Onesavings Bank shares plunge as lender declines to give guidance over coronavirus
Shares in Onesavings Bank plummeted after the specialist lender declined to issue full-year guidance over coronavirus-related uncertainty.
The lender’s stock plunged as much as 26 per cent in morning trading, its biggest intraday fall since 2016, despite it posting a strong set of results.
Statutory profit before tax increased 14 per cent for the year ending 31 December to £209.1m, with pro forma underlying pre-tax profit jumping nine per cent to £381.1m.
Onesavings Bank’s net loan book grew 105 per cent on a statutory basis to £18.4bn, while its statutory net interest margin — a key measure of profitability — was 2.43 per cent.
Chief executive Andy Golding said he was “delighted” with the lender’s achievements in 2019, including its merger with mortgage financer Charter Court, which completed in October.
However Golding said that it was “too soon” to know what the impact of the coronavirus pandemic would be on Onesavings bank, so the lender would not issue guidance.
“The UK and global economies are currently experiencing unprecedented uncertainty stemming from Covid-19. Whilst we entered the year with a robust pipeline, strong application levels in our core businesses and stable margins, it is too soon to say what the impact will be and we therefore consider it imprudent to provide forward guidance for 2020.”
“We enter this period of uncertainty as an enlarged business with the strength of our combined lending and funding franchises, robust capital position, secured loan book and strong risk management capabilities,” Golding said.
Goodbody analyst John Cronin said Onesavings Bank had delivered a “strong financial performance”.
“While last year’s performance is somewhat academic given the current market environment, we think investors will be pleased with the capital print at a time of great uncertainty,” he added.