On 2 November 2023 OSB Group issued Q3 trading update for the period from 1 July 2023 to 30 September 2023.
Andy Golding, CEO of OSB GROUP PLC, said:
“I am pleased with the Group’s strong performance in the third quarter, despite the continued macroeconomic uncertainty. We have once again proven to be a trusted partner to our borrowers and savers.
Our customer franchises performed very well. We completed £1.3bn of new lending during the third quarter demonstrating our strong relationships and attractive propositions in the market, and we are seeing borrowers continue to refinance with the Group through our retention programmes.
Retail deposits increased by 5% in the three months to 30 September as savers continued to choose our consistently fair products, and we have repaid £250m of the Bank of England’s TFSME funding using retail deposits.
The credit performance of our borrowers remained strong, with broadly stable three months plus arrears and no material change in the Group’s macroeconomic scenarios in the third quarter, albeit we continue to review these scenarios in light of ongoing uncertainty in the UK macroeconomic outlook.
I am pleased that the Group successfully issued £300m of MREL qualifying debt securities in September, as we progress towards our interim MREL requirement by July 2024. This and further anticipated issuances of qualifying MREL debt securities support the optimisation of the Group’s capital composition as well as further capital returns to shareholders.
The Group is cognisant of the rising cost of retail funds and the impact of planned future MREL issuance, but remains on track to deliver its 2023 full year guidance of underlying net interest margin of c.2.6% and underlying cost to income ratio of c.33%. Given our strong lending performance to date, particularly in retentions, we now expect to deliver full year underlying net loan book growth of c.9%.
Looking ahead, whilst the outlook for the UK economy and the overall mortgage market remains somewhat unclear, the fundamental drivers of demand in the private rented sector continue to be robust. Our strong capital and liquidity position, secured loan book and proven risk management capabilities, as well as our focus on professional and portfolio landlords, position us well to continue to generate attractive and sustainable returns for shareholders through the cycle.”
For the full Q3 2023 Trading update, please click here.