Core Viewpoint - OSB Group reported its 2025 full-year results, highlighting steady loan growth, improved lending spreads, and a focus on higher-yielding segments, while navigating challenges related to funding costs and transformation investments. Financial Performance - Net interest income for 2025 was £679.4 million, down 2% year-on-year, with a net interest margin (NIM) of 228 basis points, a decrease of 2 basis points from the previous year [1] - Profit before tax for 2025 was £382.5 million, with earnings per share (EPS) of 75.6p, reflecting a 6% increase in EPS in the second half of the year [6][18] - The full-year dividend was raised by 5%, and a £100 million share buyback was announced for 2026 [6][18] Loan and Credit Quality - Net loans grew by 3.2% in 2025, with originations from higher-yielding segments increasing by 53%, now representing 12% of the total loan book [3][6] - The three-month-plus arrears rate remained stable at 1.7% at the end of 2025, indicating strong credit performance [2][6] Cost and Transformation - Administrative expenses rose to £270.1 million, up 5% year-on-year, primarily due to transformation investments [11] - The cost-to-income ratio increased to 40.4% from 38.7%, reflecting the impact of transformation expenditure [12] - The technology transformation is on track, with new products launched on the platform and significant customer adoption of self-service features [13][14] Funding and Capital Position - Retail deposit balances were £24.3 billion at year-end, up 2% year-on-year, supporting loan growth [17] - The Common Equity Tier 1 (CET1) ratio ended at 15.8%, with a new target range set at 13%–13.5% [19] - The group generated 150 basis points of capital in 2025, and the total expected credit loss (ECL) provision was £123.6 million [15][19] Outlook - Management guided for a NIM of approximately 225 basis points in 2026, assuming normalization of funding costs [8] - Expectations for net loan book growth in 2026 are similar to 2025, with a focus on maintaining pricing discipline in a competitive market [20]

Core Viewpoint - OSB Group PLC is preparing for changes in its Minimum Requirements for Own Funds and Eligible Liabilities (MREL) regime, effective from January 1, 2026, as notified by the Bank of England [4][5]. Group's MREL Requirements - The Group's MREL will be equal to the minimum capital requirements, which include Pillar 1 and Pillar 2A capital requirements set by the Prudential Regulation Authority (PRA) [5]. Company Overview - OSB Group PLC, trading as OneSavings Bank, began operations on February 1, 2011, and was listed on the London Stock Exchange in June 2014, joining the FTSE 250 index in June 2015 [7]. - The Group provides specialist lending and retail savings, regulated by the Financial Conduct Authority and the Prudential Regulation Authority [7]. Business Segments - OSB primarily targets high-growth market sub-sectors, including Buy-to-Let, commercial mortgages, and bespoke residential lending, utilizing a skilled underwriting process [8][9]. - Charter Court Financial Services Group (CCFS) focuses on Buy-to-Let and specialist residential mortgages, leveraging automated technology for efficient processing and risk management [11][12]. Funding Sources - OSB is mainly funded by retail savings through the Kent Reliance brand, with additional funding from securitisation programmes and the Bank of England's Term Funding Scheme [10]. - CCFS is predominantly funded by retail savings from its Charter Savings Bank brand, also utilizing securitisation and the Bank of England's funding schemes [13].

Core Insights - The Group's financial results for the first half of 2025 show resilient performance and strategic progress, aligning with management expectations during a two-year transition period [2][11][32] - The net loan book increased by 1.2% to £25.4 billion, supported by a 10% growth in originations to £2.1 billion [6][12][54] - Profit before tax decreased by 20% to £192.3 million, primarily due to lower net interest income and a fair value loss on financial instruments [13][39] Financial Performance - Net interest income was £337.0 million, down 5% from £353.5 million in H1 2024, with a net interest margin (NIM) of 230 basis points [6][41] - Administrative expenses rose to £131.4 million, a 4% increase from £126.2 million in H1 2024, leading to a cost-to-income ratio of 40.3% [6][46] - Return on tangible equity (RoTE) was 13.7%, down from 17.4% in the prior period [6][17] Loan Book and Originations - The Group's loan book diversification strategy continued, with significant growth in originations across Commercial, Asset Finance, Residential Development, and Bridging segments [4][19] - Buy-to-Let lending remained the largest segment, accounting for 69% of the total gross loan book, down from 70% at the end of 2024 [21][70] - Total originations for H1 2025 reached £2.1 billion, a 10% increase compared to £1.9 billion in H1 2024 [6][76] Capital and Liquidity - The Common Equity Tier 1 (CET1) capital ratio was strong at 15.7%, down from 16.3% at the end of 2024 [6][60] - Retail deposits increased by 3% to £24.6 billion, contributing to the repayment of £730 million of TFSME funding [6][55] - The Group's liquidity coverage ratio was 167%, significantly above the regulatory minimum [56][58] Dividend and Shareholder Returns - An interim dividend of 11.2 pence per share was declared, representing a 5% increase from 10.7 pence in H1 2024 [6][52] - The Group's strategy aims to support both net loan book growth and further capital returns to shareholders [31][35]