Shares in OSB Group PLC (LSE:OSB) fell 21% after the buy-to-let lender announced a 28% decline in underlying profit, the departure of its finance chief and lower than expected margin guidance.
The FTSE 250-listed lender, which runs OneSavings Bank, Kent Reliance and Charter Court Financial Services, said April Talintyre will retire as chief financial officer at the annual meeting on 9 May.
For 2024, OSB management expects loan book growth to slow to 5%, based on current application volumes and the subdued mortgage market.
Underlying net interest margin (NIM) is expected to be "broadly flat" at circa 2.51%, reflecting the impact of a higher cost of funds and the impact of lower margin lending.
Analyst Gary Greenwood at Shore Capital said: "NIM guidance is lower than we and consensus had expected, which is likely to drive sizeable forecast downgrades."
For the past calendar year, OSB reported underlying profit before tax of £426 million, which was down 28% on the prior year but 4% ahead of consensus forecasts, primarily due to lower-than-expected impairments.
Adjusted earnings per share fell 25% to 75p but this was 2% ahead of consensus. The CET1 capital ratio of 16.1% was slightly higher than expected too.
The board proposed a full-year ordinary dividend of 32p per share, which represents a 5% increase on the prior year despite lower earnings, and announced a £50 million share buyback to be completed during the first half.
Chief executive Andy Golding hailed 12% growth in retail deposits and 9% net loan book as the group grew its share of the buy-to-let segment against a backdrop of a subdued wider mortgage market.
"The group’s target professional landlords continue to demonstrate resilience, supported by high levels of demand in the Private Rented Sector, long-term income improvement and a reduction in the cost of borrowing towards the end of the year."
Shore Cap's Greenwood said he had assumed a flat dividend while consensus had anticipated a small reduction, so this was better than expected.
The buyback was lower than the £150 mllion he forecast model, but he said he thinks "there is scope for a further buyback to be announced at the half year".