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OneSavings Bank loan book up 5% in first quarter
The loan book at OneSavings Bank grew 5% in the first quarter, the company said on Wednesday, as it reiterated its guidance for the year.
In the three months to the end of March, net loans and advances grew by £368m to £7.7bn, while organic originations rose 15% to £689m at attractive margins.
The challenger bank said it had Term Funding Scheme drawings of £1.5bn in the quarter, up from £1.25bn at the end of December.
Chief executive officer Andy Golding said: "I am delighted with the performance of the business so far this year. Strong levels of applications led to the net loan book growing to £7.7bn in the first quarter with new lending at attractive margins.
"Our lending and retail savings franchises remain strong, and given current levels of applications in our core buy-to-let and commercial businesses, we are confident that we can deliver at least mid-teens net loan book growth this year. There is no change to other guidance for 2018."
Shore Capital analyst Gary Greenwood, who rates the stock at 'buy', said: "Notwithstanding a slower overall buy-to-let market, some margin pressure and additional regulatory costs, we believe that OneSavings Bank is well positioned to continue growing its loan book and profit base over the medium-term through further market share gains as mainstream lenders withdraw from the professional landlord market on which the group is primarily focused.
"Should its shares continue to languish at such low earnings multiples then a takeover approach cannot be ruled out, in our view."
At 0812 BST, the shares were up 0.6% to 411.60p.