OSB Group Demonstrates Resilience Amidst Transformation, Reaffirms 2025 Guidance

OSB Group PLC (OSB.L), a specialist lending and retail savings group, announced its results for the first half of 2025 on Wednesday, showcasing resilient financial performance aligning with management expectations, despite ongoing strategic transitions.

The group maintained its focus on disciplined cost management and lending practices, achieving a 13.7% return on tangible equity.

The net loan book experienced a 1.2% increase, reaching £25.4 billion, driven by a 10% surge in originations to £2.1 billion. This growth reflects a strategic emphasis on diversifying into higher-yielding sub-segments such as Commercial, Asset Finance, Residential Development, and Bridging.

Net interest income stood at £337.0 million, with a net interest margin (NIM) of 230bps. In the same period last year, net interest income was 353.5 million.

Profit before tax reached £192.3 million, down from 241.3 million reported in H1 2024, while basic earnings per share (EPS) was recorded at 37.3 pence.

The lower profit was put down to lower net interest income and a fair value loss on financial instruments compared to a fair value gain in the prior period.

OSB's interim dividend was increased by 5% to 11.2 pence per share, consistent with the group’s dividend policy.

Additionally, OSB Group is executing a £100 million share repurchase program, with £38 million worth of shares already repurchased as of August 18, 2025.

The Common Equity Tier 1 capital ratio remains strong at 15.7%, inclusive of the repurchase program's full impact.

Driver Breakdown:

• Strategic Diversification: Expansion into higher-yielding sub-segments is driving loan book growth and improving overall returns.
• Transformation Program: Investments in a new lending platform and the Rely brand for Buy-to-Let investors are progressing on schedule, enhancing future capabilities.
• Cost Discipline: Core administrative expenses saw minimal increase, demonstrating effective cost management despite ongoing investments.

CEO Andy Golding commented, “The Group’s results for the first half of 2025 demonstrate resilient financial performance in line with management expectations in addition to strategic progress as we work our way through the two-year transition period.”

Despite a slight increase in arrears balances to 1.8%, the loan loss ratio was reported at 2bps, with total expected credit loss provisions held at £125.1 million, highlighting a prudent approach to risk management.

OSB Group reiterated its 2025 guidance, projecting low single-digit net loan book growth, a NIM of approximately 225bps, administrative expenses around £270 million, and a low teens return on tangible equity (RoTE).

The group also outlined its medium-term aspirations, targeting mid-single-digit loan book growth by 2027-2029, with Buy-to-Let comprising ≤ 60% of the net loan book.