Loan book growth lifts OneSavings
ONESAVINGS BANK was the standout mid cap yesterday, jumping more than 15pc after it reported loan-book growth and a double-digit rise in profit despite heavy impairment costs.
The specialist loans group – which is the parent of Kent Reliance, the buy-to-let lender – revealed a 10pc rise in profit before tax to £99.3m for the first six months of 2020, while its loan book grew 2pc to £18.8bn.
Andy Golding, the chief executive, said: “We expect to deliver double digit underlying net loan book growth for the full year, excluding the impact of the structured asset sales in January.”
Its underlying losses from impairments stood at £54.4m for the period, which the group said was “predominantly driven by a £42m charge due to the adoption of more severe Covid-19 related macroeconomic scenarios”.
Goodbody’s John Cronin said OneSavings Bank looks like a fairly strong stock pick, adding it has “considerable headroom to cope with any negative shocks in an asset quality context as furlough schemes are tapered”. OneSavings Bank ended the day 40.8p higher at 301.4p. It came as the FTSE 100 slipped 0.75pc into the red, back below the 6,000 points mark, after US Federal Reserve chief Jerome Powell said he would not rush to raise interest rates and could allow inflation to stay above his 2pc target “for some time”.
The FTSE 250, however, did manage to eke out some gains, climbing 0.05pc to 17,762.03.
Elsewhere, Ocado shares fell slightly after it named Rolls-Royce’s chief financial officer Stephen Daintith as its new finance boss, replacing Duncan Tatton-Brown, who is stepping down for family reasons after eight years. Mr Tatton-Brown will remain until Nov 22, after which he will become a non-executive director.
Lord Rose, Ocado’s chairman, thanked the outgoing finance chief for his contribution and said Mr Daintith’s “broad experience will be an asset to the company”. Shares closed 15p lower at £25.20.
However, Rolls-Royce shares, managed to recoup their early losses after sinking into negative territory for most of the session. Its first half adjusted operating loss was £1.67bn, which was greater than expected, but the group is examining ways to strengthen its balance sheet. It is eyeing asset sales which should raise at least £2bn. It gained 3.5p to 256.5p.
Meanwhile, shares in WPP pushed 40.4p higher to 664.4p, after the advertising giant said its trading is improving after swinging to a £2.6bn first-half loss. The FTSE 100 group saw revenues fall 10.2pc and took £2.7bn of impairments during the period but said its trading improved during July, suggesting the worst part of the virus’s impact has passed.