OSB Group (OSB) investor relations material

Executive summary

• Delivered resilient financial and operational performance in H1 2026, maintaining #1 position in specialist lending and progressing on transformation initiatives amid macroeconomic and geopolitical uncertainty.

• Net loan book grew by 1.3% to £26.3bn, with originations up 10% year-over-year, driven by strong buy-to-let and moderate growth in higher-yielding segments.

• Transformation program progressing on track, enhancing operational efficiency, customer outcomes, and pricing agility, with new savings and lending platforms launched and 130k accounts migrated.

• Interim dividend increased by 5% to 11.8p per share, and £69m of a £100m share buyback completed, totaling £360m capital returned over 18 months.

• CEO transition announced, with Enrique Alvarez Labiano succeeding Andy Golding effective 1 September 2026.

Financial highlights

• Net interest income rose 1% year-over-year to £340m; net interest margin declined to 223bps from 230bps due to higher retail funding costs.

• Profit before tax was £187m, down 3% from prior period, impacted by higher impairment charges and administrative expenses.

• Administrative expenses up 4% to £136.5m, mainly due to transformation investment; cost to income ratio stable at 40.1%.

• Basic EPS increased 3% to 38.5p per share, mainly due to a lower average share count.

• Loan loss ratio rose to 12bps (from 2bps), but credit quality remains strong and arrears over three months improved to 1.6%.

Outlook and guidance

• 2026 NIM guidance revised to 215–220bps due to persistent elevated funding costs and competition.

• 2026 RoTE guidance revised to ~12.5%; mid-teens RoTE targeted for 2028, rising to upper mid-teens in 2029.

• Full-year net loan book growth expected to match 2025 levels; administrative expenses guidance reiterated at c.£280m for 2026.

• Transformation investment to conclude in 2027, with operational leverage benefits accruing thereafter.

• Buy-to-let to comprise ≤60% of net loan book over time, with continued focus on portfolio diversification.