**Summary of OSB GROUP PLC Interim Results for Six Months Ended 30 June 2025**
**Overview**
OSB GROUP PLC (OSBG) reported resilient financial performance for the first half of 2025, with net loan book growth of 1.2% to £25.4 billion, supported by a 10% increase in originations to £2.1 billion. The Group maintained cost and lending discipline, achieving a 13.7% return on tangible equity (RoTE). Profit before tax was £192.3 million, down from £241.3 million in H1 2024, primarily due to lower net interest income and a fair value loss on financial instruments. The Group reiterated its 2025 guidance, expecting low single-digit net loan book growth, a net interest margin (NIM) of circa 225bps, administrative expenses of circa £270 million, and a low teens RoTE.
**Financial Highlights**
**Net Loan Book Growth**Increased by 1.2% to £25.4 billion, driven by diversification into higher-yielding sub-segments like Commercial, Asset Finance, Residential Development, and Bridging.
**Net Interest Income and NIM**Declined to £337.0 million and 230bps, respectively, due to more costly funding spreads and the impact of a £1.25 billion securitisation in December 2024.
**Administrative Expenses**Rose to £131.4 million, reflecting investment in the transformation programme and lower total income.
**Profit Before Tax**Decreased by 20% to £192.3 million, primarily due to lower net interest income and fair value losses.
**Retail Deposits**Grew by 3% to £24.6 billion, offsetting TFSME repayments.
**Return on Tangible Equity**Fell to 13.7% from 17.4% in H1 2024, due to lower profit after tax.
**Dividend**Interim dividend increased by 5% to 11.2 pence per share, in line with the Group’s dividend policy.
**Strategic Progress**
**Transformation Programme**On track, with positive feedback from the soft launch of the new lending platform and Rely brand for Buy-to-Let investors.
**Loan Book Diversification**Continued focus on higher-yielding sub-segments, with strong growth in Commercial, Asset Finance, Residential Development, and Bridging originations.
**Funding**Retail deposits remained the primary funding source, with a 3% increase to £24.6 billion. The Group repaid £730 million of TFSME funding and utilized the Bank of England’s Indexed Long-Term Repo programme.
**Risk Management**
**Credit Quality**The loan book remained high-quality, with a slight increase in arrears balances of three months or more to 1.8%.
**Impairment Charge**Recorded at £2.0 million, representing a loan loss ratio of 2bps.
**Capital Position**Strong, with a Common Equity Tier 1 (CET1) ratio of 15.7%, reflecting the impact of the £100 million share repurchase programme.
**Outlook**
OSBG reaffirmed its 2025 guidance and medium-term aspirations, emphasizing continued focus on loan book diversification, cost discipline, and strong returns for shareholders. The Group aims to reduce Buy-to-Let lending to ≤60% of the loan book over the next four years and improve operational efficiency, targeting a low 30s% cost-to-income ratio.
**Conclusion**
OSB GROUP PLC demonstrated resilience in the first half of 2025, achieving strategic and financial progress despite challenging market conditions. The Group remains well-positioned to deliver on its medium-term aspirations, prioritizing stakeholder outcomes and shareholder returns.