In its trading update for the period, OSB Group said it “maintained its lending discipline” as demand for its core offering stayed in line with previous expectations.
The group saw a 2% rise in underlying and statutory net loans for the nine months to 30 September to £26.3bn, higher than respective values of £25.7bn and £25.8bn as of December 2023.
OSB said it was progressing with its “renewed focus” on commercial mortgages, bridging finance and asset finance as it was seeing a rise in applications across each sub-segment in Q3.
It now expects an underlying net loan book growth of just under 3% for the whole of 2024.
OSB said the guidance for its underlying net interest margin (NIM) was unchanged at around 230-240 basis points (bps) for this year, as “higher-yielding mortgages in the back book roll off to current prevailing spreads and as the market observes slightly elevated fixed term retail deposit pricing”.
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There was a 10bps rise in balances in arrears of three months or more, coming to 1.7% as of 30 September. OSB said this was in line with expectations as long-term fixed rate mortgages matured and moved onto higher rates.
The group said it continued to observe borrower behaviour in the reversion period during Q4 and assess this as part of its year-end process.
It said the potential impact of Precise buy-to-let (BTL) borrowers spending less time on reversion would reduce “significantly” over the next two years as mortgages matured.
OSB said it would focus on cost control with “proactive actions” to make its cost base more efficient.
Andy Golding, CEO of OSB Group, said: “Looking forward, whilst challenges remain, there are signs of a gradual return of confidence in our core markets and we are seeing increased applications in our more cyclical businesses. The potential impact on the future plans of professional landlords due to the increase in stamp duty on second properties introduced following the recent Budget is being monitored.
“We have a diversified loan book with proven capabilities in multi-property professional buy-to-let lending and specialist residential mortgages and continue to invest in our business to ensure it is fit for the future.”
