Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

OneSavings Bank shares jump as ShoreCap says it sees loan book growing at strong pace

OneSavings group reported a 17% increase in its loan book in the first nine months of the year
OneSavings Bank lifted full year expectations for loan book growth

OneSavings Bank PLC (LON:OSB) is well positioned to continue growing its loan book, analysts at Shore Capital said after the company raised it full year guidance.

The bank lifted its full year expectations for loan book growth to 20% from a previous growth estimate in the high teens. In 2016, the loan book rose 16% to £5.9bn.

Shares jumped 3.90% to 413.0p in morning trading.

In the first nine months of the year, the bank achieved a 17% increase in its loan book and said net loans and advances rose by £997mln pounds to £6.9bn.

“Notwithstanding a slower overall buy-to-let market, we believe that OneSavings Bank is well positioned to continue growing its loan book at a strong pace through further market share gains as mainstream lenders withdraw from the professional landlord market on which the group is primarily focused,” said ShoreCap analyst Gary Greenwood.

Last year, OneSavings said it was increasing its focus on professional landlords and tightened lending criteria for financing smaller developments after the Brexit vote.

ShoreCap has 'buy' on OneSavings

However, the market has seen a slowdown in buy-to-let investment after the government last year announced tax hikes and regulatory changes.

ShoreCap expects OneSavings Group will report adjusted pre-tax profit of £163.5mln for the year, on the back of higher loan growth, along with adjusted earnings per share of 48.0p, dividend per share of 12.0p and tangible net asset value per share of 198p.

"At yesterday’s closing price of 398p and based on our current forecasts, OneSavings Bank trades on a PER of 8.3x (dropping to 7.3x in 2018F and 6.6x in 2019F), dividend yield of 3.0% (payout ratio of 25%) and P/TNAV of 2.0x (RoTE of 26.9%)."

The broker repeated a 'buy' rating and target price of 398p. 

View full OSB profile View Profile

OneSavings Bank Timeline

Related Articles

August 23 2018
PCF has taken on more than 2,400 new customers and retail deposits have increased to £108mln since it started as a fully-operational bank in July 2017.
August 16 2018
Advantage Finance motor division continues to receive more than 80,000 applications for loans a month and customer numbers now stand at a record 58,000.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use