OneSavings Bank has reported an increase in profit as its loan book continued to grow in the first half of this year.
In its interim report for the first six months of 2018, the lender saw its pre-tax profits grow 17 per cent to £91.8m - this was despite a slight squeeze on its net interest margin, which dropped from 324bps in the first half of last year to 301bps this year.
OneSavings reported a net loan book growth of 11 per cent, attributed to a 17 per cent growth in new business to £1.4bn - driven by professional buy-to-let and commercial and semi-commercial products.
Andy Golding, the company’s chief executive, said whilst regulatory and tax changes in the buy-to-let market have dampened industry-wide demand for new purchase mortgages, this was partially offset by an increase in demand for remortgages.
He said: "We focus on the professional buy-to-let market where trends remain positive -demand for five year fixed rate products has risen noticeably across the market with competition continuing to increase, however we continue to see good opportunities for growth and our InterBay Commercial business continues to flourish."
OneSavings’ total assets grew to £9.7bn in the first half of this year, compared with £7.2bn in the same period last year.
The growth is part of an ongoing trend for the challenger bank, which earlier this year reported growth in net loans and advances and an increase in underlying profit before tax.
Mr Golding said: "Given the growth already achieved this year and considering the current pipeline and application levels for the third quarter to date, we now expect to deliver net loan book growth of high-teens in 2018, whilst maintaining an appropriate margin for the risks we are underwriting."
Mr Golding said there will be further investment in the second half of the year in technology infrastructure and enhancements to online savings and mortgage origination platforms.
He added: "We continue to expect that our cost to income ratio will be c.30 per cent for the full year, as previously guided, with all other guidance for the full year also unchanged."
rachel.addison@ft.com
