A different sort of newcomer bank. Formerly Kent and Reliance Building Society, most of their funding is from retail deposits and balance sheet is more easily understood than the impenetrable ones of the big banks. Heavily into the buy to let sector of lending, so rapid growth last two years likely to tail off, but nothing wrong with a good cash cow. Yield should be around 5% this year. I have bought a modest holding but always dyor.

Breakout

Well done Chris. I got shaken out for a couple of points.

Thanks CC

Trading update http://www.moneyam.com/action/news/showArticle?id=5734639

Ed:Up nearly 5% on that news so far.

A nice range trade this as it's been bouncing off around 400. I've closed now.

Good luck to all that hold. Personally I'd like to see it go back to 400 so I can run the trade again but that doesn't seem very likely after this set of trading results.

Not taken profit yet on SB's have a few in ISA long term.

How strange to release the trading update again today.

Bought back in at 400.6 yesterday. Let's see how it goes this time.

15 March 2018

OneSavings Bank plc

Preliminary results for the year ended 31 December 2017

Financial highlights

Underlying profit before tax1 increased 21% to £167.7m (2016: restated2 £138.2m)

Loan book growth of 23% to £7.3bn (2016: £5.9bn) driven by 14% growth in gross originations to £2.6bn (2016: £2.3bn)

Strong income growth alongside continued focus on cost discipline and efficiency delivered a stable cost to income ratio3 of 27% (2016: 27%)

Net interest margin ('NIM')4 stable at 316bps (2016: restated2 316bps)

Further improved loan loss ratio5 of 7bps (2016:16bps)

Return on equity ('RoE')6 remained strong at 28% (2016: 29%), despite strengthening our Common Equity Tier 1 ('CET1') capital ratio to 13.7% (2016: 13.3%)

Underlying basic earnings per share7 grew 23% to 51.1 pence (2016: 41.7 pence)

Recommended final dividend8 of 9.3 pence per share giving a full year dividend of 12.8 pence per share, in line with our target dividend payout ratio

Further optimisation of capital structure through the issue of £60m of Additional Tier 1 securities
Andy Golding, CEO of OneSavings Bank, said:

"I am delighted that OneSavings Bank has delivered another excellent set of results for 2017, whilst successfully negotiating significant regulatory and tax changes in our core Buy-to-Let market.

We generated a 21% increase in underlying profit before tax and a 23% increase in underlying basic earnings per share. This was underpinned by strong organic originations, up 14% to £2.6bn, maintaining attractive margins and prudent risk management alongside continued cost efficiency and discipline. We delivered a strong return on equity of 28% despite strengthening our CET1 ratio to 13.7%.

Despite market sentiment linked to political and economic uncertainty going forward, we entered 2018 with a strong pipeline of new business in our core markets and intend to deploy our proven credit risk and operational competencies to expand our residential and commercial product offerings in 2018.

We also expect to deliver net loan book growth in the mid-teens in 2018 and NIM of c. 3%, reflecting current asset pricing and an expectation of a rising cost of funds after the end of TFS. We anticipate a cost to income ratio of c. 30% for 2018, reflecting the significant increase in the cost of regulation and planned investment in the business to support our growth strategy.

OneSavings Bank is well placed to take advantage of growth opportunities in 2018 and we remain confident in our ability to generate attractive returns for our shareholders."


Key metrics

2017 2016
Loan loss ratio5 (bps) 7 16
Statutory profit before tax (£m) 167.7 163.1
Total assets (£bn) 8.6 6.6
Statutory basic EPS9 (pence) 51.1 49.4
Loan to deposit ratio10 (%) 92 90
3 months + arrears11 (%) 1.2 1.4
Customer net promoter score +62 +59

Interims out this Thursday and will be interesting to see how OSB are doing.

The only bank I would invest in at the moment.

Interims:

http://www.moneyam.com/action/news/showArticle?id=6101970

34,000 shares sold by a relative http://www.moneyam.com/action/news/showArticle?id=6124003

Directors sell for tax liabilities http://www.moneyam.com/action/news/showArticle?id=6130715

Trading update https://www.moneyam.com/action/news/showArticle?id=6198912