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Shares in OneSavings leap 8 per cent; profits double

Kit Klarenberg
Written By:
Kit Klarenberg
Posted:
Updated:
18/03/2015

Shares in challenger bank OneSavings jumped by over 8 per cent today, after its annual profits more than doubled.

OneSavings’ pre-tax profits for last year rose to £69.7m, up from £30m last year, driven primarily by the growth of the bank’s buy-to-let and small and medium enterprises mortgage offering, which almost doubled to £2.1bn (up from £1.1bn). Total loans and advances grew 29 per cent to £3.9bn; net interest margins rose to 291 basis points, from 211 a year ago.

OneSavings was created four years ago out of the ashes of Kent Reliance Building Society, which was salvaged by a £50m cash injection from JC Flowers. It floated in June last year, with shares valued at 170p each; shares were trading at 231.5p following the profit announcement today. The bank has confirmed it will pay its maiden dividend this year, of 3.9p per share.

OneSavings’ chief Andy Golding said he was delighted with the results, and “expected to see a continuation of last year’s positive trends, as the macroeconomic backdrop remained supportive for the overall housing market.”

“We remain confident in the outlook for our business and anticipate demand will remain strong as we continue to differentiate ourselves from the competition through the identification of high value, underserved markets.”

In an interview with Reuters today, Golding also indicated that OneSavings was open to takeover bids. He acknowledged the excitement that had attended Sabadell’s announcement of a £1.7bn bid to absorb TSB last week across the challenger sector, and said “if an offer came over the hill for us, and there was a good premium, of course the board would consider it, and we would consider recommending to shareholders.”

Golding also said the bank could in future make acquisitions itself, noting the board was already sizing up prospects for penetrating new markets via acquisition. “There is probably going to be some consolidation in the challenger sector in the near future,” Golding concluded. “There are a number of smaller players in the market, many of them with much smaller balance sheets than we have.”


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