The residential, second charge and buy-to-let provider recorded a 31% increase in loans and advances on its balance sheet to reach £5.1bn in 2015, up from £3.9bn in 2014. This was driven by its gross lending volumes combined with the purchase of £14m second charge mortgage portfolio earlier this year.
Of these loans and advances, £3.1bn consisted of buy-to-let loans, £2bn of residential mortgages and £49.4m were made up of personal loans.
Sales and marketing director John Eastgate said the bank is planning to grow its support for intermediary partners this year.
“We’re in the process of restructuring our sales team to make it more fit for purpose for intermediaries,” he said.
“We also see a lot of scope in the commercial, buy to let, HMO and refurbishment sectors and plan to make enhancements to our short-term lending proposition.”
Underlying profit before tax at the bank soared by 52% taking it to £105.9m in 2015. Cost to income ratio at the lender was reduced further in 2015, with cited strong income growth and cost control taking this from 28% in 2014 to 26% last year.
The lender said its core businesses had not been impacted by competitive pricing pressure and had retained strong application volumes throughout the year.
OneSavings Bank is made up of a number of specialist financial services businesses including Kent Reliance, Interbay Commercial and Prestige Finance, with the majority of its lending generated through the buy-to-let sector.
CEO of OneSavings Bank Andy Golding said: “We have continued to grow the loan book through our specialist lending brands and improved both our net interest margin and cost to income ratio. This growth has been achieved while strengthening our capital ratio, demonstrating strong organic capital generation capability through profitability, and at the same time improving our excellent levels of customer service.”
In light of multiple tax changes due to be imposed on the buy-to-let market by the government, the bank said it had repositioned its focus on the professional buy-to-let investor and ‘reduced its attractiveness’ to the amateur.
Professional and multi-property landlords accounted for 69% of applications at the lender by value during the second half of 2015.
The lender added that changes to its lending criteria and customer focus has further strengthened its position as a specialist lender, which it plans to build on throughout 2016.
Golding added: “Looking forward we remain cognizant of the political and regulatory headwinds in buy to let and in 2016 we have amended our lending criteria to cement our focus on the professional landlords that we believe will continue to develop their buy-to-let portfolios. This is in line with our expectation that the private rented sector will continue to be a vital component of the UK housing market. We have entered 2016 with our strongest ever pipeline, and application and completion volumes are showing sustained growth. We look forward with confidence.”
OneSavings Bank added that changes to the tax regime for banks introduced by the Chancellor in the summer Budget last year would also affect how it carried out business. The replacement of the bank levy with an 8% tax surcharge on firms’ profits would reduce the amount of capital available to fund new lending, it said.
The bank now has just 48 cases of arrears over three months in duration, to total an aggregate balance of £5.1m and average loan-to-value of 56%.
