OSB Group (OSB) H1 2024 earnings summary

Executive summary

• Delivered strong operational performance in H1 2024, with underlying profit before tax up 114% to £250m, driven by non-recurrence of adverse EIR adjustment and disciplined lending.

• Net loan book grew 1.5% to £26.1bn, with originations of £1.9bn as the group prioritized returns over growth.

• Return on equity increased to 18% for H1 2024.

• Announced a £50m share buyback to commence in September and declared an interim dividend of 10.7p per share.

• Continued investment in digitalization and customer service, including a new mobile app for intermediaries and upcoming savings platform.

Financial highlights

• Underlying pre-tax profit rose to £250m in H1 2024 from £117m in H1 2023; statutory profit before tax increased to £241.3m.

• Net interest income increased 29% to £362m; underlying NIM at 243bps, statutory NIM at 237bps.

• Cost-to-income ratio improved to 34%; admin expenses at £126m, reflecting investment in people, operations, and digitalization.

• Underlying loan loss ratio improved to a credit of (4)bps, driven by provision releases from improved macroeconomic scenarios.

• Retail deposits grew 10% to £24.3bn, supporting lending growth and TFSME repayment.

Outlook and guidance

• Net loan book growth for 2024 expected at ~3%.

• NIM guidance for 2024 set at 230–240bps, reflecting ongoing pricing discipline and market competition.

• Cost-to-income ratio expected at ~36% for 2024.

• CET1 ratio expected to remain above 14% target as Basel 3.1 rules are awaited.

• Well-capitalized and positioned to leverage multi-brand structure for future opportunities.