OSB Group Sees Steady Growth in Q1 Amid Market Conditions

OSB Group PLC reports 2025 Q1 figures aligning with expectations. With stable growth in originations and strategic positioning, investors can find positive signals within this trading update.

Date: 30-04-2025

AI Rating: 7

OSB Group PLC has presented an encouraging trading update for Q1 2025. The Group's originations were reported at £1.1 billion, a solid increase from £1.0 billion in Q1 2024, pointing towards positive revenue growth. The slight expansion in the net loan book to £25.2 billion indicates the company’s management is effectively capitalizing on the steady demand within higher-yielding specialist segments.

Net Income remains implicit, but the guidance points to expectations of a gradual increase in profitability through focus on growing segments like Commercial and Asset Finance.

Additionally, the managing of retail deposits at £23.8 billion and a lowered TFSME balance indicates robust liquidity management, which is crucial in times of fluctuating market conditions. Maintaining loans in arrears at 1.7% also highlights effective risk management, aligning with expected parameters.

OSB’s strong emphasis on prioritizing returns over mere growth, as articulated by CEO Andy Golding, shows a prudent strategy focused on profitability. The Group forecasts low single-digit growth on the net loan book and is aiming for a net interest margin of about 225 bps, which could have positive implications for overall profitability and Profit Margins. The commitment to keep administrative expenses around £270 million underlines a careful approach to cost management, critical for sustaining margins.

Further, the company's move to repurchase £15.7 million worth of shares from its repurchase programme signals confidence in its current market position and could potentially enhance Earnings Per Share (EPS) in the long term.

As such, OSB Group's outlook aligned with its trading update may attract investor interest, affirming its ability to generate stable returns, manage risk effects efficiently, and potentially yield favorable outcomes in the upcoming quarters.

Stocks: OSB.L