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Investing.com - OSB Group shares gained 2.4% after the specialist lender reported better-than-expected 2024 earnings and announced a new share buyback program, despite a slight decline in its loan book.
The UK-based company reported underlying profit before tax of £442.9 million for 2024, up 4% from £426.0 million in 2023 and surpassing analyst estimates. Statutory profit before tax rose 12% to £418.1 million.
OSB’s underlying net loan book decreased 2% to £25.1 billion, primarily due to a £1.25 billion securitization transaction in December. Excluding this, the loan book would have grown 2.5% YoY.
Net interest margin (NIM) declined to 230 basis points from 251 basis points in 2023, impacted by lower spreads and an adverse £15.9 million adjustment related to effective interest rate (EIR) accounting.
OSB announced a new £100 million share repurchase program over the next 12 months, starting March 14, 2025. The company also declared a final dividend of 22.9 pence per share, bringing the total 2024 dividend to 33.6 pence, up from 32.0 pence in 2023.
For 2025, OSB expects low single-digit loan book growth and NIM of around 225 basis points. The company aims for mid-single digit loan book growth and mid-teens return on tangible equity in the 2027-2029 period.
RBC updated its estimates following the results, maintaining 600p price target and reiterating outperform rating.
"Whilst this is not a short-term story, OSB’s valuation is undemanding and, arguably, investors are being paid to wait through an attractive dividend and total shareholder return," RBC said in a note.
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