Banks bounce back after OneSavings profits surge
THE finance industry was the latest sector to quash Brexit uncertainty yesterday, as OneSavings Bank said it will continue to focus on what it does best.
In an interim update the challenger bank said underlying pretax profit was £64.6m in the first six months of the year, up 36pc on the same period a year ago.
Assets on its books have grown 20.8pc to £6.3bn. Highlighting how the property market does not appear to be slowing, the mortgage and loan provider said its underlying loan book had grown 10pc in the first half of the year.
The business has also seen the proportion of customers at least three months in arrears fall from 2.4pc to 2.1pc. It is the latest reassuring data to suggest that the referendum result may not drive the UK into recession.
Earlier this week, housebuilders and travel firms soared on confident updates as investors started to believe that the impact of Brexit may not be as bad as feared.
OneSavings, created through a tie-up between Kent Reliance Building Society and private equity firm JC Flowers, has increased its interim dividend to 2.9p a share, from just 2p a year ago.
Chief executive Andy Golding said the business had achieved all of its financial objectives since it listed on the stock market two years ago. Shares rocketed 16.9pc, or 40p, to 277.3p.
The update had a ripple effect on the firm’s rivals. Challenger bank
Shawbrook climbed 7.8pc, or 14.8p, to 204.3p, while Aldermore advanced 4.8pc, or 6.7p, to 147p. Some of the big banks also bounced up as figures from the British Banking Association showed consumer credit is still rising.
Credit card lending in July was
up 20pc on a year ago, although fewer mortgages were approved.
Lloyds leapt 2.9pc, or 1.7p, to 59.27p while Barclays bumped up 1.2pc, or 1.95p, to 166.55p.
They were among the top risers on the FTSE, which closed down 32.73 points, at 6835.78.
The greatest fallers of the day were dominated by miners as the oil price slipped another 3pc, below $47 a barrel.
Randgold Resources dropped 5pc, or 405p, to 7615p, while Antofagasta fell 3.9pc, or 21.5p, to 532p.
Hikma Pharmaceuticals was also in the red for the day. In its interim results for the first half of the year the firm said total operating profit was £91.4m, down 27pc on the same period last year.
Revenue was up 28pc to £666m in that time and the business said it is on track to reach its full-year revenue forecast of up to £1.6bn. Investors, used to strong results, were unforgiving and shares slid 3.3pc, or 75p, to 2228p.
Tech start-up LoopUp made its stock market debut yesterday, the first technology business to list on AIM since the referendum.
The firm, brought to market by
Panmure Gordon, offers conference calling services. The company, which has appointed Institute of Directors director general Lady Barbara Judge as chairman, has initially raised £9m from investors.
Founders Steve Flavell and Michael Hughes met at Stanford business school in the US and each have a 10pc stake. The Londonbased company has 2,000 customers and 96 staff across the UK, San Francisco, Boston and Hong Kong. Revenues last year were £10.1m. Shares were issued at 100p and finished the day at 112.5p.
Cluff Natural Resources advanced as its chairman said the southern North Sea could be one of the most prosperous offshore gas areas in the world. The AIM-listed exploration firm said one of its sites may have the same amount of gas that the UK uses in a year.
Chairman Algy Cluff said smaller companies will be crucial in the next stage of exploration.
In its interim results for the six months to June 30 the business said it had made a loss of £662,473, down from £744,668 in the same period a year ago. Shares soared 14.9pc, or 0.18p, to 1.35p.