Onesavings Bank profit slides amid coronavirus lockdown
Onesavings Bank reported a drop in profit in the six months to the end of June as growth in its loan book did little to offset the impact of the pandemic.
The figures
Onesavings Bank reported underlying profit before tax fell 14 per cent to £156.3m in the six months to the end of June.
The challenger bank’s underlying net loan book inched up two per cent to £18.5bn in the period.
Underlying basic earnings per share came to 26.1p, down from 30.3p a year earlier, while the return on equity fell from 24 per cent to 18 per cent.
Why it’s interesting
While Onesavings Bank’s loan book increased just two per cent, applications have picked up considerably since lockdown was lifted and the bank anticipates double digit growth for the full year.
The bank said since the housing market reopened, it is now approaching 60 per cent of pre-lockdown levels on tighter lending criteria and higher pricing.
Based on current pricing Onesavings Bank expects underlying net interest margin for the full year to be broadly flat, with the base rate cuts passed on to retail depositors in full by the end of the third quarter.
Payment holidays peaked at 28 per cent of the loan book, but as this comes to an end just 18 per cent are choosing to extend. The bank had previously suggested the holidays were largely taken by landlords on a pre-emptive basis.
What Onesavings Bank said
Chief executive Andy Golding said:
“It remains too early to say what the full impact of COVID-19 will be on the UK economy, nevertheless we will continue to be there for our customers, supporting them in the best way that we can. The foundations of our business remain extremely strong, with a very strong capital position and a prudent business model, all of which position us well to respond to the challenges and opportunities ahead and to continue to support our colleagues, customers and communities and deliver value to our shareholders over the long-term.”