OSB H1 profits fall, maintains interim dividend
By Iain Gilbert
Date: Wednesday 20 Aug 2025
(Sharecast News) - Mortgage lender OSB Group said on Wednesday that profits had fallen in the six months ended 30 June, with rising funding costs and a competitive mortgage market weighing on profitability.
Statutory pre-tax profits dropped 31% to £226.7m, hit by a 59% surge in impairment charges to £54.6m, while underlying pre-tax profits fell 25% to £260.6m, and operating income slipped 3% to £398.6m.
Loan book growth remained solid, up 6% to £24.4bn, but the group's cost-to-income ratio rose to 27%, compared with 24% a year earlier, and net interest margin narrowed to 2.56%, down from 2.78%, reflecting elevated savings rates and a shift in product mix. However, OSB maintained its interim dividend at 11.7p per share.
Looking forward, OSB expects margins to stabilise in the second half, but warned of ongoing uncertainty around arrears and customer behaviour. It also confirmed the launch of a £30m share buyback programme, citing strong capital generation and a resilient balance sheet.
Chief executive Andy Golding said: "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.
"Given the performance in the first half of the year, today we reiterate our 2025 guidance of low single-digit net loan book growth, NIM of circa 225bps, circa £270m of administrative expenses and a low teens RoTE."
Reporting by Iain Gilbert at Sharecast.com
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