OSB GROUP PLC Interim Report for the six months ended 30 June 2026
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6 August 2026 LEI: 213800ZBKL9BHSL2K459
This announcement contains inside information for the purposes of Article 7 of the UK Market Abuse Regulation. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
| OSB Group PLC's results for the six months ended 30 June 2026 are available in full unedited text at: 2026 Interim Report and on the Group’s corporate website https://www.osb.co.uk/investors/results-reports-presentations. A copy of these results has also been submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism. This announcement is made in accordance with DTR 6.3.5R(1A). |
OSB GROUP PLC (OSBG or the Group), the specialist lending and retail savings group, announces today its results for the six months ended 30 June 2026.
Andy Golding, Group CEO, said:
“The Group delivered a resilient financial and operational performance in the first half of 2026 against a volatile macroeconomic backdrop.
Our Buy-to-Let and Residential franchises performed well in the period. Originations grew moderately in our higher-yielding sub-segments compared to the prior period, despite macroeconomic uncertainty and elevated mortgage rates. The transformation programme continued at pace and I am pleased that we have soft launched Residential products on the new lending platform and our savings migration is progressing well.
We have seen strong competition in the retail savings market and elevated retail funding costs so far this year. We have made the conservative assumption that these pressures will not ease, if that is the case, we now expect net interest margin for 2026 to be 215bps to 220bps.
We continue to expect administrative expenses to be c.£280m, excluding costs related to the incoming CEO.
Our net loan book growth guidance for the year remains unchanged.
We now expect return on tangible equity (RoTE) for 2026 to be c.12.5%, assuming elevated costs of funds continue and excluding costs related to the incoming CEO.
Whilst it is too early to be more precise, if the funding cost pressures seen so far this year continue, this could result in a modest impact on our 2027 mid-teens RoTE aspiration.
We have confidence in delivering on our longer-term 2028 - 2029 aspirations supported by both mechanical factors, including MREL and back book roll-off, and management actions such as continued loan book diversification and benefits from our transformation programme.
Further to my retirement announcement, I will be stepping down as CEO and Board Director with effect from 31 August 2026. Enrique Alvarez Labiano’s appointment as the Group CEO and Board Director will take effect from 1 September 2026. I wish him every success as he takes the business forward.”
David Weymouth, Chair of the Board, said:
“I and the whole OSB Group Board would like to acknowledge and thank Andy for his significant contribution to growing OSB into the UK’s largest specialist lender over the last 14 years. The Group’s success was driven by his strong leadership, strategic vision and focus on growing deposits and broadening the Group’s lending profile. He has delivered substantial shareholder value and shareholder returns of over £1.3bn since 2019. We all wish him well in his future endeavors.”
Financial and operational highlights
- Net loan book grew by 1.3% to £26.3bn (31 December 2025: £25.9bn) supported by a 10% growth in originations to £2.3bn (H1 2025: £2.1bn) with continued focus on sustainable lending margins
- Net interest income increased by 1% to £339.8m (H1 2025: £337.0m). Net interest margin1 reduced to 223bps (H1 2025: 230bps) due to more costly spreads to SONIA from new retail funding that more than offset the back book dynamics and new business written at sustainable margins
- Administrative expenses increased by 4% to £136.5m (H1 2025: £131.4m) as a result of further investment in the transformation programme; core administrative expenses2 decreased by 0.4%. Cost to income ratio was broadly unchanged at 40.1% (H1 2025: 40.3%)
- Loan loss ratio3 increased to 12bps (H1 2025: 2bps) and arrears balances of three months or more decreased to 1.6% (31 December 2025: 1.7%)
- Profit before tax reduced to £187.2m (H1 2025: £192.3m) due to a higher impairment charge and higher administrative expenses which more than offset an increase in net interest income and a lower fair value loss on financial instruments
- Retail deposits increased by 3% to £25.0bn (31 December 2025: £24.3bn)
- RoTE4 reduced to 13.3% (H1 2025: 13.7%) due to a lower profit attributable to ordinary shareholders in the period
- TNAV per share5 improved to 584 pence as at 30 June 2026 (31 December 2025: 579 pence) primarily as a result of a lower number of shares outstanding
- Basic earnings per share6 (EPS) increased to 38.5 pence (H1 2025: 37.3 pence) primarily due to a lower weighted average number of shares outstanding
- Common Equity Tier 1 capital ratio, which included the full impact of the £100m share repurchase programme announced in March, remained robust at 15.2% (31 December 2025: 15.8%)
- Interim dividend of 11.8 pence per share (H1 2025 11.2 pence), representing one-third of the full year 2025 ordinary dividend, in line with the Group’s stated dividend policy
- As at market close on 4 August, the Group had repurchased £69.5m worth of shares under the £100m share repurchase programme announced in March which is due to complete no later than 6 March 2027
Dividend details
The Board has declared an interim dividend of 11.8 pence per share, which will be paid on 18 September 2026 to shareholders on the register at the close of business on 14 August 2026. The ordinary shares will be quoted ex-dividend on the London Stock Exchange from 13 August 2026.
Enquiries:
OSB GROUP PLC Brunswick Group
Alexander Holcroft, Investor Relations Robin Wrench/Simone Selzer
osbrelations@osb.co.uk t: 020 7404 5959
Results presentation
A webcast presentation for analysts will be held at 9:30am on Thursday 6 August. To view the webcast and participate in the Q&A, please register at the link below, participants can ask questions either through the Zoom platform or by telephone.
https://storm-virtual-uk.zoom.us/webinar/register/WN_vQCs18aNRROpYHYScXdxQA
Cautionary statement
Your attention is drawn to the cautionary statement set out at the end of this announcement.
Summary financials
| H1 2026 | H1 2025 | Change | H2 2025 | Change | |
| Net interest income, £m | 339.8 | 337.0 | 1 % | 342.4 | (1) % |
| Net fair value loss on financial instruments, £m | (2.5) | (14.3) | (83) % | (7.8) | (68) % |
| Total income, £m | 340.3 | 325.8 | 4 % | 342.2 | (1) % |
| Administrative expenses, £m | (136.5) | (131.4) | 4 % | (138.7) | (2) % |
| Impairment of financial assets, £m | (15.8) | (2.0) | n/m | (11.0) | 44 % |
| Profit before tax, £m | 187.2 | 192.3 | (3) % | 190.2 | (2) % |
| Taxation, £m | (45.9) | (50.2) | (9) % | (46.6) | (2) % |
| Profit after tax, £m | 141.3 | 142.1 | (1) % | 143.6 | (2) % |
| Coupon paid on AT1 securities, £m | (6.3) | (4.5) | 40 % | (5.6) | 13 % |
| Profit attributable to ordinary shareholders, £m | 135.0 | 137.6 | (2) % | 138.0 | (2) % |
| Earnings per share6, pence | 38.5 | 37.3 | 3 % | 38.3 | 1 % |
| Dividend per share, pence | 11.8 | 11.2 | 5 % | 24.1 | (51) % |
| Net interest margin1, bps | 223 | 230 | (7) | 226 | (3) |
| Cost to income ratio, % | 40.1 | 40.3 | (0.2) ppt | 40.5 | (0.4) ppt |
| Loan loss ratio3, bps | 12 | 2 | 10 | 9 | 3 |
| Return on tangible equity4, % | 13.3 | 13.7 | (0.4) ppt | 13.7 | (0.4) ppt |
| TNAV per share5, pence | 584 | 540 | 8 % | 579 | 1 % |
| 30-Jun-26 | 31-Dec-25 | Change | |||
| Net loans and advances, £m | 26,257.5 | 25,920.6 | 1.3 % | ||
| Total assets, £m | 30,348.8 | 31,122.7 | (2.5) % | ||
| Retail deposits, £m | 24,985.3 | 24,251.1 | 3.0 % | ||
| Risk-weighted assets, £m | 12,676.2 | 12,541.7 | 1.1 % |
- Net interest income as a percentage of a 7 point average of interest earning assets.
- See the Appendix for definition and calculation of APMs.
- Impairment losses as a percentage of a 7 point average of gross loans and advances.
- Profit attributable to ordinary shareholders, which is profit after tax, and after deducting coupons on AT1 securities, gross of tax, as a percentage of a 7 point average of shareholders’ equity excluding average intangible assets and of AT1 securities.
- Tangible net asset value per share is shareholders’ equity excluding intangible assets and AT1 securities as at the end of the period divided by the number of shares outstanding at the end of the period.
- Profit attributable to ordinary shareholders, which is profit after tax, and after deducting coupons on AT1 securities, gross of tax, divided by the weighted average number of ordinary shares in issue.
Chief Executive Officer’s statement
The first six months of the year were marked by elevated macroeconomic and geopolitical uncertainty, contributing to a volatile operating environment. Against this backdrop, the Group delivered a resilient performance, both financially and operationally and further progress against the strategy we announced in March 2025.
Strategic progress
The Buy-to-Let market saw an increase in activity in the first half, despite the disruption caused by the Middle East conflict that led to higher pricing of fixed term mortgages. UK Finance reported an increase of 14% in the gross new lending for the first five months of 2026 to £17.8bn from £15.6bn in the equivalent period last year.1 For 2025, the Group was ranked the largest independent Buy-to-Let lender in the UK in terms of gross new lending with a market share of 4.3%.2
The Group’s Buy-to-Let originations reached £1,028m, an increase of 10% from £935m in the first half of 2025. Our Rely brand, which now serves all of our new Buy-to-Let borrowers, performed strongly in the period. We were able to react swiftly during the period of swap rate volatility, protecting our margins and originating high quality Buy-to-Let business as our competitors withdrew their products.
Combined originations in our higher-yielding sub-segments grew moderately in the first half at £892m (H1 2025: £884m). Some of our borrowers postponed their financing decisions given the macroeconomic uncertainty and elevated mortgage rates. However, we remain committed to our loan book diversification strategy.
I’m pleased that Interbay Asset Finance was accredited by the British Business Bank to provide loans under the Growth Guarantee Scheme. This demonstrates the quality of our asset finance franchise and enables us to finance a wider range of assets without compromising our risk appetite.
Progress in the transformation programme continued in the period. We soft launched Residential products on the new lending platform to a small group of selected brokers. We will take their feedback to improve functionality before full market launch later in the year. Technology is driving improvements across the Group, including in our Financial Support team that is now benefitting from a new system providing automation and improved processes for colleagues and customers.
In savings, we extended the variable rate product range by developing and launching a new limited access account. We also continued to migrate fixed rate accounts to the new savings platform with c.130k accounts moved so far. In the first half, we opened more than 134k new savings accounts across our two brands and retention rates were strong at 95% and 90% for Kent Reliance and Charter Savings Bank, respectively.
AI and advanced analytics form part of the transformation programme and play a key role in improving process efficiency across the Group. We have recently introduced AI into our call centres where it assists in call note taking, real-time transcriptions and voice analytics, giving colleagues more time to focus on our customers.
Attractive shareholder returns
In line with our stated dividend policy, the Board has today declared an interim dividend of 11.8 pence for the first half of 2026 (H1 2025: 11.2 pence), an increase of 5%, as guided.
New CEO transition
Further to my retirement announcement in November 2025, I will be stepping down as CEO and Board Director with effect from 31 August 2026. As I prepare to retire, I would like to take a moment to reflect on the last 14 years leading OSB Group. We have grown from a balance sheet of £3bn at the end of 2012 to over £31bn today, completed an IPO and a successful merger, delivered an ongoing transformation programme, established award-winning lending and savings franchises and set a clear strategic direction. I am proud of the business I am handing over. These achievements reflect the dedication, expertise and commitment of colleagues across the Group and I would like to thank them for their contribution.
Enrique Alvarez Labiano’s appointment as the Group CEO and Board Director will take effect from 1 September 2026. I wish him every success as he takes the business forward.
Andy Golding
Chief Executive Officer
5 August 2026
- UK Finance, BTLA1, July 2026
- UK Finance, MM11, Largest BTL Mortgage Lenders, July 2026
Chief Financial Officer’s statement
The Group delivered a resilient performance in the first half of 2026 despite elevated swap rates caused by the uncertain geopolitical environment, underscoring the strength of the Group’s franchises and strategy.
Resilient financial performance
The Group’s net loan book increased by 1.3% to £26.3bn as at 30 June 2026 (31 December 2025: £25.9bn). The growth was supported by originations of £2.3bn, an increase of 10% from £2.1bn in the first six months of 2025. While we took the opportunity to write more attractive new business in our core sub-segments of Buy-to-Let and Residential in the first half, our commitment to the medium-term loan book diversification strategy remains.
Return on tangible equity (RoTE) reduced to 13.3% (H1 2025: 13.7%) as a result of lower profit attributable to ordinary shareholders in the period.
Net interest income increased by 1% to £339.8m for the first six months of 2026 (H1 2025: £337.0m). Net interest margin was 223bps, down 3bps from 226bps in the second half of 2025 (H1 2025: 230bps). The reduction was due to more costly spreads to SONIA from new retail funding that more than offset the back book dynamics and new business written at sustainable margins.
The Group’s net interest margin excluding liquid assets1 was 262bps for the first half (H1 2025: 269bps) enabling a more meaningful comparison with our closest peers.
I am pleased that core administrative expenses1 across the UK and India decreased by 0.4% compared to the prior period, demonstrating our strong cost discipline and operational efficiency. Total administrative expenses for the first half were £136.5m (H1 2025: £131.4m) and the cost to income ratio was broadly unchanged at 40.1% (H1 2025: 40.3%). The increase in total administrative expenses was primarily as a result of further investment in the transformation programme.
For the first six months, the impairment charge was £15.8m, an increase from £2.0m in the prior period and represented a loan loss ratio of 12bps (H1 2025: 2bps).
Lending and funding
The first six months of 2026 were marked by heightened volatility in the swap rates reflecting geopolitical and macroeconomic instability. Supported by new technology platforms, we reacted with agility, repricing both our mortgages and savings products to protect margins and returns while ensuring we remained present in the market to support our customers.
Our disciplined approach to lending delivered sustainable new lending margins in the first half. However, as the back book matures, some of that benefit was offset by the roll-off of historical higher yielding mortgages.
Our funding requirements were primarily fulfilled by retail deposits. As with mortgages, we were actively managing the impact of swap rate volatility by promptly repricing our savings products and using market opportunities to prefund at lower cost. The retail savings market remained competitive in the period, however the Group’s blended cost of new retail funds remained in line with our expectations. Retail deposits reached £25.0bn at 30 June, an increase of 3% from £24.3bn at the end of 2025.
We continued to actively use central bank facilities, maintaining substantial further capacity as we repaid maturing funds in the period. As at 30 June, central bank facilities balances reduced to £251.5m (31 December 2025: £1,509.9m). In line with our approach to use such facilities, we will on occasion make drawings to facilitate peaks in our funding requirements.
In May, the Group completed a £549m securitisation of Buy-to-Let mortgages under the PMF programme, achieving its best pricing since 2018 for this type of transaction. We will continue to complement retail savings with attractive price and duration wholesale funding options as we actively manage our overall cost of funds.
Strong capital position
I am pleased that the Group’s CET1 ratio at the end of June was 15.2% (31 December 2025: 15.8%), tracking down towards our target of 13% - 13.5% post adoption of the Basel 3.1 rules. We continue to expect that the implementation of the Basel 3.1 rules as written, would reduce the CET1 ratio as at 30 June 2026 by 1.2% as a result of a 9% uplift in the RWAs.
Outlook
We made progress against our strategic priorities in the first half of 2026, both financially and operationally.
Our revised 2026 guidance and aspirations are presented below. Whilst it is too early to be more precise, if the funding cost pressures seen so far this year continue, this could result in a modest impact on our 2027 mid-teens RoTE aspiration.
We have confidence in delivering on our longer-term 2028 - 2029 aspirations supported by both mechanical factors, including MREL and back book roll-off, and management actions such as continued loan book diversification and benefits from our transformation programme.
| 2026 Guidance | 2027–2029 | ||
| Former | Updated | Aspirations | |
| Loan book growth | Broadly similar to 2025 outcome | Unchanged | Mid single digit if returns meet our requirements |
| NIM | circa 225bps | 215bps - 220bps | |
| Loan book diversification | Buy-to-Let to comprise ≤60% of the net loan book | ||
| Administrative expenses | c.£280m1 | Unchanged | Gradual improvement to low 30s% cost to income ratio and positive jaws |
| RoTE | Low teens | c.12.51 | Mid teens in 2027-28 increasing to the top end of mid teens in 2029 |
| Distributions | 5% dividend per share growth and commitment to return excess capital | Unchanged | Progressive dividend per share and commitment to return excess capital |
| CET1 ratio | 13 – 13.5% post implementation of Basel 3.1 | ||
| |||
Victoria Hyde
Chief Financial Officer
5 August 2026
1. See the Appendix for definition and calculation of APMs.
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