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(Alliance News) - OSB Group PLC on Thursday reported first-half increases in income and profit, as the lender released bad loan provisions and sold more mortgages on a buoyant UK housing market.
Shares in OSB, a mortgage specialist based in Chatham, Kent, were up 3.6% to 508.50 pence each in London on Thursday morning, the best performer in the FTSE 250.
Total income in the first half of 2021 was up 18% year-on-year, to GBP290.0 million from GBP245.3 million. Pretax profit more than doubled to GBP221.9 million from GBP99.3 million.
In the first half of 2019, before the acquisition of Charter Court Financial Services, OSB made total income of GBP143.8 million and pretax profit of GBP91.0 million.
The bank reinstated its interim dividend at 4.9 pence per share, in line with its policy of paying a third of the previous year's total payout as an interim dividend. It decided against a payout in the first half of 2020.
Profit was driven by the release of bad loan provisions, a growing loan book and a lower cost of retail funds, OSB said.
The bank recorded an impairment credit of GBP14.6 million, versus a charge of GBP54.2 million in the first half of 2020, because of the improving outlook for the economy.
Gross new organic lending was up 16% year-on-year to GBP2.5 billion from GBP2.1 billion, as demand for residential and buy-to-let mortgages remained strong.
Since the end of the first half, OSB relaunched high loan-to-value mortgages, similar to pre-pandemic criteria. Those will "build a strong pipeline of new business, principally for early 2022 completions," the company said.
Looking ahead, OSB said it remains confident for 10% underlying net loan book growth in 2021.
"I am delighted with the strong financial and operational performance of the group in the first half of 2021, despite ongoing challenges presented by the pandemic," Chief Executive Andy Golding said.
"Our resilient business model, strong capital position, secured loan book and strong risk management capabilities, continue to position us well to respond to the opportunities and challenges ahead and to deliver attractive and sustainable returns for our shareholders across the cycle."
By Ivan Edwards; ivanedwards@alliancenews.com
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