Announcements from OSB Group PLC (LSE:OSB) and Metro Bank Holdings PLC (LSE:MTRO) have become more interesting following Nationwide’s £2.9 billion takeout of rival challenger bank Virgin Money.
Analysts are not sure there is too much read across, though OSB trading on a consensus PE ratio of 2.7 times is an obvious target, according to KBW.
Metro, too, is cheap says KBW, but faces considerable challenges and “would no doubt have been taken over during the restructuring if there had been any interest”.
The bank has moved to reassure as best it can, says AJ Bell, raising £325 million fresh capital in autumn 2023, when it also unveiled a new cost-cutting plan designed to save at least £30 million a year.
A small £11 million profit is expected in 2023 when it updates on Wednesday, to end a long streak of annual losses but the uncertainty on its future means Metro is the most lowly rated of all the challenger banks.
On a multiple of book value, it is rated at a fraction of the value afforded to Virgin Money by the Nationwide bid, notes AJ Bell.
OSB on recovery tack
Specialist mortgage lender OSB is also recovering from a profit warning and stuttering housing market.
Profits are expected to rebound in 2024, despite the soggy economic outlook, says AJ Bell, and OSB is expected to maintain a generous dividend as a result.
OSB increased its interim payment to 10.2p from 8.7p though the final payment will be more cautious.
Pre-tax income is expected to drop to £361 million from £532 million.
Results are due on Thursday 14 March.