OSB Group (OSB) investor relations material

Executive summary

• Delivered resilient financial and operational performance in H1 2026, maintaining a leading 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, supported by strong Buy to Let and Residential franchises.

• Transformation program on track, enhancing operational efficiency, customer outcomes, and pricing agility, with significant investment in technology and AI.

• Interim dividend increased by 5% to 11.8p per share, and £69m of a £100m share buyback completed.

• 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 £339.8m; net interest margin declined to 223bps from 230bps due to higher retail funding costs.

• Profit before tax was £187.2m, down 3% year-over-year; basic EPS up 3% to 38.5p per share.

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

• Loan loss ratio rose to 12bps (H1 2025: 2bps), with impairment charge of £15.8m; credit quality remains strong.

• CET1 ratio at 15.2% (31 Dec 2025: 15.8%), reflecting share repurchases and dividend payments.

Outlook and guidance

• 2026 net loan book growth expected to be broadly similar to 2025.

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

• Administrative expenses for 2026 expected at circa £280m, excluding CEO transition costs.

• ROTE expected to be circa 12.5% in 2026, rising to mid-teens by 2028–2029.

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