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Trading Update

OneSavings Bank plc
·11-min read


OneSavings Bank plc: Trading update

Published: 12.11.2020

OneSavings Bank plc

Trading update

OneSavings Bank plc (‘OSB’ or ‘the Group’), the specialist lending and retail savings group, today issues its trading update for the period from 1 July 2020 to date.


  • The Group delivered strong financial and operating performance in the three months to 30 September 2020

  • Organic originations for the combined Group of £725m in the three months to 30 September 2020 (Q3 2019: pro forma underlying1 £1.7bn, statutory: £842m for OSB and £865m for Charter Court Financial Services Group (‘CCFS’))

  • Underlying2 net loans and advances increased by 8% in the nine months to 30 September 2020, excluding the impact of structured asset sales in the first half. On an underlying2 basis, after structured asset sales, net loans and advances as at 30 September 2020 increased 3% to £18.7bn (31 December 2019: pro forma underlying1 £18.2bn). On a statutory basis, net loans and advances were £19.0bn (31 December 2019: £18.4bn)

  • Underlying2 net interest margin (‘NIM’) improved as expected when the full impact of the base rate cuts was passed on to retail savers towards the end of the third quarter

  • Slight improvement in three months plus arrears (and earlier arrears) during the quarter and as at 30 September 2020, active payment holidays had decreased to only c. 3% of the Group’s loan book by value with a weighted average loan to value (‘LTV’) of 69%. Very low levels of new arrears on accounts exiting payment holidays

  • No significant change in IFRS 9 macroeconomic scenarios, staging criteria or impairment provisions during the quarter

  • Insertion of a new holding company to facilitate the issuance and compliance with the Group’s MREL requirements approved by shareholders at a general meeting on 2 November 2020

  • The Board aspires to return to dividend payment and will assess at the end of the year whether circumstances support the payment of a dividend for 2020, taking into account the macroeconomic and capital outlook

1. Pro forma underlying refers to ratios and results which assume that the Combination with CCFS occurred on 1 January 2019 and exclude exceptional items, integration costs and other acquisition-related items arising from the Combination with CCFS.

2. Underlying refers to results and ratios which exclude exceptional items, integration costs and other acquisition-related items arising from the Combination with CCFS.

Andy Golding, CEO of OneSavings Bank, said:

“I am extremely proud of OSB’s continued strong performance in a challenging and uncertain environment. Throughout the pandemic we have adapted quickly and have continued to offer our customers the high service levels we are recognised for.

We are lending prudently, with a controlled risk appetite and current application volumes are strong across our Kent Reliance and Precise Buy-to-Let and Residential brands. Total application levels for the Group are c.65% of pre-COVID-19 lockdown levels, as we remain cautious with the criteria offered in our more cyclical market segments. We continue to expect double digit underlying net loan book growth for 2020, excluding the impact of structured asset sales although we remain cognisant of the potential impact of the latest lockdown on the timing of completions and redemptions.

Underlying NIM improved as expected when the full impact of the base rate cuts was passed on to retail savers towards the end of the third quarter and we expect it to be broadly flat to the first half for full year 2020. We maintained our cost discipline in the third quarter and the underlying cost to income ratio for the full year is expected to be marginally higher than in the first half, due primarily to the impact of gains on structured asset sales in the first half.

Our loan book continues to perform well, with a slight improvement in arrears in the third quarter and no significant change in IFRS 9 economic scenarios, staging criteria or impairment provisions. Live payment holidays have reduced to only c.3% of the Group’s loan book by value, with very low levels of new arrears for borrowers that were due to resume payments.

Despite the current complex environment, the Group has made good progress on the integration with CCFS and remains on track to deliver the synergies that were identified at the outset of the Combination. The Group has also demonstrated exemplary operational resilience as, in line with Government guidelines, the majority of our employees continue to work from home, including those in India. The physical safety and emotional wellbeing of our employees are paramount to us and we continue to ensure all of our colleagues are fully supported whether at home or socially distanced in our offices. I would like to thank all of our outstanding colleagues for their resilience, dedication and determination in keeping our business running so smoothly.

We acknowledge that the outlook for the UK economy remains uncertain with the continued progression of COVID-19 and associated measures and restrictions, including a new national lockdown, extensions to the furlough scheme and COVID-19 payment deferrals, as well as the ongoing Brexit negotiations. However, the Group is well positioned, with strong capital and liquidity ratios, sensible LTVs and strong risk management capabilities.”


OneSavings Bank plc

Alastair Pate, Investor Relations, t: 01634 838 973

Brunswick Group

Robin Wrench / Simone Selzer, t: 020 7404 5959

Analyst presentation

A webcast and a conference call will be held at 10:00am on Thursday 12 November and both will be available on the OneSavings Bank website at Registration is open immediately.

About OneSavings Bank plc

OneSavings Bank plc (OSB) began trading as a bank on 1 February 2011 and was admitted to the main market of the London Stock Exchange in June 2014 (OSB.L). OSB joined the FTSE 250 index in June 2015. On 4 October 2019, OSB acquired Charter Court Financial Services Group plc (CCFS) and its subsidiary businesses. OSB is a specialist lending and retail savings Group authorised by the Prudential Regulation Authority, part of the Bank of England, and regulated by the Financial Conduct Authority and Prudential Regulation Authority.

OneSavings Bank

OSB primarily targets market sub-sectors that offer high growth potential and attractive risk-adjusted returns in which it can take a leading position and where it has established expertise, platforms and capabilities. These include private rented sector Buy-to-Let, commercial and semi-commercial mortgages, residential development finance, bespoke and specialist residential lending, secured funding lines and asset finance.

OSB originates mortgages organically via specialist brokers and independent financial advisers through its specialist brands including Kent Reliance for Intermediaries and InterBay Commercial. It is differentiated through its use of highly skilled, bespoke underwriting and efficient operating model.

OSB is predominantly funded by retail savings originated through the long-established Kent Reliance name, which includes online and postal channels as well as a network of branches in the South East of England. Diversification of funding is currently provided by securitisation programmes, the Term Funding Scheme, Term Funding Scheme for SMEs and the Bank of England Indexed Long-Term Repo operation.

Charter Court Financial Services Group

CCFS focuses on providing Buy-to-Let and specialist residential mortgages, mortgage servicing, administration and credit consultancy and retail savings products. It operates through its three brands – Precise Mortgages, Exact Mortgage Experts and Charter Savings Bank.

It is differentiated through risk management expertise and best-of-breed automated technology and systems, ensuring efficient processing, strong credit and collateral risk control and speed of product development and innovation. These factors have enabled strong balance sheet growth whilst maintaining high credit quality mortgage assets.

CCFS is predominantly funded by retail savings originated through its Charter Savings Bank brand. Diversification of funding is currently provided by securitisation programmes, the Term Funding Scheme, Term Funding Scheme for SMEs and the Bank of England Indexed Long-Term Repo operation.

Important disclaimer
This document should be read in conjunction with the documents distributed by OneSavings Bank plc (‘OSB’) through the Regulatory News Service (‘RNS’). This document is not audited and contains certain forward-looking statements, beliefs or opinions, including statements with respect to the business, strategy and plans of OSB and its current goals and expectations relating to its future financial condition, performance and results. Such forward-looking statements include, without limitation, those preceded by, followed by or that include the words ‘targets’, ‘believes’, ‘estimates’, ‘expects’, ‘aims’, ‘intends’, ‘will’, ‘may’, ‘anticipates’, ‘projects’, ‘plans’, ‘forecasts’, ‘outlook’, ‘likely’, ‘guidance’, ‘trends’, ‘future’, ‘would’, ‘could’, ‘should’ or similar expressions or negatives thereof. Statements that are not historical facts, including statements about OSB’s, its directors’ and/or management’s beliefs and expectations, are forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. Factors that could cause actual business, strategy, plans and/or results (including but not limited to the payment of dividends) to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements made by OSB or on its behalf include, but are not limited to: general economic and business conditions in the UK and internationally; market related trends and developments; fluctuations in exchange rates, stock markets, inflation, deflation, interest rates and currencies; policies of the Bank of England, the European Central Bank and other G8 central banks; the ability to access sufficient sources of capital, liquidity and funding when required; changes to OSB’s credit ratings; the ability to derive cost savings; changing demographic developments, and changing customer behaviour, including consumer spending, saving and borrowing habits; changes in customer preferences; changes to borrower or counterparty credit quality; instability in the global financial markets, including Eurozone instability, the potential for countries to exit the European Union (the “EU”) or the Eurozone, and the impact of any sovereign credit rating downgrade or other sovereign financial issues; technological changes and risks to cyber security; natural and other disasters, adverse weather and similar contingencies outside OSB’s control; inadequate or failed internal or external processes, people and systems; terrorist acts and other acts of war or hostility and responses to those acts; geopolitical, pandemic or other such events; changes in laws, regulations, taxation, accounting standards or practices, including as a result of an exit by the UK from the EU; regulatory capital or liquidity requirements and similar contingencies outside OSB’s control; the policies and actions of governmental or regulatory authorities in the UK, the EU or elsewhere including the implementation and interpretation of key legislation and regulation; the ability to attract and retain senior management and other employees; the extent of any future impairment charges or write-downs caused by, but not limited to, depressed asset valuations, market disruptions and illiquid markets; market relating trends and developments; exposure to regulatory scrutiny, legal proceedings, regulatory investigations or complaints; changes in competition and pricing environments; the inability to hedge certain risks economically; the adequacy of loss reserves; the actions of competitors, including non-bank financial services and lending companies; and the success of OSB in managing the risks of the foregoing.

Accordingly, no reliance may be placed on any forward-looking statement and no representation, warranty or assurance is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Any forward-looking statements made in this document speak only as of the date they are made and it should not be assumed that they have been revised or updated in the light of new information of future events. Except as required by the Prudential Regulation Authority, the Financial Conduct Authority, the London Stock Exchange PLC or applicable law, OSB expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in OSB’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. For additional information on possible risks to OSB’s business, please see Risk review section in the OSB 2019 Annual Report and Accounts. Copies of this are available at and on request from OSB.

Nothing in this document and any subsequent discussion constitutes or forms part of a public offer under any applicable law or an offer to purchase or sell any securities or financial instruments. Nor does it constitute advice or a recommendation with respect to such securities or financial instruments, or any invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000. Past performance cannot be relied on as a guide to future performance. Nothing in this document is intended to be, or should be construed as, a profit forecast or estimate for any period.

Liability arising from anything in this document shall be governed by English law, and neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. Nothing in this document shall exclude any liability under applicable laws that cannot be excluded in accordance with such laws.

Certain figures contained in this document, including financial information, may have been subject to rounding adjustments and foreign exchange conversions. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly to the total figure given.