(Alliance News) - OSB Group PLC on Thursday reported a decline in underlying profit in 2020, after recording a GBP20 million impairment because of potential fraud by a third party.
Underlying pretax profit fell 9.2% to GBP346.2 million from GBP381.1 million in 2019. In the first full year after the merger with Charter Court Financial Services in October 2019, statutory pretax profit increased 25% to GBP260.4 million from GBP209.1 million. Net interest income rose 37% to GBP472.2 million from GBP344.7 million.
Shares in the Kent-based lender were down 0.4% to 454.80 pence in London on Thursday.
The results were delayed after OSB discovered potential fraudulent activity by a third party which owed GBP28.6 million. After an investigation, OSB decided to write down the value of the loan by GBP20 million. It said it believes this is an isolated incident.
OSB proposed a 14.5p per share dividend, its first after suspending the 2019 final dividend on the outbreak of Covid-19. The payment represents 25% of underlying earnings, in line with the company's dividend policy.
The FTSE 250-listed lender said its performance was resilient in a challenging year, and that applications for residential and buy-to-let mortgages have recovered to near pre-pandemic levels.
OSB expects underlying net loan book growth of 10% this year, as it has a strong pipeline of new business. It sees the net interest margin recovering to the 2019 level of 243 basis points, after narrowing to 216 basis points in 2020.
"The foundations of our business remain extremely robust, with a very strong capital position and a resilient business model," Chief Executive Andy Golding said.
By Ivan Edwards; email@example.com
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