OneSavings Bank Share News (OSB)

(Sharecast News) - OSB Group reported a solid start to 2025 on Wednesday, with first-quarter performance in line with expectations and the group reiterating its full-year guidance.

The FTSE 250 company said lending activity increased, while the net loan book and deposit base remained broadly stable.

Total originations reached £1.1bn in the quarter, up from £1bn a year earlier, reflecting the group's continued focus on higher-yielding specialist lending segments such as commercial, asset finance, bridging and development finance.

The net loan book edged up slightly to £25.2bn from £25.1bn at year-end.

Retail deposits were unchanged at £23.8bn, while the group reduced its outstanding balance from the Bank of England's Term Funding Scheme with additional incentives for SMEs (TFSME) to £810m from £1.4bn at the end of 2024.

Credit performance remained stable, with loans more than three months in arrears holding steady at 1.7%, in line with internal expectations.

The group said it had repurchased £15.7m of shares under its £100m buyback programme, which was due to be completed by March next year.

"I am pleased with the performance of our lending and savings franchises in the first quarter of 2025," said chief executive officer Andy Golding.

"We continued to prioritise returns over growth when pricing new and retention mortgage products which led to a broadly flat net loan book compared to the end of 2024.

"We saw growth in originations in more complex Buy-to-Let and our higher-yielding specialist sub-segments and retail deposit pricing remained in line with our assumptions with an attractive blended front book margin."

Golding said retail deposits were broadly flat as the group focused on optimising liquidity and used funds from the December securitisation to repay £600m of its TFSME balance, noting that since the end of the quarter, it had repaid a further £150m of the funding.

"The transformation programme progressed well in the quarter with all new Kent Reliance fixed rate bonds now available on our new savings platform.

"I am proud that our focus on building and delivering excellent journeys for our customers was recognised in March by the FS Tech award for Best Customer Service and Experience - Technology.

"Given the Group's performance to date, we are on track to deliver the 2025 guidance of low single digit net loan book growth, net interest margin of around 225 basis points, about £270m of administrative expenses and low-teens RoTE."

Andy Golding said the board was cognisant of the geopolitical environment, and continued to monitor its impact on the UK economy and the macroeconomic scenarios used in the group's IFRS 9 models.

"The group is well positioned to deliver on its guidance with attractive and sustainable returns for the shareholders and I look to the future with confidence."

At 1106 BST, shares in OSB Group were flat at 468.8p.

Reporting by Josh White for Sharecast.com.