 250.0 - 273.5 - 273.5
27,917.4 27,451.0 - 12,510.2 15,447.7 27,957.9
1. Balance excludes prepayments.
2. Balance excludes deferred income.
The valuation techniques for all the financial instruments are consistent with
those set out on page 248-249 of the 2024 Annual Report and Accounts. For
other assets and other liabilities fair value is considered to be equal to
carrying value.
31. Operating segments
The Group segments its lending business and operates under two segments in
line with internal reporting to the Board:
* OSB
* CCFS
The Group applies consistent accounting policies across all segments. The
Group separately discloses the impact of Combination accounting but does not
consider this a business segment.
The financial position and results of operations of the above segments are
summarised below:
OSB CCFS Combination Total
£m £m £m £m
Balances as at 30 June 2025 (Unaudited)
Gross loans and advances to customers 16,036.0 9,518.7 - 25,554.7
Expected credit losses (103.0) (22.1) - (125.1)
Loans and advances to customers 15,933.0 9,496.6 - 25,429.6
Capital expenditure 16.0 - - 16.0
Depreciation and amortisation 5.9 1.0 - 6.9
Profit for six months ended 30 June 2025 (Unaudited)
Net interest income 203.9 133.1 - 337.0
Other income (13.2) 2.0 - (11.2)
Total income 190.7 135.1 - 325.8
Impairment of financial assets (6.1) 4.1 - (2.0)
Contribution to profit 184.6 139.2 - 323.8
Administrative expenses (77.9) (53.5) - (131.4)
Provisions (0.1) - - (0.1)
Profit before taxation 106.6 85.7 - 192.3
Taxation (27.6) (22.6) - (50.2)
Profit for the period 79.0 63.1 - 142.1
OSB CCFS Combination Total
£m £m £m £m
Balances as at 31 December 2024 (Audited)
Gross loans and advances to customers 15,439.0 9,814.2 - 25,253.2
Expected credit losses (101.1) (25.8) - (126.9)
Loans and advances to customers 15,337.9 9,788.4 - 25,126.3
Capital expenditure 43.7 0.2 - 43.9
Depreciation and amortisation 7.5 3.1 0.7 11.3
Profit for six months ended 30 June 2024 (Unaudited)
Net interest income/(expense) 194.6 167.4 (8.5) 353.5
Other income 3.2 5.0 0.9 9.1
Total income/(expense) 197.8 172.4 (7.6) 362.6
Impairment of financial assets (3.8) 9.0 (0.5) 4.7
Contribution to profit 194.0 181.4 (8.1) 367.3
Administrative expenses (58.8) (66.9) (0.5) (126.2)
Provisions 0.2 - - 0.2
Profit/(loss) before taxation 135.4 114.5 (8.6) 241.3
Taxation (1) (37.5) (27.9) 2.4 (63.0)
Profit/(loss) for the period 97.9 86.6 (6.2) 178.3
1. The taxation on Combination credit includes the release of deferred
taxation on CCFS Combination relating to the unwind of the deferred tax
liabilities recognised on the fair value adjustments of the CCFS assets and
liabilities at the acquisition date £2.4m.
32. Adjustments for non-cash items and changes in operating assets and
liabilities
Six months ended 30-Jun-25 Six months ended 30-Jun-24
(Unaudited) (Unaudited)
£m £m
Adjustments for non-cash and other items:
Depreciation and amortisation 6.9 5.6
Interest on investment securities (29.4) (17.5)
Interest on subordinated liabilities 12.6 12.6
Interest on PSBs - 0.3
Interest on securitised debt 25.9 30.4
Interest on senior notes 32.3 31.1
Interest on financing debt 25.3 68.4
Interest on other liquid assets (0.6) -
Impairment charge/(credit) on loans 2.0 (4.7)
Administrative expenses (0.2) -
Provisions 0.1 (0.2)
Net expense on derivative financial instruments - subordinated liabilities and senior notes 1.4 -
Net expense on derivative financial instruments - structural hedge 2.4 -
Fair value losses/(gains) on financial instruments 14.3 (5.9)
Share-based payments 3.0 3.9
Total adjustments for non-cash and other items 96.0 124.0
Changes in operating assets and liabilities:
(Increase)/decrease in loans and advances to credit institutions (24.3) 97.0
Increase in loans and advances to customers (305.2) (363.4)
Increase in amounts owed to retail depositors 769.8 2,165.8
(Decrease)/increase in cash collateral and margin received (152.9) 83.0
Net (increase)/decrease in other assets (5.1) 9.6
Net increase/(decrease) in derivatives and hedged items 9.2 (18.7)
Net increase/(decrease) in amounts owed to other customers 336.3 (24.7)
Net increase in other liabilities 11.2 8.7
Exchange differences on working capital (1.7) 0.2
Total changes in operating assets and liabilities 637.3 1,957.5
33. Capital management
The Group’s individual regulated entities and the Group as a whole complied
with all of the capital requirements, which they were subject to, for the
periods presented.
The Group’s Pillar 1 capital information is presented below:
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Unaudited)
£m £m
Common Equity Tier 1 (CET1) capital
Called up share capital 3.6 3.7
Share premium 4.9 4.5
Retained earnings 3,363.1 3,406.4
Foreseeable dividends (54.6) (85.2)
Other reserves (1,342.3) (1,341.2)
CET1 capital: instruments and reserves 1,974.7 1,988.2
Regulatory Adjustments
Prudent valuation adjustment (1) (0.8) (0.4)
Intangible assets (58.3) (48.8)
Deferred tax asset (0.1) (0.2)
COVID-19 ECL transitional adjustment - 7.6
Total CET1 capital 1,915.5 1,946.4
AT1 capital
AT1 securities 150.0 150.0
Total Tier 1 capital 2,065.5 2,096.4
Tier 2 capital
Tier 2 securities 250.0 250.0
Total Tier 2 capital 250.0 250.0
Total regulatory capital 2,315.5 2,346.4
Risk-weighted assets (RWAs) 12,205.0 11,915.7
1. The Group has adopted the simplified approach under the Prudent Valuation
rules, recognising a deduction equal to sum of absolute value equal to 0.1%
(31 December 2024: 0.1%) of fair value assets and liabilities excluding
offsetting fair-valued assets and liabilities.
The Group’s MREL information is presented below:
As at 30-Jun-25 As at 31-Dec-24
(Unaudited) (Unaudited)
£m £m
Total regulatory capital 2,315.5 2,346.4
Eligible liabilities 700.0 700.0
Total own funds and eligible liabilities 3,015.5 3,046.4
The Group has been given a preferred resolution strategy of a single point of
entry bail-in at the holding company level by the PRA and was initially given
an interim MREL requirement (including buffers) of 18% of RWAs.
The end-state MREL requirement applies from July 2026 and is higher of:
(i) two times the sum of Pillar 1 and Pillar 2A plus regulatory buffers; or
(ii) if subject to a leverage ratio, two times the applicable requirement plus
regulatory buffers.
34. Related parties
The Group had no related party transactions during the six months to 30 June
2025 and 30 June 2024 that materially affected the position or performance of
the Group.
Transactions with key management personnel
During the period, the Group granted 239,402 (30 June 2024: 250,393) awards
under the Deferred Share Bonus Plan and 1,305,158 (30 June 2024: 1,090,734)
awards under the Performance Share Plan to 11 (30 June 2024: 11) key
management personnel. The awards were granted on 24 March 2025 and 15 April
2025 with a grant price of £3.57. Details of these plans can be found in note
10 of the 2024 Annual Report and Accounts on pages 215 to 217.
Appendix
Independent assurance statement by Deloitte LLP to OSB GROUP PLC on selected
Alternative Performance Measures
Opinion
We have performed an independent limited assurance engagement on the
Alternative Performance Measures (collectively, the APMs) set out below for
the financial half year ended 30 June 2025. The definition and the basis of
preparation for each of the following assured APMs is described in the
Appendix to the 2025 Interim Report (OSB Group’s APM Definitions and Basis
of Preparation).
* Gross new lending * Net interest margin
* Cost to income ratio
* Management expense ratio
* Dividend per share
* Loan loss ratio
* Basic earnings per share
* Return on tangible equity
In our opinion nothing has come to our attention that causes us to believe
that the assured APMs for the financial half year ended 30 June 2025, have not
been prepared, in all material respects, in accordance with OSB Group’s APM
Definitions and Basis of Preparation.
Directors’ responsibilities
The directors of OSB Group are responsible for:
* selecting APMs with which to describe the entity’s performance and
appropriate criteria (as set out in the Group’s APM Definitions and Basis of
Preparation) to measure them;
* designing, implementing and maintaining internal controls relevant to the
preparation and presentation of the assured APMs that are free from material
misstatement, whether due to fraud or error; and
* preparing and presenting the APMs.
Our responsibilities
We are responsible for:
* planning and performing procedures to obtain sufficient appropriate evidence
in order to express an independent limited assurance opinion on the assured
APMs;
* communicating matters that may be relevant to the assured APMs to the
appropriate party including identified or suspected non-compliance with laws
and regulations, fraud or suspected fraud, and bias in the preparation of the
assured APMs; and
* reporting our conclusion in the form of an independent limited assurance
report to the directors of OSB GROUP PLC.
Key procedures performed
We are required to plan and perform our procedures in order to obtain limited
assurance as to whether the assured APMs have been prepared, in all material
respects, in accordance with OSB Group’s APM Definitions and Basis of
Preparation.
The procedures performed in a limited assurance engagement vary in nature and
timing from, and are less in extent than for, a reasonable assurance
engagement. Consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that would have
been obtained had a reasonable assurance engagement been performed.
The nature, timing and extent of the assurance procedures selected depended on
our judgment, including the assessment of the risks of material misstatement,
whether due to fraud or error, of the assured APMs.
In making those risk assessments, we considered internal controls relevant to
the preparation of the assured APMs.
Based on that assessment we carried out testing which included:
* agreeing amounts used in the calculation of the assured APMs which are
derived or extracted from the financial statements of OSB Group for the period
ended 30 June 2025 to the financial statements.
* for amounts used in the calculation of the assured APMs which were not
derived or extracted from the financial statements of OSB Group for the period
ended 30 June 2025, agreeing the amounts to the underlying data used in
determining the assured APMs.
* checking the mathematical accuracy of the calculations used to prepare the
assured APMs and testing whether they are prepared in accordance with OSB
Group’s APM Definitions and Basis of Preparation; and
* reading the 2025 Interim Report and assessing whether the assured APMs were
presented and described consistently.
We were not asked to give, and therefore have not given any assurance over (i)
any APMs other than the assured APMs or (ii) other data in the Interim Report
as part of this engagement. We believe that the evidence obtained is
sufficient and appropriate to provide a basis for our opinion.
Our independence and quality control
We have complied with the independence and other ethical requirements of the
FRC’s Ethical Standard and the Code of Ethics for Professional Accountants
issued by the International Ethics Standards Board for Accountants, which is
founded on fundamental principles of integrity, objectivity, professional
competence and due care, confidentiality and professional behaviour.
We applied the International Standard on Quality Management (UK) 1 (“ISQM
(UK) 1”), issued by the Financial Reporting Council. Accordingly, we
maintained a comprehensive system of quality including documented policies and
procedures regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Use of our report
This assurance report is made solely to OSB GROUP PLC in accordance with ISAE
3000 (Revised) and the terms of the engagement letter between us. Our work has
been undertaken so that we might state to OSB GROUP PLC those matters we are
required to state to them in an independent limited assurance report and for
no other purpose.
Without assuming or accepting any responsibility or liability in respect of
this report to any party other than OSB GROUP PLC and the directors of OSB
GROUP PLC, we acknowledge that the directors of OSB GROUP PLC may choose to
make this report publicly available for others wishing to have access to it,
which does not and will not affect or extend for any purpose or on any basis
our responsibilities. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than OSB GROUP PLC and the directors
of OSB GROUP PLC as a body, for our assurance work, for this assurance report
or for the opinions we have formed.
Deloitte LLP, London
20 August 2025
Key performance indicators
Net interest margin (NIM)
NIM is calculated as net interest income annualised on an actual days basis,
as a percentage of a 7 point average(1) of interest earning assets (cash,
investment securities, loans and advances to customers and to credit
institutions). It represents the margin earned on loans and advances and
liquid assets after swap expense/income and cost of funds.
H1 2025 £m H1 2024 £m H2 2024 £m
Net interest income 337.0 353.5 312.9
Net interest income annualised on an actual days basis – A 679.6 710.9 622.4
7 point average of interest earning assets – B 29,563.2 29,964.4 30,286.1
NIM equals A/B 230bps 237bps 206bps
Cost to income ratio
The cost to income ratio is calculated as administrative expenses as a
percentage of total income. It is a measure of operational efficiency.
H1 2025 £m H1 2024 £m H2 2024 £m
Administrative expenses – A 131.4 126.2 131.9
Total income – B 325.8 362.6 304.6
Cost to income equals A/B 40.3% 34.8% 43.3%
Management expense ratio
The management expense ratio is calculated as administrative expenses
annualised on a simple basis as a percentage of a 7 point average(1) of total
assets. It is a measure of operational efficiency
H1 2025 £m H1 2024 £m H2 2024 £m
Administrative expenses (as in cost to income ratio above) – A 131.4 126.2 131.9
7 point average of total assets – B 29,864.6 30,265.5 30,582.6
Management expense ratio equals A/B 88bps 83bps 86bps
Loan loss ratio
The loan loss ratio is calculated as impairment losses annualised on a simple
basis as a percentage of a 7 point average(1) of gross loans and advances. It
is a measure of the credit performance of the loan book.
H1 2025 £m H1 2024 £m H2 2024 £m
Impairment charge/(credit) – A 2.0 (4.7) (7.0)
7 point average of gross loans – B 25,377.9 26,116.3 26,216.8
Loan loss ratio equals A/B 2bps (4)bps (5)bps
Return on tangible equity (RoTE)
RoTE is calculated as profit attributable to ordinary shareholders, which is
profit after tax and after deducting coupons on AT1 securities, annualised on
a simple basis, as a percentage of a 7 point average(1) of shareholders’
equity excluding 7 point average of intangible assets and excluding £150m of
AT1 securities.
H1 2025 £m H1 2024 £m H2 2024 £m
Profit after tax 142.1 178.3 129.8
Coupons on AT1 securities (4.5) (4.5) (4.5)
Profit attributable to ordinary shareholders – A 137.6 173.8 125.3
7 point average of tangible shareholders’ equity (excluding AT1 securities) – B 2,010.9 1,997.6 2,004.7
Return on tangible equity equals A/B (annualised)
13.7% 17.4%
12.5%
Basic earnings per share
Basic earnings per share is defined as profit attributable to ordinary
shareholders, which is profit after tax and after deducting coupons on AT1
securities, gross of tax, divided by the weighted average number of ordinary
shares in issue.
H1 2025 £m H1 2024 £m H2 2024 £m
Profit attributable to ordinary shareholders (as in RoTE ratio above) – A 137.6 173.8 125.3
Weighted average number of ordinary shares in issue – B 368.7 391.4 379.9
Basic earnings per share equals A/B 37.3 44.4 33.0
1. 7 point average is calculated as an average of opening balance and closing
balances for six months to 30 June.
Tangible net asset value per share (TNAV)
TNAV is calculated as shareholders’ equity excluding intangible assets and
£150m of AT1 securities as at the end of the period divided by the number of
shares outstanding at the end of the period.
H1 2025 £m H1 2024 £m H2 2024 £m
Shareholders’ equity 2,179.3 2,186.9 2,223.4
Intangible assets (58.3) (37.8) (48.8)
AT1 securities (150.0) (150.0) (150.0)
Tangible net asset value – A 1,971.0 1,999.1 2,024.6
Number of shares outstanding – B 365.1 386.9 372.1
Tangible net asset value per share (pence) A/B
540 517 544
About OSB GROUP PLC
OneSavings Bank plc (OSB) began trading as a bank on 1 February 2011 and was
admitted to the main market of the London Stock Exchange in June 2014 (OSB.L).
OSB joined the FTSE 250 index in June 2015. On 4 October 2019, OSB acquired
Charter Court Financial Services Group plc (CCFS) and its subsidiary
businesses. On 30 November 2020, OSB GROUP PLC became the listed entity and
holding company for the OSB Group. The Group provides specialist lending and
retail savings and is authorised by the Prudential Regulation Authority, part
of the Bank of England, and regulated by the Financial Conduct Authority and
Prudential Regulation Authority. The Group reports under two segments,
OneSavings Bank and Charter Court Financial Services.
OneSavings Bank (OSB)
OSB primarily targets market sub-sectors that offer high growth potential and
attractive risk-adjusted returns in which it can take a leading position and
where it has established expertise, platforms and capabilities. These include
private rented sector Buy-to-Let, commercial and semi-commercial mortgages,
residential development finance, bespoke and specialist residential lending
and asset finance.
OSB originates mortgages organically via specialist brokers and independent
financial advisers through its specialist brands including Kent Reliance for
Intermediaries and InterBay Commercial. It is differentiated through its use
of highly skilled, experience-based manual underwriting and efficient
operating model.
OSB is predominantly funded by retail savings originated through the
long-established Kent Reliance name, which takes deposits online and through a
network of branches in the South East of England. Diversification of funding
is currently provided by securitisation programmes and the Bank of England’s
Term Funding Scheme with additional incentives for SMEs.
Charter Court Financial Services Group (CCFS)
CCFS focuses on providing Buy-to-Let and specialist residential mortgages and
retail savings products. It operates through its brands: Precise and Charter
Savings Bank.
It is differentiated through risk management expertise and best-of-breed
automated technology and systems, ensuring efficient processing, strong credit
and collateral risk control and speed of product development and innovation.
These factors have enabled strong balance sheet growth whilst maintaining high
credit quality mortgage assets.
CCFS is predominantly funded by retail savings originated through its Charter
Savings Bank brand. Diversification of funding is currently provided by
securitisation programmes and the Bank of England’s Term Funding Scheme with
additional incentives for SMEs.
Important disclaimer
This document should be read in conjunction with any other documents or
announcements distributed by OSB GROUP PLC (OSBG) through the Regulatory News
Service (RNS).
This document is not audited and contains certain forward-looking statements
with respect to the business, strategy and plans of OSBG, its current goals,
beliefs, intentions, strategies and expectations relating to its future
financial condition, performance and results, and ESG ambitions, targets and
commitments described herein. Such forward-looking statements include, without
limitation, those preceded by, followed by or that include the words
‘targets’, ‘believes’, ‘estimates’, ‘expects’, ‘aims’,
‘intends’, ‘will’, ‘may’, ‘anticipates’, ‘projects’,
‘plans’, ‘forecasts’, ‘outlook’, ‘likely’, ‘guidance’,
‘trends’, ‘future’, ‘would’, ‘could’, ‘should’ or similar
expressions or negatives thereof but are not the exclusive means of
identifying such statements. Statements that are not historical or current
facts, including statements about OSBG’s, its directors’ and/or
management’s beliefs and expectations, are forward-looking statements. By
their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend upon circumstances that may or may not occur
in the future that could cause actual results or events to differ materially
from those expressed or implied by the forward-looking statements. Factors
that could cause actual business, strategy, plans and/or results (including
but not limited to the payment of dividends) to differ materially from the
plans, objectives, expectations, estimates and intentions expressed in such
forward-looking statements made by OSBG or on its behalf include, but are not
limited to: general economic and business conditions in the UK and
internationally, including any changes in global trade policies; market
related trends and developments; fluctuations in exchange rates, stock
markets, inflation, deflation, interest rates, energy prices and currencies;
policies of the Bank of England, the European Central Bank and other G7
central banks; the ability to access sufficient sources of capital, liquidity
and funding when
required; changes to OSBG’s credit ratings; the ability to derive cost
savings; changing demographic developments, and changing customer behaviour,
including consumer spending, saving and borrowing habits; changes in customer
preferences; changes to borrower or counterparty credit quality; instability
in the global financial markets, including Eurozone instability, the potential
for
countries to exit the European Union (the EU) or the Eurozone, and the impact
of any sovereign credit rating downgrade or other sovereign financial issues;
technological changes and risks to cyber security; natural and other
disasters, adverse weather and similar contingencies outside OSBG’s control;
inadequate or failed internal or external processes, people and systems; acts
of war and terrorist acts or hostility and responses to those acts;
geopolitical events and diplomatic tensions; the impact of outbreaks,
epidemics and pandemics or other such events; changes in laws, regulations,
taxation, ESG reporting standards, accounting standards or practices,
including as a result of the UK’s exit from the EU; regulatory capital or
liquidity requirements and similar contingencies outside OSBG’s control; the
policies and actions of governmental or regulatory authorities in the UK, the
EU or elsewhere including the implementation and interpretation of key
legislation and regulation; the ability to attract and retain senior
management and other employees; the extent of any future impairment charges or
write-downs caused by, but not limited to, depressed asset valuations, market
disruptions and illiquid markets; market relating trends and developments;
exposure to regulatory scrutiny, legal proceedings, regulatory investigations
or complaints; changes in competition and pricing environments; the inability
to hedge certain risks economically; the adequacy of loss reserves; the
actions of competitors, including non-bank financial services and lending
companies; the success of OSBG in managing the risks of the foregoing; and
other risks inherent to the industries and markets in which OSBG operates.
Accordingly, no reliance may be placed on any forward-looking statement.
Neither OSBG, nor any of its directors, officers or employees provides any
representation, warranty or assurance that any of these statements or
forecasts will come to pass or that any forecast results will be achieved. Any
forward-looking statements made in this document speak only as of the date
they are made and it should not be assumed that they have been revised or
updated in the light of new information of future events. Except as required
by the Prudential Regulation Authority, the Financial Conduct Authority, the
London Stock Exchange PLC or applicable law, OSBG expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this document to reflect any change in
OSBG’s expectations with regard thereto or any change in events, conditions
or circumstances on which any such statement is based. For additional
information on possible risks to OSBG’s business, (which may cause actual
results to differ materially from those expressed or implied in any
forward-looking statement), please see the “Risk review”.
Nothing in this document or any subsequent discussion of this document
constitutes or forms part of a public offer under any applicable law or an
offer or the solicitation of an offer to purchase or sell any securities or
financial instruments. Nor does it constitute advice or a recommendation with
respect to such securities or financial instruments, or any invitation or
inducement to engage in investment activity under section 21 of the Financial
Services and Markets Act 2000. Past performance cannot be relied on as a guide
to future performance. Statements about historical performance must not be
construed to indicate that future performance, share price or results in any
future period will necessarily match or exceed those of any prior period.
Nothing in this document is intended to be, or should be construed as, a
profit forecast or estimate for any period.
In regard to any information provided by third parties, neither OSBG nor any
of its directors, officers or employees explicitly or implicitly guarantees
that such information is exact, up to date, accurate, comprehensive or
complete. In no event shall OSBG be liable for any use by any party of, for
any decision made or action taken by any party in reliance upon, or for
inaccuracies or errors in, or omission from, any third-party information
contained herein. Moreover, in reproducing such information by any means, OSBG
may introduce any changes it deems suitable, may omit partially or completely
any aspect of the information from this document, and accepts no liability
whatsoever for any resulting discrepancy.
Liability arising from anything in this document shall be governed by English
law, and neither OSBG nor any of its affiliates, advisors or representatives
shall have any liability whatsoever (in negligence or otherwise) for any loss
howsoever arising from any use of this document or its contents or otherwise
arising in connection with this document. Nothing in this document shall
exclude any liability under applicable laws that cannot be excluded in
accordance with such laws.
Certain figures contained in this document, including financial information,
may have been subject to rounding adjustments and foreign exchange
conversions. Accordingly, in certain instances, the sum or percentage change
of the numbers contained in this document may not conform exactly to the total
figure given.
Non-IFRS performance measures
OSBG believes that any non-IFRS performance measures included in this document
provide a more consistent basis for comparing the business' performance
between financial periods, and provide more detail concerning the elements of
performance which OSBG is most directly able to influence or which are
relevant for an assessment of OSBG. They also reflect an important aspect of
the way in which operating targets are defined and performance is monitored by
the Board. However, any non-IFRS performance measures in this document are not
a substitute for IFRS measures and readers should consider the IFRS measures
as well. Refer to the Appendix (Key performance indicators) for further
details, reconciliations and calculations of non-IFRS performance measures
included throughout this document, and the most directly comparable IFRS
measures.
Company information
Registered office
OSB House
Quayside, Chatham Maritime
Chatham
Kent, ME4 4QZ
Registered in England, company number: 11976839
Internet
www.osb.co.uk
Auditor
Deloitte LLP
1 New Street Square
London
EC4A 3HQ
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100 Bishopsgate
London, EC2N 4AA
Media and Public Relations
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