by Elena Vardon
London-based lending and savings group, OSB Group, has reported a decline in pretax profit for the first half of the year. The company attributed this decrease to an adverse interest-rate adjustment and maintained its loan-book growth target for 2023.
In the six months ending June 30, OSB Group recorded a pretax profit of £76.7 million ($97.5 million), compared to £268.1 million in the same period last year. This was in line with the company's previous announcement in July, where it anticipated an interest-rate reversion adjustment of up to £180 million in its half-year financial statements.
Net interest income also declined from £343.4 million to £237.5 million, resulting in a net interest margin of 1.71%. On an underlying basis, the net interest margin was 2.03%.
Despite these challenges, OSB Group's net loan book grew by 4% to reach £24.6 billion during the first half of the year.
The company's common equity Tier 1 ratio, which measures balance-sheet strength, stood at 15.7% compared to 18.3% six months earlier.
Chief Executive Andy Golding stated, "Based on our current pipeline and application volumes, we reaffirm our target underlying net loan book growth of approximately 7% for 2023."
OSB Group projects a full-year net interest margin of around 2.6%, with the second half of the year expected to be in line with 2022. Furthermore, the company anticipates an underlying cost-to-income ratio of approximately 33%.
The board of directors has approved an interim dividend of 10.2 pence per share, an increase from the 8.7 pence declared in the previous year.
As of 0710 GMT, OSB Group's shares were down 2%, trading at 368.6 pence.
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