OneSavings Bank, the specialist buy-to-let property lender, reported a 36 per cent rise in profits in the first half of the year, noting it was “too soon” to judge the impact of the Brexit vote on the UK economy.
The challenger bank said pre-tax profits grew to £64.6m in the six months to the end of June, compared to £47.6m over the same period last year. It also reported a 10 per cent increase in its loan book and boosted its common equity capital ratio (CET1) to 13.3 per cent from 11 per cent.
In a world of record low interest rates, OneSavings said its net interest rate margin inched up 2 basis points to 307 basis points from 305 basis points.
The bank also said it was “well placed” to take advantage of the opportunities that could arise from the UK’s vote to leave the EU, adding:
It is too soon to predict the medium to long-term impact of Brexit on the UK economy, but we will continue to concentrate on what we have proven we do best; using our broker relationships, manual underwriting expertise and secured lending strategy to lend responsibly to customers in underserved markets.
Following the Bank of England’s decision to cut its base rate to a fresh record low of 0.25 per cent, OneSavings said it would reduce its standard variable rate by an equivalent 25 basis points from September 1. The reduction should not have a “significant impact” on its net interest margins, it added.
Andy Golding, chief executive said:
I am pleased to report that OneSavings Bank again met or exceeded all of its financial objectives in the first half of 2016. The 36% increase in underlying profit before taxation to £64.6m in the first half reflects strong growth in loans and advances and an improved net interest margin of 307bps, despite prudently increasing liquidity ahead of the EU referendum.
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