OSB Group (OSB) H2 2024 earnings summary

Executive summary

• Disciplined lending and cost control supported a 4% rise in underlying pre-tax profit to GBP 443 million, with ROE at 16%.

• Net loan book grew 2.5% year-over-year, excluding derecognition, reflecting pricing discipline.

• Cost-to-income ratio held at 37%, with core cost growth limited to 3% and redundancy costs included.

• Transformation program advanced, enabling new product rollouts and digital engagement.

• Total return to shareholders reached GBP 226 million in 2024, with a new GBP 100 million buyback announced for 2025.

Financial highlights

• Net interest margin was 2.30%, including a GBP 15.9 million EIR adjustment, down from 2.51% year-over-year.

• Net loan book ended at GBP 25.1 billion, down 2% due to GBP 1.25 billion derecognition; would have grown 2.5% otherwise.

• Retail/customer deposits increased 8% to nearly GBP 24 billion.

• CET1 ratio strong at 16.3% at year-end, with leverage ratio at 7.7%.

• Administrative expenses were GBP 257 million; management expense ratio at 85 basis points.

Outlook and guidance

• 2025 and 2026 are transition years as transformation completes and NIM stabilizes around 2.25%.

• 2025 guidance: NIM circa 225 basis points, admin expenses around GBP 270 million, low single-digit loan book growth, and low-teens ROTE.

• Dividend per share to increase by about 5% in 2025, with commitment to return excess capital.

• CET1 ratio target remains at 14%, with a glide path above this ahead of Basel 3.1 implementation.