OSB Group PLC (LSE:OSB) has reiterated its outlook for 2025 after reporting lower half-year profits, saying it remained on track with its two-year transformation plan.
The specialist mortgage and savings bank said on Wednesday it continued to expect “low single digit” loan book growth this year, a net interest margin of around 2.25 %, administrative expenses of about £270 million and a return on tangible equity in the low teens.
For the six months to June, profit before tax fell to £192.3 million from £241.3 million a year earlier.
The drop was mainly the result of reduced net interest income, which slipped to £337 million from £353.5 million, reflecting tighter spreads on savings and the impact of a loan securitisation completed at the end of last year.
The group’s net loan book grew 1.2 % to £25.4 billion, with new lending up 10 % to £2.1 billion as it pushed into higher-yielding areas such as commercial and asset finance, residential development and bridging loans.
Retail deposits rose 3 % to £24.6 billion, offsetting repayments of funding drawn under the Bank of England’s Term Funding Scheme.
Chief executive Andy Golding said: “The group’s results for the first half of 2025 demonstrate resilient financial performance in line with management expectations in addition to strategic progress as we work our way through the two-year transition period.”
He added that the launch of a new lending platform and the introduction of a brand aimed at buy-to-let investors were “key steps in our strategic plan”.
OSB declared an interim dividend of 11.2p per share, up 5 % on last year. Its capital position remained strong, with a Common Equity Tier 1 ratio of 15.7 % after taking into account the impact of a £100 million share buyback programme.